7/18/97
AGREEMENT
AGREEMENT made as of the 1st day of January, 1997, by and between Blue
Cross & Blue Shield of Rhode Island, a nonprofit hospital and medical service
corporation organized under the laws of the State of Rhode Island, with an
address at 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 ("Blue
Cross"), and CareAdvantage Health Systems, Inc., a business corporation
organized under the laws of the State of Delaware, with an address at 000-X
Xxxxx 0 Xxxxx, Xxxxxx, Xxx Xxxxxx 00000-0000 ("CareAdvantage").
W I T N E S S E T H:
WHEREAS, Blue Cross is a nonprofit hospital and medical service
corporation organized for the purpose, inter alia, of underwriting and
administering various hospital and medical service plans; and
WHEREAS, CareAdvantage is a business corporation which provides
various health care management services, including without limitation
utilization review and medical management services, to third party payors and
administrators of health benefit plans; and
WHEREAS, CareAdvantage has previously provided and desires to continue
to provide certain medical management services to Blue Cross, in connection with
their existing and new health care plans and Blue Cross desires to enter into an
agreement with CareAdvantage for the provision of such services; and
WHEREAS, the parties hereto desire to set forth the terms and
conditions of their agreement for the provision to Blue Cross by CareAdvantage
of certain health care management services;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Term and Termination. (a) This Agreement shall commence on January 1,
1997 for a period to end no later than December 31, 1999 (the "Term").
(b) This Agreement shall be terminable by either party without cause
upon ninety (90) days' prior written notice.
(c) This Agreement shall be terminable by either party for cause upon
not less than twenty (20) days' prior written notice to the other party, setting
forth in detail the cause, and providing that the agreement is to be terminated
upon the expiration of twenty (20) days or such longer period which may be set
forth in the notice, unless the condition giving rise to the cause is corrected
within that time period. "Cause" shall include breach of the Agreement, the
insolvency of either party, or the seeking by either party of protection under
bankruptcy or receivership laws.
(d) On or before September 1, 1999 the parties hereto shall meet for
the purpose of discussing an extension of this Agreement on terms to be mutually
agreed. Absent the mutual written agreement of the parties hereto to extend this
Agreement on mutually acceptable terms, this Agreement shall terminate on
December 31, 1999.
2. Health Care Management Services. (a) During the Term hereof,
CareAdvantage shall provide to Blue Cross, when requested by Blue Cross, certain
care management services as more particularly specified herein and in Attachment
I attached hereto and incorporated herein by reference for the purpose of
assisting Blue Cross in the proper and effective administration of its health
benefit programs (underwritten and administered) and in the reduction of
inappropriate claims liability for its underwritten and administered health
benefit plans.
(b) During the Term, the services provided by CareAdvantage under this
Agreement shall be supervised by Xxxxxxx X. Deutsch, M.D. or another physician
with similar qualifications approved by Blue Cross, which approval shall not be
unreasonably withheld; provided, however, that during the term hereof, Blue
Cross may withdraw its approval of any physician providing supervisory services
hereunder if Blue Cross reasonably determines that the supervisor is not
providing effective supervision in a manner which is compatible with Blue Cross
procedures, whereupon CareAdvantage shall remedy the supervisory problem to the
satisfaction of Blue Cross or replace such supervisor with a supervisor approved
by Blue Cross, with such action to be taken within ninety (90) days of a written
request from Blue Cross. Dr. Deutsch (or such other physician) shall spend half
time at Blue Cross in order to properly supervise the provision of such
services.
(c) In fulfilling its responsibilities under this Agreement,
CareAdvantage shall provide at least three and one-half medical management
physicians on a full-time equivalent basis: (i) one of which shall serve as the
Medical Director for Blue Cross; (ii) one-half of which shall act as a Director
responsible for the coordination of the provision of services which
CareAdvantage shall provide in accordance with the terms of Section 2(b); (iii)
two of which shall serve as Associate Medical Director and Physician Adviser to
conduct utilization review and case reviews for Blue Cross as required under the
terms of this Agreement; and (iv) such other physicians, nurses, experts, and
other personnel, which individuals shall be employed by, or under contract to,
CareAdvantage, as shall be necessary for CareAdvantage to perform its
obligations under this Agreement.
The Medical Director, Associate Medical Directors, and other
physicians, individuals and/or entities employed by, or under contract to
CareAdvantage to provide services under this Agreement shall in all respects be
satisfactory to Blue Cross in its reasonable judgment, including in medical
education, training, experience, judgment, and ability to effectively work with
and relate to Blue Cross employees, physicians under contract with Blue Cross,
and others in the medical community. The number, quality and performance of the
physicians and other individuals and/or entities employed by, or under contract
to, CareAdvantage to perform services hereunder shall be satisfactory to Blue
Cross in its reasonable judgment and shall be as required for CareAdvantage to
effectively and efficiently deliver such services.
CareAdvantage shall ensure the timely availability of appropriate
physicians, nurses and other personnel to provide the services under this
Agreement, as well as the reasonable continuity of such physicians, nurses and
personnel in order to provide stability to the medical management services being
performed and to maximize efficiency and productivity.
(d) In the performance of the utilization review services to be
provided by CareAdvantage pursuant to the terms of this Agreement, CareAdvantage
shall be responsible for recommending to Blue Cross what constitutes "medically
necessary" treatment and services, "medically indicated" treatment and services,
"emergency" treatment and services, "urgent care" and "experimental" and/or
"investigational" treatment and services, as such terms are defined by Blue
Cross pursuant to its contracts, administrative policies and rules and
regulations, and for recommending other medical determinations required to
properly perform utilization review and case management functions and the other
services, and in order to allow Blue Cross to determine whether benefits are
payable under health benefit plans administered or underwritten by Blue Cross.
Notwithstanding anything to the contrary contained in this Section 2(d), it
shall be Blue Cross' determination, and not CareAdvantage's determination, as to
whether benefits are payable under any Blue Cross underwritten or administered
health benefit plans. In making such determination of whether benefits are
payable under health benefit plans administered or underwritten by Blue Cross,
Blue Cross may rely upon CareAdvantage's determinations of what constitutes
"medically necessary" treatment and services, "medically indicated" treatment
and services, "emergency" treatment and services, and upon CareAdvantage's
determinations on other matters within the scope of its responsibilities to
provide services pursuant to and in accordance with the terms of this Agreement.
As a part of the utilization review services to be provided by
CareAdvantage pursuant to the terms of this Agreement, CareAdvantage is
responsible for conducting a periodic formal program for training, on-going
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monitoring, and evaluation of the performance of all staff physicians involved
in all levels of the review process. Included as part of the training shall be
orientation in the principles and procedures of utilization review, Utilization
Review Accreditation Committee Standards, National Committee for Quality
Assurance, and peer review.
CareAdvantage shall meet regularly with the management of the Health
Benefits Management Department of Blue Cross and appropriate senior management
to provide guidance on the use of staff and resources of the Health Benefits
Management Department to implement agreed upon utilization management strategies
and to provide proposals for CareAdvantage to effect reductions in per member
claims liability. The utilization management strategies and proposals made by
CareAdvantage must be reasonable and consistent with Blue Cross contracts,
policies and procedures. In the event that CareAdvantage determines that Blue
Cross has failed to take action with regard to utilization review, case
management, and/or a health care management proposal in a way so as to refuse to
adopt the recommendation of CareAdvantage, or dilute, alter, or materially
change the recommendation of CareAdvantage, and CareAdvantage determines that
the result of such action or inaction by Blue Cross is that the measurement of
CareAdvantage's performance for purposes of compensation under this Agreement is
materially and adversely affected, CareAdvantage shall so notify Blue Cross in
writing, and if Blue Cross does not alter or change its utilization review, case
management, and health care management policies in a manner which CareAdvantage
determines, in good faith, is reasonably acceptable to CareAdvantage, then
CareAdvantage shall have the right to terminate this Agreement by giving Blue
Cross ninety (90) days' prior written notice of such termination.
