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Medcath - Management Services Agreement For Heart Hospital
EXHIBIT 10.10
MANAGEMENT SERVICES AGREEMENT
This Agreement is entered into as of the 5th day of September , 2001, by and between LAFAYETTE HEART HOSPITAL, LLC, a Delaware limited liability company (the "Owner") and LAFAYETTE HOSPITAL MANAGEMENT, INC., a North Carolina corporation ("LHMI"), both parties hereinafter collectively referred to as the "Parties."
RECITALS:
WHEREAS, Owner desires to obtain the Contract Management Services (defined below) of LHMI to manage its hospital specializing in the diagnosis and treatment of cardiovascular disease and cardiovascular and vascular surgery in the greater Lafayette, Louisiana area (the "Hospital");
WHEREAS, affiliates of LHMI, including LHMI's sole shareholder MedCath Incorporated ("MedCath"), have a substantial amount of experience and expertise in developing and operating hospitals similar to the Hospital as a result of their development and operations of heart hospitals throughout the United States;
WHEREAS, Owner and LHMI mutually desire that such Contract Management Services be made available to Owner.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the Parties agree as follows:
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DEFINITIONS
1.1 ACT.
The term "Act" shall mean the Delaware Limited Liability Company Act, as in effect in Delaware and set forth at 6 Del. C.ss.18-101 through 18-1109 (or any corresponding provisions of succeeding law).
1.2 AGREEMENT.
The term "Agreement" shall mean this Management Services Agreement and any amendment thereto as may be from time to time adopted in writing as hereinafter provided.
1.3 AT OWNER'S EXPENSE.
The term "At Owner's Expense" shall mean an expense incurred by LHMI on behalf of Owner either pursuant to an approved budget or as otherwise authorized herein.
1.4 BOARD OF DIRECTORS.
The term "Board of Directors" means and shall refer to the Board of Directors designated pursuant to the Operating Agreement of Owner (the "Operating Agreement").
1.5 CONTRACT MANAGEMENT SERVICES.
The term "Contract Management Services" shall mean the services which are authorized to be furnished by LHMI under this Agreement. The term "Contract Management Services" shall not mean or be construed to include physician services. It is hereby acknowledged that Contract Management Services shall be provided to Owner hereunder by LHMI and its Affiliates (such terms and other capitalized terms not defined herein shall have the same meaning as set forth in the Operating Agreement).
1.6 EQUIPMENT.
The term "Equipment" shall mean the appropriate equipment and supplies acquired in connection with the development and operation of the Hospital.
1.7 GAAP.
The term "GAAP" or "Generally Accepted Accounting Principles" shall mean the accounting and financial reporting principles as promulgated from time to time by the American Institute of Certified Public Accountants and the Financial Accounting Standards Board.
1.8 HOSPITAL POLICIES.
The term "Hospital Policies" shall mean and include the Operating Agreement, the written policies of Owner and other reasonable policies and procedures of the Hospital, all as are from time to time adopted, revised, authorized or approved by the Board of Directors and communicated in writing by Owner to LHMI.
1.9 MEDCATH.
The term "MedCath" shall mean MedCath Incorporated, the sole shareholder of LHMI.
1.10 MEMBER.
The term "Member" shall mean any member of Lafayette Heart Hospital, LLC, a Delaware limited liability company.
1.11 OWNER.
The term "Owner" shall mean Lafayette Heart Hospital, LLC, a Delaware limited liability company.
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1.12 PERSONNEL.
The term "Personnel" shall mean all persons (including supervisors, nurses, technicians, support personnel and other individuals) hired pursuant to this Agreement by LHMI as employees of Owner to furnish services to Owner, each of which persons must hold such currently valid licenses, certifications and/or registrations as may be required by local, State or federal laws or authorities (including the Medicare and Medicaid programs) for the operation of the Hospital. Except as provided herein, all Personnel shall be on the payroll of Hospital and Hospital shall bear all salary and employee benefits expenses for such personnel. The term "Employee Benefits" shall include (as applicable) the employer's contribution to F.I.C.A., unemployment compensation and other employment taxes, all bonuses, pension or profit sharing plan contributions, worker's compensation, group life, accident and health insurance premiums, disability and other benefits when applicable.
