EXHIBIT 10.14
AGREEMENT FOR THE PROVISION OF SERVICES BETWEEN
AMERICAN PSYCH SYSTEMS, INC.
AND
PRIORITY
THIS AGREEMENT, effective December 1, 1998, ("Effective Date") is by and
between AMERICAN PSYCH SYSTEMS, INC., a Maryland business corporation ("APS")
and PRIORITY, a Michigan nonprofit corporation and health maintenance
organization ("Priority").
RECITALS
A. Priority has entered into contracts with employers, individuals and
other purchasers of health care, which require Priority to provide mental health
and substance abuse services to such purchasers. In connection with its service
contracts, Priority has established a network of providers of mental health and
substance abuse services.
C. Priority desires to obtain from APS certain consulting, training and
technical services, systems and supplies relating to Priority' provision and
administration of mental health and substance abuse services and APS is willing
to provide such services according to the terms of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants set
forth below, Priority and APS agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. BENEFIT PLAN. A plan of benefits, which includes health care
coverage and coverage of MHSA Services, that is sponsored or issued by Priority
or a Sponsor and contains the terms and conditions of an Enrollee's health care
coverage.
Section 1.2. CAPITATION RATE. The amount to be paid to APS for
each Enrollee per month that is specified in and adjusted by Attachment A to
this Agreement.
Section 1.3. PRIORITY PROVIDER. A healthcare professional or
facility that has an agreement in effect with Priority to provide health care
services to Enrollees.
Section 1.4. COVERED SERVICES. The health care services and
supplies covered by the Enrollee's Benefit Plan, including MHSA Services.
Section 1.5. EMERGENCY. A serious condition that arises suddenly
and requires immediate care and treatment generally within 24 hours of onset,
to avoid jeopardy to the life or health of an Enrollee or others.
Section 1.6. ENROLLEE. An individual who is enrolled as a
subscriber or covered dependent with any Benefit Plan who is entitled to
Covered Services under such Benefit Plan.
Section 1.7. IN-NETWORK MHSA SERVICES. The MHSA Services authorized in
advance and provided to an Enrollee by a MHSA Provider, or by a non-MHSA
Provider upon referral by Priority or APS if the MHSA Services are not available
from a MHSA Provider.
Section 1.8. MANAGED BENEFITS. Priority Managed Benefits, Inc., a
Michigan business corporation, management services company and licensed Third
Party Administrator that is commonly owned with Priority.
Section 1.9. MEDICALLY NECESSARY. MHSA services or supplies that are
necessary to meet the basic health needs of an Enrollee and are: (a) provided in
the most cost-efficient manner and type of setting appropriate for the delivery
of the service; (b) consistent in type, frequency and duration of treatment with
relevant scientifically-based guidelines of national medical, research and
health care coverage organizations or governmental agencies that are accepted by
APS and Priority; (c) consistent with standards of good medical practice within
the medical community in the Service Area; (d) consistent with the diagnosis of
the condition; (e) requited for reasons other than the comfort or convenience of
the Enrollee or his or her provider, or not to be required solely for custodial
comfort or maintenance reasons; and (f) of demonstrated medical value. The fact
that a provider may have prescribed, ordered, recommended or approved the
provision of certain services or supplies to the Enrollee does not necessarily
mean that such services or supplies satisfy the criteria stated in this Section
1.9.
Section 1.10 MHSA. Mental health and substance abuse.
Section 1.11 MHSA PROGRAM. The program established by Priority, and made
effective by this Agreement, for the evaluation and provision of MHSA Services
for Members in accordance with the terms of the Members' Benefit Plans.
Section 1.12. MHSA PROVIDER.. A health care professional or facility that
has contacted with Priority to provide MHSA Services to Enrollees, or a clinical
location at which health care professionals provide MHSA Services to Enrollees.
Section 1.13. MHSA SERVICES. The Medically Necessary MHSA services and
supplies that are: a) Covered Services under an Enrollee's Benefit Plan; b)
quantified more specifically in the PIFs; c) included in the MHSA Services
Addendum (which is attached to this Agreement as Attachment B); and d) not
excluded by the MHSA Services Addendum.
Section 1.14. PIF. Product Identification Forms, which identify
for Benefit Plans the MHSA Services, and for new and modified Benefit Plans,
the applicable Capitation Rate.
Section 1.15. SERVICE AREA. The geographic area within those counties and
zip-code areas in the State Michigan in which Priority is licensed to operate
and such other areas as identified on Attachment C to this Agreement or as
stated in written notice given by Priority to APS from time to time.
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Section 1.16. Sponsor. The employer or otherwise legally constituted
group, to whom Priority or Managed Benefits issues a Benefit Plan or for whom
Priority or Managed Benefits provides, with respect to its Benefit Plan,
administrative or other services.
Section 1.17. UM SERVICES. Utilization management services, which include
the review of an Enrollee's MHSA Services to assure the continuity, cost
effectiveness and appropriateness of care, including clinical triage, referral,
prior authorization, concurrent review and discharge planning.
