EXHIBIT 10.2.2
AMENDMENT NUMBER 2 TO
MEDICAL DIRECTOR SERVICES AGREEMENT
THIS AMENDMENT NUMBER 2 TO MEDICAL DIRECTOR SERVICES AGREEMENT (this
"Amendment") is made and entered into as of the 12th day of February, 2002, by
and between RCG INDIANA, LLC, a Delaware limited liability company as assignee
of Renal Care Group, Inc. (the "Company"), and INDIANA DIALYSIS MANAGEMENT, a
division of INDIANA MEDICAL ASSOCIATES, an Indiana corporation (the "Group ").
WITNESSETH:
WHEREAS, Renal Care Group, Inc. and the predecessor of the Group, Indiana
Dialysis Management, P.C., are parties to a Medical Director Services Agreement
(Group Practice/Freestanding Facility), effective as of February 12, 1996, which
was amended by Amendment Number 1 to Medical Director Services Agreement,
effective as of January 1, 1999 (as so amended, the "Agreement"), under which
the Group agrees to provide medical director services for the Company's dialysis
facilities located in and near Ft. Xxxxx, Indiana, which Agreement was assigned
by Renal Care Group, Inc. to the Company; and
WHEREAS, by mutual agreement, the Agreement has been amended to add
additional facilities developed in and near Ft. Xxxxx, Indiana, including
facilities owned by the Company in joint ventures with the Group; and
WHEREAS, the parties to this Amendment now desire to make certain
modifications and amendments to the Agreement as provided herein; and
WHEREAS, capitalized terms that are used but not defined in this Amendment
that are defined in the Agreement shall have the meanings set forth in the
Agreement;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
undertakings set forth in this Amendment and in the Agreement, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Amendment hereby agree as follows:
1. Facilities. The parties agree that the definition of "Facilities" is
hereby amended by deleting the current definition thereof in the Agreement. In
lieu of such definition, for purposes of the Agreement the term "Facilities"
means those dialysis facilities owned in whole or in part by the Company that
are located within the Territory (as defined in the Agreement), including the
facilities listed on EXHIBIT A attached to this Amendment and any new facilities
developed by the Company or an affiliate of the Company within the Territory;
provided, however, that "Facilities" shall not include any dialysis facilities
that are acquired by the Company or an affiliate of the Company from an
unrelated third party.
2. Compensation. The parties agree that Section 3.1 of the Agreement is
hereby amended by deleting such section in its entirety and inserting in lieu
thereof, the following:
3.1 Compensation.
(a) In consideration of the services, covenants, and
agreements agreed to be performed by the Group during the Initial Term and
any Renewal Term, effective as of
February 12, 2002, the Company shall pay the Group $620,000 per year,
payable in substantially equal monthly installments. The installment for
the month of February 2002 will be $47,381.22, and the installment for the
12-day period ending February 12, 2006 will be $22,142.86. The parties
agree that this $620,000 per year medical director fee will be fixed for
the years ending February 11, 2003, 2004, 2005 and 2006. In addition to
the monthly medical director fee prescribed above, the Group shall be
eligible for an annual bonus of up to 15% of the base medical director
compensation paid during the year based upon the success of the Facility
in meeting annual clinical outcomes targets and in achieving performance
objectives for the Facilities and the Group generally prescribed by Renal
Care Group, Inc. ("RCG") for its dialysis facilities in the region in
which the Facilities are located. This bonus shall be payable on a
calendar year basis, and it will be prorated for years in which this
Agreement (and this bonus provision) is in force for less than the entire
year. The criteria for reviewing and determining the bonus amount will be
substantially similar to those attached hereto as EXHIBIT C. RCG may
change such criteria annually, and the Company will provide the revised
criteria to the Group when adopted. The amount of the bonus payable to the
Group shall be determined by reviewing such criteria for all Facilities.
If the Facilities (as a group) are in the top quartile (the top 25%) of
RCG facilities, then the bonus will be 15%; if the Facilities are in the
second quartile, then the bonus will be 10%; if the Facilities are in the
third quartile, then the bonus will be 5%; if the Facilities are in the
bottom quartile, no bonus will be paid. The Group agrees to accept the
payment under this subsection (a) (as it may be adjusted as provided
below) as the total compensation for all services, covenants and
agreements pursuant to this Agreement.
