[Form of Amended and Restated
Practice Management Services Agreement]
AMENDED AND RESTATED
PRACTICE MANAGEMENT SERVICES
AGREEMENT dated as of October
6, 1997, among
____________________________
("Physician"), ORTHOPAEDIC
MANAGEMENT NETWORK, INC., an
Arizona corporation ("OMNI")
and BMJ MEDICAL MANAGEMENT,
INC., a Delaware corporation
("Parent").
RECITALS:
A. Pursuant to an Agreement and Plan of Reorganization (the "Merger
Agreement") dated as of October 6, 1997, among OMNI, Parent and OMNI Acquisition
Corporation, a wholly owned subsidiary of Parent ("Acquisition Sub"),
Acquisition Sub will merge with and into OMNI (the "Merger"). As a result
thereof, OMNI will be a wholly owned subsidiary of Parent. In connection with
the Merger, the shareholders of OMNI, including the Physician, will be entitled
to receive, in exchange for their respective shares of capital stock of OMNI, an
amount in cash and shares of Parent's capital stock. The execution and delivery
of this Amended and Restated Practice Management Services Agreement is a
condition to the closing under the Merger Agreement.
B. OMNI is a health care management services organization engaged in the
business of (i) arranging for the delivery of health care services by, and (ii)
providing certain management services to, a network (the "Network") of health
care providers ("Participating Providers"). These services include arranging for
providers to participate in group purchasing programs, group health insurance
plans and group malpractice insurance plans.
C. OMNI also enters into, or arranges for health care providers to enter
into, written agreements with licensed health care services organizations (also
known as health maintenance organizations), insurance companies, union trust
funds, employers and other third-party payors ("Payors") which would obligate
Participating Providers to provide, or obligate OMNI to arrange for the
provision of, certain health care services to a specified patient population.
D. Parent is a physician practice management company that provides an
extensive range of non-medical administrative and managerial services to medical
groups across the United States that specialize in musculoskeletal care.
E. Physician has determined that the combined resources of OMNI and Parent
will enhance the ability of the Physician to serve the needs of his patients
and, accordingly, improve the quality of health care services rendered in the
Physician's medical practice.
F. In light of the foregoing, the Physician, OMNI and Parent desire to
enter into this Amended and Restated Practice Management Services Agreement in
order to obtain the mutual benefits available from this relationship.
AGREEMENT:
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Managed Care Services. OMNI shall use its best efforts to provide the
following services to the Physician:
a. Contracting Services. OMNI shall identify, solicit and negotiate
capitated, case rate and other contracts with Payors on behalf of the
Network which would obligate Participating Providers to provide, or
obligate OMNI to arrange for the provision of, certain health care services
to, specified patient populations ("Managed Care Contracts"). OMNI may
arrange for the Physician to directly enter into the Managed Care
Contracts, or OMNI may itself directly enter into the Managed Care
Contracts, in either case the Physician shall provide health care services
to specified patient populations in accordance with the Managed Care
Contracts. For any contract offers from any payors that do not involve the
sufficient sharing of risk or the economic integration by the Physicians
who are members of the OMNI network so as to avoid antitrust liability,
OMNI shall serve as a messenger between the Physician and the potential
Payor in accordance with the following: (i) OMNI shall obtain from each
Physician a fee schedule or conversion factor that represents the minimum
payment that such Physician will accept from a Payor; (ii) OMNI shall be
authorized to enter into contracts on each Physician's behalf with Payors
offering prices at or above the minimum level; (iii) OMNI shall aggregate
such information into a schedule to be presented to a Payor showing the
percentages of all of the participating physicians who have authorized
entry into a contract with the Payor at different price levels; and (iv)
OMNI is not authorized to, and shall not, negotiate the price level with
any Payor. The foregoing procedure shall be identified as the "Messenger
Procedure." At such time as all of the physicians in the OMNI network have
achieved sufficient
-2-
clinical or financial integration so as to avoid any substantial likelihood
of liability under state or federal antitrust laws, OMNI shall cease to
utilize the Messenger Model Procedure, unless otherwise required by law.
b. Administrative Services. OMNI shall provide the Physician with
those administrative services made available by OMNI for which the
Physician subscribes.
2. Service Fees. As compensation for OMNI's managed care contracting
services hereunder, the Physician shall pay OMNI the amounts set forth on
Exhibit A attached hereto and incorporated herein by reference as and when due.
Any compensation payable to OMNI for administrative services shall be mutually
agreed upon by the parties at such time as the Physician subscribes for such
services.
3. Billing and Payment. Fees for Managed Care Contracting Services shall be
paid as provided in Exhibit A hereto. Any fees for administrative services shall
be paid as provided in the agreement between the parties therefor.
4. Term. The initial term of this Agreement (the "Initial Term") shall be
for a period of two years commencing on the date hereof, unless sooner
terminated in accordance with the provisions of Section 12 hereof. Upon the
expiration of the Initial Term, this Agreement shall automatically extend for
successive one-year periods unless sooner terminated in accordance with the
provisions of Section 12 hereof (the Initial Term as so extended is referred to
herein as the "Term").
