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Pediatrix Medical Group - Management & Administrative Services Agree
br/> EXHIBIT 10.7
AMENDED AND RESTATED EXCLUSIVE MANAGEMENT
AND ADMINISTRATIVE SERVICES AGREEMENT
THIS AMENDED AND RESTATED EXCLUSIVE MANAGEMENT AND ADMINISTRATIVE SERVICES AGREEMENT (the "Agreement") effective January 1, 2003, is by and between PEDIATRIX MEDICAL GROUP, INC., a Florida corporation ("Manager") and __________________________, a _____________ professional corporation ("Practice").
WHEREAS, Practice is a professional corporation or association which employs physicians and other clinical professionals qualified to provide neonatology, perinatology, and/or certain other pediatric services to patients ("Professional Medical Services"); and
WHEREAS, Manager is a corporation engaged in the business of providing administrative and management services to medical practices and hospitals, including arranging for the provision of Professional Medical Services; and
WHEREAS, Manager and Practice are parties to that certain Exclusive Management and Administrative Services Agreement dated _________________ (the "Prior Agreement") pursuant to which Practice engaged Manager for the provision of management and administrative services; and
WHEREAS, in recognition of and in consideration for the parties' mutual obligations to each other with respect to the handling of protected healthcare information and in order to take into account other changes in practice operations since execution of the Prior Agreement, the parties desire to enter into this Agreement pursuant to the terms set forth below; and
WHEREAS, the Prior Agreement is superseded and replaced in its entirety by this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and other valuable consideration, the sufficiency of which is hereby acknowledged, the parties intending to be legally bound by this Agreement, agree as follows:
ARTICLE 1.
ENGAGEMENT
Practice hereby engages Manager, and Manager hereby agrees to be engaged by Practice, to provide the management and administrative services described in this Agreement, and to arrange for Practice, through the physician and other clinical employees or independent contractors of Practice (the "Professionals"), to provide the Professional Medical Services to hospital(s) and patients.
-1- ARTICLE 2.
DUTIES OF MANAGER
Manager shall provide all of the management and administrative services required for the day-to-day operations of Practice. Manager shall have exclusive authority over all decision-making relating to ongoing, major or central operations of Practice (except for decision-making relating to the delivery of Professional Medical Services, which shall be the exclusive responsibility of the Professionals). Specifically, Manager shall have exclusive decision-making authority over the scope of services (other than Professional Medical Services), patient acceptance policies and procedures, pricing of services, negotiation and execution of contracts, establishment and approval of operating and capital budgets, and issuance of debt by the Practice. Further, Manager shall have exclusive authority over total compensation of the Professionals as well as the ability to establish and implement guidelines for the selection, hiring and firing of Professionals. Additional responsibilities and duties of Manager hereunder shall include the following:
2.1 Coding. Manager will provide resources to the Practice to assist with the process of assigning CPT and ICD-9 codes to the Professional Medical Services provided by the Professionals. Such services may include implementation of coding guidelines, computerized billing programs, and individual coding review. The Practice acknowledges that, although Manager will provide resources to assist the coding process, final coding decisions shall be the responsibility of the Professionals. Practice and Manager acknowledge that, in connection with such coding support, it may be necessary to provide Manager with Protected Health Information (as defined in Section 2.17) and Practice and Manager agree to treat such information in accordance with Section 2.17 hereof.
