CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.
PORTIONS FOR WHICH CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY "[*]".
CONFIDENTIAL INFORMATION OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
EXHIBIT 10.2
HEALTH SERVICES AGREEMENT
BETWEEN FOUNDATION HEALTH, A CALIFORNIA HEALTH PLAN
AND XXXXXX MEDICAL CENTERS
This Health Services Agreement ("Agreement") is entered into this 1st day
of February, 1996, by and between Foundation Health, a California Health Plan, a
California corporation ("Foundation"), and Xxxxxx Medical Centers, a California
corporation ("Molina").
RECITALS
A. Foundation is a prepaid full-service health care service plan licensed
under the Xxxx-Xxxxx Health Care Services Plan Act of 1975, as amended (the
"Xxxx-Xxxxx Act").
X. Xxxxxx is also a prepaid full-service health care service plan
licensed under the Xxxx-Xxxxx Act, with a Medi-Cal service area defined in
Addendum A (the "Molina Service Area").
C. Foundation intends to contract with the California Department of
Health Services under the Medi-Cal Managed Care Program for the provision of
Health Care Services to persons who enroll in the Foundation Medi-Cal Plan for
Los Angeles County.
X. Xxxxxx has established staff-model facilities and contracted with a
network of Participating Physicians and Participating Facilities for the
rendering of Health Care Services.
E. Foundation wishes to contract with Molina for the arrangement of
Health Care Services, marketing services and certain administrative services to
those Medi-Cal beneficiaries residing in Los Angeles County who enroll in the
Foundation Medi-Cal Plan and who select, or who are assigned by Foundation to, a
Molina Participating Physician as his or her Primary Care Provider.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties agree as follows:
ARTICLE I - DEFINITIONS
1.01 Capitation Payment - is a fixed monthly payment negotiated by the
parties that is payable to Molina by Foundation for each Molina Member.
1.02 DHS - is the California Department of Health Services.
1.03 DHHS - is the United States Department of Health and Human Services.
1.04 DOC - is the California Department of Corporations.
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1.05 DOJ - is the United States Department of Justice.
1.06 Eligibility List - is a list of all Molina Members to be provided by
Foundation on a monthly basis to Molina.
1.07 Emergency Services - are those Health Care Services required for
alleviation of severe pain or immediate diagnosis and treatment of unforeseen
medical conditions, which, if not immediately diagnosed and treated, would lead
to disability or death.
1.08 Foundation Enrollment Packet - The information provided by Foundation
to Medi-Cal Members upon enrollment in the Medi-Cal Plan which summarizes the
Foundation Medi-Cal Plan offered to Molina Members and which includes an
Evidence of Coverage, Disclosure Form, and Participating Provider Directory for
Los Angeles County. The Evidence of Coverage is attached hereto and incorporated
herein as Addendum B, the Disclosure Form is attached hereto and incorporated
herein as Addendum C, and the Participating Provider Directory is attached
hereto and incorporated herein as Addendum D.
1.09 Foundation Medi-Cal Plan - is the Foundation benefit plan covering the
provision of Health Care Services to Medi-Cal Members pursuant to the Medi-Cal
Agreement. The benefits of the Foundation Medi-Cal Plan are set forth in the
Medi-Cal Agreement.
1.10 Health Care Services - are all medical, hospital and ancillary
services, including Emergency Services, which are covered benefits under the
Foundation Medi-Cal Plan.
1.11 Xxxx-Xxxxx Act - is the Xxxx-Xxxxx Health Care Service Plan Act of
1975, as amended, and the rules and regulations promulgated by DOC thereunder.
1.12 Medi-Cal - is a federal and state funded health care program
established by Title XIX of the Social Security Act, as amended, which is
administered in California by the DHS.
1.13 Medi-Cal Agreement - is the agreement to be entered into by and
between Foundation and DHS pursuant to the Xxxxxx-Xxxxx Act, under which
Foundation will agree to provide health benefits under the Medi-Cal Managed Care
Program to Los Angeles County Medi-Cal beneficiaries who enroll in the
Foundation Medi-Cal Plan. A copy of the Medi-Cal Agreement will be provided to
Molina by Foundation upon execution. The required elements of this Agreement
will, among other things, conform with the requirements set forth in the State
of California DHS Request for Application ("RFA") dated September 1994, as
amended.
1.15 Medi-Cal Member - is an individual residing in Los Angeles County who
is eligible for Medi-Cal and is enrolled in the Foundation Medi-Cal Plan.
1.16 Monthly DHS Payment - is the revenue received by Foundation each month
from DHS, as determined by DHS, for the Health Care Services each Medi-Cal
Member is to be provided under the Foundation Medi-Cal Plan.
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1.16 Primary Care Physician - is either an internist, pediatrician, or
family practitioner who has been selected by or assigned to a Medi-Cal Member
for the purpose of coordinating Health Care Services under the Foundation
Medi-Cal Plan.
1.17 Primary Hospital - is the hospital selected by a Medi-Cal Member at
the time of enrollment where most hospital services will be provided to the
Medi-Cal Member
1.18 Molina Member - is a person enrolled in the Foundation Medi-Cal Plan
who has been assigned to or selected a Molina Participating Physician as his or
her Primary Care Physician in accordance with the procedures set out in Addendum
E hereto.
1.19 Molina Participating Facility - is a licensed acute-care facility
which is owned by or has contracted with Molina to furnish Health Care Services
to Molina Members.
1.20 Molina Participating Physician - is a licensed physician or osteopath
or group of physicians or osteopaths which has contracted with or is employed by
Molina to provide or arrange Health Care Services to Molina Members.
1.21 Molina Participating Providers - are Participating Physicians,
Participating Facilities and other providers, such as ancillary service
providers, which contract with Molina to provide Health Care Services to Molina
Members.
1.22 Molina Service Area - The geographic area in Los Angeles County in
which, as of the Commencement Date of this Agreement, Molina is licensed by the
DOC to provide or arrange Health Care Services for its Medi-Cal enrollees. The
Molina Service Area is described in Exhibit A, attached hereto and incorporated
herein. The Molina Service Area may be revised in Los Angeles County upon the
approval of the DOC and DHS.
1.23 Molina Subcontracts - are the contracts entered into between Molina
and Molina Participating Providers for the performance of Health Care Services.
1.24 Xxxxxx-Xxxxx Act - is the Xxxxxx-Xxxxx Prepaid Health Plan Act
(commencing at Section 14200 of the California Welfare and Institutions Code),
and the rules and regulations promulgated thereunder by the DHS.
ARTICLE II - XXXXXX'X DUTIES
2.01 Arrange Health Care Services - Molina shall provide or arrange all
Health Care Services to Molina Medi-Cal Members as identified on the Eligibility
List provided by Foundation pursuant to Section 3.04 of this Agreement. Xxxxxx'x
obligation to provide Health Care Services under this Agreement is limited to
the Molina Service Area and is subject to Xxxxxx'x capacity limitation specified
in Section 2.04 below.
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2.02 Participating Providers.
2.02.01 Standards. All Health Care Services shall be provided by duly
licensed, certified or accredited Molina Participating Providers who will
provide such services consistent with the scope of their license, certification
or accreditation and in accordance with the standards of medical practice in the
community. In addition, Molina Participating Providers shall satisfy the
standards for participation and all applicable requirements for providers of
health services under the Medi-Cal Program as set forth in Title 22 of the
California Code of Regulations, Article 4, Section 51200 et seq. Molina agrees
that Molina Facilities shall comply with the facility standards established by
DHS as set forth in Title 22, California Code of Regulations. Molina shall
cooperate with inspections of Molina Participating Providers, as conducted by
DHS or Foundation staff, that are required to assure compliance with DHS and
Foundation standards.
2.02.02 Adequacy and Availability. Molina shall demonstrate the
continuous availability and accessibility of adequate numbers of Molina
Participating Providers to provide Health Care Services to Molina Members on a
24-hour basis, seven (7) days a week, including the provision of Emergency
Services. Molina will have as a minimum the following:
(i) One full-time equivalent Primary Care Physician per two
thousand (2,000) prepaid persons;
(ii) One full-time equivalent physician per one thousand two
hundred (1,200) prepaid persons;
(iii) One full-time equivalent non-physician medical practitioner
per one thousand (1,000) prepaid persons; and
(iv) One(1) designated Emergency Services facility in Los
Angeles County, providing care on a 24-hour basis, seven (7) days a week.
2.02.03 List of Providers. Molina shall provide to Foundation at the
time of the execution of this Agreement a complete list of the names, addresses,
specialities, license numbers and normal hours of operation for each Molina
Participating Physician and the names and addresses of each Molina Participating
Provider other than a Molina Participating Physician who will be providing
Health Care Services under the Foundation Medi-Cal Plan. Molina agrees to
provide Foundation with any additional provider information required by the DHS
and DOC.
2.02.04 Changes in Provider Network. Molina will provide Foundation an
updated list of Molina Participating Providers on a monthly basis and Foundation
shall publish either a new Participating Provider Directory or an amendment to
the existing Participating Provider Directory as required by DHS. Xxxxxx'x
updated monthly list shall identify those Molina Participating Providers which
have been added or deleted from the previous monthly list of Molina
Participating Providers, and those Molina Participating Providers that have
changed office locations. Molina shall immediately inform Foundation of the
termination of any Molina Primary
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Care Physician so that Foundation may reassign all linked Molina Members. When a
Molina Participating Provider moves to a new facility, Molina shall conduct an
on-site inspection of such new facility as required by law. In addition, Molina
shall immediately inform Foundation of any other type of provider change that
may impact Foundation's responsibilities under the Medi-Cal Agreement of law. In
the event of termination of a Molina Participating Provider for any reason,
Molina remains responsible for the continued provision of Health Care Services
to all Molina Members, including those who are receiving Health Care Services
from the terminated Molina Participating Provider.
2.02.05 Primary Care Physician. Molina shall ensure that an
appropriate Primary Care Physician is available for each Molina Member. A Molina
Member may select a Primary Care Physician or Foundation may assign a Molina
Member to a Primary Care Physician.
2.03 Insurance. Molina shall maintain professional liability insurance and
general liability and errors and omissions liability insurance in the minimum
amounts of five million dollars ($5,000,000) per person and ten million dollars
($10,000,000) total liability for coverage of Molina, its agents and employees.
In the event Molina procures a claims made policy, as distinguished from an
occurrence policy, Molina shall procure and maintain prior to termination of
such insurance, continuing extended reporting coverage for the maximum term
provided in the professional liability policy. Molina shall notify Foundation of
any material changes in insurance coverage and shall provide a certificate of
such insurance to Foundation upon request. Molina shall require Molina
Participating Providers to maintain insurance consistent with the standards of
the relevant community.
2.04 Acceptance of Members and Limitation on Enrollment. Molina shall
accept as Molina Members all Foundation Medi-Cal Members who chose a Molina
Primary Care Physician or who are assigned to Molina in accordance with the
procedures, and up to the enrollment limitation, set out in Addendum E hereto.
2.05 Coordination of Benefits. Molina may recover the costs of Health Care
Services rendered to a Molina Member to the extent a Molina Member is covered
for such services under any other state or federal medical care program or under
other contractual or legal entitlement, including, but not limited to, private
group or individual indemnification programs, in accordance with applicable
coordination of benefits laws.
2.06 Third Party Liability. Neither Molina nor Molina Participating
Providers may attempt to recover costs of Health Care Services in circumstances
involving casualty insurance, tort liability or workers' compensation. Molina
shall notify Foundation within five (5) calendar days of discovering any
circumstances involving a Molina Member which may result in the Molina Member
recovering tort liability payments, casualty insurance payments or workers'
compensation awards. Molina shall also provide to Foundation such other related
information as required under the Medi-Cal Agreement (see Section 3.41 of the
draft Medi-Cal Agreement). The parties understand and agree that the Medi-Cal
Agreement provides that said recoveries are the exclusive property of the DHS.
5
2.07 Molina Licensure and Compliance.
2.07.01 Xxxx-Xxxxx License. Throughout the term of this Agreement,
Molina shall maintain Xxxx-Xxxxx licensure in good standing with the DOC.
2.07.02 Regulatory Approval. Molina shall use its best efforts and
take all necessary steps to obtain, prior to the date operations commence under
this Agreement and throughout the term of this Agreement, via appropriate
approval by all applicable regulatory bodies, including, without limitation, the
DOC, approval for Molina to participate in the Foundation Medi-Cal Plan and to
provide Health Care Services under this Agreement within the Molina Service
Area. Molina shall provide to Foundation written evidence of such approval prior
to enrolling any Molina Members pursuant to this Agreement.
2.07.03 Approved Molina Service Area. Molina shall enroll persons
under this Agreement only within the Molina Service Area for Medi-Cal enrollees.
2.07.04 Licensure Changes/Limitations. Molina shall notify Foundation
in writing within five (5) working days in the event of any suspension,
restriction or limitation is placed on its licensed Molina Service Area by the
DOC.
2.08 Quality Assurance and Remedial Procedures. The parties shall mutually
agree upon and implement a quality assurance program for application to
Foundation Medi-Cal Members, in accordance with the requirements of the
Xxxx-Xxxxx Act, the Xxxxxx-Xxxxx Act and the Medi-Cal Agreement. The Foundation
Medi-Cal Plan quality assurance program shall include maintenance of a
Foundation Medi-Cal Plan Quality Assurance Committee which shall be responsible
for oversight of all Health Care Services provided to Foundation Medi-Cal
Members. The Foundation Medi-Cal Plan Quality Assurance Committee may be
established as a subcommittee of the Foundation Quality Assurance Committee. A
Molina designated physician shall participate in the Foundation Medi-Cal Plan
Quality Assurance Committee. Molina shall additionally maintain an independent
Quality Assurance Committee for reviewing matters related to Molina Members
which shall meet at least monthly. Molina may satisfy this requirement by
establishing a Subcommittee to the Molina Quality Assurance Committee. Molina
shall, through its Medi-Cal Plan Quality Assurance Committee or Subcommittee,
perform quality assurance reviews of Health Care Services provided to Molina
Members in compliance with the Foundation Medi-Cal Plan quality assurance
program as brought before Molina internally or from Foundation's Medi-Cal Plan
Quality Assurance Committee, the DOC, DHS and any other governmental agencies
with regulatory or enforcement jurisdiction over this Agreement. The Molina
Quality Assurance Committee shall keep minutes of the committee meetings, a copy
of which shall be made available to the Foundation Medi-Cal Plan Quality
Assurance Committee. A Foundation designated physician shall participate in the
Molina Quality Assurance Committee's review of Molina Member matters.
Notwithstanding any provision in this Agreement to the contrary, Molina
shall, at its sole cost, engage an outside quality management firm satisfactory
to Foundation (e.g., MEDSTAT) to
6
perform facility inspections and medical chart audits of every Molina
Participating Provider which is not a Foundation Participating Provider. Such
facility inspections and medical chart audits shall be conducted in accordance
with Foundation's standards. The facility inspections and medical chart audits
shall be completed during the implementation period of the Medi-Cal Agreement
and repeated annually thereafter during the term of this Agreement. Molina shall
assure that Molina Participating Providers implement any corrective action plan
identified as being necessary by the outside quality management firm. On or
about August 1, 1996, Foundation will evaluate Xxxxxx'x capacity to conduct its
own facility inspections and medical chart audits in accordance with
Foundation's standards. Foundation will at that time strike the requirement that
such work be done by a third party if Foundation determines that Molina has
developed an internal capacity which meets Foundation standards. If on said date
Foundation determines that Molina has not developed said internal capacity,
Foundation will strike the requirement on such later date as Foundation
determines that Molina has developed said internal capacity.