ARTICLE II
PRIORITY OBLIGATIONS
Section 2.1. COMPENSATION. For the services that APS provides to
Priority under this Agreement, Priority will pay APS in accordance with
Article V below.
Section 2.2. ELIGIBILITY. Priority will provide APS eligibility
information regarding Enrollees by either direct computer linkage or a computer
tape provided at least monthly. The eligibility information will be prepared and
provided to APS at Priority's expense.
(a) APS will treat the information received under this Section 2.2 as
confidential and will not distribute or furnish such information to
any other person or entity, except as necessary, pursuant to APS'
standard practices, to provide the services APS is required to
provide under this Agreement.
(b) APS acknowledges that there will be retroactive adjustments to the
eligibility of individuals as Enrollees and that Priority is not
able to control such adjustments. Notwithstanding the above, the
parties agree that APS will not be financially liable for any claims
for MHSA Services related to any retroactive adjustments of greater
than 90 days.
Section 2.3 COMPLIANCE WITH UNDERWRITING GUIDELINES. Priority will
ensure that all Sponsors meet Priority's underwriting guidelines as applied to
the Sponsor's MHSA Services, unless renewal of the Sponsor's Benefit Plan is
required pursuant to state or federal law.
Section 2.4. IDENTIFICATION WITH UNDERWRITING GUIDELINES. Except as
provided below, Priority will ensure that the Benefit Plans provide no greater
coverage for MHSA services than the MHSA Services defined in this Agreement.
(a) Upon Priority's request, APS will advise Priority regarding MHSA
services that should be covered or excluded, and how such services
should be described, under the Benefit Plan, but the final
determination regarding the identification and description of the
MHSA Services will be solely that of Priority or Sponsor. APS will
have the right to review any new description or revision of the
description of MHSA Services in the Benefit Plans.
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(b) If Priority or Sponsor elects to offer coverage for MHSA services
that are not MHSA Services, for whatever reason, including
Priority's or a Sponsor's decision to provide extra-contractual
benefits, Priority or the Sponsor will be responsible for the
cost of providing or arranging for such MHSA services. If APS
provides or arranges for the requested services, Priority will
pay APS according to its standard fee schedule for services
provided by MHSA Providers or providers who are not MHSA
Providers for such services arranged for by APS.
Section 2.5. NEW BENEFIT PLANS AND CHANGES TO MHSA SERVICES UNDER BENEFIT
PLANS. Priority will notify APS in writing at least 30 days prior to
implementation of any modification to the MHSA Services in any existing Benefit
Plan or development of a MHSA Services in any new Benefit Plan.
Section 2.6. PRIORITY PROVIDER AND ENROLLEE COMMUNICATIONS. Priority will
develop the content of materials regarding APS and MHSA Services to be
periodically sent to Priority Providers and Enrollees, which is subject to
approval by APS. Such materials, once developed, may be used by Priority to
communicate to Priority Providers and Enrollees, unless APS reasonably requests
that they cease to be used. Priority will be responsible for producing and
distributing such materials to Priority Providers and Enrollees, including
postage costs.
Section 2.7 PRIORITY PROVIDER COMPLIANCE. In an effort to support APS'
efforts under this Agreement, Priority will use its best efforts to cause
Priority Providers to cooperate with APS with respect to APS' role and
responsibilities pursuant to this Agreement.
ARTICLE III
APS SERVICES
Section 3.1. GENERAL. APS will provide Priority with consulting, training
and technical services, systems and supplies with respect to Priority's
provision of MHSA Services to Enrollees. APS will assist Priority in its efforts
to arrange for, manage, monitor, coordinate, evaluate and oversee Priority's
MHSA Services.
Section 3.2. MANAGEMENT SERVICES. APS will provide Priority with
management services including, without limitation, assistance in Priority's
oversight of:
(a) intake, pre-authorization of care and referral to MHSA Providers;
(b) concurrent, retrospective and utilization review;
(c) care and case management;
(d) discharge planning;
(e) information management and reporting;
(f) medical records management;
(g) initial and ongoing Enrollee communication; and
(h) program development.
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Section 3.3. CLINICAL SERVICES. APS will provide Priority with MHSA
medical management services including reasonable access to the APS medical
director and APS network physician advisors, utilization review guidelines, and
all APS policies and procedures, existing at the Effective Date or developed
during the term of this Agreement, that either party reasonably deems necessary
for Priority to provide a level of care consistent with current standards.
Section 3.4. NETWORK CREDENTIALING AND DEVELOPMENT. APS will perform
certain credentialing and recredentialing functions, on Priority behalf, for all
MHSA Providers and will assist Priority in the development of provider contracts
and provider profiling.
(a) Priority delegates to APS certain functions related to the
credentialing of all professional MHSA Providers, as described
and delineated in Attachment D to this Agreement and as set forth
in the separate Letter of Agreement for Delegated Credentialing
by and between the parties. APS' credentialing activities will
comply with the applicable requirements of the National Committee
for Quality Assurance ("NCQA") as more specifically addressed in
Section 7.4.
(b) APS will assist Priority in the institution of its network
management tool known as the "APS Core Group concept," including use
of automated authorization protocols and case rates where
applicable.
