PREMIER PURCHASING PARTNERS, L.P. GROUP PURCHASING AGREEMENT CLINICAL LABORATORY SERVICES COVER SHEET

 

 

PREMIER PURCHASING PARTNERS, L.P.

GROUP PURCHASING AGREEMENT-

CLINICAL LABORATORY PRODUCTS AND SERVICES

 

SELLER:

CONTRACT NUMBER:

 

Exhibit G: Seller Information Sheet

Exhibit H: Participating Member Connectivity Agreement(s)

 

 

 

PREMIER PURCHASING PARTNERS, L.P.

SELLER:

Specialty Laboratories

By:

PREMIER PLANS, L.L.C., Its General Partner

By:

/s/ Robert L. Hamon

By:

/s/ Cheryl Gallarda

Printed Name:

Robert L. Hamon

Printed Name:

Cheryl Gallarda

Title:

Senior Vice President, Group Purchasing Services

Title:

Vice President Business Operations

By:

/s/ John H. Biggers, Jr.

Printed Name:

John H. Biggers, Jr.

Title:

Group Vice President, Contract Negotiations

 

 

WHEREAS, Purchasing Partners is an affiliate of Premier, Inc. (“Premier”), and an alliance of hospitals and health care organizations;

 

WHEREAS, Premier’s core objective is to improve the health of communities;

 

WHEREAS, such core objective as well as the objective of helping to assure that patients receive safe and efficacious care can be accomplished, in part, by achieving economies of scale and innovations through group strategies and shared resources;

 

WHEREAS, group purchasing is a fundamental way hospitals and health systems cooperate to reduce the costs of providing health services;

 

WHEREAS, Premier’s group purchasing program is operated by Purchasing Partners;

 

WHEREAS, Seller is a manufacturer and supplier of health care products and services;

 

WHEREAS, Seller has offered to provide products and services to the Premier membership consistent with the terms of this Agreement;

 

WHEREAS, Purchasing Partners has committed to comply with the Best Ethical Practices for the Group Purchasing Industry, prepared by Professor Kirk O. Hanson and released on October 23, 2002 (the “Best Ethical Practices”), the requirements of the Health Industry Group Purchasing Association Code of Conduct, adopted on July 24, 2002 (the “HIGPA Code”), and the additional commitments made by Purchasing Partners to Senator Herb Kohl and Senator Mike DeWine of the Subcommittee on Antitrust, Competition and Business and Consumer Rights in a letter dated August 5, 2002, (the “Additional Commitments”).  The Best Ethical Practices, HIGPA Code and Additional Commitments are referred to collectively herein as the “Premier Ethical Standards”.

 

WHEREAS, by entering into this Agreement with Seller it is Purchasing Partners’ expectation that Seller, in its dealings with Purchasing Partners under this Agreement, will respect Purchasing Partners’ commitment to comply with the Premier Ethical Standards.

 

NOW THEREFORE, in consideration of the mutual promises contained herein and other good and sufficient consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereto agree as follows:

 

1.0  TERM OF AGREEMENT .  This Agreement will remain in effect for the period of time set forth in Item 5 of the Cover Sheet.

 

2.0   SERVICES

 

2.1  Services Covered.  Seller hereby agrees to provide the reference laboratory testing services set forth in Exhibit A hereto (the “Services”) pursuant to the terms of this Agreement.  Seller shall provide Purchasing Partners with written notice of any Services which are not performed by Seller (i.e., those Services which are performed by a third party), setting forth the Test/Procedure name and the name of the actual performer of the testing.  Any additions or deletions of Services from Exhibit A shall not be effective unless evidenced by an amendment signed by both Parties.

 

2.2  Supplies.  Seller will provide to Participating Members, at no charge, a reasonable amount of supplies required to facilitate the collection, transfer and transport of specimens from the Participating Member to Seller.  Seller will also provide supplies required for specimen management and reporting such as forms, labels, test directory, etc...

 

2.3  Couriers.  Seller will provide or cause to be provided courier service on a daily basis (Monday through Saturday) to pick up specimens from the laboratory facility of any Participating Member.  Seller will also provide STAT, On-Call and Sunday pick-up as specified in Exhibit A.