1.13 STATE.
The term "State" shall mean the State of Louisiana.
1.14 TERM.
The term "Term" shall mean the contract period provided for under this Agreement.
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APPOINTMENT AND AUTHORITY
2.1 APPOINTMENT OF LHMI.
Owner hereby retains LHMI and LHMI hereby accepts such retention to provide Contract Management Services.
2.2 AUTHORITY OF LHMI.
The Board of Directors hereby delegates to LHMI the authority to manage the Hospital as set forth below, subject, however, in all cases to: (i) the authority and approval of the Board of Directors as set forth in the Operating Agreement, which provides that the Board of Directors shall be responsible for making all Material Decisions and approving all Material Agreements (as defined in the Operating Agreement); (ii) such policies and procedures as may be adopted by the Board of Directors from time to time; and (iii) such power and authority expressly required to be retained by the Board of Directors or Owner pursuant to applicable law, including, without limitation, requirements of licenses, conditions of participation in third party payor programs, and certification and accreditation standards.
Subject to the terms and conditions of this Agreement, LHMI shall have the exclusive right and commensurate authority, express or implied, to provide Contract Management Services to Owner, which shall also include, subject to the terms and conditions of this Agreement and the
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Operating Agreement, all services and actions which LHMI determines to be reasonably necessary or appropriate for the development and operation of the Hospital. The Parties acknowledge and agree that individual physicians who treat patients at the Hospital (the "Physicians"), shall have complete freedom and control over the provision of all professional medical services and the charges for their services, subject only to the Medical Staff Bylaws and Rules and Regulations of the Hospital. The Parties expressly agree and acknowledge that: (i) performance of this Agreement shall not require or permit LHMI to become engaged in the practice of medicine, nursing or other medical services whatsoever; (ii) this Agreement shall not interfere with or inhibit the private physician-patient relationship between the Physicians and their patients; and (iii) this Agreement shall not require nor permit any illegal or unethical division of Physicians' fees.
Subject in all cases to the foregoing and to the other terms and conditions of this Agreement, LHMI shall have the right and the power, if, as, and when it, from time to time, deems necessary or appropriate on behalf of Owner and the Hospital:
(a) To negotiate and execute on behalf of Owner all
documents, instruments and agreements reasonably necessary or
appropriate to lease or acquire for fair market value, as approved by
both Members, the real property on which the Hospital will be located,
and to borrow funds to finance such acquisition and/or construction
(it being acknowledged that the Hospital will consist of a newly
constructed building);
(b) To prepare a budget for the development of the
Hospital and thereafter, annual operating budgets;
(c) To acquire in the name of Owner the Equipment, as
approved by the Board of Directors or as further described at Section
3.4 below, and enter into loans or other financing arrangements
therefor;
(d) To handle the negotiation and execution of all such
other agreements regarding the purchase of goods or services for the
Hospital;
(e) To establish procedures for quality assurance, peer
review and granting privileges to physicians with other specialties at
the Hospital, subject to the terms of the Hospital and Medical Staff
Bylaws approved by the Board of Directors and adopted for the
Hospital;
(f) To expend all or portions of Owner's capital and
income in furtherance of or relating to Owner's business and purposes
in accordance with the budget established for the Hospital and other
reasonable cash management guidelines reasonably established by the
Board of Directors in accordance with the terms of the Operating
Agreement, including, but not limited to, payment of all ongoing
operational expenses, payment of commissions, organization expenses,
professional fees, rental fees, and operating and licensing fees and
development fees, and to invest in short-term debt obligations
(including, but not limited to, obligations of federal and State
governments and their agencies, commercial paper, and certificates of
deposit of commercial banks, or savings
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banks or savings and loan associations) such of Owner's funds as are
temporarily not required for the development or operation of the