5. Compliance With Managed Care Contract Requirements. The Physician shall
comply with and be bound by, and shall ensure that his/her employed health care
professionals comply with and are bound by, the requirements imposed by Payors
in the Managed Care Contracts, including requirements for adequate
credentialing, quality and professional liability insurance. The Physician shall
also comply with the provisions of Exhibit B attached hereto and incorporated
herein by reference. The Physician hereby grants OMNI or its duly authorized
agent the authority to act on behalf of the Physician as his/her
attorney-in-fact for the purpose of entering into binding Managed Care
Contracts.
6. Practice and Personnel. The Physician shall operate his/her Medical
Practice in the ordinary course of business and OMNI shall not control, direct,
or supervise the Physician or his/her assistants or employees in the performance
of medical services. The Physician agrees to defend at his/her own cost and
indemnify and hold harmless OMNI, and its officers, directors, stockholders,
employees and agents, from and against any and all lawsuits, claims, costs,
expenses (including attorneys' fees and disbursements), damages, losses and
-3-
liabilities, however caused, resulting directly or indirectly from the act or
omission of any employee or agent of the Physician. OMNI agrees to defend at its
own cost and indemnify and hold harmless Physician, his employees and agents,
from and against any and all lawsuits, claims, costs, expenses (including
attorney's fees and disbursements), damages, losses and liabilities, however
caused, resulting directly or indirectly from the act or omission of any
employee or agent of OMNI, provided such employee or agent of OMNI is not the
Physician, his employee or agent. The Physician and OMNI agree that
notwithstanding the termination of this Agreement pursuant to Section 4 hereof,
this Section shall survive any such termination and remain in full force and
effect.
7. Non-Exclusivity. Nothing in this Agreement shall be construed to
restrict the Physician from providing, or entering into other contracts or
agreements to provide health care services to persons who are not members of
health care plans offered by Payors with whom OMNI has arranged Managed Care
Contracts. In rendering such services, the Physician shall neither represent nor
imply in any way to the recipient that such services are being rendered by or on
behalf of OMNI or such Payors. Any professional services rendered by the
Physician outside the scope of this Agreement shall not be billed by, to or
through OMNI or any such Payor. Notwithstanding anything to the contrary
contained in this Section 7, the Physician is not prohibited from carrying on
the activities set forth on Exhibit C attached hereto.
8. Professional Information. All Participating Providers shall maintain an
unrestricted current license or certification or other acceptable accreditation
to practice his/her specialty in the State of Arizona, unless otherwise approved
by the board of directors of OMNI in its sole discretion. Each Participating
Provider shall complete and submit a credentialing questionnaire to OMNI, and
the Physician hereby warrants and represents that such information is correct
and that the Physician shall promptly notify OMNI of any change. To facilitate
access by OMNI to information regarding the Physician, the Physician agrees to
execute such information authorizations or releases as OMNI may request. The
Physician shall notify OMNI promptly concerning any denial, modification,
reduction, restriction, suspension, or termination (either voluntary or
involuntary) of his/her privileges by any hospital or professional organization.
The Physician hereby authorizes any hospital or professional organization to
notify OMNI promptly if any disciplinary or other action of any kind is
initiated against the Physician which could result in any denial, modification,
reduction, restriction, suspension, or termination (either voluntary or
involuntary) of the Physician's privileges, except temporary disciplinary action
of a few days duration taken or threatened to be taken due to the Physician's
failure to complete medical records on a timely basis. The Physician shall
-4-
notify OMNI promptly of (i) any modification, restriction, suspension or
revocation of the license, certification or accreditation of the Physician or
any of its physicians or surgeons; (ii) any modification, restriction,
suspension, or revocation of the authorization of the Participating Providers to
prescribe or to administer controlled substances; (iii) the imposition of any
sanctions against the Participating Providers under the AHCCCS or Medicare
programs or any other governmental program; or (iv) any other professional
disciplinary action or criminal action of any kind against the Participating
Providers which is either initiated, in progress, or completed as of the date of
this Agreement and at all times during the Term.
9. Confidentiality, Non-Solicitation and Noncompete.
a. Confidential Information. The Physician acknowledges that in the
course of receiving services under this Agreement he/she will become
acquainted with confidential information concerning the respective
businesses of OMNI and Parent, including, without limitation, their
respective existing or potential markets, health care knowledge, data, and
procedures, supplier and vendor data, processes, prices, procedures,
financial information and marketing strategies (collectively, the
"Confidential Information") which belong to and are the proprietary trade
secrets and property of OMNI and Parent, respectively. The Physician
covenants and agrees that he/she will not, at any time during the Term or
thereafter, without in each instance obtaining the prior written consent of
OMNI and Parent (which consent may be granted or withheld in their sole and
absolute discretion), disclose or make use of any Confidential Information
except as may be required in the course of the performance of the
Physician's duties hereunder. All notes, data, tapes, reference items,
memoranda, records and other materials in any way relating to any
Confidential Information or to the respective businesses of OMNI or Parent
shall belong exclusively to OMNI and Parent, respectively, and, upon the
expiration or termination of this Agreement, the Physician shall
immediately deliver the original and all copies of such items in the
Physician's possession or control to the appropriate party. The Physician
agrees to execute any instruments and to do all other things reasonably
requested by OMNI or Parent (during and after the Term) in order to vest
more fully in OMNI or Parent all ownership and rights in those items hereby
transferred by the Physician to OMNI and Parent.
b. Soliciting Employees. The Physician covenants and agrees that
during the Term and for a period of two years thereafter ("Non-Compete
Period"), he/she will not, directly or indirectly, hire or engage, attempt
to hire or engage, or solicit or aid in the solicitation of the employment
of, any of OMNI's or Parent's employees, whether for or on behalf of
himself/herself or for any entity in which the Physician acts as an agent
or may have a direct or indirect interest.
