EXHIBIT 6(b)
MANAGED CARE CONSULTANTS, INC.
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THIRD PARTY ADMINISTRATION AGREEMENT
FOR
MD HEALTH SHARES CORPORATION
AND ITS SUBSIDIARY,
PATIENT'S CHOICE, INC.
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MANAGED CARE CONSULTANTS, INC. (hereinafter referred to as "TPA"), a
corporation organized under the laws of the State of Nevada and with an address
of 0000 Xxxxx Xxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000, and MD HEALTHSHARES
CORPORATION (HEREINAFTER REFERRED TO AS "MDHS") and its subsidiary, PATIENT'S
CHOICE, INC. (hereinafter referred to as "Patient's Choice"), with an address of
Suite 4400, 000 Xx. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxx, 00000, both
Louisiana Corporations.
This Agreement is effective the 1st day of January 1997.
Whereas, Patient's Choice has been organized and capitalized to operate
throughout the State of Louisiana as a health maintenance organization
(hereinafter referred to as "HMO")
Whereas, Patient's Choice desires to engage TPA to provide certain services
necessary and appropriate to implementation and administration of health benefit
plans offered and contracted by Patient's Choice and for the benefit of its Plan
Members as described infra.
NOW THEREFORE, the Parties, for lawful consideration and intending to be
legally bound, agree as follows:
ARTICLE I
DEFINITIONS
1.01 The term "Plan" shall mean the contract, certificate, policy, health plan
document or any other document offered or sponsored by Patient's Choice
under which a Covered Person may be entitled to receive
reimbursement/payment for health care services.
1.02 The term "Covered Person" or "Member" shall mean an employee or dependent
who is eligible under the Plan and whose enrollment materials have been
properly completed and submitted to and accepted by Patient's Choice and
who has made payment or on whose behalf payment has been made to Patient's
Choice for providing or arranging for the provision of Covered Services.
1.03 The term "Covered Services" means the medically necessary medical,
hospital and other health care services specified as such by the Plan and
described in its Benefits Summary.
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1.04 The term "Participating Provider" means any licensed physician, other
health professional, ancillary service provider, hospital or other entity
or institutional health care provider who or which has entered into a
contractual agreement with Patient's Choice, directly or indirectly, to
provide Covered Services to Members.
1.05 The term "Contract Physician" means a licensed physician who is a
Participating Provider as defined herein but is not a shareholder of MDHS.
1.06 The term "Regional IPA" means one of the six regionally organized
independent practice associations with which Patient's Choice has
contracted to provide Covered Services to Members through the physicians
members of the IPA.
ARTICLE II
DUTIES AND RESPONSIBILITIES OF TPA
2.01 DATABASE MAINTENANCE, ACCESS AND SECURITY
A. TPA shall, based on information and data furnished by Patient's
Choice, create, establish, and maintain, to the best of TPA's ability,
an accurate, complete and current computer database record of:
1. the enrolled Members of all Patient's Choice Plans it administers,
including all data elements as may be necessary or appropriate to
properly identify such Members and the covered groups with which
they are affiliated and to the timely and efficient performance of
the functions and services of TPA provided for in this Agreement;
and
2. Patient's Choice's Participating Providers (with Contract
Providers and non-physician ancillary providers being separately
designated as such) including such data elements as may be
necessary or appropriate to properly identify the Participating
Providers, their respective medical specialties and the Regional
IPA with which they are affiliated, and otherwise as may be
necessary or appropriate to the timely and efficient performance
of the functions and services of TPA provided for in this
Agreement.
B. TPA shall also establish, and maintain, using the Benefit Management
Systems ("BMS") database management and claims paying system under
license from BMS, as customized by TPA for Patient's Choice, an
accurate complete and current computer database record of claims for
reimbursement for Covered Services submitted by Participating
Providers to and processed by TPA pursuant to Section 2.04-2.05 of
this Agreement.
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C. TPA shall provide for Patient's Choice and each of the Regional IPAs to
have computer access, by modem, dial-up telephone line, to each of the
Patient's Choice databases maintained by TPA pursuant to this Agreement.
TPA shall provide Patient's Choice and its Regional IPAs with such
communications and other computer software and technical and user support
as may be necessary or appropriate to access, view and download such data
and generate reports from the database management system(s) utilized by
TPA.
D. TPA shall operate a toll-free automated telephone system, maintained at
Patient's Choice's expense in accordance with (S) 8.02 of this Agreement,
allowing Participating Providers to verify Member eligibility 24 hours a
day, seven days a week.
