EXHIBIT 10.3
MEDICAL DIRECTOR SERVICES AGREEMENT
THIS MEDICAL DIRECTOR SERVICES AGREEMENT (the "Agreement") is made and
entered into this 14th day of August 2003, effective as of the February 12,
2003, by and between RENAL CARE GROUP TEXAS, INC., a Texas corporation (the
"Company"), and TYLER NEPHROLOGY ASSOCIATES, P.A., a Texas professional
corporation (the "Practice"). In addition, each Practice Physician, as defined
below, has executed the attached Physician Joinder and by which each such
Practice Physician has agreed to be bound by certain terms of this Agreement as
provided in the Physician Joinder.
W I T N E S S E T H:
WHEREAS, the Company owns and operates the renal dialysis facilities at
the addresses shown on EXHIBIT A (collectively, the "Facilities" and,
individually, the "Facility"), which provide outpatient and home dialysis
services;
WHEREAS, the Facilities are outpatient dialysis facilities certified by
the Center for Medicare and Medicaid Services ("CMS") for payment under the
Medicare program, which program requires each Facility to obtain the services of
a physician or group of physicians to perform prescribed medical director
services for such Facility;
WHEREAS, the Company desires to engage one or more nephrologists skilled
in dialysis center administration to provide medical director services at the
Facilities in accordance with the requirements established by CMS and as
provided in this Agreement;
WHEREAS, the Practice desires and is qualified to provide the medical
director services contemplated by this Agreement to the Facilities through one
or more of its Practice Physicians, each of whom will be licensed to Practice
medicine and prescribe drugs without restriction in the State of Texas, will
specialize in nephrology and dialysis services and will be experienced in
dialysis center administration.
NOW, THEREFORE, in consideration of the premises set forth above and the
mutual covenants and agreements of the parties set forth in this Agreement, the
receipt and sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE I
ENGAGEMENT AND SERVICES
1.1 Engagement. The Company engages the Practice to provide, and the
Practice shall provide, services for the Company as medical director of the
Facilities in accordance with the requirements of applicable CMS regulations
(including, without limitation, 42 C.F.R. Section 405.2100 et seq. and any
successor regulations) and all applicable state regulations, as the same may be
amended or supplemented, together with such other services as are customarily
performed by medical directors at high quality dialysis facilities and such
other tasks related to the oversight of dialysis treatments administered at the
Facilities as the Company may from time to time reasonably designate.
1.2 Responsibilities. Without limiting the generality of this Article I,
the Practice shall provide the medical director services described in EXHIBIT B,
which may be revised and updated from time to time by the Company, provided that
any change that is not a CMS or other legal requirement must first be approved
by the Practice if it increases the medical director duties hereunder.
1.3 Principal Contact. The Practice shall from time to time designate in
writing to the Company a Practice Physician to serve as the principal contact at
each Facility and who shall provide or arrange for the provision of the services
required hereunder, and who shall serve as the principal contact for a period of
no less than 12 months. The Practice may change the designation of the principal
contact with the written consent of the Company (such written consent not to be
unreasonably withheld or delayed); provided that the Practice will not change
the principal contact more often than once per 12-month period, unless the
principal contact dies, becomes disabled, leaves the Practice or experiences
other exigent circumstances. The initial principal contact for each Facility is
set forth on Exhibit A.
1.4 Patient Care Manual. The Practice shall advise the Company in
developing, maintaining and implementing a patient care policy and procedures
manual for each Facility describing:
(a) The types of dialysis used in the Facility and the procedures to
be followed in performing each type of dialysis;
(b) Procedures for implementing universal precautions for the
prevention of disease transmission;
(c) Procedures for properly handling blood-borne and infectious
pathogens; and
(d) A disaster readiness plan.
1.5 Records. The Company and the Practice acknowledge that attending
physicians have medical responsibility for the content of medical records of
each Facility and that the head nurse of each Facility has operational
responsibility for the day-to-day maintenance of such Facility's records. The
Company, through a medical records supervisor designated for the Facility, with
the assistance and support of the Practice, shall oversee the maintenance of
current medical and business records relating to the care and treatment of
patients in the Facilities in accordance with Company policies and applicable
regulations of governmental agencies, including:
(a) Patient long-term care plans, patient short-term care plans and
medical histories;
(b) Results of physical examinations and laboratory tests; and
(c) Progress notes by all patient care staff, and complete and legibly
signed orders and discharge summaries.
1.6 Documentation. The Practice and Practice Physicians who provide
services hereunder shall maintain, and provide to the Company upon request,
reasonably complete and detailed documentation of the time spent and services
performed in providing medical director services under this Agreement. This
documentation shall be maintained in a form reasonably satisfactory to or
prescribed by the Company.
1.7 Medical Staff. The Practice shall review the applications of
physicians requesting to attend to patients at each Facility and forward a
recommendation concerning such applications to the body making credentialing
decisions for the Facility under its Professional Staff Bylaws. Subject to each
Facility's Professional Staff Bylaws, the Practice shall maintain oversight of
all disciplinary actions with regard to any matter of such physicians or patient
care personnel as needed to assure the quality of services and conformity to
Company and Facility rules and policies.
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1.8 Coverage. The Practice shall make available one or more Practice
Physicians, as appropriate, to provide medical director services at each
Facility for its hours of operation. The Practice and the Company shall confer
from time to time in good faith concerning the appropriate level of physician
coverage to provide medical director services hereunder.
1.9 Practice Physicians. (a) The Practice represents and warrants that all
physicians who as of the date of this Agreement meet the definition of a
Practice Physician have executed the Physician Joinder attached hereto. As a
condition to engaging any physician in a manner that causes such physician to
become a Practice Physician, the Practice shall obtain the signature of such
physician on the Physician Joinder in consideration for such engagement the fees
payable to the Practice hereunder.
(b) For purposes of this Agreement, the term "Practice Physician"
means any physician who is a physician performing services on behalf of the
Practice at any of the Facilities (whether as an employee, partner, member,
shareholder or independent contractor of the Practice), any other physician
performing services on behalf of the Practice hereunder (as may be approved by
the Company), and any other physician in any way affiliated or associated with
the Practice, or regularly seeing patients of the Practice (other than on a
covering or locum tenens basis).
1.10 No Required Referrals. Notwithstanding any other provision of this
Agreement, each of the Company, the Practice and the Practice Physicians
acknowledges and agrees that neither the Practice nor any Practice Physician is
required to make referrals of patients to the Company or any affiliate of the
Company or to the Facilities. Each of the Practice Physicians is free to
maintain professional staff privileges at any dialysis facility, to refer
patients to any other facility for dialysis or other services, and, subject to
Article VII, otherwise to perform professional medical services at or through
any entity, whether or not it is competing with any Facility, the Company or
with any affiliates of the Company.
1.11 Supervising Nurse. The Company shall provide a full-time nurse to
manage the provision of patient care in each Facility. The Practice may delegate
to the supervising nurse the responsibility for the execution of patient care
policies on a day-to-day basis, and the principal contact will provide medical
guidance to the supervising nurse in the execution of these duties; provided,
however, that the Practice may only delegate to the supervising nurse duties
covered by this Agreement.
ARTICLE II
TERM AND TERMINATION
2.1 Initial and Renewal Terms. This Agreement is effective as of February
12, 2003, (the "Effective Date") and shall remain in full force and effect until
12:00 p.m. midnight on the seventh anniversary of the Effective Date (the
"Initial Term"), unless earlier terminated as provided in this Article II. This
Agreement shall automatically renew for additional successive terms of three
years each (the "Renewal Terms"), unless either party gives written notice of
non-renewal to the other party not less than 90 days prior to the expiration of
the Initial Term or then-current Renewal Term, as applicable. If such notice is
given, this Agreement shall expire as of the last day of the Initial Term or the
then-current Renewal Term, as applicable.
