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EXHIBIT 10.22
FULL-SERVICE MANAGEMENT AGREEMENT
This Full Service Management Agreement is made and entered into as of
this_____ day of_________ 199_, effective as of this_____ day of _____, 199_, by
and between TRI CO., L.L.C. (hereinafter referred to as "TRI CO"), and
Tri-County Physicians Association, INC., a Tennessee non profit corporation
(hereinafter referred to as "IPA").
WITNESSETH
WHEREAS, IPA is a duly organized and validly existing Tennessee
nonprofit corporation that is engaged in the business of arranging medical
services through independent contractor relationships with individual physicians
who are licensed to practice medicine in the State of Tennessee and who are
employed or otherwise retained by IPA.
WHEREAS, TRI CO is a duly organized and validly existing Limited
Liability Corporation.
WHEREAS, IPA and TRI CO. mutually desire an arrangement that
facilitates the management and administration of the business operations of IPA.
WHEREAS, IPA desires to engage TRI CO. to provide such management and
administrative services as are necessary and appropriate for the administration
of IPA's business, including the management of risks that IPA has undertaken
with third party payors and the negotiation, monitoring and the quality
assurance of contracts with third party payors, all upon the terms and
conditions set forth in this Agreement.
WHEREAS, TRI CO. desires to provide IPA with such management and
administrative services, all upon the terms and conditions set forth in this
Agreement.
NOW THEREFORE, for and in consideration of the mutual terms, covenants
and conditions set forth in this Agreement, the adequacy of which is now and
forever acknowledged, the parties mutually agree as follows.
I. Definitions,
For the purposes of this Agreement, the following terms shall have the
meanings ascribed thereto in this section or above, unless otherwise clearly
required by the context in which the term is used.
1.1 Agreement. The term "Agreement" shall mean this Full-
Service Management Agreement by and between TRI CO. and IPA and any amendments
hereto as may be adopted as provided herein.
1.2 IPA Account. The term "IPA Account" shall mean the bank
account of IPA as described in Sections 3.7 and 3.10 hereof.
1.3 IPA Expense or IPA's Expense. The term "IPA Expense" or
"IPA's Expense" shall mean an expense or cost incurred by TRI CO. or IPA and
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for which IPA is financially liable, regardless of whether the transfer of IPA's
funds to satisfy IPA's financial liability is performed by IPA or by TRI CO. on
IPA's behalf. IPA expense includes, but is not limited to management fees;
meeting expenses; meeting stipends; advertising and promotion; special
engagements; and outside consultant fees; all payments to health care providers;
interest expense for monies borrowed by the IPA; repayment of principal for
monies borrowed by the IPA; attorney's fees and expenses incurred by or on
behalf of the IPA, relating to litigation by or against the IPA or otherwise
directly relating to the IPA's operations or business; fees for accountants or
consultants retained to audit the IPA and/or prepare and submit tax forms for
the IPA; a program of property, liability and other forms or insurance coverage,
limits and carriers acceptable to TRI CO.; all costs associated with investments
or loans made by the IPA; remuneration, if any, of the IPA's officers and Board
members; any other fees, costs, expenses or taxes paid by TRI CO. (in all cases
in conformity with the budget approved by the IPA) relating to the business or
operations of the IPA.
1.4 Management Fee. The term "Management Fee" shall mean TRI
CO.'s compensation for nonmedical management and administrative services
established as described in Article V.
1.5 TRI CO. Expense or TRI CO's Expense. The term "TRI CO.
Expense" or "TRI CO.'s Expense" shall mean an expense or cost incurred by TRI
Co. in the course of fulfilling the terms of this Agreement. The term "TRI
CO.'s Expense" or "TRI CO. Expense" shall include, without limitation, budgeted
direct and indirect expenses of TRI CO. incurred in the provision of services
and other items to IPA including but not limited to general and administrative
expenses.
1.6 Medical Services. The term "Medical Services" shall mean
general medical, specialty and other health care services provided by Physicians
and other professional personnel, including, without limitation, employees and
independent contractors, pursuant to contracts between IPA and third party
payors.
1.7 Physician or Physicians. The term "Physician" or "Physicians"
shall mean the individual licensed professionals, individually or collectively,
with whom IPA has provider agreements.
1.8 State. The term "State" shall mean the State of Tennessee.
1.9 Term. The term "Term" shall mean the initial and any renewal
periods of duration of this Agreement as described in Section 6.1 hereof.