-5-
c. Noncompete. The Physician further covenants and agrees that during
the Non-Compete Period he/she will not, directly or indirectly, engage in
the provision of managed care contracting services of the type then being
provided by OMNI pursuant to Section 1 of this Agreement to health care
providers located in any metropolitan area in which clients of OMNI are
located; provided, however, that Physician may provide such services to
participating providers on behalf of OMNI and, further provided, that
Physician may seek an exemption from this provision by obtaining written
approval from OMNI. Notwithstanding anything to the contrary contained in
this Section 9, the Physician is not prohibited from carrying on the
activities set forth on Exhibit C attached hereto.
d. Miscellaneous. The Physician acknowledges the right and ability of
OMNI to assign his/her rights under this Section to third parties, whether
in connection with a merger, reorganization, liquidation or otherwise. The
Physician covenants and agrees that the duration of the Non-Compete Period
is reasonable, necessary and appropriate to protect OMNI's legitimate
business interests. The Physician represents and warrants that each of the
terms and provisions contained in this Section have been carefully reviewed
on his/her behalf, and he/she unconditionally and irrevocably agrees to be
bound by same.
e. Reformation. In the event that any of the provisions of this
Section should ever be deemed to exceed the time or geographic limitations
permitted by the applicable laws, then the Physician and OMNI covenant and
agree that such provisions shall be reformed to the maximum time or
geographic limitations permitted by applicable law.
f. Remedies. If the Physician violates any of the provisions of this
Section, then each of OMNI and Parent shall, notwithstanding any other term
or provision of this Agreement (including Section 25 hereof), have the
unconditional right to: (1) Withhold any payments, compensation,
distributions or consideration otherwise owed or to be paid to the
Physician under this Agreement or any other agreement between the parties;
(2) Seek, apply for and receive a temporary restraining order without
notice to the Physician enjoining the Physician from continued violation of
such provision(s) (for such purpose only, the Physician hereby waives
notice of any petition or application for a temporary restraining order);
(3) Avail itself of each of the foregoing remedies and all other available
legal and equitable remedies, which remedies shall be cumulative and not
mutually exclusive; and/or (4) Seek and recover monetary damages for the
Physician's violation of the provisions of this Section 9. In addition, the
Physician covenants and agrees that, if he/she shall violate any of the
covenants or agreements under this Section, each of Parent and OMNI shall
be entitled to an accounting and repayment of all profits, compensation,
royalties,
-6-
commissions, remuneration or benefits which the Physician directly or
indirectly shall have realized or may realize relating to, arising out of
or in connection with any such violation; such remedy shall be in addition
to and not in limitation of any injunctive relief or other rights or
remedies to which OMNI or Parent is or may be entitled at law, in equity or
otherwise under this Agreement. The Physician and OMNI hereby agree to
defend, indemnify and hold harmless the other party to this Agreement
against and in respect of: (i) any and all losses and damages resulting
from, relating or incident to, or arising out of any misrepresentation or
breach by the other party to this Agreement of any warranty, covenant or
agreement made or contained in this Agreement; and (ii) any and all
actions, suits, proceedings, claims, demands, judgments, costs and expenses
(including reasonable attorneys' fees) incident to the foregoing.
10. Group Purchasing Contracts. Parent agrees to permit the Physician to
participate in any group purchasing contracts or programs established by Parent,
subject to the delivery to Parent of Physician's written election to so
participate. For so long as the Physician participates in any such programs or
contracts, Parent will share with the Physician any savings derived from any
such program or contract by calculating 35% of the savings directly attributable
to the purchases made by or on behalf of the Physician during each fiscal year
of Parent, as determined by Parent, and delivering to Physician, within 60 days
after the end of such fiscal year, a check payable for such aggregate amount.
11. Right of First Refusal. In the event that, at any time during the
period beginning on the date hereof and ending on the first anniversary of the
expiration or termination of the Term, the Physician (a) decides to affiliate
with a practice management organization, including, without limitation, a
physician practice management company, hospital or healthcare organization, and
(b) receives a written bona fide offer (the "Offer") to join such an entity (the
"Offering Entity"), the Physician will notify Parent in writing of the terms and
provisions of such Offer, including the name of the Offering Entity, the
consideration proposed to be exchanged between the parties and all other
relevant terms of the proposed affiliation. Parent shall have 30 days from
receipt of such notice to present to the Physician a substantially identical
offer for a physician practice management arrangement between Parent and
Physician. In the event Parent delivers such an offer, Parent and the Physician
shall execute and deliver definitive agreements setting forth the terms for such
physician practice management arrangement.