 

2.4  Electronic Interfaces.   See Exhibit A

 

2.5  Repeat testing.   Seller will, upon request from any

 

Participating Member, perform repeat testing at no charge if based on an error or negligence of Seller and the test results do not correlate with other patient information, unless such repeat testing is necessitated as a result of the fault of the Participating Member.

 

3.0  PARTICIPATING MEMBERS .  Set forth in Exhibit B of this Agreement are instructions for accessing and downloading the list of Premier members (“Participating Members”), who shall have the right to purchase Services in accordance with this Agreement.  The list of Participating Members (the “Membership Roster”) may be amended by Purchasing Partners from time to time and Purchasing Partners reserves the right to provide the Membership Roster in other suitable forms.  The Parties hereto acknowledge that Participating Members may include

 

 

PREMIER PURCHASING PARTNERS, L.P.

STANDARD TERMS AND CONDITIONS

GROUP PURCHASING AGREEMENT- CLINICAL LABORATORY PRODUCTS AND SERVICES

 

Seller:

Contract Number:

 

entities/facilities which are accessing the benefits of this Agreement through participation in the group purchasing programs operated by Purchasing Partners’ affiliate, Provider Select, Inc. (“Provider Select”) rather than Purchasing Partners itself.  Such entities/facilities shall nonetheless be deemed Participating Members under this Agreement.  Seller shall be responsible for routinely maintaining the current Membership Roster.  New Participating Members added to the Membership Roster shall be eligible to participate under this Agreement upon the relevant date set forth in the Membership Roster.  Seller shall stop providing the pricing set forth herein to entities removed from the Membership Roster within thirty (30) days following the applicable date of removal set forth in the Membership Roster.

 

On a quarterly basis, Seller shall provide Purchasing Partners with written notice of any Participating Members which are also members of group purchasing organizations other than Purchasing Partners (such notice is referred to as the “Dual Membership Notice”). Seller shall have no right to challenge or contest its obligation to pay Purchasing Partners administrative fees in accordance with Section 10.1, on the basis that such Participating Member is also a member of another group purchasing organization, with respect to any Participating Members which are not listed in the Dual Membership Notice for the applicable quarter.

 

The form of any agreement between Seller and a Participating Member and any amendments thereto shall be approved in advance by Purchasing Partners.

 

4.0   REQUIREMENTS .

 

4.1   Participation.   In order to be entitled to the pricing terms (described in Exhibit A hereto), Participating Members shall comply with the participation requirements set forth in Exhibit A.

 

4.2   Exempt .  Participating Members that utilize another Premier Member’s clinical reference laboratory for testing services are exempt from their obligation to use a Premier contracted vendor

 

5.0  TERMINATION OF EXISTING CONTRACTS .  Any Participating Member desiring to avail itself of the benefits of this Agreement may, at its option and without liability, terminate any existing contract(s) or other arrangement(s) with Seller for the purpose of participating in the group purchasing arrangement set forth in this Agreement.  Existing clients, that are also Participating Members, will be “rolled over” to the pricing set forth in Exhibit A hereto as of the effective date of this Agreement or within sixty (60) days of the effective date of this Agreement.

 

6.0   ORDERING; RESULT REPORTING; TURNAROUND TIME; REPORTS

 

6.1   Testing Laboratories .  It is the intent of the Seller to perform substantially all of the Services.  To the extent that the Participating Member requests a service not performed by the Seller, the Seller will refer the specimen to the Seller affiliated laboratory listed in Exhibit A for the cost designated in Exhibit A.  To the extent that the Participating Member requests that Seller refer a specimen to a clinical laboratory unaffiliated with Seller (not listed in Exhibit A), the Seller will be entitled to charge the fee set forth in Exhibit A.

 

6.2   Payment Terms .  Participating Member will receive an additional [*] ([*] %) off of the pricing set forth in Exhibit A if full payment is made to Seller within [*] ([*]) days following either delivery of Service(s) to or receipt of invoice by the Participating Member, whichever date is later.  In any event, full payment must be made within forty-five (45) days following delivery of Service(s) or receipt of invoice, whichever date is later.

 

6.3   Reporting of Results.   When any service is ordered, Seller will provide a report to Participating Member, which will include patient demographics, test name, test results, assay reference range and any appropriate and necessary comments deemed essential by the Seller.