2.2 Termination By Agreement. The Company and the Practice may agree in
writing signed by both parties to terminate this Agreement at a time and date
stipulated in such writing.
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2.3 Termination by the Practice for Cause. (a) The Practice may during the
Initial Term or any Renewal Term terminate this Agreement upon written notice to
the Company in the event of the occurrence of any of the following:
(i) material breach of any covenant, agreement, term,
representation or warranty of the Company in this Agreement or the failure of
any representation or warranty of the Company in this Agreement to be true and
correct in all material respects when made or deemed made hereunder, which
breach or failure, if susceptible of cure, continues uncured for 30 days after
the Practice gives written notice of such breach or failure of the Company, any
notice of breach or failure will describe such breach or failure with reasonable
particularity;
(ii) the revocation of the Medicare certification of the Facility
or the exclusion of the Company from participation in the Medicare or Medicaid
program which exclusion or revocation has not been cured, stayed or rescinded
within 90 days;
(iii) any felony conviction (including a plea of nolo contendere)
of any officer of management-level employee of the Company relating to the
provision of health care services at the Facility;
(iv) dishonesty, misappropriation of property, or false or
defamatory disparagement of the Practice or any of its medical staff,
affiliates, representatives or employees;
(v) the failure of the Company reasonably to consider or
reasonably to act upon a written request by the Practice that the Company
provide equipment, personnel or training for personnel necessary to operate the
Facility in accordance with applicable law and the conditions of participation
in the Medicare program, which failure continues for 30 days after the Practice
gives the Company notice written notice that the Practice intends to terminate
this Agreement under this Section 2.3(a)(v); or
(vi) the existence of an immediate threat to the health or safety
of any patient receiving treatment at the Facility, which threats results from
any act or omission of the Company or any of its employees (and not from any act
or omission of the Practice).
(b) Upon the occurrence of any event described in Section 2.3(a)(iii),
or 2.3(a)(iv), the Practice shall not terminate this Agreement, if, within 30
days after the Practice gives the Company written notice of the action or event
giving the Practice the right to terminate this Agreement, the Company agrees
that the individual who is the subject of such cause will not have any further
involvement with the Facilities.
2.4 Termination by the Company.
(a) The Company may during the Initial Term or any Renewal Term
terminate this Agreement upon written notice to the Practice in the event of the
occurrence of any of the following with respect to the Practice or any one of
the Practice Physicians:
(i) dishonesty, misappropriation of property, disparagement of
the Company, any Facility or Renal Care Group, Inc., the parent company of the
Company ("RCG"), or any of their affiliates, representatives or employees;
(ii) negligence in the performance of any duty or responsibility
as medical director under this Agreement, which negligence was not occasioned in
whole or in part by any negligence by the
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management or employees of the Company, the Facilities or RCG, and which
negligence results in substantial harm to the reputation or ongoing ability to
conduct the business of the Facility or the Company;
(iii)suspension, revocation or limitation of the licenses or
authorizations required to be maintained by the Practice or the Practice
Physicians;
(iv) exclusion of the Practice or any Practice Physician from
participation under Medicare, Medicaid or any other federal health benefits
program;
(v) revocation, suspension, probation, removal or resignation
under investigation of any Practice Physician from membership or privileges on
the medical staff of any Facility or of any other health care facility at which
such Practice Physician has medical staff privileges;
(vi) the existence of an immediate threat to the health or safety
of any patient receiving treatment at any Facility, which threat results from
any act or omission of the Practice or any Practice Physician;
(vii) the requirement, or threatened requirement, by any federal
or state agency having jurisdiction over the Company or any Facility that the
Practice or any Practice Physician cease to provide medical director services at
a Facility;
(viii) commission or conviction, including a plea of nolo
contendere, of any felony or of any crime involving moral turpitude; or
(ix) material breach of any covenant, agreement, term,
representation or warranty of the Practice or any Practice Physician in this
Agreement or the failure of any representation or warranty of the Practice in
this Agreement to be true and correct in all material respects when made or
deemed made hereunder, which breach or failure, if susceptible of cure,
continues uncured for 30 days after the Company gives written notice of such
breach or failure to the Practice; any notice of breach will describe such
breach with reasonable particularity.
(b) Upon the occurrence of any event described in paragraph (a) of
this Section 2.4 that is the result of an act or omission of one or more
specific Practice Physicians who do not constitute a majority of the Practice
Physicians then providing services hereunder, the Company shall not terminate
this Agreement if, within 30 days after the Company gives the Practice written
notice of the act or omission giving the Company the right to terminate this
Agreement, the Practice agrees that any Practice Physician who is the subject of
such cause will not provide further services under this Agreement and, if
requested by the Company, that the Practice will use its best efforts to cause
such physician to resign the privileges of such Practice Physician to attend
patients at the Facilities.
(c) Upon the occurrence of any event described in paragraph (a) of
this Section 2.4, the Company shall have, in addition to the right to terminate
this Agreement, the right to suspend the Practice from providing services under
this Agreement for a period of up to one year. In the event of any such
suspension, this Agreement shall remain in force, except that (i) the Practice
will not be required to perform services required under this Agreement, (ii) the
Company will not be required to pay the compensation contemplated by this
Agreement, and (iii) the term of this Agreement shall not be extended by the
occurrence of such suspension. At any time during or at the end of any such
period of suspension, the Company may elect to terminate this Agreement.
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2.5 Effect of Termination or Expiration. Upon and following the expiration
of this Agreement or its termination for any reason, the Practice shall not
interfere with any efforts by the Company to contract with any other individual
or entity for the provision of medical director services. Expiration or
termination of this Agreement shall not affect any rights or obligations of the
parties accruing hereunder through the date of expiration or termination,
including the Company's obligation to compensate Practice for medical director
services pro-rated through such date, and such rights and obligations shall
survive expiration or termination.
ARTICLE III
COMPENSATION
3.1 Compensation.
(a) In consideration of the services, covenants, and agreements agreed
to be performed by the Practice during the Initial Term and any Renewal Term,
the Company shall pay the Practice at the rate of $532,000 per year, payable in
substantially equal monthly installments on or before the 15th day of each month
for services rendered during the preceding month. In addition to the monthly
medical director fee prescribed above, the Practice shall be eligible for an
annual bonus of up to 15% of the base medical director compensation paid during
the year based upon the success of the Facilities in meeting annual clinical
outcomes targets and in achieving performance objectives for the Facilities and
the Practice generally prescribed by RCG for its dialysis facilities in the
region in which the Facilities are located. Such annual bonus (if any) shall be
payable on or before July 1 for the prior year's services. The current criteria
for reviewing and determining the bonus amount are attached hereto as EXHIBIT C.
RCG may change such criteria annually, and the Company will provide the revised
criteria to the Practice when adopted. The Practice agrees to accept the payment
under this subsection (a) (as it may be adjusted as provided below) as the total
compensation for all services, covenants and agreements pursuant to this
Agreement.
(b) (i) Beginning effective as of the second anniversary of the
Effective Date, if either party believes that the fair market value of the
services provided by the Practice under this Agreement has changed in any
material way since the most recent anniversary of the Effective Date, then such
party may notify the other that it believes such a change has occurred and the
Practice and the Company shall negotiate in good faith an adjustment to the
compensation described in Section 3.1(a) above so that it represents fair market
value for the duties and responsibilities of the Practice to be provided during
the next year under this Agreement. Notwithstanding the foregoing, no adjustment
pursuant to this subsection (b)(i) to the compensation payable under this
Agreement shall be effective unless set forth in writing signed by each of the
Practice and the Company, which writing shall be deemed an amendment to this
Agreement. The parties hereto agree that any additional compensation paid to the
Practice pursuant to this Agreement in connection with additional renal dialysis
facilities developed or acquired by the Company after the Effective Date shall
be no less than $30,000 per facility, per annum.