(e) Hiring of Employees. The parties agree that they shall not, except
with the prior written consent of the other, employ or contract with any person
employed by the other then or within the preceding twelve months who was
directly or indirectly involved in the performance of this Agreement. This
restriction against hiring shall remain in effect for the life of this Agreement
and one (1) year thereafter.
(f) Utilization Review Restrictions. Notwithstanding anything to the
contrary contained in this Agreement, Blue Cross does not intend to utilize
CareAdvantage to provide first level utilization review services. Rather, Blue
Cross intends to contract with individual physicians to provide such services.
Accordingly, CareAdvantage shall not provide first level utilization review
services hereunder unless and until so directed by Blue Cross in writing,
whereupon the parties will adjust the compensation under this Agreement to
reflect the termination of the physicians providing first level review under
contract to Blue Cross.
3. Nature of Relationship. (a) The parties hereto recognize that the
relationship established by this Agreement is purely contractual in nature, that
such parties are independent contractors, and that this Agreement does not
establish a joint venture, partnership, or other arrangement pursuant to which
such parties shall share profits or losses or shall be bound to pay or perform
the obligations of the other party. Neither party hereto shall be authorized to
act as an agent or representative for the other party hereto unless expressly
authorized in writing for each such purpose, and then only to the extent so
authorized. Neither party hereto may bind the other party in any respect, except
as previously authorized in writing signed by such party to be bound, and then
only to the extent expressly so authorized, and neither party hereto may hold
itself out to or represent to third parties that such party has the power or
authority to bind the party hereto, and any such purported representations shall
be null and void and of no further force and effect. Neither party hereto may
represent to any third party that the subject of this Agreement constitutes a
partnership, joint venture, or other risk-sharing arrangement or that any party
hereto is liable or responsible for the obligations of the other party hereto.
For all purposes hereof, Blue Cross and CareAdvantage shall be deemed to be
independent contractors, and neither party hereto shall be responsible for the
acts or omissions of the other party.
(b) Each party hereto recognizes and acknowledges that it makes no
representation regarding, and assumes no responsibility for, the quality of
health care services provided by providers under any health benefit plan
underwritten or administered by Blue Cross, and that neither party hereto has
any control over the kind and quality of health care services provided by
providers pursuant to health benefit plans administered or underwritten by Blue
Cross.
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4. Compensation. Effective January 1, 1997 Blue Cross shall pay
CareAdvantage for its services under this Agreement in accordance with
Attachment II, attached hereto and incorporated herein by reference.
5. Adjustments to Services and Compensation. The parties acknowledge that
the managed care business is continuously changing, and that during the Term it
may be desirable to reconfigure the services provided by and to adjust the
compensation payable to CareAdvantage under this Agreement. The parties agree to
negotiate such matters in good faith, provided, however, that in the event they
are unable to agree, either party may terminate this Agreement without cause
pursuant to Section 1(b).
6. Warranties and Representations. (a) CareAdvantage warrants and
represents to Blue Cross as follows, such warranties and representations to be
true as of the date hereof and during the Term hereof and any extension thereof:
(i) CareAdvantage is duly organized, validly existing, and in good
standing under the laws of its state of organization and
incorporation, and is qualified to do business in all states where
such business qualification is required, including without limitation,
Rhode Island;
(ii) CareAdvantage is duly licensed as a utilization review agent in
the State of Rhode Island, such Rhode Island license is valid, in full
force and effect, and has not been suspended or revoked, and
CareAdvantage is not the subject of any pending disciplinary or
administrative proceedings pertaining to such license not disclosed to
Blue Cross, and to its knowledge, CareAdvantage has otherwise taken
all action to comply with all applicable laws, rules and regulations
pertaining to acting as a utilization review agent in Rhode Island;
(iii) CareAdvantage is in compliance with all applicable federal,
state and local laws, rules and regulations required or necessary in
order to allow CareAdvantage to perform its obligations pursuant to
this Agreement.
(iv) CareAdvantage does not now have any material lawsuits,
administrative actions, claims, grievances, or other legal actions
pending against it which, if adversely determined, would materially
impair its ability to perform its obligations under this Agreement;
(v) There are no actions, pending or threatened, against
CareAdvantage, and there are no conditions which are threatened or, to
its knowledge, exist, including actions by regulatory authorities,
relating to the obligations of CareAdvantage set forth in this
Agreement, which, if they came to pass or continue would result in
CareAdvantage being in default hereunder or would materially impair
CareAdvantage's ability to perform its obligations under this
Agreement; and
(vi) CareAdvantage is adequately capitalized and has the financial and
personnel resources to perform its obligations under this Agreement,
and all of its employees or parties with whom it contracts who will
provide services under the terms of this Agreement are or shall be
duly qualified, licensed where required, and otherwise competent and
able to effectively perform the services and responsibilities of
CareAdvantage as required under this Agreement.
(b) Blue Cross warrants and represents to CareAdvantage as follows,
such warranties and representations to be true as of the date hereof and during
the Term hereof:
(i) Blue Cross is duly organized, validly existing, and in good
standing under the laws of its state of organization and
incorporation, and is qualified to do business in all states where
such business qualification is required, including without limitation,
Rhode Island;
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(ii) Blue Cross is duly licensed as a nonprofit hospital and medical
service corporation and a utilization review agent in the State of
Rhode Island, such licenses are valid, in full force and effect, and
have not been suspended or revoked, and Blue Cross is not the subject
of any pending disciplinary or administrative proceeding pertaining to
such licenses not disclosed to CareAdvantage, and to its knowledge,
Blue Cross has otherwise taken all action to comply with all
applicable laws, rules and regulations pertaining to acting as a
nonprofit hospital and medical service corporation and a utilization
review agent in Rhode Island;
(iii) Blue Cross is in compliance with all applicable federal, state
and local laws, rules and regulations required or necessary in order
to allow Blue Cross to perform its obligations pursuant to this
Agreement;
(iv) Blue Cross does not now have any material lawsuits,
administrative actions, claims, grievances, or other legal actions
pending against it which, if adversely determined, would materially
impair its ability to perform its obligations under this Agreement;
(v) There are no actions, pending or threatened, against Blue Cross,
and there are no conditions which are threatened or, to its knowledge,
exist, including actions by regulatory authorities, relating to the
obligations of Blue Cross set forth in this Agreement, which, if they
came to pass or continue would result in Blue Cross being in default
hereunder or would materially impair Blue Cross' ability to perform
its obligations under this Agreement; and
(vi) Blue Cross is adequately capitalized and has the financial and
personnel resources to perform its obligations under this Agreement.
7. Insurance. (a) Each party hereto shall obtain and maintain throughout
the Term of this Agreement appropriate policies of insurance, as shall protect
the named insured and the other party hereto from claims of bodily injury, death
or property damage that may arise from any activities of either party hereto, or
their respective agents, servants or employees associated with this Agreement.
Such policies shall provide coverage for worker's compensation, comprehensive
general liability, vehicular and all-risk property insurance, and "errors and
omissions" liability insurance, and in the case of CareAdvantage only,
professional liability (i.e., malpractice) insurance, all such insurance having
such limits and deductibles, and upon such terms and conditions, as are common
and customary for comparable contracts, and all such coverage and such carriers
providing coverage to be mutually acceptable to the parties. A duplicate
original of each policy and certificate of renewal of each policy required under
this Section 7 shall be given to the party upon request. Each of the policies of
insurance shall include provisions naming the other party as one of the insured
and shall deny to the insured rights of subrogation against the other party
(provided such provisions are reasonably obtainable without invalidating the
insurance so provided or disproportionately increasing the premiums therefore);
provided, however, that in no event shall one party be required to maintain an
insurance policy with a waiver of subrogation provision if the other party is
not able to procure such waiver of subrogation provision in its insurance policy
of the same type. The parties hereto each shall exercise good faith, and
diligent efforts, to ensure that such parties' policies of insurance as required
hereunder shall contain the aforesaid waiver of subrogation provisions.