(c) APS will assist Priority in developing a network plan, which will
ensure a network of the proper size, scope and levels of care to
adequately service Enrollees.
(d) APS will assist Priority in contracting with MHSA Providers to
provide MHSA Services and UM Services to Enrollees adequate to
assure that 90% of all Enrollees residing within the Service Area
are within 30 miles or 30 minutes of a MHSA Provider. Priority
will notify APS in writing at least 120 days prior to any
modification to the Service Area as it exists on the date of this
Agreement. If Priority expands the Service Area; APS will assist
Priority in arranging for MHSA Providers in such expanded Service
Area.
(e) Upon written request by Priority, APS will provide Priority a copy
of APS' then current generic provider agreements and will provide
Priority such other assistance with provider contracting as Priority
reasonably requests.
Section 3.5. TRIAGE OF CARE. APS will assist Priority in providing the
services of an appropriately qualified health care professional to Enrollees via
a 24-hour toll-free telephone line for the referral of required MHSA Services
and response to inquiries and questions regarding MHSA Services.
Section 3.6. PROVISION OF MHSA SERVICES AND UM SERVICES. APS will
ascertain that Priority is adequately providing or arranging for the provision
of MHSA Services and UM Services pursuant to the Benefit Plans. Priority hereby
delegates to APS certain functions related to the UM Services, as described and
delineated in Attachment E to this Agreement. APS'
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provision of UM Services will comply with the applicable requirements of the
NCQA as more specifically addressed in Section 7.4.
(a) APS will develop and ascertain that Priority applies standards of
medical necessity appropriateness and efficiency, which reflect
patterns of care found in established managed care environments. APS
will involve a certified, licensed psychiatrist whenever rendering a
recommendation that MHSA services that have been requested or for
which payment has been requested are not Medically Necessary.
(b) APS and Priority will together have the right to determine the
level and extent of MHSA Services that are appropriate for the
treatment of Enrollees, including whether MHSA Services will be
rendered on an inpatient or an outpatient basis. APS will have
the right to require Enrollees to receive In-Network MHSA
Services from MHSA Providers when such care can be provided
consistent with the service standards and standards of practice
set forth in this Agreement. Except for Emergency MHSA Services,
or as otherwise agreed to by APS, APS will not in any way be
responsible for arranging or paying for any MHSA services that
have not been authorized through APS' authorization system.
(c) APS will use reasonable efforts to advise, or assist Priority in
advising, MHSA Providers that utilization management determination
is a recommendation of Medical Necessity only and not a confirmation
of eligibility or benefit coverage.
Section 3.7. AVAILABILITY OF IN-NETWORK MHSA SERVICES. APS will comply
with the applicable NCQA standards or the following standards; whichever is more
demanding, in assisting Priority in arranging for In-Network MHSA Services:
(a) Emergency In-Network MHSA Services will be made available to an
Enrollee within four hours.
(b) Urgent In-Network MHSA Services will be made available to an
Enrollee within 24 hours of the time the MHSA Services are
requested.
(c) Non-Emergency and non-urgent In-Network MHSA Services will be made
available to an Enrollee within 10 working days of the time the MHSA
Services are requested.
(d) APS will be deemed to comply with the above requirements if an
appointment at a geographically appropriate MHSA Provider is offered
to Enrollee within such time period, notwithstanding Enrollee's
preference or unavailability.
Section 3.8. MIXED SERVICES. When an Enrollee has a condition or illness
that requires MHSA Services and non-MHSA Services, APS will be responsible for
paying for only the MHSA Services. Priority, the Sponsor or the Enrollee will be
responsible for payment of any non-MHSA Services. In determining whether certain
services will be considered MHSA
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Services or non-MHSA Services, APS and Priority will follow the procedure in the
attached MHSA Services Addendum (Attachment B to this Agreement).
Section 3.9. TRANSITION OF MHSA SERVICES COMMENCED PRIOR TO EFFECTIVE
DATE.
(a) With respect to outpatient services, Enrollees who have commenced
a treatment plan with or through Priority's prior MHSA providers
prior to the Effective Date, will be authorized to continue the
treatment plan with the same provider for three sessions in order
to complete the treatment or to move the provision of services to
a MHSA Provider, Priority will arrange for APS to receive a list
of such Enrollees 30 days prior to the Effective Date of this
Agreement.
(b) With respect to inpatient services, APS will not be responsible for
providing, arranging for the provision of, or paying for MHSA
services that an Enrollee is receiving on a continuing inpatient
basis on the Effective Date of this Agreement.
Section 3.10. TRAINING AND EDUCATION. APS agrees to provide education and
training to Priority's employees and Priority Providers as described below.
(a) APS will provide each Priority employee who is engaged in
Priority's provision of MHSA Services with comprehensive training
and education in all aspects of the management and administration
of MHSA Services, which training and education will be of at
least the same scope and quality as the training and education
provided by APS for APS employees. APS will make available to
Priority employees all of APS' information reasonably necessary
or useful for such training and education, subject to the
limitations in this Agreement concerning confidentiality and
return of Proprietary Information.
