ADMINISTRATIVE SERVICES AGREEMENT
BETWEEN
UNITED WISCONSIN SERVICES, INC.
AND
HMO OF WISCONSIN INSURANCE CORPORATION
This Agreement, effective November 1, 1994, is by and between United
Wisconsin Services, Inc. ("UWSI") and HMO of Wisconsin Insurance Corporation
("HMOW").
WHEREAS, HMOW is the underwriter of HMO Products and POS Products pursuant
to joint venture agreements that UWSI has entered into with HMOW, HMO-W,
Incorporated, Blue Cross & Blue Shield United of Wisconsin, U-Care HMO, Inc.,
University Health Care, Inc. and other affiliated entities (the "Joint Venture
Agreements");
WHEREAS, HMOW desires to obtain certain administrative services from UWSI
in relation to these products; and
WHEREAS, UWSI desires to provide certain administrative services to HMOW in
relation to these products.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and conditions set forth in this Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall apply:
A. "HMO PRODUCTS" shall mean the health maintenance organization plans
underwritten and/or administered by HMOW pursuant to the Joint Venture
Agreements.
B. "POS PRODUCTS" shall mean point of service plans, the HMO portion of
which is underwritten by HMOW and the indemnity portion of which is underwritten
by Blue Cross or an affiliate of Blue Cross that is licensed to underwrite
indemnity insurance business pursuant to the Joint Venture Agreements.
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ARTICLE II
OBLIGATIONS OF UWSI
UWSI shall provide administrative services to HMOW which may include the
following:
A. Actuarial Services
B. Accounting Services
C. Financial Reporting Services
D. Management Information Services
E. Legal Services
F. Investment Management Services
G. Financial Audit Services
H. Information Systems Support Services
I. Corporate Communications Services
J. Medical Director Services
K. Medical Consultant Services
L. Health Policy/Pricing Services
M. Utilization Management Services
ARTICLE III
COMPENSATION
As consideration for providing administrative services to HMOW, UWSI shall
be compensated by HMOW on a cost basis, such that all administrative profit
remains with the HMO Products and POS Products. In addition, UWSI may incur
certain expenses for the benefit of HMOW, including, but not limited to,
advertising, external auditors, outside management fees, insurance and payments
due under service contracts and royalty agreements related to the Joint Venture
Agreements. At such time as payment is made by UWSI for said expenses, the
expenses will be charged to HMOW.
ARTICLE IV
RECORDKEEPING
UWSI shall maintain at its principal office, for the duration of this
Agreement and for six years thereafter, this Agreement and the books and records
of all transactions between itself and HMOW. Such books and records shall be
maintained according to the generally accepted standards of insurance business
recordkeeping.
HMOW, its employees, or authorized representatives may inspect all such
books and records to the extent necessary to assure compliance with this
Agreement and to fulfill its obligations under applicable state law. UWSI shall
make such books and records available to
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HMOW at UWSI's principal office during regular business hours and upon
reasonable advance notice.
UWSI shall make its books and records available for examination, audit or
inspection by agents or representatives of state insurance regulators, as
required by applicable state law.
UWSI shall furnish to HMOW such reports relating to the business which is
the subject of this Agreement as and when HMOW may reasonably require.
ARTICLE V
TERM AND TERMINATION
This Agreement shall be effective November 1, 1994, and shall continue in
effect through October 31, 1999. Thereafter, it shall renew for additional five
(5) year terms unless either party terminates upon thirty (30) days prior
written notice. Notwithstanding the foregoing, this Agreement shall terminate
at such time as the Service Agreement by and between UWSI and Community Health
Systems, L.L.C., terminates.
Termination of this Agreement shall not limit the obligation or liabilities
of either party incurred but not discharged prior to termination.
ARTICLE VI
GENERAL PROVISIONS
A. Each party shall comply with all applicable state laws and
regulations.
B. In the event that either HMOW or UWSI receives from a state insurance
regulator any complaint or inquiry related to business subject to this
Agreement, the party receiving such complaint or inquiry shall promptly forward
to the other a copy of such complaint or inquiry and shall provide, at the
other's request, access to or copies of all information in its possession
pertaining to such complaint or inquiry.
C. UWSI's relationship with HMOW shall be that of an independent
contractor. It is not the intent of the parties to create, nor should this
Agreement be construed to create, a partnership, or an employment relationship
between HMOW, its officers, employees, agents, or representatives and UWSI, its
officers, employees, agents, or representatives.
D. UWSI agrees to indemnify and hold harmless HMOW, its officers,
directors, employees, agents or representatives for any and all claims, demands,
liabilities, fines, assessments, damages and costs, including reasonable
attorneys' fees, arising out of or caused by any negligent act, error or
omission of UWSI, its officers, directors, employees, agents or representatives.
This indemnification by UWSI does not apply to any act, error or omission of
HMOW, its officers,
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directors, employees, agents or representatives.
E. HMOW agrees to indemnify and hold harmless UWSI, its officers,
directors, employees, agents or representatives for any and all claims, demands,
liabilities, fines, assessments, damages and costs, including reasonable
attorneys' fees, arising out of or caused by any negligent act, error or
omission of HMOW, its officers, directors, employees, agents or representatives.
This indemnification by HMOW does not apply to any act, error or omission of the
UWSI, its officers, directors, employees, agents or representatives.
F. Written notice required under this Agreement shall be given by U. S.
mail and addressed as follows:
To HMOW:
Xxxxx X. Xxxxxx, President
HMO of Wisconsin Insurance Corporation
000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
To UWSI:
Xxxxxx X. Xxxxx, Chairman, President and Chief Executive Officer
United Wisconsin Services, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
G. No party may assign its rights or delegate its duties under this
Agreement without the prior written consent of the other party. Such approved
assignment or delegation shall inure to the benefit of the parties, their
successors and their permitted assigns or delegates.
H. The rights of any party to enforce any provision of this Agreement
shall not be affected by its prior failure to require the other party's
performance under such provision or any other provision. No right under this
Agreement shall be deemed to have been waived unless such waiver is in writing
and signed by the party making the waiver.
I. This Agreement constitutes the entire agreement between the parties
and creates no rights or duties other than as expressly provided herein. Unless
otherwise provided in this Agreement, any amendment to this Agreement must be in
writing, executed by, and delivered to, each of the parties.
J. In the event that a court, regulator, or administrative judge of
competent jurisdiction declares any provision of this Agreement to be invalid or
unenforceable, such declaration shall have no effect on the validity or
enforceability of the remainder of this Agreement.
K. This Agreement shall be construed according to the laws of the State
of Wisconsin.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and effective as of the above stated date.
UNITED WISCONSIN SERVICES, INC. HMO OF WISCONSIN INSURANCE
CORPORATION
By: By:
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Title: Title:
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