Molina and Molina Participating Providers shall abide by Foundation's
written Quality Management Program, and Foundation's policies and procedures,
including: (1) Oversight of Quality Management Functions to Medical Groups and
IPAs; (2) Assessment of Medical Groups and IPAs for Delegated Quality
Management; (3) Monitoring and Oversight of Quality Management Activities of
Network Providers; (4) Delegation of Quality Management - HMO Coalition Studies;
(5) Delegation of Quality Management - Medical Records Audits; (6) Delegation of
Quality Management - Medi-Cal Facility Inspections; and (7) Standards for
Delegated Quality Improvement.
2.09 Utilization Review. Molina shall develop a utilization review program
in conformance with the requirements of the DOC, DHS and the Foundation Medi-Cal
Plan Quality Assurance Committee. Molina shall maintain a Utilization Review
Committee which shall meet as frequently as necessary. The Utilization Review
Committee shall keep minutes of the committee meetings, copies of which shall be
made available to Foundation. Molina shall review elective referral and hospital
admissions on a concurrent and prospective basis and Emergency Services on a
retrospective basis.
2.10 Credentialling. Molina shall be responsible for credentialing Molina
Participating Providers in accordance with the standards of the DOC and DHS and
the Foundation Medi-Cal Plan Quality Assurance Committee.
2.11 Non-discrimination. Molina and Molina Participating Providers shall
not unlawfully discriminate against any employee nor applicant for employment
because of race, religion, color, national origin, ancestry, physical handicap,
medical condition, marital status, age (over 40) or sex. Molina and Molina
Participating Providers shall ensure that the evaluation and treatment of their
employees and applicants for employment are free of such discrimination. Molina
and Molina Participating Providers shall comply with the provisions of the Fair
Employment & Housing Act (California Government Code, Section 12990, et seq.)
and the applicable regulations promulgated thereunder (CCR, Title 2, Section
7285.0, et seq.). The applicable regulations of the Fair Employment and Housing
Commission implementing
7
Government Code, Section 12990, set forth in Chapter 5 of Division 4 of Title 2
of the CCR are incorporated into this Agreement by reference and made a part
hereof as if set forth in full. Molina and Molina Participating Providers shall
give written notice of their obligations under this clause to labor
organizations with which they have a collective bargaining or other agreement.
Molina shall include the non-discrimination and compliance provisions of this
Section in all subcontracts to perform services under this Agreement.
Molina and Molina Participating Providers shall not discriminate against
Medi-Cal Members because of race, color, creed, religion, ancestry, marital
status, sexual orientation, national origin, age (over 40), sex, or physical or
mental handicap in accordance with Title VI of the Civil Rights Act of 1964, 42
USC Section 2000d, rules and regulations promulgated pursuant thereto, or as
otherwise provided by law or regulation.
2.12 Accounts Payable System.
2.12.01 Provider Claims. Molina agrees to operate its accounts payable
system in a manner which assures that providers of authorized Health Care
Services, including Molina Participating Providers and noncontracting providers,
receive timely payment for Health Care Services rendered to Molina Members. For
purposes of this Agreement, timely payment shall mean payment within the time
specified in the applicable agreement between Molina and the provider. If such
agreement does not specify a time period or if no agreement is in place, timely
payment shall mean payment within the time periods required by California law.
2.12.02 Member Claims. Molina shall pay uncontested claims for
Emergency Services or other Health Care Services for which a Molina Member has
been billed within thirty (30) working days of receipt of a claim. If the claim
is contested by Xxxxxx, Xxxxxx shall notify the Molina Member that the claim is
contested within the time period specified in this paragraph and shall provide
Foundation a copy of the notice. The notice shall identify the portion of the
claim that is contested and the specific reasons for contesting the claim.
2.13 Protection of Members. Molina may not impose any limitations on the
acceptance of Medi-Cal Members for care or treatment that it does not impose on
its non-Medi-Cal Members. Neither Foundation, Molina, nor any Molina
Participating Provider may request, demand, require or seek directly or
indirectly the transfer, discharge, or removal of any Medi-Cal Member for
reasons of the Medi-Cal Member's need for, or utilization of, Health Care
Services.
2.14 Child Health and Disability Prevention ("CHDP") Program Services.
Molina agrees to maintain and operate a system which ensures the provision of
CHDP services to Medi-Cal Members under the age of 21 in accordance with Title
17, California Code of Regulations, Section 6800 et seq.
2.15 Identification of Officers, Owners, Stockholders, Creditors. As
required by DHS, Molina shall identify the names of the following persons by
listing them on Addendum F to this Agreement: (i) Molina officers and owners;
(ii) Molina shareholders owning greater than ten
8
percent (10%) of any stock issued by Molina; and (iii) major creditors holding
more than five percent (5%) of any debts owed by Molina. Molina shall notify
Foundation within thirty (30) days of any changes in the information provided in
Addendum F.
2.16 Molina Subcontracts.
2.16.01 Subcontracts. Molina shall maintain and make available to DHS
and Foundation copies of all executed Molina Subcontracts. All Molina
Subcontracts shall be in writing and shall be consistent with the terms and
provisions of this Agreement and in compliance with applicable State and federal
laws. Each Molina Subcontract shall contain the amount of compensation which the
Molina Subcontractor will receive under the term of the Molina Subcontract.
Each Molina Subcontract shall also provide that the State of California, DHS,
Foundation and Molina Members are held harmless in the event Molina does not pay
for services under the Molina Subcontract.
2.16.02 Records. Molina shall require all Molina Subcontractors to
make their books and records pertaining to Health Care Services available at all
reasonable times for inspection, examination, or copying by the DHS, DOC, DOJ,
DHHS and Foundation. Molina shall also require all Molina Subcontractors to
retain such books and records for a term of at least five years from the close
of the fiscal year in which the Molina Subcontract is in effect.
2.16.03 Continuing Care Requirements. Molina shall require all Molina
Participating Providers to assist Molina and Foundation in the orderly transfer
of the medical care of Molina Members in the event of termination of the
Medi-Cal Agreement, including, without limitation, making available to DHS
copies of medical records and any other pertinent information necessary for
efficient case management of Medi-Cal Members, as determined by DHS.
2.16.04 Continuing Obligations. The obligations of Molina and Molina
Subcontractors under this Section 2.16 shall not terminate upon the termination
of this Agreement.
2.17 Local Health Department Coordination. As more fully set out in the
Medi-Cal Agreement, Foundation will enter inter an agreement for the specified
public health services with the Local Health Department ("LHD") in Los Angeles
County. The agreement will specify the scope and responsibilities of the County,
Foundation, Molina and Universal Care Health Plan, billing and reimbursements,
reporting responsibilities, and medical record management to ensure coordinated
health care services. The specified public health services under the agreement
are as follows:
2.17.01 Family planning services, as specified under the Medi-Cal
Agreement.
2.17.02 Sexually transmitted disease ("STD") services diagnosis and
treatment of disease episode of the following STDs: syphilis, gonorrehea,
chlamydia, herpes simplex, chancroid, trichomoniasis, human papilloma virus,
non-gonococcal urethritis, lymphogranuloma venereum
9
and granuloma inguinale.
2 17.03 Confidential HIV testing, as specified under the Medi-Cal
Agreement.
2.17.04 Immunizations, as specified under the Medi-Cal Agreement.
2.17.05 California Children Services.
2.17.06 Maternal and Child Health.
2.17.07 Child Health and Disability Prevention Program.
2.17.08 Tuberculosis Direct Observed Therapy.
2.17.09 Women, Infants, and Children Supplemental Food Program.
2.17.10 Population based Prevention Programs: collaborate in LHD community
based prevention programs.
The services specified in Sections 2.17.01 through 2.17.04 require
reimbursement to the LHD. The parties understand and agree that Molina shall be
responsible for the arrangement, support and coordination of said services,
billing and reimbursements, reporting responsibilities, and medical record
management to ensure coordinated health care services involving Molina Members.
2.18 Pharmacy and Formulary Compliance. In accordance with Title 22,
California Code of Regulations, Section 53214, Molina shall comply with DHS
standards for the appropriate use, storage and handling of pharmaceutical items.
Molina shall permit periodic audits upon reasonable notice by Foundation or DHS
to measure Xxxxxx'x compliance with DHS standards and to provide recommendations
regarding improvement.
2.19 Additional Responsibilities. Molina shall have additional
responsibilities as identified in the Matrix of Responsibilities attached hereto
and incorporated herein as Addendum G. The specific details for these additional
responsibilities shall be mutually agreed upon by the parties and shall be
included in a Policies and Procedures Manual that will be jointly developed by
the parties.
ARTICLE 3 - DUTIES OF FOUNDATION
3.01 Medi-Cal Agreement. Foundation will endeavor to maintain the Medi-Cal
Agreement in effect throughout the term of this Agreement. Foundation will
administer the Medi-Cal Agreement and will act as the liaison between DHS and
Molina for all purposes related to the provision of Health Care Services to
Medi-Cal beneficiaries under the Medi-Cal Agreement.
10
3.02 Licensure. Throughout the term of this Agreement, Foundation will
remain a licensed health care service plan in good standing with the DOC.
Foundation shall notify Molina in writing within five (5) working days in the
event of any suspension, restriction or limitation placed on its license or
approved service area by the DOC.
3.03 Enrollment. Foundation will enroll Medi-Cal Members into the
Foundation Medi-Cal Plan in accordance with applicable State and federal laws
and the Medi-Cal Agreement. Foundation will assign Medi-Cal Members among
Xxxxxx, Xxxxxx Medical Centers and itself on a rational, fair and alternating
basis, as more fully set out in the procedures attached hereto and incorporated
herein as Addendum E.
3.04 Verification of Eligibility. Within five (5) days after receipt of the
monthly Eligibility List from DHS, Foundation will provide to Molina a copy of
such Eligibility List listing the Molina Members based on DHS information. Such
Eligibility List for Molina Members shall be provided to Molina in a mutually
agreeable electronic data submission format.
3.05 Member Information and Identification Cards. Within seven (7) days
after Foundation receives notice of the effective date of enrollment, Foundation
shall distribute to new Molina Members (i) the information required to be
provided to Molina Members under applicable State laws, including, without
limitation, the Foundation Evidence of Coverage, Disclosure Form, and
Participating Provider Directory, and (ii) an identification card which
identifies the Molina Member as a Foundation Medi-Cal Member.
3.06 Insurance. Foundation shall maintain professional liability insurance
and general liability and errors and omissions liability insurance in the
minimum amounts of five million dollars ($5,000,000) per person and ten million
dollars ($10,000,000) total liability for coverage of Foundation, its agents and
employees. In the event Foundation procures a claims made policy, as
distinguished from an occurrence policy, Foundation shall procure and maintain
prior to termination of such insurance, continuing extended reporting coverage
for the maximum term provided in the professional liability policy. Foundation
shall notify Molina of any material changes in insurance coverage and shall
provide a certificate of such insurance to Foundation upon request.
3.07 Management of Delegated Quality Improvement Activities. As more fully
set out in the Medi-Cal Agreement, Foundation will maintain a system to ensure
accountability of delegated quality improvement ("QIP") activities including:
3.07.01 Maintenance of policies and procedures which describe
delegated activities, QIP authority, function, and responsibilities, how Molina
will be informed of the scope of QIP responsibilities, and Xxxxxx'x
accountability for delegated activities.
3.07.02 Establish reporting standards to include findings and actions
taken by Molina as a result of QIP activities with the reporting frequency to be
at least quarterly.
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3 07.03 Maintenance of written procedures and documentation of
continuous monitoring and evaluation of the delegated functions, evidence that
the actual quality of care being provided meets professionally recognized
standards.
3.07.04 Assurance and documentation that Molina has the administrative
capacity, task experience, and budgetary resources to fulfill its
responsibilities.
3.07.05 Foundation will approve Xxxxxx'x QIP, including its policies
and procedures which meet Foundation's standards.
3.07.06 Foundation will ensure that the actual quality of care being
provided is being continuously monitored and evaluated.
3.07.07 Foundation will investigate all potential quality issues
involving Molina Members and Molina Participating Providers and shall take
appropriate action upon finding an actual quality issue. Molina and its
Participating Providers shall cooperate with such investigations and abide by
Foundation's determinations.
3.08 Management of Delegated Credentialling Activities. As more fully set
out in the Medi-Cal Agreement, Foundation is responsible for the implementation
and maintenance of policies and procedures which delineate the credentialing
activities which are delegated to Molina under this Agreement, and Foundation
shall monitor such activities. The parties understand and agree that Molina
shall ensure the qualification of all Molina Participating Providers, approve
new providers and sites, and terminate or suspend individual providers, in
accordance with the standards of the DOC and DHS and the Foundation Medi-Cal
Plan Quality Assurance Committee. Foundation shall perform on-site inspections
and investigations of Molina Participating Providers as required by the DHS and
as necessary to investigate a potential quality issue involving a Participating
Provider, and Molina and Molina Participating Providers shall cooperate with
Foundation's inspections and investigations.
3.09 Management of Delegated Utilization Review Activities. As more fully
set out in the Medi-Cal Agreement, Foundation is responsible for the
implementation and maintenance of a utilization management program which meets
the requirements of the Medi-Cal Agreement. The parties understand and agree
that Molina shall develop a utilization review program in conformance with the
requirements of the Medi-Cal Agreement, DOC, DHS and the Foundation Medi-Cal
Plan Quality Assurance Committee. Molina shall maintain a Utilization Review
Committee which shall meet as frequently as necessary. The Utilization Review
Committee shall keep minutes of the committee meetings, copies of which shall be
made available to Foundation. Molina shall review elective referral and hospital
admissions on a concurrent and prospective basis and Emergency Services on a
retrospective basis. Foundation shall ensure that said delegated utilization
management activities are regularly evaluated and approved and that the such
process is documented.
3.10 Member Satisfaction Surveys. Foundation will conduct member
satisfaction
12
surveys of Molina Members as required under the Medi-Cal Agreement.
3.11 Additional Responsibilities. Foundation shall have additional
responsibilities as identified in the Matrix of Responsibilities attached hereto
and incorporated herein as Addendum G. The specific details for these additional
responsibilities shall be mutually agreed upon by the parties and shall be
included in a Policies and Procedures Manual that will be jointly developed by
the parties.
ARTICLE 4 - JOINT RESPONSIBILITIES
4.01 Solicitation of Enrollment. The parties shall mutually develop a plan
for marketing the Foundation Medi-Cal Plan and Xxxxxx'x participation in the
Foundation Medi-Cal Plan. The marketing plan shall be developed in compliance
with all applicable laws.
4.02 Agency Inquiries and Complaints. Any party receiving any inquiry,
complaint, deficiency notice or request for corrective action from DHS, DOC, DOJ
or the DHHS relating to Xxxxxx'x arrangement of Health Care Services under this
Agreement, or relating to the administration of the Foundation Medi-Cal Plan or
to the arrangement of Health Care Services to Medi-Cal Members, shall notify the
other party within one (1) working day of the receipt of the matter. The parties
shall cooperate fully and as necessary to resolve such matters.
