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EXHIBIT 10.1
RISK-SHARING AGREEMENT
This Agreement is effective the 31st day of March, 1997, by and between
HEALTHAMERICA PENNSYLVANIA, INC., a Pennsylvania corporation licensed to operate
a health maintenance organization ("HealthAmerica"), COVENTRY CORPORATION, a
Delaware corporation ("Coventry") for and on behalf of the MEMBER COMPANIES (as
hereinafter defined) other than HealthAmerica, and ALLEGHENY HEALTH, EDUCATION
AND RESEARCH FOUNDATION, a Pennsylvania nonprofit corporation ("AHERF").
WHEREAS, HealthAmerica and affiliated companies, and AHERF, through its
affiliated entities and its network of integrated health care providers, have
entered into provider agreements and related documents to provide health care
services for participants in managed care programs;
WHEREAS, HealthAmerica and AHERF desire to enter into this Agreement to
confirm their commitment to enhance quality and cost effective managed care
through their cooperative efforts;
WHEREAS, HealthAmerica and AHERF mutually desire to preserve and
enhance patient dignity.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and
undertakings herein and intending to be legally bound hereby, the parties agree
as follows:
1. Definitions
For purposes of this Agreement, the following capitalized words and
phrases shall have the meaning specified.
1.1 "AHERF Affiliated Provider" means Allegheny General Hospital,
Allegheny Integrated Health Group, Allegheny University
Medical Centers, Allegheny University of the Health Sciences,
Allegheny University Hospitals, St. Christopher's Hospital for
Children, Penn Group Medical Associates, any provider of
healthcare services employed by any of the foregoing, and any
other provider of health care services, including hospitals,
physicians, and other providers and facilities by and at which
health care services are made available, which is now or
hereafter directly or indirectly controlled by, controlling,
or under common control with (or, in the case of a
professional corporation, managed by) AHERF.
1.2 "AHERF Contracted Provider" means: (i) any provider of health
care services, including hospitals, physicians, and other
providers and facilities by and at which health care services
are made available, which is not an AHERF Affiliated Provider,
but with which AHERF or an AHERF Affiliated Provider has an
arrangement for the provision of health care services to
payers contracting with AHERF or such AHERF Affiliated
Provider, including but not limited to the Third
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
Parties; and (ii) any other HealthAmerica Participating
Provider which provides Covered Services to an Covered
Individual, for which AHERF shall assume risk at the
HealthAmerica provider contracted rate.
1.3 "AHERF Premium Amount" means the amount of compensation to be
paid to AHERF in a Risk Year (or, if computed with respect to
a monthly or quarterly period during a Risk Year, in such
monthly or quarterly period) under this Agreement,which shall
be (i) [__]* of Total Premiums for Risk Years 1-5 and [__]* of
Total Premiums for Risk Years 6 through the end of this
Agreement for the Commercial HMO Program (ii) [__]* of
Total Premiums for the PPO Program and POS Program and (iii)
[__]* of Total Premiums for the Medicare HMO Risk Program.
The AHERF Premium Amount may be adjusted during the term
hereof pursuant to Section 2.4.1 and Section 5.2.
1.4 "AHERF Provider," "AHERF Providers" means individually AHERF
Contracted Providers or AHERF Affiliated Providers, as
applicable, and collectively, AHERF Contracted Providers and
AHERF Affiliated Providers.
1.5 "Central Pennsylvania Region" means the area served by a
Member Company in the Central portion of the Commonwealth of
Pennsylvania, which area includes the following Pennsylvania
counties: Adams, Berks, Xxxxx, Centre, Clearfield, Clinton,
Columbia, Cumberland, Dauphin, Franklin, Fulton, Huntingdon,
Juniata, Lackawanna, Lancaster, Lebanon, Lehigh, Luzerne,
Mifflin, Northampton, Northumberland, Perry, Schuykill,
Xxxxxx, Union, Wyoming, York.
1.6 "Coinsurance" means that percentage portion of the fee for
Covered Services provided to Covered Individuals that is to be
paid by the Covered Individual or by another payor as required
under the applicable Plan.
1.7 "Commercial HMO Program" means the commercial health
maintenance organization program offered by HealthAmerica to
employers, unions, or other purchasers of group health
insurance plans. The parties understand and agree that
Commercial HMO Program does not include any self-insured
health maintenance organization plans administered by
HealthAmerica, including, without limitation, any self-insured
health benefit plans offered by an AHERF Provider to its
employees, unless there is mutual agreement to add any such
plans subsequent to this Agreement.
1.8 "Copayment" means the fixed dollar amount that a AHERF
Provider collects from a Covered Individual, if allowed under
the applicable Plan.
1.9 "Covered Individual" means any person, and his or her eligible
dependents, who is enrolled in a Plan and is eligible to
receive the Covered Services set forth in the
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Plan, except for persons residing in HealthAmerica's Central
Pennsylvania Region or in the State of Ohio.
1.10 "Covered Services" means all health care services and supplies
that a Member Company is obligated to provide to Covered
Individuals pursuant to the applicable Plan.
1.11 "Deductible" means that amount which must be incurred by a
Covered Individual for Covered Services prior to a Covered
Individual's eligibility for payment for Covered Services.
1.12 "Emergency," "Emergency Medical Services," etc. shall have the
same meaning set forth in the applicable Plan unless
otherwise required by law, in which case such terms shall
have the meaning required by law.
1.13 "HealthAmerica Participating Provider" means any provider of
health care services, including hospitals, physicians, and
other providers and facilities by and at which health care
services are made available, which meets HealthAmerica's
participation criteria and has entered into a provider
contract to provide Covered Services to Covered Individuals
participating in one of HealthAmerica's or other Member
Company's Plans.
1.14 "Medically Necessary" means all medical, surgical or other
related treatment which a Covered Individual requires in the
professional opinion of an AHERF Provider who is a physician
in consultation with HealthAmerica's Medical Director, from
time to time, in conformity with generally accepted medical
and surgical practices in effect at the time of determination
of treatment, the applicable Plan, and in conformity with the
professional and technical standards adopted by the quality
improvement and utilization review and management programs of
HealthAmerica.
1.15 "Medicare" means the Medicare program administered by the
Health Care Financing Administration of the United States of
America ("HCFA").
1.16 "Medicare HMO Risk Program" means the prepaid health care
plan(s) offered by HealthAmerica, pursuant to a contract with
HCFA, to individuals eligible to participate in Medicare.
1.17 "Member Company" shall mean HealthAmerica or any other direct
or indirect subsidiary of Coventry that offers a Program to
Covered Individuals in the Commonwealth of Pennsylvania,
including Coventry HealthCare Management Corporation d.b.a.
HealthAssurance ("HealthAssurance") and Coventry Health &
Life Insurance Company ("CHL").
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1.18 "Plan" means a health care plan offered by HealthAmerica or
other Member Company which provides, among other things, a
Program to Covered Individuals. The parties understand and
agree that in no event shall Plan include any self-insured
health care benefits plans administered by HealthAmerica or
other Member Company, including, without limitation, any
self-insured health benefit plans offered by an AHERF Provider
to its employees.
1.19 "POS Program" means the commercial point of service plan
(sometimes referred to as a coordinated care program or
gatekeeper preferred provider organization) offered by CHL
(and administered by HealthAssurance) to employers, unions or
other purchasers of group insurance; provided, however, POS
Program does not include any self-insured point of service
plans.
1.20 "PPO Program" means the commercial preferred provider
organization plan offered by HealthAssurance to employers,
unions or other purchasers of group health insurance;
provided, however PPO Program does not include any
self-insured preferred provider organizations.
1.21 "Primary Care Physicians" means physicians who specialize in
general or family practice medicine, internal medicine, or
pediatric medicine and are participating providers in a Member
Company's network other than in the Central Pennsylvania
Region or Ohio.
1.22 "Program" or "Programs" means individually the Commercial HMO
Program, PPO Program, POS Program or the Medicare HMO Risk
Program, as applicable, and collectively, the Commercial HMO
Program, PPO Program, POS Program and the Medicare HMO Risk
Program.
1.23 "Risk Year" means the period commencing with the date of
consummation of the Asset Purchase Agreement dated February
26, 1997 by and among AHERF, HealthAmerica and Coventry
Corporation, ("Asset Purchase Agreement") and December 31,
1997, and each successive one (1) year period thereafter so
long as this Agreement is in effect.
1.24 "Third Parties" shall mean the ancillary service providers
listed on Exhibit A, who, as of the Effective Date, have
entered into contracts for provision of certain Covered
Services to Covered Individuals under contractual terms with
HealthAmerica which are assumed by AHERF.
