Services Agreement

Exhibit 10.17

SPECIFIC TERMS IN THIS EXHIBIT HAVE BEEN REDACTED BECAUSE CONFIDENTIAL TREATMENT FOR THOSE TERMS HAS BEEN REQUESTED. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE REDACTED TERMS HAVE BEEN MARKED IN THIS EXHIBIT AT THE APPROPRIATE PLACE WITH TWO ASTERISKS [**].

SERVICES AGREEMENT BETWEEN

TENET HEALTHSYSTEM MEDICAL, INC.

AND

INNOVATIVE MANAGED CARE SYSTEMS, INC.

DATED JULY 24, 2000

SERVICES AGREEMENT

This Services Agreement (the " Agreement" ), is made and entered into on July 24 , 2000 (" Effective Date" ), by and between Tenet HealthSystem Medical, Inc., for itself and its affiliates, a corporation having its principal place of business at 13737 Noel Road Suite 100, Dallas Texas 75240 (" Tenet" ) and Innovative Managed Care Systems, Inc., a corporation having its principal place of business at 14135 Midway Road, Suite 250, Dallas, Texas 75244 (the " IMaCS" ).

WHEREAS, Tenet and its subsidiaries own, operate and manage hospitals, which contract with insurance and managed care plans which reimburse them for healthcare services rendered to beneficiaries of such insurance and managed care plans; and

WHEREAS, IMaCS analyzes and audits the payments of insurance plans and managed care plans to determine whether healthcare companies have received proper payments; and WHEREAS, Tenet and IMaCS have entered into a Master Software License and Service Agreement executed on even date herewith (" MLSA" ) under which IMaCS licenses its proprietary software to Tenet and supports and maintains such software; and

WHEREAS, Tenet has the right under the MLSA to engage the services of one or more data processing center operators to use certain software on its behalf; and

WHEREAS, pursuant to its right to designate such operator(s), Tenet wishes to have IMaCS provide the services more fully described in this Agreement to it and Clients, as defined herein, and IMaCS wishes to provide such services; NOW, THEREFORE, in consideration of the recitals and for mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

1. Definitions All capitalized terms shall have the meanings ascribed to them as set forth below: 1.1 " Account Manager" shall mean the respective representatives of the Parties responsible for communicating regarding the relationship set forth in this Agreement.

1.2 " Additional Services" shall have the meaning set forth in Section 3.1 . 1.3 " Agreement" shall mean this Services Agreement.

1.4 " Data Center" shall mean the facility or facilities established by IMaCS for reviewing claims as necessary to fulfill IMaCS' s obligations under this Agreement. 1.5 " Clients" shall mean Tenet together with Tenet Entities and Third Party Entities which have executed a Subscription Agreement, which shall be interpreted collectively or individually as context requires.


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1.6 " Confidential Information" shall mean the identity of patients, the content of any medical records, financial and tax information, Data, information regarding Medicare and Medicaid claims submission and reimbursements, the object and source codes and Documentation for proprietary software, and such other information so designated in writing prior to disclosure by the party claiming that the information to be disclosed is confidential or proprietary business information and delivered or disclosed pursuant to this Agreement. 1.7 " Data" shall mean all tangible data elements provided by or belonging to Tenet, a Tenet Entity or a Third Party Entity under the terms of this Agreement. Data specifically includes, but is not limited to, patient identification information, patient medical records, financial information, business forecasts, personnel information, customer lists, marketing information and other information relating to the business of Tenet, a Tenet Entity or a Third Party Entity and their respective patients, clients or customers.

1.8 " Documentation" shall include any user manuals, training materials, specifications and other material, whether printed or electronic, related to the Software. 1.9 " Effective Date" shall mean the date first set forth above.

1.10 " Force Majeure Event" shall have the meaning set forth in Section 10 .

1.11 " Hardware" shall mean the computer equipment, peripherals, operating system software, telecommunications equipment and related items used by IMaCS to provide the Services. 1.12 " IMaCS" shall mean Innovative Managed Care Systems, Inc.