E. TPA shall ensure the physical and electronic integrity and security of
all data which it maintains for and on behalf of Patient's Choice
relating to Members, Participating Providers and claims. Security
provisions shall include, at a minimum, having a commercially reasonable
disaster recovery plan in the event of the complete or partial loss of
data or malfunction of computer systems and maintaining current off-site
backup copies of all of the Patient's Choice data files at a location
known to Patient's Choice and to which Patient's Choice has access at all
times upon reasonable prior notice. TPA shall furnish Patient's Choice
with a written log of the tapes or other computer media in the off-site
location monthly after each update of such data. Duplicates of the
magnetic tapes or other media containing the current records of Patient's
Choice shall be furnished by TPA to Patient's Choice once every six
months during the term of this Agreement. Additional or more frequent
duplicates as may be requested by Patient's Choice will be supplied by
TPA at cost, at the expense of Patient's Choice.
F. TPA shall also ensure, through any and all measures, policies and
procedures as may be necessary or appropriate, that no person, firm or
entity other than TPA, its officers and employees having responsibilities
with respect to the provision of services hereunder, and such persons as
may be Authorized by Patient's Choice, shall have access to the computer
data and other records of Patient's Choice maintained by TPA under this
Agreement.
G. Within fifteen (15) days of the date on which proper notice of
termination of this Agreement is given by one party to the other pursuant
to Article 6 of this Agreement, TPA shall transfer and deliver to
Patient's Choice on magnetic tape or other computer readable media a
complete, accurate and current copy of all computer databases and other
files and records than maintained by TPA on behalf of Patient's Choice
pursuant to this Agreement, together with the computer-readable and
executable software for the BMS
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claims payment system and other database management systems, if any,
used by TPA, as the same may have been customized by or for TPA for
its provision of services hereunder and any and all manuals and other
written or printed documentation with respect thereto. Concurrently,
TPA shall ensure that Patient's Choice and MDHS are granted, at no
additional cost, expense or fee to Patient's Choice or MDHS, a
perpetual, non-exclusive license, or sublicense, to use the BMS claims
payment system and other database management systems delivered to
Patient's Choice hereunder.
2.02 PREMIUM BILLING AND COLLECTION
A. In accordance with Plan specifications, Member and Group enrollment
information and premium rates specified by Patient's Choice, TPA
shall, in the name of Patient's Choice or such other name in which it
elects to do business and so advises TPA, render initial and monthly
invoices to the persons, firms and entities constituting Groups
identified by Patient's Choice for the payment of Plan premiums and
other charges for or on behalf of Members.
B. Premium payments received by TPA from Patient's Choice Member Groups
shall be verified, reconciled and recorded by TPA and deposited in a
segregated account for premium receipt established by and in the name
of Patient's Choice.
C. TPA shall give written notice to Member Groups in accordance with Plan
specifications of any delinquency or deficiency in the payment of Plan
premiums and shall otherwise make commercially reasonable efforts to
collect all premium payments due Patient's Choice.
D. TPA shall notify Patient's Choice by an accounts receivable report of
any and all premium payments which remain unpaid within 45 days of the
date on which an invoice for such premiums was rendered.
E. TPA shall give written notice of termination or cancellation to any
Member Group for nonpayment of premiums when so authorized and
directed by Patient's Choice.
2.03 PRECERTIFICATION: HMO PLAN DESIGN
A. In accordance with applicable provisions of Plan certificates of
coverage, Managed Care Consultants, Inc. ("MCC") shall on behalf of
Patient's Choice review and if medically necessary and appropriate,
authorize, Participating Provider requests for pre-certification of
all inpatient hospital admissions, outpatient surgical procedures, and
not more than ten (10) addi-
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tional procedures which are Covered Services and which Patient's
Choice may designate for precertification prior to the effective date
of this Agreement.
B. MCC's precertification function shall be performed by licensed
physicians or licensed registered nurses employed or contracted by
MCC, or by such other class of licensed healthcare practitioner as may
be approved by Patient's Choice. No admission or procedure shall be
denied precertification except upon the approval of MCC's Medical
Director, who shall be a doctor of medicine licensed to practice
medicine, with the concurrence of Patient's Choice given through its
Medical Director or other designee.
C. MCC shall respond to and provide notice of precertification decisions
with respect to hospital admissions on the same business day as the
request is received, except in cases where a hospital admission is
urgently required, in which case, MCC shall respond immediately so as
not to delay care pending the receipt of sufficient information for
retroactive certification. With respect to all other procedures for
which precertification is required, MCC shall respond and provide
notice of precertification decisions within not more than 24 hours or
one business day of a request for and reasonably sufficient
information pertaining to precertification, except as to purely
elective Covered Services for which precertification is required, in
which case MCC shall respond within 72 hours.
2.04 CLAIMS PROCESSING
A. TPA shall receive and review all claims to determine if such allocated
claims are within the predetermined limits of the corresponding fee
schedule. In all cases where there is a submitted xxxx that is greater
than allocated limit(s), TPA shall re-factor such payment(s)
accordingly. Re-factoring of payments shall not be applicable to
Contract Providers or Participating Providers who or which are not
shareholders of MDHS and members of a Regional IPA.