 

6.4   Minimum Order .  Seller shall have no minimum purchase order requirement applicable to any or all Participating Members.

 

6.5   Guarantee of Turnaround Time.   Seller agrees that all Services ordered by any Participating Member shall be delivered to such member within no more than the published turnaround time in the Directory of Services.  If Seller fails to deliver any Service(s) within the above-mentioned turnaround time period for a period of two consecutive months, Participating Member may purchase any substitute service(s) from another source(s), and Seller shall reimburse such member for the difference between such member’s actual cost for such service(s) and the price(s) such member would have paid for Seller’s Service(s) under this Agreement., Seller will be subject to performance penalties as defined in Exhibit A.  Upon the request of any Participating Member, Seller will assist any such Participating Member in finding alternative acceptable sources for any Service(s) which Seller cannot deliver according to the delivery time specified above.

 

6.6   Guarantee of Turnaround Time under Emergency Conditions .  In the event of a natural disaster or industry wide shortage of Services (“Emergency Condition”), Seller agrees to use commercially reasonable efforts to continue uninterrupted Service for the Participating Members for the duration of the Emergency Condition.

 

* Information for which confidential treatment has been requested pursuant to Rule 24(b)(2) of the Securities Exchange Act of 1934, as amended.  The omitted material has been filed separately with the Securities and Exchange Commission.

 

©2003 BY PREMIER PURCHASING PARTNERS, L.P.  THIS DOCUMENT MAY NOT BE REPRODUCED IN ANY FORM WITHOUT THE EXPRESS PERMISSION OF PREMIER PURCHASING PARTNERS, L.P.

 

2

 

6.7 Testing Services Utilization Reports.   Seller will deliver monthly to Purchasing Partners and Participating Member, if requested for the extent of time defined in Item 5 on the Cover Sheet, utilization reports that describe the following by Participating Member: Client number, Test Name, Test Number/Code, Test Volume, Test Charges and CPT code when available, on a monthly basis and a year to date basis.  Seller and Purchasing Partners will consult and collaborate to create reports that organize the above information by system, facility type, facility size and other parameters as deemed reasonably necessary by Purchasing Partners and Seller.

 

6.8 Laboratory Data.   During the period of time set forth in Item 5 of the Cover Sheet, Seller will provide to Purchasing Partners on a monthly basis the raw laboratory data (which includes tests ordered and test results) and associated demographic information as received by Seller from Participating Members with respect to all Services performed on specimens sent by each Participating Member, but only to the extent authorized by such Participating Member and only to the extent permitted by law.  For this purpose, Services include clinical laboratory services and anatomic pathology services.  Seller will cooperate with Purchasing Partners in good faith efforts to obtain consent of the Participating Members as part of the participation agreement.  Notwithstanding the foregoing, such data will not include any patient names, or other information that would identify the patient (excluding specimen identification number) provided by the Participating Member, which will be included unless and to the extent permitted by applicable law.  The data will be provided in HL7 format or in any other manner that is mutually agreed upon by Purchasing Partners and Seller.  Purchasing Partners and Seller agree that, except to the extent limited by law, there will be no limitation on the use of such data by Purchasing Partners except that Purchasing Partners agrees that neither it nor any of its Affiliates will disclose the data to any third party other than in an aggregated format that does not indicate patient identification code or any other information that could identify the patient and agrees to indemnify and hold harmless Seller from and against any claims brought by any person with respect to any breach or alleged breach of any patient confidentiality laws by reason of any disclosure of laboratory data by Purchasing Partners and its affiliates .

 

7.0  PRICING TERMS .

 

7.1 Pricing.   Service pricing is set forth in Exhibit A hereto.  All pricing will remain firm for thirty-six (36) months (from the effective date of this agreement).