4.03 Member Grievance Procedures. Molina shall abide by Foundation's Member
Grievance Procedures which are attached hereto and incorporated herein as
Addendum X. Xxxxxx shall abide by, and implement upon request, all Foundation,
DOC and DHS determinations on Molina Member appeals and grievances. Molina
understands and further agrees as follows.
4.03.01 Foundation will publish a single form of Evidence of Coverage
for its Los Angeles County Medi-Cal Members. The Evidence of Coverage and
Foundation's separately stated written Member grievance procedures attached
hereto as Addendum H will contain a single Foundation telephone number and
single Foundation address for receipt of Medi-Cal Member customer service
inquiries, appeals and grievances. If Molina receives a written grievance or
appeal involving a Molina Member, it will fax same to Foundation's Director of
Medi-Cal Customer Service within one (1) working day of receipt.
4.03.02 Foundation will mail all letters acknowledging receipt of a
grievance or appeal to Molina Members. Foundation will forward first level
Molina Member appeals and grievances to Molina for initial review. However, for
grievances which Foundation determines to involve a potential quality issue and
Molina or a Molina Participating Provider, Foundation shall also conduct a
concurrent review of such grievances.
4.03.03 For Molina Member grievances involving a potential quality
issue, Molina shall, within 15 calendar days of the receipt of the grievance,
submit all applicable records and its written findings, recommendations and
proposed corrective action plan where applicable, to
13
Foundation's Director of Medi-Cal Customer Service for Foundation's review and
determination on the matter. Molina and Molina Participating Providers shall
cooperate fully in Foundation's handling of such grievances.
4.03.04 If Xxxxxx'x review determination on a Molina Member's first
level appeal or grievance not involving a potential quality issue is to overturn
its previous denial of coverage or to remedy the grievance to the Molina
Member's satisfaction, then Molina will draft an appropriate letter in a form
approved by Foundation and on Foundation's letterhead and mail the letter to the
Molina Member. Molina shall also provide a copy of the response to Foundation.
4.03.05 If Xxxxxx'x review recommendation on a Molina Member's first
level appeal or grievance not involving a potential quality issue is to uphold
its previous denial of coverage or to not remedy the grievance to the Molina
Member's satisfaction, then Molina will, within 15 calendar days of the receipt
of the appeal or grievance, draft an appropriate written response in a form
approved by Foundation and fax same with all supporting medical records and
other documentation to Foundation's Director of Medi-Cal Customer Service for
Foundation's review and determination on the matter. Foundation will, in its
sole discretion, reasonably determine to (i) ratify Xxxxxx'x review
recommendation; (ii) modify Xxxxxx'x review recommendation; or (iii) reject
Xxxxxx'x review recommendation and direct Molina to arrange and cover the
disputed service or to remedy the grievance to the reasonable satisfaction of
the Molina Member. In the event that Foundation determines to ratify Xxxxxx'x
review recommendation, Foundation will so advise Molina and Molina will mail the
letter to the Molina Member. In the event that Foundation determines to modify
Xxxxxx'x review recommendation, Foundation will so advise Molina and Foundation
will draft the response, mail the letter to the Molina Member, and provide a
copy to Molina. In the event that Foundation determines to reject Xxxxxx'x
review recommendation, Foundation will so advise Molina and Foundation will
draft the response, mail the letter to the Molina Member, and provide a copy to
Molina.
4.03.06 Foundation will handle all second level Molina Member
grievance hearings and DHS reviews. Molina shall cooperate fully and provide
assistance as requested by Foundation, and shall appear and participate at the
hearings if requested by Foundation.
4.03.07 Molina shall abide by, and implement upon request, all
Foundation, DOC and DHS determinations on Molina Member appeals and grievances.
If Molina fails to implement a determination of Foundation, DOC or DHS in a
timely manner, Foundation may arrange and cover the disputed service or remedy
the grievance to the reasonable satisfaction of the Molina Member and offset the
cost of same from Foundation's payment under this Agreement to Molina.
4.03.08 Molina will maintain a written log of all appeals, grievances
and DOC and DHS complaints involving Molina Members and provide a copy of same
to Foundation on a monthly basis.
4.04 Reciprocity. If and only to the extent current contracts permit
reciprocity, Foundation shall make good faith efforts to provide reciprocity at
Foundation rates on claims for
14
Health Care Services provided to Molina Members by providers who contract with
Foundation but who are not Molina Participating Providers. Likewise, if and only
to the extent current contracts permit reciprocity, Molina shall make good faith
efforts to provide reciprocity at Molina rates on claims for Health Care
Services provided by Molina Participating Providers to Medi-Cal Members assigned
to Foundation.
4.05 Requests for Transfers. The parties shall cooperate in arranging
Member transfers in the event a Molina Member requests a non-Molina Primary Care
Physician but desires to remain a Foundation Medi-Cal Member or in the event a
Foundation Medi-Cal Member requests a transfer in order to select a Molina
Primary Care Physician.
4.06 Additional Responsibilities. The parties shall have additional
responsibilities as identified in the Matrix of Responsibilities attached hereto
and incorporated herein as Addendum G. The specific details for these additional
responsibilities shall be mutually agreed upon by the parties and shall be
included in a Policies and Procedures Manual that will be jointly developed by
the parties.
ARTICLE 5 - COMPENSATION
Foundation shall pay Molina Capitation Payments at the rates and according
to the procedures set forth in Addendum I attached hereto and incorporated
herein.
ARTICLE 6 - TERM
The initial term of this Agreement shall commence concurrently with the
effective date of the Medi-Cal Agreement (the "Commencement Date") and shall
continue for the full term of the Medi-Cal Agreement and any extensions thereto,
unless sooner terminated as set forth in Article 7 below.
ARTICLE 7 - TERMINATION
7.01 Xxxxxx'x Right to Termination. Subject to the prior written approval
of DHS, Molina shall have the right to terminate this Agreement immediately upon
written notice to Foundation in the following circumstances:
(i) revocation, suspension or expiration of Foundation's license as
a health care service plan pursuant to the Xxxx-Xxxxx Act;
(ii) Foundation's breach of any material term, covenant or condition
of this Agreement and subsequent failure to cure such breach within thirty (30)
calendar days after notice by Molina of such breach. The remedy of such breach
within thirty (30) calendar days of receipt of such notice shall revive this
Agreement for the remaining term, subject to any of the rights of termination
contained in this or any other provision of this Agreement; or
(iii) Foundation's material failure to comply with the Medi-Cal
Agreement, the
15
Xxxx-Xxxxx Act or the Xxxxxx-Xxxxx Act or the rules and regulations promulgated
thereunder, as evidenced by a deficiency notice or cease and desist letter from
DOC or DHS, and failure to cure such material failure within forty-five (45)
days of the receipt of such notice from DOC or DHS.
7.02 Foundation's Right to Termination. Subject to the prior written
approval of DHS, Foundation shall have the right to terminate this Agreement
immediately upon written notice to Molina in the following circumstances:
(i) revocation, suspension or expiration of Xxxxxx'x license as a
health care service plan pursuant to the Xxxx-Xxxxx Act;
(ii) Xxxxxx'x breach of any material term, covenant or condition of
this Agreement and subsequent failure to cure such breach within thirty (30)
calendar days after notice by Foundation of such breach. The remedy of such
breach within thirty (30) calendar days of receipt of such notice shall revive
this Agreement for the remaining term, subject to any of the rights of
termination contained in this or any other provision of this Agreement; or
(iii) Xxxxxx'x material failure to comply with the Medi-Cal Agreement,
the Xxxx-Xxxxx Act or the Xxxxxx-Xxxxx Act or the rules and regulations
promulgated thereunder, as evidenced by a deficiency notice or cease and desist
letter from DOC or DHS, and failure to cure such material failure within
forty-five (45) days of the receipt of such notice from DOC or DHS.
7.03 Termination of Medi-Cal Agreement. This Agreement shall immediately
terminate upon the termination or nonrenewal of the Medi-Cal Agreement. Such
termination of obligations shall be accomplished by delivery of written notice
to Molina of the date upon which such termination shall become effective.
7.04 Termination Without Cause. Subject to the prior written approval of
DHS, either party may terminate this Agreement with or without cause effective
upon the renewal date of the Medi-Cal Agreement by giving written notice to the
other party at least one hundred eighty (180) days prior to renewal of the
Medi-Cal Agreement.
7.05 Notification of DHS of Amendment or Termination. Molina shall notify
DHS in the event of an amendment or termination of this Agreement. Notice shall
be given by properly addressed letter deposited in the United States Postal
Service as first-class postage-prepaid registered mail. Any termination under
Sections 7.01, 7.02 or 7.04 above is subject to the prior written approval of
DHS.
7.06 Termination of Enrollment of a Molina Member. Termination of
enrollment of a Molina Member shall be in accordance with the terms of the
Foundation Medi-Cal Plan and shall be upon the mutual agreement of the parties.
7.07 Continuing Care Period. Molina shall continue to provide Health Care
Services to
16
Molina Members as required by this Agreement after the effective date of
termination of this Agreement until either (i) such services are complete or the
Molina Member can be safely transferred to the care of another provider and such
transfer does not violate State laws regarding abandonment of patients, or (ii)
Foundation has made provisions for the assumption of such services, whichever
occurs first. Foundation will use its best efforts to provide for the assumption
of such services as soon as is reasonably practicable, taking into account the
best interests of the Molina Member and the availability of appropriate
providers. Compensation to Molina during this continuing care period will be
compensated at the DHS Medi-Cal fee schedule.
ARTICLE 8 - DISPUTE RESOLUTION
8.01 Arbitration. The parties agree to meet and confer in good faith to
resolve any problems or disputes that may arise under this Agreement. Such
negotiation shall be a condition precedent to the filing of any arbitration
demand by either party. Any controversy, dispute or claim between the parties
arising out of or relating to interpretation, performance or breach of this
Agreement shall be resolved by binding arbitration at the request of either
party, in accordance with the California Arbitration Act, California Code of
Civil Procedure, Sections 1280-1294.2. The arbitration shall be conducted in Los
Angeles, California by a single, neutral arbitrator who is licensed to practice
law in the State of California. The arbitration shall be conducted under the
auspices of Judicial Arbitration & Mediation Services, Inc. ("JAMS"), except
that if JAMS is nor longer in existence or is otherwise unable to appoint a
neutral arbitrator, the parties shall conduct arbitration in accordance with the
Commercial Rules of the American Arbitration Association ("AAA") as supplemented
by the provisions in this Section 8.01. If the parties are unable to agree on
the choice of the arbitrator, then the parties agree that either JAMS or AAA
shall appoint a neutral arbitrator.
The arbitrator shall apply California substantive law and federal
substantive law where State law is preempted. Civil discovery for use in such
arbitration may be conducted in accordance with the California Code of Civil
Procedure and the California Evidence Code, and the arbitrator selected shall
have the power to enforce the rights, remedies, duties, liabilities, and
obligations of discovery by the imposition of the same terms, conditions and
penalties as can be imposed in like circumstances in a civil action by a
superior court of the State of California. The provisions of California Code of
Civil Procedure Section 1283 and 1283.05 concerning the right to discovery and
the use of depositions in arbitration are incorporated herein by reference and
made applicable to this Agreement. Each party shall have the right to take no
more than three (3) depositions of individuals or entities, including
depositions of expert witnesses, and copies of all exhibits and demonstrative
evidence to be used at the arbitration. However, rebuttal and impeachment
evidence need not be exchanged until presented at the arbitration hearing.
The arbitrator shall have the power to grant all legal and equitable
remedies and award compensatory damages provided by California law, except that
punitive damages may not be awarded. The arbitrator shall prepare in writing and
provide to the parties an award including factual findings and the legal reasons
on which the decision is based. The arbitrator shall not have the power to
commit errors of law or legal reasoning, and the award may be vacated or
corrected
17
pursuant to California Code of Civil Procedure Sections 1286.2 or 1286.6 for any
such error.
Notwithstanding the above, in the event either party wishes to obtain
injunctive relief or a temporary restraining order, such party may initiate an
action for such relief in a court of law and the decision of the court of law
with respect to the injunctive relief or temporary restraining order shall be
subject to appeal only through the courts of law. The courts of law shall not
have the authority to review or grant any request or demand for damages or
declaratory relief.
ARTICLE 9 - RECORDS AND DATA COLLECTION
9.01 Maintenance of Records. Molina shall maintain and provide to the DHS,
DOC, DOJ, DHHS and Foundation all books, records, patient records, encounter
data (in a format approved by Foundation), and other information as may be
necessary for compliance by the parties with the Xxxx-Xxxxx Act, the
Xxxxxx-Xxxxx Act, and all other applicable law. Such books and records shall be
maintained in a form in accordance with the general standards and laws
applicable to such book or record keeping, including medical histories, records
and reports from other providers, hospital discharge summaries, records of
Emergency Services and such other information as said parties may require or as
necessary to disclose the quality, appropriateness or timeliness of Health Care
Services provided to Molina Members under this Agreement. The obligations under
this Section shall not terminate upon the termination of this Agreement, whether
by rescission or otherwise.
The parties shall keep and maintain their books and records on a current basis
in accordance with general standards for book and record keeping. The parties
shall retain said records for a term of at least five years from the close of
the fiscal year in which this Agreement is in effect.
9.02 Right to Inspect. Molina shall make available for inspection,
examination or copying by the DHS, DOC, DOJ, DHHS and Foundation at reasonable
times at Xxxxxx'x usual place of business, or at such other mutually agreeable
place in California, all books, records, patient records, encounter data, and
other information relating to the services provided pursuant to this Agreement,
including, but not limited to, Molina Member patient records, subject to the
confidentiality restrictions set forth in Section 9.03, and financial records
pertaining to the cost of operations and income received for Health Care
Services provided to Molina Members. The right of said parties to inspect,
evaluate and audit such records shall extend through five (5) years from the
date of termination of this Agreement.
9.03 Confidentiality. The parties shall maintain the confidentiality of
Molina Member medical records and related information in accordance with
applicable federal, State and local laws, including, without limitation, Title
45, Section 250.50 of the Code of Federal Regulations, and Welfare and
Institutions Code Section 1400.2 and the regulations promulgated thereunder.
Where required by law, the parties shall obtain a specific written authorization
from the Molina Member prior to releasing the Molina Member's medical records.
The parties shall establish and maintain procedures and safeguards so that no
information pertaining to Medi-Cal Members contained in the parties' records or
obtained from DHS in carrying out the terms of this
18
Agreement shall be used or disclosed by the parties or their agents or employees
other than for purposes directly connected with the administration of the
Foundation Medi-Cal Plan.
9.04 Financial Statements. Molina shall provide to Foundation copies of the
quarterly financial reports submitted by Molina to the DOC. Foundation shall
provide to Molina copies of the quarterly financial reports submitted by
Foundation to the DOC
9.05 Provision of Data. The parties shall jointly and separately maintain
statistical records and data relating to the utilization of Health Care Services
by Molina Members as required for the administration of the Foundation Medi-Cal
Plan and in compliance with all DHS and DOC statistical, financial and encounter
data reporting requirements. Encounter data shall be submitted in a format
approved by Foundation and on a timely basis so that Foundation can meet its
regulatory reporting requirements.