B. TPA shall complete its review of all claims after complete proof of
claim is received by TPA in accordance with the State of Louisiana's
applicable laws and regulations.
C. TPA shall make provision for the electronic submission and filing of
claims by Participating Providers.
D. TPA shall process all HMO claims in the order received and shall use
its best efforts, consistent with either industry standards or
statutory guidelines, to compute reimbursements based on claims to
funding ratios.
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E. TPA shall process all PPO and indemnity claims in the order received and
shall use its best efforts, consistent with industry standards, to
compute the benefits payable, if any, in accordance with the Plan. TPA
will process completed claims in the order received. All contested claims
will be subject to the appeal procedures set forth in the Plan.
2.05 CLAIMS PAYMENT/REIMBURSEMENT
A. Claims shall be paid/reimbursed in the order processed and based on
claims to funding ratios.
B. TPA shall manage, pay, and/or reimburse all claims according to the
appropriate payment structure (capitated, per diem, and fee schedule) as
it pertains to each of the six (6) Regional IPAs.
C. All clean claims for payment received by TPA from Participating
Providers on or before the fifth business day of each calendar month
with respect to Covered Services provided to Members during the preceding
calendar month shall be paid by TPA on or before the 10th business day of
such month, provided, however, that TPA's payment of Participating
Provider submitted to manually, in writing or other than by electronic
filing may be deferred for not more than an additional 10 days beyond the
date when payment of such claims would otherwise be due.
D. TPA shall transmit with each payment made to a Participating Provider who
is subject to refactoring of claims an explanation of benefits (EOB) or
equivalent written explanation of the factor by which the claim was
reduced by TPA pursuant to (S) 2.04 of this Agreement.
2.06 UTILIZATION MANAGEMENT
TPA shall flag and report, via first class mail, Health Information Network
(hereinafter referred to as "HIN"), fax, and/or telephone, to each IPA, if
applicable, when agreed upon Xxxxxxxx & Xxxxxxxxx designated length of stay(s)
falls out of range. Notification shall be given to both the IPA's case managers
and the Director of Medical Management.
2.07 REPORTS
A. TPA shall provide to Patient's Choice, on diskette, a Physician/Provider
Directory from information supplied by CompHealth, a credentialing
verification organization.
B. TPA shall prepare and provide to Patient's Choice the following reports:
1. Disbursements/reimbursements made to or on behalf of participants.
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2. Total number of claims received during a specific month and
turnaround time to process. Claims to be broken down according to
type of Plan Covered Person is enrolled in; HMO or PPO.
3. Eligibility: Total number of lives on the last day of each month.
4. Breakdown by specific IPA of the total number of Milliman & Xxxxxxxxx
designated length of stays falling out of range.
5. Phone statistics: Total number of calls that come into TPA for
specific month broken down by type of question(s).
6. Ad-hoc or focus reports shall be generated in consultation with
Patient's Choice.
7. Failure of Patient's Choice to object, in writing, to any reports
delivered to it by TPA within thirty (30) days of the date of mailing
shall constitute Patient's Choice's approval of TPA's acts and
information described therein.
2.08 RESPONSE PERFORMANCE STANDARDS
A. Telephone Response Time: TPA shall respond to 90% of all status
inquiries, eligibility, and provider relations phone calls not answered
live, within 6 hours and 100% within two (2) business days or forty-
eight (48) hours.
B. Mail Response Time: All correspondence shall be responded to within ten
(10) business days of receipt.
C. Member Concerns Response Time: TPA shall coordinate with Patient's
Choice to respond to Member concerns regarding providers within three
(3) business days or seventy-two (72) hours of receipt.
D. Claims Investigation Response Time: TPA shall coordinate with Patient's
Choice to respond to providers or Members regarding claims payments
issues within three (3) business days or seventy-two (72) hours of
receipt. TPA shall verify provider contract and utilization management
information necessary to make a determination of claims payment
accuracy.
E. Utilization Management Issues: TPA shall report and respond to
utilization management issues for all sources within three (3) business
days or seventy-two (72) hours.
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2.09 RECORDS AND CONFIDENTIALITY
A. TPA shall maintain, at its office, adequate Plan records, in such form
as may be convenient to TPA, whether hard copy, electronic data, or any
other format, regarding all transactions in which TPA engages relating
to the Plan. All records that identify a Member are confidential.
B. TPA and Patient's Choice shall allow each other reasonable access to
Plan records. TPA shall, with thirty (30) days written notice from
Patient's Choice, allow Patient's Choice or its authorized agent to
inspect or audit all records and files maintained by TPA at the office
of TPA during normal business hours. Patient's Choice shall be
responsible for all costs associated with the inspection or audit. Any
agent or auditor that has access to the records and files maintained by
TPA shall agree not to disclose any proprietary or confidential
information of TPA.