(ii) If the Practice and the Company are unable to agree on an
adjustment, then either may require that an adjustment of the compensation
hereunder be submitted to a qualified independent third party mutually selected
by both the Practice and the Company to determine the fair market value of the
services required hereunder, the costs and fees of which shall be borne equally
by the Practice and the Company. If the Practice and the Company are unable to
agree on the third party, then each such party shall at its own cost and expense
select its own qualified independent third party and the average of such two
determinations of fair market value shall be the revised compensation unless
such determinations are more than 10% apart, in which case such third parties
shall mutually select an additional qualified independent third party, the fees
and expenses of which shall be shared equally, who shall determine the fair
market
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value of the services hereunder from between the range of the amounts determined
by the first two appraisals. The fair market value of the services as determined
in accordance with the provisions of this subsection (b)(ii) shall be the
compensation payable under this Agreement effective as of the applicable
anniversary of the Effective Date, and such final determination shall be deemed
an amendment to this Agreement.
(c) Any change to the compensation payable hereunder in accordance
with subsection (b) of this Section 3.1 shall be effective as of the applicable
anniversary of the Effective Date and shall remain effective, and not subject to
adjustment under Section 3.1(b) or otherwise, for at least 12 months from the
effective date of such change.
(d) In further consideration of the Practice's execution and delivery
of this Agreement and the services, covenants and agreements of the Practice and
the Practice Physicians pursuant to this Agreement, the Company shall pay the
Practice a signing bonus of $600,000 (the "Signing Bonus"). The Signing Bonus
will be payable $100,000 in cash by wire transfer to one or more accounts
designated by the Practice, which wire transfer will be made and upon the
Practice's execution and delivery of this Agreement, and $500,000, plus interest
in the amount of 5% per annum, in substantially equal monthly installments of
$7,066.96, in arrears on or before the 15th of each month during the Initial
Term.
3.2 Expenses. The Company shall be responsible for all reasonable expenses
incurred in the operation of the Facility and the support of the services
provided by Practice hereunder, including appropriate office space and
secretarial support, and shall reimburse the Practice for all reasonable
out-of-pocket expenses incurred by the Practice in attending meetings outside
the service area of the Facility as required or requested by the Company
pursuant to Article I of this Agreement. The Company and the Practice
acknowledge and agree that attendance by existing medical directors at RCG's
annual medical meeting is not required under this Agreement. The Company will
pay the Practice $1,000 each year to help defray the cost of one or more
Practice Physicians attending RCG's annual medical meeting if one or more
Practice Physicians attend such annual meeting.
ARTICLE IV
STATUS OF PARTIES
4.1 Tax Status. The Company and the Practice acknowledge and agree that
the relationship created under this Agreement between them is that of
independent contractors and that nothing in this Agreement shall be deemed to
render either party the employer or employee of the other, agent or principal of
the other, or joint venturer or partner of the other. The parties acknowledge
and agree that the Practice Physicians will be engaged by the Practice and will
under no circumstances be considered the employee(s) of the Company, RCG or the
Facilities, or any of their affiliates. The Practice shall be responsible for
all withholding, payroll and similar taxes related to its engagement of the
Practice Physicians, and neither the Practice nor the Practice Physicians shall
be entitled to any benefits afforded to the employees of the Company, RCG or the
Facilities, or any of their affiliates. The Practice agrees that (i) neither it
nor any Practice Physician be treated as an employee of the Company for federal
tax purposes; (ii) the Company will not withhold on behalf of the Practice any
sums for income tax, unemployment insurance, social security, or any other
withholding pursuant to any law or requirement of any governmental body; (iii)
all of such taxes, payments and withholdings, if any, are the sole
responsibility of the Practice; and (iv) the Practice will indemnify and hold
the Company and RCG harmless from any and all loss or liability arising with
respect to such benefits, taxes, payments and withholdings, if any. If the
United States Internal Revenue Service ("IRS") should question or challenge the
worker status of the Practice or the Practice Physicians, then the parties agree
that both the Practice and the Company shall have the right to participate in
any discussion or negotiation
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occurring with the IRS, irrespective of which party initiated such discussions
or negotiations, and each party shall notify the other in advance of any planned
meeting or discussion.
4.2 No Agency. The Practice shall not have the right or authority to, and
expressly agrees that it will not, enter into any contract in the name of the
Company or otherwise to bind the Company, in any way, without the express
written consent of the Company. The Practice shall indemnify and hold the
Company harmless from any and all loss or liability attributable to a violation
of this covenant.
4.3 Access to Records. If it is ultimately determined that Section 952 of
the Omnibus Reconciliation Act of 1980 (42 CFR 420.300 et seq.) applies to this
Agreement, then until the expiration of four years after the furnishing of
services provided under this Agreement, the Practice will make available to the
Secretary of the United States Department of Health and Human Services, the
United States Comptroller General, and their representatives, this Agreement and
all books, documents and records necessary to certify the nature and extent of
the costs of those services. If the Practice carries out the duties of this
Agreement through a subcontract worth $10,000 or more over a twelve-month period
with a related organization, the subcontract will also contain an access clause
to permit access by the Secretary, Comptroller General, and their
representatives to the related organization's books, documents and records.
4.4 The Company's Work Product. All operating procedures, protocols,
information systems, operating data, databases, reports and other non-public
proprietary business systems or information owned by the Company or RCG shall be
and remain the exclusive property of the Company or RCG, as appropriate. If the
Practice or any Practice Physician modifies, enhances or alters any of such
property such modification, enhancement or alteration will be deemed a
work-for-hire and shall be the property of the Company or RCG, as appropriate.
The Practice or Practice Physician making such modification, enhancement or
alteration will execute all documents reasonably requested by the Company to
vest fully in the Company or RCG title to such modification, enhancement or
alteration.
ARTICLE V
INSURANCE
5.1 Practice Insurance Coverage. The Practice shall purchase and maintain
at its expense for itself and each of the Practice Physicians professional and
general liability insurance, with an insurance company reasonably acceptable to
the Company, with policy limits of at least $1,000,000 per occurrence and
$3,000,000 in the aggregate for each of the Practice Physicians and policy
limits of at least $200,000 per occurrence and $600,000 in the aggregate for the
Practice, including coverage for acts and omissions in performing services under
this Agreement and in rendering medical services to patients of the Facilities.
5.2 Company Insurance Coverage. The Company shall procure and maintain
throughout the term of this Agreement professional and general customary
liability insurance (through self-insurance or an insurance carrier) with policy
limits of at least $1,000,000 per occurrence and $3,000,000 in the aggregate.
5.3 Evidence of Coverage. Upon the execution of this Agreement and
annually thereafter or on reasonable request, the Company and the Practice shall
each provide the other with certificates of insurance or other reasonably
satisfactory evidence of the insurance required to be maintained under Sections
5.1 and 5.2. Each party shall notify the other at least 60 days prior to the
voluntary cancellation or termination of any such coverage and immediately upon
receipt of any notice of involuntary cancellation or termination of any such
coverage.
