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MANAGEMENT SERVICES AGREEMENT
This Management Agreement (“Agreement”) is made and
entered into as of this 1st day of August, 2008, by and between
Apollo Medical Management, Inc., a Delaware corporation
(“Manager”), and ApolloMed Hospitalists, a California
medical corporation (“Group”). Recitals:
A. Manager
is a Delaware corporation engaged in the business of managing
physician practices to enhance the quality and efficiency of the
medical practices it manages.
B. Group
is a California medical corporation that provides hospitalist
services to inpatients at hospitals staffed by Group.
C. Group
desires retain Manager to provide assistance to Group in managing
and administering all non-medical aspects of Group’s medical
practice in a manner and to the extent permitted by law.
D. Group
and Manager recognize that Group has sole responsibility for
providing medical services to Group’s patients, and Manager
shall provide assistance to Group in managing and administering all
non-medical functions of Group’s medical practice.
THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree as follows:
1. Management
Services. During the term of this Agreement, Group
engages Manager to assist Group in providing the following
management and administrative services required by Group for the
operation of the Practice:
(a) Business
Matters. Supervising and coordinating all day-to-day,
non-medical business aspects of Group’s Practice.
(b) Supplies
and Equipment. Ordering and purchasing, after
consultation with Group, all medical and office supplies and
equipment required by Group in connection with the operation of
Group’s practice. All such supplies shall be of a
quality acceptable to Group.
(c) Bookkeeping. Providing
all bookkeeping and accounting services, including, without
limitation, maintenance, custody and supervision of Group’s
business records, papers and documents, ledgers, journals and
reports, and the preparation, distribution and recording of all
bills and statements for professional services rendered by Group in
the course of Group’s Practice.
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(d) Management
& Clinical Information Systems. Upon request and in
consultation with Group, the planning, negotiation with third party
vendors, selection, installation and operation of appropriate
hardware and software (including but not limited to the Apollo Web
database technology) to provide Group with management and clinical
information systems support. All clinical and financial
data pertaining to Group’s practice shall be regularly backed
up on electronic media, with additional hard copy back up when in
the judgment of Manager, after consultation with Group, it is
prudent to do so, and copies of such back up data in both
electronic media and hard copy shall be provided to Group from time
to time upon request of Group. Upon termination of this
Agreement for any reason, all such data and back up data shall be
promptly delivered to Group to ensure continuity of Group’s
financial and clinical operations. All such services
shall comply, as appropriate, with the Health Insurance Portability
and Accountability Act of 1996, and the regulations promulgated
thereto (“HIPAA”).
(e) Billing
& Collection. Subject to Section 3(d) below,
providing all billing and collection services for Group’s
medical practice. All billings shall be accurate and in
accord with appropriate and up-to-date payor coding
requirements. Manager shall diligently pursue
collections of Group and shall follow up billings in a timely
fashion to ensure that payments are received to the greatest extent
possible in a commercially reasonable time, and that aged accounts
receivable are maintained within commercially reasonable limits,
for medical practices similar to that of Group.
(i) Attorney-In-Fact; Assignment and
Limitations. In performing its billing and collection
duties hereunder, Manager shall act as Group’s agent and
shall indicate it is billing in the name of Group. Group
hereby appoints Manager, for the term hereof, as its true and
lawful attorney-in-fact, with full power of assignment and
substitution, to bill patients or third party payors on
Group’s behalf; collect accounts receivable arising out of
billings, and receive payments on behalf of
Group. Notwithstanding the foregoing, no assignment
shall be made to Manager of any sums or rights to payment, the
assignment of which is prohibited by law (e.g., revenues from
patients covered by the Medicare program). In lieu of
assignment of such payments, unless otherwise prohibited by law,
Group shall remit to Manager the amount of any such sums within
five (5) business days of Group’s receipt
thereof. Group and Manager shall cooperate in the
establishment of a separate account or accounts to track all such
amounts. In connection with its billing activities,
Manager may take possession of, and endorse in the name of Group,
any and all notes, drafts and other instruments received by way of
payment. Manager shall assist Group in negotiating or
otherwise communicating with any patient or third party payor
regarding claims processing and any disputes arising therefrom.
(ii) Bank
Accounts. Manager is hereby granted a general power of
attorney with respect to the bank accounts of Group and shall have
full access to and signatory rights, with Group, over such bank
accounts. Manager shall have full power and authority to
deposit funds into, and withdraw funds from, all such accounts in
accordance with the terms of this Agreement; provided, however,
that Group may impose such limitations upon Manager’s
signatory rights over such accounts as Group shall determine from
time to time, in Group’s sole discretion. Manager
shall have full authority to receive and transact on behalf of
Group all cash, checks, drafts, notes and other instruments
tendered as payment for professional services rendered by Group,
except as may be precluded by law. -2-
(f) UR/QA. Assisting
Group in the establishment and implementation of a program or
programs of utilization review and quality assurance for the
activities of Group, and in the formulation and implementation of
related policies, procedures and protocols including, but not
limited to both a monitoring function and the development and
implementation of performance parameters, evidence based medicine
protocols, and outcomes measurements
(g) Insurance. Negotiating
and securing appropriate insurance coverage on behalf of Group and
in connection with Group’s Practice, after consultation with
Group, including coverage for malpractice, comprehensive general
liability, fire and premises liability, worker’s
compensation, business interruption, and such other coverage as may
be agreed from time to time between Manager and Group.
