MASTER SERVICE AGREEMENT
EXECUTION SHEET
This Master Agreement ("Agreement") is made and entered into by and among Aetna
U.S. Healthcare Inc., on behalf of itself and all of its applicable affiliates
(collectively, "Aetna USHC") (other than Human Affairs International,
Incorporated ("HAI") and its subsidiaries), Magellan Health Services, Inc.
("Magellan") and HAI. As used in this Agreement, "Contractor" refers to HAI and
its subsidiaries. As used in this Agreement, "Aetna USHC" may refer from time to
time to Aetna U.S. Healthcare Inc. and its affiliated companies, collectively,
including HAI and its subsidiaries prior to the Effective Date and excluding HAI
and its affiliates after the Effective Date. Aetna USHC and Contractor are
hereinafter sometimes referred to collectively as "Parties" and individually as
a "Party".
The "Effective Date" of this Agreement shall be the date the transactions
contemplated by the Stock Purchase Agreement dated as of August 5, 1997 between
Aetna Insurance Company of Connecticut and Magellan Health Services, Inc. (the
"Stock Purchase Agreement") are consummated, subject to any applicable
regulatory approvals.
Aetna USHC and Contractor mutually desire to enter into an agreement whereby
Aetna USHC and Contractor will provide access to and coordinate the provision of
behavioral health care services to Members with the objective of delivering
cost-effective, quality behavioral health care services.
This Agreement constitutes the complete and exclusive contract between the
parties with respect to the subject matter hereof and supersedes any and all
prior or contemporaneous oral or written communications or proposals not
expressly included herein.
In consideration of the mutual covenants and promises stated herein and other
good and valuable consideration, the parties hereby enter into this Agreement.
By executing this Agreement, the parties acknowledge and agree that they have
reviewed all of the terms and conditions of this Agreement and intend to be
legally bound by same.
Aetna U.S. Healthcare Inc. Magellan Health Services, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President Title: Chairman, President & CEO
Date: August 5, 1997 Date: August 5, 1997
Human Affairs International,
Incorporated
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President & CEO
Date: August 5, 1997
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This Agreement is entered into by and between Aetna USHC, Magellan and HAI,
which parties have signed the Execution Sheet attached hereto.
1. Behavioral Healthcare Services
A. Contractor provides, and manages the administration and utilization
of, behavioral healthcare benefits in multiple jurisdictions
throughout the United States. It is the intention of the Parties that
all Members for which Aetna USHC compensates Contractor pursuant to
Section 6 hereof will be serviced by or through Contractor. In the
event that any services are provided to Members by Magellan or a
subsidiary of Magellan (other than Contractor), such services will be
deemed to be provided by Contractor for purposes of Section 7 of this
Agreement. In addition, in the event that Contractor transfers to
Magellan or a subsidiary of Magellan (other than Contractor) any
Member who receives Managed Behavioral Health services, such Member
shall be deemed to be a Member for purposes of Section 7 of this
Agreement so long as such Member continues to receive Managed
Behavioral Health services from Magellan or one of its subsidiaries.
In the event that the product category known as "Managed Behavioral
Health" is amended, changed, subdivided or combined with other
categories of products or services without the intent of preventing
the counting of increase in Managed Behavioral Health Members, and as
a result of such action it becomes impossible or impracticable for the
Parties to determine the number of Members receiving Managed
Behavioral Health services, Contractor shall be deemed to have
provided such services to not less than the number of such Members
immediately prior to such event for purposes of Section 7 of this
Agreement.
Commencing on the Effective Date, Contractor shall provide the
services described in Exhibits A [GENERIC HMO AGREEMENT] and B
[NON-HMO AGREEMENT] hereto (collectively, the "Vendor Contracts") in
the markets described in Schedules A [HMO MARKETS] and B [NON-HMO
MARKETS], respectively, subject to the qualifications set forth in
paragraphs B and C below.
B. Aetna USHC and Contractor shall implement the Behavioral Health Care
Service Agreements substantially in the form attached hereto as
Exhibit A (the "HMO Agreement") for each of the markets identified in
Schedule A on the Effective Date, subject to any applicable regulatory
approvals and licensing requirements. It is understood and agreed that
the form of HMO Agreement attached hereto may need to be modified in
each market in a manner that is reasonably acceptable to Aetna USHC
and Contractor to meet applicable regulatory requirements. The parties
to the HMO Agreements shall be the applicable HMO subsidiary or
affiliate of Aetna USHC on the one hand and Contractor or one of its
affiliates on the other.
C. Aetna USHC and Contractor (or Magellan) may, from time to time,
mutually agree to enter into HMO Agreements in other geographic
markets not identified on Schedule A.
D. Aetna USHC and Contractor shall enter into the Behavioral Health Care
Service Agreement substantially in the form attached hereto as Exhibit
B (the "Non-HMO Agreement") on the Effective Date, subject to any
applicable regulatory approvals. The Non-HMO Agreement shall govern
the provision of services identified therein for Aetna USHC throughout
the United States.
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E. In order to provide services pursuant to this Agreement, Network
Providers must have executed individual Participating Provider
Addendum attached to the applicable HMO Agreement. Contractor and all
Network Providers will act as independent contractors of Aetna USHC in
providing Covered Services to Members. Except as otherwise set forth
in this Agreement, Aetna USHC shall not be liable for any provider's
failure to properly perform health care services to any Member or
fulfill his/her/its obligations under applicable provider contract.
F. Network Providers who are HMO Network Providers shall participate in
all Plans covering Members serviced by Contractor throughout the term
of this Agreement, provided they continue to meet Aetna USHC's
participation criteria.
G. On an ongoing basis Contractor shall identify potential Network
Providers who have agreed to participate in the Aetna USHC provider
network and shall encourage such providers not currently participating
with Aetna USHC to apply for participation with Aetna USHC. Aetna USHC
agrees to accept for participation any such provider that meets Aetna
USHC's applicable participation criteria and agrees to the terms and
conditions required by this Agreement. It is understood by the
parties, however, that an HMO Network Provider cannot provide services
pursuant to this Agreement unless such provider participates in all
Plans.
2. Products/Publicity
Aetna USHC shall have the primary responsibility for the advertising and
marketing of all Plans. Neither Party may advertise, issue a press release
or make any public written statement about the other Party or this
Agreement without such other Party's prior written approval, which shall
not be unreasonably withheld, provided that neither Party shall need the
approval of the other Party for disclosure relating to this Agreement
within the text of any periodic report (other than a press release) filed
with the Securities and Exchange Commission ("SEC"), that both Parties
recognize this Agreement may be filed with the SEC as an exhibit to an SEC
report and that this Section shall not prohibit either Party from making
any disclosure permitted by Section 17.A, B or C.
