MANAGEMENT SERVICES
AGREEMENT
This Management Agreement
(“Agreement”) is made and entered into as of this 20th
day of March, 2009, 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.
(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.
(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.
(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
(25 th
) 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.
(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
ensure that its respective personnel do not disclose any
confidential information in violation of this
provision. This covenant shall survive the termination
of this Agreement. Each party agrees that upon
termination of this Agreement for any reason, it shall promptly
return to the other party the originals and all copies of any and
all trade secrets, confidential or proprietary information, it may
then possess, including without limitation any such information
stored on computer media.
(b)
Medical Information & Patient Records . Each
party shall maintain the confidentiality of all patient
records,