(b) (i) Beginning 90 days prior to February 12, 2006 and each
year thereafter, if either party believes that the fair market value of
the services provided by the Group under this Agreement has changed in any
material way since the most recent anniversary of the effective date of a
change in compensation payable under this Agreement (a "Compensation
Adjustment Date") (or since February 12, 2002 with respect to the
Compensation Adjustment Date occurring on February 12, 2006), then such
party may notify the other that it believes such a change has occurred and
the Group and the Company shall negotiate in good faith an adjustment to
the compensation described in Section 3.1(a) above so that it represents
fair market value for the duties and responsibilities of the Group to be
provided during the next year under this Agreement. Notwithstanding the
foregoing, no adjustment pursuant to this subsection (b)(i) to the
compensation payable under this Agreement shall be effective unless set
forth in writing signed by each of the Group and the Company, which
writing shall be deemed an amendment to this Agreement.
(ii) If the Group and the Company are unable to agree on
an adjustment, then either may require that an adjustment of the
compensation hereunder be submitted to a qualified independent third party
mutually selected by both the Group and the Company to determine the fair
market value of the services required hereunder, the costs and fees of
which shall be borne equally by the Group and the Company. If the Group
and the Company are unable to agree on the third party, then each of the
Company and the Group shall at its own cost and expense select its own
qualified independent third party and the average of such two
determinations of fair market value shall be the revised compensation
unless such determinations are more than 10% apart, in which case such
third parties shall mutually select an additional qualified independent
third party, the fees and expenses of which shall be shared equally, who
shall determine the fair market value of the services hereunder from
between the range of the amounts determined by the first
2
two appraisals. The fair market value of the services as determined in
accordance with the provisions of this subsection (b)(ii) shall be the
compensation payable under this Agreement effective as of the applicable
anniversary of the Compensation Adjustment Date, and such final
determination shall be deemed an amendment to this Agreement.
(c) Any change to the compensation payable hereunder in
accordance with subsection (b) of this Section 3.1 shall be effective as
of the applicable anniversary of the Compensation Adjustment Date and
shall remain effective, and not subject to adjustment under Section 3.1(b)
or otherwise, for at least 12 months from the effective date of such
change.
2. No Further Amendment. Except as expressly modified and amended by this
Amendment, the parties agree that the Agreement shall continue in full force and
effect as provided therein, and the parties reaffirm all of its provisions.
3. Miscellaneous. The section and other headings used in this Amendment
are for convenience of reference only and shall not affect the interpretation of
this Agreement in any way. This Amendment may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and all
of which shall be deemed, collectively, one agreement.
[the remainder of this page intentionally left blank, signatures follow]
3
IN WITNESS WHEREOF, this Amendment is executed effective as of the date
first set forth above.
The Company:
RCG INDIANA, LLC
By: /s/ R. Xxxx Xxxxxxx
-----------------------------------------
Title: Vice President of Manager
The Group
INDIANA DIALYSIS MANAGEMENT
a division of INDIANA MEDICAL ASSOCIATES
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------------------------
Title: President
--------------------------------------
4
Each physician executing below acknowledges that he or she has read and
understood the terms of this Amendment and the Agreement amended hereby and
hereby confirms and ratifies the acknowledgement set forth in Section 6.1(i) of
the Agreement and the agreements set forth in Article VII of the Agreement, as
provided therein.
/s/ Xxxxxxx X. XxXxxxxx
---------------------------------------
XXXXXXX X. XxXXXXXX, M.D.
/s/ Xxxx Xxxxxx
---------------------------------------
XXXX XXXXXX, M.D.
/s/ Xxxxxx Xxx
---------------------------------------
XXXXXX XXX, M.D.
/s/ Xxxx Xxxx
---------------------------------------
XXXX XXXX, M.D.
/s/ Xxxx Xxxxxxx
---------------------------------------
XXXX XXXXXXX, D.O.
/s/ Xxxxxx X'Xxxxxxxxxxx
---------------------------------------
XXXXXX X'XXXXXXXXXXX, M.D.