1.25 "Total Premiums" means the total dollar amount of premiums
received by Member Companies for the coverage of, or provision
of Covered Services to Covered Individuals for a Risk Year.
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1.26 "Total Provider Payments" means the total dollar amount of
payments made by Member Companies, directly or on behalf of
AHERF, to any providers, including AHERF Providers, for the
performance of Covered Services to Covered Individuals
incurred during the applicable period less any recoveries of
payments subsequently determined not to be owed to such
providers.
1.27 "Urgently Needed Services" shall have the same meaning, if
any, set forth in the applicable Plan unless otherwise
required by law, in which case such terms shall have the
meaning required by law.
1.28 "Western Region" shall mean the following Pennsylvania
counties: Allegheny, Washington, Greene, Fayette, Somerset,
Westmoreland, Armstrong, Beaver, Xxxxxx and Indiana.
2. SCOPE OF AGREEMENT
2.1 AHERF Network. On or before the effective date of this
Agreement, AHERF shall provide to HealthAmerica a complete
list of AHERF Providers as of the date of this Agreement and
the usual and customary capitation, percentage of premium or
fee schedule under which they are to be paid. If such
information is not provided with respect to an AHERF Provider,
the fee schedule in the standard provider agreements of the
Member Companies will be used to determine payments to such
provider. It is generally understood that it may take up to 45
days from date of receipt before payments can be processed.
The parties understand and agree that AHERF shall as soon as
possible use its best efforts to contract and include in its
network all physicians who have active medical staff
privileges at hospitals that are AHERF Affiliated Providers.
2.2 Provider Leaving Network. AHERF shall notify HealthAmerica or
other Member Company within 10 days of being notified that any
AHERF Provider has or will discontinue providing Covered
Services to Covered Individuals. If such AHERF Provider is
simultaneously discontinuing participation in a HealthAmerica
or affiliated product, the parties shall cooperate in
transitioning the care of such Covered Individuals to another
HealthAmerica Participating Provider within a reasonable
amount of time; provided, however, such transfer shall take
place immediately if such discontinuance is due to quality of
care or HealthAmerica determines that continuation of care may
negatively affect care rendered to Covered Individuals.
2.3 Becoming a HealthAmerica Provider. AHERF shall cause each
current or future AHERF Affiliated Provider, and shall make a
good faith effort to cause any current or future AHERF
Contracted Provider not already participating with
HealthAmerica, to apply for participation with the Member
Companies in
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
Programs offered within such Provider's service area, and the
Member Companies agree to use their best efforts to accept as
soon as possible and in any event within 30 days of receipt of
a completed application, for participation any such provider
that meets the Member Companies' participation criteria and
agrees to the Member Companies' contract terms.
AHERF shall notify HealthAmerica or other Member Company of
any new AHERF Providers and the fee schedule under which such
providers are to be paid. If AHERF provides notification to
HealthAmerica prior to the 15th day of any month,
HealthAmerica shall implement such fee schedule in the
following month. In the event that AHERF fails to notify a
Member Company of the fee schedule under which a AHERF
Provider is to be paid, a Member Company shall pay such
provider under the Member Company's then current applicable
fee schedule.
The parties understand and agree that under no circumstances
may an AHERF Provider provide Covered Services hereunder
unless it is first accepted by HealthAmerica for participation
and agrees to the Member Companies' contract terms.
2.4 Programs.
2.4.1 [___]* The foregoing terms shall be effective upon the
later of: (i) the date such provider becomes an AHERF
Affiliated Provider: or (ii) the date of this
Agreement.
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
2.4.2 Annual Statements. Within one hundred twenty (120)
days after the end of each fiscal year, AHERF shall
submit to HealthAmerica an annual statement signed by
AHERF Chief Financial Officer or Treasurer evidencing
AHERF's compliance with Section 2.4. [___]*
HealthAmerica shall be entitled to obtain an
independent audit of compliance with Section 2.4, the
cost of which shall be divided equally between
HealthAmerica and AHERF.
2.5 Termination of a AHERF Provider.
2.5.1 In the event of AHERF's termination or suspension of
an AHERF Provider's contract with AHERF, AHERF shall
immediately cause such AHERF Provider to cease
providing Covered Services to Covered Individuals,
notify Health America of the foregoing and if the
reason for such termination or suspension is required
to be reported to the National Practitioner Data
Bank, such notice shall state the reason for such
termination or suspension.
2.5.2 In the event that one of the events listed below
occurs as to an AHERF Provider, HealthAmerica may
notify AHERF that such Provider is no longer eligible
to provide Covered Services to Covered Individuals
and AHERF shall thereafter immediately cause such
AHERF Provider to cease providing Covered Services to
Covered Individuals:
2.5.2.1 Any action involving termination of or
limitation on an AHERF Physician's or
Provider's hospital privileges related
to quality of care or ability to admit
patients to any hospital or inpatient
facility.
2.5.2.2 Any situation that requires an AHERF
Provider to notify a state or federal
agency or licensing board that may
result in the termination, revocation or
suspension of the Provider's license or
certification.
2.5.2.3 Any situation involving an investigation
conducted or complaint filed by a state
or federal agency or licensing board
that may jeopardize or restrict an AHERF
Hospital's ability to operate an
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acute care hospital, an AHERF Physician's license to practice medicine or
osteopathy or an AHERF Ancillary Provider's license or certification to provide
professional services.
2.5.2.4 A change in any AHERF Physician's
license to practice medicine or
osteopathy, any form of reportable
discipline against such license, a
change in any AHERF Hospital's
accreditation by JCAHO, or
certifications including, but not
limited to, those under Titles XVIII or
XIX of the United States Code, or a
change in any AHERF Ancillary Provider's
license or certification to provide
professional services or any form of
reportable discipline against the same.
2.5.2.5 Any lawsuit or claim filed or asserted
against an AHERF Provider alleging
professional malpractice involving a
Covered Individuals, provided that
HealthAmerica shall consult with AHERF
prior to terminating an AHERF Provider
under this Section 2.5.2.5.
2.5.2.6 Any felony conviction of an AHERF
Provider.
2.5.2.7 Any AHERF Provider's suspension or
termination from participation in
Medicare or the Medical Assistance
program of any state.
2.5.2.8 HealthAmerica determines in good faith
that the AHERF Provider's continued
provision of services to Members may
result in, or is resulting in, an
imminent danger to the health, safety or
welfare of Covered Individuals.
2.5.2.9 HealthAmerica determines in good faith
that, after notice from HealthAmerica
and opportunity to cure, the AHERF
Provider has not materially complied
with the provisions of HealthAmerica's
or AHERF's quality improvement or
utilization management programs.
2.5.2.10 One of the events of default set forth
in the applicable AHERF Provider
Agreement occurs and HealthAmerica has
complied with the applicable notice
provisions set forth therein.
2.6 Corrective Action. If terminated for one of the items set
forth immediately above, an AHERF Provider may utilize
HealthAmerica's then current applicable
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
Corrective Action Program if such AHERF Provider would have otherwise been
entitled to utilize such Corrective Action Program.
2.7 Administration of AHERF Employee Health Programs. At the
earliest available opportunity, HealthAmerica or another
appropriate Coventry subsidiary will be provided the
opportunity to bid or negotiate for the administration of each
self-funded (sometimes referred to as home host) program
offered to employees of AHERF or any of its affiliates within
HealthAmerica's or such Coventry subsidiary's service area(s),
and [___]* to HealthAmerica or such Coventry subsidiary the
contract for administration of such plan.
2.8 Medicaid HMO Product. In the event that HealthAmerica or
Coventry's indirect subsidiary, Pennsylvania HealthCare USA,
Inc. d/b/a Care Plus, desires to enter into an agreement with
AHERF for a Medicaid HMO, AHERF will provide healthcare
services [___]*
2.9 Private Label Product; HealthAmerica Geographic Expansion.
AHERF acknowledges that HealthAmerica's affiliate, Coventry
Healthcare Management Corporation d.b.a. HealthAssurance,
intends to offer a private label, limited network, point of
service product (the "Private Label Product") [___]*. AHERF
and HealthAmerica agree to work together to develop a business
plan for a private label product on a mutually beneficial
basis [__]*
2.10 HealthAmerica Network. AHERF shall take all reasonable steps
to maintain in Health America's Western Region network
("Network") the providers listed on Exhibit B attached hereto
so long as this Agreement is in effect. The parties hereto
understand and agree that those providers listed in Exhibit B
with an asterisk associated therewith shall not be removed
from the Network except upon the mutual agreement of the
designated representatives of the parties comprising the
Operating Committee, taking into account quality, location and
impact on marketing the Programs. Further, it is understood
and agreed that those providers listed in Exhibit B without an
asterisk associated therewith, shall not be removed from the
Network except upon the mutual agreement of the designated
representatives of the parties comprising the Operating
Committee, taking into account quality and location. In no
event will a provider be terminated from the Network unless
such termination may be effected without legal liability and
appropriate notice to Covered Individuals. In the event that a
Member Company desires to add a particular physician or
practice group to its physician provider panel, or desires to
add physician providers in a particular geographic area within
the Western Pennsylvania Region or in a particular type of
practice or specialty, it will identify its specific needs in
writing to AHERF, including the rationale for the proposed
provider addition. AHERF will use its best efforts to meet the
Member Company's identified need through employment, practice
acquisition, contractual affiliation or otherwise.