II. Appointment and Authority of TRI CO.
2.1 Appointment. IPA hereby appoints TRI CO. as its agent for the
management and administration of the business functions and affairs of IPA as
set forth in this agreement and TRI CO. hereby accepts such appointment, subject
at all times to the provisions of this Agreement.
2.2 Authority. Consistent with the provisions of this Agreement,
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TRI CO. shall have the responsibility and commensurate authority to provide, to
the extent not provided by IPA under this Agreement, management and
administrative services for IPA, including, without limitation, the management
of risks associated with capitated contracts that IPA has undertaken with third
party payors and the negotiation, monitoring and the quality assurance of
contracts with third party payors. In connection with provision of such
services, TRI CO. shall provide support services, personnel, administration,
financial services, data processing, debt collection, general accounting
services and other business office services. TRI CO. is hereby expressly
authorized to provide such services in any reasonable manner TRI CO. deems
appropriate to meet the day-to-day requirements of the business functions of
IPA. To the extent practicable, TRI CO., at its discretion, may perform such
business office services for IPA at locations of TRI CO.'s choosing. The
parties acknowledge and agree that the Physicians, and not TRI CO., shall be
responsible and liable for and shall have complete authority, supervision, and
control over the provision of all Medical Services performed for patients and
that all diagnoses, treatments and procedures related to Medical Services shall
be provided and performed under the supervision of Physicians as such
professionals, in their sole discretion, deem appropriate.
III. Covenants and Responsibilities of TRI CO.
3.1 Management and Administration. During the Term of this
Agreement, TRI CO. shall provide all management and administrative services as
are necessary and appropriate for the administration of IPA's operations as
described in Section 2.2 hereof, this Article III and elsewhere in this
Agreement in accordance with the law and all rules, regulations and guidelines
of applicable governmental agencies.
3.2 Quality Assurance. Risk Management and Utilization Review. TRI
CO. shall assist IPA in the establishment and monitoring the implementation of
procedures to promote the consistency, quality, appropriateness and medical
necessity of Medical Services provided by Physicians pursuant to or in
connection with third party payor agreements. TRI CO. shall provide
administrative support for such procedures and in connection with third party
payor agreements, shall monitor participation in IPA's quality assurance, risk
management and utilization review programs. TRI CO. shall provide regular
reports to IPA regarding such activities. TRI CO. will provide the following
medical management services: develop a utilization review and quality assurance
program ("UR/QA") to monitor the medical appropriateness and cost-effectiveness
of all health care arranged for by the IPA; design the process and procedures
for the provision of health care arranged for by the IPA; provide all such
reports regarding the medical management of the IPA and/or its providers as the
IPA and TRI CO. shall reasonably deem necessary or appropriate.
3.3 Marketing. TRI CO. will, at the request of the Board of
Directors of IPA, negotiate on behalf of IPA with payors, employers, HMOs, or
Insurance Companies for IPA professional service agreements in programs which
require or permit hospital services to be contracted for by such payors at any
hospital acceptable to payor and IPA.
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TRI CO. will develop and/or assist in certain marketing efforts
including strategic planning and contract negotiations. Such efforts, however,
shall not include sales and advertising as part of TRI CO.'s management fee.
3.4 Licenses and Permits. TRI CO. shall, at IPA's Expense and on
behalf of and in the name of IPA, coordinate all development and planning
processes, and apply for and use TRI CO.'s best effort to obtain and maintain
all federal, state, and local licenses and regulatory permits and third-party
payor agreements and identification numbers required for or in connection with
the operation of IPA.
3.5 TRI CO. Personnel.
3.5.1 Management Personnel. TRI CO. shall employ or otherwise
retain, at TRI CO.'s Expense, and shall be responsible for selecting, training,
supervising and terminating all personnel as TRI CO. deems reasonably necessary
and appropriate for TRI CO.'s performance of its duties and obligations under
this Agreement. TRI Co. shall have sole responsibility for determining the
salaries and fringe benefits of all such management and administrative
personnel, for paying such salaries and providing such fringe benefits, and for
withholding, as required by law, any sums for income tax, unemployment
insurance, social security, or any other withholding required by applicable law
or governmental requirement.