12. Termination.
a. Events of Termination. This Agreement may be terminated as follows:
-7-
i. The Physician may terminate this Agreement, with or without
cause, upon at least ninety (90) days prior written notice to OMNI.
ii. OMNI may terminate this Agreement, with or without cause,
upon at least ninety (90) days prior written notice to the Physician.
iii. In the event of a material breach of this Agreement by
either OMNI or the Physician or a material breach by the Physician of
any OMNI policy or protocol (including, without limitation,
utilization review guidelines), the other party shall have the right
to cancel this Agreement by giving written notice of cancellation to
the breaching party. In the event such breach is not cured to the
reasonable satisfaction of the non-breaching party within ten (10)
days after the giving of the notice, this Agreement shall
automatically terminate at the election of the non-breaching party
upon the giving of a second written notice of termination to the
breaching party, provided that such second notice shall be given by
the non-breaching party to the breaching party no later than ninety
(90) days after the giving of the first notice; otherwise, the
non-breaching party may pursue such termination for breach only by
giving the breaching party another first notice pursuant to this
paragraph or by pursuing other available remedies under this Section
or at law.
iv. OMNI shall have the right to terminate this Agreement
immediately upon written notice to the Physician upon the occurrence
of any of the following events:
(A) The Physician's license or certification to practice in
the State of Arizona, or accreditation or authorization to
administer controlled substances, if applicable, is denied,
modified, reduced, restricted, suspended, or terminated (either
voluntarily or involuntarily).
(B) The Physician's medical staff privileges, if applicable,
at any licensed general acute care hospital are denied, modified,
reduced, restricted, suspended, or terminated (either voluntarily
or involuntarily) other than temporary suspensions of a few days
duration due solely to the Physician's failure to complete
medical records on a timely basis.
(C) The Physician's professional liability or comprehensive
general liability coverage as required under this Agreement is
reduced or is no longer in effect.
(D) The death or incapacity of the Physician. The board of
directors of OMNI, in its sole
-8-
discretion, shall determine whether the Physician is
incapacitated for the purposes of this clause.
(E) The Physician fails to provide OMNI any notice required
to be provided of the Physician hereunder.
(F) OMNI makes a reasonable and good faith determination
that such termination is necessary in order to protect the health
and welfare of members of health care programs sponsored by
Payors with whom OMNI has arranged Managed Care Contracts.
(G) The Physician or any physician or surgeon in the
Physician designated on Exhibit B hereto is convicted of a
felony, whether or not involving moral turpitude, or a
misdemeanor involving moral turpitude.
(H) Insolvency or bankruptcy of the Physician.
b. Effect of Termination. Upon termination, all rights and
obligations of the parties under this Agreement and all Managed Care
Contracts entered into by OMNI on behalf of the Physician shall
immediately cease with respect to the Physician, except as provided
elsewhere in this Agreement. Termination of this Agreement shall not
relieve any party of any obligation to any other party with respect to
services furnished prior to such termination. The Physician shall have
no hearing or other appeal rights with respect to any termination of
this Agreement except to the extent that such rights may be expressly
required by law.
13. Records and Accounts. Each party hereto shall maintain a record of all
charges, xxxxxxxx and collections relating to the provision of services by OMNI
and Parent during the Term. Each party shall have complete access to such
records during all normal business hours.
14. Insurance. The Physician shall secure and maintain, at his/her expense,
throughout the Term, professional and comprehensive general liability insurance
in a minimum amount of $1,000,000 per occurrence and $3,000,000 aggregate,
unless otherwise approved by the board of directors of OMNI. Any deductible or
coinsurance is also subject to approval by the board of directors of OMNI. On or
before the date hereof, the Physician shall provide OMNI with copies of the
policies or other evidence of compliance with the foregoing insurance
requirements acceptable to OMNI. The Physician further agrees that the Physician
shall use his/her best efforts to obligate the insurance carrier to provide at
least thirty (30) days prior written notice to OMNI of cancellation or amendment
and to include OMNI as an additional named insured on such policy if the
additional cost therefor is no more than nominal. If any policy or professional
liability insurance of the Physician is
-9-
terminated, restricted, reduced or otherwise modified, the Physician shall
immediately notify OMNI and, if such insurance provided "claims made" coverage,
shall immediately purchase "tail" coverage necessary to continue coverage which
meets all of the requirements of this Section covering any services rendered
during the Term. The obligations of this Section shall survive the termination
of this Agreement.
15. Notices. Any notice, payment, report or other communication required or
permitted to be given hereunder shall be duly given if in writing, signed by or
on behalf of the person giving the notice, and shall be deemed to have been
given on the date of actual delivery and receipt thereof by the addressee or, if
mailed, on the third business day after being deposited in an official
depository of the United States Post Office, postage prepaid, addressed to the
person or persons to whom such notice is to be given as follows:
a. If to the Physician, to the address indicated below the signature
block of the Physician on the signature page hereof.
b. If to OMNI, to 000 X. Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx
00000, Facsimile: (000) 000-0000.
c. If to Parent, to 0000 X. Xxxxxxx Xxxxxxx, Xxxxx 000-X, Xxxx Xxxxx,
Xxxxxxx 00000, Facsimile: (561) 391- 1389.
Any party hereto may specify a different address by sending to the other parties
a notice, in accordance with this Section 15, of such different address.
16. Binding Effect. Except as herein otherwise provided to the contrary,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their legal representatives, successors and assigns.
17. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Arizona.
18. Counterparts. This Agreement may be executed in several counterparts,
all of which so executed shall constitute one agreement, binding on all of the
parties hereto, notwithstanding that all of the parties are not signatory to the
original or the same counterpart.