C. Plan records shall be maintained for Plan year to which they relate and
for the seven (7) year period following such Plan year, regardless of
the date of termination of this Agreement. TPA shall maintain the Plan
records in accordance with prudent standards of insurance record-keeping
and in accordance with (S) 6.03 (D) infra.
D. TPA and Patient's Choice shall comply with applicable laws and
regulations of the State of Louisiana regarding confidentiality or
privacy of all records and other Plan records and to cooperate to ensure
such compliance.
E. During the time Plan records are in its custody or control, TPA shall
take all reasonable precautions to prevent disclosure or use for a
purpose unrelated to administration of the Plan. TPA shall disclose such
information only:
(i) in response to a court order,
(ii) for an examination conducted by an authorized state governmental
authority, or by the federal government under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
(iii) to or at the expressed written request of Patient's Choice, or
(iv) with written consent of Plan participant or his/her legal
representative.
F. The applicable state insurance departments and other regulatory bodies
may have access to such records as often as necessary for the purpose of
examination, audit, and inspection, providing advanced written notice of
five (5) business days is given.
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G. Each party to this Agreement agrees that all information provided it by
the other party and not otherwise available to the public shall be held
and maintained by such party, its employees, agents, and affiliates, in
the strictest confidence and shall not be divulged in any way, either
directly or indirectly, without the prior written consent of the other
party. Upon termination of this Agreement, all such information shall be
returned to the party from which it was received or shall be destroyed.
If the information is of such a character that it cannot reasonably be
returned to the other party and is destroyed by the party holding the
information pursuant to this Article, the party so holding the
information shall provide affidavits in a form reasonably satisfactory
to the other party attesting to the proper destruction of such.
2.10 COMMISSION PAYMENT
TPA shall pay all commissions associated with the sale of the Plan(s) to selling
broker and agents appointed and in accordance with commission rates prescribed
by Patient's Choice. Such payments will be made from an account established by
and in the name of Patient's Choice, which will from time to time deposit
sufficient funds in such account for the payment of commissions by TPA.
2.11 CLAIM ADJUSTMENTS
TPA shall perform all adjustments, refunding and payment of prescribed bonuses,
if any, to Participating Provider physicians on a quarterly basis; provided,
however, that no such adjustments shall be made or bonuses paid from Patient's
Choice Regional IPA distribution pools for the first 12 months during which the
Plan is operative. In connection with such quarterly adjustments and payments,
TPA shall provide to Patient's Choice and each Regional IPA a profile of
Participating Providers utilization relative to other Participating Providers
within a Regional IPA and of each Regional IPAs utilization relative to the
other Regional IPAs.
2.12 GOVERNMENTAL AUDITS
If Patient's Choice is investigated or audited by any state or federal
governmental agency, TPA shall fully cooperate with such agency's reasonable and
lawful requests for information. Any and all costs of such investigation shall
be paid by Patient's Choice.
2.13 INSURANCE
TPA shall, at all times, maintain Third Party Administrators Professional
Liability Insurance of with indemnity limits of not less than One Million
Dollars And No/100 ($1,000,000.00) for each wrongful act or series of
continuous, repeated, or interrelated
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wrongful acts and One Million Dollars And No/100 ($1,000,000.00) aggregate, and
shall, within thirty (30) days of a written request, present evidence of such to
Patient's Choice.
2.14 LICENSURE
TPA shall be a licensed TPA in the State of Louisiana and shall maintain such
licensure, at its expense, throughout the term of this Agreement.
ARTICLE III
DUTIES AND RESPONSIBILITIES OF PATIENT'S CHOICE
3.01 PROVISION OF INFORMATION
Patient's Choice shall provide eligibility and all other necessary Plan data to
TPA in a computer format compatible with the BMS claims paying system.
On a timely basis, but not later than the tenth (10th) day of each month,
Patient's Choice shall provide TPA with information which shall permit TPA
to identify all individuals entitled to participate in the Plan.
3.02 DISTRIBUTION OF INFORMATION
Patient's Choice shall distribute to all Covered Persons all necessary Plan
documents and materials, including summary Plan descriptions, Plan amendments,
identification cards, enrollment forms, and applications and notice forms, as
may be necessary for the operation of the Plan or to satisfy the requirements of
all applicable laws and regulations of the State of Louisiana. Furthermore,
Patient's Choice shall direct Plan Members to present the identification card to
contracting providers at the time medical services are received.
3.03 COLLECTION OF IDENTIFICATION CARDS
If an individual ceases to be eligible for benefits under the Plan, Patient's
Choice shall make reasonable efforts to collect and destroy such individual's
Plan identification cards by the date the individual ceases to be eligible to
participate in the Plan. Patient's Choice, and not TPA, shall be liable for any
and all claims resulting from failure of Patient's Choice to collect
identification cards as required by this Section.