3. Duties of Contractor and Magellan
A. Magellan shall, and shall cause its subsidiaries (including HAI), to
comply with their respective obligations of this Agreement and all
Vendor Contracts (including the HMO Agreements and the Non-HMO
Agreement) entered into pursuant to this Agreement.
B. Contractor shall satisfy all regulatory and licensure requirements for
the implementation and continued effectiveness of the HMO Agreements
in all of the markets in which Contractor is providing services and
for the implementation and continued effectiveness of the Non-HMO
Agreement.
C. Contractor shall comply with all federal and state laws in all
material respects applicable to it related to this Agreement, the
Vendor Contracts and the services to be provided thereunder,
including, but not limited to statutes and regulations
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related to fraud, abuse, discrimination, disabilities,
confidentiality, self-referral, false claims and prohibition of kick
backs.
D. Contractor shall use commercially reasonable best efforts to require
that Network Providers properly provide the Covered Services of the
applicable Plan.
E. Contractor shall use commercially reasonable best efforts, in
cooperation with Aetna USHC, to review, inform and educate Network
Providers of all applicable Aetna USHC policies and procedures
delivered to HAI.
4. Duties of Aetna USHC
A. Aetna USHC shall cause its affiliates located in the markets
identified on Schedule A hereto to enter into and comply with the
terms of the HMO Agreements and the Non-HMO Agreement for their
particular markets, consistent with the provisions of Section 1
hereof.
B. Prior to the Effective Date, Aetna USHC shall satisfy all regulatory
and licensure requirements applicable to it for the implementation of
the HMO Agreements in all of the markets identified on Schedule A
hereto and for the implementation of the Non- HMO Agreement.
C. Aetna USHC shall comply with all federal and state laws in all
material respects applicable to it related to this Agreement and the
Vendor Contracts.
5. Provider Contracts/Network Rental Arrangement
A. Aetna USHC understands and agrees that Contractor is in the midst of a
recontracting effort to establish provider contracts directly with all
of its participating providers, and that Contractor may not have
completed this effort prior to the Effective Date. Aetna USHC agrees
to use reasonable efforts to assist Contractor in such efforts.
Contractor may therefore need to avail itself of a portion of Aetna
USHC's behavioral health provider network for a period of time
following the Effective Date. Aetna USHC hereby agrees to enter into a
network rental arrangement (the "Network Rental Arrangement") with
Contractor on terms and conditions that are reasonably satisfactory to
both Parties (at no fee to Contractor) for a period of one year
following the Effective Date. Unless prohibited by the applicable
contract, the Network Rental Arrangement shall encompass all Aetna
USHC behavioral health participating providers who or which do not
have a direct contractual relationship with Contractor. Except for
cause, Aetna USHC shall not terminate any contracts with any such
participating providers until termination of the Network Rental
Arrangement. Aetna USHC shall not, however, be obligated to renew any
such contracts that expire. To the extent necessary to maintain the
quality of Contractor's provider networks, the Parties may mutually
agree to extend the six-month Network Rental Arrangement for such
longer period of time as may be appropriate under the circumstances.
Upon request, Contractor shall provide Aetna USHC with a mailing list
of all behavioral health providers who have entered into any direct
contracts of the type described above with Contractor, which will
enable Aetna USHC to terminate existing provider contracts with Aetna
USHC (where it deems appropriate).
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B. Subject to terms of the immediately preceding paragraph, Contractor
shall cooperate with Aetna USHC's efforts in the event Aetna USHC
concludes it is desirable to terminate (or terminate its participation
in) any behavioral health provider contracts to which Aetna USHC is a
party, including but not limited to the three-party provider contracts
entered into prior to the Effective Date and any contracts to which
Aetna USHC and the provider are the sole contracting parties. Aetna
USHC will use commercially reasonable best efforts to cooperate with
and assist Contractor in enforcing contracts with Participating
Providers utilized by Contractor pursuant to the Network Rental
Agreement.
C. Contractor shall indemnify and hold Aetna USHC harmless from all
claims, obligations, liabilities or other causes of action (including
costs and counsel fees) (collectively, "Claims") relating to the
Network Rental Arrangement, behavioral health care services provided
by Contractor or any Participating Provider or Participating
Provider's commercial relationship with Contractor, except that Aetna
USHC will not be indemnified for, and shall indemnify and hold
Contractor harmless from, all Claims which arise from Aetna USHC's
negligence or willful misconduct in performing its obligations under
the Rental Network Agreement.
6. Rates; Payment Arrangements
A. The rates for services provided under the HMO Agreements shall be as
set forth in Schedule A.
B. The rates for services provided under the Non-HMO Agreement shall be
as set forth in Schedule B hereto.
C. If (a) Aetna USHC changes the Covered Services or the level of care
criteria applicable to a Plan, or implements a new Plan, which will
(in Aetna USHC's or Contractor's reasonable actuarial estimate) result
in $.05 or more change (either increase or decrease) in the total cost
of Covered Services per Member per month under such Plan (or if no
applicable Plan exists, under the most similar Plan) from the then
total cost of the Covered Services then in effect (whether such
addition results from a change in Plan structure or benefits or from a
change in law or regulation), (b) Aetna USHC changes the co-payment or
co-insurance requirements of a Plan which will, in Aetna USHC's
reasonable actuarial estimate which is reasonably acceptable to
Contractor, result in a material change in the utilization of Covered
Services, (c) Aetna USHC implements any material changes in the
policies and procedures applicable to Contractor (including any
amendments to credentialing criteria, reporting obligations, etc)
which will result in Contractor becoming obligated to perform a task
it was otherwise not obligated to perform and the incurrence of a
material increase in expense by Contractor's expense (which expense
increase shall be demonstrable to Aetna USHC's reasonable
satisfaction), or (d) an advance in technology materially lowers
treatment costs, the Parties shall negotiate in good faith for a
period of sixty (60) days to make appropriate increases or decreases
(as appropriate) to the rates described in this Section 6. If the
Parties are unable to agree upon such increases, the Parties shall
resolve any dispute arising from such negotiation pursuant to Section
13 of this Agreement. If the Parties agree upon such increase or
decrease in rates (whether through negotiations or through dispute
resolution),
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the changed rates shall be effective as of the first date on which the
applicable event described above have occurred or occur. If the
changed rates described above are not utilized during any period when
such changed rates should have been utilized, the then-existing rates
prior to such change in rates shall be utilized to pay Contractor and
any adjustment thereto necessary to reflect the changed rates shall be
applied retroactively. During any period in which any change in rates
is being determined pursuant to this Section (whether through
negotiations or through dispute resolution), Aetna USHC shall continue
to pay to Contractor in accordance with the then-existing rates prior
to such change, and upon determination of such changed rates and if
the effective date of such change is prior to the date of such
determination, any adjustment to the then-existing rates prior to such
change shall be retroactively applied to such effective date.