 

7.2 Competitive Pricing .  Subject to applicable law, Seller represents and warrants that the prices, terms and conditions offered by Seller to Purchasing Partners through this Agreement shall, at all times, be at least as good as those offered to any other customer which purchases a comparable volume of Services relative to the volume purchased by Participating Members hereunder.  Further, Seller represents and warrants that the prices, terms and conditions offered under this Agreement are proportionally better than the prices, terms and conditions offered to any other customer which purchases a lower volume of Services relative to the volume purchased by Participating Members hereunder.  Seller also agrees to extend any terms or pricing offered to an individual Participating Member to all Participating Members.  Notwithstanding any other provision of this Agreement, upon obtaining the prior written consent of Purchasing Partners (which may be withheld in Purchasing Partners’ sole discretion), Seller may, under certain circumstances (e.g., Beta testing, research and development related activities) and for a specified reasonable period of time, offer special acquisition programs to certain designated Participating Members, the terms of which shall be mutually agreed upon by Seller, Purchasing Partners and such Participating Members.

 

7.3 Pricing of New Services .  Pricing for any additional and/or new services which the Parties mutually agree to add to Exhibit A will be negotiated at prices consistent with the prices of Services already covered by this Agreement.  Seller agrees to notify via regular mail or electronic mail the Purchasing Partners contract director/manager responsible for this Agreement (as set forth on the Cover Sheet) of new services that Seller plans to introduce to the market at least 60 days prior to the introduction of such new services to the market.  Seller also agrees to provide to Purchasing Partners, as soon as practical, a copy of the summary basis of approval or medical officer’s report for new services approved by the FDA.

 

8.0  MARKETING; SALES SUPPORT; TRAINING .

 

8.1  Seller Representatives .  Seller will provide representatives to call upon Participating Members on a periodic basis mutually agreed to by Seller and each individual Participating Member.

 

8.2 In-Service/Clinical Training .  Included in the price of the Service(s), Seller will provide to Participating Members in-service and clinical training related to the Services as required or requested by each Participating Member.

 

9.0 SERVICE PRICING INFORMATION; SALES DOCUMENTATION; ADMINISTRATIVE FEE REPORTING .

 

9.1  Service Pricing Information (Sales Catalogs) .  Seller will provide to Purchasing Partners service pricing information including list prices in the ANSI X.12 v004010 format via EDI VAN Services as described on Purchasing Partners’ web-site.  Instructions for accessing such reporting format information on Purchasing Partners’ web-site are set forth in Exhibit D.  If Seller cannot provide service pricing information in such format, Seller may utilize the alternative format as detailed on Purchasing Partners’ web-site.  Purchasing Partners shall have the right to update Exhibit D and the reporting format guidelines on its web-site from time to time upon notice to Seller.  Further, Purchasing Partners shall have the right to disclose all such pricing information to Participating Members.  In the case of electronic transfer of data, the file format described on Purchasing Partner’s web-site must be used.

 

3

 

9.2  Sales Documentation .  Seller will provide to Purchasing Partners monthly reports of all services of Seller delivered and invoiced to each Participating Member during each calendar month of the term regardless of whether such Services are provided directly by Seller or other sources.  Such reports shall identify which Services have been sold directly by Seller and which Services have been sold through another reference laboratory.  Seller shall provide Purchasing Partners such reports no later than thirty (30) days after the last day of the applicable calendar month.  Such reports shall be sent by Seller to the attention of the “Analysis Department” at Purchasing Partners’ address set forth on the Cover Sheet.  Reports will include, without limitation, reporting period start and end dates, Participating Member name, city, state, and sales volume per test (totaled per Participating Member).  Participating Members will be identified by HIN number, DEA number, and/or, as noted in the Membership Roster, the Premier Entity Code number.  Seller will provide such sales information in the ANSI X.12 format as described on Purchasing Partners’ web-site.  Instructions for accessing such reporting format information on Purchasing Partners’ web-site are set forth in Exhibit D.  If Seller cannot provide such information in such format, Seller may utilize the alternative format detailed on Purchasing Partners’ web-site.  Purchasing Partners shall have the right to update Exhibit D and the reporting format guidelines on its web-site from time to time upon notice to Seller.  In the case of electronic transfer of data the file format described on Purchasing Partners’ web-site must be used.