(b) PRIORITY PROVIDERS. APS will provide each Priority Provider training
and education in the provision of MHSA Services. Such training and
education will be of at least the same scope and quality as the
training and education provided by APS to providers affiliated with
APS, and will include, at a minimum, a provider orientation program,
education concerning APS' clinical guidelines and, at least
semi-annually, a provider newsletter.
Section 3.11. QUALITY MANAGEMENT AND OTHER PROGRAMS. APS will establish
and maintain a quality management program and other such programs, and will
cooperate with any such reasonable and similar programs established or required
by Priority with respect to MHSA Services and UM Services. APS' quality
management program will comply with the applicable requirements of NCQA
consistent with Section 7.4.
Section 3.12. REPORTING REQUIREMENTS. APS will provide to Priority the
reports identified below regarding MHSA Services. APS will provide such reports
to Priority no later than 60 working days after the end of each month or
calendar quarter; as appropriate.
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(a) APS will provide to Priority APS' standard monthly and quarterly
cumulative reports.
(b) APS will provide to Priority APS' standard reports required for
compliance with the applicable requirements of the NCQA consistent
with Section 7.4.
(c) APS will provide, within a time period mutually agreed to by the
parties, specialized reporting of data regarding MHSA Services.
Section 3.13. APS INFORMATION SYSTEMS.
(a) APS will employ and provide to Priority an informational services
professional that will work onsite at Priority to maintain the MHSA
workstations (including operating systems), network hardware and
provide MHSA reporting. APS will, upon Priority's reasonable
request, replace the APS employee assigned to Priority pursuant to
this Section 3.13
(b) APS will grant Priority employees access to APS' data warehouse and
reporting systems.
(c) APS will supply workstations (with the capability to connect to
Priority's network for Microsoft Office and Outlook
applications), operating systems, network services and all
network hardware. APS and Priority will jointly determine the
equipment that is necessary and the vendors from whom it will be
purchased. All equipment will be and remain the property of the
purchasing party and will be returned, upon termination of this
Agreement, to such purchasing party.
(d) APS and Priority will perform, as necessary to comply with this
Agreement, mutual data exchanges regarding membership, utilization,
authorizations, referrals, accumulators and other information within
10 working days of month end.
(e) Upon termination of this Agreement, or if a majority of stock or
substantially all assets of APS are transferred to another xxxxx,
APS shall allow Priority to license (for current market value as
determined, if necessary, by an independent appraiser), continuing
rights to the APS software, proprietary protocols, reporting, data
warehouse and decision support applications.
(f) APS will provide Priority with a secure Wide Area Network link
including all necessary equipment, installation, set up costs and
leased line costs.
Section 3.14. MHSA LIAISON COMMITTEE. APS and Priority will each
designate one person to serve as a member of the MHSA Liaison Committee. The
MHSA Liaison Committee will meet at least semi-annually. Specifically, but
not by way of limitation, the MHSA Liaison Committee will;
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(a) Review complaints by Enrollees, Priority Providers and MHSA
Providers;
(b) Review cases selected by APS or Priority;
(c) Discuss operational issues that arise under this Agreement; and
(d) Review APS' performance to assure compliance with this Agreement.
Section 3.15. NATURE OF APS SERVICE. With respect to the services that APS
provides under this Agreement, APS will give Priority the same consideration as
it does any APS department. This consideration will include reasonable access to
supervisory and management staff; training materials and trainers in clinical,
customer service and information systems; information systems resources; and
information regarding national changes in the delivery of behavioral health
services. APS representatives will meet with Priority, from time to time and
with reasonable notice, to discuss matters of mutual interest to APS and
Priority, such as utilization, data analysis and program design.
ARTICLE IV
COVERAGE DISPUTES
Section 4.1. COVERAGE DISPUTES WITH ENROLLEES.
(a) In the event of a dispute regarding coverage of MHSA Services, APS
will attempt to resolve the coverage dispute. If APS is not able to
resolve the coverage dispute, the Enrollee will be subject to
Priority or Sponsor's grievance process.
(b) APS will cooperate with Priority's or Sponsor's grievance process as
provided in the Enrollees Benefit Plan. The result of the grievance
process will be binding on APS, unless APS disagrees with such
result, in which case, Priority or Sponsor may authorize coverage
and pay for the provision of the services and supplies in dispute,
and the parties will proceed with the dispute resolution procedure
pursuant to Section 4.2.
(c) Each party will promptly inform the other party of any MHSA
coverage disputes with Enrollees that result in actual or
threatened arbitration or litigation against APS, Priority or
Sponsor. APS will defend Priority and Sponsor in any Enrollee
dispute and each party will fully cooperate with the other in
resolving the Enrollee dispute. If Priority or Sponsor at any
time elects to settle the Enrollee dispute and APS does not agree
with the terms of the settlement, Priority or the Sponsor will
pay for the provision of the services and supplies in dispute,
and the parties will proceed with the dispute resolution
procedure described in Section 4.4. APS will indemnify Priority
and Sponsors for arbitration awards or judgments pursuant to
Section 6.2.