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ARTICLE VI
PRACTICE REPRESENTATIONS AND COVENANTS
6.1 Representations and Covenants. The Practice represents, covenants and
warrants as follows:
(a) The Practice is, and shall at all times during the term of this
Agreement be, licensed to conduct its business in the State of Texas, and shall
engage as Practice Physicians only physicians who are licensed without
restriction to Practice medicine in Texas and who never have had any such
license in this or any other state limited, withdrawn, suspended, subject to
reprimand, curtailed, placed on probation or revoked;
(b) The Practice shall engage as Practice Physicians only physicians
who are board eligible or board certified in the specialty of nephrology as
recognized by the American Board of Medical Specialists;
(c) The Practice shall engage as Practice Physicians only physicians
who are members of the medical staff of a local hospital, who have at least one
year experience or training in the care of patients at an end stage renal
disease treatment facility, and who have been granted privileges to practice at
the Facilities;
(d) Except as may be approved in writing by the Company, which
approval will not be unreasonably withheld or delayed, the Practice shall engage
as Practice Physicians only physicians who have never been denied membership or
reappointment to membership on the medical staff of any health care facility,
and who have never had medical staff membership or clinical privileges limited,
suspended, curtailed, revoked, placed on probation or withdrawn, and who have
never been subject to reprimand whether voluntarily or as a result of action
(either formal or informal) initiated by any health care facility or its medical
staff;
(e) The Practice shall require the Practice Physicians to use their
commercially reasonable best efforts and professional skills and judgment in
rendering services under this Agreement;
(f) The Practice shall require the Practice Physicians to perform
professional services and render care to patients in accordance with, and in a
manner consistent with, appropriate standards and the ethics of the medical
profession and as necessary for the Facilities to maintain compliance with
applicable governmental laws and regulations;
(g) The Practice shall require the Practice Physicians promptly to
notify the Company of any actual or threatened denial, suspension, revocation or
curtailment of licensure or certification status, medical staff membership or
clinical privileges held by such physician(s) with any state, with any Facility
of the Company, or with any payor or other health care facility;
(h) The Practice has notified the Company of each action or claim
alleging professional negligence filed or asserted against the Practice or any
Practice Physician within the previous five years and a current status and/or
ultimate resolution of such claim and will promptly notify the Company in
writing of its receipt of any action, claim or lawsuit alleging professional
negligence lodged against the Practice or any Practice Physician individually or
any partnership, professional corporation or association with which any Practice
Physician is affiliated;
(i) The Practice shall, for itself, and for each Practice Physician,
promptly notify the Company of any sanction, threatened sanction, investigation
or proceeding by any governmental agency or
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any entity regarding the participation by the Practice or any Practice Physician
in the Medicare, Medicaid program or any third party payor program in which the
Facilities participate; and
(j) This Agreement covers all of the services being provided to the
Company by the Practice and the Practice Physicians as medical directors of the
Facilities, and the Practice acknowledges and agrees that the aggregate amount
of services to be provided under this Agreement will not exceed an amount that
is reasonable and necessary for the legitimate medical and business purposes of
this arrangement.
ARTICLE VII
CONFIDENTIALITY, NONCOMPETITION
AND NONSOLICITATION COVENANT
7.1 Additional Covenants.
(a) During the term of this Agreement and for a period of two years
after the termination or expiration of this Agreement, the Practice and each
Practice Physician agrees that it, he or she will not in any manner, directly or
indirectly, by itself, himself or herself or in conjunction with any other
person, (i) conduct any of the activities or perform any of the responsibilities
delineated in Article I and EXHIBIT B ("Services") of this Agreement for any
business entity that is competitive with the business of the Company or (ii)
establish or own any financial, beneficial or other interest in (other than an
interest consisting of less than one percent (1%) of a class of a publicly
traded security), make any loan to or for the benefit of, or render any
managerial, marketing or other business advice, to any entity that is then
conducting activities that are competitive with those of the business of the
Company, in either case within a 25-mile radius around each Facility (the
"Territory"). For purposes of this Article, the "business of the Company" means
owning or operating a renal dialysis center, unit or facility or providing
dialysis supplies or services to any other such center, unit or facility to any
home dialysis program, including the provision of pharmaceuticals or laboratory
services related to renal dialysis, but does not include participating, directly
or indirectly, as a limited partner in RCG East Texas, LLP.
By executing a counterpart of this Agreement and in consideration of
the compensation paid to the Practice hereunder, each Practice Physician agrees
to be bound by the terms of this Article VII. With respect to the Practice
Physicians, the two year time periods applicable to this Article VII shall begin
on the earlier of (i) the termination or expiration of this Agreement, or (ii)
the termination of the employment, independent contractor or other relationship
or affiliation of the Practice Physician with the Practice, such that such
Practice Physician ceases to fall within the definition of a Practice Physician
hereunder and generally ceases to treat patients of the Practice.
(b) During the term of this Agreement and for a period of two years
after the termination or expiration of this Agreement, the Practice and each
Practice Physician will use all reasonable efforts to keep confidential and not
to divulge, or allow to be divulged to anyone, or use or otherwise appropriate
for its, his or her own benefit or for the benefit of others, any knowledge or
information of a confidential nature with respect to the business of the
Company, the Company itself, or any of its affiliates, including all trade
secrets, pricing information, marketing information or technical information
(hereinafter referred to as the "Confidential Data"), except for (i) information
that is generally available to the public other than as a result of a breach of
a confidentiality agreement, (ii) information available on a non-confidential
basis from a source other than the Company or its affiliates or agents, which
source itself is not bound by a confidentiality agreement, (iii) information
required to be disclosed by law or pursuant to court order, but only to the
extent such disclosure is necessary to respond to such law or court order, or
(iv) disclosure necessary in order for the Practice to perform its obligations
under this Agreement, but only to the extent
- 10 -
such disclosure is necessary for such performance. Each of the Practice and the
Practice Physician acknowledges and agrees that the prohibitions against
disclosure of Confidential Data recited herein are in addition to, and not in
lieu of, any rights or remedies that the Company may have available pursuant to
the laws of any jurisdiction or at common law to prevent the disclosure of
confidential information or trade secrets, and the enforcement by the Company of
its rights and remedies under to this Agreement shall not be construed as a
waiver of any other rights or available remedies that the Company may possess in
law or equity.
(c) During the term of this Agreement and for a period of two years
after the termination or expiration of this Agreement, neither the Practice nor
any of the Practice Physicians will, for its, his or her own benefit or the
benefit of others, solicit any person or entity that has or has had, or disrupt
or attempt to disrupt, any relationship, contractual or otherwise, with the
Company (including any payor, physician, provider, managed care organization or
supplier) at any time during the term of this Agreement for the purpose of
assisting or creating such a relationship for any business entity that is
competitive with the business of the Company.
(d) During the term of this Agreement and for a period of two years
after the termination of this Agreement, no party hereto will hire or attempt to
hire, or induce, or attempt to induce, any employee of another party or any of
its affiliates to terminate his or her association with such other party or any
of its affiliates. If any employee of a party hereto or any of its affiliates
(the "Non-Hiring Party") responds to a general solicitation and seeks employment
with another party or any of its affiliates (the "Hiring Party"), and the Hiring
Party desires to hire such employee, then the Hiring Party shall give notice of
its, his or her desire to hire such employee to the Non-Hiring Party and will
not offer to hire such employee until the earlier of seven days after such
notice is received by the Non-Hiring Party or the date on which the Non-Hiring
Party approves such hiring. If the Hiring Party hires an employee of the
Non-Hiring Party after following the procedures outlined above, the Non-Hiring
Party may request that the employee continue to provide services to the
Non-Hiring Party for up to 30 days to provide for an orderly transition.
(e) These covenants are considered by the parties hereto to be fair,
reasonable and integral for the protection of the Company. The parties agree
that if a violation of any of these covenants occurs, then (i) such violation
and any threatened violation will cause irreparable injury to the Company, (ii)
the remedy at law for any such violation or threatened violation will be
inadequate, and (iii) the Company will be entitled to injunctive relief to
prevent such violation. The parties acknowledge that these covenants will
survive, and remain in effect and enforceable after, termination of this
Agreement.
(f) Nothing in this Article VII shall be deemed to prohibit any
Practice Physician from exercising his or her medical judgment concerning the
medical treatment of a patient in any manner whatsoever in any location
whatsoever, and shall not be deemed to require the referral of any such patient
to any facility of the Company or any of its affiliates. The parties acknowledge
and agree that this Agreement shall in no way be deemed to restrict the right or
ability of the Practice and the Practice Physicians to admit and provide
professional service to patients at facilities and institutions other than the
Facilities or other facilities of the Company or RCG, including without
limitation facilities operated by business entities that are competitive with
the business of the Company. The Practice and the Practice Physicians
acknowledge that enforcement of this covenant will not prevent any physician of
the Practice from earning a living by practicing medicine or nephrology.