19. Severability. In the event that any portion of this Agreement is
declared by a court of competent jurisdiction to be void, such portion shall be
deemed severed from the remainder of this Agreement and the balance of this
Agreement shall remain in effect.
-10-
20. Headings. Titles or captions contained in this Agreement are inserted
only as a matter of convenience and for reference. Such titles and captions
shall not be construed to define, limit, extend or describe the scope of this
Agreement nor the intent of any provision thereof.
21. Gender and Number. Whenever required by the context hereof, the
singular shall include the plural and vice versa, and the masculine gender shall
include the feminine and neuter genders and vice versa.
22. Further Instruments. Each party hereby agrees to, from time to time and
at such time as may be required, take such further actions and execute such
further documents as may be reasonably required and necessary to effectuate the
provisions hereof.
23. Attorneys' Fees. Subject to Section 31 hereof, in case of any action or
proceeding to compel compliance with, or for a breach of, any of the terms and
conditions of this Agreement, the prevailing party shall be entitled to recover
from the non-prevailing party all costs of such action or proceeding, including,
without limitation, reasonable attorneys' fees, costs and disbursements.
24. Computation of Time. In computing any period of time pursuant to this
Agreement, the day or date of the act, notice, event, or default from which the
designated period of time begins to run will not be included. The last day of
the period so computed will be included, unless it is a Saturday, Sunday or a
legal holiday in the State, in which event the period runs until the end of the
next day which is not a Saturday, Sunday or such legal holiday.
25. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
supersedes any prior agreement or understanding among the parties and may not be
modified or amended in any manner other than as set forth herein.
26. Survival. It is the express intention and agreement of the parties that
all covenants, agreements, statements, representations, warranties and
indemnities made in this Agreement shall survive the execution and delivery of
this Agreement and that all indemnities contained herein shall survive the
termination hereof for a period of one year after such termination.
27. Waivers. Neither the waiver by a party of a breach of or a default
under any of the provisions of this Agreement, nor the failure of a party, on
one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right, remedy or privilege hereunder shall thereafter be
-11-
construed as a waiver of any subsequent breach or default of a similar nature,
or as a waiver of any such provisions, rights, remedies or privileges hereunder.
28. Exercise of Rights. No failure or delay on the part of a party in
exercising any right, power or privilege hereunder and no course of dealing
between the parties shall operate as a waiver or abandonment thereof, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein expressly provided are
cumulative and not exclusive of any other rights or remedies which a party would
otherwise have at law or in equity or otherwise.
29. Limitation on Benefits on this Agreement. It is the explicit intention
of the parties that (a) no person or entity other than the parties is or shall
be entitled to bring any action or enforce any provision of this Agreement
against any party, and (b) the covenants, undertakings and agreements set forth
in this Agreement shall be solely for the benefit of, and shall be enforceable
only by, the parties (or their respective successors and assigns as permitted
hereunder).
30. Independent Contractors. The parties hereto are independent contractors
and shall in no event be deemed to be principal and agent, employer or employee,
partners or joint venturers. The Physician shall be solely responsible for all
local, state and federal withholding and employment taxes and similar
obligations with respect to the Physician and his/her employees.
31. Amendments. This Agreement may not be modified or amended in any manner
other than by an instrument or instruments in writing signed by the parties.
32. Mediation/Arbitration. Any dispute, controversy or claim (including,
without limitation, tort claims, requests for provisional remedies or other
interim relief, and issues as to arbitrability of any matter) arising out of or
relating to this Agreement, or the breach thereof, that cannot be settled
through negotiation shall be settled (a) first, by the parties trying in good
faith to settle the dispute by mediation under the Commercial Mediation Rules of
the American Arbitration Association ("AAA") (such mediation session to be held
in Phoenix, Arizona and to commence within 15 days of the appointment of the
mediator by the AAA), and (b) if the dispute, controversy or claim cannot be
settled by mediation, then by arbitration administered by the AAA under its
Commercial Arbitration Rules (such arbitration to be held in Phoenix, Arizona
before a single arbitrator and to commence within 15 days
-12-
of the appointment of the arbitrator by the AAA), and judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
* * * *
-13-
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Practice Management Services Agreement as of the day and year first
above provided.
ORTHOPAEDIC MANAGEMENT NETWORK, INC.
By:________________________________
Name:
Title:
BMJ MEDICAL MANAGEMENT, INC.
By:________________________________
Name:
Title:
PHYSICIAN:
___________________________________
Name:
Address:
___________________________________
___________________________________
___________________________________
Facsimile:
___________________________________
-14-
EXHIBIT A
to
PRACTICE MANAGEMENT SERVICES AGREEMENT
Managed Care Contracting: Service Fee
To defray expenses incurred by Orthopaedic Management Network, Inc.