ARTICLE 10 - RELATIONSHIP OF PARTIES
10.01 Independent Contract Relationship. The relationship between the
parties is one of independent contractors. Nothing in this Agreement is intended
to create nor will be deemed or construed to create any relationship between the
parties other than that of independent contracts. Neither of the parties, nor
any of their respective officers, directors or employees, shall act as nor be
construed to be the partner, agent, employee or representative of the other. The
relationship between the parties, as a subcontractor of Foundation, and DHS and
the State of California are independent contractor relationships. Neither
Foundation nor Molina nor any agents, officers or employees of Foundation or
Molina are agents, officers, employees, partners or associates of DHS or the
State of California. None of the provisions of this Agreement shall be construed
to create a relationship of partnership, agency, joint venture or employment
between Foundation or Molina, as a subcontractor of Foundation, and DHS and the
State of California.
10.02 Indemnification. The parties will indemnify and hold each other
harmless against any claims, demands, damages, liability, judgments and
expenses, including reasonable attorney fees, as follows:
10.02.01 To the extent that any allegations against Molina are based
on alleged fault by Molina (or its agents, employees or providers) in providing
or failing to provide Health Care Services to Molina Members or in other
administrative dealings with Molina Members, and the allegations against
Foundation are based on vicarious, passive or secondary liability, including,
without limitation, allegations of apparent or ostensible agency and negligent
selection, Molina will fully indemnify Foundation against such claims, including
attorney fees and costs.
10.02.02 To the extent that any allegations against Foundation are
based on alleged fault by Foundation (or its agents, employees or providers) in
providing or failing to provide Health Care Services to Molina Members or
otherwise failing to perform under the Medi-Cal Agreement or under the
Foundation Medi-Cal Plan, and the allegations against Molina are based on
vicarious, passive or secondary liability, including, without limitation,
allegations of
19
apparent or ostensible agency and negligent selection, Foundation will fully
indemnify Foundation against such claims, including attorney fees and costs.
10.02.03 To the extent of any other claims, the parties will mutually
indemnify each other, including attorney fees and costs, in proportion to the
relative degree of each party's fault that contributed to the claim. In
interpreting this paragraph, the principals of comparative fault shall apply.
10.03 Cooperation. The parties shall maintain an effective liaison and
close cooperation with one another to ensure smooth working relationships with
Medi-Cal Members, effective communication between providers, and maximum
benefits to each Medi-Cal Member at the most reasonable cost, consistent with
quality of Health Care Services.
ARTICLE 11 - MISCELLANEOUS
11.01 Assignment. This Agreement and the rights, interests, and benefits
hereunder shall not be assigned, transferred, pledged, or hypothecated in any
way by the parties and shall not be subject to execution, attachment or similar
process nor shall the duties imposed herein be subcontracted or delegated
without the written consent of the other party. Any assignment or delegation of
the Agreement shall be void unless prior written approval is obtained from the
DHS.
11.02 Amendments. The parties may amend this Agreement by providing thirty
(30) days' prior written notice to the other party in order to maintain
compliance with applicable federal and State laws. Such amendment shall be
binding upon the parties. Other amendments to this Agreement shall be effective
only upon mutual written consent.
11.03 Confidentiality of this Agreement. To the extent possible, each party
agrees to maintain the terms of this Agreement confidential. Disclosure of the
terms of this Agreement, other than disclosures required by the DOC or DHS,
shall not be made without the approval of the other party.
11.04 Notices. All notices required or permitted by this Agreement shall be
in writing and may be delivered in person or may be sent by regular, registered
or certified mail or United States Postal Service Express Mail, with postage
prepaid, or by facsimile transmission, and shall be deemed sufficiently given if
served in the manner specified in this Section 11.04. The addresses below shall
be the particular party's address for delivery or mailing of notice purposes:
To Molina: Xxxxxx Medical Centers
Xxx Xxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxxxx 00000
ATTENTION: C. Xxxxx Xxxxxx, M.D.
20
To Foundation: Foundation Health, a California Health Plan
0000 Xxxx Xxxxx
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
ATTENTION: President
The parties may change the names and addresses noted above through written
notice in compliance with this Section 11.04. Any notice sent by registered or
certified mail, return receipt requested, shall be deemed given on the date of
delivery shown on the receipt card, or if not delivery date is shown, the
postmark date. If sent by regular mail, the notice shall be deemed given
forty-eight (48) hours after the notice is addressed and mailed with postage
prepaid: Notices delivered by United States Express Mail or overnight courier
that guarantee next day delivery shall be deemed given twenty-four (24) hours
after delivery of the notice to the United States Postal Service or other
courier. If any notice is transmitted by facsimile transmission or similar
means, the notice shall be deemed served or delivered upon telephone
confirmation of receipt of the transmission, provided a copy is also delivered
via delivery or mail.
11.05 Entire Agreement. This Agreement contains all the terms and
conditions between Molina and Foundation concerning the subject matter of this
Agreement and supersedes all other agreements, oral or otherwise, including,
without limitation, that certain Health Services Agreement entered into by the
parties on April 13, 1995.
11.06 Provisions Separable. The invalidity or uneforceability of any term
or provision of this Agreement will in no way affect the validity or
enforceability of any other term or provision.
11.07 Headings. The headings of the various sections of this Agreement are
inserted merely for the purpose of convenience and do not expressly, or by
implication, limit or define or extend the specific terms of the section so
designated.
11.08 Waiver of Breach. The waiver by either party of a breach or violation
of any provision of this Agreement shall not operate as or be construed to be a
waiver of any subsequent breach thereof.
11.09 Applicable Law and Compliance with Medi-Cal Agreement. This Agreement
shall be governed in all respects by the laws of the State of California and
applicable federal law, including, without limitation, (i) the Xxxx-Xxxxx Act
and the regulations promulgated thereunder by the DOC; and (ii) the Xxxxxx-Xxxxx
Act and the regulations promulgated thereunder by DHS. Molina shall comply with
the terms and conditions of the Medi-Cal Agreement as it relates to the
arrangement of Health Care Services to Molina Members and shall cooperate fully
with Foundation to assist Foundation to remain in compliance with the Medi-Cal
Agreement. Any provision that any law, regulation or the Medi-Cal Agreement
requires to be in this Agreement shall bind the parties whether or not
specifically provided herein.
11.10 Exhibits. The addenda attached to this Agreement are an integral part
of this
21
Agreement and are incorporated herein by reference.
11.11 Attorney Fees and Costs. If any action at law or suit in equity or
arbitration is brought to enforce or interpret the provisions of this Agreement
or to collect any monies due hereunder, the prevailing party shall be entitled
to reasonable attorney fees and reasonable costs, together with interest at ten
percent (10%) per annum, in addition to any and all other relief to which it may
otherwise be entitled.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
set forth below.
XXXXXX MEDICAL CENTERS FOUNDATION HEALTH, A CALIFORNIA
HEALTH PLAN
By: /s/ Xxxx X. Xxxxxx By: /s/
-------------------------- ---------------------------
Title: VICE-PRESIDENT Title: President
------------------------ -------------------------
Date: FEBRUARY 2, 1996 Date: February 6, 1996
------------------------- -------------------------
22
SCHEDULE OF ADDENDA
ADDENDUM A MOLINA SERVICE AREA
ADDENDUM B EVIDENCE OF COVERAGE
ADDENDUM C DISCLOSURE FORM
ADDENDUM D PARTICIPATING PROVIDER DIRECTORY FOR LOS
ANGELES COUNTY
ADDENDUM E PROCEDURE FOR ASSIGNMENT OF FOUNDATION'S LOS
ANGELES COUNTY MAINSTREAM MEDI-CAL MEMBERS
AMONG FOUNDATION, MOLINA AND UNIVERSAL CARE
HEALTH PLAN
ADDENDUM F OFFICERS, OWNERS, STOCKHOLDERS, CREDITORS
ADDENDUM G MATRIX OF RESPONSIBILITIES
ADDENDUM H FOUNDATION'S MEDI-CAL MEMBER GRIEVANCE
PROCEDURES
ADDENDUM I COMPENSATION
23
ADDENDUM A
MOLINA SERVICE AREA
(The entirety of Los Angeles County, inclusive of all ZIP Codes)
24
ADDENDUM B
EVIDENCE OF COVERAGE
(To be developed by Foundation and attached)
25
ADDENDUM C
DISCLOSURE FORM
(To be developed by Foundation and attached)
26
ADDENDUM D
PARTICIPATING PROVIDER DIRECTORY FOR LOS ANGELES COUNTY
(To be developed by Foundation and attached)
27
ADDENDUM E
PROCEDURE FOR ASSIGNMENT OF FOUNDATION'S LOS ANGELES COUNTY MAINSTREAM MEDI-CAL
MEMBERS AMONG FOUNDATION, MOLINA AND UNIVERSAL CARE HEALTH PLAN
OVERVIEW OF ENROLLMENT OPTIONS AND PROCESS
Following an enrollment presentation and notification by mail, Los Angeles
County Medi-Cal beneficiaries will have thirty days to select either the local
initiative plan or Foundation as the mainstream plan. If the beneficiary does
not select either plan within the required thirty days, the enrollment
contractor will assign the beneficiary to one of the plans. All assignments will
be made to the local initiative plan until its total enrollment has reached the
minimum enrollment levels for the County. Once this minimum enrollment level has
been met, assignments will alternate between the mainstream plan and local
initiative plan, taking into account such items as plan capacity and location of
service sites in relation to the beneficiary's residence.
ASSIGNMENT OF FOUNDATION'S LOS ANGELES COUNTY MAINSTREAM MEDI-CAL MEMBERS
Prepaid Health Plan Enrollees. If a Medi-Cal beneficiary was a Medi-Cal
prepaid health plan enrollee of Foundation, Molina or Universal immediately
prior to the commencement date of operations for the Two Plan Model in Los
Angeles County, Foundation will assign the Medi-Cal beneficiary to such plan,
unless prohibited by the DHS or otherwise requested by the Medi-Cal beneficiary.
Assignment of a Medi-Cal Member Who Selects a PCP Unique to One of the
Three Plans. Los Angeles County Medi-Cal beneficiaries who select or who are
assigned by the enrollment contractor to Foundation's mainstream plan will be
offered the opportunity to select their Primary Care Physician from a single
listing of Foundation, Molina and Universal Care Health Plan Primary Care
Physicians. If the Medi-Cal Member selects or is assigned to a Primary Care
Physician that contracts with only one of the three plans, such health plan will
be responsible for the arrangement of Health Care Services for the Medi-Cal
Member, but the Medi-Cal Member remains a Medi-Cal Member of Foundation.
Assignment of a Medi-Cal Member Who Either Selects a PCP of Two or Three of
the Plans or Who Does Not Select a PCP. If a Medi-Cal Member selects a Primary
Care Physician that contracts with two or three of the plans, or the Medi-Cal
Member does not select a Primary Care Physician at the time of enrollment, the
Medi-Cal Member will be assigned by Foundation to one of the plans on a
rational, fair and alternating basis. In making this assignment, Foundation will
consider the ability of the plans' available Primary Care Physicians to
accommodate the geographic and linguistic needs of the Medi-Cal Member. Where
the geographic and linguistic needs of the Medi-Cal Member can be adequately
served by Primary Care Physicians of two or more of the plans, Foundation will
assign the Medi-Cal Member to the plan which is next due for an assignment on an
alternating basis among the three plans.
28
If a Medi-Cal Member selects a Primary Care Physician that contracts with
Molina and Universal, the Medi-Cal Member will be assigned by Foundation to
Molina or Universal on a rational, fair and alternating basis.
This forementioned assignment procedure will also apply to Medi-Cal Members
who request a Primary Care Physician change but who do not indicate the name of
a new Primary Care Physician.
Additionally, if a Medi-Cal Member selects a PCP that contracts with two or
three of the plans but requests in writing to be assigned to one of such plans,
Foundation will assign the Medi-Cal Member to the requested plan. However, the
parties understand and agree that such assignments to Molina and Universal shall
only be made until Molina and Universal reach the 26% enrollment limitation
described in this Addendum below.
Enrollment Limitation for Molina and Universal. This assignment process
will continue until Molina and Universal each achieve a total Medi-Cal
membership in Los Angeles County of 26% of the total number of Foundation
Medi-Cal Members in Los Angeles County (Foundation will calculate enrollment
numbers on a monthly basis). When Molina or Universal achieve such enrollment,
these plans will only receive new Medi-Cal Members if they are the sole plan
that contracts with the Primary Care Physician selected by the Medi-Cal Member.
If any of the plans is unable to service additional Medi-Cal Members due to
lack of capacity, Foundation will assign additional Medi-Cal Members to the
remaining plans with capacity using the above procedure.