Hospital and the payment of Owner obligations;
(g) To employ or retain on such terms and for such
compensation as LHMI may reasonably determine, such persons, firms, or
corporations as LHMI may deem advisable, including without limitation
qualified medical and other employees necessary or appropriate to
operate the Hospital, attorneys, accountants, financial and technical
consultants, supervisory managing agents, insurance brokers, brokers
and loan brokers, appraisers, architects and engineers, who may also
provide such services to LHMI, provided that the selection of the
President shall be a Material Decision (as defined in the Operating
Agreement) to be made by the Board of Directors;
(h) To execute leases, deeds, contracts, rental
agreements, construction contracts, sales agreements, and management
contracts;
(i) To exercise all rights, powers, and privileges of
Owner as lessee with respect to the Hospital or rights held by Owner;
(j) To consent to the modification, renewal, or
extension of any obligations to Owner of any Person or of any
agreement to which Owner is a party or of which it is a beneficiary;
(k) To execute in furtherance of any or all of the
purposes of Owner, any deed, lease, deed of trust, security interest,
mortgage, promissory note, bill of sale, assignment, contract, or
other instrument or to encumber in whole or in part the Equipment or
the Hospital or other real or personal property of Owner for the
purpose and reasons approved by the Board of Directors;
(l) To prepay in whole or in part, refinance, recast,
increase, modify, or extend any security interest, deed of trust, or
mortgage affecting the Hospital and in connection therewith to execute
any extensions or renewals thereof on the Hospital and to grant
security interests in any of the Equipment or the Hospital;
(m) To adjust, compromise, settle, or refer to
arbitration any claim against or in favor of Owner, and to institute,
prosecute, and defend any actions or proceedings relating to Owner,
its business, and properties provided, however, that LHMI will consult
with the Board of Directors regarding such claims;
(n) To acquire and enter into any contract of insurance
which LHMI deems necessary or appropriate for the protection of Owner
and LHMI, for the conservation of Owner or its assets, or for any
purpose beneficial to Owner; however, neither LHMI nor its Affiliates
shall be compensated for providing insurance brokerage services
relating to obtaining such insurance;
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(o) To prepare or cause to be prepared reports,
statements, and other relevant information for distribution to the
Members, including annual reports;
(p) To open accounts and deposit and maintain funds in
the name of Owner in banks or savings and loan associations; provided,
however, that Owner's funds shall not be commingled with the funds of
any other Person;
(q) To cause Owner to make or revoke any of the
elections referred to in Section 754 of the Internal Revenue Code of
1986 as amended or any similar provisions enacted in lieu thereof;
(r) To make all decisions related to generally accepted
principles of accounting to be applied on a consistent basis and
federal income tax elections;
(s) To possess and exercise, subject to the restrictions
contained in this Agreement, any and all of the rights, powers and
privileges of a manager under the Act;
(t) To modify or otherwise improve the Hospital, subject
to the restrictions contained in this Agreement or in the Operating
Agreement;
(u) To manage, direct, and guide the operation of the
Hospital, including all necessary acts relating thereto, other than
medical or clinical matters which shall be under the direction of the
Medical Director (as defined in the Operating Agreement) and other
agreed upon qualified medical personnel;
(v) To establish minimum insurance requirements for all
physicians practicing at the Hospital;
(w) To file and publish all certificates, statements, or
other instruments required by law for the formation and operation of
Owner as a limited liability company in all appropriate jurisdictions;
(x) To cause Owner to obtain and keep in force during
the term of Owner fire and extended coverage and public liability and
professional liability insurance with such issuers and in such amounts
as LHMI shall deem advisable, but in amounts not less (and deductible
amounts not greater) than those customarily maintained with respect to
the business equipment and property comparable to Owner's;
(y) To deliver to the Secretary of State of Delaware for
filing an annual statement in accordance with the Act and make any
similar filings required under Louisiana law;
(z) To cause tax returns (income tax, sales tax, etc.)