("OMNI") in connection with rendering services as to Managed Care Contracts,
OMNI shall be paid by the Physician a fee (the "Managed Care Contracting Fee")
in an amount equal to the sum of (i) the costs incurred by OMNI in connection
with such Managed Care Contracts and (ii) five percent (5%) of the Payor's or
OMNI's payments to the Physician for Covered Services furnished to Plan Members
under each such Managed Care Contract; provided, however, that such sum shall
not exceed thirteen percent (13%) of the Payor's or OMNI's payments to the
Physician for Covered Services furnished to Plan Members under each such Managed
Care Contract, unless OMNI shall obtain the prior written consent of its
Operations Committee (as described in Article III, Section 8 of OMNI's Bylaws)
to such excess amount. If a Payor, inadvertently or otherwise, pays the
Physician under a Managed Care Contract directly or otherwise in a manner other
than through OMNI, the Physician agrees to remit the Managed Care Contracting
Fee to OMNI within 30 days of the Physician's receipt of payment from the Payor;
otherwise, OMNI shall be entitled to deduct for its own account the Managed Care
Contracting Fee from payments that OMNI receives from the Payor on behalf of the
Physician prior to remitting to the Physician the net amount due the Physician.
The undersigned hereby acknowledge that this Exhibit A constitutes part of
the Amended and Restated Practice Management Services Agreement among the
Physician, Parent and OMNI.
ORTHOPAEDIC MANAGEMENT NETWORK,
INC.
By:________________________________
Name:
Title:
PHYSICIAN
___________________________________
Name:
Address:
___________________________________
___________________________________
___________________________________
Facsimile:_________________________
EXHIBIT B
to
PRACTICE MANAGEMENT SERVICES AGREEMENT
Supplemental Provisions Regarding Managed Care Contracts
Pursuant to the Practice Management Services Agreement between the
Physician and Orthopaedic Management Network, Inc. ("OMNI"), the Physician is
hereby designated as the person who will provide healthcare services under the
Managed Care Contracts.
Pursuant to Section 5 of the Practice Management Services Agreement between
the Physician and OMNI, the parties hereby agree as follows:
1. Definitions. When used in this Agreement, the following words and terms
shall mean:
a. "Covered Services" means healthcare services that are authorized
for payment under the Plan Member's Plan healthcare program when rendered
by a provider who is under contract with a Payor.
b. "Plan Member" means an individual eligible to receive Covered
Services under a Payor healthcare program to whom the Physician is required
to provide Covered Services hereunder.
2. Healthcare by the Physician. The Physician shall provide Covered
Services on an as needed basis, within the scope of the Physician's licensing,
training, experience and qualifications and consistent with accepted standards
of healthcare practice and the applicable Managed Care Contract. The Physician
shall accept all new Plan Members assigned to the Physician by OMNI or the
Payor; provided, however, that the Physician may refuse to accept new Plan
Members upon giving at least ninety (90) days prior written notice to OMNI. The
Physician's refusal to accept new Plan Members will apply to Plan Members of all
Managed Care contracts, whether reimbursement is on a capitated or
fee-for-service basis. The Physician may begin to accept new Plan Members upon
written notice to OMNI of Physician's interest to accept new Plan Members. The
Physician shall be paid pursuant to a fee schedule or on a capitated basis as
designated in this Agreement. If the Physician is paid on a capitated basis, the
Physician shall provide Plan Members with those services which are within the
scope of the Physician's licensure or certification, are customarily provided by
a Practice of such licensure, or certification and are Covered Services and
shall accept the capitation payments as payments in full for Covered Services,
except for any applicable copayments, coinsurance or deductibles (collectively
referred to herein as "Copayments,") for providing such services; provided,
however, that the Physician may restrict the scope of the services which
are customarily provided by a Practice of such licensure or certification by
setting forth the restrictions on the services to be provided in the Physician's
application to participate and such restrictions are approved and accepted by
OMNI. If the Physician is paid pursuant to a fee schedule, the Physician shall
accept the payments under the fee schedule as payment in full, less any
applicable Copayments, for providing Covered Services. The Physician shall
devote this time, attention and energy necessary for the competent and effective
performance of his or her duties hereunder to Plan Members assigned or
designated by OMNI and the Payor.
3. Payment to the Physician. The Physician shall be compensated for Covered
Services provided by the Physician to Plan Members as described in the fee
schedule established by OMNI as in effect from time to time. OMNI shall promptly
notify the Physician of each Managed Care Agreement to which the Physician is
bound and the compensation to be paid to the Physician under such Managed Care
Agreement. Payments to the Physician for Covered Services rendered shall be made
as follows:
a. Fee-for-Service Contracts. For any Covered Services for which the
Physician is to be paid on a fee-for-service basis, the Physician shall,
within thirty (30) days following the provision of such Covered Services,
submit to OMNI a statement or statements of the Covered Services rendered
by the Physician to Plan Members, the Physician's usual and customary
charge for such Covered Services and, if applicable to the compensation
provisions of the Managed Care Contract, the amount of compensation due.
OMNI shall use its reasonable best efforts to pay (provided it has received
the applicable payment from the Payor) or require the Payor to pay the
compensation due Provider under this Section, less the Managed Care
Contracting Fee described in Exhibit A to this Practice Management Services
Agreement, within sixty (60) days after the receipt of OMNI or the Payor,
as applicable, of a complete and accurate invoice. In the event the Payor
fails or refuses to pay, OMNI shall use its reasonable best efforts to
assist the Physician in collecting any amounts due from the Payor;
provided, however, that OMNI shall not be responsible for payment of any
attorney's fees, accounting fees or other fees or costs incurred by the
Physician in attempting to collect from the Payor. Notwithstanding the
above, the Physician may, in its sole discretion, attempt to collect any
amounts due the Physician directly from the Payor. The Physician agrees to
accept the compensation provided under this Section, less the Managed Care
Contracting Fee, as payment in full for all Covered Services, less any
applicable copayments. Any claims received by OMNI sixty (60) days or more
after the date of service may be refused for payment by OMNI, in OMNI's
sole discretion; provided, however, that OMNI shall not refuse payment if
the Physician is attempting to coordinate benefits with another payor in
accordance with OMNI's and/or the Payor's policies and procedures and has
notified OMNI within at least
B-2
sixty (60) days after the date of service that the Physician is attempting
to coordinate benefits.