Section 4.2 COVERAGE DISPUTES BETWEEN APS AND PRIORITY OR A SPONSOR
REGARDING ENROLLEES. If APS and Priority or a Sponsor disagree regarding whether
particular services and supplies for an Enrollee are MHSA Services for which APS
had financial responsibility or if Priority or the Sponsor settles an Enrollee
grievance, arbitration or litigation and APS and
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Priority or Sponsor do not agree on financial liability for such services, the
parties will comply with the following procedure.
(a) The dispute will be submitted to Priority's and APS' Medical
Directors for review.
(b) The Medical Directors will issue their determination within 7
business days after submission and receipt of appropriate and
necessary information. If there continues to be a dispute after
review by the Medical Directors, the parties will submit the dispute
to the MHSA Liaison Committee described in Section 3.14 for
consideration at the next or at a special meeting of the MHSA
Liaison Committee.
(c) The MHSA Liaison Committee will review the dispute. If both party's
representatives on the MHSA Liaison Committee agree on a resolution
of the dispute, such resolution will be binding on the parties.
Otherwise, the dispute will be arbitrated in accordance with Section
9.1.
ARTICLE V
COMPENSATION
Section 5.l. COMPENSATION.
(a) Priority will pay to APS the Capitation Rates, as set forth in
Attachment A, on or before the fifteenth (15th) day of each calendar
month, for each Enrollee Priority assigns to APS. Each capitation
payment will be accompanied by a roster, either in writing or by an
electronic medium mutually acceptable to APS and Priority, of all
Enrollees in the Service Area, identifiable by any Benefit Plans as
may be separately described in Attachment A.
(b) APS will within thirty (30) days after receiving a billing and all
requested information, reimburse Priority for all payments and costs
Priority makes or incurs with respect to the MHSA Program as
specified in Attachment A.
(c) Any retroactive adjustment to account for any Enrollee's
termination, change, or addition of coverage will not cause a
reduction of APS's past capitation payments for that individual of
more than a total of three (3) months. In the event that any month's
payment is discovered to have been based on an inaccurate count of
Enrollees, Priority will make any necessary adjustments in the
monthly payment following discovery of the inaccuracy.
(e) In no event, including but not limited to nonpayment by Priority,
insolvency or breach of this Agreement, will APS xxxx, charge,
collect a deposit from, seek compensation, remuneration or
reimbursement from, or have any recourse against any Enrollee or
any person other than Priority for services rendered pursuant to
this Agreement. This provision will survive the termination of
this Agreement
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and will be construed to be for the benefit of Enrollees. This
provision supersedes any oral or written agreement now existing or
hereafter entered into between APS and Priority (or persons acting
on either party's behalf) insofar as such agreement relates to
liability for payment for services provided under the terms and
conditions of this Agreement.
Section 5.2. FINANCIAL LIABILITY FOR MHSA SERVICE. APS acknowledges that
it is financially liable to the extent described on Attachment A to this
Agreement for MHSA Services provided to Enrollees under this Agreement. However,
in no event will APS have any obligation to provide or arrange for the provision
of MHSA Services for which APS has financial responsibility, unless and until
Priority has paid APS pursuant to the terms of this Agreement. If a Sponsor does
not pay Priority amounts due under the terms of its agreement with Priority,
Priority will remain liable to APS pursuant to the terms of this Agreement.
Section 5.3. TRANSFERS OF FUNDS. Priority will be solely responsible for
depositing or transferring the capitation payments on or before the 15th day of
each month for which such payment is due into a bank account designated by APS.
Section 5.4. CHANGE IN CIRCUMSTANCES. If Priority or a Sponsor modifies
the terms of any of its Benefit Plans or develops a new Benefit Plan or the
financial assumptions made in the development of the Capitation Rate change,
where such change, modification or new Benefit Plan is deemed by either Priority
or APS to be a material change to the obligations under this Agreement or the
pricing assumptions used in establishing the Capitation Rate, the parties will
renegotiate this Agreement, as necessary, in accordance with Section 9.3. Upon
such renegotiations, Priority or APS will prepare a proposed amendment to this
Agreement and forward it to the other to be signed by an authorized
representative of the other party. Notwithstanding any other provision of this
Agreement, upon signature of the amendment by the authorized representative of
the parties, the change, or new or modified Benefit Plan will be incorporated
into this Agreement without further writing required.
Section 5.5. PHARMACY RISK. The parties will, in good faith,
study and initiate the development of a risk sharing arrangement with respect
to MHSA pharmaceutical costs.
ARTICLE VI
INSURANCE AND INDEMNIFICATION
Section 6.1. INSURANCE.
(a) APS will procure and maintain, at its sole expense, professional
and general liability insurance and other insurance as may be
necessary to protect itself and its employees, agents, or
representatives against any claims, liabilities, damages or
judgments that arise out of services provided by or to be
provided by itself or its employees, agents or representatives in
the discharge of its or their responsibilities under this
Agreement. APS will provide proof of such insurance to Priority
upon
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request and will immediately notify Priority if APS receives notice
that such Insurance coverage will be terminated.