---------------------------------------
---------------------------------------
---------------------------------------
---------------------------------------
5
EXHIBIT A
LIST OF FACILITIES
RCG Van Xxxx RCG DuPont Road
000 Xxx Xxxx, Xxxxx 000 00000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxxx 00000 Xxxx Xxxxx, Xxxxxxx 00000
Northeast Indiana Kidney Center - Auburn Regional Dialysis Center of Xxxxxxxx County
0000 X. 00xx Xxxxxx 000 X. Xxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000 Xxxxx, Xxxx 00000
Northeast Indiana Kidney Center - Decatur Northeast Indiana Kidney Center - Ft. Xxxxx
0000 X. 00xx Xxxxxx 0000 X. Xxxxxxxxx Xxxx., Xxxxx X00
Xxxxxxx, Xxxxxxx 00000 Xxxx Xxxxx, Xxxxxxx 00000
Northeast Indiana Kidney Center - Marion Northeast Indiana Kidney Center - New Haven
1797 Kem Road 0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000 Xxx Xxxxx, Xxxxxxx 00000
Northeast Indiana Kidney Center - Warsaw
0000 Xxxx Xxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
6
EXHIBIT C
MEDICAL DIRECTOR PERFORMANCE REVIEW
There has been general agreement regarding the need for a clear set of
guidelines and expectations of an RCG Medical Director. Objectivity in the
annual performance evaluation has been prerequisite, leading to the development
of this document. Our mission is "to improve the quality of life and to care for
those patients with chronic and acute renal disease." This requires that the
dialysis facility and its staff function collaboratively at the highest possible
level, under the leadership of the Medical Director.
The Interpretive Guidelines for ESRD Facilities states in V-420 "Treatment
is under the general supervision of a Director who is a physician. The Medical
Director is responsible for planning, organizing, conducting and directing the
professional ESRD services and must devote sufficient time to carrying out these
responsibilities." The Nephrologist has the medical skills and must develop
leadership and collaborative management skills to fulfill this mandate as
Medical Director. Teamwork and collegiality are highly valued as the leader of
the ESRD team.
The measure of performance will be based on a point system as authorized
by the Medical Advisory Board (MAB). The specific criteria and weight may be
changed in the future at the discretion of the MAB. The elements to be measured
and their weight are as follows:
- 50% based on Clinical Indicators of the Facility
- 30% based on Medical Director administrative duties
- 20% based on patient satisfaction with the Facility
CLINICAL PERFORMANCE MEASURES (50%)
HEMODIALYSIS MEDICAL DIRECTOR
(evaluation based on annual rolling average of prior year)
- URR (% of patients with URRs >=70%) >75% = 10 points
RCG average 65% 70-75% = 8 points
Best Region 72.8% 65-69.9% = 6 points
60-64.9% = 4 points
<60% = 0 points
- HEMATOCRIT (% of Hcts >=33%) >75% = 10 points
RCG average 63.7% 70-75% = 8 points
Best Region 70.2 65-69.9% = 6 points
60-64.9% = 4 points
55-59.9% = 2 points
<55% = 0 points
- HOSPITALIZATION (91+ days, based on days per patient year at risk)
RCG average 12.0 days < 10 days = 8 points
Best Region 8.6 days 10-14.9 days = 6 points
15-20 days = 2 points
>20 days = 0 points
7
- MORTALITY (91+ days, based on deaths per 100 patient years at risk)
RCG average 20.7 < 20 = 8 points
Best Region 15.5 20-23.9 = 6 points
24-29.9 = 4 points
30-35 = 2 points
>35 = 0 points
- VASCULAR ACCESS:
-
% OF TEMPORARY CATHETERS < 10% = 8 points
RCG average 19.8% 10-14.9% = 6 points
Best Region 10.7% 15-19.9% = 4 points
20-25% = 2 points
>25% = 0 points
% NATIVE AV FISTULAS >35% = 15 points
RCG average 22% 30-34.9% = 12 points