3.5.2 Non-exclusivity. In recognition of the fact that the
nonmedical management and administrative personnel provided to IPA by TRI CO.
pursuant to this Agreement may from time to time perform services for others,
this Agreement shall not prevent TRI CO. from performing such services for
others or restrict TRI CO. from so using TRI CO.'s personnel provided pursuant
to this Agreement. TRI CO. shall use reasonable efforts, consistent with sound
business practices, to honor the specific requests of IPA with regard to the
assignment of TRI CO. Is personnel; provided, however, that TRI CO. reserves the
sole right to determine the assignment of its personnel.
3.5.3 Equal Employment Opportunity. Without limitation of any
provision of this Agreement, TRI Co. expressly agrees to abide by any and all
applicable federal and/or state equal employment opportunity statutes, rules and
regulations, including without limitation, Title VII of the Civil Rights Act of
1964, the Equal Employment opportunity Act of 1972, the Age Discrimination in
Employment Act of 1967, the Equal Pay Act of 1963, the National Labor Relations
Act, the Fair Labor Standards Act, the Rehabilitation Act of 1973, and the
Occupational Safety and Health Act of 1970, all as may from time-to-time be
modified or amended.
3.5.4 Labor Reports, TRI CO. shall appropriately prepare, maintain,
and file all requisite reports and statements regarding income tax
withholdings, unemployment insurance, social security, workers, compensation,
equal employment opportunity, or other reports and statements required with
respect to personnel provided by TRI CO. under this Agreement.
3.5.5 Provider Relations. TRI CO. will provide the following
provider relations services: Make available to the providers the necessary
provider applications and review them for completeness; recommend credentialing
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criteria to the IPA for provider participation; collect information about
providers who have applied for participation in the IPA; monitor the provision
of health care by participating providers; evaluate the practice patterns of
physicians; arrange enrollee satisfaction surveys regarding the delivery of
healthcare services arranged for or provided by IPA; administer a grievance
process developed and adopted by the IPA for complaints received by the IPA
about the health care provided; comply with the IPA's policies regarding the
credentialing, evaluation, and termination of health care providers; train staff
at physician offices and hospitals about procedures concerning the filing of
claims and the scope of benefits offered to persons for which the IPA arranges
health care.
3.6 Consultants TRI CO. shall render such business and financial
management, consultation, and advice as may from time-to-time be requested by
IPA in connection with the business operations of IPA. In addition, TRI CO.
shall at IPA's request and at IPA's Expense, provide consultation and advice as
reasonably necessary, specialists in such areas as accounting, auditing,
budgeting, physician practice management, finance, government programs,
insurance, management development, medical records, nursing, physician
recruitment, quality assurance, systems and procedures, and third party
reimbursement.
3.7 Contract Negotiations. TRI CO. shall advise IPA with respect
to and negotiate on IPA's behalf and subject to IPA's approval, all contractual
arrangements with third party payors as are reasonably necessary and
appropriate for the conduct of IPA's business.
3.8 Administration of Funds TRI Co. shall have access to the IPA
Account, which shall be established and maintained at a bank of IPA's choosing.
In connection with the administration of funds under this Section and throughout
the Term, IPA hereby grants TRI CO. a special power of attorney and appoints TRI
CO. as IPA's true and lawful agent and attorney-in-fact, and TRI CO. hereby
accepts such special power of attorney and appointment, to deposit appropriate
funds into the IPA Account and to make withdrawals from the IPA Account for
payments specified in this Agreement and as requested by IPA. TRI CO. shall be
obligated to deposit any monies or other assets it receives for any reason on
behalf of IPA in the IPA Account. Notwithstanding the special power of attorney
granted to TRI CO. hereunder IPA may continue to draw checks on the IPA Account.
Upon request of TRI CO. or the financial institution wherein the IPA Account is
maintained, such additional documents or instruments as may be necessary to
evidence or effect the special power of attorney granted to TRI CO. by IPA.
3.9 Fiscal Matters.
3.9.1 Design and Implementation. TRI CO. shall design and implement
and accounting/finance system, appropriate for the scope of the IPA's
operations, to provide the IPA with financial information about its business.
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3.9.2 Annual Budget. Annually and at least thirty (30) days prior to
the commencement of each fiscal year of IPA, TRI CO. shall prepare and deliver
to IPA an operational budget for such fiscal year ("Budget"), setting forth an
estimate of IPA's revenues and expenses (including, without limitation, all
costs associated with the services provided by TRI CO. hereunder).