D. In the event that Aetna USHC's reversals of Contractor's clinical
denials that are consistent with Company's standards, policies,
procedures and criteria become in the aggregate materially burdensome
to Contractor, Contractor may bring the resulting incremental cost
increase issue to the Operating Committee pursuant to Sections 13.B.
and 13.C of this Agreement.
7. Contingent Payments
A. Tranche 1 and Tranche 2 Payments. In respect of each Contract Year,
Contractor shall promptly pay to Aetna USHC the "Tranche 1 Payments"
and "Tranche 2 Payments" described below, if any, calculated in
accordance with, and payable pursuant to the terms and conditions of,
this Section 7.
B. Certain Defined Terms. For purposes of this Section, the following
terms shall have the following meanings:
(i) "Aggregate Member Months" shall mean for any Contract Year (a)
with respect to Tranche 1 Members, the total Member Months for
all Tranche 1 Members during such Contract Year, and (b) with
respect to Tranche 2 Members, the total Member Months for all
Tranche 2 Members during such Contract Year.
(ii)"Base Members" shall mean (a) with respect to Tranche 1 Members,
the Tranche 1 Members as of the last day of the month immediately
prior to the Effective Date (but in no event later than December
31, 1997), and (b) with respect to Tranche 2 Members, the Tranche
2 Members as of the last day of the month immediately prior to
the Effective Date (but in no event later than December 31,
1997).
(iii)"Contract Year" shall mean each of the twelve-month periods ending
on the last day of the month in which the Effective Date takes
place in 1998, 1999, 2000, 2001, and 2002. If the Effective Date
shall be in 1998, the reference to Contract Years in this Section
shall be one year later than as stated herein.
(iv)"Equivalent Members" for any Contract Year shall be determined as
follows, with respect to a designated category or categories of
Members serviced by Contractor: (a) determine the Aggregate
Member Months for
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which Contractor provides services to designated category or
categories of Members during the applicable Contract Year, and
(b) divide by 12.
(v) "FPR" shall mean the provision to Members of one or more products
or services described in Schedule C hereto, regardless of the
name of such product or service and regardless of the identity of
the affiliate of Contractor offering or providing such product or
service.
(iii)"HMO" shall mean the provision to Members of one or more products
or services described in Schedule D hereto, regardless of the
name of such product or service and regardless of the identity of
the affiliate of Contractor offering or providing such product or
service.
(iv)"Initial Contract Year" shall mean the Contract Year ending in
1998.
(v) "Managed Behavioral Health" shall mean the provision to Members
of one or more products or services described in Schedule E
hereto, regardless of the name of such product or service and
regardless of the identity of the affiliate of Contractor
offering or providing such product or service.
(vi)"Managed Choice" shall mean the provision to Members of one or
more products or services described in Schedule F hereto,
regardless of the name of such product or service and regardless
of the identity of the affiliate of Contractor offering or
providing such product or service.
(vii)"Member" shall mean, for purposes of this Section 7 only, (a) any
Member (as defined in Section 19.B of this Agreement) or (b) any
member who receives Managed Behavioral Health services from
Contractor (regardless of whether such member is a member of a
Plan or a plan offered by an employer that is not a customer of
Aetna USHC).
(viii)"Member Months" shall mean, for each Member, the number of months
for which Contractor provides services and is compensated under
this Agreement or any Vendor Contract.
(ix)"Tranche 1 Cumulative Incremental Members" shall mean, with
respect to any Contract Year, (i) the number of Equivalent
Members serviced by Contractor during such Contract Year for
Tranche 1 Members, minus (ii) (A) for each Contract Year other
than the Initial Contract Year, the number of Equivalent Members
serviced by Contractor for Tranche 1 Members during the
immediately preceding Contract Year or (B) for the Initial
Contract Year, the Base Members.
(x) "Tranche 2 Cumulative Members" shall mean, with respect to any
Contract Year, (i) the Equivalent Members serviced by Contractor
during such Contract Year for Tranche 2 Members, minus (ii) the
Base Members.
(xi)"Tranche 1 Members" shall mean Members for whom Contractor
provides services in any of the following categories of products
or services: Managed Choice, Managed Behavioral Health, and HMO
(including conversions of individuals who are serviced only in
the category referred to by Contractor as "Network" members into
Managed Choice, Managed
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Behavioral Health, and HMO Members, but not conversions of FPR
Members into such categories. In the event the names of any of
the above service or product categories are changed or any of the
above services or products are amended, changed or subdivided,
the Member for whom Contractor provides such changed, amended or
subdivided service or product shall be deemed Tranche 1 Members.
(xii)"Tranche 2 Members" shall mean Members for whom Contractor
provides products or services in the category of HMO (including
conversions of service with respect to individuals who are
serviced only by Contractor in the category referred to by
Contractor as "Network" members, but not conversions of FPR
Members into HMO Members). In the event the names of any of the
above service or product categories are changed or any of the
above services or products are amended, changed or subdivided,
the Member for whom Contractor provides such changed, amended or
subdivided service or product shall be deemed Tranche 2 Members.
"Tranche 1 Multiplier" shall have the meaning set forth in Schedule H.
(xi) "Tranche 2 Multiplier" shall have the meaning set forth in
Schedule H.
(xii)"Tranche 1 Payment" shall mean the aggregate amount payable to
Aetna USHC pursuant to Section 7.C. with respect to Tranche 1
Members.
(xiii)"Tranche 2 Payment" shall mean the aggregate amount payable to
AUSHC pursuant to Section 7.C. with respect to Tranche 2 Members.
C. Tranche 1 Payment.
(i) Upon the expiration of each Contract Year, the Tranche 1 Payment
shall vest with respect to such Contract Year in an amount equal to the
product of (i) the Tranche 1 Cumulative Incremental Members for such
Contract Year and (ii) the Tranche 1 Multiplier for such Contract Year. For
purposes of this Section 7.C., the vested amount of Tranche 1 Payment shall
be zero with respect to any Contract Year in which the Tranche 1 Cumulative
Incremental Members is a negative number.