29
ADDENDUM F
OFFICERS, OWNERS, STOCKHOLDERS, CREDITORS
Name and address of each person with an ownership or control interest:
NAME ADDRESS PERCENT OF OWNERSHIP
--------------------------------------------------------------------------------
Molina Family Trust One Golden Shore 100%
Xxxx Xxxxx, Xxxxxxxxxx
00000
OFFICERS:
NAME TITLE
--------------------------------------------------------------------------------
C. Xxxxx Xxxxxx, M.D., M.P.H. President & Treasurer
--------------------------------------------------------------------------------
Xxxx X. Xxxxxx Secretary & Vice President
--------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, M.D. Vice President for Medical Operations
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx, M.D. Medical Director
--------------------------------------------------------------------------------
C. Xxxxxx Xxxxx Chief Administrative Officer
--------------------------------------------------------------------------------
Xxxxxx Xxxx Chief Financial Officer
--------------------------------------------------------------------------------
Xxxx Xxxxxx Xxxxxx, M.D. Vice President, Medical Staff Services
MAJOR CREDITORS
CREDITOR DESCRIPTION
--------------------------------------------------------------------------------
30
ADDENDUM G
MATRIX OF RESPONSIBILITIES
(i.e., Division of Responsibilities Between Foundation and Molina)
JOINT: JOINT:
EXCLUSIVELY EXCLUSIVELY JOINT: PRINCIPALLY PRINCIPALLY
FUNCTION FOUNDATION MOLINA EQUAL FOUNDATION MOLINA
-------- ----------- ----------- ------ ----------- -----------
MARKETING
Advertising X
Material X
Staff X
NETWORK DEVELOPMENT
Provider Contracting X
Rate Determination X
IPA Management X
Office Training & Orientation X
Provider Manuals & Bulletins X
UTILIZATION REVIEW
Hospital & Utilization Tracking X
Case Management X
Specialty Referral Review X
Computer Input X
Physician/Enrollee X
Notification Coordination X
On-Call Scheduling X
Phone Advice Availability X
Coordination of Community Resources X
Claims Review X
Oversight for Compliance with F's Standards X
MEMBERSHIP SERVICES
Membership Staff X
Phone Access X
1st Level Grievance Resolution X
2nd Level Grievance Resolution (Hearing) X
Member Newsletter X
Data Collection X
Member Rights X
Electronic Interface X
Cultural & Linguistic X
Member Satisfaction Survey X
CLAIMS ADJUDICATION
Claims Review X
31
JOINT: JOINT:
EXCLUSIVELY EXCLUSIVELY JOINT: PRINCIPALLY PRINCIPALLY
FUNCTION FOUNDATION MOLINA EQUAL FOUNDATION MOLINA
-------- ----------- ----------- ------ ----------- -----------
Denials X
Third Party Liability X
Coordination of Benefits X
Claims Check Processing X
Claims Inventory Monitoring X
LAG Study Tracking X
IBNR Calculations X
Stop-Loss Billing X
MANAGEMENT INFORMATION SYSTEMS
Hardware X
Software X
Communication X
Computer Operations X
ENROLLMENT AND ELIGIBILITY
Enrollment Forms X
Evidence of Coverage X
Disclosure Form X
Welcome Letter X
Identification Cards X
Enrollment Mailing X
Participating Provider Directory (quarterly) X
Processing X
Enrollment Data Entry X
Eligibility List X
Electronic Tape Processing X
Eligibility Reconciliation X
CAPITATION PROCESSING
Medical Group/IPA Monitoring X
Medical Group/IPA Payments X
Risk Reserve Calculation X
DATA COLLECTION
Medical Group/IPA Report Cards X
Physician Profiling X
HEDIS Reporting X
Regulatory Requirements X
UNDERWRITING
Fraudulent Enrollment Resolutions X
Governmental Relations Reporting X
32
JOINT: JOINT:
EXCLUSIVELY EXCLUSIVELY JOINT: PRINCIPALLY PRINCIPALLY
FUNCTION FOUNDATION MOLINA EQUAL FOUNDATION MOLINA
-------- ----------- ----------- ------ ----------- -----------
QUALITY MANAGEMENT
Credentialing/Re-credentialing X
Quality Improvement Operations X
Meeting Minutes and Follow-up X
Chart Review X
Standards Development X
Network Auditing X
Review of Bad Outcome QA Cases X
Administration of Disciplinary Action X
Peer Review X
Health Education X
Policy & Procedure Maintenance X
Interface with Public Health X
11 Quality of Care Studies X
Oversight for Compliance with F's Standards X
Review of Potential Quality Issue Grievances X
ACCOUNTING
Accounts Payable X
Purchasing X
Cash Management X
Checking Account Reconciliation X
Fee-for-Service Billing X
Financial Statements Development X
Audits X
Insurance Maintenance X
Payroll X
Budget Development X
Budget Monitoring X
Purchase of Forms X
PHARMACY MANAGEMENT
Claims Adjudication X
Pharmacy Contracting X
Mail Order Prescription X
Pharmacy Data X
Claims Payment X
DUR/DUE X
OTHER
Policy and Procedure Manual X
Legal X
DOC Interface X
DHS Interface X
Coordination with County Health Department X
33
ADDENDUM H
FOUNDATION'S MEDI-CAL MEMBER GRIEVANCE PROCEDURES
I GRIEVANCE PROCESSING
Medi-Cal Members may contact the Member Services Department by telephone
(000) 000-0000, in person or in writing to file a grievance.
Foundation will send written acknowledgment to the Medi-Cal Member within
five days after receipt of the grievance. The acknowledgment letter will
include the time frame and steps that will be taken to resolve the
grievance and the Medi-Cal Member's right to request a fair hearing from
the Department of Health Services at any time during the process.
Grievances will be responded to within 30 days, unless the Medi-Cal Member
is notified that additional time is required.
Medi-Cal Members will be notified in writing of Foundation's determination
on their grievance. If Foundation's determination is to uphold the initial
denial of coverage, the response will include the Medi-Cal Member's right
to request a fair hearing from the Department of Health Services, and/or
request disenrollment from Foundation should the Medi-Cal Member feel that
no satisfactory resolution is possible.
II. FOUNDATION'S INTERNAL APPEAL PROCESS
A. If the Medi-Cal Member is dissatisfied with Foundation's initial
determination regarding a claim or request for prior authorization, the
Medi-Cal Member may appeal in writing to Foundation at the following
address:
Foundation Health, a California Health Plan
Member Services Department, Appeals Unit
000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
If requested, the Member Services Department staff will assist the
Medi-Cal Member in writing the appeal. Written appeals must be signed by
the Medi-Cal Member (unless incapacitated or a minor), and include any
additional information that the Medi-Cal Member wishes Foundation to
consider.
The written appeal must be received by Foundation within 30 days of the
final action taken on a grievance. Written acknowledgment will be sent
to the Medi-Cal Member, within five days of receipt of the written
appeal.
Depending on the subject matter of the appeal, the matter may be
reviewed by one of Foundation's Medical Directors who has not previously
been involved in the grievance, a
34
member of Foundation's administrative staff, or a provider consultant.
Foundation will notify the Medi-Cal Member in writing of the results of
its review and the specific basis of its decision in 30 days following
its receipt of the grievance. If additional time is required to resolve
the grievance, the Medi-Cal Member will be notified within the 30-day
period of the reason additional time is necessary. If Foundation's
determination is to uphold the initial denial of coverage, the response
to the Medi-Cal Member will include the Medi-Cal Member's right to
request a hearing by Foundation's Member Grievance Committee, right to
request a fair hearing by the Department of Health Services, or request
disenrollment from Foundation.
B. The final internal level of appeal available to a Medi-Cal Member for
resolution of a claim or request for prior authorization of coverage, is
a hearing before Foundation's member Grievance Committee. Requests for a
hearing must be in writing and received by Foundation within 90 days of
Foundation's mailing of its determination on the first step grievance.
Appeals received by Foundation after this period will not be considered
and no further internal recourse is available.
Although the make-up of the Committee is subject to change at the
discretion of Foundation, it is currently comprised of one Medi-Cal
Member, a physician who has not previously been involved in the
grievance, and Foundation's Medi-Cal Member Services Director or his or
her designee. A quorum to convene a hearing is two of these persons.
Hearings will be scheduled within 30 days of written request and heard
within 60 days of receipt, unless the Medi-Cal Member requests a later
hearing date. Medi-Cal Members may appear with and have information
offered by third parties, including attorneys, but not any persons
having a conflict of interest with Foundation. Unless incapacitated or a
minor, Medi-Cal Members must appear in person and are to be principally
responsible for the presentation of their grievance and for direct
response to questions by the Committee. The hearing is conducted as an
informal administrative hearing -- formal rules of evidence and
discovery which are common to legal hearings do not apply. In some
cases, Foundation may require the hearing to be conducted by telephone
conference.
III. EXTERNAL OPTIONS FOR GRIEVANCE RESOLUTION
A. A Medi-Cal Member may request a fair hearing from the Department of
Health Services at any time during the grievance process, by contacting
the Public Inquiry and Response Unit at (000) 000-0000, TDD (800)
952-8349.
B. If the Medi-Cal Member feels that no satisfactory resolution is
possible, he or she may request disenrollment from Foundation by
contacting the State's contractor, Health Choice, Inc., at (address and
telephone number to be determined). Foundation may provide the Medi-Cal
Member with a disenrollment form at his or her request, however,
processing of the disenrollment form will be completed by Health Choice,
Inc.
35
ADDENDUM I
COMPENSATION
1. Compensation. The following compensation rates shall apply for the period
beginning with the date Foundation's Medi-Cal Plan for Los Angeles County
commences and ending September 30, 1997. The below initial rates shall be
adjusted in the same proportion and at the same time as the Monthly DHS Payments
to Foundation are adjusted.
1.1 Xxxxxx'x Compensation. Foundation shall pay to Molina for all Health
Care Services and other services provided or arranged by Molina under this
Agreement the following monthly Capitation Payment amounts for each Molina
Member assigned by Foundation to Molina (based on the Molina Member's aid
category):
FAMILY AGED DISABLED CHILD ADULT
--------------------------------------------------------------------------------
$ [*] $ [*] $ [*] $ [*] $ [*]
In addition, Molina shall also exclusively enjoy all coordination of benefits
recoveries and third party liability recoveries collected pursuant to Sections
2.05 and 2.06 of the Agreement.
1.2 Foundation's Compensation. In consideration for the services provided
by Foundation pursuant to this Agreement and the Medi-Cal Agreement, Foundation
will keep the balance of the Monthly DHS Payment for each Molina Member assigned
by Foundation to Molina, as follows:
FAMILY AGED DISABLED CHILD ADULT
--------------------------------------------------------------------------------
$ [*] $ [*] $ [*] $ [*] $ [*]
2. Due Date. Foundation shall make Capitation Payments as described in this
Addendum on a monthly basis, due and payable within five (5) working days of
Foundation's receipt of the corresponding payment from DHS.
3. Foundation Reinsurance. Foundation shall assume financial responsibility
for any Health Care Services which exceed [*]% of the "estimated specified total
expenditures" made by Molina under this Agreement. For the purposes of this
provision, "estimated specified total expenditures" is defined as [*]% of DHS
premium (excludes Xxxxxx'x estimated profits of [*]% of the Monthly DHS Payment
and Foundation's compensation of [*]% of the Monthly DHS Payment). Foundation
will only pay for Health Care Services (i.e., not Xxxxxx'x administrative
expenses) if and to the extent the [*]% threshold of "estimated specified total
expenditures" is exceeded on an "aggregate, annual" basis (i.e., the health care
cost experience of all Molina Members over a one-
36
year period).
Reconciliation will occur once annually, four months after the close of each
fiscal year, with incurred but not reported claims not considered after 90 days
of the close of each 12-month contract period. For the purposes of this
provision, "fiscal year" shall mean the period running annually from June 1 of
one year through May 31 of the next year.
4. Retroactive Adjustments. If DHS determines that a Molina Member was
improperly omitted from the Eligibility List for a period of time during which
the Molina Member actually was eligible for Health Care Services, Foundation
will pay Molina for the Molina Member for such time period at the Capitation
Payment rate specified in this Addendum within five (5) working days of
receiving the corresponding payment from DHS. If DHS determines that a Molina
Member was improperly enrolled or should have been disenrolled in a prior month,
Foundation will debit the Capitation Payment amount paid to Molina by the amount
attributable to such Molina Member for such time period. Molina agrees that
Foundation is not liable for any Capitation Payment amounts payable to or
deductible from Xxxxxx'x compensation amount due to any errors in the
Eligibility List not caused by Foundation unless and except to the extent that
DHS has recognized and corrected such errors, informed Foundation of the correct
information, and made appropriate payment adjustments under the Medi-Cal
Agreement.
5. Collection of Charges from Molina Members. Neither Molina nor any Molina
Participating Provider shall in any event, including, without limitation,
non-payment by Foundation, insolvency of Foundation, or breach of this
Agreement, xxxx, charge, collect and deposit, or attempt to xxxx, charge,
collect or receive form of payment, from any Molina Member for Health Care
Services provided pursuant to this Agreement. Neither Molina nor any Molina
Participating Provider shall maintain any action at law or equity against a
Molina Member to collect sums owed by Foundation to Molina. Upon notice of any
violation of this paragraph, Foundation may terminate this Agreement pursuant to
Section 7.02(ii) and take all other appropriate action consistent with the terms
of this Agreement to eliminate such charges, including, without limitation,
requiring Molina, and Molina Participating Providers to return all sums
improperly collected from Molina Members or their representatives.
Each contract between Molina and a Molina Participating Provider shall
provide that in the event that Molina fails to pay the Molina Participating
Provider, the Molina Member shall not be liable to the Molina Participating
Provider for any sums owed by Molina.
In addition, Molina agrees to hold harmless the State of California and DHS
in the event of non-payment by Foundation for Health Care Services provided to
Molina Members.
Xxxxxx'x obligations under this paragraph shall survive the termination of
this Agreement with respect to Health Care Services provided during the term of
this Agreement without regard to cause of termination of this Agreement.
6. Capitation Deposit Account. The parties shall establish an account (the
"Account") at
37
a mutually acceptable bank for the purpose of protecting Molina in the event of
Foundation's failure to make a Capitation Payment. The Account shall be
established in accordance with the following guidelines:
6.1 Foundation shall deposit five (5) working days prior to the
scheduled receipt of the first Capitation Payment from DHS an amount equal to
the estimated Capitation Payment amount to Molina for the first month of the
Agreement. Thereafter, Foundation shall adjust the Account by depositing
additional amounts or withdrawing amounts so that, following the adjustment, the
Account is equal to the most recent one month's Capitation Payment.
6.2 If Foundation fails to make Capitation Payments to Molina by the
due date, Molina shall provide notice of non-payment to Foundation. If
Foundation fails to make a payment in full within fifteen (15) days of the
receipt of notice of non-payment, Molina may withdraw an amount from the Account
equal to the delinquent amount of Capitation Payments due to Molina. Molina
shall not be entitled to withdraw from the Account if Foundation, within the
fifteen (15) day notice period, notifies Molina that it is contesting the claim
for Capitation Payment and includes an explanation of Foundation's reason for
contesting the Capitation Payment claim.
6.3 Following any permissible withdrawal from the Account by Xxxxxx,
Foundation shall have fifteen (15) days to replenish the amount withdrawn from
the Account. Failure to do so shall constitute breach of this Agreement.
6.4 Upon the effective date of termination of this Agreement, Molina
shall be entitled to withdraw from the Account any delinquent Capitation
Payments due from Foundation. Foundation shall be entitled to any remaining
amounts in the Accounts upon the effective date of termination.
6.5 Except as provided in Sections 6.1 and 6.4 of this Addendum,
Foundation shall have no ability to withdraw funds from the Account.
6.6 Except as provided in Sections 6.2 and 6.4 of this Addendum,
Molina shall have no ability to withdraw funds from the Account.
6.7 Foundation shall be entitled to any and all interest earned on the
Account. The parties understand and agree that the compensation arrangement
under this Agreement is contingent upon the parties simultaneously entering into
and maintaining separate similar subcontracts for Xxxxxx'x Medi-Cal Agreements
for Riverside and San Bernardino counties, whereunder the parties shall reverse
the roles for the parties that are set out in this Agreement.
38
NOTICE OF AMENDMENT TO AGREEMENT REQUIRED BY
CALIFORNIA DEPARTMENT OF HEALTH SERVICES
REQUIRED MEDI-CAL SUBCONTRACT PROVISIONS
This is an amendment to the Health Services Agreement (the "Agreement") between
Foundation Health, a California Health Plan ("Foundation") and Xxxxxx Medical
Centers ("Provider"). For the purposes of this amendment, Foundation's Medi-Cal
agreements with the California Department of Health Services ("DHS") and its
subcontracts with Medi-Cal prepaid health plans, are hereinafter collectively
referred to as the "PHP Agreement". Foundation has been directed by the DHS to
amend its Medi-Cal participating provider agreements to include the below
provisions which are required to appear in all subcontracts under the PHP
Agreement by the terms of the PHP Agreement and by Medi-Cal law. The unilateral
and generic form of this amendment is legally and administratively necessary
because the language of this amendment may not be negotiated and because this
amendment is being provided to many thousands of health care providers of
different types (e.g., individual practitioners, medical groups, IPAs,
facilities, ancillary providers, FQHCs, and subcontracting health plans), and
these providers contract with Foundation under a variety of different forms of
contracts. In accordance with the provision of the Agreement which provides that
amendments required because of regulatory or legal requirements do not require
the consent of Provider or Foundation, this amendment is effective immediately
and is an integral part of the Agreement and shall supersede any contractual
provisions to the contrary.