3. DUTIES OF AHERF.
3.1 AHERF shall perform the following duties:
3.1.1 Arrange for provision of all Covered Services
delivered to Covered Individuals, at the Covered
Individuals's request or otherwise, including such
Covered Services as are provided at providers which
are not AHERF Providers.
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3.1.2 Ensure that AHERF Affiliated Providers take any and
all actions required to be bound by the terms of this
Agreement and to permit AHERF to comply herewith and
AHERF Providers to comply with the agreements they
have executed with AHERF or HealthAmerica. AHERF and
HealthAmerica shall cooperate as necessary to
establish compliance with such agreements, and
subsequent negotiation or renegotiation of such
agreements should be conducted by HealthAmerica
personnel or AHERF personnel with appropriate
HealthAmerica oversight.
3.1.3 Comply with all applicable federal and state laws and
regulations related to this Agreement and the
services to be provided hereunder; including but not
limited to, statutes and regulations related to fraud
and abuse, discrimination, disabilities,
confidentiality, self-referral, false claims, and
prohibition of kickbacks. Comply with all applicable
NCQA and HCFA requirements.
3.1.4 Review administrative and management services related
to the provision of services by AHERF Providers.
3.1.5 AHERF shall cause each of AHERF Affiliated Providers
to offer to their employees any Program that a Member
Company chooses to offer within such AHERF Affiliated
Provider's service area on terms, including, without
limitation, employer contributions, at least as
favorable as those for any health benefit programs
with comparable benefits and premiums as are offered
on behalf of any other third party payor. Such
Program(s) shall be offered during each AHERF
Affiliated Provider's next health plan open
enrollment but in no event to become effective for
coverage later than January 1, 1998. The parties
understand and agree that AHERF Affiliated Providers
shall not promote or favor a competing health benefit
program with benefits comparable to any Program
offered in the AHERF Affiliated Providers' service
area so long as the cost to the applicable AHERF
Affiliated Provider for the competing health benefit
program is no greater than the cost of the Program.
In addition, an AHERF Affiliated Provider shall not
agree with another third party payor to exclude
HealthAmerica or any of its affiliates from the
health care benefits offered to the AHERF Affiliated
Provider's employees. AHERF shall cause each AHERF
Affiliated Provider to immediately inform
HealthAmerica in the event that it intends to offer
any other third party payor's health benefits plan on
terms more favorable than a Program.
3.1.6 AHERF shall contract with the Third Parties under or
assume as provided in Section 1.2 the terms and
conditions of the contracts listed in Exhibit A for
provision to Covered Individuals of such Covered
Services as are within
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the specialty of the ancillary providers who are
parties to the contracts. Upon the termination of any
contracts with a Third Party, AHERF may cause an
AHERF Provider to provide such Covered Services. In
the event AHERF determines to terminate any of such
agreements, it agrees to indemnify and hold harmless
Coventry, HealthAmerica, any Member Company, or any
subsidiary of the foregoing which is a party to such
agreement, and any of their officers, directors,
agents or employees, from any loss, expense, damages
or other costs incurred by them arising out of such
termination, including all costs and expenses
(including reasonable attorneys fees in connection
with any action, suit, proceeding in connection
therewith).
3.1.7 AHERF shall maintain continuity of care for Covered
Individuals, including permitting admissions and/or
referrals to all HealthAmerica Participating
Providers (so long as such providers have contracted
with HealthAmerica to provide care to Covered
Individuals).
3.1.8 HealthAmerica, HCFA, NCQA and the Commonwealth of
Pennsylvania shall have the right to review AHERF's
books and records pertaining to provision of services
to Covered Individuals, including, but not limited
to, quality improvement and utilization management
programs, and all data on utilization of medical
services and providers of those services pertaining
to Covered Individuals. AHERF shall have the right to
review HealthAmerica's books and records pertaining
to its premium collection activities, coordination of
benefits, subrogation, and claims payment activities,
in each case to the extent pertaining to Covered
Individuals and to the extent such functions have not
been delegated to AHERF hereunder.
4. DUTIES OF HEALTHAMERICA.
4.1 HealthAmerica or other Member Company shall perform the
following duties.
4.1.1 Utilization. Utilization review and management
services and the obligations imposed upon
HealthAmerica or other Member Company by federal and
state statute and regulation.
4.1.2 Member Services. Member services, including
enrollment, dedicated member services phone line,
member grievance process and collection of premium
and processing will continue to be the responsibility
of HealthAmerica or other Member Company.
4.1.3 Provider Services. Provider services, including a
dedicated provider relations telephone line, and
Medical Director interface.
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4.1.4 Marketing. Marketing services, including projections
by product or plan, and underwriting services.
4.1.5 Quality Improvement. Quality improvement services,
including provider credentialing and recruiting, NCQA
accreditation, member satisfaction surveys (related
to primary care physicians, provider sanctioning,
specialists and hospital services) and data
collection, analysis and reporting. In performing
credentialing activities with respect to AHERF
Providers, HealthAmerica shall not discriminate
against any AHERF Provider in comparison to any other
HealthAmerica Participating Provider, and such
credentialing program shall be reasonable,
consistently and uniformly applied to each
HealthAmerica Participating Provider, including AHERF
Providers.
Notwithstanding anything herein to the contrary,
AHERF shall have the right, subject to and in
accordance with AHERF's credentialing and
recredentialing programs and procedures and subject
to applicable law, to terminate any provider as an
AHERF Provider if such provider fails to meet AHERF
standards and criteria. AHERF shall promptly notify
HealthAmerica in writing of any such termination, and
upon such notice, such AHERF Provider will cease to
be an AHERF Provider for purposes of the risk
reconciliation provisions of this Agreement as of the
last day of the month in which the effective date of
the termination occurs.
4.1.6 Information Systems. The parties shall work closely
together to facilitate efficient transfer of
information which is needed for performance of their
duties under this Agreement. HealthAmerica or other
Member Company shall provide the information systems
mutually agreed upon by the parties, including access
-- electronic on-line access if feasible -- to
HealthAmerica's authorization system for purposes of
communicating to HealthAmerica or other Member
Company authorizations for provision of health care
services to Covered Individuals.
HealthAmerica or other Member Company shall provide
to AHERF on a monthly basis, and to the extent
reasonably feasible, in mutually acceptable computer
readable format, claims information and reports to be
agreed upon with respect to Covered Individuals who
have received Covered Services from AHERF Providers.
At a minimum, HealthAmerica or other Member Company
will provide AHERF all of the claim data in the
HealthAmerica claims system needed by AHERF to
complete the data fields listed on Exhibit C. Data
will be provided on an independent practice basis and
on a system basis in accordance with mutually
determined specifications.
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4.1.7 Claims Processing. AHERF shall provide HealthAmerica
with all information required for HealthAmerica or
other Member Company to process and reconcile claims
presented for payment by AHERF Providers. Subject to
the provisions of Section 5, HealthAmerica or other
Member Company shall be responsible for processing
and paying such claims and for otherwise paying on
behalf of Covered Services provided to Covered
Individuals, including the coordination of benefits
and payment of other claims from other providers to
Covered Individuals. HealthAmerica or other Member
Company shall provide such claims information to
AHERF on a monthly basis, and shall use its
reasonable efforts to provide the information in
mutually acceptable electronic format. HealthAmerica
or other Member Company will use its best efforts to
process such claims within 30 days of receipt of a
clean claim as mutually agreed by HealthAmerica and
AHERF.
4.1.8 Risk Pools. HealthAmerica shall be responsible for
the administration of mutually agreed upon interest
bearing risk pools relating to Covered Individuals.
4.1.9 Eligibility, and Benefit Verification. HealthAmerica
or other Member Company shall be responsible for the
determination under each Program as to whether (i) a
person receiving services, supplies, products or
accommodations from an AHERF Provider is a Covered
Individual, and (ii) the services, supplies, products
and accommodation provided to a Covered Individual
are Covered Services. The Member Company shall use
its reasonable efforts to provide AHERF and AHERF
Providers with real time access to the Member
Company's eligibility files to verify a Covered
Individual's eligibility and coverage. HealthAmerica
agrees that such verification process shall be
reasonable and consistently and uniformly applied to
each HealthAmerica Participating Provider.