(ii)Within 30 days following the end of each Contract Year, a
statement regarding the calculation of the Tranche 1 Payment for such
Contract Year (the "Tranche 1 Statement"), including the supporting
information regarding (A) the Aggregate Member Months for such Contract
Year, (B) the Base Members and (C) the vested and unpaid amounts as of the
applicable time and by each previous Contract Year and for such Contract
Year (before and after any adjustment for such Contract Year pursuant to
clause (iv) of this Section 7.C), shall be delivered in accordance with
Section 7.E. below.
(iii) Within 15 days after receipt by Aetna USHC of the Tranche 1
Statement in accordance with paragraph (ii) of this section 7.C. for each
Contract Year, Contractor shall pay to Aetna USHC the lesser of (i) the
vested portion of the Tranche 1 Payment for such Contract Year and the
vested and unpaid amount relating to prior Contract Years as of the end of
the immediately preceding
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Contract Year (after any adjustment for such Contract Year pursuant to
clause (iv) of this Section 7.C) and (ii) $25,000,000. To the extent that
the vested and unpaid portion of the Tranche 1 Payment exceeds $25,000,000,
the Tranche 1 Payment remitted to Aetna USHC shall be deemed to have been
paid first from any vested but unpaid amounts from previous Contract Years
in order from the earliest Contract Year for which vested amounts remain
unpaid to the most recent Contract Year at the time of such calculation.
Except with respect to the Contract Year ending 2002, any vested but unpaid
portion of the Tranche 1 Payment shall be available for payment to Aetna
USHC in future Contract Years, subject to the provisions of paragraph (iv)
of this Section 7.C. All vested but unpaid amount of Tranche 1 Payments
shall expire following the payment of the Tranche 1 Payment in respect to
the Contract Year ending in 2002, except as otherwise provided in clause
(v) below. Notwithstanding anything herein to the contrary, in no event
shall the aggregate Tranche 1 Payments to Aetna USHC hereunder exceed
$125,000,000.
(iv) In the event that the number of Tranche 1 Cumulative Incremental
Members in respect to any Contract Year is a negative number due to a
decrease in the number of Tranche 1 Cumulative Incremental Members for such
Contract Year (as compared to the immediately preceding Contract Year),
Aetna USHC will forfeit the right to receive a certain portion (which may
be none or all) of the vested and unpaid amounts of the Tranche 1 Payment
relating to preceding Contract Years in accordance with the following
sentences. For purposes of this calculation, the vested and unpaid amount
of the Tranche 1 Payment for all applicable Contract Years (the "vested and
unpaid balance") will be converted to a number of Tranche 1 Members by
dividing the vested and unpaid balance for each applicable Contract Year by
the Tranche 1 Multiplier for such Contract Year and rounding to the nearest
whole number and aggregating all such Tranche 1 Members (the resulting
number being referred to as the "vested and unpaid Tranche 1 Members").
Once the vested and unpaid balance has been converted to the vested and
unpaid Tranche 1 Members, Aetna USHC will forfeit the vested and unpaid
Tranche 1 Members equal to the negative number of Tranche 1 Cumulative
Incremental Members during the Contract Year for which the calculation is
being made. The vested and unpaid Tranche 1 Members will be forfeited in
the order of Contract Year from the earliest Contract Year for which the
vested and unpaid Tranche 1 Members were converted. To the extent that one
or more vested and unpaid Tranche 1 Members are remaining after the
forfeiture resulting from the negative Tranche 1 Cumulative Incremental
Members has been completed as described above, such vested and unpaid
Tranche 1 Members will be converted back to vested and unpaid balance by
multiplying the number of each portion of such remaining vested and unpaid
Tranche 1 Members for each Contract Year by the Tranche 1 Multiplier for
the Contract Year in which such vested and unpaid Tranche 1 Members
originally vested. The resulting amount of vested and unpaid balance will
be available for payment of the Tranche 1 Payment in accordance with clause
(iii) above.
(v) In the event that the aggregate Tranche 1 Payments paid to Aetna
USHC in respect of all Contract Years is less than $125,000,000, Aetna USHC
shall be eligible to earn such deficit amount from any vested but unpaid
balance remaining after payment of Tranche 1 Payment in respect of the
Contract Year ending 2002. In order to become eligible to receive such
deficit amount, Aetna USHC must elect (by written notice to Contractor
delivered no later than 45 days following the
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expiration of the Contract Year ending in 2002) to extend the term of this
Agreement and all HMO Agreements and the Non-HMO Agreement for a term
expiring the contract year ending in 2005 and on the terms and conditions
which are in effect during the Contract Year expiring 2002. In the event
that Aetna USHC makes such an election, Aetna USHC shall be eligible to
receive vested and unpaid amount of Tranche 1 Payments (subject to the
annual maximum payment of $25,000,000 and the aggregate maximum of
$125,000,000) in respect of the extended contract years expiring in 2003,
2004 and 2005 on the same terms and conditions applicable (including
eligibility, calculation and receipt mechanics) to Tranche 1 Payments in
respect of Contract Years; provided that (a) in no event shall Aetna USHC
be entitled to receive an amount in excess of the vested and unpaid balance
at the end of Contract Year 2002 (after any adjustment for such Contract
Year pursuant to clause (iv) of this Section 7.C) and (b) all vested and
unpaid amount of Tranche 1 Payments shall expire upon the earlier of (i)
the payment of aggregate Tranche 1 Payments of $125,000,000 or (ii)
expiration of the Contract Year ending 2005.
(vi) Contractor shall use "best efforts" (as defined below) to
maintain and grow the Managed Behavioral Health business. For purposes of
this clause, Contractor's "best efforts" shall include retaining at least
the substantially same level of resources currently devoted to such
business by Contractor and not increasing rates charged for such business
by Contractor above the reasonable market rate, as reviewed and determined
annually by the Operating Committee in accordance with Section 13.
D. Tranche 2 Payment.
(i) Upon the expiration of each Contract Year, the Tranche 2 Payment
shall be an amount equal to the lesser of: (a) (I) the product of (A) the
Tranche 2 Cumulative Members for such Contract Year and (B) the Tranche 2
Multiplier applicable to such number of Tranche 2 Cumulative Members, minus
(II) the aggregate of the Tranche 2 Payments paid to Aetna USHC for all
previous Contract Years and (b) $35,000,000. For purposes of this Section
7.D., this amount shall be zero with respect to any Contract Year in which
the Tranche 2 Cumulative Members is a negative number.