 

9.3  Administrative Fee Reporting .  Seller will provide Purchasing Partners with monthly reports setting forth the Purchasing Partners Administrative Fee (as defined in Article 10 below) amounts generated by each Participating Member during each calendar month of the term.  Seller shall provide Purchasing Partners such reports no later than thirty (30) days after the last day of the applicable calendar month.  Participating Members will be identified by HIN number, DEA number, and/or, as noted in the Membership Roster, the Premier Entity Code.  Seller will provide such information in the ANSI X.12 v004010 format via EDI VAN Services as described on Purchasing Partners’ web-site.  Instructions for accessing such reporting format information on Purchasing Partners’ web-site are set forth in Exhibit D.  If Seller cannot provide such information in this format, Seller may utilize the alternative format as detailed on Purchasing Partners’ web-site.  Purchasing Partners shall have the right to update Exhibit D and the reporting format guidelines on its web site from time to time upon notice to Seller.  In the case of electronic transfer of data, the file format described on Purchasing Partners’ web-site must be used.

 

9.4  Participating Members’ EDI Transaction Sets .  Seller shall use best efforts to accommodate the requests of Participating Members with respect to Seller’s use of Electronic Data Interchange ANSI X.12 Transaction Sets, including without limitation, Transaction Sets 810 (invoice), 820 (payment order/remittance advice), 832 (price/sales catalog), 850 (purchase order), 855 (purchase order acknowledgment), 856 (ship notice/manifest), 844 (product transfer account adjustment), and 849 (response to product transfer account adjustment [or charge back or rebate]).

 

9.5   Supplier Qualification Review Process and Quality Standards Information .  Seller shall comply with Purchasing Partners’ requests for information necessary to assure the qualification of the Seller as an eligible Seller consistent with the requirements of Purchasing Partners’ Supplier Qualification Review Process.  Seller shall also comply with requests by Purchasing Partners’ or Participating Members for information necessary to assure the quality of Services, to include responses to Contract Products/Supplier Experience Reports as provided to Seller by Purchasing Partners.

 

9.6   Failure to Provide Reports .  Seller’s failure to provide the information and reports described in Sections 9.1, 9.2 and/or 9.3 shall be deemed a material breach of this Agreement.

 

9.7   Test Code Standardization Implementation .  Seller acknowledges that a universal test code system for laboratory testing would enhance standardization and supply chain efficiencies through common use of standard test code numbers or symbols.  Seller supports Purchasing Partners’ efforts to implement a universal test code system and Seller will use all reasonable efforts to implement any universal test code system reasonably adopted by Purchasing Partners.

 

10.0   FEES .

 

10.1   Purchasing Partners Administrative Fee .  Seller will pay Purchasing Partners an administrative fee (the “Purchasing Partners Administrative Fee”) equal to the percentage set forth in Item 7 of the Cover Sheet of the total dollar volume of Services purchased (net of any credits) by Participating Members through Seller during the term of this Agreement,

 

Seller shall also pay administrative fees on the total dollar volume of reference laboratory services for Participating Member’s laboratories that are a party to an outsourcing or management agreement with Seller or a third party outsourcing or management agreement that is referring testing to Seller.

 

Notwithstanding the foregoing, Seller shall continue to pay the Purchasing Partners Administrative Fee under this Article 10 with respect to sales of any Services which occur after the expiration or termination of this Agreement pursuant to a direct contract between Seller and a Participating Member (a “Member Agreement”) which was entered into during the term of this Agreement.  Seller’s obligation to pay such administrative fees shall continue until the expiration or termination of the then-current term of the Member Agreement.  Further, all other provisions relating to the Purchasing Partners Administrative Fee, including without limitation, the obligation to provide sales documentation and administrative fee reporting pursuant to Sections 9.2 and 9.3 above, shall survive the expiration or termination of this Agreement and remain in effect with respect

 

4

 

to Services purchases under Member Agreements until the expiration or termination of the then-current term of the applicable Member Agreement.

 

10.2  Manner of Payment .  Seller will pay to Purchasing Partners the Purchasing Partners Administrative Fee monthly, without demand or notice, within thirty (30) days after the end of each month during the term.  Seller’s first Administrative Fee payment hereunder shall include amounts due with respect to any “stub” period (i.e., the period of time from the Effective Date until the first day of the first calendar month) and the entire first calendar month.  Seller’s failure to timely pay the Purchasing Partners Administrative Fee shall be deemed a material breach of this Agreement.

 

All payments shall be by wire or electronic transfer to the account of “Premier Purchasing Partners, L.P.” in accordance with the written instructions set forth as Exhibit E hereto or by a check payable to “Premier Purchasing Partners, L.P.”. If paying by check, Seller shall send checks to the following address:

 

Premier Purchasing Partners, L.P.