3.04 ELIGIBILITY: DETERMINATION OF BENEFITS
Patient's Choice shall have sole authority to determine which persons/
individuals are eligible to receive benefits under the Plan. Moreover, Patient's
Choice shall have final authority in establishing the terms and conditions of
the Plan. However, Patient's Choice acknowledges that any stop loss insurance
policy issued to Patient's Choice may limit
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coverage to claims eligible and paid under the written terms and conditions of
the policy. TPA shall not be liable for claims paid in good faith reliance on
eligibility information provided to or acts or omissions not provided to TPA by
Patient's Choice, its agents, representative, or any other legal entity.
3.05 ADMINISTRATIVE FEES AND OTHER COSTS
A. Patient's Choice shall pay TPA each month all fees described in (SS)
8.01-8.04 infra of this Agreement.
B. TPA and Patient's Choice have agreed not to adjust TPA administrative
fees for the first term of this Agreement.
C. Patient's Choice shall pay TPA monthly based upon Patient's Choice
records of current enrollment in the Plan as of the first (1st) day of
each month.
D. Patient's Choice shall pay TPA all monthly fees by the tenth (10th) day
of the month following the month to which they relate, as provided in
(S) 3.06 hereof.
E. Patient's Choice shall reimburse TPA for any set-up and start-up fees
and costs incurred and paid by TPA for software programming and
customization necessary to configure its systems to perform the
functions to be provided by TPA hereunder, up to a maximum of ONE
HUNDRED TWENTY FIVE THOUSAND DOLLARS AND NO/100 ($125,000.00). Prior to
or concurrently with execution of this Agreement, Patient's Choice
shall advance such amount to TPA, to be credited by TPA against such
expenses. TPA shall furnish Patient's Choice with a written itemization
of any costs so incurred by TPA and to the extent that such costs are
less than $125,000, TPA shall refund the difference to Patient's Choice
or credit the difference against other fees and costs due TPA from
Patient's Choice, as the parties may agree.
F. Patient's Choice shall be responsible for payment of costs for
identification cards and all Plan materials.
3.06 PAYMENT OF ADMINISTRATIVE FEES AND REIMBURSABLE COSTS
The administrative fees and reimbursable costs payable to TPA by Patient's
Choice for its service under this Agreement, as provided by (S) 3.05 and
8.01-8.04 hereof, shall be invoiced monthly by TPA by the tenth day of each
month with respect to Patient Choice's enrollment as of the first of such month,
and paid monthly by Patient's Choice by the tenth (10th) day of the month
following its receipt of such written invoice from TPA
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itemizing the applicable administrative fees for the month and all costs
incurred by TPA which are reimbursable hereunder.
3.07 CLAIMS PAYMENT ACCOUNT
Patient's Choice shall establish and maintain a blank account in the name of
itself (hereinafter referred to as "Payment Account") during the term of this
Agreement. Patient's Choice shall fund the Payment Account from its general
assets only on an as needed basis to ensure that the Payment Account contains
sufficient funds to pay claims for benefits of Covered Persons under the Plan.
Funds in the Payment Account shall remain the property of Patient's Choice
except as required under applicable laws of the State of Louisiana.
3.08 PROVIDER CREDENTIALING
Patient's Choice, together with its contracted CVO, if any, shall be solely
responsible for credentialing and contracting providers for the Plan. Moreover,
Patient's Choice shall maintain and manage such credentialing.
3.09 NOTIFICATION OF SALE
Patient's Choice shall be solely responsible for notifying TPA of any and all
sales of the Plan(s).
3.10 LICENSURE
Patient's Choice shall be licensed and maintain a certificate of authority in
the State of Louisiana as an HMO, at its expense, throughout the term of this
Agreement.
3.11 COMPLIANCE WITH THE LAW
Patient's Choice shall comply with all legal requirements applicable to the Plan
and shall satisfy any and all reporting, notice, disclosure and filing
requirements imposed by all applicable laws and regulations.
ARTICLE IV
FUNDING
4.01 RECEIPT OF FUNDS
All funds received by TPA for or on behalf of Patient's Choice shall be
deposited by TPA in a Patient's Choice trust account, except for funds received
by TPA from Patient's
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Choice designated as payment for administrative fees and costs payable to TPA
under this Agreement.
4.02 REMITTANCE OF FUNDS
On receipt of funds from Patient's Choice, TPA shall promptly deposit the funds
in the Payment Account.
4.03 PLAN RECOVERIES
TPA shall promptly deposit the net amount of all coordination of benefits
recoveries, duplicate payment recoveries, subrogation and similar recoveries
received by TPA for the benefit of Patient's Choice into the Payment Account.
4.04 PAYMENT ACCOUNT RECORDS
A. TPA shall keep records that reflect separately any and all deposits and
withdrawals from the Payment Account on behalf of Patient's Choice.
B. TPA shall maintain copies of these records at its corporate
headquarters.
C. TPA shall at the request and expense of Patient's Choice furnish copies
of the records relating to deposits and withdrawal on its behalf.