1.13 " IMaCS System" shall mean the Software and the Services, operating together as a unitary whole.

1.14 " Initial Term" shall have the meaning set forth in Section 4.1 .

1.15 " MLSA" shall mean the Master Software License and Service Agreement.

1.16 " Master Software License and Service Agreement" shall mean the agreement entered into between Tenet and IMaCS of even date herewith.

1.17 " Minimum Service Levels" shall have the meaning set forth in Section 6.3 and the Service Metrics and Reporting Section of Schedule D .

1.18 " Owning Party" shall have the meaning set forth in Section 11.1 .

1.19 " Parties" shall mean both IMaCS and Tenet. 1.20 " Party" shall mean either IMaCS or Tenet.

1.21 " Performance Credit" shall have the meaning set forth in Section 7.5 .

1.22 " Receiving Party" shall have the meaning set forth in Section 11.1 .


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1.23 " Renewal Term" shall have the meaning set forth in Section 4.1 . 1.24 " Services" shall have the meaning set forth in Section 2 and Schedule B . 1.25 " Software" shall mean the computer software other than that supplied by Tenet, which is used by IMaCS in supplying the Services provided for hereunder to Tenet, Tenet Entities and Third Party Entities under the terms of this Agreement, including any related interfaces and any custom software, as more fully described in the MLSA. 1.26 " Tenet" shall mean Tenet HealthSystems Hospitals, Inc.

1.27 " Tenet Entities" shall mean those healthcare and related facilities (however constituted) which: (i) Tenet or a " Tenet Affiliate" (defined as an entity which Tenet owns, manages, operates or in which Tenet owns a controlling interest) manages or operates; or (ii) contracts (except for the execution of the Subscription Agreement) with Tenet or a Tenet Affiliate for the delivery of information system services. 1.28 " Term" shall be the Initial Term plus any Renewal Term.

1.29 " Third Party Entities" shall mean those healthcare and related facilities (however constituted) but not including Tenet Entities. 1.30 " Subscription Agreement" shall mean the agreement between Tenet and a Tenet Entity or Third Party Entity in a form substantially similar to Schedule A to this Agreement, and which is agreeable to IMaCS.

2. Understandings and Services 2.1 Services; Data Center . On and after the Effective Date and throughout the Term of this Agreement, IMaCS shall deliver and implement the services described in Schedule B to Clients (the " Services" ) in accordance with the standards described in Schedule B and D . During the Term of this Agreement, IMaCS shall establish, maintain and operate a Data Center for the purpose of providing the Services hereunder (the " Data Center" ).

2.2 Staffing Requirements . IMaCS shall provide sufficient staff, with the necessary experience levels, including the IMaCS Account Manager to operate and maintain the Data Center and provide the Services applicable to the IMaCS System and any other obligations specified herein. 2.3 Hardware and Software Requirements . IMaCS shall provide sufficient Hardware, operating system software and related services, materials, and personnel to provide the Services and fulfill any other obligations specified in Section 2 or undertaken pursuant to a work order for Additional Services in accordance with Section 3 . 2.4 Additional Responsibilities . There may be functions, responsibilities, activities and tasks not specifically described in this Agreement which are required for the proper performance and delivery of the Services and are a necessary, customary or inherent part of, or a necessary sub-part included within the Services. If such functions, responsibilities, activities and tasks are determined to be required for the proper


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performance and delivery of the Services or are a necessary, customary or inherent part, or a necessary sub-part included within the Services, such functions, responsibilities, activities and tasks shall be deemed to be implied by and included within the scope of the Services to the same extent and in the same manner as if specifically described in this Agreement. 2.5 Tenet' s Obligations . Tenet shall provide, at its expense or upon mutual agreement reimburse IMaCS, for the following: 2.5.1 A high speed data line connecting the Tenet Corporate Clearing House to the Data Center operated by IMaCS; 2.5.2 Required licenses for grouper and editor software (i.e., DRG, APC), as required; 2.5.3 Medicare and Medicaid facility specific information; 2.5.4 Proprietary fee schedules for CHAMPUS, TriCare, and other government or commercial carriers as required; 2.5.5 Assistance is obtaining data from state and federal authorities as required; 2.5.5 Average wholesale price (AWP) tables if required; 2.5.6 Usual customary and reasonable (UCR) databases if required; 2.5.7 Proprietary payment methodology licenses (i.e., RVP fees, ASA relative values) if required; 2.5.8 Other proprietary information similar to Section 2.5.7 as mutually agreed by the parties; 2.5.9 Procedures to safeguard passwords issued to Tenet personnel to access IMaCS Systems; and 2.5.10 Notification to IMaCS within five (5) business days of the termination of Tenet personnel possessing access to IMaCS Systems.