Foundation thanks you for your participation as an essential part of
Foundation's Medi-Cal operations and we appreciate your understanding of this
form of amendment.
All references to "Beneficiaries" in this amendment are deemed to refer to those
Medi-Cal beneficiaries who are covered by Foundation under the PHP Agreement.
The Agreement is hereby amended to include the following provisions to the
extent that such provisions do not appear in the Agreement:
1. Preparation and Retention of Records; Access to Records; Audits. Provider
shall prepare and maintain medical and other books and records required by
law in a form maintained in accordance with the general standards
applicable to such book or record keeping. Provider shall maintain such
financial, administrative and other records as may be necessary for
compliance by Foundation with all applicable local, State, and federal
laws, rules and regulations. Provider shall retain such books and records
and all encounter data for a term of at least five years from the close of
the California fiscal year in which the Agreement is in effect. Provider
shall make Provider's books, records and encounter data pertaining to the
goods and services furnished under the terms of the Agreement, available
for inspection, examination or copying by Foundation, DHS, the United
States Department of Health and Human Services ("DHHS"), the California
-1-
Department of Corporations ("DOC"), the United States Department of Justice
("DOJ"), and any other regulatory agency having jurisdiction over
Foundation. The records shall be available at Provider's place of business,
or at such other mutually agreeable location in California. When such
entities request Provider's records, Provider shall produce copies of the
requested records at no charge. Provider shall permit Foundation, and its
designated representatives, and designated representatives of local, State,
and federal regulatory agencies having jurisdiction over Foundation, to
conduct site evaluations and inspections of Provider's offices and service
locations. [22 CCR Section 53250(e)(l); W & I Section 14452(c);PHP
Agreement]
2. Governing Law. The Agreement shall be governed by and construed and
enforced in accordance with all laws, regulations and contractual
obligations incumbent upon Foundation. Provider shall comply with all
applicable local, State, and federal laws, rules and regulations, now or
hereafter in effect, to the extent that they directly or indirectly affect
Provider or Foundation, and bear upon the subject matter of the Agreement.
Provider shall comply with the provisions of the PHP Agreement, and
Chapters 3 and 4 of Subdivision 1 of Division 3 of Title 22 of the
California Code of Regulations. In addition, Foundation is subject to the
requirements of Chapter 2.2 of Division 2 of the California Health and
Safety Code and Subchapter 5.5 of Chapter 3 of Title 10 of the California
Code of Regulations. Any provision required to be in the Agreement by
either of the above laws shall bind the parties whether or not provided in
the Agreement. [22 CCR Section 53250(c)(2)]; W & I Section 14452(a);
Xxxx-Xxxxx Act]
3. Amendments. Amendments to the Agreement shall be submitted by Foundation to
the DHS for prior approval at least 30 days before the effective date of
any proposed changes governing compensation, services or term. Proposed
changes, which are neither approved nor disapproved by the Department,
shall become effective by operation of law 30 days after the DHS has
acknowledged receipt, or upon the date specified in the amendment,
whichever is later. Subcontracts between a prepaid health plan and a
subcontractor shall be public records on file with the DHS. [22 CCR
Sections 53250(a), (c)(3), & (e)(4); W & I Section 14452(a)]
4. Provider's Notice to DHS Upon Termination. Provider shall notify the DHS in
the event that the subcontract is amended or terminated. Notice to the DHS
is considered given when properly addressed and deposited in the United
States Postal Service as first- class registered mail, postage attached.
[Xxxx-Xxxxx Act and PHP Agreement]
5. Notice of Change in Availability or Location of Covered Services.
Foundation is obligated to ensure Beneficiaries are notified in writing of
any changes in the availability or location of Covered Services at least 30
days prior to the effective date of such changes, or within 14 days prior
to the change in cases of unforeseeable circumstances. Such notifications
must be approved by DHS prior to the release. In order for Foundation to
meet this requirement, Provider is obligated to notify Foundation in
writing of any
-2-
changes in the availability or location of Covered Services at least 40
days prior to the effective date of such changes. [Xxxx-Xxxxx Act and PHP
Agreement]
6. Reports and Information. Provider shall provide Foundation, within the time
requested by Foundation, with all such reports and information as
Foundation may require to allow it to meet the reporting requirements under
the PHP Agreement or any applicable law, rule or regulation. [22 CCR
Section 53250(c)(5)]
7. Subcontracting Under the Agreement. Provider shall not subcontract for the
performance of services under the Agreement without the prior written
consent of Foundation. Every such subcontract shall provide that it is
terminable with respect to Beneficiaries by Provider upon Foundation's
request. Provider shall furnish Foundation with copies of such
subcontracts, and amendments thereto, within ten days of execution. Each
such subcontracting provider shall meet Foundation's credentialing
requirements, prior to the subcontract becoming effective. Provider shall
be solely responsible to pay any health care provider permitted under the
subcontract, and shall hold, and ensure that health care providers hold,
Foundation, Beneficiaries and the State harmless from and against any and
all claims which may be made by such subcontracting providers in connection
with services rendered to Beneficiaries under the subcontract. Provider
shall maintain and make available to Foundation, DHS, DHHS, DOC, DOJ, and
any other regulatory agency having jurisdiction over Foundation, copies of
all Provider's subcontracts under the Agreement and to ensure that all such
subcontracts are in writing and require that the subcontractor: (1) make
all applicable books and records available for inspection, examination
or copying by said entities; (2) retain such books and records for a term
of at least five years from the close of the fiscal year in which the
subcontract is in effect; and (3) maintain such books and records in a form
maintained in accordance with the general standards applicable to such book
or record keeping. [22 CCR Section 53250(e)(3)]
8. Beneficiaries and State Held Harmless. Provider agrees that in no event,
including, but not limited to, non-payment by Foundation, the insolvency of
Foundation, or breach of the Agreement, shall Provider or a subcontractor
of Provider xxxx, charge, collect a deposit from, seek compensation,
remuneration, or reimbursement from, or have any recourse against
Beneficiaries, the State of California, or persons other than Foundation
acting on their behalf for services provided pursuant to the Agreement.
Provider further agrees that: (1) this provision shall survive the
termination of the Agreement regardless of the cause giving rise to
termination and shall be construed to be for the benefit of Beneficiaries;
and (2) this provision supersedes any oral or written contrary agreement
now existing or hereafter entered into between Provider and Beneficiaries
or persons acting on their behalf. Any modification, addition, or deletion
of or to the provisions of this clause shall be effective on a date no
earlier than 15 days after the State regulatory agency has received written
notice of such proposed change and has approved such change. [22 CCR
Section 53250(e)(6)]
-3-
9. Transfer of Care Upon Termination of the Agreement. Provider shall,
pursuant to the requirements of the PHP Agreement, assist in the orderly
transfer of care of all Beneficiaries under the care of Provider in the
event of the termination of the Agreement. [Xxxx-Xxxxx Act and PHP
Agreement]
10. Assignment and Delegation. Assignment or delegation of the Agreement shall
be void unless prior written approval is obtained from the DHS. In
addition, any assignment or delegation of the Agreement by Provider shall
be void unless prior written approval is obtained from Foundation. [22 CCR
Section 53250(e)(5)]
11. Beneficiary Education. Provider shall make health education materials and
programs available to Beneficiaries on the same basis that it makes such
materials and programs available to the general public, and shall use its
best efforts to encourage Beneficiaries to participate in such health
education programs. [PHP Agreement]
12. Grievances. Provider and Foundation agree to cooperate in resolving all
grievances relating to the provision of services to Beneficiaries. Provider
shall comply with Foundation's grievance procedure, including any fair
hearing procedure involving the State of California or Foundation. Provider
shall abide by, and implement upon request, all Foundation, DHS and DOC
determinations on Beneficiary appeals and grievances. If Provider fails to
implement a determination of Foundation, DHS or DOC in a timely manner,
Foundation may arrange and cover the disputed service or remedy the
grievance to the reasonable satisfaction of the Beneficiary and offset the
cost of same from Foundation's payment under the Agreement to Provider.
Copies of complaint forms and Foundation's grievance procedure will be made
available to Provider and all Beneficiaries. Provider shall provide a
Foundation complaint form to a Beneficiary who wishes to register a written
complaint. Provider shall report any Beneficiary complaint directly to
Foundation within one business day of receipt, whether resolved directly or
not. All Beneficiary complaints will be logged by Foundation, a form letter
acknowledging the complaint will be sent to the Beneficiary within five
days of its receipt, and resolve the complaint within 30 days or document
reasonable efforts to resolve the complaint. Beneficiaries may request
disenrollment from Foundation or may request a fair hearing from the
California Department of Social Services. [Section 1368 of the Xxxx-Xxxxx
Act and PHP Agreement]
13. Provider-Patient Relationship. Provider shall be solely responsible,
without interference from Foundation or its agent, for providing health
care to Beneficiaries, and shall have the right to object to treating any
individual who makes onerous the relationship between Provider and
Beneficiary. In the event of a breakdown in such relationship, Foundation
shall make reasonable efforts to assign the Beneficiary to another
participating provider. If reassignment is unsuccessful, a request may be
filed with the DHS to permit termination of services to such Beneficiary.
Approval from the DHS must be obtained before Provider terminates services
to such Beneficiary. Provider and Foundation are
-4-
independent contractors in relation to each other and each party is
responsible for its own acts. [PHP Agreement]
14. Fair Employment Requirements. During the term of the Agreement, Provider
and its subcontractors shall not unlawfully discriminate against any
employee or applicant for employment because of race, religious creed,
color, national origin, ancestry, physical disability, mental disability,
medical condition, marital status, age (over 40) or sex. Provider and its
subcontractors also shall ensure that the evaluation and treatment of their
employees and applicants for employment are free of such discrimination.
Provider and its subcontractors shall comply with the provisions of the
Fair Employment & Housing Act (California Government Code Section 12990 et
seq.) and the applicable regulations promulgated thereunder (2 CCR Section
7285.0 et seq.). The applicable regulations of the Fair Employment &
Housing Commission implementing Government Code Section 12990, set forth in
Chapter 5 of Division 4 of Title 2 of the California Code of Regulations
are incorporated into the Agreement by reference and made a part hereof as
if set forth in full. Provider and its subcontractors shall give written
notice of their obligations under this clause to labor organizations with
which they have a collective bargaining or other agreements. [PHP
Agreement]
15. Confidentiality of Information. Names of persons receiving public social
services are confidential and are to be protected from unauthorized
disclosure in accordance with Title 45, Code of Federal Regulations,
Sections 205.50 & 14100.2 of the California Welfare and Institutions Code
and the regulations adopted thereunder. For the purposes of the Agreement,
all information, records, data, and data elements collected and maintained
for or in connection with performance under the Agreement and pertaining to
Beneficiaries shall be protected by Provider from unauthorized disclosure.
With respect to any identifiable information concerning a Beneficiary under
the Agreement that is obtained by Provider or its subcontractors, Provider:
(1) will not use any such information for any purpose other than carrying
out the express terms of the Agreement; (2) will promptly transmit to
Foundation all requests for disclosure of such information; (3) will not
disclose, except as otherwise specifically permitted by the Agreement, any
such information to any party other than Foundation without Foundation's
prior written authorization specifying that the information is releasable
under applicable law; and (4) will, at the expiration or termination of the
Agreement, return all such information to Foundation or maintain such
information according to written procedures provided Provider by Foundation
for this purpose. Provider shall ensure that its subcontractors comply with
the provisions of this provision. [PHP Agreement]
16. Third Party Tort Liability. Provider shall make no claim for recovery for
health care services rendered to a Beneficiary when such recovery would
result from an action involving the tort liability of a third party or
casualty liability insurance, including workers' compensation awards and
uninsured motorist coverage. Within five days of discovery, Provider shall
notify Foundation of cases in which an action by the Beneficiary
-5-
involving the tort or workers' compensation liability of a third party
could result in a recovery by the Beneficiary. Provider shall promptly
provide: (1) all information requested by Foundation in connection with the
provision of health care services to a Beneficiary who may have an action
for recovery from any such third party; (2) copies of all requests by
subpoena from attorneys, insurers or Beneficiaries for copies of bills,
invoices or claims for health care services; and (3) copies of all
documents released as a result of such requests. Provider shall ensure that
its subcontractors comply with the requirements of this provision. [PHP
Agreement]
17. Non-Discrimination. Provider shall not discriminate against any Beneficiary
in the provision of Contracted Services hereunder, whether on the basis of
the Beneficiary's coverage, age, sex, marital status, sexual orientation,
race, color, religion, ancestry, national origin, disability, handicap,
health status, source of payment, utilization of medical or mental health
services or supplies or other unlawful basis including, without limitation,
the filing by such Beneficiary of any complaint, grievance or legal action
against Provider, Foundation, or an affiliate or subcontractor of
Foundation. [Xxxx-Xxxxx Act and PHP Agreement]
18. Encounter Reporting. For Beneficiaries for which Provider may receive
capitation compensation under the Agreement, Provider shall provide
Foundation with the following information, via personal computer diskette,
magnetic tape or electronic transmission in standard HCFA 1500 form or its
successor format and hardcopy, for each encounter with a Beneficiary during
a calendar month. Such electronic encounter information and hardcopy
materials shall be complete, accurate and provided to Foundation by the
15th day of the month following the month in which the encounter occurred.
Encounter reporting shall be in accordance with, but not limited to, the
Health Plan Employer Data and Information Set (HEDIS), Version 2.0, or its
successor. Additionally, Provider shall promptly provide Foundation with
all corrections to and revisions of such encounter data. [PHP Agreement]
19. No Surcharges and No Copayments. Provider shall not charge a Beneficiary
any fee, surcharge or Copayment for health care services rendered pursuant
to the Agreement. In addition, Provider shall not collect a sales, use or
other applicable tax from Beneficiaries for the sale or delivery of medical
services. If Foundation receives notice of any additional charge, Provider
shall fully cooperate with Foundation to investigate such allegations, and
shall promptly refund any payment deemed improper by Foundation to the
party who made the payment. [Xxxx-Xxxxx Act and PHP Agreement]
NOTE: THE FOLLOWING PROVISIONS ARE NON-STANDARD AND UNIQUE TO
XXXXXX MEDICAL CENTERS.
20. Striking of Inaccurate Default Enrollment Provision. Addendum E in the
Agreement contains certain inaccurate language concerning the enrollment
process of the State and
-6-
inaccurate language concerning members being required to select a primary
hospital. Addendum E is hereby deleted in its entirety and replaced with
the restated Addendum E attached hereto as Attachment 1.
21. No Automatic Rate Adjustment Commensurate With DHS Rate Adjustment to
Foundation. The second sentence in Section 1 of Addendum I to the Agreement
concerning the automatic adjustment in rates commensurate with adjustments
in Foundation's rate from the DHS, has been determined by the DHS to be
impermissible and is hereby stricken. If the parties are unable to mutually
agree on a rate adjustment under the circumstances of Foundation's rate
from the DHS being adjusted, then either party may terminate the Medi-Cal
line of business under the Agreement with 30 days' written notice. Section
1.2 of Addendum I to the Agreement is also hereby stricken.