3.9.3 IPA Accounts. TRI CO. shall open and/or maintain accounts in
the name of the IPA and deposit in such bank accounts all receipts and monies
arising from the operation of the IPA. TRI CO. shall make disbursements from the
accounts on behalf of the IPA in such amounts and at such times as the same are
required for the operation of the IPA or as directed by the IPA. Signatures and
approvals as to the amounts of all checks shall be in accordance with policies
adopted by the IPA provided such policies have previously been made available to
TRI CO..
3.9.4 Access. IPA shall have the right at all times during normal
business hours to audit, examine, and make copies of books of account maintained
by TRI CO. in respect of IPA's provision of Medical Services and TRI CO.'s
xxxxxxxx and collections on IPA's behalf.
3.9.5 General, TRI CO. shall:
(a) Establish and maintain all necessary accounting
journals.
(b) Establish and maintain all backup records for
accounting and managerial control. In the event such
backup records are lost or destroyed, TRI CO. will
reconstruct them as soon as reasonably possible.
(c) Establish and maintain all necessary tax-related
records and prepare, or contract to have prepared,
the IPA's annual corporate income tax filings. TRI
CO. shall be responsible for filing the prepared
income tax documents, provided that sufficient funds
and all necessary documents and information are
available from the IPA.
(d) Prepare balance sheets and income statements on a
monthly basis.
(e) Perform all billing and collection functions for
amounts owed by the IPA to its vendors and for
accounts receivable of the IPA.
(f) Develop an appropriate and fiscally prudent case
management plan to determine cash flow needs of the
IPA and to manage and invest the IPA's cash reserves.
Such cash management plan shall include provisions
for the settlement of the IPA's obligations to
provide for funds withheld by the IPA to create cash
reserves.
(g) Be responsible, in those instances in which TRI CO.
acts as claims processor, for all regularly required
financial reporting to federal, state, and local
agencies including annual distribution of IRS Form
1099. Such financial reporting shall not include any
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additional reporting, beyond that otherwise
contemplated by this Agreement, required as a result
of an audit, corporate income tax filings or other
special request made by a federal, state, or local
agency.
(h) Evaluate proposals of auditors and recommend to the
Board an outside auditor to conduct an annual audit
of the IPA's financial condition and results of
operation. The Board shall have the ultimate
authority to determine the necessity of an annual
audit and to select the auditing firm.
(i) As part of any full-risk contract, TRI CO. will
perform financial recovery activities on behalf of
the IPA to obtain funds the IPA is entitled to under
stop-loss limits, subrogation, and coordination of
benefits.
(j) Pay all expenses from the IPA funds associated with
the IPA's Business, provided that any expenses
exceeding $5,000 must be approved in advance by the
IPA's Board if not identified in the Budget.
(k) Design and maintain a program of property, liability
and other insurance to protect the IPA from its
business and professional risks. The design of the
program will be approved by the IPA.
(l) Perform any other financial administration services
requested by the IPA and agreed to be performed by
TRI CO. pursuant to this Agreement.
(m) Provide all such reports regarding the financial
performance of the IPA and the overall management of
the IPA as the IPA and TRI CO. shall reasonably deem
necessary or appropriate.
(n) Recommend and assist in the acquisition of stop-loss
coverage.
3.10 Tax Returns and Taxation Matters. TRI CO. shall arrange for
the preparation of all appropriate tax returns and reports required of IPA. As
requested by IPA, TRI CO. shall, on behalf of IPA and at IPA's Expense, protest
and/or file applications regarding regulations, orders and determinations that
are issued by any governmental taxing authority and that affect or are issued to
IPA.
3.11 Reports and Records. TRI CO. shall timely create, prepare
and file reports and records as are reasonably necessary and appropriate in
connection with the provision of TRI CO.'s services as are reasonably requested
by IPA.
3.12 Legal Actions. As reasonably requested by IPA, TRI Co. shall,
at IPA's Expense, advise and engage assistance on behalf of IPA in instituting
or defending, in the name and on behalf of IPA, all legal actions or proceedings
by or against third parties arising out of IPA's business.
