SERVICE AGREEMENT
THIS SERVICE AGREEMENT ("Agreement") is made as of the 5th day of January,
1998 (the "Effective Date") by and between New York Care Plus Insurance Company,
Inc. ("NYCP"), with its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and CareAdvantage, Inc. ("CAI") with its principal
place of business at ▇▇▇-▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, CAI is engaged in the business of providing managed care services,
including medical management services;
WHEREAS, NYCP, which provides health insurance coverage and managed care
coverage desires to retain CAI to provide certain services;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the parties agree as follows:
1. Services.
1.1 Generally. CAI will provide the services described in Sections 1.2,
1.3, 1.4, and 1.5 ("Services") to NYCP's Buffalo Division. To the extent NYCP's
Buffalo Division is sharing resources with its Albany Division, CAI will also
provide Services to the Albany Division. CAI and NYCP shall consult regularly
regarding the allocation of CAI's resources between NYCP's Buffalo and Albany
Divisions.
1.2 Clinical Support.
a. CAI will provide experienced physician reviewers, equivalent to one
(1) FTE, to support NYCP's medical directors and the utilization management
staff. Their services will include case review and policy development. These
services will be provided through a combination of an on-site presence,
telephone access, and if desired by NYCP, an internet connection. CAI will
ensure that physician reviewers are available at the same days and times that
NYCP is available to health care providers to conduct utilization review. CAI
further agrees that access to physician reviewers shall be provided on-site at
NYCP no less than sixty percent (60%) of such NYCP Utilization Management
Department operating hours. The physician reviewers shall be subject to NYCP's
approval, which shall not be unreasonably withheld.
▇. ▇▇▇ will provide NYCP with matched specialty review through access
to CAI's Specialty Advisor Panel on an as-needed basis. The parties contemplate
that emphasis will be on pediatric, oncology, and cardiology cases.
▇. ▇▇▇ shall maintain any licensure required in connection with its
activities. The parties acknowledge and agree that NYCP and/or self-insurers, as
applicable, shall have final decision-making authority with regard to
utilization management decisions, subject to the right of covered persons to
appeal such determinations subject to NYCP's and/or the self-insurer's, as
applicable, grievance procedure.
1.3 Skill Development for Nurse and Physician Reviews.
a. CAI will provide on-site training programs for NYCP's nurse and
physician reviewers to build skills in the following areas:
i. Communication skills;
ii. Negotiation and review techniques;
iii. Anticipating the progression of care; and
iv. Triaging to case management.
CAI shall provide the training in the areas set forth in clauses i and ii above
not later than sixty (60) days after the Effective Date. In advance of training,
CAI will undertake an inter-reviewer reliability evaluation, the results of
which will be used to focus the training, as well as to serve as a benchmark for
the post-training assessment. CAI will train department supervisors as to CAI's
training activities regarding reviewers. CAI will conduct regularly scheduled
chart audits, the sample design and schedule to be agreed upon by the parties,
during and after completion of training to identify further opportunities to
improve the effectiveness of nurse and physician reviewers.
▇. ▇▇▇, through its medical directors, will provide on-site clinical
training sessions for identified problem areas. These are expected to include
cardiology, oncology, orthopedics, and pediatric care. CAI will develop
additional sessions on an as-needed basis.
1.4 Operations Review.
a. CAI will conduct a comprehensive review of NYCP's utilization and
case management operation. Such review will address those functions that impact
results and productivity, including but not limited to program focus and scope,
application of review criteria, physician review support, current staff training
program, timeliness of notification and review, the on-site review process,
denials, penalties and appeals, and adequacy of systems support.
▇. ▇▇▇ will conduct an audit of completed cases to identify process,
training, and performance issues. Measures will include application of criteria,
decision making, facilitation of on-going care, and case documentation.
▇. ▇▇▇ will prepare a report summarizing the operations review and
making recommendations for improvement or change.
▇. ▇▇▇ will work with NYCP management team to identify opportunities
for achieving improved productivity.
1.5 Reports. CAI will provide NYCP with activity reports, bi-weekly during
the first quarter, and monthly thereafter. The content and format of the
activity reports shall be subject to the approval of NYCP, which shall not be
unreasonably withheld.
2. Compensation & Expenses
2.1 Base Compensation. CAI's annual compensation for the Services provided
pursuant to this Agreement shall be Six Hundred Thousand ($600,000) Dollars,
payable in monthly installments of Fifty Thousand ($50,000) Dollars. NYCP shall
pay CAI the monthly installment due on account of a month within thirty (30)
days after the last day of such month.
2.2 Certain Special Advisory Panel Fees. In addition to the fees provided
by Section 2.1, NYCP shall pay CAI one hundred ($100) dollars for each case
reviewed by CAI's Special Advisory Panel in excess of 2000 cases. NYCP shall pay
CAI within thirty (30) days of its receipt of CAI's invoice for such services.