(ii)Within 30 days following the end of each Contract Year, a
statement regarding the calculation of the Tranche 2 Payment for such
Contract Year (the "Tranche 2 Statement"), including the supporting
information regarding the Aggregate Member Months for such Contract Year
and the Base Members, shall be delivered in accordance with Section 7.E.
below.
(iii) Within 15 days after receipt by Aetna USHC of the Tranche 2
Statement in accordance with paragraph (ii) of this section 7.D. for each
Contract Year, Contractor shall pay to Aetna USHC in accordance with this
Section 7 the amount of Tranche 2 Payment payable for such Contract Year
calculated in accordance with clause (i) above. All rights to receive
Tranche 2 Payment shall expire following the payment of the Tranche 2
Payment in respect to the Contract Year ending in 2002, except as otherwise
provided in clause (iv) below. Notwithstanding anything herein to the
contrary, in no event shall the aggregate Tranche 2 Payment to AUSHC
hereunder exceed $175,000,000.
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(iv) In the event that the aggregate Tranche 2 Payments paid to Aetna
USHC in respect of all Contract Years is less than $175,000,000, Aetna USHC
shall be eligible to earn such deficit amount. In order to become eligible
to receive such deficit amount, Aetna USHC must elect (by written notice to
Contractor delivered no later than 45 days following the expiration of the
Contract Year ending in 2002) to extend the term of this Agreement and all
HMO Agreements and the Non-MHO Agreement for a term expiring in the
contract year ending in 2005 and on the terms and conditions which are in
effect during the Contract Year expiring 2002. In the event that Aetna USHC
makes such an election, Aetna USHC shall be eligible to receive the
remaining Tranche 2 Payments (subject to the annual maximum of $35,000,000
and the aggregate maximum of $175,000,000) in respect of the extended
contract years expiring in 2003, 2004 and 2005 on the same terms and
conditions applicable (including eligibility, calculation and receipt
mechanics) to Tranche 2 Payments in respect of Contract Years; provided
that all rights to receive Tranche 2 Payments shall expire upon the earlier
of (i) payment of the aggregate Tranche 2 Payments of $175,000,000 or (ii)
expiration of the contract year ending 2005.
E. Annual Statements. Prior to the Effective Date, the Operating
Committee shall determine the process by which the Tranche 1 and 2
Statements (including the methodology by which Members will be counted
for purposes of Section 6 and 7, with the purpose of making minimal
changes from the existing methodology for counting Members) will be
prepared and delivered to each Party in accordance with Sections
7.C(ii) and 7.D(ii). During the 30-day period following expiration of
each Contract Year, the Operating Committee shall endeavor to agree
upon and submit to Aetna USHC and Contractor a proposed Tranche 1
Statement and Tranche 2 Statement. If the Operating Committee is
unable to agree upon any such Statement, the Parties agree to resolve
their differences in accordance with Section 13. If the differences
among the members of the Operating Committee are resolved pursuant to
Section 13, the Tranche 1 and Tranche 2 Statements shall be delivered
to Aetna USHC and Contractor pursuant to such resolution, which shall
be binding upon both Parties. Notwithstanding any objection raised by
either Party pursuant to this Section E., Contractor shall deliver the
undisputed amount due hereunder to Aetna USHC in accordance with
Section 7.C(iii) or 7.D(iii), as the case may be.
F. If any Tranche 1 or 2 Payment is due hereunder on a non-business day,
such Payment shall be due and payable on the immediately following
business day.
G. From the Effective Date until the end of Contract Year ending 2002,
Aetna USHC agrees not to utilize any vendor (i) for servicing of any
FPR Members serviced by Contractor (other than any FPR Members covered
by Plans acquired by Aetna USHC or one of its affiliates through
purchase of stock or assets, or merger, consolidation or joint venture
with another entity, or any other similar transaction) or (ii) for
servicing of HMO and Managed Choice Members which would have the
result of Aetna USHC not achieving any portion of Tranche 1 Payment or
Tranche 2 Payment for any Contract Year, provided further that the
Parties agree that this Section G shall not prohibit Aetna USHC from
having any Member (as defined in Section 19.B of this Agreement)
serviced by any vendor pursuant to any provider arrangements with
integrated delivery systems or any existing contractual commitments of
Aetna USHC as of the Effective Date. This Section G shall not apply to
any market in which Contractor is unable to serve Members (whether due
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to contractual, licensure, legal or regulatory restrictions or any
other reason). During each Contract Year, when and if Aetna USHC knows
that it has achieved sufficient number of Tranche 1 Members and
Tranche 2 Members to be entitled to full payment of Tranche 1 Payment
and Tranche 2 Payment for such Contract Year, Aetna USHC will so
inform Contractor. During the same period, Aetna USHC agrees to use
commercially reasonable best efforts to encourage its customers to be
serviced by Contractor for Managed Behavioral Health services.
H. Prior to the Effective Date, the Parties shall use best efforts to
negotiate an agreement regarding Members covered by Plans (including
the valuation method for such covered Members) acquired by Aetna USHC
or one of its affiliates through purchase of stock or assets, or
merger, consolidation or joint venture with another entity, or any
other transaction (except any such transaction that are immaterial to
Aetna USHC) during the term of this Agreement, which the Parties will
refer to as "Tranche 3 Members" and "Tranche 3 Payments". Unless
adverse to either Party, the Parties shall amend and restate this
Agreement to reflect the agreement described above.