for Owner to be prepared, at Owner expense, and timely filed with the
appropriate authorities. As soon as is reasonably practicable, and in
any event on or before the expiration of 75 days following the end of
each Fiscal Year, each Member (as defined in the Operating Agreement)
shall
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be furnished with a statement to be used in the preparation of the
Member's tax returns, showing the amounts of any Profits or Losses
allocated to the Member, and the amount of any distributions made to
the Member, pursuant to this Agreement, along with a reconciliation of
the annual report with information furnished to Members for tax
purposes;
(aa) To open and maintain, on behalf of Owner, a bank
account or accounts in a federally insured bank or savings institution
approved by the Board of Directors, which approval shall not be
unreasonably withheld or delayed, in which all monies received by or
on behalf of Owner shall be deposited; provided, however, if Owner's
or MedCath's lender requires that Owner use a particular bank or
savings institution as a condition to financing provided by such
lender, then LHMI shall open and maintain accounts in such bank or
savings institution and shall not be required to receive the approval
of the Board of Directors. All withdrawals from such accounts shall be
made upon the signature of those representatives of LHMI who LHMI may
from time to time designate (provided that LHMI provides written
notice of the representatives so designated to the Board of
Directors), and such other Person or Persons as LHMI may from time to
time designate subject to the approval of the Board of Directors,
which approval shall not be unreasonably withheld or delayed. Any
funds of Owner which LHMI may determine are not currently required for
the conduct of Owner's business may be deposited with a federally
insured bank or savings institution or invested in short-term debt
obligations (including obligations of federal or State governments and
their agencies, commercial paper, certificates of deposit of
commercial banks, savings banks or savings and loan associations) as
shall be determined by LHMI, subject to the approval of the Board of
Directors, which approval shall not be unreasonably withheld or
delayed; provided, however, if Owner's or MedCath's lender requires
that Owner deposit funds in a particular bank or savings institution
or invest in particular short term debt obligations as a condition to
financing provided by such lender, then LHMI shall deposit such funds
in such bank or savings institution or invest in such short term debt
obligations and shall not be required to receive the approval of the
Board of Directors;
(bb) To execute, acknowledge, and deliver any and all
documents or instruments in connection with any or all of the
foregoing.
2.3 RESERVED POWERS OF OWNER.
Subject to the terms of this Agreement, Owner reserves the right to direct that LHMI operate the Hospital in accordance with: (i) the terms and conditions of the Operating Agreement; (ii) such policies and procedures as may be adopted by the Board of Directors from time to time; and (iii) such power and authority required to be retained by the Board of Directors pursuant to applicable law, including, without limitation, requirements of licenses, condition of participation in third party payor programs, and certification and accreditation standards. At any time during the term of this Agreement, Owner may change its policies, subject to the terms of its Operating Agreement.
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2.4 RELIANCE ON LHMI'S AUTHORITY.
Any party dealing with or entering into any agreement with Owner may rely on LHMI's execution of any such agreement without further inquiry, and such signature by LHMI shall be binding upon Owner hereunder.
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COVENANTS OF LHMI
LHMI makes the following covenants with respect to this Agreement, the performance of which shall be subject to the authority and approval of the Board of Directors as set forth in the Operating Agreement:
3.1 DEVELOPMENT OF HOSPITAL.
LHMI shall propose a plan for the development of the Hospital which sets forth a timeline for the planning, construction, licensing, accreditation and operation of the Hospital (the "Development Plan") for approval by the Board of Directors. The Development Plan shall be consistent with the Development Budget or other budget approved by the members or directors of the Owner pursuant to the Operating Agreement. Once approved by the Board of Directors, LHMI shall use commercially reasonable best efforts to cause the Hospital to be constructed and become operational in accordance with the Development Plan, subject to the obligation of the Hospital to approve reasonable amendments to the Development Plan as plans for the Hospital are finalized and changes to such plans are thereafter made by Owner.
3.2 PERFORMANCE OF CONTRACT MANAGEMENT SERVICES.
During the term of this Agreement, LHMI shall perform necessary Contract Management Services for the Hospital at all times and in all places as required pursuant to this Agreement.