3. Additional Services.

3.1 Additional Services . The Parties may from time to time identify certain services or upgrades of technology or software which are not within the scope of the Services as described herein, but which the Parties anticipate that a Client may require during the Term of this Agreement (" Additional Services" ). In the event that Tenet requires any Additional Services during the Term of this Agreement, Tenet may request and IMaCS shall provide such Additional Services in the form of the Change Order Process as set forth in Schedule D .


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3.2 Third Party Providers of Additional Services . Notwithstanding Section 3.1 , the Parties acknowledge that IMaCS is not a " sole source" supplier of Additional Services. Accordingly, Tenet may choose to engage a third party to provide the Additional Services. In that event, IMaCS shall cooperate with Tenet and such third party to the extent reasonably requested by Tenet, including by providing: (i) written requirements, standards, and policies for systems operations so that the enhancements or developments provided by such third party may be operated by IMaCS and (ii) assistance and support services to such third party at reasonable prices.

3.3 Provision of Additional Services . The following shall govern IMaCS' s provision of Additional Services to Clients:

3.3.1 At Tenet' s election and subject to Section 3.3.2 , IMaCS shall provide Additional Services described in Section 3 and the Change Order Process of Schedule D to Clients at the rates set forth in Schedule C . 3.3.2 IMaCS shall not perform Additional Services until Tenet and IMaCS have executed a written work order for such work. Each work order shall be billed on the terms stated herein. IMaCS shall not perform Additional Services through subcontractors without the prior written consent of Tenet, which consent Tenet may withhold in its sole discretion. In the event Tenet approves the use of a subcontractor for a particular Additional Service, IMaCS shall bill Tenet the same amount the subcontractor charges IMaCS. IMaCS will provide management services related to subcontractors as an Additional Service. These management services shall be separately stated as part of IMaCS' s estimate for the particular Additional Service. If IMaCS exceeds the costs in the estimate for the work order then IMaCS shall inform Tenet as soon as reasonably possible of such cost overruns at which time Tenet may cancel the work order, reduce the scope of the work order, or approve the new estimate in writing.

4. Term; Termination

4.1 Term . This Agreement shall commence on the Effective Date and shall continue for a period of one (l) year from the Effective Date (the " Initial Term" ), unless earlier terminated pursuant to Sections 4.2, 4.3, 4.4, or 4.5 or extended as provided in this Section 4.1 . Following the Initial Term, this Agreement shall automatically renew for subsequent one (l) year periods (each, a " Renewal Term" ), unless earlier terminated pursuant to Sections 4.2, 4.3, 4.4 or 4.5 or unless Tenet provides written notice to IMaCS at least one hundred eighty (180) days prior to the expiration of the Initial Term or then current Renewal Term.

4.2 Termination for Cause . If either Party materially defaults (including but not limited to the willful, material and wrongful disclosure of Confidential Information) in the performance of any of its duties or obligations under this Agreement (except for a default in payments by Tenet) which default is not substantially cured within thirty (30) days after written notice is given to the defaulting Party specifying the default, or, with respect to those defaults which cannot reasonably be cured within thirty (30) days, if the defaulting Party fails to proceed within thirty (30) days to commence curing said default and to proceed with all due diligence substantially to cure the default, but in any event does not substantially cure the default within ninety (90) days, then the Party not in default may, by


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giving written notice of termination to the defaulting Party, terminate this Agreement as of a date specified in the notice of termination (the " Termination Date" ) such Termination Date being subsequent to the date of the notice of termination.

