INDEPENDENT CONTRACTOR AGREEMENT

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

 

2

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.

 

3

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

 

4

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.

 

5

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 costs incurred by the P.A. in connection with the Physicians employed or otherwise engaged by the P.A. to provide services at the Facility plus (y) an amount equal to ten percent (10%) of such costs (the sum of the foregoing being referred to herein as the “Services Fees”). Services Fees shall be payable to the P.A. not later than the tenth (10^th) day of each month for services rendered in the prior month.

 

ARTICLE 6. BILLING AND COLLECTION

 

6.1 Billing and Collection. Ambergris, at its sole discretion, but after consultation with the P.A., will establish fees, policies and procedures for billing and collecting for Services provided by the P.A. and for the technical component of the radiation therapy services provided at the Facility. Ambergris will be solely responsible for billing and collecting, or arranging for billing and collection, from the Medicare and Medicaid programs, Patients and/or their third party payors and insurers all amounts owed for those Services provided by the P.A. pursuant to this Agreement, as well as for the technical component of the radiation therapy services provided at the Facility. The P.A. hereby irrevocably assigns to Ambergris any right the P.A. may have to bill and collect for any and all Services provided by Ambergris and Physicians to Patients at the Facility during the Term of the Agreement at the Facility. The P.A. will take all actions reasonably requested by Ambergris to implement the provisions of this Section 6.1. The P.A. agrees that Ambergris shall have the right to bill the Medicare and Medicaid Programs in the P.A.’s name, using the P.A.’s group Medicare and Medicaid provider numbers, and if appropriate, the P.A.’s Federal Identification Numbers. In furtherance hereof, the P.A. hereby appoints Ambergris as its agent and true and lawful attorney in fact for the following purposes: (i) to submit all claims and other documents necessary or appropriate for the timely and aggressive billing for the Services, (ii) to collect, receive payment of, receipt for, and give discharges and releases for all claims for such healthcare and ancillary services; (iii) to make demand with respect to, settle, compromise, and adjust such claims and to commence and prosecute either in its name or in the name of the P.A. and the Physicians, and for their mutual benefit any suit, action or proceeding to collect any such claims in accordance with sound risk management practices; and (iv) to take possession of and endorse in the name of the Group or

 

6