Department 7650

Los Angeles, CA  90084-7650

 

Seller shall pay to Purchasing Partners interest on any past due amount owing Purchasing Partners hereunder at the lesser of (a) one and one-half percent (1-1/2%) per month or (b) the maximum interest rate legally permitted.

 

11.0  COMPLIANCE WITH LAWS AND REGULATIONS .

 

11.1   General .  Seller represents and warrants that throughout the term of this Agreement and any extension hereof, Seller and all Services shall be and shall remain in compliance with all applicable federal, state and local laws and regulations, including without limitation all applicable “safe harbor” regulations relating to group purchasing organizations and fees, discounts and incentives paid and/or granted to group purchasing organizations and any participants therein.  Seller shall disclose to Participating Members, per applicable regulations, the specified dollar value of discounts or reductions in price.  The Parties acknowledge and agree that for purposes of 42 C.F.R. Section 1001.952(h), any reduction in the amount Seller charges a Participating Member (excluding group purchasing organization fees, such as the Purchasing Partners Administrative Fee) is a “discount or other reduction in price” to the Participating Member.  Participating Members shall disclose the specified dollar value of discounts or reductions in price under any state or federal program which provides cost or charge-based reimbursement to such Participating Members for the Services covered by this Agreement in accordance with applicable regulations.

 

Seller agrees that, until the expiration of four (4) years after the furnishing of any services pursuant to this Agreement, it will make available, upon written request of the Secretary of Health and Human Services or the Comptroller General of the United States or any of their duly authorized representatives, copies of this Agreement and any books, documents, records and other data of Seller that are necessary to certify the nature and extent of the costs incurred by Participating Members in purchasing such services.  If Seller carries out any of its duties under this Agreement through a subcontract with a related organization involving a value or cost of ten thousand dollars ($10,000) or more over a twelve-month period, Seller will cause such subcontract to contain a clause to the effect that, until the expiration of four (4) years after the furnishing of any service pursuant to said contract, the related organization will make available upon written request of the Secretary of Health and Human Services or the Comptroller General of the United States or any of their duly authorized representatives, copies of this Agreement and any books, documents, records and other data of said related organization that are necessary to certify the nature and extent of costs incurred by Seller for such goods or services.  Seller shall give Purchasing Partners notice immediately upon receipt of any request from the Secretary of Health and Human Services or the Comptroller General of the United States or any of their duly authorized representatives for disclosure of such information.

 

Seller represents and warrants that as of the date of this Agreement, Seller has not: (a) been listed by any federal or state agency as excluded, debarred, suspended or otherwise ineligible to participate in federal and/or state programs; or (b) been convicted of any crime relating to any federal and/or state program.  Seller further agrees to immediately notify Purchasing Partners in writing in the event Seller is listed by a federal or state agency as excluded, debarred, suspended or otherwise ineligible to participate in any federal and/or state programs or if Seller is convicted of any crime relating to any such program.

 

11.2  HIPAA Compliance .  The U.S. Department of Health and Human Services issued regulations on “Standards for Privacy of Individually Identifiable Health Information,” which comprise 45 C.F.R. Parts 160 and 164 (the “Privacy Rule”), and “Security Standards,” which comprise 45 C.F.R. Parts 160, 162, and 164 (the “Security Rule”), promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996).  Seller shall comply with the Privacy Rule and Security Rule, pursuant to the manner set forth in the HIPAA Addendum attached hereto, if applicable.

 

12.0  INDEMNIFICATION; WARRANTIES; SPECIFICATIONS AND NOTICES .

 

12.1  Indemnification .  Seller hereby agrees to indemnify, defend and hold harmless Purchasing Partners and each Participating Member and their respective directors, officers, employees, agents and insurers from and against any and all claims, demands, actions, losses, expenses, damages, liabilities, costs (including, without limitation, interest, penalties and reasonable attorneys’ fees) and judgments to the extent arising out of: (a) alleged bodily injury, property damage or any other damage or injury allegedly caused by, contributed by or associated with any of the Services

 

5

 

covered by this Agreement, and (b) alleged acts or omissions of Seller and its employees and agents a