(b) The policies of insurance required to be maintained by the parties
under this Agreement shall be noncancelable and nonamendable unless notice in
writing is given to the other party not less than ten (10) days prior to the
effective date of any cancellation or amendment (but such notice shall not limit
the continuing obligations to maintain insurance pursuant to this Agreement). If
any such policy of insurance is a claims made policy and not an occurrence
policy, either appropriate claims made or tail insurance shall be maintained in
full force for that period of time, after termination of this Agreement,
required under applicable law to continue to provide insurance protection to
both parties pursuant to this Agreement, with respect to occurrences prior to
the termination of this Agreement.
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8. Indemnification. (a) CareAdvantage hereby indemnifies, exonerates and
holds harmless Blue Cross from and against any claim, loss, cost, damage,
expense or other liability arising out of the performance by CareAdvantage of
services under this Agreement, excepting only liability attributable to the
willful misconduct or the willful, wanton or reckless failure by Blue Cross, its
agents, servants, employees or independent contractors engaged by Blue Cross
(but not CareAdvantage) to perform their respective obligations under this
Agreement or Blue Cross' negligence or the negligence of Blue Cross' agents,
servants, employees or independent contractors engaged by Blue Cross (but not
CareAdvantage); provided, however, that if such negligence is attributable in
part to CareAdvantage or its agents, servants, employees, or independent
contractors engaged by CareAdvantage and in part to Blue Cross or its agents,
servants, employees or independent contractors engaged by Blue Cross (but not
CareAdvantage), Blue Cross shall be entitled to indemnification by CareAdvantage
under this Section 8. If the attribution of negligence on a comparative basis is
not made by a court of competent jurisdiction for any reason, including without
limitation, because such claim is settled by the parties involved, then the
determination of respective fault, if any, shall be made by an arbitrator
mutually acceptable to Blue Cross and CareAdvantage. This indemnity agreement
shall include indemnity against all costs, expenses and liabilities incurred in
and in connection with any such claim or liability, and proceedings brought
thereunder, and the reasonable cost of the defense thereof with legal counsel
reasonably acceptable to Blue Cross. Notwithstanding anything herein to the
contrary, this Section 8 is not intended to obligate CareAdvantage to compensate
Blue Cross for claims for medical services that Blue Cross is contractually
obligated to pay.
(b) Blue Cross hereby indemnifies, exonerates and holds harmless
CareAdvantage from and against any claim, loss, cost, damage, expense or other
liability arising out of an act (or a failure to act) by Blue Cross contemplated
by or arising under this Agreement, excepting only liability attributable to the
willful misconduct or the willful, wanton or reckless failure by CareAdvantage,
its agents, servants, employees or independent contractors engaged by
CareAdvantage (but not Blue Cross) to perform their respective obligations under
this Agreement or CareAdvantage's negligence or the negligence of
CareAdvantage's agents, servants, employees or independent contractors engaged
by CareAdvantage (but not Blue Cross); provided, however, that if such
negligence is attributable in part to Blue Cross or its agents, servants,
employees, or independent contractors engaged by Blue Cross (but not
CareAdvantage) and in part to CareAdvantage or its agents, servants, employees
or independent contractors engaged by CareAdvantage, CareAdvantage shall be
entitled to indemnification by Blue Cross under this Section 8. If the
attribution of negligence on a comparative basis is not made by a court of
competent jurisdiction for any reason, including without limitation, because
such claim is settled by the parties involved, then the determination of
respective fault, if any, shall be made by an arbitrator mutually acceptable to
CareAdvantage and Blue Cross. This indemnity agreement shall include indemnity
against all costs, expenses and liabilities incurred in and in connection with
any such claim or liability, and proceedings brought thereunder, and the
reasonable cost of the defense thereof with legal counsel reasonably acceptable
to CareAdvantage.
Unless such claim or liability results from the willful misconduct of
or the willful, wanton or reckless failure by Blue Cross or its agents,
servants, employees or independent contractors engaged by Blue Cross (and not by
CareAdvantage) to perform their respective obligations under this Agreement (in
which case no such maximum or aggregate amount shall obtain) this indemnity
agreement shall in each instance be limited by and shall not exceed the
aggregate amount equal to the amount of the proceeds of insurance available to
satisfy the obligations of Blue Cross under this indemnity agreement.
(c) In no event shall either party hereunder be liable to the other
for lost profits or punitive damages on account of a default under this
Agreement or otherwise; provided, however, that the scope of the indemnification
provided by each party hereto may require the indemnitor hereunder to compensate
the indemnitee hereunder for damages which include punitive damages or lost
profits awarded to or incurred by a third party.
(d) An indemnitee entitled to indemnification under this Section 8
shall give notice to the indemnitor of a claim or other circumstances likely to
give rise to a request for indemnification promptly after the indemnitee becomes
aware of the same. An indemnitor shall be afforded the opportunity to undertake
the defense of
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and to settle by compromise or otherwise any claim for which indemnification is
available under this Section 8, with legal counsel approved by the indemnitee
(which approval shall not be unreasonably withheld or delayed). If an indemnitor
so assumes the defense of any claim, the indemnitee may participate in such
defense with legal counsel of the indemnitee's selection and at the expense of
the indemnitee. If the indemnitor, prior to the expiration of twenty (20) days
after receipt of notice of a claim by the indemnitee under this Section 8, has
not assumed the defense thereof, the indemnitee may thereupon undertake the
defense thereof on behalf of, and at the risk and expense of, the indemnitor,
with all reasonable costs and expenses of such defense to be paid by the
indemnitor. No compromise or settlement of any such claim shall be made without
the prior consent in writing of the indemnitee.
9. Notice of Certain New Business. During the term hereof, CareAdvantage
shall provide Blue Cross with prior notice, in the manner hereinafter provided,
before CareAdvantage provides any consulting services for the benefit of any
entity engaged in the health care industry (a "Health Care Entity"). In the
event that such Health Care Entity engages or conducts, directly or indirectly,
business in the States of Rhode Island or Massachusetts (a "Competitor Entity"),
CareAdvantage shall provide Blue Cross with one hundred (100) days' prior
written notice prior to providing services to such Competitor Entity. In the
event that such entity is not a Competitor Entity, CareAdvantage shall provide
Blue Cross with fifteen (15) business days' prior written notice prior to
providing services to such entity. It is the intention of Blue Cross not to
continue in a business relationship with CareAdvantage in the event
CareAdvantage provides services to a Competitor Entity. Accordingly, within ten
(10) business days after the receipt of either of the aforesaid notices, Blue
Cross shall notify CareAdvantage whether it considers such Health Care Entity to
be a Competitor Entity, whether or not designated a Competitor Entity by
CareAdvantage, and in the event Blue Cross determines such Health Care Entity to
be a Competitor Entity, whether or not Blue Cross intends to terminate this
Agreement on ninety (90) days' prior written notice, as allowed under Section
1(b) hereof. In no event shall CareAdvantage be required to give notice to Blue
Cross in the event it intends to provide services to a licensee of the Blue
Cross Blue Shield Association, provided, however, that CareAdvantage shall be
required to give notice in the manner required for a Competitor Entity in the
event that such Health Care Entity is a subsidiary or affiliate of such licensee
of the Blue Cross Blue Shield Association, and such subsidiary or affiliate
conducts or engages in business, directly or indirectly, in the States of Rhode
Island or Massachusetts.
10. Confidentiality. (a) Blue Cross and CareAdvantage have executed a
Nondisclosure Agreement governing the handling of "Proprietary Information"
between the parties, as such term is defined in the Nondisclosure Agreement. The
Nondisclosure Agreement between the parties, a copy of which is attached hereto
as Attachment III and incorporated herein by reference, shall continue to govern
the obligations of the parties with regard to Proprietary Information.