2.2 Billing and Collection Services. Manager shall provide billing and collection services for all Professional Medical Services rendered by Practice and its Professionals. Such services shall include: the correlation of records kept by the Professionals who render care; maintenance of insurance information for each patient; computation and submission of regular bills for each patient account; pursuit of any disputed claims, including the filing of lawsuits to obtain payment; and accounting for the collection of all revenues. To facilitate the expeditious collection of all of Practice's fees for services provided by its Professionals, and to assist Manager in providing appropriate cash flow management to Practice, Practice hereby assigns to Manager all of its professional fees and accounts receivable for services provided, excluding fees and accounts receivable relating to professional services rendered to patients eligible for coverage under the Medicare or Medicaid programs or other third party payors which refuse to honor such assignments, and hereby appoints Manager as its true and lawful attorney-in-fact, with full power to collect and otherwise deal in and with such fees and receivables assigned by Practice; provided, however, that, to the extent allowed by law, Practice assigns to Manager all income received by it on account of services rendered to patients of Practice who are eligible for coverage in the Medicare or Medicaid programs and other third party payors which refuse to honor assignments, and Practice agrees to surrender, transfer, and remit to Manager promptly all
-2- fees received on behalf of or from such patients. Practice agrees to execute any and all instruments and documents deemed necessary or desirable by Manager to carry out the provisions of this section. Practice agrees that to the extent Manager receives notice from a hospital of, or Manager makes on its own behalf, a bona fide request to write-off or hold in abeyance any of Practice's professional fees, that Practice will not unreasonably refuse the request of the hospital or Manager. Practice and Manager acknowledge that, in connection with such billing and collection services, it may be necessary to provide Manager with Protected Health Information and Practice and Manager agree to treat such information in accordance with Section 2.17 hereof.
2.3 Third Party Payors. Manager shall act as the liaison of Practice with all third party payors for the purpose of negotiating managed care, preferred provider, and other agreements with such third party payors. Manager shall monitor performance of the respective parties to such agreements for compliance with the terms and conditions set forth therein, as well as all applicable Federal and state laws, rules and regulations.
2.4 Hospital Liaison. Manager shall be the administrative liaison between Practice and any hospital in which Practice and/or Professionals provide Professional Medical Services, including pursuant to a contractual arrangement between either Manager or Practice and the hospital. Manager shall provide to Practice all administrative services associated with Practice's Professional Medical Services at such hospitals. Manager shall also bill and collect all medical director stipends, coverage fees or other sums that may be due from such hospitals.
2.5 Personnel Services. Manager shall provide the following personnel services: maintenance of complete personnel records on each employee; establishment and administration of employee benefits, including insurance plans; recruitment of Professionals and recruitment and hiring of non-medical personnel; evaluation and salary recommendations for non-medical personnel; provision of day-to-day management and direction to non-medical personnel; and development of personnel policies and procedures. Manager shall establish payroll accounts and procedures in accordance with Section 2.7.
2.6 Financial Services. Manager shall provide the following financial services: Manager shall provide such bookkeeping services as may be required to keep the books and accounts of Practice, and may retain a professional accountant to perform same; Manager shall ensure that all state and federal tax returns are prepared and filed on a timely basis; and Manager shall track and pay all accounts payable from funds made available by Practice. Manager and Practice shall work together to develop a fee schedule for each service to be provided by Practice; provided, however, that this fee schedule shall be subject to the approval of Manager. Manager shall review the fee schedule on a periodic basis and recommend changes to Practice as may be necessary.
2.7 Cash Management. Manager is authorized to open one or more bank accounts necessary to manage the finances of Practice, at banks designated by Practice. Practice shall approve one or more individuals designated by Manager to have authority to sign checks, make deposits and transact such other business as may be reasonably necessary. Manager is authorized
-3- to establish payroll systems and make payroll payments, pay accounts payable, and otherwise satisfy the obligations of Practice from these accounts. Manager shall deposit all collections from services rendered by Practice into these accounts. Manager shall prepare and provide Practice monthly reconciliations of all bank accounts. Manager may utilize one bank account to deposit funds of Practice and other entities with whom Manager has similar arrangements so long as Manager is able to account for the funds of Practice.
2.8 Recruitment. Manager shall recruit and provide initial screening of Professionals on behalf of Practice. Practice retains responsibility for monitoring and maintaining the qualifications of its Professionals, and agrees that the role of Manager is to present candidates for consideration by Practice consistent with guidelines established by Manager.
2.9 Planning and Budgeting. Manager shall assist Practice in short and long range planning, including the projection of personnel needs, proposals of benefit packages, analyses of future markets, and other necessary planning services. Manager shall prepare annual budgets on behalf of Practice, which shall be submitted to Practice for its approval. Practice agrees to provide Manager with an approved budget ("Annual Budget") no later than 30 days prior to commencement of each fiscal year during the term of this Agreement. Such Annual Budget must be acceptable to Manager in its sole discretion. Practice agrees to operate within and in accordance with the Annual Budget unless the variance from the Annual Budget is previously approved by Manager or it involves an emergency expenditure to maintain required staffing levels or treatment standards and approval of Manager could not be obtained in a timely manner because of the emergency.