8. Corporate Governance
A. Magellan shall take such action as shall be necessary so that, on the
date hereof or such later date as Aetna USHC shall designate, the
Aetna USHC Representative(s) (as defined below) shall be appointed to
the Board of Directors of Magellan (the "Magellan Board") at the next
annual meeting of Magellan's stockholders for a term in office
expiring three years thereafter. If no vacancy exists at the Magellan
Board at the time of such appointment, the Aetna USHC
Representative(s) shall have a right to participate (with no voting
power) at the Magellan Board meetings following the Effective Date
until the Aetna USHC Representative(s) is duly elected by the
stockholders. During the term of this Agreement (including any
extensions or renewals thereof), Magellan shall (i) include the Aetna
USHC Representative(s) in the slate of nominees recommended by the
Magellan Board for election as directors at each applicable meeting of
stockholders of Magellan, commencing with the next meeting of
stockholders, to the Magellan Board (unless Aetna USHC no longer
wishes to have the Aetna USHC Representative(s) serve on such board),
and (ii) unless otherwise instructed by the shareholder in the proxy
card, cause the shares for which Magellan's management or Board of
Directors holds proxies or is otherwise entitled to vote (other than
shares individually owned by Magellan's management or members of the
Magellan Board in their individual capacity) to be voted in favor of
the election of the Aetna USHC Representative(s). For purposes of this
Agreement, the "Aetna USHC Representative(s)" means such person(s) as
may from time to time be specified by Aetna USHC, and reasonably
acceptable to Magellan (who will initially be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) to
serve as Aetna USHC's representative(s) on the Magellan Board, the
number of such person(s) to be equal to the aggregate number of
person(s) that are appointed by or represent any Blue Cross or Blue
Shield plan or its affiliates on the Magellan Board. If, at any time,
an Aetna USHC Representative no longer continues to serve as a
director on the Magellan Board for any reason (including, without
limitation, resignation, death or disability), at the request of Aetna
USHC, Magellan shall use its best efforts to ensure that such vacancy
shall be filled by another Aetna USHC Representative.
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B. Magellan agrees to pay the Aetna USHC Representative(s) the standard
Magellan Board compensation and benefits(including, without
limitation, all travel, lodging and other related expenses).
C. Notwithstanding the foregoing, Magellan agrees that if, at any time,
Blue Cross and Blue Shield of New Jersey, Inc., Health Care Service
Corporation, ▇▇▇▇▇▇ County Medical Bureau, Inc., Independence Blue
Cross or any other Blue Cross or Blue Shield plan or any of their
respective successors, assigns, transferees, affiliates or
subsidiaries shall possess any rights with respect to representation
or participation on the Magellan Board, any committee thereof to which
the full powers of the Board (such as the executive committee or the
administrative committee, if any) are delegated or on the Board of
Directors of Contractor, Aetna USHC shall be promptly notified of such
rights and (upon Aetna USHC's request) shall be granted rights that
are no less favorable with respect to such representation or
participation. In addition, Magellan shall not take any action that
will significantly reduce the rights of Aetna USHC Representative(s)
as member(s) of the Magellan Board, any committee thereof or the Board
of Directors of Contractor (in comparison to the other members
thereof).
D. Upon date of termination of this Agreement in accordance with the
provisions hereof, unless superseded or succeeded by a similar
agreement, the Aetna USHC Representative(s) shall resign from the
Magellan Board.
9. Term and Termination
A. This Agreement shall be effective for a term of six (6) years from the
Effective Date and for an additional two (2) years thereafter if Aetna
USHC delivers the notice of extension contemplated by Section 7.C(v)
or 7.D(iv) hereof. This Agreement may not be terminated by either
Party hereto except as expressly stated in this Section 9.
B. An "Event of Default" shall be deemed to have occurred under this
Agreement with respect to any Party in the event that:
(i) (A) such Party fails to perform any material obligation of such
Party under this Agreement or breaches any obligation of such
Party under this Agreement having a material adverse effect on the
business of the other Party, including the health and safety of
Members, taken as a whole, or (B) such Party causes an event of
default under or a breach of the Non-HMO Agreement and the other
Party terminates the Non-HMO Agreement in accordance with the
termination provisions thereof;
(ii) the direct or indirect acquisition by an entity that is a direct
competitor of Aetna USHC (with respect to the businesses or
practices prohibited by Section 11 of this Agreement) of a
controlling interest in Magellan or Contractor;
(iii)the suspension or disbarment of Contractor from participation in
the Medicare or Medicaid programs unless Magellan or a subsidiary
of Magellan that is reasonably acceptable to Aetna USHC and has
the necessary license continues to provide the same services that
Contractor can no longer provide due to such suspension or
disbarment;
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(iv) the filing by such Party of a petition under Chapter 7 under
the federal Bankruptcy Code;
(v) the filing by such Party of a plan of reorganization under
Chapter 11 of the federal Bankruptcy code in which the required
parties have formally approved a plan of reorganization prior to
the filing of the bankruptcy petition and without participation
by the other Party;
(vi) the termination by either Party of this Agreement without cause;
(vii)the closing, termination or substantial elimination by Contractor
of any line of its behavioral healthcare business required to
service the Tranche 1 Members; or
(viii) the termination without cause by Contractor of (A) the HMO
Agreements covering more than 50% of the Members as of the
Effective Date or (B) the Non-HMO Agreement;
provided, that if any event described above is curable, no such event
shall be deemed to constitute an "Event of Default" unless the Party
causing the event shall fail to remedy such event within a period of
ninety (90) days after the other Party shall have given the Party
causing the event a written notice of default and further provided
further that if the nature of the event requires more than ninety days
to cure and the Party causing the event has substantially completed
such cure within the ninety day period and continues diligently to
pursue such cure, such cure period shall be extended for up to an
additional 90 day period to permit the breaching Party to complete
such cure. In the Event of Default by Magellan or Contractor, Aetna
USHC shall receive credit for purposes of Section 7 of this Agreement
any Members or Member Months decreased or lost as a result of such
Event of Default during the cure period. In the event of any
suspension, withdrawal, expiration, non-renewal or revocation of any
state or local license, certificate, approval or authorization of
Contractor or the indictment, arrest, charge or conviction of
Contractor or any of its senior officers (in connection with providing
services on behalf of Contractor) for any felony related to moral
turpitude or professional practice related to this Agreement, Aetna
shall not have a right to terminate this Agreement, provided that
Aetna USHC shall receive credit for purposes of Section 7 of this
Agreement any Members or Member Months decreased or lost as a result
of such event.