(b) Should Blue Cross enter into a contract with a vendor other than
CareAdvantage to manage a discrete segment of its business that is not managed
by CareAdvantage, then CareAdvantage will enter into a confidentiality agreement
with that vendor similar to the confidentiality agreement Blue Cross has with
the vendor.
11. Third-Party Beneficiaries. No individuals or entities are intended by
the parties hereto to be third-party beneficiaries to this Agreement, and this
Agreement shall not be construed or interpreted to confer rights or benefits on
any third-party and shall not be enforceable by any entity not a party to this
Agreement.
12. Further Contracts. The decision by Blue Cross to enter into this
Agreement with CareAdvantage shall not be construed or interpreted by
CareAdvantage as the intention of Blue Cross to enter into any other contract
with CareAdvantage for any other services, during the Term or following the
termination of this Agreement, and the parties hereto expressly acknowledge that
Blue Cross has no obligation to enter into any further contract or agreement
with CareAdvantage for the provision of any services, either during the Term or
following the termination of this Agreement. CareAdvantage is not authorized to
make representation to, and shall not make representation to, any third party
that Blue Cross has any obligation to enter into any other contract with
CareAdvantage either during the Term or following the termination of this
Agreement.
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13. Rights to Proprietary Data. (a) The parties hereto acknowledge that
Blue Cross has entered into a license agreement with Milliman & Xxxxxxxxx, Inc.
("M&R") pursuant to which Blue Cross has licensed from M&R certain Health Care
Management Guidelines for use by medical personnel in managing health care
delivery systems (the "M&R Guidelines"). The parties further acknowledge that
CareAdvantage has provided certain services to Blue Cross with regard to
modification of the M&R Guidelines, including meeting with physicians and
proposing and drafting modifications to the M&R Guidelines. CareAdvantage hereby
agrees that it has no right, title, or interest in the M&R Guidelines, and that
the M&R Guidelines are the property of Blue Cross, subject to the rights of M&R
under the license agreement between Blue Cross and M&R for the M&R Guidelines,
and CareAdvantage hereby forever remises, releases, and relinquishes any
interest, right, claim, or title in the M&R Guidelines, in any form whatsoever,
including as such M&R Guidelines may have been modified with the assistance of
CareAdvantage. Notwithstanding anything to the contrary contained in this
Section 13(a), this Agreement shall not limit CareAdvantage from entering into
any separate licensing agreement with M & R or with any other licensor of health
care delivery products, nor shall it prevent CareAdvantage from making any
modification to any such separately licensed product, whether with M & R or with
any other licensor of health care delivery products.
(b) CareAdvantage further hereby acknowledges and agrees that it has,
and shall have, no right, title or interest in any other manuals, instructions,
treatment protocols, critical path guidelines, materials, guidelines, studies,
analysis, case management programs, processes, procedures, modifications,
operating codes, methods of access, or access codes, produced or developed by
CareAdvantage and provided for the use or benefit of Blue Cross and/or its
subscribers or providers as part of the services provided by CareAdvantage, or
as part of any other services provided by CareAdvantage under this Agreement
(collectively, the "Work Product"), and that all such Work Product shall be the
property of Blue Cross. CareAdvantage shall have no right, title or interest in
such Work Product, unless (i) CareAdvantage has rights to such Work Product
pursuant to a valid, previously-existing patent, trademark, copyright, or
license, and then only to the extent of such patent, trademark, copyright, or
license, (ii) CareAdvantage shall have notified Blue Cross in writing prior to
the creation of such Work Product setting forth in detail the existence of such
patent, trademark, copyright, or license, and the proposed use of such patented,
trademarked, copyrighted or licensed material (hereafter referred to as
"CareAdvantage Protected Material") in any such Work Product, and (iii) Blue
Cross and CareAdvantage shall have agreed in writing in advance as to the
respective rights of Blue Cross and CareAdvantage to any Work Product which
would or could contain any such CareAdvantage Protected Material.
Notwithstanding anything to the contrary contained in this Section 13(b), "Work
Product" shall not be deemed to include (i) information (regardless of the
medium in which maintained), which is or becomes generally available to the
public, other than as a result of the disclosure thereof by CareAdvantage, its
agents or representatives, or (ii) information in any medium which is made
available to CareAdvantage on a non-confidential basis by a third party not
bound by a confidentiality agreement with or under an obligation of
confidentiality to Blue Cross.
14. Interpretation and Amendments. This Agreement constitutes the entire
understanding of the parties hereto and supersedes all prior representations and
understanding, whether oral or written. Any changes, amendments, or alterations
hereto shall not be effective unless agreed upon in writing signed by authorized
representatives of the parties hereto.
15. Notices. Any notices required to be given under this Agreement shall be
by certified mail, return receipt requested. Notice shall be directed to the
parties at the addresses listed below, or such other addresses as the party may
designate by written notice.
If to Blue Cross: Blue Cross & Blue Shield
of Rhode Island
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Medical Officer
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With a copy to: Xxxx Xxxxxxx, Esq.
General Counsel
Blue Cross & Blue Shield
of Rhode Island
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
and Xxxx X. Xxxxxxxx, Esq.
Xxxxxxxxx, Snow & Xxxx
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
If to CareAdvantage: Xxxxxx Xxxxxx
President and Chief Executive Officer
CareAdvantage Health Systems, Inc.
000-X Xxxxx 0 Xxxxx
Xxxxxx, XX 00000-0000
With a copy to: President and Chief Executive Officer
CareAdvantage, Inc.
000-X Xxxxx 0 Xxxxx
Xxxxxx, XX 00000-0000
16. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns (if
permitted), and this Agreement shall not be assigned, except by prior written
agreement of the other party hereto, which agreement may be withheld in such
party's absolute and sole discretion. Any purported assignment in violation of
this Section 16 shall be null and void and of no further force and effect.
17. Waiver. A waiver of any breach of this Agreement by any party hereto
shall not be construed to be a continuing waiver for a similar breach.
18. Severability. In the event that any provision of this Agreement is
found by a court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too broad a range of activities or
in too large a geographic area, such provision shall be interpreted to extend
only after the maximum period of time, range of activities or geographic areas
to which it may be enforceable.
19. Governing Law. This Agreement has been negotiated, entered and
delivered in Rhode Island, is intended to be performed primarily in Rhode
Island, and this Agreement shall be governed, construed and interpreted in
accordance with the laws of the State of Rhode Island. CareAdvantage hereby
irrevocably consents to the jurisdiction of the state and federal courts in the
State of Rhode Island for the adjudication of all rights and remedies pursuant
to the terms of this Agreement.
9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their representatives thereunto duly authorized on the day and date first above
written.
Blue Cross & Blue Shield
of Rhode Island
By:_______________________________
Its duly authorized_______________
CareAdvantage Health Systems, Inc.
By:_______________________________
Xxxxxxx X. Deutsch, M.D.
Senior Vice President and
National Medical Director
10
ATTACHMENT I.
CAREADVANTAGE HEALTH SYSTEMS
Health Care Management Services
January 1997 through December 1999
The services to be provided during the term of this Agreement shall include the
following health care management services:
Health Care Management Services
-- CareAdvantage will provide physician and administrative support to
review and develop Blue Cross medical policies, interpret benefits,
assist with general provider relations, assist with Blue Cross quality
management, and assist with other general Blue Cross business.
-- CareAdvantage will provide physician and administrative support to
develop, delineate the use of, credential and provide quality control
for different levels of care.
-- CareAdvantage will provide physician and administrative support to
accomplish preauthorization, concurrent review, retrospective review,
and case management of medical and surgical admissions and inpatient
days within Blue Cross's service area.