b. Capitated Contracts. For any Covered Services for which the
Physician is to be paid on a capitated basis, OMNI shall pay the Physician
according to the compensation formula then existing, which formula shall be
determined by the Operations Committee and shall take into account the
enrollment and eligibility information provided to OMNI by Payors. The
Physician shall be subject to any retroactive adjustments as required by
the applicable Managed Care Contract. The Physician agrees to provide all
services included within and required by the relevant Managed Care
Contract. The Physician agrees to accept such capitation payments as
payments in full, less the Managed Care Contracting Fee, and except for any
applicable Copayments, for all services provided by the Physician. The
Physician shall, within thirty (30) days following the end of each calendar
month during the Term, submit to OMNI and, if requested by OMNI or required
by the applicable Managed Care Contract, to the Payor, encounter data (in a
form designated by OMNI) with respect to the Covered Services rendered by
the Physician to Plan Members during the immediately preceding calendar
month. Failure to submit encounter reports may result in withholding of the
Physician's compensation by OMNI and/or the Payor.
4. Billing by the Physician. The Physician shall xxxx the Payor through
OMNI in a form approved by OMNI and the Payor pursuant to the applicable Managed
Care Contract. All such bills shall be submitted to OMNI for processing as
required in this Agreement. The Physician may xxxx a Plan Member for any
non-Covered Services which the Physician may provide to a Plan Member provided
that, if practicable, the Physician shall obtain a written acknowledgement and
acceptance of patient financial responsibility from the Plan Member prior to the
time such non-Covered Services are provided (a sample form for Acknowledgement
of Disclosure and Acceptance of Patient Financial Responsibility is attached
hereto as Exhibit B-i), or, at a minimum, shall obtain verbal acknowledgement
and acceptance of financial responsibility from the Plan Member after making
such disclosure. The Physician may not under any circumstances surcharge or
otherwise xxxx a Plan Member for any Covered Services except to collect any
applicable Copayments provided for under a Payor's healthcare program. All
Copayments should, whenever possible, be collected by the Physician at the time
Covered Services are rendered, and the Physician shall report to OMNI, upon
request, all Copayments received by the Physician hereunder. The Physician shall
not maintain any action at law or equity against Plan Members to collect sums
owed to the Physician by OMNI or the Payor for Covered Services under this
Agreement. Notwithstanding the above, the Physician shall not pursue available
legal or other remedies against OMNI unless and to the extent that a Payor has
paid OMNI for such Covered Services for a Plan Member and
B-3
OMNI has failed to pay the Physician as required by this Agreement for Covered
Services provided to that Plan Member.
5. Directory. The Physician hereby authorizes OMNI and the Payor to list,
at a minimum, the name, specialty, address, and telephone number of the
Physician in any Payor or OMNI marketing materials to help promote OMNI, the
Payor or a Payor healthcare program to potential Plan Members.
6. Coordination of Benefits. The Physician agrees to cooperate in providing
for effective implementation of the provisions of a Payor's healthcare program,
Managed Care Contract or OMNI's policies relating to coordination of benefits.
7. Non-Discrimination. The Physician shall not discriminate in the
treatment of Plan Members based on race, color, national origin, ancestry,
religion, sex, marital status, sexual orientation, or age. The Physician shall
make the Physician's services available to Plan Members in the same manner, in
accordance with the same standards, and within the same availability as to
non-Plan Members.
8. Notice of Claims. The Physician shall notify OMNI promptly whenever a
Plan Member files a claim or notice of intent to commence legal action alleging
professional negligence against the Physician, or if a final judgment is
rendered against the Physician in such a legal action.
9. OMNI and Payor Policies and Procedures; OMNI Committees. The Physician
agrees to participate in, cooperate with and comply with all applicable
requirements of OMNI and the Payor relating to utilization review, quality
assessment, credentialing, Plan Member grievance procedures, and any other
policies and procedures adopted by OMNI or the Payor. If the Physician fails to
comply with such utilization review requirements, the Physician agrees that
compensation otherwise due the Physician hereunder for the services in question
may be subject to forfeiture, in whole or in part, directly or by way of offset,
according to the policies of OMNI or the Payor. The Physician shall also serve
on the Utilization Review and Quality Assessment Committee established by OMNI,
without compensation, if requested to do so by OMNI.
10. Records.
a. Coordination with Other Providers. OMNI shall use its
reasonable best efforts to obligate other Practices with whom OMNI has
service agreements to comply with all reasonable requests of the
Physician for access to patient records reasonably necessary for the
performance of the Physician's duties under this Agreement.