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3.13 Physician Recruitment. Upon IPA'S reasonable request TRI CO.
shall perform administrative services reasonably necessary and appropriate to
recruit potential Physicians to contract with IPA and shall provide IPA with
model agreements to document IPA's service arrangement with such Physicians. It
will be and remain the responsibility of IPA to interview, select, contract
with, supervise, compensate, control and terminate all Physicians performing
Medical Services or other professional services, and TRI CO. shall have no
authority whatsoever with respect to such activities, except that as requested
by IPA, TRI CO. shall assist in the interview, selection, and negotiation with
such potential Physicians.
3.14 Confidentiality. TRI CO. shall instruct its personnel to keep
confidential any financial, statistical, personal, personnel, or patient
information obtained or encountered relating to IPA and IPA's medical practice
except as otherwise required by law or contract. TRI CO. shall not
disseminate, distribute, or report IPA data to any person, including other
IPAs, hospital entities, HMOs, or insurance companies without the express
written consent of the Board of Directors of IPA.
3.15 TRI CO.'s Insurance. Throughout the Term, TRI CO. shall, at
TRI CO.'s Expense, obtain and maintain with commercial carriers, self-insurance
or some combination of these appropriate workers, compensation coverage for TRI
CO.'s employed personnel provided pursuant to this Agreement, and casualty and
comprehensive general liability insurance covering TRI CO., TRI CO's personnel
and all of TRI CO.'s equipment in such amounts, on such basis and upon such
terms and conditions as TRI CO. deems appropriate.
3.16 Reinsurance. TRI CO. shall, at IPA's request, negotiate and
obtain reinsurance for IPA. The cost of such reinsurance shall be an IPA
expense.
3.17 Claims Processing. For the claims processing services it has a
duty to provide pursuant to this Agreement, TRI CO. shall provide claims
processors needed for the IPA's Business. Claims will be processed within a
reasonable period of time after TRI CO. receives all information necessary for
proper adjudication of the claims. Payment terms will be set by the IPA from
time to time.
3.18 Computer Equipment. TRI CO. will arrange for the provision of
data processing services and equipment necessary for TRI CO. to carry out its
duties under this Agreement and as described in the annual budget, subject to
IPA approval. Unless such assets (tangible or intangible) were purchased and
utilized solely for the activities of the IPA, such assets shall be solely owned
by TRI CO., unless otherwise agreed to by the IPA and TRI CO.
3.19 Telephone Support. Personnel shall be provided by TRI CO. and
shall be available by telephone to answer all inquires from enrollees, the IPA
and the Hospital during normal business hours.
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IV. Representations, Covenants and Responsibilities of IPA.
4.1 Organization and Operation. IPA, being a nonprofit corporation
created pursuant to the laws of the State of Tennessee, shall at all times
during the Term be and remain legally organized and authorized to conduct its
business in a manner consistent with all applicable State and federal laws.
4.2 Medical Services. Throughout the Term of the Agreement, IPA
shall arrange for, through its Physicians, Medical Services necessary to meet
patient service requirements. In providing such Medical Services,
notwithstanding any provisions herein to the contrary, the Physicians shall
exercise independent medical judgment and shall have full authority over all
medical Services and all clinical decisions pertaining to the delivery of
Medical Services. Administrative policies and management shall be consistent
with the delivery of Medical Services in accordance with accepted standards of
care.
4.3 Quality Assurance, Risk Management, and Utilization Review.
IPA shall adopt and monitor the implementation of quality assurance, risk
management, and utilization review programs designed to monitor and evaluate the
quality of Medical Services provided by Physicians and to evaluate the
professional skills of potential Physicians (including, without limitation,
determining whether each Physician may provide Medical Services and the scope
and conditions of such privileges) prior to permitting such persons to provide
services. As requested of IPA, TRI CO. shall provide administrative assistance
to IPA in performing its quality assurance, risk management, and utilization
review.
4.4 Equal Employment Opportunity. Without limitation of any
provision herein, IPA expressly agrees to abide by any and all applicable
federal and/or state equal employment opportunity statues, rules and
regulations, including, without limitation, Title VII of the Civil Rights Act of
1964, the Equal Employment Opportunity Act of 1972, the Age Discrimination in
Employment Act of 1967, the Equal Pay Act of 1963, the National Labor Relations
Act, the Fair Labor Standards Act, the Rehabilitation Act of 1973, and the
Occupational Safety and Health Act of 1970, all as may from time-to-time be
modified or amended.