4.3 Termination for Nonpayment . If Tenet defaults in the payment when due of any amount due to IMaCS and does not, within thirty (30) days after being given written notice, either: (a) cure such default; or, (b) indicate that the payment is in dispute and provide a detailed explanation of such dispute and deposit the disputed amount in escrow in a major U.S. commercial bank reasonably designated by IMaCS, with interest to be allocated to the Party entitled to the principal upon resolution of the dispute, then IMaCS may terminate this Agreement. In the event Tenet deposits any disputed amount in escrow, such amount, together with any accrued interest, shall be released by the escrow agent only upon (a) receipt of written instructions signed by both IMaCS and Tenet or (b) receipt of an order from an arbitrator or court of competent jurisdiction.

4.4 Termination for Convenience . Tenet may terminate this Agreement in its entirety on or after the first anniversary of the Effective Date upon at least one hundred eighty (180) days' prior written notice to IMaCS. 4.5 Termination of MLSA . Tenet may terminate this Agreement upon the termination by either party of the MLSA or expiration of the MLSA.

4.6 Obligations Upon and After Termination . Notwithstanding anything in the Agreement to the contrary, whenever the Agreement is terminated or expires, in addition to any rights or remedies of the Parties under the Agreement, Tenet or its designee shall have the right to obtain the services provided for under this Agreement from a third party. IMaCS agrees to cooperate with any third party so as to accomplish the transaction without an interruption or disruption of the business operations of any Clients. Upon termination or expiration of this Agreement, for a period of one (l) year following such termination or expiration, Tenet shall have the right, but not the obligation and IMaCS shall fully cooperate with Tenet and/or its designee, if any, to facilitate the transfer of the IMaCS System, operations, Hardware, Documentation, licenses for use of all related materials pertaining to the operation of the Data Center to Tenet or its designee for a fee computed as follows: the greater of either (i) 25% of IMaCS' s actual initial purchase costs or prepaid license fees or (ii) the purchase costs or prepaid license fees, less straight line depreciation over sixty (60) months following the date of purchase license by IMaCS. Notwithstanding anything contained in the Agreement to the contrary, Tenet shall pay no additional fees to IMaCS under this Section 4.6 for any software provided pursuant to the Master Software License and Service Agreement. IMaCS shall provide the services at its then-prevailing commercial rates. IMaCS shall provide other transition services as requested by Tenet as Additional Services under the terms of this Agreement for a period of sixty (60) days following the transfer of the IMaCS System to Tenet, or its designee, at IMaCS' s then prevailing commercial rates.

5. Account Manager

5.1 Account Manager . Prior to the execution of this Agreement, Tenet and IMaCS shall each appoint an Account Manager who shall be authorized to act as the primary point of contact for each Party in dealing with the other Party with respect to


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certain aspects of this Agreement. Each Party shall cause the person assigned as its Account Manager to devote all reasonably necessary working time and effort to the delivery of the Services and Additional Services under this Agreement, subject to reasonable holiday, vacation and medical leave policies. Tenet shall have the right, in the exercise of its reasonable discretion, to request replacement of individuals designated by IMaCS as IMaCS' s Account Manager. IMaCS shall not change or rename its Account Manager without Tenet' s prior written approval, which shall not be unreasonably withheld. Each Party' s Account Manager shall issue all consents or approvals and make all requests on behalf of the Party within the scope of their duties hereunder. References in this Agreement or any other related document to Tenet or IMaCS making commitments or agreements or giving consents or approvals on behalf of the respective Party shall mean each Party' s designated Account Manager.