2.10 Insurance. Manager shall evaluate, on an ongoing basis, the professional liability, general liability, and other insurance needs of Practice and its employees and Professionals taking into consideration coverage customarily maintained by similar enterprises, hospital requirements, and general availability of coverage in the market. Insurance shall be maintained in accordance with Article 10 hereof.
2.11 Equipment and Supplies. Manager shall develop inventory systems to assure that reasonable inventories of equipment and supplies required by the employees of Practice are available at all times. Manager shall purchase, pay for and arrange for the delivery of such equipment and supplies.
2.12 Compliance. Manager shall develop, on behalf of Practice, a compliance program under which Manager shall make available a Compliance Officer, compliance hotline and compliance training program for Practice's personnel to facilitate compliance by Practice with laws impacting its business and to create a reporting process for concerns regarding compliance issues. Manager shall coordinate filing of all state mandated clinical reports. Practice and Manager acknowledge that, in connection with such compliance initiatives or clinical reports, it may be necessary to provide Manager with Protected Health Information and Practice and Manager agree to treat such information in accordance with Section 2.17 hereof.
-4- 2.13 Legal and Risk Management. Manager shall arrange for legal resources to facilitate hospital and clinical employment contracting, lease and other contract review, maintenance of corporate records and minute books, and general legal compliance. Manager also shall develop programs to identify areas of potential legal risk for the Practice and provide and coordinate legal representation in the event of actual or anticipated litigation against Practice. Practice and Manager acknowledge that, in connection with such legal representation, it may be necessary to provide Manager with Protected Health Information and Practice and Manager agree to treat such information in accordance with Section 2.17 hereof.
2.14 The Pediatrix-Obstetrix Center for Research and Education. Manager shall provide educational resources to Professionals, including resources to support continuing medical education requirements of the Professionals under state licensure laws. Manager shall make available to Professionals various resources and opportunities to participate in and support clinical research projects. In addition, Manager shall undertake research using certain clinical data assembled by Practice. Practice and Manager acknowledge that, in connection with such education and research programs, it may be necessary to provide Manager with Protected Health Information and Practice and Manager agree to treat such information in accordance with Section 2.17 hereof.
2.15 Quality Improvement. Consistent with the Health Care Quality Improvement Act of 1986, 42 U.S.C. Section 11101, Manager shall develop and maintain, on Practice's behalf, programs to improve the quality of care provided by Practice's Professionals. Specifically, Manager shall implement the following programs:
(a) Peer Review. Upon a request for peer review from an
officer or Professional employee of the Practice, Manager, through its
Medical Board, shall arrange for a review by a qualified professional
or professionals in the same or similar specialty as the Professional
under review. Manager's Medical Board shall report the results of such
review to the officer or agent of the Practice and provide assistance
to the Practice to implement recommendations, follow-up and fulfill
reporting obligations, if any. Practice and Manager acknowledge that,
in connection with such peer review activities, it may be necessary to
provide Manager with Protected Health Information and Practice and
Manager agree to treat such information in accordance with Section 2.17
hereof.
(b) Quality Improvement. Manager shall develop programs
designed to improve the quality of care provided by the Professionals
and encourage identification and adoption of best demonstrated
processes. Practice and Manager acknowledge that, in connection with
such quality improvement activities, it may be necessary to provide
Manager with Protected Health Information and Practice and Manager
agree to treat such information in accordance with Section 2.17 hereof.
2.16 Additional Services. Although the parties have endeavored to reflect the management and administrative services that Manager shall provide hereunder, they expressly recognize that there may be additional services provided by Manager, it being the intent of the parties that all management and administrative services necessary for the operations of the
-5- Practice be provided by Manager. Additional services also may be suggested by Practice and provided by Manager upon mutual agreement of the parties.