(b) Priority will procure and maintain, at its sole expense,
professional and general liability insurance and other insurance
as may be necessary to protect it and its employees, agents, or
representatives against any claims, liabilities, damages or
judgments that arise out of services provided by or to be
provided by itself or its employees, agents or representatives in
the discharge of its or their responsibilities under this
Agreement. Priority will provide proof of such insurance to APS
upon request and will notify APS if such insurance coverage is
terminated, Priority will ascertain that its agreements with MHSA
Providers require MHSA Providers to procure and maintain, at
their sole expense, professional and general liability insurance.
Section 6.2. INDEMNIFICATION.
(a) APS will defend, hold harmless and indemnify Priority from any
and all claims, liabilities, damages or judgments asserted
against, imposed upon or incurred by Priority that arise out of
APS' sole negligence or intentional wrongdoing in the discharge
of APS' responsibilities to an Enrollee or APS' responsibilities
under this Agreement. The indemnification granted under this
Section 6.2 expressly includes indemnification with respect to
expense costs, legal fees, defense costs, court costs, or amounts
paid in settlement or in satisfaction of any judgment or award.
(b) Priority agrees to defend hold harmless, and indemnify APS from
any and all claims, liabilities, damages or judgments asserted
against, imposed upon or incurred by APS that arise out of
Priority's sole negligence or intentional wrongdoing in the
discharge of Priority's responsibilities to an Enrollee or
Priority's responsibilities under the Benefit Plan and this
Agreement. The indemnification granted under this Section 6.2
expressly includes indemnification with respect to expense costs,
legal fees, defense costs, court costs, or amounts paid in
settlement or in satisfaction of any judgment or award.
ARTICLE VII
REGULATORY COMPLIANCE, FILING REQUIREMENTS
AND NCQA REQUIREMENTS
Section 7.1. REGULATORY COMPLIANCE. Priority and Sponsors will be solely
responsible for ensuring that their respective activities are in compliance with
all applicable federal, state or local laws and regulations. APS will be solely
responsible for ensuring that the services it provides or arranges under this
Agreement comply with any such applicable laws and regulations. Each party will
cooperate with the other in its efforts to achieve and maintain regulatory
compliance.
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Section 7.2. ERISA COMPLIANCE. If any Benefit Plan is subject to ERISA,
APS will not be identified as or understood to be the `Plan Administrator" or a
"Named Fiduciary" of the plan, as those terms are used in ERISA. APS has no
responsibility for the preparation or distribution of the "Plan Document" or
"Summary Plan Descriptions", as those terms are used in ERISA, or for the
provision of any notices or for the filing of any reports or information
required to be filed in regard to the Benefit Plan.
Section 7.3. REGULATORY FILING. Priority will be responsible for filing
this Agreement with federal, state and local agencies to the extent it is
required to do so by any applicable law or regulation. If any federal, state or
local agency requires a change to this Agreement that either APS or Priority
reasonably anticipates would materially and negatively affect the risk assumed
by APS or Priority under this Agreement and the parties cannot agree as to an
appropriate contractual change, the parties will follow the procedures
established under Section 9.2.
Section 7.4. NCQA ACCREDITATION COMPLIANCE. APS will establish and
maintain processes and programs for MHSA Provider credentialing,
recredentialing, utilization management and quality assessment and improvement.
With respect to such activities, APS will meet NCQA accreditation standards as
described in the most recent revision of NCQA's publication, STANDARDS FOR
MANAGED CARE ORGANIZATIONS, APS will submit its policies and procedures on
credenitialing, recredenitialing, utilization management and quality
assessment/improvement to Priority for review.
(a) APS Will submit to Priority standard reports in a form mutually
acceptable to the parties with respect to the following categories
of information:
(i) Credentialing/recredentialing reports
(ii) Quarterly MHSA Provider sanction reports
(iii) Monthly MHSA Services utilization reports
(iv) Quarterly quality management reports
(b) Priority may audit APS' records regarding the above processes and
programs. At least annually, Priority will provide written
feedback to APS regarding the results of Priority's review of
APS' reports 30 days following any audit activities, and at least
annually. If Priority reasonably determines, including pursuant
to any audit, that APS does not meet NCQA accreditation
standards, Priority will notify APS of the alleged deficiency
and, within 30 days, Priority and APS will meet to assess the
alleged deficiency and, if appropriate, develop a mutually
satisfactory plan of correction. If the parties develop a plan
of correction, APS will submit regular reports to Priority
documenting progress on the plan of correction until the
corrective action plan has been completed. If APS does not
correct the deficiency to Priority's satisfaction within 90 days
following the beginning of such corrective action plan, Priority
may deem such failure a material breach of this Agreement for
purposes of Subsection 10.2(a). Priority and APS will also
exchange information about, and Priority will give APS regular
feedback on, MHSA Provider credentialing, recredentialing,
utilization management and
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quality assessment/improvement processes and programs at the
regularly scheduled MHSA Liaison Committee meetings.