2.3 Expenses. NYCP shall reimburse CAI for CAI's reasonable out-of-pocket
expenses incurred in connection with this Agreement, including expenses for
travel, lodging and meals. NYCP shall pay CAI within thirty (30) days of its
receipt of CAI's invoice for such expenses.
3. Confidentiality
3.1 Generally. Each party hereto hereby agrees that, during the term of
this Agreement and after its termination, it shall (a) not, directly or
indirectly, use (other than for the purposes contemplated hereby during the
term), (b) keep secret and retain in strictest confidence, and (c) not disclose
to any third party, Confidential Information as defined herein. Notwithstanding
the foregoing, a party may disclose Confidential Information: (i) when compelled
to do so by applicable law, provided that to the extent feasible it gives the
other party advance notice of its intent to make the disclosure, and (ii) to
those of such party's officers, directors, partners, employees and agents who
have a "need to know." In addition, each party will obtain a confidentiality
agreement from any independent contractor to which it discloses the other
party's Confidential Information.
3.2 Definition. "Confidential Information" shall mean (a) any forms,
policies, procedures, manuals and materials of any kind created, owned or
provided by a party in connection
with, or with respect to, the Services, (b) any information or data relating to
the Services or this Agreement that is made available by a party to the other
party and (i) is marked confidential, or at the time of its being made
available, is otherwise indicated to be confidential, or (ii) within thirty (30)
days after such information or data is first made available, is indicated in
writing to be confidential, (c) any derivative works based on the materials,
information or data described in subclauses (a) and (b) above, and (d) with
respect to the confidentiality obligations hereunder of CAI only, (i) patient
information, and (ii) any and all information or data (whether patient specific,
account specific, aggregates thereof or otherwise) relating to the cost or
utilization of health care services provided to, or received by an individual
covered by any NYCP health care benefit plan; provided, however, Confidential
Information shall not mean information or data that (A) was previously known to
the receiving party at the time of disclosure, provided that such information
was acquired through no fault of the receiving party nor was received from a
person that did not have the legal right to make such information available, (B)
is publicly known through no act or omission by the receiving party, or (C) is
disclosed to the receiving party by a third party having the legal right to make
such disclosure.
4. Term.
4.1 Generally. The Effective Date of this Agreement is January 1, 1998 and
CAI will commence providing services to NYCP including, but not limited to,
Clinical Support Services referenced in Section 1.2, above, no later than
January 5, 1998. This Agreement shall be for a one (1) year term beginning on
the Effective Date, and shall renew automatically for successive one (1) year
terms, unless either party provides the other with notice of non-renewal not
less than sixty (60) days prior to the end of the scheduled term.
4.2 Termination for Cause. This Agreement shall be terminable by either
party for its material breach upon not less than thirty (30) days' prior written
notice to the other party, setting forth in detail the material breach, and
providing that the Agreement is to be terminated upon the expiration of thirty
(30) days or such longer period which may be set forth in the notice, unless the
material breach is cured within that time period.
4.3 Right to Early Termination. Notwithstanding the foregoing, NYCP shall
have the right to terminate this Agreement on the first six-month anniversary of
the Effective Date in the event that it determines in its sole and
non-reviewable discretion that it is dissatisfied with CAI's performance;
provided, however, that in such event NYCP shall give CAI thirty (30) days'
prior written notice of its intent to terminate this AGREEMENT.
5. Insurance; Indemnification; Defense of Litigation
5.1 Insurance. CAI shall maintain in full force and effect during the term
of this Agreement errors and omissions/utilization review and utilization
management insurance in per occurrence and aggregate face amounts of at least $5
million and $10 million, respectively, naming NYCP as an additional insured,
such policy or policies not to be cancelable upon less than thirty (30) days'
prior notice, and providing that NYCP shall receive copies of any notice of
cancellation.
5.2 Indemnification. Each party hereto (as such, an "Indemnifying Party")
agrees to indemnify, defend and hold harmless (collectively, "Indemnify") the
other party and such other party's officers, directors, employees or agents
(collectively, "Indemnified Parties") from and against any and all claims or
portions thereof, suits, costs and expenses, including without limitation, costs
of investigation and defense, incurred by such Indemnified Parties as a result
of any willful misconduct or any negligent act or omission by the Indemnifying
Party in connection with this Agreement. This provision is not intended to
obligate CAI to Indemnify NYCP for claims, or portions thereof, under the terms
of NYCP's health insurance policies or HMO agreements which NYCP would have been
obligated to pay regardless of the misconduct or act or omission of CAI.
