Exhibit 10.2
EXECUTION COPY
INDEPENDENT CONTRACTOR AGREEMENT
THIS INDEPENDENT CONTRACTOR
AGREEMENT (the “Agreement”) is entered into as of the
18th day of October, 2005, by and between Ambergris, LLC, a West
Virginia limited liability company (“Ambergris”) and
Katin Radiation Therapy, P.A., a Maryland professional corporation
duly qualified to do business in West Virginia (the
“P.A.”).
WITNESSETH:
1. Ambergris owns and operates a
free standing radiation therapy center located at
2000 Foundation Way, Suite 1100, Martinsburg, West
Virginia (the “Facility”).
2. The P.A. is in the business of
providing professional medical services within the specialty of
radiation oncology through its duly licensed physician-employees
(the “Physicians”).
3. Ambergris desires to engage the
P.A. as an independent contractor upon the terms and conditions
hereafter set forth to provide radiation oncology services to
patients at the Facility, and the P.A. desires to accept such
engagement.
NOW, THEREFORE,
in consideration of the mutual
promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
mutually acknowledged, the parties hereto agree as
follows:
ARTICLE 1.
RETENTION OF THE P.A.
Commencing on the 1st day October,
2005 (the “Commencement Date”), upon the terms and
conditions set forth herein, Ambergris hereby retains the P.A. as
an independent contractor during the Term, for the purpose of
having the P.A. render radiation oncology medical services
(referred to hereafter as “Services”) to those members
of the general public for whom such Services are to be provided at
the Facility (referred to hereafter as
“Patients”).
ARTICLE 2.
DUTIES OF THE P.A.
2.1 Professional Services .
The P.A. agrees to provide, or arrange to be provided, Services at
the Facility through such number of Physicians and during such
hours each day during each week during the term of this Agreement
as may be necessary to meet Patient demands and needs, but in no
event shall it provide less than four (4) hours of Services
during each such weekday and otherwise at all times in compliance
with Section 3.5 and Section 3.6. The P.A. will also
arrange to have a Physician on call during the Term of the
Agreement such that the Physician will be accessible by telephone
In rendering Services, the P.A. will comply, and will cause each
Physician employed by, or under contract to it to provide Services
at the Facility to comply, with all policies, standards and
regulations established by Ambergris, including any and all
credentialing requirements, quality assurance, and utilization
review procedures which are imposed or instituted by Ambergris. The
P.A. will also comply, and will cause each Physician to comply,
with such standards of care in the community, professional ethics,
standards, regulations, administrative instructions, and practices
as may be adopted from
time to time by all relevant local, State and
federal regulatory agencies, professional associations and
societies, and accrediting agencies having jurisdiction over the
Facility, Ambergris, the P.A., or the Physicians, and the
requirements of all managed care organizations.
2.2 Additional Duties . The
duties of the P.A. and the Physicians shall also include, without
limitation, promoting the consistency of Services and
standardization and uniformity of the administration of Services,
providing efficiency in the operation of the Facility, evaluating
diagnostic tests and treatment results and providing therapeutic
care, supervising the hiring and training of medical staff and
technical staff, establishing and maintaining the required
treatment protocols, evaluating the appropriateness of radiation
oncology treatments for Patients, assisting the Facility’s
billing staff to obtain pre-approval from insurance carriers, and
supervising the actual Services and any follow-up
Services.
2.3 Group Practice . The P.A.
hereby confirms that it is, and agrees that it will continue to be,
a group practice as defined under 42 U.S.C. §1395nn and
the regulations issued thereunder (the “Stark Act”);
that its Group Provider Number is 649L and Federal Identification
Number 52-2110080, the P.A. hereby further confirms that it
has required, and agrees that it will require, each Physician to
assign to it its right to bill the Medicare, Medicaid and other
governmental programs and Payors as defined in Section 2.20 of
this Agreement.
2.4 Medical Records . The
P.A. shall cause the Physicians to timely document and maintain
appropriate medical records relating to all Services rendered by
the Physicians under this Agreement.
2.5 Reports . The P.A. will
cause the Physicians to timely prepare and submit such additional
reports as may be required by Ambergris from
time-to-time.
2.6 Credentials . The P.A.
will cause each Physician to maintain at the Facility a current and
bona fide copy of Physician’s license to practice medicine in
the State of West Virginia and medical staff privileges and such
other evidence of Physician’s training and authorization to
perform his duties under this Agreement as Ambergris shall
request.
2.7 Public Image . The P.A.
shall cause each Physician to promote and maintain for himself, for
the P.A., and for Ambergris a public image and reputation of
excellence in the health care community and the general
public.
2.8 Timely Notice . The P.A.
shall notify and shall cause each Physician to notify in a timely
manner Ambergris of any event, including but not limited to, any
change in Physician’s physical or mental health, error,
omission, action, act or alleged act of material practice, failure
to act, or other incident or occurrence that may adversely affect
any Physician, any Patient , the Facility, and/or
Ambergris.