ARTICLE VIII
CONFIDENTIALITY OF PATIENT RECORDS
- 11 -
8.1 Patient Records. (a) All patient medical records shall be and remain
the sole property of the Company and shall be maintained at the Facilities. The
Practice shall assist the Company in implementing procedures to preserve the
confidentiality of patient medical records and shall cooperate in compiling data
regarding patient treatment costs and outcomes.
(b) Neither the Practice nor any Practice Physician shall disclose to
any third party, except where permitted or required by law or where such
disclosure is expressly approved by the Company in writing, any patient or
medical record information regarding patients of the Company, and the Practice
and the Practice Physicians shall comply with all federal and state laws and
regulations and with the policies of the Company regarding the confidentiality
of such information. Each party acknowledges that in receiving or otherwise
dealing with any records or information from the other party about a Facility's
patients receiving treatment for alcohol or drug abuse, each party are fully
bound by the provisions of the federal regulations governing Confidentiality of
Alcohol and Drug Abuse Patient Records (42 C.F.R. Part 2, as amended from time
to time).
(c) The Company, the Practice and the Practice Physicians agree to
comply with the applicable provisions of the Administrative Simplification
section of the Health Insurance Portability and Accountability Act of 1996, as
codified at 42 U.S.C. Section 1320d through d-8 ("HIPAA"), and the requirements
of any regulations promulgated thereunder including without limitation the
federal privacy regulations as contained in 45 CFR Part 164 (the "Federal
Privacy Regulations") and the federal security standards as contained in 45 CFR
Part 142 (the "Federal Security Regulations"). The Company, the Practice and the
Practice Physicians agree not to use or further disclose any protected health
information, as defined in 45 CFR 164.504, or individually identifiable health
information, as defined in 42 U.S.C. Section 1320d (collectively, the "Protected
Health Information"), concerning a patient other than as permitted by this
Agreement and the requirements of HIPAA or regulations promulgated under HIPAA
including without limitation the Federal Privacy Regulations and the Federal
Security Regulations. The Practice and the Practice Physicians will assist the
Company in implementing appropriate safeguards to prevent the use or disclosure
of a patient's Protected Health Information other than as provided for by this
Agreement, and the Practice and the Practice Physicians will abide by the
policies and procedures adopted by the Company with respect to the Protected
Health Information of the Facility's patients. Each of the Practice Physicians
and the Practice will promptly report to the other any use or disclosure of a
Company patient's Protected Health Information not provided for by this
Agreement or in violation of HIPAA, the Federal Privacy Regulations, or the
Federal Security Regulations of which the Practice or the Practice Physician
becomes aware. In the event the Practice or any Practice Physician, with the
Company's approval, contracts with any agents to whom the Company provides a
patient's Protected Health Information, the Practice or the Practice Physician
shall include provisions in such agreements whereby the Practice or the Practice
Physician and such agent agree to the same restrictions and conditions that
apply to the Practice and the Practice Physicians with respect to such patient's
Protected Health Information. The Practice and the Practice Physicians will make
their internal practices, books, and records relating to the use and disclosure
of a patient's Protected Health Information available to the Secretary of Health
and Human Services to the extent required for determining compliance with the
Federal Privacy Regulations and the Federal Security Regulations.
Notwithstanding the foregoing, no attorney-client, accountant-client, or other
legal privilege shall be deemed waived by the Company, RCG, the Practice or any
Practice Physician by virtue of this subsection.
(d) The provisions of this Section 8.1 shall survive expiration or
other termination of this Agreement, regardless of the cause of such
termination.
- 12 -
ARTICLE IX
MISCELLANEOUS
9.1 Notices. Any notice sent in accordance with the provisions of this
Section 9.1 shall be deemed to have been received (even if delivery is refused
or unclaimed) on the date that is: (i) the date of proper posting, if sent by
certified U.S. mail or by express U.S. mail or private overnight courier, or
(ii) the date on which sent, if sent by facsimile transmission, with
confirmation and with the original sent by certified U.S. mail, addressed as
follows:
Practice: Tyler Nephrology Associates, P.A.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Company: Renal Care Group Texas, Inc.
c/o Renal Care Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
and General Counsel
Any party hereto may change its address specified for notices herein by
designating a new address by notice in accordance with this Section 9.1.
9.2 Amendments. Subject to Section 9.4, this Agreement may be amended at
any time by mutual agreement of the Practice and the Company hereto, but any
such amendment shall not be operative or valid unless the same is reduced to
writing and approved by the parties hereto.
9.3 Assignability. This Agreement shall not be assignable by the Practice,
and the Practice shall not assign any of its rights or obligations under this
Agreement without the written consent of the Company. This Agreement shall not
be assignable by the Company, and the Company shall not assign any of its rights
or obligations under this Agreement without the written consent of the Practice;
provided that, without the consent of Practice, the Company may assign or
transfer this Agreement to an affiliate of the Company or RCG or in connection
with a sale of the Facilities or all or substantially all of the assets or
business of the Company.
9.4 Contract Modifications; Severability.
(a) This Agreement shall be construed to the fullest extent possible
to be in compliance with and permitted by all Federal (including Medicare and
Medicaid) and state statutes, rules and regulations. If a Triggering Event (as
defined below) occurs, either the Company or the Practice may by written notice
to the other propose an amendment to this Agreement as necessary to comply with
the item giving rise to the Triggering Event. To the fullest extent possible,
any such amendment shall preserve the responsibilities and duties of the parties
and the underlying economic and financial arrangements between the Company and
the Practice with the least changes to the parties' expectations hereunder. If
the Practice and the Company fail to agree to the form of an amendment within 60
days after the date of such notice, then either of such party may submit the
matter to arbitration as provided in Section 9.9, and any arbitration award
shall comply with
- 13 -
the second sentence of this Section; provided that if any resulting change to
this Agreement includes a change to the compensation under Section 3.1(a), then
the amount of compensation shall be determined under the procedures in Section
3.1(b). For purposes of this Section 9.4, "Triggering Event" means the
effectiveness of any statute, rule, regulation, order, decree or regulatory
interpretation (i) prohibiting the Practice or any of the Practice Physicians
from referring patients (whether Medicare, Medicaid or otherwise) for renal
dialysis either directly or indirectly to the Facilities; (ii) prohibiting the
Company, the Practice or any Practice Physician from submitting claims or
receiving payment under the Medicare, Medicaid or any other third party payment
programs for services rendered to patients receiving care at the Facilities;
(iii) determining that the amount or method for determining compensation paid to
the Practice hereunder does not reflect fair market value for the services
provided by the Practice under this Agreement without taking into account the
volume or value of referrals made by the Practice Physicians; or (iv) otherwise
rendering illegal the relationship hereunder between the Company, the Practice
and the Practice Physicians.
(b) Subject to the provisions of subsection (a) of this Section 9.4,
if any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future laws in effect during the term of this
Agreement, the legality, validity or enforceability of the remaining provisions
of this Agreement shall not be affected thereby.
9.5 Headings. The headings of this Agreement are inserted for convenience
only and are not to be considered in construction of its provisions.
9.6 Entire Agreement. This Agreement constitutes the full contract and
agreement of the parties with respect to its subject matter, superseding all
prior or contemporaneous agreements, either oral or written.
9.7 Construction of the Agreement and Binding Effect. Notwithstanding the
place where this Agreement may be executed by any of the parties hereto, the
parties expressly agree that all terms and conditions of this Agreement shall be
construed under and governed by the laws of the State of Texas. Venue of any
dispute regarding this Agreement (including any mediation or arbitration) shall
be in ▇▇▇▇▇ County, Texas.
9.8 Non-Waiver. The failure of either party to exercise any of its rights
under this Agreement for a breach thereof shall not be deemed to be a waiver of
such rights or a waiver of any subsequent breach.