3.3 SELECTION, RETENTION, SUPERVISION, TRAINING AND SCHEDULING OF PERSONNEL.
Except as otherwise provided herein and except for certain senior management personnel of the Hospital who shall be hired by and be employees of MedCath and be assigned to the Hospital by MedCath, LHMI or MedCath shall hire for Owner all Personnel who may be required for the proper operation of the Hospital and shall have responsibility for the selection, retention, supervision, training and termination of such Personnel. LHMI shall cause appropriate Personnel to be scheduled and available as required to meet the reasonable business needs of Owner in carrying out the Hospital's business.
3.4 SELECTION, PROVISION AND MAINTENANCE OF FACILITIES AND EQUIPMENT.
LHMI shall recommend for lease or purchase by Owner such facilities and Equipment as may be required to meet the reasonable business needs of Owner in carrying out the Hospital's business, including appropriate maintenance contracts. LHMI shall periodically inspect and
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evaluate, or arrange therefor, all such facilities and Equipment so that they are being maintained in a safe and efficient manner and shall assure that all facilities and Equipment are in good repair, ordinary wear and tear excepted. LHMI shall also maintain a current level of knowledge with respect to new and innovative technology in the field of the diagnosis and treatment of cardiac disease and vascular and cardiovascular surgery and shall make recommendations to Owner with respect thereto as appropriate.
3.5 SUPPLIES AND SUPPORT SERVICES.
LHMI shall assure the availability of all supplies and support services that may be reasonably required for the proper and efficient operation of the Hospital. LHMI may purchase goods and services for Owner from Members of Owner or their Affiliates as long as they are of substantially the same quality and at a fair market price as could be obtained from an unrelated third party in an arm's length transaction. It is intended that LHMI and its Affiliates shall have the first opportunity to provide information and accounting services to be purchased by the Hospital.
3.6 QUALITY ASSURANCE.
LHMI shall use its commercially reasonable best efforts to assure that the Hospital is operated in accordance with the standards established by the Joint Commission on Accreditation of Healthcare Organizations ("JCAHO") and shall make regular reports to the Board of Directors relative thereto. In order to facilitate this covenant, LHMI shall prepare, update and maintain from time to time a quality assurance plan in writing and shall submit it to Owner for review and approval.
3.7 BUSINESS MANAGEMENT POLICIES, PROCEDURES, RECORDS AND REPORTS.
LHMI shall arrange for the maintenance of such records and make or arrange for the making of such reports as are reasonably necessary and appropriate for the conduct of the Hospital. Such business records and reports shall include those applicable to a system of transaction approvals, revenue and statistical accounting (including revenue analysis by customer and customer group) and accounts receivable, payrolls, purchasing and accounts payable, bank accounts, lines of credit, cash receipts and disbursements, general ledger, property records for plant and equipment, statistical records, budgeted expenses by department, tax matters and other journals, ledgers and records generally required to be kept in order to effectuate the financial record keeping and reporting for a business of the size and complexity of the Hospital. LHMI shall report to Owner monthly on the financial position and results of operations of the Hospital, to include the amounts of costs and expenses paid to LHMI and its Affiliates that are not included in the Development Fee paid to LHMI pursuant to Section 5.2 or the Management and Licensing Fee paid to LHMI pursuant to Section 5.3 of this Agreement. Such interim reports shall be on an accrual basis. LHMI shall prepare or arrange for the preparation of all tax reports and other filings and shall assure the timely and accurate filing thereof. LHMI shall arrange for the timely completion of annual financial audits by an independent certified public accountant. LHMI shall use the same audit firm as used by MedCath. LHMI shall prepare and submit to the Board of Directors for consideration and approval annual budgets and proposed capital
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expenditures including proposed financing arrangements therefor in accordance with the terms of the Operating Agreement. Subject to Section 3.7-1 below, in the event exceptions to the approved budget are required, LHMI shall submit proposals therefor to the Board of Directors.