HealthAmerica shall make eligibility determinations
according to its then current policies.
As to AHERF Providers being compensated on a
capitation basis, if a Covered Individual's
eligibility has been canceled retroactively,
HealthAmerica may deduct from payments to be made to
the AHERF Provider an amount equal to the capitation
payments paid to the AHERF Provider on account of
such Covered Individual after the date of the
retroactive cancellation: provided, however, such
amount shall not exceed an amount equal to three (3)
months of capitation payments for such Covered
Services. The AHERF Provider may xxxx such Covered
Individual for services rendered during such period
of ineligibility, which billing shall not constitute
a violation of Sections 5.9. If a Covered
Individual's enrollment in an AHERF Provider's
practice has been added retroactively
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for three (3) or more months, HealthAmerica shall
make a capitation payment equal to three months of
capitation payments for such Covered Individual. The
foregoing financial terms and conditions shall be
AHERF Provider's sole and exclusive remedy for
failing to notify HealthAmerica or Member Company of
a Covered Individual's enrollment in an AHERF
Provider's practice.
AHERF Providers shall provide health care services to
Covered Individuals without prior verification of
eligibility or authorization in cases of an
emergency.
4.2 Delegation. The Parties acknowledge that for all Programs
covered by this Agreement, certain functions may be most
effectively performed by AHERF. Therefore, the parties agree
that the services set forth in this Section 4.2 may be
delegated to AHERF in accordance with the provisions of this
Section 4.2.
4.2.1 Delegated Functions Pre-requisites/Oversight. Subject
to the terms and conditions set forth in this Section
4.2.1, HealthAmerica or another Member Company shall
delegate the performance of a function listed in
Section 4.2.1.6 below (individually a "Delegated
Function" and collectively the "Delegated
Functions"), to AHERF with regard to the Programs in
the Western Region.
4.2.1.1 HealthAmerica Pre-delegation Evaluation.
HealthAmerica or another Member Company
shall not be required to delegate a
Delegated Function hereunder unless and
until HealthAmerica has performed a
pre-delegation audit and determined, in its
sole discretion, that AHERF shall perform
such Delegated Function in accordance with
the standards set forth in this Section
4.2.1.
4.2.1.2 Work Plan. HealthAmerica or another Member
Company shall not be required to delegate a
Delegated Function hereunder unless and
until AHERF has submitted to HealthAmerica
or another Member Company and HealthAmerica
or another Member Company has approved a
work plan satisfactory to it setting forth
in sufficient detail the tasks to be
performed by AHERF in performing the
Delegated Function.
4.2.1.3 HealthAmerica Oversight. The parties
understand and agree that pursuant to state
requirements regarding integrated delivery
systems and NCQA, a Member Company is
required
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to retain oversight of the Delegated
Functions. A Member Company shall not be
required to delegate a Delegated Function
hereunder unless and until the Member
Company and AHERF mutually agree to the
frequency and content of periodic reports to
be provided by AHERF to the Member Company
in order to assist HealthAmerica in
performing its oversight duties hereunder. A
Member Company shall conduct an annual
on-site audit of AHERF to ensure compliance
with HealthAmerica's, DOH and NCQA
standards.
4.2.1.4 Standard of Performance. All Delegated
Functions shall be performed in accordance
with standards satisfactory to the Member
Company, which standards shall be no less
than the standards required by NCQA, the
Pennsylvania Department of Health ("DOH") or
the Pennsylvania Insurance Department
("DOI"), including, without limitation, the
requirements set forth in the DOH's
Statement of Policy and the DOI's Statement
of Policy, each as amended from time to
time, respectively set forth at 28 Pa.
Code ss.9.401 et seq. and 31 Pa.
Code ss.301.301 et seq. (collectively the
"Statement of Policy"). Further, all
Delegated Functions shall be subject to
performance monitoring by the Member Company
and the
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DOH, and is subject to independent
validation by the Member Company, DOH and an
independent quality review/assessment
approved by the DOH. HealthAmerica may elect
to rescind any delegated duties if, in
HealthAmerica's sole opinion, AHERF's
performance of such functions may jeopardize
either the health or safety of
HealthAmerica's members, or HealthAmerica's
compliance with applicable regulations or
other certification requirements.
4.2.1.5 Consideration. The parties shall mutually
agree to the amount of consideration to be
paid to AHERF for performance of a Delegated
Function prior to delegation of the
Delegated Function, provided that in no
event shall a Member Company agree to
consideration that does not provide the
Member Company with a substantial savings,
as determined by the Member Company, in its
cost in directly performing the Delegated
Function. At a Member Company's request,
AHERF shall provide the Delegated Function
on behalf of a Member Company's other
products, including self insured products,
at the same consideration.
4.2.1.6 Delegated Functions.
4.2.1.6.1 Utilization Review/Management.
The parties hereto shall use
their best efforts to delegate
utilization review/management
to AHERF within six (6) months
of the effectiveness of date of
this Agreement.
4.2.1.6.2 Provider Recruitment/Network
Maintenance. The parties hereto
shall negotiate in good faith
to delegate provider
recruitment/network maintenance
to AHERF. The parties
understand and agree that in
no event shall a Member Company
be required to include in its
network of participating
providers, providers that do
not meet it's standard
credentialing standards or that
it reasonably believes may
endanger the health and welfare
of Covered Individuals.
HealthAmerica and other Member
Companies retains the right,
based on quality issues, to
approve new practitioners,
providers and sites, and to
terminate or suspend individual
practitioners.
4.2.1.6.3 Quality Improvement. The
parties hereto shall negotiate
in good faith to delegate
quality improvement to AHERF.
4.2.1.6.4 Claims Payment. The parties
hereto shall negotiate in good
faith to delegate claims
payment to AHERF.
4.2.1.6.5 No Delegation of Member
Services. Member Companies
shall continue to perform
member service, including,
without limitation, member
grievance functions.
4.2.2 Approval of Charters. HealthAmerica shall
review and approve the quality improvement,
utilization management and credentialing
charters and policy and procedure manuals
which shall be developed by AHERF.
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4.2.3 Access to Records. AHERF shall provide, and
cause practitioners and providers to
provide, any Member Company, DOH and an
independent review/assessment organization
with access to medical and other records
concerning the provision of Covered Services
to Covered Individuals by and through AHERF
and AHERF Providers.
4.2.4 Confidentiality. AHERF and Member Companies
shall maintain, in strict confidence, the
records and information of Covered
Individuals. AHERF and Member Companies
shall afford Covered Individuals the
opportunity to approve or deny the release
of identifiable personal information by
AHERF or the Member Companies, except where
such release is required by law.
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4.2.5 Other Duties
4.2.5.1 AHERF shall provide quarterly
performance reports according to
HealthAmerica specifications
regarding quality improvement
and utilization management.
4.2.5.2 Representatives from
HealthAmerica shall be included
as voting members of all
committees of AHERF including
but not limited to the committee
which addresses the development
of quality improvement standards,
provided, such participation
shall be limited to matters
relating to Covered Individuals
and shall not jeopardize any peer
review protection granted under
applicable law.
4.2.6 Failure to Perform Delegated Functions to
the Satisfaction of a Member Company. In the
event that AHERF fails to perform a
Delegated Function in accordance with this
Agreement, a Member Company shall so notify
AHERF, which notice shall set forth in
detail the reasons for such failure. Within
fifteen (15) days of the date of the Member
Company's notice to AHERF, AHERF shall
provide to the Member Company a written plan
for correcting the items detailed in the
Member Company's notice. In the event that
such failure is not corrected within fifteen
(15) days of the date of AHERF's written
plan, the Member Company may notify AHERF
that the Member Company shall perform the
affected Delegated Function and shall
discontinue payment for the same effective a
date certain to be chosen by the Member
Company.
4.3 Contractual Responsibilities to Covered Individuals. The
parties recognize that regulatory requirements provide that
HealthAmerica and other Member Companies will remain
ultimately responsible to Covered Individuals, financially or
otherwise, for AHERF's functions and responsibilities under
the terms of this Agreement and that HealthAmerica will retain
oversight authority over such functions and responsibilities.
5. FINANCIAL TERMS.
5.1 Financial Responsibility. All Covered Services rendered for
Covered Individuals are to be either directly provided by or
paid for by AHERF. AHERF shall be responsible for the total
costs of Covered Services whether provided within or outside
of AHERF's system. Covered Services for which AHERF shall be
financially responsible will include without limitation
Emergency Medical Services or Urgently Needed Services.