9.9 Disputes. (a) The parties agree that any dispute arising in connection
with, or relating to, this Agreement or the termination of this Agreement (other
than a dispute related to Sections 3.1(b) or 9.4) shall be subject to resolution
through informal methods. If the parties are unable to resolve such dispute
after thirty days of efforts, then such dispute shall be submitted to mediation
with a singe mediator selected by the parties or, failing the parties' agreement
on a mediator, selected by the American Health Lawyers Association Alternative
Dispute Resolution Service (the "AHLA-ADRS"). The mediation shall be conducted
in accordance with the AHLA-ADRS Rules of Procedure for Mediation. If the
parties are unable to resolve the dispute through mediation, they shall retain
all rights and remedied at applicable law, subject to paragraph (b) below.
(b) Following the procedures outlined in paragraph (a) above, the
parties agree that any dispute arising in connection with, or relating to, this
Agreement or the termination of this Agreement (other than a dispute related to
Section 3.1(b) and, unless the Company so agrees, a dispute under Article VII),
to the maximum extent allowed by applicable law, shall be subject to arbitration
in accordance with the terms of the AHLA-ADRS Rules of Procedure for Arbitration
(the "ADR Procedures"). A single arbitrator shall be
- 14 -
chosen mutually by the parties pursuant to the ADR Procedures. Notwithstanding
the foregoing, any party hereto may seek all available preliminary injunctive or
other temporary relief pending the issuance of an arbitration award. The award
of the arbitrator shall contain findings of fact and conclusions of law and
shall be binding and conclusive upon the parties.
9.10 Third Party Beneficiaries. The Practice and the Practice Physicians
agree that RCG and its affiliates are express and intended third party
beneficiaries of this Agreement.
9.11 Right of First Refusal to Provide Medical Director Services. If the
Company or any affiliate of the Company seeks to establish any de novo or
satellite dialysis facility within the Territory (as defined in Section 7.1),
then the Practice shall have a right of first refusal, but not the obligation,
to provide medical director services to any such facility. The terms and
provisions governing the provision of such services shall be substantially the
same as the terms and provisions of this Agreement, provided that the
compensation for such additional services shall not be less than $30,000 per
facility. The Company will notify the Practice in writing at least 120 days
prior to opening a de novo or satellite facility. Such notice will specify the
medical director fee proposed for such facility. If the Practice declines such
offer or fails to respond to such offer within the applicable 120-day period,
then the Company will be free to engage another physician or practice to provide
such medical director services on substantially the same terms and conditions as
offered by the Company to the Practice.
- 15 -
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written to be effective as provided hereinabove.
Company:
-------
RENAL CARE GROUP TEXAS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Senior Vice President
----------------------------------------
Practice:
--------
TYLER NEPHROLOGY ASSOCIATES, P.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., M.D.
----------------------------------------
Title: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., M.D., President
----------------------------------------
PHYSICIAN JOINDER
Each Practice Physician executing below acknowledges that he or she has
read and understood the terms of the Medical Director Services Agreement,
effective February 12, 2003, to which this Physician Joinder is attached and as
same may be amended or revised as provided therein (the "Agreement"). By signing
this Physician Joinder, each Practice Physician agrees in his or her individual
capacity, to (i) the nature and scope of medical director duties set forth in
Article I of the Agreement, including as described in detail on Exhibit B, (ii)
the restrictive covenants contained in Article VII of the Agreement, and (iii)
the third party beneficiary designated in Section 8.10 of this Agreement, in
each case as may be amended by agreement of the Practice.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D. (seal)
-------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
--------------------------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,, M.D. (seal)
-------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,, M.D.
--------------------------------------------
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D. (seal)
-------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, M.D.
--------------------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, M.D. (seal)
-------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, M.D.
--------------------------------------------
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., M.D. (seal)
-------------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., M.D.
--------------------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. (seal)
-------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
--------------------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. (seal)
-------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
--------------------------------------------
EXHIBIT A
FACILITIES
Initial Principal Contact
-------------------------
Athens Dialysis Center
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ --------------------------
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Carthage Dialysis Center
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ --------------------------
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Jacksonville Dialysis Center
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇ --------------------------
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Mineola Dialysis Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ --------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Mt. Pleasant Dialysis Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ --------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Palestine Dialysis Center
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ --------------------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Tyler Dialysis - ▇▇▇▇▇▇ ▇▇▇▇ (and Home Dialysis)
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ --------------------------
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
West Tyler Dialysis Center
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ --------------------------
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
MEDICAL DIRECTOR
DUTIES AND RESPONSIBILITIES
Qualifications: THE MEDICAL DIRECTOR SHALL BE A PHYSICIAN PRACTICING NEPHROLOGY
LICENSED IN THE STATE WHERE THE FACILITY IS LOCATED, WHO MEETS THE ESRD
"QUALIFIED PHYSICIAN DIRECTOR" CRITERIA AS WELL AS THE REQUIREMENTS FOR STAFF
MEMBERSHIP AS DEFINED BY THE APPLICABLE PROFESSIONAL STAFF BYLAWS.
DUTIES AND RESPONSIBILITIES: As required by Title 42 of the Federal Code of
Federal Regulations (C.F.R.), the Medical Director has responsibility for the
quality of professional care delivered to the patients at the Facility. He
exercises that responsibility through directing the professional services of the
Facility and conscientiously applying its policies and procedures.
The Medical Director is an independent contractor, responsible to the Chief
Medical Officer of Renal Care Group. Specific responsibilities of the Medical
Director include administrative, medical and technical services as outlined
below. The position is separate and distinct from that of the attending
Nephrologist.
EVALUATION: The Medical Director's duties and responsibilities are tracked
monthly and reported annually for each Medical Director by the Chief Medical
Officer. Section 4 of the Medical Director Handbook describes the evaluation
process and scoring system. The components of the duties are listed below:
Administrative
A. The Medical Director will provide advice and assistance to the Facility
in the implementation and maintenance of written policies and
guidelines including:
1. Patient care delivery policy and procedures manual.
2. Communicable disease control within the unit.
3. The RCG Professional Staff Bylaws.
4. Maintenance of patient medical records.
5. Patient and staff education programs.
6. Physical environment, fire and safety, and emergency
preparedness of the dialysis facility.
7. Responsibilities and functions of each category of personnel
employed by the facility.
Such policies and guidelines will be developed by Company personnel,
including the Facility's head nurse or manager and the area
administrator, and the policies and guidelines will be subject to the
review and comment of the Medical Director. The Company will, with the
advice and assistance of the Medical Director, oversee the
implementation and maintenance of such policies and procedures and the
training of personnel in the same, and the Medical Director will
provide advice in such training as needed to the Company. Training for
nurses and dialysis technicians will be provided by the Company through
an instructor qualified under 25 TAC Section 117.62(g)(2).
B. The Medical Director will actively participate in Facility Quality
Improvement Programs (CQI), as well as participate in multidisciplinary
quality assurance programs that monitor the performance of the
Facilities' written policies.
C. The Medical Director will participate and communicate as needed with
the RCG Medical Office and the regional Executive Board (or its
representative) in pursuit of the common goal of delivering the
optimal patient care. Pursuit of this goal requires implementation of
mandated directives by the Medical Advisory Board (MAB) and ▇▇▇▇▇▇▇
consideration of its recommendations.
D. The Medical Director will review on a timely basis the RCG Quality
Indicator and patient satisfaction data for the facility with the
manager of the facility and will consult with attending nephrologists
regarding achievement of Quality Indicator targets.
E. The Medical Director will assure that the Facility and all attending
physicians comply with applicable ESRD Network, State, Federal and RCG
mandates.
F. The Medical Director will review incident reports, patient complaints
and any disciplinary action of medical staff or patient care personnel
in a timely fashion.
G. The Medical Director will serve as Facility liaison with affiliated
medical institutions for services such as renal transplantation,
hospitalization, and emergency medical services.