2.9 Licensure . The P.A.
warrants and covenants that during the Term of this Agreement each
Physician who provides Services at the Facility (i) has, and
will maintain in good standing and without restriction during the
Term of this Agreement, an unrestricted license to practice
medicine in West Virginia; (ii) is and will continue to be
board certified (or board eligible with certification to be
received within eighteen (18) months of the date on which
Physician first becomes board eligible) in therapeutic radiology by
the American Board of
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Radiology with appropriate training in radiation
oncology; and (iii) has and will maintain medical staff
privileges at the facilities listed on Schedule A
.
2.10 Medicare/Medicaid and other
Programs . The P.A. shall maintain, and shall cause each
Physician to maintain, its and Physician’s unrestricted
eligibility to participate in the Medicare and Medicaid programs,
as well as Physician’s eligibility to participate in such
other Payor Contracts as described in Section 2.20.
2.11 Other Duties . The P.A.
shall cause each Physician to faithfully perform such additional
duties, pursuant to the terms of this Agreement and the intent of
the parties, as are reasonably related to Physician’s duties
hereunder, to the best of his ability and to the reasonable
satisfaction of Ambergris.
2.12 Authority . Neither the
P.A. nor the Physician shall have no authority to enter into any
contracts binding upon Ambergris or to create any obligations or
encumber any of the assets of Ambergris.
2.13 Compliance with Laws .
In the performance of its responsibilities under the Agreement, the
P.A. shall comply and shall cause each Physician to comply with the
requirements of all applicable Federal, state and local laws, rules
and regulations, and published official interpretations of the
foregoing, including without limitation, those including the
licensure and regulation of hospitals, outpatient diagnostic
centers and physicians, and those prohibiting employment
discrimination, discrimination against Patients, those prohibiting
kick-backs and remuneration for referral of Patients, and shall
comply with the requirements of the Medicare and Medicaid programs,
and the standards of any accrediting agency having jurisdiction
over Ambergris, the P.A. or the Physician.
2.14 Malpractice Insurance
.
2.14.1 Professional Liability
Insurance . The P.A. will, at its sole cost and expense,
provide and maintain in good standing professional liability
(“malpractice”) insurance during the Term of this
Agreement covering each of the Physicians while such
Physician is employed by, or under contract to, the P.A. in the
minimum amount of One Million Dollars ($1,000,000) per occurrence
and Three Million Dollars ($3,000,000) in the aggregate, or such
greater amounts as may be required by law. The P.A. shall promptly
furnish Ambergris with a certificate of such insurance upon the
request of Ambergris.
2.14.2 Prior Acts Coverage .
If the insurance coverage acquired under Subsection 2.14.1
above is claims made, and not occurrence coverage, then upon the
termination of this Agreement for any reason whatsoever, the P.A.
shall secure and maintain in effect for its benefit, the benefit of
the Physicians, and Ambergris, prior acts coverage (tail insurance
coverage) for a period of seven (7) years after the date of
termination, in the amount of malpractice insurance coverage then
in effect at the time of the termination of this Agreement for any
acts of malpractice alleged to have been committed by the P.A. or
any Physician during the term of this Agreement. The P.A. shall
promptly provide, upon the request of Ambergris, a certificate of
such insurance.
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2.15 P.A. Responsibility .
The P.A. shall be responsible for the payment of all compensation
and benefits of every type and nature due the Physicians for
providing the Services under this Agreement, including, for example
(i) salaries and bonuses; (ii) all health, life,
professional, medical, malpractice and disability insurance and
workers’ compensation insurance; (iii) all professional
dues; (iv) all professional and medical licensure fees and
expenses; (v) all beeper, answering services, paging and
mobile phone expenses; (vi) all continuing medical education
costs; (vii) all travel and entertainment expenses;
(viii) all FICA, Federal, withholding, Medicare and other
taxes pertaining to the employment of the Physicians by the P.A.;
(ix) all medical staff dues, journals, publications, board
certification fees; (x) federal, state or local income taxes
of West Virginia; (xi) liability judgments against the P.A. or
any of the Physicians; and (xii) all other expenses incurred
by the P.A. and the Physicians providing the Services.
2.16 Recruitment of
Physicians . The P.A. shall, at its sole cost and expense, be
responsible for recruitment and retention of those physicians
necessary to provide the Services under this Agreement.
2.17 Conduct of Medical
Practice . The P.A. and the Physicians alone will be solely and
exclusively responsible for, and shall have exclusive control of,
all aspects of the practice of medicine and the provision of
Services to the Patients at the Facility. Ambergris shall not
interfere with the exercise by the Physicians of their professional
judgment, nor with Ambergris interfere with, control, direct, or
supervise the Physicians or any other professional in connection
with the care and treatment of the Patients.
2.18 Quality Management.
Continuous Improvement Risk Management, Utilization Review and Cost
Containment . The P.A. shall, and shall cause each Physician
to, assist them and cooperate with quality management, continuous
improvement, risk management, utilization review and cost
containment policies, procedures and programs adopted periodically
by Ambergris.