ARTICLE VIII
BOOKS AND RECORDS
Section 8.1. MAINTENANCE OF PATIENT RECORDS. APS will cause to be
maintained medical histories, chart and records for each Enrollee who seeks and
receives MHSA Services from MHSA Providers. All such records, which do not
include the actual clinical records maintained by Providers, will, be and remain
the property of Priority, subject to any rights of the Enrollee. APS will
deliver to Priority, upon Priority's request, such records in APS' possession.
If the Enrollee appropriately consents to such disclosure, Priority will provide
copies of the Enrollees' assessment and termination reports to the Enrollee's
referring and attending physician. APS and Priority will endeavor to promote
communication to such referring and attending physician regarding the Enrollee's
referral, subject to restrictions arising under state or federal law.
Section 8.2. PRIVACY OF RECORDS. APS and Priority will maintain the
confidentiality of all information regarding Enrollees in accordance with any
applicable statutes and regulations, including the federal regulations governing
Confidentiality of Alcohol and Drug Abuse Patient Records, 42 CFR part 2. APS
and Priority will undertake to resist in judicial proceedings any effort to
obtain access to information pertaining to Enrollees otherwise than as expressly
provided for in such federal confidentiality regulations.
Section 8.3 ACCESS TO OTHER PARTY'S RECORDS. During regular business
hours and upon reasonable notice and demand, each party will have access to
information and records or copies of records held by the other party that are
reasonably related to its obligations under this Agreement. The party conducting
the audit or inspection will pay for the other party's personnel's time in
excess of 16 hours and the cost of the copies of any records which it requests.
All records maintained by either party relating to their responsibilities under
this Agreement will be retained for at least 6 years after the date the records
were created. Neither party will allow or designate any third party to conduct
an audit or inspection without the prior written consent of the party whose
records are being audited or inspected except as may be required by state or
federal law.
ARTICLE IX
ARBITRATION AND
RENEGOTIATION OF THIS AGREEMENT.
Section 9.1. ARBITRATION BETWEEN PRIORITY AND APS. If a dispute between
APS and Priority arises out of or is related to this Agreement, APS and Priority
will meet and negotiate in good faith to attempt to resolve the dispute. If the
dispute is not resolved within 30 days of the date a party sends written notice
of the dispute to the other party, and if either party wishes to pursue the
dispute, it will be submitted to binding arbitration in accordance with the
rules of the American Arbitration Association. In no event may arbitration be
initiated more than one year
14
following the sending of written notice of the dispute. Any arbitration
proceeding under this Agreement will be conducted in Grand Rapids, Michigan. The
arbitrators will have no authority to award any punitive or exemplary damages or
to vary or ignore the terms of this Agreement and will be bound by controlling
law.
Section 9.2. RENEGOTIATIONS OF THIS AGREEMENT DUE TO A SIGNIFICANT CHANGE
OF CIRCUMSTANCES. If a significant change of circumstances occurs during the
term of this Agreement that presents a material departure from the risk
assumptions and the intent of the parties in entering into this Agreement, then
the parties will, upon the request of either party, renegotiate the applicable
terms of this Agreement to reasonably incorporate the effects of such change of
circumstances. A significant change of circumstances will include, but is not
limited to, (a) a change in law or an order for compliance issued by a
government authority having competent jurisdiction; (b) a significant reduction
in the number or change in the composition of Enrollees.
Section 9.3. RENEGOTIATIONS PROCEDURE. The parties will engage in good
faith negotiations with the intent and goal of reaching a consensus that will
preserve each party's anticipated benefit and respective rights and obligations
under this Agreement and avoid default of this Agreement.
a) Failure to agree upon renegotiated amounts pursuant to this Section
9.3 within 75 days after request for renegotiation will be cause for
termination pursuant to Section 10.2(d).
b) When an event occurs that allows a party to demand renegotiation of
the amounts to be paid to APS under this Agreement, Priority will
pay the amounts specified in this Agreement until final resolution
of the dispute. Any adjustments to the amounts paid to APS that are
subsequently agreed to by the parties will be retroactive to the
effective date of the event that allowed a party to demand such
renegotiation.
ARTICLE X
TERMINATION OF THIS AGREEMENT
Section 10.1. TERM. This Agreement will be effective on the Effective Date
and will continue until the date three years after the Effective Date, unless
terminated as provided in this Agreement, provided, however, this Agreement will
automatically renew for additional 1 year terms unless either party provides
written notice to the other party at least 90 days prior to the expiration of
the then current term of its intent not to renew this Agreement.
Section 10.2. TERMINATION. This Agreement may be terminated as follows:
a) by either party upon 60 days prior written notice in the event of a
material breach by the other party of this Agreement. The written
notice will specify the precise nature of the breach. If the
breaching party cures the breach to the satisfaction of
15
the non-breaching party within 60 days after the non-breaching
parry's written notice, this Agreement will not terminate.
b) by either party immediately due to the other party's failure to make
any payment pursuant to Article V within 60 business days of the
date such payment was due.
c) by either party immediately upon written notice by either party that
such party is the subject of a rehabilitation, liquidation or
bankruptcy proceeding or if there are no longer any Enrollees.
d) by either party upon 60 days written notice if renegotiations of
APS' reimbursement, pursuant to Section 9.3, do not result in a
mutually agreed upon rate.
e) by Priority, after the initial three year term of the Agreement,
without cause upon 120 days prior written notice to APS.