H. The Medical Director will participate in the Facility survey process by
Federal, State, and private groups approved by RCG and will then
communicate to the Facility's Governing Body and the Executive Board
the results of such surveys.
I. The Medical Director will collaborate with RCG's Chief Medical Officer
(CMO) and the MAB in obtaining data from regulatory agencies and other
sources as part of RCG's strategy to work continuously to improve
patient care.
J. The Medical Director will make best efforts to participate in national
RCG Medical Director educational symposiums, as well as attend the
quarterly Quality conference calls.
K. The Medical Director will collaborate with the laboratory to implement
ESRD Network, State, Federal and RCG mandates.
L. The Medical Director will document the performance of all such duties
with a written log detailing duties performed and provide documentation
of these duties on a monthly basis to the RCG Medical Office or its
designee (Administrative checklist).
Medical
A. The Medical Director will be a member of the renal health care team to
ensure quality of care, including the establishment and implementation
of policies regarding patient care. Among these quality of care
criteria are:
- The suitability of patients admitted to the outpatient
dialysis Facility.
- Implementation of existing RCG patient care policies and
procedures.
- The appropriateness of dialysis prescriptions in the Facility,
particularly for all new patients.
- Administration of dialysis related medications as listed on
the Facility Drug Inventory. - Administration of recommended
vaccines for ESRD patients and staff.
B. The Medical Director will serve on the professional team in the
development of both short and long-term patient care plansand will
participate in the selection of the most appropriate ESRD modality for
the patients of the Facility.
C. The Medical Director will advise the Company regarding the
implementation of written policies outlining the patient's options for
various treatment modalities, including in-center hemodialysis, home
hemodialysis, peritoneal dialysis, and transplantation.
D. When self-dialysis training or home dialysis training is offered, the
Medical Director will advise the Company in developing and implementing
a program that assures that patient teaching materials are available
for use of all trainees during training and at times other than during
the dialysis procedure.
E. The Medical Director will work to assure that the ESRD patient has
appropriate consultation with a renal dietician, social worker,
financial counselor and other individuals as needed.
F. The Medical Director will oversee the appropriate performance of the
dialysis orders and day-to-day patient care policy by the nursing and
technical staff.
G. The Medical Director will use reasonable efforts to encourage attending
physicians to comply with the facility's policies on patient care.
H. The Medical Director will review patient satisfaction surveys and
clinical outcomes data and will consult with attending physicians and
staff as appropriate to implement appropriate action to address issues
identified and to improve patient care at the Facility.
Technical
A. The Medical Director will participate in the selection of
cost-effective treatment modalities and dialysis supplies to be offered
by the Facility and advise attending physicians regarding the
compatibility of their dialysis prescriptions with the options
available at the Facility.
B. The Company will provide to the Medical Director, and the Medical
Directo will review and approve, policies and procedures designed to
ensure the adequate training of nurses and technicians in dialysis
science and techniques.
C. The Medical Director will provide continuous availability for medical
and technical questions to the patient care staff, including coverage
when unavailable.
D. The Medical Director will advise the Company regarding the
implementation of a dialysis water standards policy including
monitoring and enforcement.
E. The Medical Director will advise the Company regarding the
implementation of a policy regarding dialyzer reuse including
monitoring and quality improvement.
F. The Medical Director will advise the Company regarding the
implementation of a policy on the administration of intradialytic
medications.
EXHIBIT C
MEDICAL DIRECTOR PERFORMANCE REVIEW
The annual evaluation of the RCG Facility and Medical Director is
essential to the mission, "to improve the quality of life and to care for those
patients with chronic and acute renal disease." To achieve this mission, all
associates of the Facility must function collaboratively at the highest possible
level, under the leadership of the Medical Director. The Facility/Medical
Director evaluation is conducted annually by the Chief Medical Officer, to whom
the Medical Director is primarily responsible. This evaluation process must be
understood by Medical Directors, since it is an important component of the RCG
policy of continuous quality improvement.
The Interpretive Guidelines for ESRD Facilities states "Treatment is
under the general supervision of a Director who is a physician. The Medical
Director is responsible for planning, organizing, conducting and directing the
professional ESRD services and must devote sufficient time to carrying out these
responsibilities." The Nephrologist has the medical skills and must develop
leadership and collaborative management skills to fulfill this mandate as
Medical Director. Teamwork and collegiality are highly valued as the leader of
the ESRD team.
The Practice shall be eligible for an annual bonus of up to 15% of the
base medical director compensation paid during the year based upon the success
of the Facilities in meeting annual clinical outcomes targets and in achieving
performance objectives for the Facilities and the Practice generally prescribed
by RCG for its dialysis facilities in the region in which the Facilities are
located. Each year the base compensation paid to the practice is allocated
between the Facilities as agreed upon by RCG and the Practice. Then, each
Facility is placed in a quartile based on its evaluation. If a Facility is in
the top quartile, then 100% of 15% of the base compensation allocated to that
Facility is paid to the Practice. If a Facility is in the second quartile, then
66.67% of 15% of the base compensation allocated to that Facility is paid to the
Practice. If a Facility is in the third quartile, then 33.33% of 15% of the base
compensation allocated to that Facility is paid to the Practice. If a Facility
is in the fourth quartile, then nothing is paid to the Practice for that
Facility.
The evaluation is based on an annually updated point system, authorized
and reviewed by the RCG Medical Advisory Board (MAB). The elements measured and
their weight are as follows:
- 50 % based on Clinical Indicators of the Facility. The
Clinical Indicators are measured monthly and reported
quarterly. Measurement is based on the RCG one year rolling
average. Tracking the Clinical Indicators and observing trends
provides opportunities for quality improvement using the CQI
process. The market or regional Quality Management Committee
is charged with reviewing the outcomes and performance of each
Facility and is available as a resource to the Medical
Director.
The point system has been weighted to encourage reduction of
temporary catheters and placement of AV fistulas. Vascular
access is the indicator most influenced by the concerted
effort of the Medical Director. The literature shows both
mortality and morbidity are reduced with early permanent
access placement. Reduction of mortality is the most important
outcome, but can only occur with improvement in all care
processes that impact patient outcomes (such as URR,
nutrition, anemia, etc.).
- 30 % based on Medical Director administrative duties. Section
5 and 6 of this Handbook describe the administrative duties in
greater detail. Guidelines have been prepared for the Medical
Directors of both Hemodialysis and Home Therapy Facilities. At
the back of each section is a grid, which is designed to
assist the Medical Director and the Manager of each Facility
in the documentation of the performance of these duties. On a
monthly basis, the required tasks should be completed and both
the Medical Director and the Manager of each Facility should
initial the completion at the bottom of the grid. At a
minimum, this will document the compliance of the Medical
Director with regulatory requirements by Medicare.
The CQI process is a vital part of the quality improvement
process of the Facility and the Medical Director is expected
to participate in this process. Three levels of participation
are provided for but a High level of participation is expected
as Medical Directors become knowledgeable and proficient with
the CQI process. The Chief Medical Officer (CMO) and his staff
are available as resources.
- 20 % based on patient satisfaction with the Facility. The
Patient Satisfaction Survey will be conducted in the spring of
each year and the results made available to the Facility and
Medical Directors. The Medical Director, as the clinical
leader, and the Manager of each Facility, are held responsible
for the performance of the staff of the Facility. Although not
directly under the control of the Medical Director, he/she is
expected to be a positive influence on the staff and their
performance in the Facility.
Completion of the duties should be documented in some manner, in
addition to a check ▇▇▇▇ on the grid sheet, further described in Section 5.
Common tools of documentation include minutes from meetings, a personal Medical
Director notebook, or dictated notes kept in the Facility. The Manager of each
Facility (or an RCG designee) must concur that the line item on the check list
was completed and initial the monthly grid sheet with the Medical Director. This
indicates that the line item was completed to the satisfaction of both parties.