C. Upon the occurrence of an Event of Default with respect to a Party
(Aetna USHC on the one hand and Magellan or Contractor on the other
hand), the other Party shall be entitled to terminate this Agreement
upon with notice to the Party causing the Event of Default. If under
either an HMO Agreement or the Non-HMO Agreement a breach or an event
of default occurs and such breach or event of default applies both
Agreements, the non-breaching Party shall treat the breach or event of
default in the same manner under both Agreements. Notwithstanding
anything to the contrary herein, in the event of a termination of the
Agreement by Aetna USHC pursuant to clauses (iv) through (viii) above
(but not clauses (i) through (iii) above), Aetna USHC shall be
entitled to receive as liquidated damages (and in lieu of any other
remedy available at law or in equity, except that Aetna USHC shall be
entitled to any indemnification rights arising under Section 16 not as
a result of an Event of Default described in clause (iv) through
(viii) above) the remaining amount which would have been payable to
Aetna USHC under Section 7 of this Agreement (as if all of Aetna
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USHC's obligations for Tranche 1 and Tranche 2 Payments described in
Section 7 from the date of termination through the Contract Year
ending 2002 had been satisfied (which shall be $300,000,000 minus the
amount of Tranche 1 Payment and Tranche 2 Payment paid to Aetna USHC
prior to such time minus the amount of Tranche 1 Payment and Tranche 2
Payment forfeited by Aetna USHC prior to such time)), which shall be
payable in accordance with the scheduled time of payment under Section
7 (except that all such amounts shall be payable at the time of such
termination if the Agreement is terminated pursuant to clause (iv) or
(v) above). In the event of any such termination pursuant to clause
(i) through (iii) above, the non- breaching Party shall be entitled to
pursue any remedy available at law or in equity.
D. In the event any amount due under Section 7 of this Agreement is in
dispute, the amount in dispute shall be paid to an escrow agent in an
interest bearing account pursuant to the terms and conditions of an
escrow agreement to be entered into prior to the first anniversary of
the Effective Date. The escrowed amount plus accrued interest shall be
payable to the appropriate party by the escrow agent upon final
adjudication of the dispute in accordance with the escrow agreement.
E. Magellan shall provide a guaranty of all obligations of Contractor
under this Agreement substantially in the form of the Guaranty
attached hereto as Exhibit C.
F. The Parties hereto expressly waive any rights to set-off any amount or
payment due hereunder or any Vendor Contract that any Party may have
under law or equity.
10. Relationship of Parties
None of the provisions of this Agreement is intended to create, nor shall
be deemed or construed to create, any relationship between the Parties
hereto other than that of independent entities contracting with each other
hereunder solely for the purpose of effecting the provisions of this
Agreement. Neither of the Parties herein, nor any of their respective
employees, shall be construed or represent themselves to be the agent,
employee, servant, employer or representative of the other. This Agreement
is not a joint venture between the Parties.
11. Restrictive Covenants
Contractor, Magellan and its wholly-owned subsidiaries agree that during
the term of this Agreement, Contractor, Magellan and its wholly-owned
subsidiaries shall not directly or indirectly enter into or engage in the
ownership, management, operation or control of any entity which is a
managed care entity offering full health care benefits. Notwithstanding
anything to the contrary set forth in the preceding sentence, Contractor,
Magellan and its wholly-owned subsidiaries may engage in and own, manage,
operate or control any entity engaged in current activities, which are
integrated delivery system services, specialty/limited health service
managed care, third party administration of specialty/limited health care
services, disease management, utilization management, network management,
care management or specialty/limited health care provision/administration
for government agencies, HMO's or insurers.
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12. Cooperation of the Parties
A. Contractor and Aetna USHC will maintain an effective liaison and close
cooperation with each other to (a) maximize the mutual benefits of
their relationship, (b) enhance the quality of behavioral health
services provided to Members and (c) ▇▇▇▇▇▇ working relationships with
network behavioral health providers.
B. Each Party will exchange such financial information, Member
demographics, encounter and clinical data necessary for the other
Party to perform its obligations under this Agreement. Such
information will be exchanged electronically to the extent feasible to
both Parties. In addition, each Party agrees to provide the other
Party reasonable access to the data (which, in the case of Contractor,
is derived from those systems described in Schedule G), at no
additional cost charged to the other Party, which are necessary for
the other Party to perform its obligations hereunder, subject to the
confidentiality obligations set forth in this Agreement. The Parties
acknowledge and agree that (i) Aetna USHC intends to modify, at its
cost, the means by which Aetna USHC provides data to Contractor under
this Agreement (including those that are derived from the systems
described in Schedule G), and (ii) Contractor shall make all necessary
modifications to its system(s), at its cost, to administer its
business on a stand-alone basis within the time period specified
below. Prior to the Effective Date, the Parties will develop a plan to
implement such changes. Each Party shall use commercially reasonable
best efforts to implement such plan and to complete its respective
obligations under such plan within nine months after the Effective
Date and shall in no event complete its obligations under such plan
later than fifteen months after the Effective Date. As soon as
practicable after the date hereof, Aetna USHC will provide to
Contractor a list indicating the priority in which it requests
Contractor to implement the changes described in clause (i) above.
Aetna USHC will consult with Contractor in the process of preparing
this list. Contractor agrees to make good faith efforts to follow
Aetna USHC's priority list.
13. Agreement Administration/Dispute Resolution
A. The Parties shall designate an Operating Committee to oversee the
operation of this Agreement and the related Vendor Contracts. The
Operating Committee shall consist of equal numbers of representatives
from each Party. The Operating Committee shall meet no less frequently
than annually. The Operating Committee shall act or make
recommendations by unanimous consent.
B. If any dispute or controversy shall arise under this Agreement or any
of the Vendor Contracts, the parties shall make good faith efforts to
resolve the dispute or controversy through negotiations within the
Operating Committee.
C. If the Operating Committee is unable to resolve such dispute or
controversy within 60 days, the Operating Committee shall request in
writing the President of each Party to resolve the dispute. If the
President of each Party are unable to resolve such disputes or
controversy within 30 days after the matter is referred to the
Presidents, either party, after such period (but in no event prior to
the expiration of such period), shall be entitled to bring an action
at law or equity in a court of competent jurisdiction, except that
this Section shall not prohibit either Party from bringing any
equitable action at any time if a delay in bringing such action could
result in irreparable harm to such Party.
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14. Use of Name
Contractor consents to the use of its name and other identifying and descriptive
material in provider directories and in other materials and marketing literature
of Aetna USHC in all formats, including, but not limited to, electronic media.
Contractor shall not use Aetna USHC's names, logos, trademarks or service marks
in marketing materials or otherwise, except as provided in this Agreement or any
Vendor Agreement, without Aetna USHC's prior written consent.
15. Interference with Contractual Relations
Contractor shall not: (a) counsel or advise, directly or indirectly, payors,
sponsors or other entities who are currently under contract with Aetna USHC or
any Affiliate to cancel, modify, or not renew said contracts; (b) impede or
otherwise interfere with negotiations which Aetna USHC or an Affiliate is
conducting for the provision of Plans; or (c) use or disclose to any third party
membership lists acquired during the term of this Agreement for the purpose of
directly or indirectly soliciting individuals who were or are Members or
otherwise to compete with Aetna USHC or any Affiliate. Nothing in this Section
is intended or shall be deemed to restrict any communication between a
Participating Provider and a Member determined by the Participating Provider to
be necessary or appropriate for the diagnosis and care of the Member. This
Section shall survive the termination of this Agreement. In the event of a
breach or a threatened breach of this Section by Contractor, Aetna USHC shall
have the right of specific performance and injunctive relief in addition to any
and all other remedies and rights at law or in equity, and such rights and
remedies shall be cumulative. Nothing in this Section is intended to prohibit
Contractor from conducting activities permitted under Section 11.