FOUNDATION HEALTH, A CALIFORNIA HEALTH PLAN
By: /s/
--------------------------------
Xxxxx X. Xxxxxxxx
Vice President
Medi-Cal Operations
-7-
ATTACHMENT 1 TO AMENDMENT
RESTATED ADDENDUM E
PROCEDURE FOR ASSIGNMENT OF FOUNDATION'S LOS ANGELES COUNTY MAINSTREAM MEDI-CAL
MEMBERS AMONG FOUNDATION, XXXXXX MEDICAL CENTERS AND UCHP
Prepaid Health Plan Enrollees. If a Medi-Cal beneficiary was a Medi-Cal
prepaid health plan enrollee of Foundation, Molina or Universal immediately
prior to the commencement of operations for the Two Plan Model in Los Angeles
County, Foundation will assign the Medi-Cal beneficiary to such plan, unless
prohibited by the DHS or otherwise requested by the Medi-Cal beneficiary.
Assignment of a Medi-Cal Member Who Selects a PCP Unique to One of the Three
Plans. Los Angeles County Medi-Cal beneficiaries who select or who are assigned
by the enrollment contractor to Foundation's mainstream plan will be offered the
opportunity to select their Primary Care Physician from a single listing of
Foundation, Molina and Universal Primary Care Physicians. If the Medi-Cal Member
selects or is assigned to a Primary Care Physician that contracts with only one
of the three plans, such health plan will be responsible for the arrangement of
Health Care Services for the Medi-Cal Member, but the Medi-Cal Member remains a
Medi-Cal Member of Foundation.
Assignment of a Medi-Cal Member Who Either Selects a PCP of Two or Three of
the Plans or Who Does Not Select a PCP. If a Medi-Cal Member selects a Primary
Care Physician that contracts with two or three of the plans, or the Medi-Cal
Member does not select a Primary Care Physician at the time of enrollment, the
Medi-Cal Member will be assigned by Foundation to one of the plans on a
rational, fair and alternating basis. In making this assignment, Foundation will
consider the ability of the plans' available Primary Care Physicians to
accommodate the geographic and linguistic needs of the Medi-Cal Member. Where
the geographic and linguistic needs of the Medi-Cal Member can be adequately
served by Primary Care Physicians of two or more of the plans, Foundation will
assign the Medi-Cal Member to the plan which is next due for an assignment on an
alternating basis among the three plans.
If a Medi-Cal Member selects a Primary Care Physician that contracts with
Molina and Universal, the Medi-Cal Member will be assigned by Foundation to
Molina or Universal on a rational, fair and alternating basis.
This forementioned assignment procedure will also apply to Medi-Cal Members
who request a Primary Care Physician change but who do not indicate the name of
a new Primary Care Physician.
Additionally, if a Medi-Cal Member selects a PCP that contracts with two or
three of the plans but requests in writing to be assigned to one of such plans,
Foundation will assign the
-8-
Medi-Cal Member to the requested plan. However, the parties understand and agree
that such assignments to Molina and Universal shall only be made until Molina
and Universal reach the 26% enrollment limitation described in this Addendum
below.
Enrollment Limitation for Molina and Universal. This assignment process will
continue until Molina and Universal each achieve a total Medi-Cal membership in
Los Angeles County of 26% of the total number of Foundation Medi-Cal Members in
Los Angeles County (Foundation will calculate enrollment numbers on a monthly
basis). When Molina or Universal achieve such enrollment, these plans will only
receive new Medi-Cal Members if they are the sole plan that contracts with the
Primary Care Physician selected by the Medi-Cal Member.
If any of the plans is unable to service additional Medi-Cal Members due to
lack of capacity, Foundation will assign additional Medi-Cal Members to the
remaining plans with capacity using the above procedure.
-9-
AMENDMENT OF
HEALTH NET-MOLINA LOS ANGELES COUNTY MEDI-CAL AGREEMENT
This is an amendment of the Health Services Agreement for Los Angeles County
(the "Agreement") entered into by and between Xxxxxx Medical Centers ("Molina")
and Health Net (formerly, Foundation Health, a California Health Plan). This
Amendment is an integral part of the Agreement and shall supersede any
contractual provisions to the contrary. The parties hereby amend the Agreement
as follows:
1. Revised compensation arrangement. Addendum I is deleted in its entirety and
replaced with the restated Addendum I attached hereto as Exhibit 1.
XXXXXX MEDICAL CENTERS HEALTH NET
By: /s/ By: /s/
-------------------------------- ----------------------------------
Xxxxxx Xxxxxxxxx, President Xxxxxxx X. Xxxxxxxxxx,
Vice President
California Health Programs
Date: 9/22/99 Date: 9/22/99
------------------------------ -------------------------------
LARATEAMD -1- 9-8-99
EXHIBIT 1 TO AMENDMENT OF
HEALTH NET-MOLINA LOS ANGELES COUNTY MEDI-CAL AGREEMENT
RESTATED ADDENDUM I
COMPENSATION
1. Compensation. Health Net shall pay to Molina for all Health Care Services
and other services provided or arranged by Molina under this Agreement the
following monthly Capitation Payment amounts for each Member assigned by Health
Net to Molina (based on the Member's aid category).
1.1 Compensation for the period of July 1,1997 to October 1,1997. For the
period of July 1, 1997 to October 1,1997, Health Net shall pay Molina the
monthly "Amended Rates" set out below for each Member assigned by Health Net to
Molina. The parties understand and agree that Health Net will make the specified
"adjustment" to the specified "Previously Paid Rates" to pass on an approximate
[*]% rate increase.
PREVIOUSLY PAID RATE AMENDED RATE ADJUSTMENT
-------------------- ------------ ----------
Family [*] [*] [*]
Child [*] [*] [*]
Disabled [*] [*] [*]
Aged [*] [*] [*]
Adult [*] [*] [*]
1.2 Compensation for the period of October 1,1997 to April 1,1998. For the
period of October 1,1997 to April 1,1998, Health Net shall pay Molina the
monthly "Amended Rates" set out below for each Member assigned by Health Net to
Molina. The parties understand and agree that Health Net made the specified
"adjustment" to the specified "Previously Paid Rates" to adjust the rates to the
specified "Amended Rates".
PREVIOUSLY PAID RATE AMENDED RATE ADJUSTMENT
-------------------- ------------ ----------
Family [*] [*] [*]
Child [*] [*] [*]
Disabled [*] [*] [*]
Aged [*] [*] [*]
Adult [*] [*] [*]
AIDS [*] [*] [*]
AIDS compensation. Payment of the AIDS rate is payable after Health Net
receives its
LARATEAMD -2- 9-8-99
AIDS compensation from the DHS, and will be reduced to the extent that Molina
has received another capitation rate from Health Net.
1.3 Compensation for the period of April 1,1998 to October 1,1998. For the
period of April 1, 1998 to October 1,1998, Health Net shall pay Molina the
monthly "Amended Rates" set out below for each Member assigned by Health Net to
Molina. The parties understand and agree that Health Net made the specified
"adjustment" to the specified "Previously Paid Rates" to pass on a similar rate
reduction in Health Net's compensation from the DHS for a carve out of optical
lenses under the Medi-Cal Agreement.
PREVIOUSLY PAID RATE AMENDED RATE ADJUSTMENT
-------------------- ------------ ----------
Family [*] [*] [*]
Child [*] [*] [*]
Disabled [*] [*] [*]
Aged [*] [*] [*]
Adult [*] [*] [*]
AIDS [*] [*] [*]
AIDS compensation. Payment of the AIDS rate is payable after Health Net
receives its AIDS compensation from the DHS, and will be reduced to the extent
that Molina has received another capitation rate from Health Net.
1.4 Compensation for the period of October 1,1998 to July 1,1999. For the
period of October 1,1998 to July 1,1999, Health Net shall pay Molina the monthly
"Amended Rates" set out below for each Member assigned by Health Net to Molina.
PREVIOUSLY PAID RATE AMENDED RATE ADJUSTMENT
-------------------- ------------ ----------
Family [*] [*] [*]
Child [*] [*] [*]
Disabled [*] [*] [*]
Aged [*] [*] [*]
Adult [*] [*] [*]
AIDS [*] [*] [*]
1.5 Compensation for the period of July 1,1999 to October 1,1999. For the
period of July 1, 1999 to October 1, 1999, Health Net shall pay Molina the
monthly "Amended Rates" set out below for each Member assigned by Health Net to
Molina.
Family [*]
Child [*]
Disabled [*]
LARATEAMD -3- 9-8-99
Aged [*]
Adult [*]
AIDS [*]
1.6 Compensation Adjustment Provision. Subject to the prior written
approval of this provision by the DHS, in the event that Health Net's
compensation for its Los Angeles County Medi-Cal Plan under Health Net's
Medi-Cal Agreement with the DHS is adjusted, Health Net and Molina will execute
an amendment of this Agreement that establishes revised per member per month
capitation rates that are commensurate with the new Medi-Cal rates paid by the
DHS, less [*]% and the $ [*] per member per month reduction described in Section
6below,
1.7 Incentive Withhold Arrangement. Commencing April 1, 1999, Health Net
shall withhold $ [*] each month from Xxxxxx'x compensation under this Agreement
to incent Xxxxxx'x efforts to assist Health Net in receiving incentive monies
withheld from Health Net by the DHS that are tied to Health Net's achievement of
specified utilization standards, as measured by encounter data and PM-160
information, and the achievement of timely encounter data and PM-160 reporting.
The performance standards, terms and conditions for Health Net's receipt of its
monies withheld by the DHS (the "DHS Withhold of Health Net Money") are set out
in the previously provided ten-page excerpt of the Medi-Cal Agreement that is
summarized below. The terms, conditions and performance standards for Xxxxxx'x
receipt of its incentive monies withheld by Health Net shall be identical to the
terms, conditions and performance standards for Health Net's receipt of its
incentive monies withheld by the DHS, except as otherwise set out in this
Compensation Addendum. The parties agree that the terms, conditions and
performance standards for Xxxxxx'x receipt of its incentive monies withheld by
Health Net shall be automatically modified to conform with any DHS modifications
of the terms, conditions and performance standards of the DHS Withhold of Health
Net Money.
The amount of any distribution of the Molina withhold will be determined by
Health Net in its sole discretion based on all of the following factors:
1. The extent of Xxxxxx'x compliance with the DHS performance standards and
the terms and conditions of this Agreement,
2. The amount of any return of the DHS Withhold of Health Net Money, and
Xxxxxx'x relative share considering the total incentive monies at stake of
the following three "Plan Partners" that collectively serve Health Net's
Los Angeles County. Medi-Cal Plan (Molina, Universal Care Health Plan and
Health Net), and
3. The combined performance of the Plan Partners against the performance
standards. That is, the DHS performance standards consider the collective
utilization of all members of Health Net's Los Angeles County Medi-Cal Plan
and the totality of PM-160 and encounter data reporting under the plan,
even though each of the Plan Partners are only responsible
LARATEAMD -4- 9-8-99
for the arrangement of health care services and related PM-160 and
encounter data reporting for a portion of the members. The return of
incentive withhold monies of each of the Plan Partners is dependent on the
collective performance of the Plan Partners against the performance
standards. For example, if Molina significantly falls short of the
performance standards, it will jeopardize the return of its $ [*] share of
the withhold, and will jeopardize the return of $ [*] share of the withhold
of its three Plan Partners. Hence, the risk of the return of our respective
withhold monies must necessarily be shared on a mutually dependent basis.
In order for Health Net to meet the performance standard of encounter data
reporting timeliness, Molina shall produce encounter data to Health Net 30 days'
prior to the time that Health Net is required to report the data to the DHS.
Summary of terms, conditions and performance standards of DHS Withhold of Health
Net Money. This Section sets out a very general summary of some of the terms,
conditions and details of the very complex DHS Withhold of Health Net Money. The
actual provisions are set out in the previously provided ten-page excerpt of the
Medi-Cal Agreement that is summarized below.
Applicable member population; Health Net's Los Angeles County Medi-Cal
Members
Withhold amount: $ [*] each month
Performance standards, means of
measurement, and portion of
withhold: 1. Children Served. 30% of children
receive CHDP services, as measured
by PM-160 information. This
standard constitutes 35% of the
withhold or $ [*]
2. Outpatient and Emergency Room
Services. For the period of July 1,
1998 - June 30, 1999, 1,380 member
encounters receive outpatient or
emergency department services for
every 1,000 members. For the period
of July 1, 1999 - June 30, 2000,
1,822 member encounters receive
outpatient or emergency department
services for every 1,000 members).
This standard is measured by
outpatient and emergency room
encounter data and constitutes 35%
of the withhold or $ [*]
LARATEAMD -5- 9-8-99
3. Timeliness of PM-160 Reporting of
Children Served. 75% of all PM-160
information for children served is
submitted within 30 days after the
end of the month of the encounter.
This standard constitutes 15% of
the withhold or $ [*]
4. Timeliness of Encounter Data
Reporting of Outpatient and
Emergency Room Services. 70% of
outpatient and emergency room data
is submitted within 90 days after
the end of the month of the
encounter. This standard
constitutes 15% of the withhold or
$ [*]
GRADUATED DISTRIBUTION FOR PARTIAL
COMPLIANCE -WITH FIRST TWO
STANDARDS % OF COMPLIANCE % OF WITHHOLD RETURNED
--------------- ----------------------
100% 100%
76-99% 75%
51-75% 50%
26-50% 25%
0-25% 0%
Timing of distribution of 9-12 months after completion of each
withhold quarter
1.8 FQHC and RHC Risk Corridor. Beginning October 1,1997 and through June
30, 1999, the DHS shall perform reconciliations to determine the variance
between the funds that have been paid to Health Net in its Los Angeles County
capitation rates to reflect the dollar value of Federally Qualified Health
Centers ("FQHC") and Rural Health Clinics ("RHC") interim rate payments made to
these entities in Los Angeles County under the Medi-Cal Fee-For-Service Program
and the amount of payments to contracting FQHCs and RHCs under Health Net's Los
Angeles County Medi-Cal Plan. For each reconciliation, if under Health Net's Los
Angeles County Medi-Cal Plan contracting FQHCs and RHCs have been paid in the
aggregate an amount greater than [*]% of the dollar value of FQHC and RHC
interim rate payments included in Health Net's Los Angeles County capitation
rates, DHS shall pay Health Net the amount in excess of [*]%. For each
reconciliation, if under Health Net's Los Angeles County Medi-Cal Plan
contracting FQHCs and RHCs have been paid in the aggregate an amount less than
[*]% of the dollar value of FQHC and RHC interim rate payments included in
Health Net's Los Angeles County capitation rates, Health Net is required to
refund the amount below [*]% to the DHS.
If Health Net receives an FQHC/RHC Risk Corridor payment from the DHS, Health
Net shall
LARATEAMD -6- 9-8-99
distribute to Molina its share. If Health Net is required to make an FQHC/RHC
Risk Corridor payment to the DHS, Health Net shall deduct Xxxxxx'x share from
its compensation under this Agreement. The amount of any such payment to, or
deduction from, Molina will be reasonably determined by Health Net based on
Xxxxxx'x share of FQHC and RHC payments relative to all FQHC and RHC payments
under Health Net's Los Angeles County Medi-Cal Plan.