(h) Worker’s
Compensation, Etc. Preparing and filing all forms,
reports, and returns required by law in connection with
unemployment insurance, workers’ compensation insurance,
disability benefits, social security, and other similar laws now in
effect or hereafter imposed.
(i) Premises. Managing
the proper maintenance and physical operation of Group’s
medical practice premises
(“Premises”). Group’s medical office
lease(s) are listed on Exhibit A, which is attached hereto and made
a part hereof.
(j) Clerical
Support. Providing reception, secretarial, human
resources, transcription and clerical personnel and services,
including management of the maintenance of medical
records. All Manager personnel shall be acceptable to
Group in its reasonable discretion and shall be appropriately
trained and supervised for the duties assigned to them in
connection with Group’s practice.
(k) Advertising. Marketing
of physician services to hospitals, and otherwise coordinating
advertising, marketing and similar activities conducted on behalf
of Group, after consultation with Group.
(l) Capital. Consulting
with Group regarding capital and financial needs, including seeking
capital, undertaking the efforts to raise, and providing access to,
capital for any lawful purpose, including without limitation
working capital, acquiring other physician practices and acquiring
other business assets of the practice.
(m) Contracting. Manager
shall assist Group in setting the parameters under which Group will
enter into, and in negotiating, contractual relations with
hospitals and third party payors.
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(n) Other
Services. Providing such other services as may be agreed
between the parties from time to time which may include, but not be
limited to, Physician recruitment services, contracting services
(with hospitals and payors), physicians scheduling, Payroll
services for the physicians (as well as management company
personnel), Case management for patients
2. Performance
of Manager’s Services.
(a) Manager’s
Availability. Manager shall devote its best efforts to
carrying out the terms of this Agreement and shall devote
sufficient time and resources, as determined by Manager after
consultation with Group, as is reasonably required to discharge its
duties under this Agreement.
(b) Manager’s
Authority. Manager shall perform all additional and
ancillary services, not otherwise described in this Agreement, that
may in Manager’s judgment, after consultation with Group, be
reasonable and appropriate in order to meet Manager’s
obligations under this Agreement. Manager may
subcontract with other persons or entities, including entities
related to Manager by common ownership or control, to perform all
or any part of the services required of Manager by this
Agreement. For purposes of this Agreement, Manager shall
have signatory rights on all bank accounts used by Group in the
conduct of Group’s Practice, and Manager shall have the right
to make deposits to and payments from such accounts as it deems
appropriate in furtherance of its obligations hereunder, in
accordance with Paragraph 1(e)(ii) (Bank Accounts).
(c) Manager’s
Responsibility. In all matters under this Agreement,
Manager shall abide by all applicable state and federal laws and
regulations, and applicable policies and procedures of Group.
(d) Reports
to Group. On or before the twenty-fifth (25th) day of
the first month of each calendar quarter, Manager shall provide
Group with an accounting of all billings and collections on behalf
of Group, and all deposits to the account(s) of Group and payments
from the account(s) of Group, effected by Manager for the benefit
of Group during the immediately preceding calendar
quarter. All reports shall be in such form as may be
agreed between Manager and Group from time to time.
3. Obligations
of Group.
(a) Designation
of Agent. Group hereby designates and appoints Manager
to act as Group’s non-physician manager and to provide
the services to Group in connection with Group’s Practice as
described in this Agreement. Group hereby designates
Warren Hosseinion, M.D. as its designated representative who is
duly authorized by the Group to bind the Group and act on behalf of
the Group in all respects pertaining to this Agreement.
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(b) Access
to Information. Group acknowledges and agrees that all
information and records concerning Group and Group’s
performance of services that may be obtained by Manager during the
term of this Agreement may be used by Manager for all purposes
necessary or convenient to Manager’s obligations under this
Agreement.
(c) Selection
of Group Personnel. Group shall retain responsibility
for the selection, hiring and termination of physicians, allied
health professionals and medical assistants working in clinical
capacities for the Group. Group, in consultation with
Manager, shall be solely responsible for determining the
compensation of all licensed medical professionals.
(d) Coding
and Billing Procedures. Group shall retain
responsibility for decisions relating to coding and billing
procedure for patient care services.
4. Confidentiality.
(a) Trade
Secrets. All proceedings, files, records and related
information of Group and of Manager are confidential and
proprietary information of Group and Manager, respectively, and
each party shall keep and maintain as strictly confidential all
such information to which it may have access by virtue of this
Agreement. Neither party shall voluntarily disclose all
or any part of such confidential information, orally or in writing,
except as expressly required by law or pursuant to a written
authorization from the other party. Each party shall
include the provisions of this Paragraph in any written contract
with any employed or contracted persons that may be engaged by such
party to render services pursuant to this Agreement, and shall take
such other steps as may be reasonable under the circumstances to
ensur
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