Exhibit 10.13
MDNY
HEALTHCARE
MDNY-IPA RECONCILIATION AGREEMENT
AGREEMENT, dated as of May __, 2000 (the "Agreement"), by and among MDNY
Healthcare, Inc, a New York corporation ("MDNY"), Island Practice Association
I.P.A., Inc. (d/b/a "Island Professional Association, I.P.A."), a New York
corporation("IPA"), Catholic Healthcare Network of Long Island, Inc., a New York
not-for-profit corporation ("CHNLI"), and Long Island Physician Holdings
Corporation, a New York corporation ("LIPH") (collectively, "the parties").
WHEREAS, MDNY is a health maintenance organization, certified in
accordance with the provisions of Article 44 of the Public Health Law;
WHEREAS, all of the shares of MDNY are currently owned by LIPH and CHNLI
and all of the shares of IPA are currently owned by LIPH;
WHEREAS, MDNY entered into an IPA Participation Agreement with IPA, in
accordance with the laws and regulations of the State of New York and with the
approval of the Department of Health, by which it contracts with IPA to arrange
for the delivery or provision of health services by individuals licensed to
practice medicine and other health professions;
WHEREAS, the IPA Participation Agreement specified that MDNY would
compensate IPA for these services pursuant to a schedule specifying certain
capitation payments, calculated as a percentage of premium of the various health
plan products offered by MDNY;
WHEREAS, MDNY met this obligation to the IPA by paying claims incurred, in
accordance with applicable fee schedules, subject to a reconciliation of the
amounts in accordance with the capitation payment amounts set forth in the IPA
Participation Agreement;
WHEREAS, during 1997 and 1998, upon review of all claims incurred and paid
that arose during the relevant time periods, it was calculated, to the
satisfaction of the parties based upon audited financial reports, that MDNY paid
claims in excess of the amount set forth in the IPA Participation Agreement,
resulting in a liability by the IPA to repay MDNY approximately $6 million;
WHEREAS, since that time, pursuant to the IPA Participation Agreement and
the existing capitation payment schedule, MDNY has not made the payments to the
IPA as are set forth in the IPA Participation Agreement during 1999 and it was
calculated, to the satisfaction of the parties based upon audited financial
reports, that MDNY owes the IPA approximately $18,465,000;
WHEREAS, the parties to this Agreement have each concluded that it would
be appropriate to reconcile the amounts owed by MDNY to the IPA against those
owed by the IPA to the MDNY, rather than maintaining two offsetting liabilities;
NOW, THEREFORE, in consideration of the mutual promises and covenants made
by each party to the others, the parties hereby agree as follows:
1. The parties agree, based on the findings of the independent auditors
who have examined the financial transaction and payments between the
parties, that the outstanding liabilities between the MDNY and the
IPA are approximately as set forth above.
2. The parties further agree that it is in the best interests of each
party to reconcile the outstanding liabilities and credit the amount
owed by IPA to MDNY to reduce the amount owed by MDNY to IPA.
3. The parties agree that, notwithstanding any prior agreement to the
contrary, including but not limited to the IPA Participation
Agreement, the reconciliation of those amounts shall result in
eliminating any repayment obligation by IPA to repay MDNY any of the
overpayments made by MDNY on the EPA's behalf during the
above-referenced time period and shall reduce the amount owed by
MDNY to the IPA as of this date for the relevant time periods to
$12,465,000.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first written above.
MDNY HEALTHCARE, INC.
By: /S/
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ISLAND PRACTICE ASSOCIATION,
IPA, INC.
By: /S/
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LONG ISLAND PHYSICIAN
HOLDINGS CORPORATION
By: /S/
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CATHOLIC HEALTHCARE
NETWORK OF LONG ISLAND, INC.
By: /S/
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