-- CareAdvantage will analyze out of state utilization and develop, along
with Blue Cross, strategies for enhanced utilization management of
these cases. Blue Cross will support CareAdvantage data requirements
for analysis and implementation of initiatives.
-- CareAdvantage will continue to develop, in conjunction with Blue Cross
Specialty Advisory Committees, new admission and length of stay
guidelines, revise previously established guidelines as necessary and
assist in the development of specific treatment guidelines (e.g., for
community acquired pneumonia) as indicated by ongoing data analysis and
the implementation of new disease management programs.
-- CareAdvantage will conduct periodic audits of specific services
provided by the Health Benefits Management Department and,
collaboratively with the department, develop a work plan to enhance the
effectiveness of these services such as general utilization management
and case management for catastrophic and high risk patients.
-- CareAdvantage will conduct continuing inservice programs for Blue Cross
personnel regarding issues concerning utilization and case management
including treatment of specific diseases, use of levels of care and as
requested by the client in conjunction with the institution of new
programs. CareAdvantage will also participate with Blue Cross in
dissemination of new information to hospitals regarding these issues.
-- CareAdvantage will assist Blue Cross in the development of specific
"real-time" daily case management reports that will compliment periodic
claims data analysis.
-- CareAdvantage will assist Blue Cross in the development of innovative
approaches for physician education regarding new programs and data
feedback to physicians.
-- CareAdvantage will provide the necessary physician and administrative
support to assist Blue Cross in contracting and medically managing
cases at out of state facilities designated as Centers of Excellence.
11
-- CareAdvantage will provide the necessary physician and administrative
support to identify and implement "infrastructure" changes at inpatient
facilities.
-- CareAdvantage will develop strategies to manage care delivered in
patients' homes (including home health care and infusion therapy) and
skilled nursing facilities.
Case and Disease Management
-- CareAdvantage will analyze the need for Disease Management Programs for
specific diseases (populations) including but not limited to
cardiology, oncology, asthma, diabetes, peptic ulcer disease,
gastroesophageal reflux and high risk pregnancies.
-- CareAdvantage will assist and support ongoing general and specific Blue
Cross data analyses and assist in the development of new approaches to
data evaluation for disease/care management.
Other Initiatives
-- CareAdvantage will choose specific inpatient and outpatient surgical
procedures, based on data analysis including incidence rates, and
develop appropriateness criteria for these procedures and tests based
on indications and levels of care. Initial focus will be in the
specialties of gynecology, general surgery, gastroenterology and
orthopedic surgery.
-- CareAdvantage will assist Blue Cross in the further development of
office surgery for specific specialties including cost benefit
analysis, delineation of appropriate procedures, credentialing, and
quality control.
-- CareAdvantage will develop and with Blue Cross support implement a
utilization review/managed care initiative for observation units.
Provider Reimbursement
-- CareAdvantage will assist and support Blue Cross in the development of
physician incentive and sharing programs including analysis to
establish specific targets, implementation, and ongoing monitoring of
outcomes.
-- CareAdvantage will assist Blue Cross in the designing and implementing
of a pilot program to include community physicians in the medical cost
management process.
12
7/23/97 Attachment II
COMPENSATION AGREEMENT
In consideration of the services provided by CareAdvantage to Blue Cross in
accordance with Attachment I, Blue Cross shall pay CareAdvantage as compensation
the Monthly Service Fees and the Performance Service Fees in accordance with
this Attachment II.
1. Monthly Service Fees
(a) Computation for 1997. Except as provided in section 1(c), for each
month during 1997, Blue Cross shall pay CareAdvantage an amount ("Monthly
Service Fee") equal to the difference between
(i) the sum of:
(A) for the group AFA business, the product of $0.48 and the
number of members in such group for such month, plus
(B) for the fully insured group business, the product of $0.156
and the number of members in such group for such month, and
(ii) the sum of:
(A) for the period July 1, 1997, through December 31, 1997, the
product of $0.48 and the number of BlueCHIP members (not to
exceed 30,000 members) for such month, plus
(B) for the period July 1, 1997, through December 31, 1997, one
thousand five hundred ($1,500) dollars for each such month.
(b) Payment. The payments provided by subsection (a) shall be made on the
tenth (10th) working day of each month based upon enrollment projections
from the previous month's enrollment. At such time as actual enrollment
becomes available, appropriate adjustments will be made to correct for any
increase or decrease to the projections.
(c) Certain Adjustments. In the event the State of Rhode Island ("SORI")
account moves from group AFA business to fully insured group business, or
in the event of the movement of any other account or accounts representing
more than two and one-half (2.5%) percent of the combined members of the
group AFA business and the fully insured group business, then the rates
provided by section 1(a)(i)(B) shall be adjusted so that the Monthly
Service Fee payable after the move of such account is the same as that
which would have been payable had such account not moved.
(d) Computation for 1998 and 1999. The parties agree to negotiate in good
faith Monthly Service Fees for 1998 and 1999; provided, however, that until
such time as the parties agree otherwise or the termination of this
Agreement, the Monthly Service Fee for 1997 shall remain in effect
throughout 1998 and 1999.
2. Performance Service Fees
(a) Generally. For each calendar year during the term of this Agreement, in
addition to the amounts provided by Section 1, Blue Cross shall pay
CareAdvantage the amounts computed in accordance with this section
("Performance Service Fees").
13
(b) Savings. Performance Service Fees for each calendar year will be based
on CareAdvantage's share of Savings for such year. Savings shall equal the
product of (i) the excess, if any, of (A) Projected PMPM over (B) Actual
PMPM for claims costs for health care services managed by CareAdvantage,
and (ii) the number of member months in each such calendar year for the
fully insured group business.
(i) Projected PMPM. Projected PMPM for a calendar year will be
computed in accordance with this subsection (i) and subsection (iii).
(A) For 1997, Projected PMPM will be calculated based on actual
experience for the fully insured group business for calendar
1996, paid through May 1998. Blue Cross will finalize Projected
PMPM for 1997 no later than June 30, 1998; Blue Cross will
estimate Projected PMPM for 1997 no later than April 30, 1997.
(B) For 1998, Projected PMPM will be calculated based on actual
experience for the fully insured group business for 1997, paid
through May 1999. Blue Cross will finalize Projected PMPM for
1998 no later than June 30, 1999; Blue Cross will estimate
Projected PMPM for 1998 no later than April 30, 1998.
(C) For 1999, Projected PMPM will be calculated based on actual
experience for the fully insured group business for 1998, paid
through May 2000. Blue Cross will finalize Projected PMPM for
1999 no later than June 30, 2000; Blue Cross will estimate
Projected PMPM for 1999 no later than April 30, 1999.
(ii) Actual PMPM. Actual PMPM for a calendar year will be calculated
180 days after the close of such year based on actual experience for
the fully insured group business for such calendar year, paid through
150 days after the close of such year, in accordance with subsections
2(b)(iii) and 2(e)(ii). Projections of Actual PMPM for a calendar year
shall be made in accordance with subsections 2(b)(iii) and 2(e)(i).
(iii) Certain Adjustments. Projected PMPM and Actual PMPM will be
computed in accordance with this subsection (iii) to remove, as
appropriate, claims costs for health care services that CareAdvantage
does not manage, the effect of unit cost increases or decreases (e.g.,
cost per day, admission, outpatient services), and age/gender changes
in the population, and to incorporate utilization trends in premium
rates.
(A) Claims Costs. Projected PMPM and Actual PMPM shall be
computed as follows:
(I) Hospital Inpatient. Projected PMPM and Actual PMPM shall
include all claims costs for hospital inpatient facilities
except those for mental health, substance abuse, maternity,
and ITS claims, and excluding professional fees. Any other
inclusions or exclusions will be prospectively agreed upon
by the parties.