Section 10.3. EFFECT OF TERMINATION.
a) Immediately upon termination of this Agreement, Priority will notify
Enrollees of such Termination.
b) APS will cooperate with Priority or Priority's new MHSA vendor
("Vendor") as the case may be, in transitioning the care and
management of Enrollees in treatment on the date of termination of
this Agreement. Priority will or will require Vendor to take and
maintain medical records in APS' possession upon such terms and
conditions as are agreed to by Priority, Vendor and APS, but which
grant APS reasonable subsequent access to such records.
(c) APS has no obligation to provide or arrange for the provision of
outpatient MHSA Services after the effective date of termination of
this Agreement.
(d) If an Enrollee was admitted to a hospital pursuant to the terms of
this Agreement prior to the effective date of termination, APS will
continue to provide, arrange for and pay for the provision of
inpatient MHSA Services after the effective date of termination
until the earlier of the date of the Enrollee's discharge or the
date on which APS recommends discharge or the date on which
Enrollee's coverage ceases under a Benefit Plan.
ARTICLE XI
MISCELLANEOUS
Section 11. AMENDMENT. This Agreement may be amended only in writing
and both parties must execute the amendment.
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Section 11.2. ASSIGNMENT. Neither APS nor Priority may assign any of its
rights and responsibilities under this Agreement to any person or entity without
the prior written consent of the other party, which consent will not be
unreasonably withheld. Each party acknowledges that persons and entities under
contract or affiliated with the other party may perform or receive certain
services under this Agreement including subsidiaries and affiliates of each
party.
Section 11.3. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties in regard to its subject matter.
Section 11.4. RELATIONSHIP BETWEEN THE PARTIES. The relationship between
APS and Priority is solely that of independent contractors, and nothing in this
Agreement or otherwise will be construed or deemed to create any other
relationship, including one of employment, agency or joint venture.
Section 11.5. TERMINATION OF ENROLLEES. Subject to any restrictions in the
Benefit Plans, Priority will act promptly to disenroll Enrollees who meet
criteria for termination.
Section 11.7. GOVERNING LAW. This Agreement will be governed and construed
in accordance with the laws of the state of Michigan.
Section 11.8. NOTICES. Any notice under this Agreement will be in writing
and hand-delivered or sent by prepaid, first class mail or overnight delivery to
the addresses and addressees identified below, except as otherwise provided in
the Agreement. The addresses and addressees to which notices are sent for either
party may be changed by proper notice.
Priority: Priority
Attn: General Counsel
0000 Xxxx Xxxxxxxx, XX
Xxxxx Xxxxxx, XX 00000-0000
APS: American Psych Systems, Inc.
Attn: Vice President, Sales & Marketing
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Section 11.9 CONFIDENTIALITY OF PROPRIETARY INFORMATION. The parties
acknowledge that in the course of the operations of this Agreement, information
of each party may be disclosed which reflects its expertise regarding the
management, programming, or delivery of services (`Proprietary Information").
Such information will be deemed Proprietary Information if marked with the name
and logo of the party or otherwise so identified by the disclosing party. The
parties agree not to use or disclose to any other person, firm, organization or
Priority, any Proprietary Information of the other party, without the prior
written consent of the party to whom such Proprietary Information belongs.
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Section 11.10. SOLICITATION OF EMPLOYEES.
(a) Unless otherwise agreed to by Priority, during the term of this
Agreement and for a period of 1-year following the termination of
this Agreement, APS will not directly or indirectly solicit, employ
or engage any employee of Priority or any of its subsidiaries.
(b) Unless otherwise agreed to by APS, during the term of this Agreement
and for a period of 1-year following the termination of this
Agreement, Priority will not directly or indirectly solicit, employ
or engage any employee of APS or any of its subsidiaries.
Section 11.11 EXCLUSIVE NATURE OF AGREEMENT. Priority and APS agree that,
except as otherwise set forth in this Agreement or in the case of written waiver
by the other party, (i) APS will be the exclusive provider of MHSA services for
all Benefit Plans issued or administered in whole or in part by Priority and
Priority's present and future subsidiaries in which MHSA services are offered as
part of such Benefit Plans, and (ii) APS will not enter into any contract for
the provision of services with anyone other than Priority within the Service
Area.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION THAT MAY BE
ENFORCED BY THE PARTIES.
AMERICAN PSYCH SYSTEMS, INC.
By /s/ Xxxxxxx Xxxxxx
---------------------------------------
Print Name Xxxxxxx Xxxxxx
-------------------------------
Print Title V.P. Sales & Marketing
------------------------------
Date 11/3/98
-------------------------------------
PRIORITY
By /s/ Xxxxxx Xxxxxxx
---------------------------------------
Print Name Xxxxxx Xxxxxxx
-------------------------------
Print Title V.P. Development
------------------------------
Date 11/4/98
-------------------------------------