5.2 IMaGS Employees . IMaCS shall take commercially reasonable actions to efficiently administer and manage the Data Center, operate and use the resources employed by IMaCS to provide and perform the Services and Additional Services under this Agreement. IMaCS shall at all times utilize sufficient staff of suitable training and skills to administer and manage the Data Center and provide the Services and Additional Services. While at Client' s locations, IMaCS' s employees, agents and subcontractors shall: (i) comply with reasonable requests from Clients and standard rules and regulations of Clients communicated to IMaCS regarding personal and professional conduct (including the wearing of a particular uniform, identification badge, or personal protective equipment and adhering to Client' s regulations and general safety practices or procedures) generally applicable to such locations and (ii) otherwise conduct themselves in a businesslike manner. 6. Performance

6.1 Performance at Industry Standards . IMaCS agrees that the Services and Additional Services will be performed for the Clients in a diligent, workmanlike manner in accordance with industry standards applicable to the performance of such services and in accordance with standards set forth in Schedule D , which shall be amended from time to time independently of the Agreement upon the mutual agreement of the parties, and such amendment shall supercede and replace the then existing Schedule D . If there is any conflict between the terms and conditions of Schedule D or Schedule D , as amended, the terms and conditions of the Agreement shall control.

6.2 IMaCS Response to Services Failure . Within thirty (30) days after receipt of a notice from Tenet alleging IMaCS' s material failure to provide the Services or Additional Services, IMaCS shall (a) perform a root-cause analysis to identify the cause of such failure, (b) correct such failure, (c) provide Tenet with a written report detailing the cause of, and procedure for correcting, such failure, and (d) provide Tenet with reasonable assurance that such failure will not reoccur. IMaCS' s obligations under this Section 6.2 shall be in addition to its other obligations under Section 6 and under this Agreement. 6.3 Minimum Service Levels . During the term of this Agreement, IMaCS shall provide all Services consistent with the Service Metrics and Report Chart on Schedule D .

6.4 Customer Satisfaction Survey . During the six (6) month period after the Effective Date, IMaCS shall conduct a baseline Clients satisfaction survey as mutually


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agreed to by Tenet and IMaCS for a representative sample of affected Clients. This survey shall be of the content and scope and administered in accordance with the procedures agreed upon by IMaCS and Tenet. At least once every 12 months during the term of this Agreement, IMaCS shall conduct a customer satisfaction survey for a representative sample of affected Clients. The content, scope and method of the survey shall be consistent with the baseline Clients survey conducted pursuant to this Section 6.4 and the timing of the above surveys are subject to mutual agreement of Tenet and IMaCS. IMaCS shall provide the Tenet Program Manager with the results of any Client satisfaction survey conducted pursuant to this Section 6.4 . In the event that such Client satisfaction level falls below eighty percent (80%) at any time during the term of this Agreement, IMaCS shall use best commercial efforts to increase the Customer satisfaction level to at least eighty percent 80% within six months of the initial determination that such Client satisfaction level fell below the eighty percent (80%) level. In the event that IMaCS fails to increase the Client satisfaction level to eighty percent 80% within such six-month period, as soon as reasonably practicable, IMaCS shall perform an analysis to identify the cause of such failure and provide Tenet with a report detailing the cause of, and containing recommendations for correcting, such failure.

7. Payments 7.1 Fees . IMaCS shall submit a single, monthly invoice to Tenet for Tenet and Tenet Entity charges, with subtotals for each Tenet Entity, in arrears, beginning on Effective Date, for all fees, charges and expenses as provided in Schedule C of this Agreement. IMaCS shall directly invoice Third Party Entities. Monthly invoices shall reflect Performance Credits earned by IMaCS or Tenet during the immediately preceding month. Tenet shall reimburse IMaCS at IMaCS' s cost for its reasonable and necessary direct out-of-pocket expenses incurred in connection with IMaCS' s performance hereunder, including without limitation long-distance toll charges, overnight courier charges and postage. If IMaCS travels to Tenet' s site in connection with IMaCS' s performance under this Agreement and such travel is approved in advance by an authorized representative of Tenet, Tenet shall reimburse ImaCS for IMaCS' s reasonable and necessary expenses at cost. Tenet shall be invoiced monthly in arrears for all such expenses and payments shall be due within 30 days of Tenet' s receipt of such invoices; provided, however, that Tenet shall have no obligation to reimburse IMaCS for any such expenses not invoiced within 180 days of the date incurred by IMaCS.