(II) Hospital Outpatient. Projected PMPM and Actual PMPM
shall include claims costs for hospital outpatient
facilities only for those categories of services subject to
CareAdvantage review activities, i.e., ambulatory surgery,
home health care, home infusion, and observation room.
Hospital outpatient claims costs shall exclude claims costs
incurred for mental health, substance abuse and ancillary
services not provided in conjunction with those categories
of services subject to CareAdvantage review activities,
maternity-related services and ITS claims, as well as
professional fees. Any other inclusions or exclusions will
be prospectively agreed upon by the parties.
14
(III) Classification. Classification of claims costs for
hospital inpatient, hospital outpatient, and professional
fees will be consistent with Blue Cross provider contracts
and administrative policies.
(IV) Future Agreements. Based on managed care initiatives
designated by Blue Cross to be performed by CareAdvantage,
the parties will agree on claims costs to be included or
excluded from PMPM calculations.
(B) Adjustment for Cost and Utilization Factors. On a quarterly
basis, the projected cost PMPMs are adjusted up or down in
concert with the updating of the hospital differential for base
period claims and specific cost factors. The utilization factor
is adjusted quarterly as trends included in rating are updated.
Performance is then measured by comparing Blue Cross's latest
actual PMPM cost estimate to the updated projected PMPM value.
(See Exhibit II.B. for an illustration of this process.)
(I) Hospital Price Factors. Estimates of hospital price
increases or decreases are calculated quarterly on a
liability per unit basis. For DRG hospitals, the inpatient
measure is liability per case and for others it is liability
per day. For outpatient services, liability per visit is
used for all hospitals. The time frame for measuring
increases are hospital fiscal years (ending September 30).
For the current fiscal year, liability for year-to-date
claims data is annualized/completed and then modified to
reflect any applicable year-end adjustments as provided for
in the hospital contracts. For DRG hospitals, a projection
of case mix change is provided separately and incorporated
into the calculations. Prior year liabilities are then
updated for all hospitals before calculating the price
increases.
For subsequent fiscal years, the factors reflect best
estimates available for inflationary increases or decreases,
as well as projected changes in case mix based on historical
trends. In addition, other types of influences--either known
or anticipated--are incorporated into the calculations
whenever possible, provided that some basis exists for
estimating the impact.
(II) Hospital Utilization Trend Factors. On a quarterly
basis, updated utilization trend factors are incorporated
into premium rates. The trend factor to project the base
period forward is based on a matrix that calculates the
overall utilization trend factor for the period being used.
This overall factor is also based on estimated enrollment
for that period, and the distribution of the quarterly
utilization trend factors weighted by the enrollment.
Quarterly, at the request of CareAdvantage, Blue Cross will
review with CareAdvantage (or its representative) the
utilization trend factors.
(C) Age/Gender Adjustment. At the time of final settlement for
each payment period, the Actual PMPM used to measure the
incremental change from the Projected PMPM will be age/gender
adjusted to account for any shifts in enrollment demographics.
15
(D) SORI Adjustment. SORI claims experience will be included in
the calendar year 1996 base period experience used to calculate
the 1997 Projected PMPM. The SORI claims experience used in the
1996 base period will coincide with the timing of the shift of
the SORI account to fully insured status in 1997. For example, if
the entire SORI account shifts on July 1,1997, then the SORI
claims experience will be included in the calendar year 1996 base
period from July 1, 1996 to December 31, 1996. In the event that
different groups of the SORI account shift to fully insured
status at different times, the inclusion of these groups into the
calendar year 1996 base period experience will match the timing
of the shift of each group in 1997.
(c) Allocation of Savings for 1997. For calendar year 1997 of this
Agreement, Savings shall be allocated between Blue Cross and CareAdvantage
as provided herein. (See Exhibit II.A. for an illustration of this
process.)
(i) Blue Cross Recoupment of Monthly Service Fee for Fully Insured
Business. Blue Cross shall be allocated 100% of Savings for such year
up to an amount equal to the amount paid to CareAdvantage for the
fully insured group business for such year pursuant to Section
1(a)(i)(B).
(ii) CareAdvantage Recoupment of Certain Expenses. CareAdvantage shall
be allocated 100% of Savings for such year in excess of that allocated
to Blue Cross pursuant to Section 2(c)(i) up to an amount equal to (A)
$1,400,000, less (B) the amount paid to CareAdvantage for the group
AFA business and the fully insured group business for such year
pursuant to Section 1(a)(i). For interim payment periods,
CareAdvantage shall be allocated 100% of Savings in excess of that
allocated to Blue Cross pursuant to Section 2(c)(i) up to an amount
equal to (A) the appropriate pro rata share of $1,400,000, less (B)
the amount paid to CareAdvantage for the group AFA business and the
fully insured group business for that interim period.
(iii) Sharing of Remaining Savings. Savings in excess of that
allocated in (i) and (ii) of this subsection shall be allocated 65% to
Blue Cross and 35% to CareAdvantage.
(iv) Allocation of Savings for 1998 and 1999. The parties agree to
negotiate in good faith the allocation of Savings for 1998 and 1999;
provided, however, that until such time as the parties agree otherwise
or the termination of this Agreement, the allocation of Savings for
1997 shall remain in effect throughout 1998 and 1999.
(d) Reports and Interim Payment Schedule. Blue Cross will provide
CareAdvantage with monitoring reports showing projected Savings (including
Projected PMPM and projected Actual PMPM computed in accordance with
subsection 2(e)(i) in conjunction with the following interim payment
schedule:
(i) 1997. Interim payment periods for 1997:
(A) January 1, 1997, through March 31, 1997, with claims payments
through March 31, 1997;
(B) January 1, 1997, through June 30, 1997, with claims payments
through June 30, 1997;
(C) January 1, 1997, through September 30, 1997, with claims
payments through September 30, 1997;
(D) January 1, 1997, through December 31, 1997, with claims
payments through
16
December 31, 1997;
(E) January 1, 1997, through December 31, 1997, with claims
payments through March 31, 1998.
17
(ii) 1998. Interim payment periods for 1998:
(A) January 1, 1998, through March 31, 1998 with claims payments
through March 31, 1998;
(B) January 1, 1998, through June 30, 1998, with claims payments
through June 30, 1998;
(C) January 1, 1998, through September 30, 1998, with claims
payments through September 30, 1997;
(D) January 1, 1998, through December 31, 1998, with claims
payments through December 31, 1998;
(E) January 1, 1998, through December 31, 1998, with claims
payments through March 31, 1999.
(iii) 1999. Interim payment periods for 1999:
(A) January 1, 1999, through March 31, 1999, with claims payments
through March 31, 1999;
(B) January 1, 1999, through June 30, 1999, with claims payments
through June 30, 1999;
(C) January 1, 1999, through September 30, 1999, with claims
payments through September 30, 1999;
(D) January 1, 1999, through December 31, 1999, with claims
payments through December 31, 1999;
(E) January 1, 1999, through December 31, 1999, with claims
payments through March 31, 2000.
(e) Payments.
(i) Interim Payments. Blue Cross will for each calendar year make
interim settlements with CareAdvantage in accordance with this
subsection (i). Interim settlements will be based on CareAdvantage's
share of projected Savings as calculated 45 days following the close
of each of the five interim payment periods for each year. In
calculating projected Savings, the Actual PMPMs used for the first
three interim settlements in a calendar year will be seasonally
adjusted and projected to reflect the fact that the experience
available will not be from a complete calendar year; in calculating
CareAdvantage's share of projected Savings for the first three interim
settlements, the amounts paid pursuant to this section shall be based
on the member months for the interim payment period. Any amounts owing
CareAdvantage shall be paid by Blue Cross within 90 days of the close
of each interim payment period; for each calendar year beginning with
the third interim payment for such year, any amounts owing Blue Cross
(after adjusting for previous interim payments) may be offset by Blue
Cross against amounts otherwise payable by Blue Cross for such year
pursuant to Section 1(a).