The grid sheet and related documentation is the property of the Medical
Director. A copy of the grid sheet should be forwarded monthly to the office of
the Associate Medical Officer for monitoring purposes and for use in the annual
Medical Director evaluation. The Medical Director will be held accountable for
meeting facility outcome criteria. Failure to improve outcomes, as measured by
the annual Medical Director evaluation, especially when in the 4th Quartile of
performance, will result in a request for a written explanation to the Chief
Medical Officer.
Clinical Performance Measures (50 %)
-----------------------------
Hemodialysis Medical Director
(evaluation based on annual rolling average of prior year)
- URR (% of patients with URRs >=70%) >80% = 10 points
RCG average 72.9 % 75-80% = 8 points
Best Region 80.7 % 70-74.9% = 6 points
65-69.9% = 4 points
<65% = 0 points
- Hematocrit (% of Hcts >=33%) >85% =10 points
RCG average 74.6 % 80-85% = 8 points
Best Region 78.4% 75-79.9% = 6 points
70-74.9% = 4 points
65-69.9% = 2 points
<65%= 0 points
- Hospitalization (91+ days, based on days per patient year at risk)
RCG average 12.1 days <10 days = 8 points
Best Region 9.4 days 10-14.9 days = 6 points
15-20 days = 2 points
>20 days = 0 points
- Mortality (91+ days, based on deaths per 100 patient years at risk)
RCG average 22.1 <20 = 8 points
Best Region 17.5 20-23.9 = 6 points
24-29.9 = 4 points
30-35 = 2 points
>35 = 0 points
- No Shows (per patient/year)
RCG average 1.8 <1.0 = 10 points
Best Region 0.8 1.1-1.5 = 8 points
1.6-2.0 = 6 points
2.1-2.5 = 4 points
>2.5 = 0 points
- Vascular Access:
- % of temporary catheters <10% = 8 points
RCG average 25.5 % 10-14.9% = 6 points
Best Region 17.4% 15-19.9% = 4 points
20-25% = 2 points
>25% = 0 points
- % native AV fistulas >43 = 8 points
RCG average 29.8 % 38-42.9% = 6 points
Best Region 42.9% 33-37.9% = 4 points
28-32.9% = 2 points
<28% = 0 points
- PTFE clotting events/patient year <0.3= 10 points
RCG average 0.8 0.3 - 0.59= 8 points
Best region 0.4 0.6 - 0.99= 6 points
1.0 - 1.2= 4 points
>1.2= 0 points
Peritoneal Dialysis Medical Director
(valuation based on annual rolling average of prior year)
- KT/V (>=2.1)
RCG average 76.8 % CAPD
RCG average 88.1 % CCPD >78 = 15 points
63-78% = 12 points
68-62.9% = 10 points
63-67.9% = 8 points
58-62.9% = 5 points
- Creatinine Clearance (>=60L CAPD or >=60 L CCPD)
RCG average 81.2 % CAPD >75 = 15 points
RCG average 75.2 % CCPD 70-75% = 12 points
Weighted average 78.2% 65-69.9% = 10 points
60-64.9% = 8 points
55-59.9% = 5 points
- Hematocrit (% of Hcts >=33%) >85% =10 points
RCG average 74.6 % 80-85% = 8 points
Best Region 78.4% 75-79.9% = 6 points
70-74.9% = 4 points
65-69.9% = 2 points
<65%= 0 points
- Hospitalization (91+ days, based on days per patient year at risk)
RCG average 12.1 days <10 days = 8 points
Best Region 9.4 days 10-14.9 days = 6 points
15-20 days = 2 points
>20 days = 0 points
- Mortality (91+ days, based on deaths per 100 patient years at risk)
RCG average 20.7 <20 = 8 points
Best Region 15.5 20-24.9 = 6 points
24-29.9 = 4 points
30-35 = 2 points
>35 = 0 points
- Peritonitis (new cases only)
RCG average 22.6 months between cases
Best Region 36.9 months between cases
>32 months between cases 10 points
28-32 months between cases 8 points
22-27.9 months between cases 6 points
17-21.9 months between cases 4 points
<17 months between cases 0 points
- Peritonitis (relapse cases only)
RCG average 11.2 % of peritonitis cases due to relapse
Best Region 7.4% of peritonitis cases due to relapse
<7 % of cases 10 points
7.0 to 9.9 % of cases 8 points
10 to 12 % of cases 6 points
12 to 15% of cases 4 points
>15% of cases 0 points
Combination Hemodialysis & Peritoneal Medical Director
For those physicians who oversee both modalities, each is evaluated using the
above criteria. The overall Clinical Quality is then a composite of these,
weighted to reflect the numbers of patients in each modality.
MEDICAL DIRECTOR ADMINISTRATIVE TASKS (30 %)
The completion of administrative tasks must be documented by the Medical
Director on a monthly basis. It is important that both the Manager of each
Facility and the Medical Director document completion of the required tasks.
Other Medical Director functions including such things as meeting with surgeons
regarding access, goals, attendance at medical meetings and literature review
regarding ESRD issues, etc, should also be noted in this record as well, since
this contributes to a high quality Facility.
Participation in monthly review:
- Review staffing & training issues impacting patient outcomes
with Manager
- Review water quality
- Review dialyzer reuse at the Facility
- Review monthly lab of patients below quality goals & develop
plan
- Review trend in hospitalizations, infections
- Review temporary catheter usage & trend
- Review patient incident reports & trends
- Monitor staff physician patient rounding process
- Adequacy of staff physician medical documentation
Participation in CQI process:
- The CQI process should be a routine process in the Facility
striving to improve its outcomes. As physicians learn this
process, Medical Directors are expected to participate at
higher levels. In the meantime, Low, Medium and High
participation levels may be chosen on the Performance grid,
depending on the physician's comfort with the process.
Participation in Professional Staff process:
- Participate in the Quarterly Quality conference calls, which
have physician CME available.
Annual checklist:
- Review and approve Facility Policy and Procedures and make
necessary modifications; review and approve clinical
protocols. - Review patient satisfaction data annually and in
concert with the Manager of the Facility make recommendations
for improvement.
- Participate with the Manager in the Budget process for the
Facility - Participate in Facilities' surveys by regulatory
agencies.
Patient Satisfaction Surveys (PSS) (20 %)
The Satisfaction Survey will be conducted in the spring of each year and results
forwarded to each Facility for review and discussion regarding potential areas
of improvement.
Nurse:
RCG average In-Center 3.43
PSS >3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
PSS < 2.5 = 0 points
RCG average Home 3.77
PSS > 3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
PSS < 2.5 = 0 points
PCT/Home Services:
RCG average In-Center 3.42
PSS >3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
PSS < 2.5 = 0 points
RCG average Home 3.67
PSS >3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
PSS < 2.5 = 0 points
Physician:
RCG average In-Center 3.27
PSS > 3.5 = 8 points
PSS >= 3.25 and < 3.5 = 6 points
PSS >=3.0 and < 3.25 = 4 points
PSS > 2.5 and < 3.0 = 2 points
PSS < 2.5 = 0 points
RCG average Home 3.67
PSS > 3.5 = 8 points
PSS >= 3.25 and < 3.5 = 6 points
PSS >=3.0 and < 3.25 = 4 points
PSS > 2.5 and < 3.0 = 2 points
Dietitian:
RCG average In-Center 3.27
PSS > 3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
RCG average Home 3.67
PSS > 3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
Social Worker:
RCG average In-Center 3.40
PSS > 3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
RCG average Home 3.51
PSS > 3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
Facility:
RCG average: In-Center 3.24
PSS > 3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
RCG average Home 3.58
PSS > 3.5 = 4 points
PSS >= 3.25 and < 3.5 = 3 points
PSS >=3.0 and < 3.25 = 2 points
PSS > 2.5 and < 3.0 = 1 points