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5.2 Percent of Premium. In consideration of AHERF's arranging for
the provision of Covered Services to Covered Individuals under
the Programs, its assumption of risk of financial loss
associated with the provision of those Covered Services and
its performance of the other duties set forth in this
Agreement, HealthAmerica or a Member Company, as appropriate,
shall pay AHERF the AHERF Premium Amount, subject to
applicable terms and conditions set forth elsewhere in this
Agreement.
If the average per member, per month premium in a Risk Year
for the aggregate of Covered Individuals enrolled in a Program
is more than two percent (adjusted for change in benefit
design and demographic mix) less than the average per member,
per month premium for the previous Risk Year for the aggregate
of Covered Individuals enrolled in such Program, the parties
hereto shall negotiate in good faith to execute and deliver a
mutually satisfactory amendment to this Agreement to adjust
the percent of premium paid to AHERF hereunder for such
Program, subject to Section 2.5.1.
5.3 Reconciliation. The parties understand and agree that because
the percentage of premium allocated to AHERF differs for each
Program, the calculations and reconciliations under this
Section 5 shall not be aggregated and shall be made separately
for the Commercial HMO Program, the Medicare Risk HMO Program,
the PPO Program and POS Program and, if implemented, the
Medicaid HMO Program and the Private Label Program.
5.4 Interim Premium Reconciliation. In order to facilitate prompt
reconciliation of differences between amounts paid and amounts
owed between the parties during each Risk Year, the Member
Companies shall perform interim premium reconciliations for
each of the first three quarters of each Risk Year ("Interim
Reconciliation Periods") commencing on the effective date.
Within one hundred thirty five (135) days after the end of
each Interim Reconciliation Period, the Member Companies shall
calculate the difference between (i) the AHERF Premium Amount
for such Interim Reconciliation Period plus any payments made
by AHERF pursuant to Section 5.10.6 ("Shortfall Payments") and
(ii) the amount of Total Provider Payments incurred by the
Member Company for services provided during such Interim
Reconciliation Period plus an amount for claims incurred but
not reported ("IBNR"), calculated consistently with the Member
Company's other IBNR claims calculations, less any amounts
recovered by AHERF from an applicable reinsurer (the "Interim
Premium Reconciliation Amount"). Detailed lag schedules
relating to the IBNR calculation will be provided with each
reconciliation, with the intention to migrate to an AHERF
specific IBNR calculation where practically feasible. There
will be no interim payments due to or from either party in the
initial year. Subsequent years will include a provision
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for interim payments only if the final reconciliation for the
prior year resulted in an amount due to and from either party
in excess of ten percent (10%) of the total premium for that
period. If the Interim Premium Reconciliation Amount is a
positive number the Member Company shall pay that amount to
AHERF within fifteen (15) days of the completion of the
reconciliation. In the event the Interim Premium
Reconciliation Amount is a negative number AHERF shall pay
that amount to the Member Company within fifteen (15) days
after receipt from the Member Company of the results of the
reconciliation.
5.5 Annual Premium Reconciliation. Within one hundred eighty (180)
days after the end of each Risk Year, HealthAmerica shall
calculate the difference between (i) the AHERF Premium Amount
plus Shortfall Payments in the Risk Year and (ii) the amount
of Total Provider Payments made by Member Companies for
services provided to Covered Individuals during such Risk Year
plus IBNR claims less any amounts recovered by AHERF from an
applicable reinsurer (the "Premium Reconciliation Amount").
Upon completion of the reconciliation, the parties agree to
meet and review the results and supporting documentation.
Either party may perform further diligence in the sixty (60)
days following presentation of the reconciliation. Absent
material differences, the party owing the other shall pay one
hundred percent (100%) of the amount due by the end of the
sixty (60) day period. Any claims presented to a Member
Company for payment following completion of the Annual Premium
Reconciliation for a given Risk Year shall be entirely AHERF's
financial responsibility, paid by the Member Company and
reimbursed through the Account.
5.6 Final Premium Reconciliation. In the event of termination of
this Agreement a Member Company shall within twenty-four (24)
months of the effective date of termination calculate for any
periods for which Premium Reconciliation Amounts have not
already been calculated and paid (the "Final Reconciliation
Period") the difference between: (i) the AHERF Premium Amount
plus Shortfall Payments for such Final Reconciliation Period
and (ii) the amount of Total Provider Payments made by the
Member Company for services provided to Covered Individuals
during the Final Reconciliation Period plus IBNR claims,
calculated consistently with the Member Company's other IBNR
claims calculations for such Final Reconciliation Period less
any amounts recovered by AHERF from an applicable reinsurer
not already calculated (the "Final Premium Reconciliation
Amount"). Any Final Premium Reconciliation Amounts owed by
either party shall be paid within ninety (90) days of receipt
of notice of the Final Premium Reconciliation Amount. Any
Premium Reconciliation Amounts previously calculated as due
from one party to the other, but not yet paid, shall be paid
at the same time.
5.7 Supporting Information; Audit. Within one hundred eighty
(180) days after the end of each Risk Year and within 180 days
of the effective date of termination of
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this Agreement, the Member Companies shall provide to AHERF
information establishing: (i) the Total Premium in respect of
such Risk Year; (ii) the Total Provider Payments in respect of
such Risk Year; and (iii) the Member Company's calculation of
the AHERF Premium amount and the Premium Reconciliation for
such Risk Year. AHERF shall be entitled to review and to
conduct an audit (either by AHERF or by independent auditors
acceptable to HealthAmerica) of the Member Company's books and
records to verify such amounts and calculations as claimed by
the Member Company. The cost of any such review and/or audit
conducted by independent auditors shall be shared equally
between the Member Company and AHERF. If, as the result of any
such review or audit, it is determined that the Premium
Reconciliation as conducted by the Member Company was
incorrect, AHERF and HealthAmerica shall promptly correct the
Premium Reconciliation. In the event AHERF and the Member
Company are unable after good faith efforts for at least 60
days to resolve a dispute with regard to any such amount or
calculation, such dispute shall be settled in accordance with
the dispute resolution provisions of this Agreement.
5.8 Insurance. Each party shall secure and maintain or cause to be
secured and maintained comprehensive general professional and
directors and officers liability insurance through a program
of self-insurance or through the purchase of insurance
providing minimum limits of liability of the greater of (i)
one million dollars ($1,000,000) per claim and three million
dollars ($3,000,000) in the annual aggregate or (ii) such
amount as shall be required by law covering the acts or
omissions of itself, its employees, officers and agents within
the scope of and during the term of this Agreement. Each party
shall provide the other with proof of the foregoing on written
request. In addition AHERF shall secure and maintain
reinsurance policies (also known as stop-loss insurance) to
insure costs of health care services required for specific
cases at least to the minimum amounts required by law or set
forth in HFCA physician incentive plan regulations and shall
report to the Member Companies recoveries on such policies as
provided under the reconciliation provisions above and the
premiums on such policies as provided in 5.10.4 below.
5.9 No Balance Billing. AHERF hereby agrees that in no event,
including but not limited to, non-payment by a Member Company,
a Member Company insolvency or breach of the Agreement, shall
AHERF xxxx, charge or collect a deposit from, seek
compensation, remuneration or reimbursement from, or have any
recourse against, Covered Individuals or persons other than a
Member Company acting on their behalf for Covered Services.
This Section shall not prohibit collection of Copayments,
Coinsurance, Deductibles or Financial Penalties made in
accordance with the terms of the applicable Covered
Individual's contract with a Member Company nor billing for
non-Covered Service for which Covered Individuals have had
prior notification and approved.
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AHERF further agrees that: (i) the no balance billing
provision herein shall survive the termination of the
Agreement regardless of the cause giving rise to termination
and shall be construed to be for the benefit of Covered
Individuals; and (ii) this no balance billing provision
supersedes any oral or written contrary Agreement now existing
or hereafter entered between AHERF and a Covered Individual or
a person acting on his/her behalf.
Any modification, addition or deletion to the provisions of
this Section shall become effective on a date no earlier that
sixty (60) days after the Pennsylvania Secretary of Health has
received written notice of such proposed change.
5.10 Assurances of Claims Payment.
5.10.1 Controlled Disbursement Account. On or before the
effective date of this Agreement, AHERF shall open
one or more interest bearing bank accounts, over
which HealthAmerica or the appropriate Member Company
shall have signature authority (the "Account"), at
bank to be agreed to by the parties. Separate
accounts will be established for each Program
hereunder to the extent administratively appropriate.
AHERF understands and agrees that under no
circumstances may AHERF withdraw any moneys from the
Account without the previous written consent of the
Member Companies, which consent shall not be
unreasonably withheld.