Originals will be furnished upon request of such at no additional
expense to Patient's Choice.
4.05 WITHDRAWALS FROM PAYMENT ACCOUNT
Patient's Choice authorizes TPA to make withdrawals from Payment Account for any
of the following purposes to the extent permissible under applicable law:
(1) Payment of benefits under the Plan;
(2) Transfer to and deposit in claims paying account(s) maintained by TPA
for payment of claims as provided under this Agreement. See Article
II, supra. Payments shall be on checks identifying Patient's Choice
and drawn on such claims paying account(s);
(3) Payment to Patient's Choice upon its request; and
(4) Deposit in an account controlled and maintained in the name of
Patient's Choice upon its request.
(5) Any and all checks, remittances or withdrawals over Twenty-Five
Thousand and No/100 Dollars ($25,000.00) shall require two (2)
signatures, one of which must be that of a Patient's Choice officer.
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ARTICLE V
LIMITS OF LIABILITY
5.01 FUNDING
TPA is not responsible or liable for the funding of claims for benefits under
the Plan or the payment of fees to third parties providing services or products
provided to Patient's Choice.
5.02 RELIANCE ON DATA
TPA is not responsible or liable for any acts or omissions made pursuant to any
direction, consent or other request reasonably believed by TPA to be genuine and
from an authorized representative or agent of Patient's Choice. Moreover, TPA is
not responsible or liable for any acts or omissions made in reliance on
erroneous data provided by Patient's Choice or any other person or the failure
of Patient's Choice to perform its obligations under this Agreement.
5.03 CLAIMS PROCESSING
TPA shall use its best efforts, consistent with industry standards, to correctly
process claims and pay in accordance with the Plan and information provided by
Patient's Choice. Patient's Choice acknowledges that, because of the great
volume of claims processed by TPA administrative errors may occur. Should
errors occur, TPA shall correct such, within industry standards.
5.04 INDEMNIFICATION/HOLD HARMLESS
A. TPA shall indemnify Patient's Choice and hold Patient's Choice harmless
against any and all claims, actions, assessments, charges and expenses,
including court costs and attorneys' fees, and against all liabilities,
loses, damages of any nature and settlements, judgements or awards,
whether compensatory, extracontractual or punitive, that Patient's
Choice shall sustain or be put to by reason of any act or omission of
TPA or its agents, employees, officers and directors or any breach by
TPA of the terms of this Agreement, except as such acts or omissions
are in response to written instructions by Patient's Choice, in which
case Patient's Choice shall indemnify TPA and hold it harmless.
B. Patient's Choice shall indemnify TPA and hold TPA harmless against any
and all claims, actions, assessments, charges and expenses, including
court costs and attorneys' fees, and against all liabilities, loses,
damages of any nature and settlements, judgments or awards, whether
compensatory, extracontractual or punitive, that TPA shall sustain or
be put to by reason of any
TPA Benefits Agreement--Louisiana
MANAGED CARE THIRD PARTY
CONSULTANTS, INC. ADMINISTRATION AGREEMENT 15
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act or omission of Patient's Choice or its agents, employees, officers
and directors or any breach by Patient's Choice or the terms of this
Agreement, except as such acts or omissions are in response to written
instructions by TPA, in which case TPA shall indemnify Patient's Choice
and hold it harmless.
ARTICLE VI
TERM AND TERMINATION
6.01 TERM OF AGREEMENT
This Agreement shall begin on the Effective Date, as noted supra, shall remain
in effect for a period of twenty-four (24) months or two (2) years, provided,
however, that this Agreement will be automatically renewed thereafter for
successive one-year terms unless either party hereto gives written notice to the
other, 90 days prior to the conclusion of its initial term or 60 days prior to
the conclusion of any extended term, that the Agreement will be terminated at
the end of its initial term or any subsequent one-year term.
6.02 TERMINATION
A. Without Cause. This Agreement may be terminated at any time without
cause or prejudice upon one hundred twenty (120) days prior written
notice by either party.
B. For Cause. TPA or Patient's Choice may terminate this Agreement at any
time for cause. Cause for termination includes, but is not limited to,
the following:
1. Failure of Patient's Choice or TPA to maintain licenses or
certifications required to operate in conformity with this
Agreement, or to comply with applicable laws and regulations.
2. Material failure of TPA, when acting as Payor, to make required
compensation to Plan Members under the Plan.
3. Material breach of this Agreement by either party.
4. Insolvency of either party.
5. Commission or omission of any act or any conduct or allegation of
conduct for which either parties license or certification is
subject to revocation or suspension.
6. Failure of Patient's Choice or TPA to maintain required liability
coverage protection.
TPA Benefits Agreement--Louisiana
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7. Failure by Patient's Choice or TPA to comply with (S)2.08, Records
and Confidentiality.
