Exhibit 10.35
SERVICE AGREEMENT
THIS SERVICE AGREEMENT ("Agreement") is made as of the 1st day of January,
1999 (the "Effective Date"), by and between HealthNow New York Inc. ("HNNY"),
with its principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, and CareAdvantage, Inc. ("CAI") with its principal place of business at
▇▇▇-▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, CAI and HNNY have entered into an agreement dated as of January
5, 1998 ("Prior Agreement"), which agreement expires December 31, 1998;
WHEREAS, the parties desire to provide to set forth the terms and
conditions pursuant to which CAI will provide certain services to HNNY on or
after January 1, 1999;
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, and 1.4 ("Services") to HNNY. HNNY acknowledges that, to the extent that
the Services set forth in Sections 1.2, 1.3 and 1.4, below, require on-site
presence at HNNY's offices, such Services will be performed at its Albany
Division. CAI and HNNY shall consult regularly regarding the allocation of CAI's
resources among HNNY's Albany, Buffalo and Central New York Divisions.
1.2 Clinical Support.
a. CAI will provide experienced physician reviewers, equivalent to one (1)
FTE, to support HNNY'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 and telephone
access. CAI will ensure that physician reviewers are available at the same days
and times that HNNY is available to health care providers to conduct utilization
review. CAI further agrees that access to physician reviewers shall be provided
on-site at HNNY no less than sixty (60%) per cent of such HNNY Utilization
Management Department operating hours. The physician reviewers shall be subject
to HNNY's approval, which shall not be unreasonably withheld.
▇. ▇▇▇ will provide HNNY with matched specialty review through access to
CAI's Specialty Advisor Panel on an as-needed basis. All reviews must be
coordinated through CAI's physician reviewers.
▇. ▇▇▇ shall maintain any licensure required in connection with its
activities. The parties acknowledge and agree that HNNY 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 HNNY's and/or the self-insurer's, as
applicable, grievance procedure.
1.3 Staff Performance Audit and Skill Development Program
a. Staff Performance Audit. CAI will conduct for the Albany Division a
baseline staff performance audit to support the customization of the training
materials and to select the additional modules most needed for the success of
the Plan's programs and initiatives. The staff performance audit findings
reports will show strengths and weaknesses in the current review staff's
knowledge and skill level as well as quantify the missed opportunities for
proactive and aggressive level and progression of care management.
b. Skill Development Program.
i. CAI will provide a comprehensive training program to HNNY's
clinical care management staff. This training program is designed to
provide such staff with a thorough understanding of the care management
process and help them develop the skills necessary to facilitate high
quality, cost-effective care. The training will be conducted by healthcare
educators and care management professionals, including an experienced CAI
medical director for those program modules with clinical content. An
outline of the training program is set forth in Attachment A.
ii. CAI will train approximately 20 clinical staff, 6-8 case
managers and 2-3 administrative support staff. Training will be scheduled
for mutually agreeable times so as to optimize the learning experience and
minimize the disruption to HNNY's review process.
iii. Upon completion of the training, CAI will measure the impact of
the training through a participant evaluation and through a post training
review audit, and will summarize and provide the results to HNNY.
1.4 Reports. CAI will provide HNNY with monthly review activity reports.
The format and content of these reports will be in accordance with those
furnished pursuant to the Prior Agreement or as the parties may mutually agree.
2. Compensation & Expenses
2.1 Base Compensation. CAI's compensation for the Services provided
pursuant to this Agreement shall be Two Hundred Fifty Three Thousand Five
Hundred Seventy-Eight ($253,578) Dollars, payable in monthly installments of
Forty Two Thousand Two Hundred Sixty Three
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($42,263) Dollars. HNNY 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, HNNY shall pay CAI one hundred ($100) dollars for each case
reviewed by CAI's Special Advisory Panel to the extent in excess of 500 cases.
HNNY shall pay CAI within thirty (30) days of its receipt of CAI's invoice for
such services.
2.3 Expenses. HNNY shall reimburse CAI for CAI's reasonable out-of-pocket
expenses incurred in connection with this Agreement, including expenses for
travel, lodging and meals. HNNY 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 HNNY 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.
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4. Term.
4.1 Generally. This Agreement shall be for a six (6) month term beginning
on the Effective Date. Notwithstanding the preceding sentence, HNNY and CAI
agree that CAI's obligations with respect to Section 1.2(b) and 1.3, above,
shall survive the termination of the Agreement with respect to any services
covered by those subsections (i.e., matched specialty review, staff development
audit and skill development programs) that are in progress but not completed as
of the effective date of termination.
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.
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 HNNY as an additional insured,
such policy or policies not to be cancelable upon less than thirty (30) days'
prior notice, and providing that HNNY 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 HNNY for claims, or portions thereof, under the terms
of HNNY's health insurance policies or HMO agreements which HNNY 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.
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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 HNNY 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 HNNY 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 HNNY 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 HNNY 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:
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If to HNNY: New York Care Plus Insurance Company.
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▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇,
Vice President
If to CAI: CareAdvantage, Inc.
▇▇▇-▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.,
President & Chief Operating Officer
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, HNNY, 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 HNNY, as the case may be, may not have an adequate remedy at law and
will suffer irreparable damage and injury. Therefore,
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in addition to any other remedy available, CAI and HNNY 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 Effect of Prior Agreement. The parties acknowledge that the Prior
Agreement expired as of December 31, 1998.
7.12 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.
HEALTHNOW NEW YORK INC.
BY:_________________________ BY:_________________________
TITLE:______________________ TITLE:______________________
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ATTACHMENT A
TRAINING PROGRAM
Program I Basic Care Management for all clinical staff and administrative staff
1. Customized levels of care
a. Care management continuum
b. Levels of care I, II and III
I: Outpatient, Observation, Acute
II: Subacute, Skilled Nursing Facility
III: Rehabilitation, Home Care
2. Facilitating appropriate level and progression of care
a. Review process I and II
b. Introduction to standard and clinical guidelines
c. Discharge planning
3. Communication and negotiation skills
a. Introduction to communication
b. Care management negotiations
c. Customer Service (administrative staff only)
Program II Basic Case Management for case managers
1. Coordination of care
2. Patient advocacy
3. Cost/benefit analysis theories
4. Legal implications
5. Generic care planning
Program III Clinical Training
Two clinical modules (to be selected through staff assessment process)
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