16. Indemnification
Each Party agrees to indemnify and hold the other Party harmless against any and
all claims, losses, liabilities, expense and costs (including reasonable
attorneys' fees) (collectively, "Damages") arising from any of the services
(which, in the case of Contractor, shall include all of the services delegated
from Aetna USHC to Contractor under this Agreement, any of the Vendor Contracts
or any other agreement mutually entered into, except Damages resulting in whole
or in part from negligence or willful misconduct on the part of Aetna USHC)
performed by the indemnifying party under this Agreement or the breach of any of
the indemnifying party's obligations under this Agreement or any of the Vendor
Contracts.
17. Non-Disclosure
The terms and conditions herein shall be treated by the Parties as strictly
confidential. Accordingly, the Parties agree not to directly or indirectly
disclose this Agreement or the terms and conditions herein, including but not
limited to all schedules and financial terms, to any third party. The parties
agree that the breach or prospective breach of this provision will cause
irreparable harm for which money damages may not be adequate. The parties
therefore agree that in addition to any other remedies, the non-breaching party
shall be entitled to injunctive or other equitable relief to restrain the breach
hereof. This provision shall not apply to:
A. disclosures required by law (including any disclosure permitted in
Section 2 without prior approval), provided such disclosure is limited
to the extent required by law; or
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B. disclosures to the accountants and attorneys retained by each Party;
or
C. information that is within the public domain and which each party
learns of through the public domain at the time of disclosure, or was
previously known to the disclosing party, or is or becomes publicly
available without breach of this Agreement, or is received from a
third party holding such information legally and having the legal
right to disseminate it without breach of this Agreement by such
disclosing party, or is disclosed by the disclosing party with the
written approval of the other party.
This paragraph 17 shall survive termination of this Agreement.
18. Miscellaneous
A. Waiver. The waiver by either Party of a breach or violation of any
provision of this Agreement shall not operate as or be construed to be
a waiver of any subsequent breach thereof. To be effective, all
waivers must be in writing and signed by the party to be charged.
B. Governing Law. This Agreement shall be governed in all respects by the
laws of the State of Delaware.
D. Severability. Any determination that any provision of this Agreement
or any application thereof is invalid, illegal or unenforceable in any
respect in any instance shall not affect the validity, legality and
enforceability of such provision in any other instance, or the
validity, legality, or enforceability of any other provision of this
Agreement.
E. Inconsistencies. If any term or provision of this Agreement relating
to Covered Services is inconsistent with a term or provision of a
non-insured Plan, then as to individuals entitled to receive Covered
Services through said Plan, the term or provision of the Plan shall
prevail.
F. Assignment. This Agreement may be assigned, subcontracted, delegated
or transferred by either Party to one of its wholly owned subsidiaries
or an affiliate of such Party which is wholly owned by the parent
company that wholly owns such Party, unless it results in a material
adverse effect on the other Party's interest under this Agreement.
G. Affirmative Action. Aetna USHC is an Equal Opportunity Employer which
maintains an Affirmative Action Program. To the extent applicable to
Contractor, Contractor shall comply with the following, as amended
from time to time: Executive Order 11246, the Vietnam Era Veterans
Readjustment Act of 1974, the Drug Free Workplace Act of 1988, Section
503 of the Rehabilitation Act of 1973, any similar legislation
regarding transactions relating to any government contract of Company
or an Affiliate, and any rules and regulations promulgated under such
laws.
H. Headings. The headings contained in this Agreement are included for
purposes of convenience only, and shall not affect in any way the
meaning or interpretation of any of the terms or provisions of this
Agreement.
I. Notices. Any notice required to be given pursuant to the terms and
provisions hereof shall be effective only if given in writing and sent
by overnight delivery service with
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proof of receipt, or by certified mail return receipt requested.
Notices shall be sent to the following addresses (which may be changed
by giving notice in conformity with this section):
To Contractor or Magellan at:
Magellan Health Services
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel and
Chief Financial Officer
and to Aetna USHC at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer and
Chief Legal Officer
J. Non-Exclusivity. Except as otherwise set forth in Section 7 of this
Agreement, this Agreement is not exclusive, and nothing herein shall
preclude either party from contracting with any other person or entity
for any purpose not inconsistent with this Agreement.
K. Entire Agreement. This Agreement (including any attached schedules)
constitutes the complete and sole contract between the parties and
supersedes any and all prior or contemporaneous oral or written
communications or proposals not expressly included herein.
19. Definitions
When used in this Agreement, all capitalized terms shall have the following
meanings:
A. Covered Services. Those Medically Necessary Services (as defined in
HMO Agreement) which a Member is entitled to receive under the terms
and conditions of a Plan.
B. Member. An individual covered by or enrolled in a Plan.
C. Network Provider. A physician, hospital, or other individual, entity
or facility involved in the delivery of health care or ancillary
services (whether or not affiliated with Contractor) that meets Aetna
USHC's participation criteria and agrees to accept the rates
contemplated by this Agreement for Covered Services. A list of these
providers as of the Effective Date shall be provided by Contractor to
Aetna USHC.
D. Participating Provider. Any physician, hospital, residential treatment
facility, skilled nursing facility, or other individual or entity
involved in the delivery of health care or ancillary services who or
which has entered into and continues to have a current valid contract
with Aetna USHC to provide Covered Services to Members, and has been
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credentialed by Contractor consistent with Aetna USHC's applicable
credentialing policies.
E. Plan. Any health benefit product or plan issued, administered, or
serviced by Aetna USHC or one of its Affiliates, including, but not
limited to, HMO, preferred provider organization, indemnity, Medicaid,
Medicare and Worker's Compensation.
F. Proprietary Information. The information developed by or belonging to
Aetna USHC or any third party payor including, but not limited to, this
Agreement, mailing lists, patient lists, employer lists, Aetna USHC
rates and procedures, product related information and structure,
utilization review procedures, formats and structure and related
information and documents concerning Aetna USHC's systems and
operations of its Plans.
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