Any occurrence under paragraph (1) above shall be grounds for
immediate termination. Termination for any other reason set forth
above shall be upon sixty (60) days prior written notice by the
terminating party unless said reason for termination is cured to
the satisfaction of the terminating party within said sixty (60)
day period.
6.03 OBLIGATIONS UPON TERMINATION
A. Termination of this Agreement by either party shall not terminate
Patient's Choice's obligation to pay or fund any amounts for which
Patient's Choice is or becomes liable pursuant to the provisions of the
Plan or this Agreement. If Patient's Choice terminates this Agreement
other than in accordance with (S)6.02 supra, Patient's Choice shall be
obligated to pay, as liquidated damages, the fees due TPA through and
including the subsequent year or the following anniversary date. Except
as provided in Subsections (B) and (C), infra, all obligations of TPA
for administration services under this Agreement shall end on the
effective date of termination of this Agreement.
B. In the event that this Agreement is terminated, TPA shall remain
obligated to process and pay claims which have been incurred by
Patient's Choice and which have been submitted to and received by TPA
on or before the effective date of termination or within 20 days
thereafter. Patient's Choice will compensate TPA on a pro rata basis
for its services during such runout period. The terms and conditions of
this Agreement shall govern any such processing except as otherwise
agreed.
C. Upon termination by either party, TPA shall, within thirty (30) days of
the termination of services under this Agreement, deliver to Patient's
Choice pending claims and eligibility database of the Plan.
Furthermore, TPA shall, upon the written request and at the expense of
Patient's Choice, provide other information regarding the Plan to the
extent reasonably available to TPA.
D. At Patient's Choice's request and expense, Plan records shall be
returned to Patient's Choice not more than 30 days following
termination of this Agreement. TPA may deliver the Plan records to the
successor administrator or, if there is no successor administrator, to
Patient's Choice and give any required written notice to appropriate
governmental authorities of the location of Plan records.
TPA Benefits Agreement--Louisiana
MANAGED CARE THIRD PARTY
CONSULTANTS, INC. ADMINISTRATION AGREEMENT 17
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ARTICLE VII
MISCELLANEOUS OBLIGATIONS
7.01 INDEPENDENT CONTRACTOR RELATIONSHIP
A. TPA is an independent contractor. Nothing contained in this Agreement
shall create, or shall be constituted to create, a relationship of
employer or employee between Patient's Choice and TPA, nor shall TPA's
employees be considered employees of Patient's Choice for any purpose.
B. Neither party may act on behalf of the other party, except as provided
in this Agreement, and neither party may bind or execute a release on
behalf of the other party, except as authorized in writing by the other
party.
C. All communications by TPA on behalf of Patient's Choice as authorized
by this Agreement, whether with Plan Members, Participating Providers
or other persons, firms or entities, shall be identified with and made
in the name of Patient's Choice or such other name in which Patient's
Choice elects to do business and so advises TPA.
7.02 FORM OF AGREEMENT
A. Headings are intended for purposes of description only and shall not be
used for purposes of interpretation of this Agreement.
B. Any reference to the singular shall include reference to the plural and
vise versa.
7.03 PROPRIETARY RIGHTS
A. All computer software, courseware, and manuals developed by TPA and its
computer vendor or its affiliate organizations shall be the property of
TPA or such organizations, which shall be the sole determiner of is use
and distribution, subject to the terms of this Agreement, including but
not limited to, those relating to confidentiality of data.
B. All data shall be the sole property of Patient's Choice. No use of
detail or aggregate data will be permitted unless specifically
authorized in writing by Patient's Choice.
7.04 ASSIGNMENT AND DELEGATION OF DUTIES
Neither Patient's Choice nor TPA may assign duties, rights, or interests under
this Agreement unless the other party shall so approve by written consent.
Consent shall not be unreasonably withheld.
TPA Benefits Agreement--Louisiana
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7.05 INTERPRETATION
The validity, enforceability and interpretation of this Agreement shall be
governed by any applicable federal law and by the applicable laws of the State
of Louisiana.
7.06 AMENDMENT
This Agreement may not be amended except by written instrument executed by TPA
and Patient's Choice.
7.07 ENTIRE CONTRACT
This Agreement constitutes the entire Agreement between the parties, relating to
the subject matter hereof, and supersedes all prior and contemporaneous
Agreements and understandings of the parties in connection therewith.
7.08 USE OF NAME
Patient's Choice agrees that TPA may include descriptive information relating to
Patient's Choice in literature distributed to existing or potential clients.
Such information shall include, but not be limited to, IPA's name, telephone
number, address, and specialty. In turn, Patient's Choice may use descriptive
information as it relates to TPA.
7.9 ENFORCEABILITY AND WAIVER
The invalidity and unenforceability of any term or provision of this Agreement
shall in no way affect the validity or enforceability of any other term or
provision. The waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed as a waiver of any subsequent
breach thereof.