5.10.2 Premium Deposits. On the fifteenth (15th) day of
each calendar month or the next business day in the
event the fifteenth (15th) day of the month is a
Saturday, Sunday or bank holiday, the Member
Companies shall deposit into the account an amount
equal to the AHERF Premium Amount during the previous
calendar month.
5.10.3 HealthAmerica Claims Withdrawals. The Member
Companies may withdraw from the Account amounts due
to health care providers and Third Parties (as
defined in Section 3.1.6) for Covered Services,
including without limitation, fee-for-service,
provider incentive and/or capitation payments (such
amounts are hereinafter collectively referred to as
"Claims"). The Member Companies shall provide to
AHERF reports regarding Claims as required elsewhere
in this Agreement.
5.10.4 Administrative Expenses and Reinsurance Premiums. No
more frequently than once each calendar month, AHERF
shall notify the Member Companies in writing
regarding: (i) administrative expenses incurred as a
result of performing the administrative services set
forth in this Agreement, (ii) reinsurance premiums
due for Covered Services
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provided to Covered Individuals (such administrative
expenses and reinsurance premiums are hereinafter
collectively referred to as "Expenses"); and (iii) if
not otherwise previously paid, capitation payments
due to providers other than primary care physicians
for Covered Services ("Other Capitation Payments").
Within fifteen (15) days of its receipt of such
notice the Member Companies shall withdraw from the
Account and forward to AHERF an amount equal to the
amount set forth in such notice, provided: (i)
Expenses are substantiated by AHERF by third party
invoice, contract or some other form of reliable
documentation; (ii) the notice lists the providers
that shall receive Other Capitation Payments and the
amounts to be received by such providers; and (ii)
such amount does not exceed ten percent (10%) of the
previous monthly deposit to the Account.
5.10.5 Restriction of Account Funds. The Member Companies
shall not withdraw moneys from the Account other than
for the purposes described in Section 5 of this
Agreement.
5.10.6 Account Shortfall. In the event that moneys in the
Account do not exceed 15 days of the daily average of
total claims for the preceding three (3) month
period, the Member Companies shall immediately notify
AHERF which notice shall include the amount of such
insufficiency (the "Shortfall"). Within three
business days of the receipt of such notice, AHERF
shall deposit in the Account an amount equal to the
Shortfall. Failure to make such payment within such
time period shall constitute a material breach under
Section 7.2.2. The obligation hereunder shall survive
termination of this Agreement.
5.10.7 Reimbursement. Within ten (10) days of its receipt
of notice from the Member Companies, AHERF shall
reimburse the Member Companies in full for any
reasonable administrative expenses incurred by the
Member Companies, as mutually determined, due to
AHERF's failure to pay any Shortfall amounts,
including, without limitation, expenses incurred as a
result of processing duplicate claims.
5.10.8 Reconciliations. Any amounts required to be paid
under Section 5 of this Agreement shall first be paid
out of any amounts remaining in the Account in excess
of the then due and outstanding Claims and Other
Capitation Payments. Any amounts remaining in the
Account after performance of all of the
reconciliations required under this Section 5 shall
be the property of AHERF.
5.11 In addition, in consideration of HealthAmerica's entering
into this Agreement, AHERF shall make payments to
HealthAmerica as follows:
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*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
5.11.1 So long as no event shall have occurred
giving rise to HealthAmerica's termination
for cause under 7.2.2.1 or 7.2.2.3. the
payments set forth below shall be made on or
before the following dates regardless as to
whether this agreement shall have been
otherwise terminated. [___]*
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6. INDEMNIFICATION.
AHERF hereby agrees to indemnify and hold HealthAmerica, Coventry and
the other Member Companies harmless against and in respect of (i) any
loss, liability or damage suffered or incurred by HealthAmerica,
Coventry or the other Member Companies due to breach of any obligation
of AHERF incurred under this Agreement or any act, error or omission of
AHERF, its employees, agents or representatives; and (ii) all
reasonable costs and expenses (including attorneys' fees) incurred by
HealthAmerica, Coventry or the other Member Companies in connection
with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section;
provided, however, that AHERF shall not be responsible for any actions
taken by AHERF Providers at the direction of HealthAmerica, Coventry or
the other Member Companies.
HealthAmerica, Coventry and the other Member Companies hereby agree to
indemnify and hold AHERF harmless against and in respect of (i) any
loss, liability or damage suffered or incurred by AHERF due to breach
of any obligation of HealthAmerica, Coventry or the other Member
Companies incurred under this Agreement or any act, error or omission
of HealthAmerica, Coventry or the other Member Companies as their
employees, agents or representatives; and (ii) all reasonable costs and
expenses (including
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attorneys' fees) incurred by AHERF in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the
matters indemnified by HealthAmerica, Coventry or the other Member
Companies in this Section.
7. TERM AND TERMINATION.
7.1 Term. This Agreement shall be effective as of the date first
stated above (the "Effective Date") and shall continue in full
force and effect for a period which shall end at the close of
business ten (10) years after the Effective Date. This
Agreement shall automatically be extended, on each anniversary
of the Effective Date ("Anniversary") for an additional year
so that the Agreement shall have a term of ten (10) years on
each Anniversary unless either party notifies the other, in
writing, no less than ninety (90) days in advance of any
Anniversary, of the intention not to extend this Agreement.
Thereafter, this Agreement shall terminate upon the last day
of the then current ten (10)-year term in which such notice
was given. If no such notice or other notice of termination
permitted hereunder is given, this Agreement shall
automatically be extended for an additional one (1)-year
period, instituting a new ten (10)-year term.
7.2 Termination.
7.2.1 For Material Breach. In the event that either party
notifies the other party in writing of its intent
to terminate this Agreement due to the other
party's material breach of this Agreement and such
breach has not been cured within sixty (60) days
following the date of such notice, this Agreement
shall terminate on the ninetieth (90th) day
following the date of the notice, provided that
such periods shall be five days and thirty days in
the case of a breach of Section 5.10.6.
7.2.2 For Cause. Either party, on 30 days written notice
to the other party, may terminate this Agreement in
the event of a "for cause" action by the other
party. For cause action shall mean the following:
7.2.2.1 The withdrawal, expiration or
non-renewal of state license,
essential certificate, approval or
authorization (and continuance without
cure or reinstatement for more than 30
days) necessary for a party (or their
successor or assigns hereunder) being
able to conduct its operations in the
normal course of its business.
7.2.2.2 The loss of or material limitation of
a party's general or professional
liability insurance.
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7.2.2.3 The dissolution (other than in
connection with a transaction
described in 7.2.4) of a party (or
their successors or assigns
hereunder).
7.2.2.4 A good faith determination by a party
that the continued participation of
the other party in this Agreement will
materially adversely affect patient
care.
7.2.2.5 The debarment of a party from
participation in any governmental
sponsored health-care program.
7.2.3 Insolvency/Bankruptcy. Either party may terminate
this Agreement immediately if: (i) the other party
files a petition in voluntary bankruptcy or
corporate reorganization, makes an assignment for
the benefit of creditors, admits in writing to its
insolvency or inability to pay debts as they come
due, consents to or has appointed on its behalf a
trustee or receiver, or otherwise ceases to do
business; or (ii) any court of competent
jurisdiction assumes custody or control of the
other party's assets.
7.2.4 No Termination for Change in Control. In the event
that either party shall merge or consolidate with
another party, engage in a sale of substantially
all of its assets, or if a majority of the shares
of capital stock shall be transferred to another
party, or a majority of the directors of a party
shall change in connection with a transaction, such
events shall not be the basis for in a termination
of this Agreement.
7.3 Actions Following Termination. Upon termination of this
Agreement, the parties hereof shall perform the following
duties and obligations and have the following rights:
7.3.1 Continuation Period. For purposes of this Section,
the period beginning upon the date of the notice of
termination and ending on the last day of the month
one year following the date of such termination
shall be referred to as the "Continuation Period."
7.3.2 Continuation of Covered Services. AHERF shall cause
AHERF Providers to continue to perform Covered
Services in accordance with this Agreement or the
applicable Agreement then in effect by and between
such AHERF Providers and AHERF during the
Continuation Period.
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If termination of this Agreement occurs for any
reason, any Covered Individual who is an inpatient
as of the end of the Continuation Period shall
continue to be provided all Covered Services by an
AHERF Provider, and HealthAmerica shall pay such
AHERF Provider for such inpatient Covered Services
in accordance with this Agreement until such
Covered Individual is transferred to another
facility per HealthAmerica's request or is properly
discharged.
7.3.3 Continuation of Payment. Within one hundred eighty
(180) days of the end of the Continuation Period,
HealthAmerica or another Member Company shall pay
the AHERF Providers all sums due and outstanding112
for services rendered to Covered Individuals
between the date of termination of the Agreement
and the end of the Continuation Period. For
services rendered during that period, or another
Member Company agrees to pay the AHERF Providers at
the rates in effect at the time of termination of
the Agreement to the extent such services would
have been Covered Services had this Agreement not
been terminated.