3.7-1 EXPENDITURE APPROVAL.
Once a budget has been approved by the Board of Directors as set forth in Section 3.7, LHMI shall have the authority to expend up to one hundred and five percent (105%) of any and all funds which are included in the budget and sign all agreements related thereto, including reimbursement to LHMI and its Affiliates for goods and services provided to Owner. LHMI agrees to make available for review by the Board of Directors on a monthly basis summaries of Owner's financial information for the applicable month. LHMI shall have the right to recast the budget by transferring all or part of the funds approved for specific line items to another category or line item by an aggregate amount not to exceed ten percent (10%) of the total budgeted funds. LHMI is further authorized to make additional expenditures reasonably related to additional revenues or increased patient or procedural volumes provided that in making such additional expenditures the gross margin between the Company's net patient revenues and operating expenses remains the same or greater than the gross margin between net patient revenues and operating expenses in the most recent budget approved by the Board of Directors. LHMI shall report to the Board of Directors from time to time on variances between the Hospital's budget and actual operating results.
3.8 BOOKS AND RECORDS AVAILABLE.
LHMI shall perform the obligations as may be from time to time specified for subcontractors in Social Security Act, Sec. 1861(v)(1)(I) and the regulations promulgated in implementation thereof (initially codified at 42 C.F.R., Sec. 420.300, et seq.). LHMI further agrees that if this Agreement is determined to be an agreement with a provider under which a physician or other entity assumes some or all of the costs of the provider department pursuant to 42 C.F.R., Sec. 405.550(e), LHMI shall make its books and records available to the Owner and the Hospital's Medicare fiscal intermediary as necessary to verify the nature and extent of the costs of the services furnished by LHMI or its Affiliates pursuant to this Agreement.
In the event any request for LHMI's or a related subcontractor's books, documents and records is made pursuant to Social Security Act, Sec. 1861(v)(1)(I), 42 C.F.R., Sec. 420.300, et seq., or 42 C.F.R., Sec. 405.550(e), LHMI or any subcontractor related to LHMI shall promptly give notice of such request to Owner and provide Owner with a copy of such request and, thereafter, consult and cooperate with Owner concerning the proper response to such request. Additionally, LHMI or any subcontractor related to LHMI shall provide Owner with a copy of each book, document and record made available to one or more of the persons and agencies above or shall identify each such book, document and record to Owner and shall grant Owner access thereto for review and copying.
In addition, LHMI agrees to make available to Owner such information and records as Owner may reasonably request to facilitate Owner's compliance with the requirements of the Medicare Conditions of Participation and the Medicaid State Plan and to facilitate Owner's
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substantiation of its reasonable costs or other claim for reimbursement or payment in accordance with the requirements applicable to Owner pursuant to the Medicare and Medicaid programs including, without limitation, the requirements contained in 42 C.F.R., Subpart D of Part 405; 42 C.F.R., Subpart C of Part 420 and 42 C.F.R., Subpart B of Part 455.
3.9 MEDICAL RECORDS AND REPORTS.
LHMI shall arrange for an appropriate system for the maintenance of medical records, including form and content reasonably acceptable to Owner, and shall ensure that necessary and appropriate medical reports arising from Hospital services are promptly and accurately prepared, issued and filed in accordance with Owner's reasonable requirements. LHMI shall not, however, be held responsible for any physician's failure to perform his or her record keeping duties.
3.10 PRESIDENT.
LHMI (or MedCath) shall hire as its employee and designate a specific individual to serve as President of the Hospital and shall, in the temporary absence of such individual, assure the availability of one or more appropriately skilled individuals to assume the duties of President. The President shall be the individual to whom Owner will first look to for specific performance of the Contract Management Services provided pursuant to this Agreement. The selection, compensation, appointment, retention and replacement of the President shall be subject to the approval of the Board of Directors, not to be unreasonably withheld. The base salary and benefits of the President will be reimbursed to LHMI in addition to the fees to be paid to LHMI under Article V of this Agreement. LHMI and the Board of Directors shall confer regarding severance pay and/or benefits to be paid to the President and Owner shall reimburse LHMI for such severance pay and benefits as are agreed to by the Board of Directors.