7.10 REGULATORY APPROVAL
In the event that Patient's Choice has not received a Certificate of Authority
to engage in business as a health maintenance organization in Louisiana prior to
the execution of this Agreement, this Agreement shall be deemed to be a binding
letter of intent. In such event, the letter shall become executed on the date
such regulatory approval is obtained. If Patient's Choice is unable to obtain
such licensure or approval after due diligence, Patient's Choice shall notify
TPA and both parties shall be released from any liability under this Agreement.
7.11 DISPUTE RESOLUTION
a. The parties shall first attempt to resolve any disputes that may rise
between the parties in the usual course of business.
TPA Benefits Agreement--Louisiana
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B. Should the dispute not be resolved through the aforementioned process,
the parties shall refer the dispute, controversy or question arising
under this Agreement to an arbitrator selected by the parties. The
proceeding shall be governed by the Rules of American Arbitration
Association then in effect, and shall be held in the jurisdiction of
Patient's Choice. If the parties are unable to agree upon such an
arbitrator within thirty (30) days after either party has given the
other party written notice of its desire to submit the dispute,
controversy or question for decision, then either party may apply to
the American Arbitration Association for the appointment of an
arbitrator or, if such Association is not then in existence or does not
desire to act in the matter, each party shall appoint an arbitrator of
its choice. The appointed arbitrators will select a third arbitrator
and the panel of three arbitrators will hear the parties and settle the
dispute, controversy or question. Each party shall assume its own
costs, but the compensation and expenses of the arbitrator(s) and any
administrative fees or costs associated with the arbitration proceeding
shall be borne equally by the parties. Arbitration shall be the
exclusive remedy for the settlement of disputes arising under this
Agreement. The decision of the arbitrator(s) shall be final, conclusive
and binding, and no action at law or in equity may be instituted by
either party other than to enforce the award of the arbitrator(s).
Judgment upon the award rendered by the arbitrator(s) may be entered in
any court of competent jurisdiction.
7.12 NOTICES
Any notice or other communication required by this Agreement shall be given in
writing and shall be deemed given on the date of actual delivery thereof by
personal delivery against written receipt therefor, by certified
return-receipt-requested mail, by facsimile, by commercial express delivery
service or by any other means generating written documentation of delivery and
receipt, addressed as follows:
If To: Patient's Choice, Inc. and/or MD HealthShares Corporation:
Xxxxx 0000
000. Xx. Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
TPA:
Xxx Xxxxxxxx, BSN, RN
President
Managed Care Consultants, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
TPA Benefits Agreement--Louisiana
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CONSULTANTS, INC. ADMINISTRATION AGREEMENT 20
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By notice given hereunder, either party may designate any different or
additional addresses at which subsequent notice shall be given.
7.13 FORCE MAJEURE
The failure of either party to perform its obligations under this Agreement due
to occurrences or contingencies beyond the reasonable control of such party,
such as fire, flood, acts of God, shall not constitute a default or breach of
this Agreement.
7.14 RESIDENT AGENT
Patient's Choice agrees to serve as the resident agent for service of process of
TPA in the State of Louisiana.
ARTICLE VIII
PRICING
8.01 In consideration for TPA providing all of the services specified in this
Agreement, Patient's Choice shall compensate TPA as follows:
SERVICES FEE
HMO: Administrative $7.60 PMPM
PPO: Reimbursement
1. Medical Management:
a. UM-telephone concurrent review $2.00
b. Case Management
2. Precertification:
Hospital admission and
outpatient surgeries $1.00PMPM
3. Repricing
a. Per claim $1.00
b. PEPM $2.00
8.02 Patient's Choice shall be solely Cost plus 15% for support
responsible for all Cost plus 15% for support and maintenance
telecommunications costs, including the cost
for and maintenance both hardware and software
of and 800 line, leasing telephone lines between
TPA and the six (6) Regional IPAs.
TPA Benefits Agreement--Louisiana
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8.03 Patient's Choice shall be solely responsible Actual cost
for paper costs and postage costs associated
with the transmittal of EOBs to appropriate IPAs.
8.04 Should Patient's Choice request TPA to produce To be determined
and distribute its Physician/Provider Directory,
additional fees shall be assessed to Patient's
Choice.
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement as of the EFFECTIVE DATE.
EXECUTED DATE MANAGED CARE CONSULTANTS, INC.,
THIRD PARTY ADMINISTRATION
_____________________ By: /S/ Xxx Xxxxxxxx
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Xxx Xxxxxxxx
President
Date: 1-13-97
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PATIENT'S CHOICE, INC.
By: /S/ Xxxxxxx X. Xxxxxx, M.D.
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Xxxxxxx X. Xxxxxx, M.D.
President
Date: 1-9-97
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MD HEALTHSHARES CORPORATION
By: /S/ Xxxxx X. Xxxxx, III, M.D.
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Xxxxx X. Xxxxx, III, M.D.
President
Date: 1-8-97
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TPA Benefits Agreement--Louisiana