7.3.4 Direct Contracting with Affiliated Providers. A
Member Company or another Member Company may
recruit and contract directly with AHERF Providers
to provide Covered Services upon the commencement
of the Continuation Period. In any case such
contracts by and between the Member Company and
AHERF Providers shall not become effective until
the termination of this Agreement. AHERF shall not
take any action to prevent AHERF Providers from
contracting directly with HealthAmerica or a
Member Company.
7.3.5 Nondisclosure. Neither party shall discuss the
circumstances of the termination of this Agreement
with third parties or refer to the other party
hereto in any negative or disparaging manner or in
any way which may negatively affect the image or
reputation of the other party. Further, AHERF will
take reasonable steps to prevent AHERF Providers
from making any such references to a Member
Company.
7.3.6 ISS. The Member Companies shall continue to provide
AHERF and AHERF Providers with all applicable
information support services as required by this
Agreement during the Continuation Period.
7.3.7 Risk Assumption. Upon the termination of this
Agreement for any reason, the risk assumption by
AHERF under the procedures described in Section 5
shall apply up to and including such date of
termination. Upon the termination of this
Agreement, AHERF and the Member Companies shall
cooperate in good faith to cause an orderly wind up
of
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the operations contemplated by this Agreement so as
not to cause unnecessary disruption to Covered
Individuals or AHERF Providers. Termination of this
Agreement has no effect upon the rights,
obligations or remedies at law or in equity of the
parties under any other Agreement.
Upon termination of this Agreement and subject to
applicable law regarding confidentiality of medical
records, each party shall for a period of seven (7)
years from the date of termination provide the
other party with full access to (and such other
party shall be entitled to make and use
computer-readable and hard copies of) all data and
information of the first party relating to the
Member Companies members developed during the term
of this Agreement relating to (i) the performance
by AHERF Providers under the UM/QA program and (ii)
claims, utilization, case management, payment and
outcome data with respect to each Covered
Individual provided any Covered Services during the
term of this Agreement. During the Continuation
Period and thereafter, each party shall have the
unrestricted ability to contact or otherwise have
access to all such Covered Individuals provided the
other party does not in any manner disparage the
other party (or any AHERF Provider) or any products
or services of such other party (or any AHERF
Provider).
8. CONFIDENTIALITY.
8.1 The parties recognize and acknowledge that performance of this
Agreement and related provider agreements shall result in the
disclosure to the other party of trade secrets, proprietary
information and confidential information including this
Agreement and its terms, conditions and financial terms and
schedules (collectively referred to as "Confidential
Information"). The non-disclosing party agrees that it and its
owned, controlled or managed entities and their employees,
representatives and agents, shall treat Confidential
Information as strictly confidential and shall:
8.1.1 protect the Confidential Information from
unauthorized use or disclosure, either directly or
indirectly, and keep it confidential;
8.1.2 use the Confidential Information only for purposes
related to this Agreement;
8.1.3 not disclose or otherwise permit any third person
or entity access to the Confidential Information
without prior written authorization by the
disclosing party; and
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8.1.4 limit disclosure to necessary individuals and
ensure that individuals exposed to Confidential
Information are advised of its confidential nature
and their obligations thereunder.
8.2 Information shall not be considered to be Confidential
Information if:
8.2.1 it is already, or otherwise becomes, publicly known
by third persons other than as a result of an act
or omission of the non-disclosing party;
8.2.2 it is lawfully received from a third person having
the right to disseminate the information without
restriction on disclosure;
8.2.3 it is furnished to others by the disclosing party
without restriction on disclosure;
8.2.4 it can be shown by the receiving party to have been
independently developed by such party; or
8.2.5 it is required to be disclosed by law or court
order.
8.3 This Section 8 shall survive termination of this Agreement.
The parties agree that the breach or prospective breach of
this provision will cause irreparable harm for which money
damages may not be adequate. The parties therefore agree that
in addition to any other remedies, the non-breaching party
shall be entitled to injunctive or other equitable relief to
restrain the breach hereof.
9. RESTRICTIVE COVENANTS.
9.1 Restriction on AHERF Activities
So long as this Agreement is in effect and for a period of one
year following its termination, AHERF will not, and will cause
any subsidiary or affiliate of AHERF to not offer, and to not
own a controlling interest in, manage or otherwise direct or
control any entity which offers, any health care benefits plan
on a direct or "retail" basis (including on an employer
self-funded or self-insured basis) to employers or other
purchasers of health care services in AHERF's aggregate
service area or in the geographic area in which HealthAmerica
presently engages in the offering of health care benefit
plans, other than to the employees of AHERF or any AHERF
provider. The foregoing sentence shall not prohibit AHERF or
any AHERF subsidiary or affiliate from providing or arranging
to provide health care services on a risk or non-risk basis
under any product of any other health maintenance
organization, preferred provider organization or other entity,
and AHERF's or its affiliates' continued passive ownership
interest of Gateway and Health Partners (so long as such
interest shall not be increased materially from that existing
on the date of this agreement, or constitute a controlling
interest).
9.2 Restrictions on HealthAmerica Activities
So long as this Agreement is in effect and for a period of one
year following its termination, Coventry and HealthAmerica
agree that Coventry and HealthAmerica will not, and will cause
each of their subsidiaries to not, provide healthcare services
directly to the public, or acquire practices which provide
such services to the public within the service area of the
AHERF Affiliated Providers (except in the Central Pennsylvania
Region).
9.3 This Section 9 shall survive termination of this Agreement.
The parties agree that the breach or prospective breach of
this provision will cause irreparable harm for which money
damages may not be adequate. Therefore, the parties agree that
in addition to any other remedies, the non-breaching party
shall be entitled to injunctive or other equitable relief
without being required to post bond.
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10. NO SOLICITATION.
So long as this Agreement is in effect and for a period of two (2)
years after the date of termination of this Agreement (whether for
material breach or for other cause or by expiration of the term)
neither party shall directly or indirectly in any capacity whatsoever
solicit, attempt to solicit or encourage any person who was employed by
the other party on a full or part-time basis while this Agreement is in
effect or to encourage such person to leave the employ of the other
party hereto without the prior written consent of the other party. For
purposes of this Agreement, indirect solicitation shall not include
advertising in professional journals and newspapers provided the party
so advertising does not request or advise such employee to make
application for such advertised positions.
11. COOPERATION OF THE PARTIES.
11.1 AHERF and the Member Companies will maintain an effective
liaison and close cooperation with each other to provide
maximum benefits at reasonable costs to Covered Individuals
consistent with high standards of medical practice. AHERF and
the Member Companies will comply with the others
administrative policies and procedures including those related
to the delivery of medical services and will keep and make
available such medical, financial and other records as each
party requires for Covered Individuals.
11.2 AHERF agrees, and will cause AHERF Affiliated Providers to
ensure, that each Primary Care Physician shall remain open to
Covered Individuals during the term of this Agreement. This
provision shall not apply when both parties have
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reasonably determined that a particular office has reached its
capacity provided that:
11.2.1 the office is closed to all new patients; and
11.2.2 AHERF demonstrates that the physician office is
attempting to hire additional staff/physicians in
order to increase capacity, if feasible.
11.3 The Member Companies will provide AHERF with relevant
information to assist AHERF in evaluation of potential
physician offices for acquisition to the extent permitted
under applicable contracts and regulations.
11.4 The Member Companies will provide advance copies of relevant
Member Company policies and procedures and updates to AHERF as
applicable.
11.5 The foregoing shall not prevent an AHERF Affiliated Provider
that is a physician from terminating his/her relationship with
a Covered Individual provided that such termination is not due
to age, race, color, creed, religion, sex, sexual preference,
national origin, health status, income level, credit history,
or on the basis that he/she is a Medicare or Medicaid
beneficiary or enrolled in a prepaid health plan. By way of
explanation of the foregoing and not by limitation, such
physician shall not terminate his/her relationship with a
Covered Individual due to the amount of Medically Necessary
Covered Services required by the Covered Individual.
12. AGREEMENT ADMINISTRATION.
12.1 Operating Committee. The parties shall designate an Operating
Committee to oversee the operation of this Agreement and the
related provider contracts. The Operating Committee shall
consist of equal representation from Coventry/HealthAmerica/
Member Companies (as a single party) and AHERF. The Operating
Committee shall meet no less than quarterly. The Committee
shall have the authority to create temporary committees
necessary for the implementation and/or effective operation of
this Agreement.