4.5 IPA Physicians. IPA will have each Physician or Physician
Groups with whom it contracts make the representations and warranties set forth
in Sections 4.5.1 - 4.5.4 to IPA. IPA represents that it will terminate a
provider agreement with any Physician who, to IPA's knowledge, no longer meets
the criteria set forth below:
4.5.1 Such Physician is licensed to practice their profession in the
State of Tennessee without restriction or subject to any disciplinary action.
4.5.2 Such Physician has all customary narcotics and controlled
substances numbers and licenses.
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4.5.3 Such Physician has professional liability insurance in full
force and effect with policy limits of [$1,000,000 individual incident/
$3,000,000 aggregate].
4.5.4 Such Physician is not in breach of any other contract,
obligation, or covenant that would affect his or her ability to perform
hereunder and, as a result of entering into this Agreement, will not breach any
such contract, obligation or covenant.
4.6 Access, At all times during the Term, IPA shall permit TRI CO.
to have access to all IPA's books, records, and reports, contracts, agreements,
licenses, survey, accreditations and any and all other information reasonably
requested by TRI CO. to perform its duties under this Agreement.
4.7 Exclusivity. TRI CO. shall be the exclusive provider of
management or similar services to IPA.
V. Financial Arrangements.
5.1 General. IPA and TRI CO. mutually recognize and acknowledge
that TRI CO. will incur substantial costs in providing support services,
personnel, marketing, management, administration, and other items and services
that are the subject matter of this Agreement. IPA and TRI CO. further
recognize that certain of such costs and expenses can vary to a considerable
degree according to the volume of IPA's business. Furthermore, IPA and TRI CO.
agree that it will be impracticable to ascertain and segregate the exact costs
and expenses that will be incurred by TRI CO. from time to time in performance
of its obligations under this Agreement. However, it is the intent of the
parties that the fees and other amounts paid to TRI CO. be reasonable and
approximate its costs and expenses associated with the efficient management and
administration of IPA.
5.2 Fees. IPA agrees to pay to TRI CO. a monthly management fee on the
10th day of each month in the amount of (a) 4.5% of the payment made by the
Health Care Financing Administration ("HCFA") to the HMO under contract with
IPA, in accordance with HCFA's Medicare Risk Program and the member premiums (if
any) and (b) $4.50 per member per month for commercial HMO enrollment and other
contracts directly between IPA and payor/user.
Any "Surplus" will be distributed as follows: Sixty-five percent (65% to IPA,
and thirty-five (35%) to TRI CO. For purposes of this Section 5.2, Surplus
means Gross Revenues less expenses. Gross Revenues means the payments made from
the HMO or other payors to the IPA in accordance with the contract between such
parties. Gross Revenues include payments for services for eligible members
covered under the HCFA Medicare Risk Program; for covered commercial HMO
members; for other covered members under contract with the IPA; and, payments
to the IPA in accordance with other performance or incentive provisions
specified in such contracts.
Expenses means (i) capitated and fee-for-service payments to contracted provider
members of the IPA for the provision of authorized medical care (ii)
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capitated and fee-for-service payments to providers for the provision of
authorized medical care who are not contractual providers of the IPA (iii)
stipends payable to IPA Board Members (iv) other reasonable and necessary IPA
expenses.
VI. Term and Termination.
6.1 Initial and Renewal Term. The term of this Agreement will be
for an initial period of seven (7) year(s) after the effective date of this
Agreement, and shall be automatically renewed for successive five (5) year
periods thereafter unless either party gives 180 days written notice of
cancellation, subject to the remainder of this Article VI.
6.2 Termination.
6.2.1 Termination by Agreement. In the event IPA and TRI CO. shall
mutually agree in writing, this Agreement may be terminated on the date
specified in such written agreement.
6.2.2 Termination for Specific Events. Either party may terminate
this Agreement upon the dissolution of the other or, after January 1, 199_, upon
IPA's failure to maintain the primary care relationship, on average during any
twelve-month period, with either at least ____ HCFA enrollees or at least _____
commercial HMO members.
6.2.3 Termination on Notice for Default. In the event that either
party shall substantially default in the performance of any obligation under
this Agreement, and such default shall not have been cured within thirty (30)
days (ten (10) days in the event of nonpayment of fees under Article V)
following the giving of written notice of such default by the other party, the
party giving such notice shall have the right to immediately terminate this
Agreement, without limiting any other rights or remedies that would otherwise be
available.