2.19 Medical Director .
During the Term of this Agreement, a Physician selected by the
P.A., with the approval of Ambergris, which approval shall not be
unreasonably withheld, shall serve as the medical director of the
Facility. Such services performed by such Physician as an employee
of the P.A. and not as an employee of Ambergris. The medical
director shall work with Ambergris in creating and implementing
medical quality assurance programs and utilization review programs
with respect to the provision of Services at the Facility and to
assure that the Physicians comply with such medical quality
assurance programs and utilization review programs at the Facility.
The medical director will also advise the P.A. and Ambergris with
an on-going assessment of staffing needs and adjustments as
appropriate to meet the needs of the Patients and the obligations
of the P.A. hereunder and to work with Ambergris to continuously
improve Patient relations, and referring Physician and Facility
relations.
2.20 Payor Contracts . If
Ambergris elects to accept a Payor Contract, as hereafter defined,
then the P.A. shall, and cause each Physician to, execute and
deliver such agreement or otherwise become a participating provider
under such Payor Contract. The P.A. shall assist Ambergris in
securing such Payor Contracts as Ambergris shall request or
otherwise designate. For purposes hereof, a “Payor
Contract” is an agreement for the provision of health care
services
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where the health maintenance organization,
preferred provider organization, exclusive provider organization,
employer, or other third party payor is obligated for the provision
of, or payment, or reimbursement for, the provision of health care
services including professional radiation therapy services, and the
professional and technical components thereof.
2.21 Removal . The P.A. shall
promptly, and thereafter continuously, prohibit any Physician from
providing Services under this Agreement at the Facility when and if
(i) requested to do so in writing by Ambergris, or
(ii) such Physician is in violation of any of the P.A.’s
warranties and representations in this Agreement as they apply to
such Physician.
2.22 Referral Disclaimer .
The amounts paid by Ambergris hereunder have been determined by the
parties through good faith and arms’-length bargaining to be
the fair market value for the Services. The fees have not been
determined in any manner that takes into account the volume or
value of any potential referrals between the parties. No amount
paid hereunder is intended to be nor shall it be construed to be,
an inducement or payment for referral of patients or other business
generated between the parties. In addition, the amount charged
hereunder does not include any discount, rebate, kickback or the
reduction in charge, and the amount charged is not intended to be,
nor shall it be construed to be, an inducement or payment for
referral of Patients by Ambergris to the PA or any Physician, or by
the P.A. or any Physician to Ambergris.
ARTICLE 3.
DUTIES OF AMBERGRIS
3.1 Facility . Ambergris
shall furnish and equip the Facility with appropriate equipment and
furnishings as are normally found within a radiation therapy center
within West Virginia, and as is otherwise required to be contained
therein by any governmental or quasi-governmental agency, or any
accrediting agency, having jurisdiction over the Facility or
Ambergris.
3.2 Personnel Services .
Ambergris shall schedule all appointments for Patients seeking
Services at the Facility and shall promptly advise the P.A. of the
dates and times of such Patients for whom it has scheduled an
appointment. Ambergris shall also provide such personnel, including
nurses, technical assistants, physicists, and such other personnel
reasonably necessary to assist the P.A. when the P.A. is providing
Services to Patients.
3.3 Supplies . Ambergris
shall supply to the P.A. for all Patients treated by the P.A. at
the Facility all supplies and other disposable items required or
requested by the P.A. to provide Services to, or to perform
procedures on, the Patients within the Facility.
3.4 Repairs to Equipment .
Ambergris shall be solely responsible for making, and shall
promptly make, all necessary repairs to the equipment provided by
it under this Agreement, and if such equipment is not repairable,
Ambergris shall promptly replace such equipment with equipment of
equivalent function. Ambergris shall also, at its sole cost and
expense, maintain the structural soundness of the exterior and
interior of Facility, including the roof and exterior walls, and
the electrical, air-conditioning and heating systems located
therein. Notwithstanding the foregoing however, the P.A. shall be
responsible for any damages caused by the P.A., or its Physicians
to any of the equipment or the Facility itself and any such damage
shall be repaired or replaced by the P.A. at its sole costs and
expense.
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3.5 Scheduling . Except for
emergencies, the P.A. and Ambergris will use their best efforts to
jointly establish by Friday of each week a schedule of working
hours for the P.A. and the Physicians for the following week, and
if the P.A. and Ambergris cannot reach an agreement, then
Ambergris’s determination will be binding on the
P.A.
ARTICLE 4.
TERM
The term of this Agreement
(“Term”) will commence on the Commencement Date, will
continue for a period of five (5) years thereafter
(“Initial Term”), and automatically will be renewed for
successive twelve (12) month periods (each a “Renewal
Term”), subject to termination as provided in Article 7
hereof.
ARTICLE 5.
COMPENSATION
As full compensation for Services
rendered to Patients at the Facility and for its performance of
such other duties and responsibilities as are set forth in this
Agreement, Ambergris will pay the P.A. an amount equal to
(x) the actual co