Best Region 33.6% 25-29.9% = 9 points
20-24% = 6 points
15-19.9% = 3 points
<15% = 0 points
PTFE CLOTTING EVENTS/PATIENT YEAR < 0.3 = 10 points
RCG average 0.9 0.3 - 0.59 = 8 points
Best Region 0.6 0.6 - 0.99 = 9 points
1.0 - 1.2 = 4 points
>1.2 = 0 points
PERITONEAL DIALYSIS MEDICAL DIRECTOR
(VALUATION BASED ON ANNUAL ROLLING AVERAGE OF PRIOR YEAR)
- KT/V (>=2.1)
RCG average 63.5% CAPD > 65 = 15 points
RCG average 70.6% CCPD 60-65% = 12 points
55-59.9% = 10 points
50-54.9% = 8 points
45-49.9% = 5 points
- CREATININE CLEARANCE (>=60L CAPD or >=60 L CCPD)
RCG average 67.1% CAPD > 70% = 15 points
RCG average 70.6% CCPD 65-70% = 12 points
60-64.9% = 10 points
55-59.9% = 8 points
50-54.9% = 5 points
8
- HEMATOCRIT (% of Hcts 33-36%) >75% = 10 points
RCG average 63.7% 70-75% = 8 points
Best Region 70.2 65-69.9% = 6 points
60-64.9% = 4 points
55-59.9% = 2 points
< 55% = 0 points
- HOSPITALIZATION (91 + days, based on days per patient year at risk)
RCG average 12.0 days < 10 days = 8 points
Best Region 8.6 days 10-14.9 days = 6 points
15-20 days = 2 points
> 20 days = 0 points
- MORTALITY (91 + days, based on deaths per 100 patient years at risk)
RCG average 20.7 < 20 = 8 points
Best Region 15.5 20-24.9 = 6 points
24-29.9 = 4 points
30-35 = 2 points
> 35 = 0 points
- PERITONITIS (new cases + relapse)
RCG average 14.9 months between cases
Best Region 16.9 months between cases
>25 months between cases 15 points
20-25 months between cases 12 points
15-19.9 months between cases 9 points
10-14.9 months between cases 6 points
>10 months between cases 0 points
9
COMBINATION HEMODIALYSIS & PERITONEAL MEDICAL DIRECTOR
For those physicians who oversee both modalities, each is evaluated using the
above criteria. The overall Clinical Quality is then a composite of these,
weighted to reflect the numbers of patients in each modality.
MEDICAL DIRECTOR TASKS (30%)
- PARTICIPATION IN MONTHLY REVIEW: (one point / month with 12 points
possible)
- Review staffing & training issues impacting patient outcomes with
Manager
- Review water quality
- Review dialyzer reuse @ the Facility
- Review monthly lab of patients below quality goals & develop plan
- Review trend in hospitalizations, infections
- Review temporary catheter usage & trend
- Review patient incident reports & trends
- Monitor staff physician patient rounding process
- Adequacy of staff physician medical documentation
- PARTICIPATION IN CQI PROCESS: (one point / hourly meeting with 12 points
possible)
- PARTICIPATION IN PROFESSIONAL STAFF PROCESS:
- Quarterly Professional Staff meetings (one point / quarter - 4
points possible)
- Quarterly Quality conference calls (one point / quarter - 4 points
possible)
- ANNUAL CHECKLIST: (2 points for each item - 8 points possible)
- Review and approve facility Policy and Procedures and make necessary
modifications; review and approve clinical protocols.
- Review patient satisfaction data annually and in concert with the
Facility Manager make recommendations for improvement.
- Participate with the Manager in the Budget process for the Facility.
- Participate in Facility surveys by BOH, CMS, etc.
PATIENT SATISFACTION SCORES (PSS) (20 %)
CAREGIVER:
RCG average 1.26
PSS>1.5 = 8 points
PSS 1.25-1.5 = 6 points
PSS 1.0-1.249 = 4 points
PSS 0.5-0.99 = 2 points
PSS <0.5 = 0 points
PHYSICIAN:
RCG average 1.11
PSS>1.5 = 10 points
PSS 1.25-1.5 = 8 points
PSS 1.0-1.249 = 6 points
PSS 0.5-0.99 = 2 points
PSS <0.5 = 0 points
10
DIETICIAN, SOCIAL WORKER, OTHER
RCG average 1.47, 1.33, 1.08
PSS>1.5 = 4 points each
PSS 1.25-1.5 = 3 points each
PSS 1.0-1.249 = 2 points each
PSS 0.5-0.99 = 1 point each
PSS <0.5 = 0 points
11