6.2.4 Termination without Cause. Either party may unilaterally
terminate this agreement during its initial or renewal term. The party
initiating termination shall give the other party 180 day notice of intent to
terminate. IPA and TRI CO. shall jointly select an independent appraiser to
establish the compensation, if any, to be paid to the involuntarily terminating
party by the party giving notice of termination.
6.2.5 Termination Due to Legislative or Administrative Changes. In
the event that any legislation, regulation or government policy is passed or
adopted or judicial interpretation is made, the effect of which would be to
affect materially IPA's ability to obtain reimbursement from Medicare or
Medicaid or any other third-party payor due to the existence of any provision of
this Agreement, then the parties agree to negotiate in good faith to modify the
terms of this Agreement to comply with applicable law. If the parties cannot
reach an agreement on such modification, either party may terminate this
Agreement by thirty (30) days' written notice to the other on any future date
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specified in such notice, or such sooner date as shall be required by the
legislative, regulatory, or judicial change. Nothing in this Agreement shall be
interpreted to require either party at any time to do anything that is illegal
or contrary to statute.
6.2.6 Termination Due to Change in Ownership or Control of TRI CO.
If Physician Network Management, L.L.C., North American Medical Management,
Inc., PhyCor, Inc. or Baptist Hospital, Inc. should sell to Columbia or another
competitor, I.P.A. shall have the right to terminate this agreement. I.P.A.
shall give TRI CO. written notice of intent to cancel within 60 days of notice.
Termination shall take effect 180 days from the date of notice of intent to
cancel.
6.3 Effects of Termination.
6.3.1 General. Upon termination of this Agreement, as hereinabove
provided, neither party shall have any further obligations hereunder, except for
(i) obligations accruing prior to the effective date of termination and (ii)
obligations under Section 4.6 and Article VII, and (iii) obligations, promises
or covenants set forth herein that are expressly made to extend beyond the Term,
which provisions shall survive the expiration or termination of this Agreement.
6.3.2 Records. Upon the termination of this Agreement for any reason
or cause whatsoever, TRI CO. shall surrender to IPA, and destroy TRI CO.'s
copies of, all books and records, including electronic data, pertaining to IPA's
Medical Services, except as otherwise provided in this Agreement. In the event
of a dispute or third party inquiry, TRI CO. shall have the right to review and
copy any and all books and records, including electronic data, unless otherwise
restricted by law.
6.4 Actions Following Termination. Following any notice of
termination of this Agreement, the parties will fully cooperate in any and all
matters relating to the winding up of TRI CO.'s activities. Notwithstanding this
or any other provision, neither party relinquishes or waives any rights to any
other remedies for breach of this Agreement by the other party.
VII. Indemnification.
7.1 TRI CO. agrees to indemnify, defend, and hold harmless IPA,
its agents, officers, and employees from and against any and all liability
expense, including defense costs and legal fees, incurred in connection with
claims for damages of any nature whatsoever arising from TRI CO.'s performance
of or failure to perform its obligations hereunder.
7.2 IPA agrees to indemnify, defend, and hold harmless TRI CO.,
its agents, officers, and employees from and against any and all liability
expense, including defense costs and legal fees incurred in connection with
claims for damages of any nature whatsoever arising from IPA's performance of or
failure to perform its obligations hereunder.
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VIII. Miscellaneous.
8.1 Independent Relationship. It is mutually understood and agreed
that IPA and TRI CO., in performing their respective duties and obligations
under this Agreement, are at all times acting and performing as independent
contractors with respect to each other, and nothing in this Agreement is
intended and nothing shall be construed to create an employer/employee,
partnership or joint venture relationship, or to allow TRI Co. to exercise
control or direction over the manner or method by which the Physicians perform
Medical Services or other professional health care services. TRI CO. shall be
the agent of IPA solely to perform TRI CO.'s obligations set forth in this
Agreement that are related to the management of IPA's business and not with
respect to provision of Medical Services.
8.2 Sales and Use Tax. TRI CO. and IPA acknowledge and agree that
certain of the services to be provided by TRI CO. hereunder are subject to State
sales and use taxes and that TRI Co. has a legal obligation to collect such
taxes from IPA and to remit same to the State Comptroller of Accounts. IPA
agrees to pay the applicable State sales and use taxes in respect of the portion
of the Management Fee attributable to such services and grants TRI CO. the right
to withdraw from the IPA Account amounts necessary to timely and fully pay such
taxes.