Interim Payment 1: 20% of CareAdvantage's projected allocation of
Savings
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Interim Payment 2: 40% of CareAdvantage's projected allocation of
Savings (adjusted for any previous interim
payments)
Interim Payment 3: 60% of CareAdvantage's projected allocation of
Savings (adjusted for any previous interim
payments)
Interim Payment 4: 80% of CareAdvantage's projected allocation of
Savings (adjusted for any previous interim
payments)
Interim Payment 5: 100% of CareAdvantage's projected allocation
of Savings (adjusted for any previous interim
payments)
(ii) Final Settlement. Final settlement for each calendar year will based
on claims paid through 150 days after the close of each such calendar year.
Final settlement will be adjusted to reflect prior interim payments for
such year, as well as the items set forth in subsection 2(b)(iii). Any
amounts owing CareAdvantage for a calendar year shall be paid by Blue Cross
within 270 days of the close of such calendar year; any amounts owing Blue
Cross shall be paid by CareAdvantage within 45 days after a receipt of an
invoice from Blue Cross.
3. Applicable Products and Members. The computations required by this Schedule
II shall include the followings populations:
(a) HealthMate 2000 (including HealthMate 2000 MHCF)
(b) Other Plans:
(i) HealthMate
(ii) Classic Managed
(iii) Classic Non-Managed
(iv) Value Care 200
(v) Point of Service
(vi) Direct Pay--Age Rated
(vii) Direct Pay--Regular
(viii) Direct Pay--Students
19
Attachment III
NONDISCLOSURE AGREEMENT
This NONDISCLOSURE AGREEMENT (the "Agreement") is made and entered into
this 14th of February, 1995, by and between Blue Cross & Blue Shield of Rhode
Island, a Rhode Island nonprofit hospital and medical service corporation with
an address at 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000 ("Blue
Cross") and CareAdvantage, Inc., a Delaware corporation with an address at Xxx
Xxxx Xxxxx Xxxx, Xxxxxx, Xxx Xxxxxx 00000 ("CareAdvantage").
W I T N E S S E T H:
WHEREAS, the parties to this Agreement are presently engaged in business
discussions regarding the provision of administrative and managed care services
to health benefit plans; and
WHEREAS, in connection with such discussions each of the parties hereto
desires to evaluate and examine certain books, records, financial information
and other confidential and/or proprietary information relating to the business
of the other party hereto; and
WHEREAS, the information which may be disclosed and/or revealed in
connection with such examination is confidential, proprietary and/or otherwise
of such a nature as to render public disclosure of the same potentially harmful
to the interests of the parties hereto.
NOW, THEREFORE, in consideration of the foregoing recitals and the
agreements and covenants set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. Proprietary Information.
1.1 (a) As used in this Agreement, the term "Proprietary Information" shall
mean with regard to each of the parties hereto all trade secrets and
confidential, proprietary and other information disclosed by such party in
accordance with the terms hereof from the inception of the business discussions
as aforesaid (which discussions may have commenced prior to the date of this
Agreement), including without limitation, any and all reimbursement policies,
any and all financial, operational, policy, marketing, underwriting and customer
information, any and all other business information manuals, know-how, uses,
capabilities, operating codes, methods of access, access codes, instructions,
materials, studies, analyses, communications, data, methods, processes,
procedures, patents, ideas, modifications, inventions, discoveries, developments
or improvements relating to any existing or future developments or improvements
relating to any existing or future product, product design, or packaging,
production, marketing or distribution process, method or facility, research
project or result, and the like regarding such party or its products, business,
technology, employees, customers, systems, computer programs or software, or
prospects, whether disclosed directly by such party or one of its
Representatives to the other party hereto or obtained by the other party hereto
indirectly in whole or in part from such sources, and whether transmitted orally
or in written documents, memoranda, reports, correspondence, drawings or other
man or machine readable media, and all other documentation and information with
respect to such party. As used herein, the term "Representatives" shall mean
such party's directors, officers, employees, advisors, agents, contractors
and/or controlling persons.
(b) Notwithstanding any other provision of this Agreement to the contrary,
the term "Proprietary Information" shall not be deemed to include the following:
(i) information which is or becomes generally available to the public, other
than as a result of the disclosure thereof by a party hereto which has received
Proprietary Information in accordance with the terms hereof; or (ii) information
which is made available to a party hereto on a non-confidential basis by a third
party not bound by a confidentiality agreement with or under an obligation of
confidentiality to the other party hereto, as evidenced by written records of
said receiving party.
1.2 The parties hereto agree and acknowledge that all Proprietary
Information shall be used solely for the purpose of evaluating a possible
transaction between Blue Cross and CareAdvantage and in no event shall any
Proprietary Information be utilized in any manner which is or may be detrimental
to either of the parties hereto. Blue Cross and CareAdvantage shall keep all
Proprietary Information that they receive in accordance with the terms hereof
confidential and neither Blue Cross nor CareAdvantage shall, without the prior
written consent of the party which has disclosed any Proprietary Information,
disclose, or permit any of its Representatives to disclose, such Proprietary
Information to any other person or entity, other than in connection with the
transaction described above. Each of the parties hereto further agrees and
acknowledges that it shall transmit and/or disclose the Proprietary Information
such party receives in accordance with the terms hereof to only those of its
Representatives who: (i) have been informed of the confidential and proprietary
nature of such Proprietary Information; (ii) have previously agreed, in writing,
to be bound by the terms and conditions set forth in this Agreement; and (iii)
need to review such Proprietary Information in order to permit said party to
properly evaluate the above-described potential transaction.
Notwithstanding anything to the contrary contained in the immediately
preceding paragraph or elsewhere in this Agreement, CareAdvantage shall not
disclose any of the Proprietary Information to anyone other than Xxxx Xxxxxxxxx,
Xxxx Xxxxxxx, and Xxxxxxx Xxxxxxxxx, and without limiting the foregoing
restriction, CareAdvantage shall not disclose the Proprietary Information to any
individual who is an officer, director, shareholder, or employee of Primedex
Health Systems, Inc. or Primedex Corporation. If CareAdvantage shall at any time
wish to disclose any of the Proprietary Information to anyone other than Messrs.
Shoffeitt, Lincoln, and Achilarre, CareAdvantage shall so notify Blue Cross in
writing, designating the individual(s) to whom such Proprietary Information is
requested to be conveyed, stating the reasons for such disclosure to such
individual(s), and warranting and representing that no such individual(s) to
whom such disclosure is sought are an officer, director, shareholder, or
employee of Primedex Health Systems, Inc. or Primedex Corporation. Such
information shall not be disclosed to any such individuals unless Blue Cross
shall consent to such disclosure in writing following receipt of the aforesaid
notice, and Blue Cross may without such consent in its sole and absolute
discretion.
1.3 In the event that Blue Cross, CareAdvantage, or any of their respective
Representatives who have received any Proprietary Information in accordance with
the terms of this Agreement becomes legally compelled to disclose any
Proprietary Information, the party so compelled will provide prompt notice
thereof to the party hereto which has disclosed such Proprietary Information in
accordance with the terms hereof so that said disclosing party may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Agreement. Any person or party which is legally compelled to
disclose any Proprietary Information shall furnish only the portion of the
Proprietary Information which it is legally required to disclose and shall use
his, hers or its best efforts to obtain a protective order or other reliable
assurances that confidential treatment will be accorded to such Proprietary
Information.
SECTION 2. Ownership of confidential Information. The parties hereto agree
and acknowledge that each of the parties hereto which discloses any Proprietary
Information in accordance with the terms hereof is and shall remain the
exclusive owner of such Proprietary Information and all patent, copyright, trade
secret, trademark and other intellectual property rights therein. No license or
conveyance of any such rights to the party receiving said Proprietary
Information is granted or implied under the terms of this Agreement.