B-4
b. Coordination with Payors. OMNI shall use its best efforts to
ensure that its policies and procedures and the Managed Care Contacts
establish protocols upon which the Physician may rely with respect to
verification of enrollment and eligibility of Plan Members, assignment
of Plan Members to primary care physicians (if applicable) and
referrals to other healthcare providers.
c. Plan Member Records. The Physician shall maintain the usual
and customary records, in accordance with all applicable federal and
state statutory and regulatory requirements, for each Plan Member in
the same manner as for other patients of the Physician.
d. Confidentiality. Except as otherwise required by applicable
law or this Agreement, OMNI and the Physician agree to keep
confidential, and to take the usual precautions to prevent the
unauthorized disclosure of, any and all records required to be
prepared or maintained by the Physician hereunder.
11. Referrals and Coverage. The Physician shall refer Plan Members only to
healthcare providers who are under contract with the Plan unless (i) otherwise
directed by the Plan Member (in which event the Physician shall obtain from the
Plan Member the written acknowledgement required for non-Covered Services; (ii)
the medical needs of a Plan Member otherwise require, such as in the event of an
emergency, or (iii) otherwise approved or directed in advance by OMNI or the
Payor. The Physician shall comply with the referral authorization procedures, as
established by the OMNI board of directors, or otherwise under the applicable
Managed Care Contract and Plan healthcare program. If the Physician is paid on a
capitated basis, the Physician shall not refer Plan Members to itself for the
provision of non-primary care services or non-specialty care services, as
applicable, unless prior approval is received from OMNI's medical director or
his or her designee. Unless other arrangements are made by OMNI, the Physician
shall be responsible for responding to emergency needs of Plan Members with
respect to Covered Services twenty-four (24) hours per day, seven (7) days per
week, including holidays. In the event that the Physician is unable to provide
the required Covered Services, the Physician shall arrange with another
equivalently licensed or certified OMNI provider to provide the required Covered
Services on a locum tenens, on-call or other backup basis. In the event that no
other such OMNI provider is available or able to provide the required services,
the Physician may arrange with another equally qualified provider to provide
coverage during any periods in which the Physician is unavailable if permitted
by OMNI or the Payor; provided, however, that such other provider agrees, in
writing, to look solely to the Physician for compensation and to be bound by the
terms and conditions of this Exhibit, with respect to any Covered Services
rendered to Plan Members, including, but not limited to, (i)
B-5
cooperating fully with OMNI's peer review procedures, (ii) not billing Plan
Members for Covered Services other than or any applicable copayments, and (iii)
complying with the requirements of all OMNI and Payor policies and procedures
including, but not limited to, utilization review and quality assessment
procedures.
12. Effect of Termination on Patients. Termination shall relieve the
Physician of his or her obligation to accept new Plan Members. Termination shall
not relieve the Physician of his or her obligation to cooperate with OMNI in
arranging for the transfer of care of members of healthcare programs sponsored
by Payors with whom OMNI has arranged Managed Care Contracts then receiving
treatment from the Physician. The Physician shall continue to furnish, and OMNI
or the Physician shall continue to pay for, in accordance with the terms of this
Agreement, Covered Services rendered to Plan Members under the care of the
Physician at the time of termination for a period of ninety (90) days or until
the services being rendered and all necessary follow-up care are complete,
whichever occurs first, unless the Payor or OMNI makes provision for the
assumption of such services by another provider. OMNI shall use its reasonable
best efforts to transfer the Plan Member to another practice upon termination of
this Agreement. Furthermore, in the event that OMNI or the Physician has
executed a Managed Care Contract which requires the continuing provision of
services to Plan Members after termination of this Agreement, the Physician
agrees to continue to provide services to Plan Members in accordance with such
Managed Care Contract.
13. Access to Books, Records and Papers. OMNI shall have access at
reasonable times upon reasonable demand to the books, records and papers of the
Physician relating to healthcare services provided to Plan Members. Such access
shall include, but is not limited to, allowing review by OMNI's medical director
or his or her designee of a random selection of the Physician's office charts
relating to Plan Members for purposes of OMNI's peer review, utilization review
and quality assessment programs. Such records shall also be accessible to state
and federal agencies upon request as required by law and as otherwise set forth
in this Agreement. Notwithstanding any termination of this Agreement OMNI and
the Payor shall continue to have access to the Physician's records for four
years from the date on which the Physician provided the Covered Services
referred to in such records.
B-6
The undersigned hereby acknowledge that this Exhibit B constitutes part of
the Amended and Restated Practice Management Services Agreement among the
Physician, Parent and OMNI.
ORTHOPAEDIC MANAGEMENT NETWORK,
INC.
By:________________________________
Name:
Title:
PHYSICIAN
_________________________________
Name:
Address:
___________________________________
___________________________________
___________________________________
Facsimile:_________________________
B-7
EXHIBIT C
to
PRACTICE MANAGEMENT SERVICES AGREEMENT
Permitted Activities
1. The Physician may, during the Term and after the termination of this
Agreement, provide health care services to patients under third party payor
contracts arranged through networks other than OMNI, such as ONZA; provided,
however, that the Physician shall not represent nor imply to any such patient
that such services are being rendered by or on behalf of OMNI.
2. The Physician or the medical group through which the Physician practices
medicine (for himself or itself only) may, during the Term and after termination
of this Agreement, solicit contracts or contract with any third party payor with
which OMNI has not as of such time entered into a Managed Care Contract.
3. The Physician may, during the Term and after termination of this
Agreement, solicit and hire physicians to join the Physician in his medical
practice.
B-8