3.11 STATUS AS MEDICARE-CERTIFIED HOSPITAL.
LHMI shall use its commercially reasonable best efforts to assist the Hospital in achieving and maintaining the status of a Medicare-certified hospital that is also qualified to accept patients under state health care programs including Medicaid.
3.12 OTHER LICENSES AND PERMITS.
LHMI shall use its commercially reasonable best efforts to obtain and maintain in force all licenses and permits required for conduct of the business.
3.13 LHMI ORGANIZATIONAL REQUIREMENTS.
LHMI shall at all times during the term of this Agreement be and remain legally organized and operated to provide Contract Management Services to the Hospital in a manner consistent with all applicable state and federal laws.
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3.14 INSURANCE.
3.14-1 FOR OWNER.
LHMI shall, upon approval of Owner and At Owner's Expense, obtain and continue worker's compensation coverage for all of Owner's employees; employment practices liability (if reasonably available), comprehensive general liability, automobile liability and professional liability insurance with such coverages sufficient to insure against the risks attendant to the Hospital in an amount sufficient to meet the reasonable needs of Owner. LHMI shall, At Owner's Expense, obtain and continue coverage appropriate to insure Owner's property from fire, flood, theft or other risks; business interruption insurance coverage; director's and officer's liability; and employee honesty.
3.14-2 FOR LHMI.
LHMI shall, at its own expense, obtain worker's compensation coverage for its other employees and comprehensive general liability coverage equivalent to that provided herein for Owner.
3.14-3 INSURANCE COMPANIES AND POLICIES.
All insurance coverage specified herein shall be placed with companies acceptable to Owner. If the liability policies are of a claims made form, LHMI shall either renew the policies with the same company or shall purchase an equivalent reporting endorsement at each anniversary of the effective date of a claims made policy relating to the policy year then ended. Such insurance may be included in master insurance policies obtained by Affiliates of LHMI for its other hospitals as long as such policies comply with the terms of this Agreement and are on terms and conditions which are substantially as favorable as could otherwise be obtained by Owner. In connection with LHMI's position as Manager of Owner, LHMI and its Affiliates shall be listed as additional insureds on insurance policies obtained by and for Owner.
3.14-4 EVIDENCE OF INSURANCE.
LHMI shall furnish Owner with copies of each insurance policy specified herein and all amendments, endorsements and renewals to each policy, so long as this Agreement is in effect. In addition, LHMI shall cause to be issued annually to Owner a Certificate or Certificates of Insurance reflecting such coverages with the insurers agreeing to provide ten (10) days, notice to Owner of the cancellation or modification of the policies.
3.15 BILLING AND COLLECTION OF ACCOUNTS.
LHMI shall, At Owner's Expense, provide or arrange for the provision of a billing and collections service for the Hospital and shall diligently attempt to collect all amounts due including the referral of overdue accounts to outside collection agencies and/or attorneys as appropriate.
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3.16 EQUAL EMPLOYMENT OPPORTUNITY.
Without limitation of any provision herein set forth, LHMI expressly agrees to abide by applicable federal and/or State equal employment opportunity statutes, rules and regulations.
3.17 PROFESSIONAL SERVICES.
LHMI shall, At Owner's Expense, retain and make appropriate use of attorneys, accountants and other advisors and consultants on behalf of Owner.
3.18 ADMINISTRATIVE MANAGEMENT.
LHMI shall apply its administrative knowledge and experience to management of the Hospital in order to train nurses, technicians, monitor operations, evaluate technical competence of staff, educate the public and assist the marketing efforts of the Hospital by devoting time to outside contacts with existing and potential clients and to preparation and presentation of proposals.
3.19 MEDICAL STAFF AFFAIRS.
LHMI shall provide appropriate support and facilitate the organization and fu...
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