SECTION 3. Nonduplication. Neither of the parties hereto shall copy or
duplicate, in any manner whatsoever, any paper, material, item, man or machine
readable media regarding or otherwise relating to or other tangible
manifestations of any Proprietary Information, unless expressly authorized to do
so, in writing, by the party hereto which has disclosed such Proprietary
Information, and then only for the purpose expressly authorized by said
disclosing party.
SECTION 4. Return of Proprietary Information. Each of the parties hereto
shall return all Proprietary Information to the party hereto which has disclosed
the same, and shall return to such disclosing party any and all papers,
materials, items, man or machine readable media regarding or otherwise relating
to or other tangible manifestations of such Proprietary Information, and all
copies or duplications thereof, within two (2) days after: (i) said disclosing
party's request therefor; or (ii) the termination of business discussions
between the parties hereto (the"Return Date"). In addition, each of the parties
hereto shall, within five (5) days after the Return Date, destroy all copies of
any analyses, compilations, studies or other documents prepared by such party
for its internal
2
use which reflect or otherwise relate in any manner whatsoever to any
Proprietary Information such party has received in accordance with the terms
hereof and shall certify, in writing, its compliance with the terms of this
Section 4. Neither of the parties hereto shall disclose any such papers,
materials, items, man or machine readable media regarding or otherwise relating
to the Proprietary Information or other tangible manifestations of any
Proprietary Information such party has received in accordance with the terms
hereof or the contents thereof to any third party without the prior written
consent of the party hereto which has disclosed such Proprietary Information in
accordance with the terms hereof.
SECTION 5. Applicability. The obligations of Blue Cross and CareAdvantage
set forth in this Agreement shall be binding upon, and Blue Cross and
CareAdvantage shall be responsible for all actions of, their respective
Representatives.
SECTION 6. Enforcement. The parties hereto expressly agree and acknowledge
that: (i) the restrictions on disclosure, reproduction and misappropriation set
forth in this Agreement represent a reasonable and necessary protection of the
legitimate interests of the parties and that each party's failure to observe and
comply with the covenants and agreements herein contained shall constitute a
breach of this Agreement; (ii) it is and will continue to be difficult to
ascertain the nature, scope and extent of the damage caused by such breach; and
(iii) a remedy at law with regard to a breach hereunder will be inadequate.
Accordingly, it is the intention of the parties hereto that, in addition to any
other rights and remedies which any party may have in the event of any breach of
this Agreement, such party shall be entitled, and is expressly and irrevocably
authorized by the other party hereto, to demand and obtain specific performance
and/or temporary and permanent injunctive relief with regard to said breach,
without the necessity of posting a bond or other security, and all other
appropriate equitable relief, against the other party hereto in order to prevent
any breach or threatened breach of this Agreement by such other party. The
parties hereby irrevocably consent to the jurisdiction of the state and federal
courts of the State of Rhode Island.
SECTION 7. Representations and Warranties of Blue Cross and CareAdvantage.
7.1 Blue Cross, and the individual executing this Agreement on behalf of
Blue Cross, represents and warrants to CareAdvantage that Blue Cross' execution,
delivery and performance of this Agreement has been duly authorized by the
appropriate corporate action, the person executing this Agreement on behalf of
Blue Cross is thereunto duly authorized, and this Agreement constitutes the
legal, valid and binding obligation of Blue Cross and is enforceable in
accordance with its terms.
7.2 CareAdvantage, and the individual executing this Agreement on behalf of
CareAdvantage, represents and warrants to Blue Cross that CareAdvantage's
execution, delivery and performance of this Agreement has been duly authorized
by the Agreement on behalf of CareAdvantage is thereunto duly authorized, and
this Agreement constitutes the legal, valid and binding obligation of
CareAdvantage and is enforceable in accordance with its terms.
SECTION 8. Miscellaneous.
8.1 Severability. Nothing contained herein shall be construed so as to
require the commission of any act contrary to law, and wherever there is any
conflict between any provisions contained herein and any present or future
statute, law, ordinance or regulation, the latter shall prevail, provided,
however, that the provision of this Agreement which is affected shall be
curtailed and limited only to the extent necessary to bring it within the
requirements of the law, and the remainder of this Agreement shall not be
affected thereby.
8.2 Further Assurances. Each of the parties hereto shall execute and
deliver any and all additional agreements, documents and other assurances, and
shall do any and all acts reasonably necessary in connection with the
performance of their obligations hereunder, to effectuate the intent of the
Agreement.
8.3 Survival. The rights and obligations of the parties set forth herein
shall survive the execution and delivery of this Agreement and the termination
of business discussions between the parties hereto and shall continue in full
force and effect.
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8.4 Waiver. Failure or delay to insist upon compliance with any provision
hereof shall not operate as, and shall not be construed as, a waiver or
amendment of such provision or a waiver of the right to insist upon compliance
with such provision or to take remedial steps to recover damages or other relief
for noncompliance. Any express waiver of any provision of this Agreement shall
not operate and shall not be construed as a waiver of any subsequent breach,
regardless of whether such breach occurs under similar or dissimilar
circumstances. No term or provision of this Agreement shall be deemed to be
waived unless such waiver is set forth in a written instrument signed by all of
the parties hereto.
8.5 Assignment. This Agreement shall be binding on, and shall inure to the
benefit of, Blue Cross and CareAdvantage and their respective successors and
assigns; provided, however, that neither Blue Cross nor CareAdvantage may assign
any of their respective rights or delegate any of their respective obligations
under this Agreement without the prior written consent of the other party to
this Agreement.
8.6 Notice. All notices, authorizations or other communications required to
be delivered in writing under the terms of this Agreement shall be deemed to
have been duly delivered on the date of service, if served personally on the
receiving party, or on the third business day after mailing, if mailed to the
receiving party by registered or certified mail, and properly addressed as
follows:
If to Blue Cross: Blue Cross & Blue Shield of Rhode Island
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxx X. Xxxxx
With a copy to: Blue Cross & Blue Shield of Rhode Island
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
If to CareAdvantage: CareAdvantage, Inc.
Xxx Xxxx Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx
CareAdvantage or Blue Cross may change their respective addresses for
purposes of this Section 8.6 by providing the other parties with notice of the
new address in the manner set forth above.
8.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
8.8 Integration. This Agreement embodies and constitutes the entire
agreement and understanding between the parties with respect to the transactions
contemplated hereunder, and all prior or contemporaneous agreements,
understandings, representations and statements, whether oral or written, are
hereby merged into this agreement.
8.9 Amendment. Neither this Agreement, nor any provisions hereof, may be
modified, amended, supplemented or altered except by written agreement executed
and delivered by all of the parties hereto.
8.10 Governing Law. The parties hereby agree and acknowledge that this
Agreement, and the rights, remedies and obligations of the parties hereunder,
shall be governed by and construed in accordance with the laws of the State of
Rhode Island.
8.11 Additional Rights and Remedies. The rights and remedies contained
herein shall not be in lieu of, but shall be in addition to, the rights and
remedies of any party with regard to a breach by the other party hereto of the
Rhode Island Uniform Trade Secrets Act (R.I. Gen. Laws xx.xx. 6-41-1 et seq.),
or any similar act which may apply (in accordance with the terms hereof) to the
conduct governed and/or the information protected hereunder.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Witness: BLUE CROSS & BLUE SHIELD OF RHODE ISLAND
/s/Xxxxxxxxxx Xxxxxx By: /s/Xxxx X. Xxxxx
------------------------- -------------------------
Name: Xxxx X. Xxxxx
-------------------------
Title: Vice President
-------------------------
CAREADVANTAGE, INC.
/s/Xxxxxxxxxx Xxxxxx By: /s/Xxxxxxx X. Xxxxxxxxx
------------------------- -------------------------
Name: Xxxxxxx X. Xxxxxxxxx
-------------------------
Title: Chief Financial Officer
-------------------------
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