8.3 Notices. Any notice, demand or communication required,
permitted or desired to be given hereunder shall be deemed effectively given
when delivered in person or mailed by prepaid certified or registered mail,
return receipt requested, addressed as follows:
IPA
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TRI CO.
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or to such other address, or to the attention of such other person or officer,
as any party may by written notice designate.
8.4 Governing Law. This Agreement has been executed and delivered
in, and shall be governed by, and construed and enforced in accordance with the
laws of the State of Tennessee. All duties and obligations of the parties
created hereunder are performable in Davidson or Xxxxxx County, Tennessee, and
Davidson or Xxxxxx County, Tennessee, shall be the exclusive venue for any
litigation, special proceeding, or other proceeding between the parties that may
be brought or arise out of or in connection with or by reason of this Agreement.
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8.5 Assignment. Except as may be specifically provided to the
contrary, this Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective legal representatives, successors, and
assigns. Neither party may assign this Agreement without the prior written
consent of the other party, which consent may not be unreasonably withheld.
8.6 Government Access. The provisions of Section 952 of the
Omnibus Reconciliation Act of 1980 (P.L. 96-499) providing for access by the
Secretary of Health and Human Services and the Comptroller General to the books
and records of the parties to the extent they provide services are incorporated
in this Agreement.
8.7 Waiver of Breach. The waiver by either party of a breach or
violation of any provision of this Agreement shall not operate as, or be
construed to constitute, a waiver of any subsequent breach of the same or
another provision hereof.
8.8 Enforcement. In the event either party resorts to legal action
to enforce or interpret any provision of this Agreement, the prevailing party
shall be entitled to recover the costs and expenses of such action so incurred,
including, without limitation, reasonable attorneys' fees.
8.9 Gender and Number. Whenever the context of this Agreement
requires, the gender of all words shall include the masculine, feminine, and
neuter, and the number of all words shall include the singular and plural.
8.10 Additional Assurances. Except as may be specifically provided
to the contrary, the provisions of this Agreement shall be self-operative and
shall not require further agreement by the parties; provided, however, at the
request of either party, the other party shall execute such additional
instruments and take such additional acts as are reasonable and as the
requesting party may deem necessary to effectuate this Agreement.
8.11 Consents. Approvals and Exercise of Discretion, Whenever this
Agreement requires any consent or approval to be given by either party, or
either party must or may exercise discretion, the parties agree that such
consent or approval shall not be unreasonably withheld or delayed, and that such
discretion shall be reasonably exercised.
8.12 Force Majeure. Neither party shall be liable or deemed to be
in default for any delay or failure in performance under this Agreement or other
interruption of service deemed to result, directly or indirectly, from acts of
God, civil or military authority, acts of public enemy, war, accidents, fires,
explosions, earthquakes, hurricanes, tornadoes, floods, failure of
transportation, strikes or other work interruptions by either party's employees,
or any other similar cause beyond the reasonable control of either party.
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8.13 Invalid Provisions, If any provision of this Agreement is held
to be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision has never been a part of this Agreement; and the remaining provisions
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
8.14 Divisions and Headings, The divisions of this Agreement into
articles, sections, and subsections and the use of captions and headings in
connection therewith is solely for convenience and shall not affect in any way
the meaning or interpretation of this Agreement.
8.15 Amendments and Agreement Execution. This Agreement and
amendments hereto shall be in writing and executed in multiple copies on behalf
of IPA by its President, and on behalf of TRI CO. by a duly authorized officer.
Each multiple copy shall be deemed an original, but all multiple copies together
shall constitute one and the same instrument.
8.16 Time of Essence. Time shall be of the essence with respect to
this Agreement.
8.17 Entire Agreement. With respect to the subject matter of this
Agreement, this Agreement supersedes all previous contracts and constitutes the
entire agreement between the parties. neither party shall be entitled to
benefits other than those specified herein. The parties specifically acknowledge
that, in entering into and executing this Agreement, the parties rely solely
upon the representations and agreements contained in this Agreement and no
others.
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IN WITNESS WHEREOF, IPA and TRI CO. have caused this Agreement to be executed,
all as of the day and year first written above and effective as of the day and
year indicated above.
IPA: A. Xxx Xxxx
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By: /s/
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Title: Chairman of the Board
TRI CO.: /s/
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By:
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