2.17 HIPAA Compliance. Manager and Practice acknowledge that Manager will be required to access the protected health information of patients, as defined in 42 U.S.C. Section 1320d and 45 CFR Section 164.501 (collectively, "Protected Health Information"), in order for Manager to perform its duties under this Agreement, particularly under Sections 2.1, 2.2, 2.12, 2.13, 2.14, and 2.15 above. Manager and Practice each agree to comply with the applicable provisions of the Administrative Simplification section of the Health Insurance Portability and Accountability Act of 1996, as codified at 42 U.S.C. Section 1320d through d-8 ("HIPAA"), and the requirements of any regulations promulgated thereunder, including, without limitation, the federal privacy regulations as contained in 45 CFR Parts 160 and 164 (the "Federal Privacy Regulations") and the federal security standards as contained in 45 CFR Part 142 (the "Federal Security Regulations"), as well as the specific agreements and assurances set forth below. A material breach of the provisions of this Section shall constitute a material breach of this Agreement.
(a) Use and Disclosure of Protected Health Information. Manager and Practice each agree not to use or further disclose any Protected Health Information other than as permitted or required by this Agreement and the requirements of HIPAA or regulations promulgated under HIPAA, including, without limitation, the Federal Privacy Regulations and the Federal Security Regulations. Manager and Practice each will implement appropriate safeguards to prevent the use or disclosure of a patient's Protected Health Information other than as provided for by this Agreement. Manager and Practice each will promptly report to the other any use or disclosure of a patient's Protected Health Information not provided for by this Agreement or in violation of HIPAA, the Federal Privacy Regulations, or the Federal Security Regulations of which Manager or Practice becomes aware. In the event Manager or Practice, with the other's approval, contracts with any agents to whom it provides a patient's Protected Health Information, it shall include provisions in such agreements whereby it and the agent agree to the same restrictions and conditions that apply to it with respect to such patient's Protected Health Information. Manager and Practice will take necessary steps to accord patients the individual rights of record access, amendment and disclosure accounting required by HIPAA and the Federal Privacy Regulations. Manager and Practice will make its internal practices, books, and records relating to the use and disclosure of a patient's Protected Health Information available to the Secretary of Health and Human Services to the extent required for determining compliance with the Federal Privacy Regulations and the Federal Security Regulations. Notwithstanding the foregoing, no attorney-client, accountant-client, or other legal privilege shall be deemed waived by Manager or Practice by virtue of this Section. Because the Manager will need Protected Health Information for the ongoing management and operation of its business, the Manager may retain such information after the termination of this Agreement, provided that the Manager continues to extend the protections of this Agreement to the Protected Health Information and limits further disclosures to the purposes that make the return or destruction of the information infeasible or to purposes otherwise required by law.
(b) Research Data. In accordance with Section 2.14 of this Agreement, Manager shall undertake research using certain clinical data assembled by Practice. Except
-6- where authorization for the use of Protected Health Information in research is obtained in accordance with the Federal Privacy Regulations, such clinical data shall be furnished to Manager in the form of a limited data set that meets the requirements of Section 164.514(e) of the Federal Privacy Regulations. That limited data set shall be used by Manager, and by its employees and agents, exclusively for the purposes of research, public health and health care operations. Manager also may grant access to the limited data set to other individuals or entities engaged in research activities. Manager shall not use or further disclose information contained in the limited data set other than as permitted by this Section 2.17(b) or as otherwise required by law. Manager further agrees that it will (i) use appropriate safeguards to prevent use or disclosure of the information contained in the limited data set other than as provided for in this Section 2.17(b), (ii) report to Practice any use or disclosure of such information not provided for in this Section of which it becomes aware, and (iii) ensure that any agents or subcontractors to whom Manager provides the limited data set agree to the same conditions and restrictions with respect to such information. Manager will not identify the information contained in the limited data set or use the limited data set to contact the individuals whose information is contained therein.
(c) Data Security. On or before April 21, 2005, Manager will implement, in accordance with the Federal Security Regulations, administrative, physical and technical safeguards that reasonably and appropriately protect the confidentiality, integrity and availability of the electronic Protected Health Information that Manager creates, receives, maintains or transmits on behalf of Practice. If Manager becomes aware of any security incident involving Protected Health Information furnished to Manager by Practice or that Manager otherwise maintains on the Practice's behalf, Manager will report such incident to Practice. Manager will require any agent or subcontractor who re...
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