12.2 Dispute Resolution. If any dispute or controversy shall arise
between the parties hereto with respect to the making,
construction, terms, or interpretation of this Agreement; or
the rights of any party hereto; or with respect to any
transaction involved; the Operating Committee shall make good
faith efforts to settle the dispute or controversy. If the
Operating Committee is unable to resolve such dispute within
60 days, the Operating Committee shall request the President
of each party (or his or her designee) to resolve the dispute
and, if the Operating Committee is able to agree, make
recommendations of possible resolution methodologies to the
Presidents.
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13. SEVERABILITY.
In the event that any provision of this Agreement conflicts with the
law under which this Agreement is to be construed, or if any such
provision is held invalid or overly broad by a court with jurisdiction
over the parties to this Agreement, such provision shall be deemed to
be restated to reflect as nearly as possible the original intentions of
the parties in accordance with applicable law. The remainder of this
Agreement shall remain in full force and effect. If it is not possible
to restate the provision in a valid and legal manner, then the invalid,
illegal or overly broad portion shall be deleted from this Agreement
and the remaining parts, terms and provisions shall remain in full
force and effect.
14. MODIFICATION AND AMENDMENT.
This Agreement may be amended or modified only by written Agreement
signed on behalf of each of the parties.
15. ENTIRE AGREEMENT.
This Agreement (including all Exhibits hereto which are hereby
incorporated by reference herein and all individual Provider
Agreements) constitutes the entire understanding of the parties hereto
and no changes, amendments, waivers or alterations shall be effective
unless signed by both parties. In the event the terms and conditions of
this Agreement are inconsistent with the terms and conditions of any
Exhibit and/or Schedule hereto, the terms and conditions of this
Agreement shall govern.
16. ASSIGNMENTS.
Subject to Section 7.2.4, neither party shall assign this Agreement or
any rights hereunder without the written consent of the other. However,
either party may assign this Agreement to a corporate entity with which
it is either directly or indirectly affiliated provided that such
entity is financially capable of fulfilling the party's obligations
hereunder and meets all applicable regulatory requirements. No such
assignment shall relieve the assigning party of its obligations
hereunder.
17. NOTICES.
Any notice required to be given pursuant to the terms and provisions
hereof shall be in writing and shall be sent by certified or registered
mail to AHERF at:
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Allegheny Health, Education and Research Foundation
Fifth Avenue Place, Suite 2900
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Chief Financial Officer
to HealthAmerica or another Member Company at:
HealthAmerica Pennsylvania, Inc.
Five Gateway Center
60 Blvd. of the Allies
Xxxxxxxxxx, XX 00000
Attn: Chief Operating Officer
and to Coventry at:
Coventry Corporation
00 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chief Financial Officer
18. RELATIONSHIP PARTIES.
None of the provisions of this Agreement is intended to create nor
shall be deemed or construed to create any relationship between the
parties hereto other than that of independent entities contracting with
each other hereunder solely for the purpose of effecting the provisions
of this Agreement. Neither of the parties herein nor any of their
respective employees shall be construed or represent themselves to be
the agent, employee, servant, employer or representative of the other.
This Agreement is not a joint venture between the parties.
19. AFFIRMATIVE ACTION.
Each party hereunder is an Equal Opportunity Employer which maintains
an Affirmative Action Program. The parties shall comply with Executive
Order 11246, the Vietnam Era Veterans Readjustment Act of 1974, the
Drug Free Workplace Act of 1988, the Vocational Rehabilitation Act and
similar legislation in transactions relating to any government
contract. The parties further agree to take affirmative action to
ensure that applicants are employed and that employees are treated
during employment without regard to their race, color, religious,
creed, ancestry, national origin, sex, sexual orientation, or
disability. Each party will ensure that all of its subcontractors will
abide by these requirements and the requirements imposed on state
contractors and subcontractor under the Contract Compliance Regulation
issued by the Pennsylvania Human Relations Commission as set
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forth at 16 Pa. Code Chapter 49, each of which will be incorporated in
this Agreement and those subcontracts by reference.
20. CAPTIONS.
The section headings contained in this Agreement are for convenience
purposes only and shall in no way limit, define or describe the scope
or intent of this Agreement.
21. NO WAIVER.
The failure of any party to strictly enforce any provisions of this
Agreement shall not be construed as a waiver thereof or as excusing the
defaulting party from future performance.
22. GOVERNING LAW.
This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania. Any action lawsuit or claim brought by either party
pertaining to breach, reformation or interpretation of this Agreement
shall be exclusively brought in Pittsburgh, Pennsylvania.
23. APPROVALS.
Notwithstanding anything else contained herein, this Agreement shall
not take effect except and until all requisite regulatory approvals
have been received from the Commonwealth of Pennsylvania, including but
not limited to, the Pennsylvania Department of Health. The parties
shall, in good faith, cooperate with each other and the Commonwealth in
providing requested information, including but not limited to, specific
documentation as deemed necessary to obtain said approvals.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the 31st day of March, 1997.
ALLEGHENY HEALTH, EDUCATION HEALTHAMERICA PENNSYLVANIA,
AND RESEARCH FOUNDATION INC.
By: /s/ Xxxxx X. XxXxxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------------------- ------------------------------
Print Name: /s/ Xxxxx X. XxXxxxxxx Print Name: /s/ Xxxxxx X. Xxxxx
------------------------------ ----------------------
Title: /s/ Executive Vice President, Title: /s/ Chief Operating Officer
----------------------------------- ---------------------------
Chief Financial Officer & Treasurer
COVENTRY CORPORATION
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Print Name: /s/ Xxxxxx X. Xxxxx
----------------------
Title: /s/ Senior Vice President
---------------------------
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EXHIBIT A
CAPITATED PROVIDERS
1. Mainstay of Central Pennsylvania, Inc. ("Mainstay") providing for mental
health and chemical dependency professional services, pursuant to an
Agreement dated as of June 1, 1996 by and among HealthAmerica, Mainstay and
Coventry (to the extent of the Plans and Covered individuals covered by the
Risk Sharing Agreement:).
2. National Imaging Associates ("NIA") providing for Diagnostic Imaging
Services pursuant to an Agreement dated as of January 1, 1996 by and
between NIA and HealthAmerica (to the extent of the Plans and Covered
Individuals covered by the Risk Sharing Agreement).
3. Omega MSD ("Omega") providing for specified orthopedic surgery, general
surgery and gastroenterology speciality services and supplies pursuant to
an Agreement dated as of July 1, 1996, between HealthAmerica and Omega (to
the extent of the Plans and Covered Individuals covered by the Risk Sharing
Agreement).
4. Ultra Healthcare Network, Inc. ("Ultra") providing for physical therapy
specialty services and supplies pursuant to an Agreement dated as of July
1, 1996 by and between Health America and Ultra (to the extent of the Plans
and Covered Individuals covered by the Risk Sharing Agreement).
5. Laboratory Corporation of America Holdings ("Labcorp") providing for
certain reference laboratory services pursuant to letter agreements between
Labcorp and HealthAmerica dated June 7, 1996, June 21, 1996, August 23,
1996, September 3, 1996, December 30, 1996 and January 8, 1997 (to the
extent of the Plans and Covered Individuals covered by the Risk Sharing
Agreement).
6. RX Oxygen Supply Company, Inc. ("RX") providing for certain homecare
services and supplies pursuant to an Agreement between HealthAmerica and RX
dated as of August 23, 1996 (to the extent of the Plans and the Covered
Individuals covered by the Risk Sharing Agreement).
7. Main Medical Inc. ("Main") providing for radiology services in each of the
medical offices owned or leased by HealthAmerica (except Brooktree Commons)
pursuant to an agreement dated as of July 1, 1996 by and between Main and
HealthAmerica (to the extent of the Plans and Covered Individuals covered
by the Risk Sharing Agreement).
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EXHIBIT B
PCPs - All Primary Care Physicians practices where HealthAmerica has 100
or more Covered Individuals.
* Allegheny General Hospital
* Allegheny Valley Hospital
* Childrens Hospital of Pittsburgh
* Forbes Regional Health Center
* Jefferson Hospital
* Xxxxx-Womens Hospital
Passavant Hospital - The Parties shall mutually determine within the
30 days following the date of this Agreement
whether Passavant Hospital shall remain within
HealthAmerica's network of participating
providers.
* Sewickley Valley Hospital
* St. Clair Memorial Hospital
Mercy Hospital
* The Medical Center, Beaver
Xxxxxx Memorial Hospital
* Uniontown Hospital
Ellwood City Hospital
Xxxxxxx Memorial Hospital
* Xxxxxx Regional Health System
Ganonsburg General Hospital
Jeannette District Memorial
* Either Latrobe Area Hospital or Xxxxxxxxxxxx Regional Hospital
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