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7.3 Payment . All IMaCS invoiced amounts are due and payable thirty (30) days after receipt by Tenet. All undisputed amounts not paid within thirty (30) days shall bear interest at the rate of one and half percent (1.5 %) per month, but not to exceed any

[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

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maximum specified by applicable law. IMaCS shall supply with such invoices supporting data as reasonably requested by Tenet or Third Party Entities.

7.4 Proration . All periodic charges (other than hourly charges) under this Agreement are to be computed on a calendar month basis, and will be prorated for any partial month.

7.5 Performance Credits . If the service level compliance should reach Critical Alert Status (as defined in the Performance Standards section of Schedule D), IMaCS will issue on its monthly bill a " Performance Credit" to Tenet equivalent to twenty-five percent (25%) of the total monthly fees paid to ImaCS for any facility that falls into this service category.

7.6 Earning Back Performance Credits . If during the next reporting period, the service level compliance improves such that the facility is no longer classified as Critical Alert Status (as defined in the Performance Standards section of Schedule D), IMaCS will add to the total monthly charges the Performance Credits associated with the failure.

8. Service Location Security 8.1 Security . As part of the Services, IMaCS shall implement and maintain security processes, procedures and techniques designed to detect and prevent unauthorized access to any and all networks and systems which process Data, and shall implement and maintain virus protection and similar software and procedures in accordance with industry standards designed to detect and prevent software viruses and any corruption of such networks and systems and the data contained therein. As part of the Services, IMaCS shall immediately inform Tenet of any breach in security or potential security issues, that either: (i) has a material impact on the delivery of the Services, or (ii) may not be material in itself, but represents a single instance in a pattern of breaches which collectively are material. IMaCS shall maintain tracking procedures sufficient to allow it to evaluate security breaches and determine whether they must be reported to Tenet under the preceding sentence.

9. Data and Reports

9.1 Rights in Data . As between Clients and IMaCS, all Data disclosed, delivered or provided to IMaCS for processing in connection with the IMaCS System, the Services or Additional Services or otherwise pursuant to this Agreement, shall be deemed to be the exclusive property of Tenet and the Client(s). In no event shall IMaCS claim any rights with respect to such Data, use such Data, or take any action with respect to such Data that is inconsistent with the obligations of a bailee for hire or in addition to the Services without the prior written consent of Tenet or the respective Clients. 9.2 Additional Rights in Data .

9.2.1 Tenet fully reserves its rights to retrieve, transport and deliver to third parties the Data of software provided to IMaCS by it or the Client(s), and all manipulations of such Data associated with the IMaCS System. IMaCS shall promptly deliver all such material to Tenet or its designee upon Tenet' s written request and IMaCS


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shall not delay, hinder or impede Tenet' s exercise of such powers, notwithstanding the pendency of any dispute between Tenet and IMaCS with respect to Tenet' s justification to so act or the pendency of any other dispute between the Parties.

9.2.2 Nothing in this Agreement shall operate as an obstacle to Tenet' s right to retrieve or place such Data with a third party for the provision of data processing services to Tenet and Clients. Moreover, IMaCS hereby waives any and all statutory and common law liens it may now or hereafter have with respect to such Data.

9.2.3 This Section 9.2 is not intended to prevent IMaCS from retaining a copy of the Data provided by any Client for the sole purpose of completing performance of IMaCS' s obligations under this Agreement.

10. Force Majeure

10.1 Each Party shall be excused from performance under this Agreement and shall have no liability to the other for any period it is prevented from performing any of its obligations, in whole or in part, as and to the extent set forth in this Section 10 , as a result of an event or delay that could not have been prevented by reasonable precautions, was not caused by IMaCS' s (or its subcontractor' s) negligence, and cannot reasonably be circumvented by the non-performing Party through the use of alternate sources, work-around plans, or other means, and which is caused, directly or indirectly, by fire, flood, earthquake, elements of nature or acts of God, acts of war, terrorism, riots, civil disorders, rebellions or revolutions in the United States, strikes, lockouts, or labor diffi ...