2. Health Net Reinsurance. Health Net shall assume financial responsibility
for any Health Care Services rendered to Members assigned to Molina that exceed
[*]% of the amount of Capitation Payments to Molina under this Agreement over
a one-year fiscal year period of June 1 of one year through May 31 of the next
year. Health Net will only pay for Health Care Services, not Xxxxxx'x
administrative expenses. Reconciliation will occur once annually. four months
after the close of each fiscal year, with incurred but not reported claims not
considered after 90 days of the close of each 12-month contract period.
3. Retroactive Enrollment Adjustments. If DHS determines that a Member was
improperly omitted from the Eligibility List for a period of time during which
the Member actually was eligible for Health Care Services, Health Net will pay
Molina for the Member for such time period at the Capitation Payment rate
specified in this Addendum within five working days of receiving the
corresponding payment from DHS. If DHS determines that a Member was improperly
enrolled or should have been disenrolled in a prior month, Health Net will debit
the Capitation Payment amount paid to Molina by the amount attributable to such
Member for such time period. Molina agrees that Health Net is not liable for any
Capitation Payment amounts payable to or deductible from Xxxxxx'x compensation
amount due to any errors in the Eligibility List not caused by Health Net unless
and except to the extent that DHS has recognized and corrected such errors,
informed Health Net of the correct information, and made appropriate payment
adjustments under the Medi-Cal Agreement.
4. Collection of Charges From Members. Neither Molina nor any Molina
Participating Provider shall in any event, including, without limitation,
non-payment by Health Net, insolvency of Health Net, or breach of this
Agreement, xxxx, charge, collect and deposit, or attempt to xxxx, charge,
collect or receive form of payment, from any Member for Health Care Services
provided pursuant to this Agreement. Neither Molina nor any Molina Participating
Provider shall maintain any action at law or equity against a Member to collect
sums owed by Health Net to Molina. Upon notice of any violation of this
paragraph, Health Net may terminate this Agreement pursuant to Section 7.02(ii)
and take all other appropriate action consistent with the terms of this
Agreement to eliminate such charges, including, without limitation, requiring
Molina, and Molina Participating Providers to return all sums improperly
collected from Members or their representatives.
Each contract between Molina and a Molina Participating Provider shall
provide that in the event that Molina fails to pay the Molina Participating
Provider, the Member shall not be liable to the Molina Participating Provider
for any sums owed by Molina. In addition,
LARATEAMD -7- 9-8-99
Molina agrees to hold harmless the State of California and DHS in the event of
non-payment by Health Net for Health Care Services provided to Members. Xxxxxx'x
obligations under this Section shall survive the termination of this Agreement
with respect to Health Care Services provided during the term of this Agreement
without regard to cause of termination of this Agreement.
5. Right to reduce compensation and/or dedelegate to the extent that Molina
has not performed its responsibilities under this Agreement. Pursuant to the
Agreement, Health Net has delegated the performance of certain functions to
Molina. In the event Health Net concludes that Molina is failing to materially
perform a delegated function to Health Net's satisfaction, Health Net may
dedelegate that function and/or reduce Xxxxxx'x compensation by an actuarially
or financially determined amount, subject to the following:
5.1 Health Net shall first provide to Molina a detailed written notification of
Health Net's determination that Molina has materially failed to perform the
delegated function. Health Net's written notification shall also include an
actuarial or financial analysis of the amount by which Health Net will
reduce Xxxxxx'x compensation.
5.2 Molina shall have 30 days from the date of receipt of the aforementioned
written notification, or such longer period as Health Net may identify in
that notification, to demonstrate that Molina is materially performing the
delegated function to Health Net's satisfaction (i.e., full performance of
the contract requirement). If Molina does so within that time frame, the
delegated function shall remain with Molina. If Molina is unable to do so
within that time frame, the function may be dedelegated and/or Health Net
may make an appropriate reduction in compensation retroactive to the date
of material nonperformance. In addition, if Molina cures the nonperformance
of a delegated responsibility within the 30-day cure period, Health Net may
make an appropriate reduction in compensation for the period of material
nonperformance.
6. Reduction for nonperformance of credentialing, primary care site review
and medical record audit responsibilities under this Agreement. Due to Health
Net's dedelegation of Molina for credentialing responsibilities, Xxxxxx'x
compensation shall be reduced by $ [*] per Member per month. Such reduction
shall apply prospectively and retroactively to October 1, 1997.
LARATEAMD -8- 9-8-99
AMENDMENT OF
HEALTH NET-MOLINA LOS ANGELES COUNTY MEDI-CAL AGREEMENT
This is an amendment of the Health Services Agreement for Los Angeles County
(the "Agreement") entered into by and between Xxxxxx Healthcare of California
(formerly, "Xxxxxx Medical Centers") and Health Net of California, Inc.
(formerly, "Foundation Health, a California Health Plan"). Subject to the terms
and conditions of Restated Addendum I to the Agreement, the parties hereby amend
the Agreement as follows:
1. Revised compensation arrangement for the period of August 1, 2000 through
September 30,2000. For the specified period, Health Net shall pay Molina
the following monthly capitation rates for each Member assigned to Molina:
Family [*]
Child [*]
Disabled [*]
Adult [*]
Aged [*]
AIDS [*]
2. Revised compensation arrangement for the period of October 1, 2000 through
September 30, 2001. For the specified period, Health Net shall pay Molina
the following monthly capitation rates for each Member assigned to Molina:
Family [*]
Child [*]
Disabled [*]
Adult [*]
Aged [*]
AIDS [*]
3. Effective date of Amendment. This Amendment is effective August 1, 2000.
XXXXXX/HEALTHCARE HEALTH NET OF CALIFORNIA, INC.
OF CALIFORNIA
By: /s/ By: /s/
---------------------------- ---------------------------
Xxxxxx Xxxxxxxxx, Xxxx Xxxxxxx,
President Vice President
California Health Programs
AMENDMENT OF
HEALTH NET-MOLINA MEDI-CAL HEALTH SERVICES AGREEMENT
FOR LOS ANGELES COUNTY
CONFORMATION OF PREEXISTING UTILIZATION MANAGEMENT DELEGATION AGREEMENT IN
COMPLIANCE WITH NCQA STANDARDS
This is an amendment of the Health Services Agreement for Los Angeles County
(the "Agreement") entered into by and between Xxxxxx Healthcare of California
("Molina") and Health Net of California, Inc. ("Health Net"). This amendment is
to (1) confirm and clarify compliance of the Agreement with the NCQA utilization
management delegation standards, and (2) clarify delegation responsibilities
concerning utilization management of pharmaceutical services.
The parties hereby amend the Agreement as follows:
1. Addition of Addendum J to each Agreement. The language attached as Exhibit
1 to this Amendment is hereby added as Addendum J to the Agreement.
2. Effective date of Amendment. This Amendment is effective June 1, 2001.
XXXXXX HEALTHCARE OF CALIFORNIA HEALTH NET OF CALIFORNIA, INC.
By: /s/ By: /s/
------------------------- --------------------
Xxxxxx Xxxxxxxxx, Xxxx Xxxxxxx,
President Vice President
California Health Programs
1
EXHIBIT 1 TO AMENDMENT OF
HEALTH NET-MOLINA MEDI-CAL HEALTH SERVICES AGREEMENT
FOR LOS ANGELES COUNTY
ADDENDUM J
CONFIRMATION OF PREEXISTING UTILIZATION MANAGEMENT DELEGATION AGREEMENT IN
COMPLIANCE WITH NCQA STANDARDS
When the parties entered into the Agreement in 1996, the party holding the
Medi-Cal contract with the DHS for the county ("Medi-Cal Plan") delegated to the
subcontracting party ("Subcontracting Plan") both the right and duty to perform
utilization management functions, including pharmaceutical utilization
management, with respect to Medi-Cal Plan members who are assigned to the
Subcontracting Plan. In Los Angeles County, Health Net is the Medi-Cal Plan and
Molina is the Subcontracting Plan. The Agreement and the delegation provisions
therein were approved by the California Department of Health Services ("DHS"),
HCFA and the California Department of Managed Health Care. The delegation of
utilization management functions under the Agreement to the Subcontracting Plan
has been successfully operative for more than five years without adverse
incident.
Although neither party is presently accredited by NCQA, each is, nonetheless,
obligated to comply with essentially all NCQA standards pursuant to their
Medi-Cal contracts with the DHS, and certain Medi-Cal and Xxxx-Xxxxx laws. In
accordance with a study prepared by NCQA and published in the January 2001
report entitled "Medi-Cal Audit Crosswalk: A Comparison of the NCQA
Accreditation Standards and Medi-Cal Regulatory Oversight Requirements for
Managed Care Organizations", both NCQA and the DHS found that NCQA standards
are consistent with existing Medi-Cal Plan Contract and legal requirements. In
particular, NCQA and the DHS found that the NCQA standard UM 13 for delegation
of utilization management functions (renumbered UM 15 for the NCQA Guidelines
that are effective July 1, 2001) is consistent with the following sections of
the Medi-Cal Plan's Contract with the DHS: Sections 3.27.1, 3.27.2, 6.5.2.6,
Delegation of QIP Activities, 6.5.2.6(A), Maintenance of policies and procedures
which describe delegated activities, 6.5.2.6(B), Establish reporting standards,
6.5.2.6(C), Continues monitoring and evaluation of the delegated functions,
6.5.2.6(D), Assurance and documentation that subcontractor has the
administrative capacity, task experience, and budgetary resources to fulfill its
responsibilities. NCQA and the DHS also found that the NCQA delegation standard
is consistent with 10 CCR 1300.70(b)(2)(B-C), and (G)(2-4). This NCQA-Medi-Cal
Plan contract consistency is not coincidental because beginning in 1996, the DHS
began to issue new, and amend existing, Medi-Cal plan contracts to conform with
NCQA requirements.
The described NCQA report also found NCQA standards UM 3-6 were consistent with
and set out in the following sections of each of the Medi-Cal Plan's contracts
with the DHS and specified law:
2
.. NCQA and the DHS found that NCQA standard UM 3 is consistent with Medi-Cal
Plan Contract Section 6.5.9.3(A) and California Health and Safety Code
Sections 1367.01(e)and 1367(g).
.. NCQA and the DHS found that NCQA standard UM 4 is consistent with Medi-Cal
Plan Contract Sections 6.5.9.3(E), 6.9.14 and California Health and Safety
Code Sections 1367.0l(h)(1-4), and 1367.10(h)(2).
.. NCQA and the DHS found that NCQA standard UM 5 is consistent with Medi-Cal
Plan Contract Section 6.5.9.1 and California Health and Safety Code
Sections 1367.5(a), and 1367(g).
.. NCQA and the DHS found that NCQA standard UM 6 is consistent with Two-Plan
Model Contract Sections 6.5.9.3(A), 6.9.14, 22 CCR 53894, 22 CCR 51014.1,
and California Health and Safety Code Sections 1367.0l(h)(4), and
1368(a)(4).
The NCQA standards in each of the Medi-Cal Plan's contracts with the DHS were,
in turn, set out in the following sections of the Agreements to conform with the
delegation and oversight requirements in the parties' Medi-Cal Contracts with
the DHS, which NCQA has acknowledged in the above-described report to conform
with NCQA requirements: Section 3.07, Management of Delegated Quality
Improvement Activities, 3.08, Management of Delegated Credentialing Activities,
and 3.09, Management of Delegated Utilization Review Activities. Sections 2.08,
2.09 and 2.10 of the Agreements conform with the Medi-Cal Plan contract and NCQA
requirements that provide that the Subcontracting Plan's quality assurance,
utilization review and credentialing activities are subject to the Medi-Cal
Plan's standards and the oversight of the Medi-Cal Plan's Quality Assurance
Committee.
In summary, this is to confirm that the parties understand and agree that the
delegation provisions in the Agreements describe the Medi-Cal Plan's requirement
to maintain the oversight responsibilities required by NCQA and meet the
required elements of an NCQA-sufficient delegation agreement as set out in NCQA
standard UM 13.1 (renumbered UM 15.1 for the NCQA Guidelines that are effective
July 1, 2001).
Although the Agreements expressly provide that the Medi-Cal Plan delegated to
the subcontracting party and its subcontractors both the right and duty to
pharmaceutical utilization management, the following clarifies the understanding
and agreement of the parties with respect to such pharmaceutical utilization
management. The Subcontracting Plan and/or its subcontracting pharmacy benefits
management company shall:
.. Have clearly documented pharmaceutical management procedures in place, and
a process for applying the procedures.
.. Review such pharmaceutical management procedures at least annually and
update as it determines to be necessary.
.. Involve actively practicing practitioners, including pharmacists, in the
development and periodic updating of its pharmaceutical management
procedures.
.. Provide its contracting providers its pharmaceutical management procedures
and any changes that the Subcontracting Plan or subcontracting pharmacy
benefits management company makes to the procedures.
3
.. When restricting pharmacy benefits via a drug formulary, the Subcontracting
Plan or subcontracting pharmacy benefits management company shall have a
process to consider medical necessity exceptions for members to obtain
coverage of a pharmaceutical not on the drug formulary; provided, however,
the parties understand and agree that the Subcontracting Plan is not
obligated to cover non-formulary medications on a medically necessary basis
that are carved out from the Medi-Cal Plan's contract with the DHS, such as
AIDS, HIV, Xxxxxxxxx'x, anti-psychotic and anti-maniac medications.
.. Provide the following reports to the Medi-Cal Plan on a quarterly basis:
1. Notification of any changes to the drug formulary.
2. Copies of denials for pharmacy prior authorization (if any).
3. Additions and deletions to pharmaceutical management procedures (other
than drug formulary).
4. Any changes in overall makeup of P&T Committee (e.g., different
specialties represented, actual member names need not be included).
4
AMENDMENT OF
HEALTH NET-MOLINA LOS ANGELES COUNTY MEDI-CAL AGREEMENT
This is an amendment of the Health Services Agreement for Los Angeles County
(the "Agreement") entered into by and between Xxxxxx Healthcare of California
(formerly, "Xxxxxx Medical Centers") and Health Net of California, Inc.
(formerly, "Foundation Health, a California Health Plan"). Subject to the terms
and conditions of Restated Addendum I to the Agreement, the parties hereby amend
the Agreement as follows:
1. Revised compensation arrangement for the period of October 1, 2001 through
October 31, 2001. For the specified period, Health Net shall pay Molina the
following monthly capitation rates for each Member assigned to Molina:
Family $ [*]
Child $ [*]
Disabled $ [*]
Adult $ [*]
Aged $ [*]
AIDS $ [*]
2. Revised compensation arrangement for the period of November 1, 2001 through
September 30, 2002. For the specified period, Health Net shall pay Molina
the following monthly capitation rates for each Member assigned to Molina:
Family $ [*]
Child $ [*]
Disabled $ [*]
Adult $ [*]
Aged $ [*]
AIDS $ [*]
3. Effective date of Amendment. This Amendment is effective October 1, 2001.
XXXXXX HEALTHCARE HEALTH NET OF CALIFORNIA, INC.
OF CALIFORNIA
By: /s/ By: /s/
---------------------- -----------------------
Xxxxxx Xxxxxxxxx, Xxxx Xxxxxxx,
President Vice President
California Health Programs