5.3 Defense of Litigation. Except as provided in Section 5.2, each party
shall be responsible at its own expense for defending itself in any litigation
brought against it, whether or not the other party is also a defendant, arising
out of any aspect of activities undertaken in connection with this Agreement.
Each party agrees to provide the other party information in its possession which
is necessary to the other party's defense in such litigation.
6. Additional Requirements
6.1 Independent Contractors. The relationship of the parties under this
Agreement shall be that of independent contractors. Neither shall have any claim
under this Agreement or otherwise against the other party as a joint venturer or
partner.
6.2 Proprietary Rights. Neither party shall use the name, logos,
trademarks, or servicemarks of the other without the other's prior written
consent, except that CAI may include NYCP in its listing of clients.
6.3 Nonsolicitation of Employees. During the term of this Agreement and for
an additional period of two (2) years after the termination of this Agreement,
neither CAI nor NYCP shall solicit for employment or hire any employee or
consultant of the other without the other's prior written consent.
6.4 No Guarantee of Medical Results. Neither the execution of this
Agreement nor the performance of any of its obligations constitutes an
undertaking by CAI to guarantee the results of health care provider services or
that such services will be rendered in accordance with generally accepted
medical standards or procedures. The parties agree that CAI is not and shall not
be deemed a health care provider as a result of the Services provided pursuant
to this Agreement, and that all decisions concerning the rendering of health
care services are determined by the patient's physician, hospital or other
health care provider and the patient. The parties acknowledge and agree that
neither CAI nor NYCP shall intervene in the provision of medical services, it
being understood and agreed that the traditional relationship between provider
and patient will be maintained. Thus, a benefit determination by NYCP and/or a
utilization management recommendation by CAI, that a particular course of
treatment is not medically necessary and/or is inconsistent with the utilization
management protocols and, thus not a covered service under the covered person's
benefit plan, shall not be deemed to be a medical determination or intervention
in the provision of medical services.
7. Miscellaneous
7.1 Compliance With Laws and Certain Regulatory Requirements. Each party
shall, throughout the term of this Agreement, be in continuous compliance with
all applicable laws. In addition CAI shall be in continuous compliance with
applicable requirements of the American Accreditation Healthcare Commission/URAC
and the National Committee on Quality Assurance.
7.2 Notice. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given upon receipt, and shall be
addressed as follows:
If to NYCP: New York Care Plus Insurance Company.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Senior Vice President & Chief Operating Officer
If to CAI: CareAdvantage, Inc.
Metropolitan Corporate Center ▇▇▇-▇
▇▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.,
Executive Vice President
or to such other address as any party hereto shall have designated to the other
parties in accordance with the provisions of this Agreement.
7.3 Parties in Interest. This Agreement is made for the exclusive benefit
of the parties hereto, their successors and permitted assigns, and no person or
entity other than CAI, NYCP, their successors or permitted assigns shall acquire
or have any rights under or by virtue of this Agreement.
7.4 Impossibility of Performance. No party shall be deemed to be in
violation of this Agreement if prevented from performing any obligation
hereunder due to matters that are beyond its control, including without
limitation war, fire, strikes, riots, floods, storms, earthquakes, other
elements or acts of God or the public enemy.
7.5 Binding Agreement; Assignability. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns and subcontractors. No party hereto shall sell,
assign, transfer, convey, subcontract or otherwise dispose of its rights or
obligations under, title to, or interest in, this Agreement, in whole or in
part, to a third party other than a wholly-owned subsidiary without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
7.6 Entire Agreement; Amendment. This Agreement and Attachment A embody the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof. This Agreement may not be amended except by a writing
executed by each of the parties hereto.
7.7 Disputes. In the event of any dispute between the parties hereto
arising out of or concerning this Agreement, the parties agree to use their
reasonable best efforts to resolve any such dispute amicably, in good faith, and
expeditiously prior to resorting to litigation.
7.8 Injunctive Relief. The parties acknowledge that in the event of the
breach of certain provisions of this Agreement, including Sections 3, 6.2 and
6.3, CAI or NYCP, as the case may be, may not have an adequate remedy at law and
will suffer irreparable damage and injury. Therefore, in addition to any other
remedy available, CAI and NYCP each agree that if it violates any of the
provisions of Section 3, 6.2 or 6.3, the non-breaching party shall be entitled
to injunctive relief, without bond, from a court of competent jurisdiction.
7.9 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York without giving effect to the
principles of conflicts of laws.
7.10 Severability. If any term of this Agreement or application thereof
shall be invalid or unenforceable, the remainder of this Agreement shall remain
in full force and effect.
7.11 Counterparts. This Agreement may be executed in several
counterparts, each of which is an original but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the date written above.
CAREADVANTAGE, INC. NEW YORK CARE PLUS
INSURANCE COMPANY, INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
TITLE: Executive Vice President TITLE:Senior Vice President