EXHIBIT 10.28
DME SUPPLY AND RELATED SERVICES
AGREEMENT
THIS DME SUPPLY AND RELATED SERVICES
AGREEMENT (the “Agreement”) is made and entered into
effective as of the
day of
January 2006 by and between The Orthopaedic Excellence of Long
Island, P.C. (“Provider”) and OrthoSupply Management,
Inc., a Delaware corporation or its designee
(“OSMI”).
RECITALS
A. WHEREAS, Provider desires to
offer Provider patients requiring durable medical equipment and
orthotics (together referenced as “DME”) the option of
having such DME fitted and dispensed within its office suite (the
“Office”) in order to enhance the continuity,
convenience and quality of care provided to Provider
patients.
B. WHEREAS, OSMI supplies DME and
related services to physician groups and other health care
providers.
C. WHEREAS, Provider desires to
purchase DME and related services from OSMI to facilitate its
provision of DME to Provider patients.
D. WHEREAS, the parties desire to
enter into this Agreement in order to provide a full statement of
their respective responsibilities hereunder during the term of this
Agreement.
FOR AND IN CONSIDERATION of the
mutual covenants and agreements hereinafter contained, the parties
hereto hereby agree as follows:
OSMI shall have only the
responsibilities and authority delegated to it under this Agreement
or as delegated by Provider and accepted by OSMI from time to time.
Subject to the ultimate authority and control of the Provider, OSMI
shall have the following authorities and responsibilities (the
payment for which shall be included in the fees set forth in
Section 3(a) and 3(b), as applicable):
(a) Personal and Management
Services . OSMI shall provide the personal and management
services identified below in order to facilitate Provider’s
on-site provision of DME and related services to Provider
patients.
(1) Rehabplus Manager . OSMI
shall employ and provide to Provider, on a full-time basis (
i.e. , at least 40 hours per week), one leased employee as
follows:
A RehabPlus Manager trained in
insurance verification process and who shall provide services at
the Office on a full-time basis. The RehabPlus Manager shall assist
Provider in processing DME orders placed by Provider physicians,
providing insurance verifications, assuring proper inventorying and
storage of DME in the Office, proper fitting of DME, dispensing DME
to Provider patients who elect to order DME from Provider,
performing patient follow up to promote proper use and efficacy of
DME and record keeping related to the above duties, as reasonably
requested by Provider. The RehabPlus Manager shall be licensed,
certified, and/or accredited as required by law to perform such
services and shall maintain such license, certification and/or
accreditation throughout the term of this Agreement.
Descriptions of the RehabPlus
Manager’s essential functions and qualifications are attached
as Exhibit A hereto. The Rehab Plus Manager’s services
hereunder shall be subject to the control, supervision and
evaluation of Provider. Such employee also shall participate in
such periodic staff meetings and meetings with treating physicians
as the parties mutually agree are reasonably required for the
effective provision of DME and related services to Provider
patients.
The RehabPlus Manager shall remain
an employee of OSMI, and not an employee of Provider. At such times
as the RehabPlus Manager is providing services on behalf of
Provider hereunder, Provider shall have authority and
responsibility for (i) the supervision and control of the
RehabPlus Manager, (ii) determining the means and methods by
which the RehabPlus Manager provides services hereunder and
(iii) determining charges for the RehabPlus Manager’s
services.
OSMI shall retain sole
responsibility for the compensation (and benefits) of the RehabPlus
Manager for her services hereunder, including, without limitation,
the setting, modification and payment thereof As employer, OSMI
shall be responsible for all deductions, payments and benefits
required by law as the employer on behalf of the RehabPlus Manager
hereunder, including, without limitation, withholding taxes, Social
Security, unemployment insurance, workers’ compensation and
disability.
To the extent applicable, at such
times as the RehabPlus Manager is providing services on behalf of
Provider hereunder, Provider shall have authority and
responsibility for determining charges and the services provided by
the RehabPlus Manager on behalf of Provider. OSMI hereby assigns
and shall, to the extent required by law or any third party payor,
cause the RehabPlus Manager to assign to Provider, the limited
right to bill and collect, subject to limits imposed by law, rule
or regulation, for all services provided by the RehabPlus Manager
on behalf of Provider. The assignment hereunder shall be limited to
the services provided hereunder aid shall not include any other
services provided by the RehabPlus Manager. All billing shall be
performed in accordance with applicable law and the rules and
regulations of the applicable third party payors.
As the RehabPlus Manager will remain
an employee of OSMI, the RehabPlus Manager shall have terms and
conditions of employment for OSMI as determined by OSMI policies.
Notwithstanding the foregoing, Provider shall have the right to
approve the person designated by OSMI to serve as the RehabPlus
Manager, which approval shall not be unreasonably withheld or
delayed. Upon written request of Provider, OSMI shall remove the
person serving as the RehabPlus Manager from service under this
Agreement and, within a reasonable period of time thereafter,
replace such person with an individual approved by Provider in
accordance with this provision.
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(2) Policy and Procedure
Manual . OSMI shall provide to the Provider a draft policy and
procedure manual (hereinafter referred to as the
“Manual”) for Provider’s review and approval,
which Manual shall include protocols, operating policies and
procedures and similar materials that are reasonably necessary for
the proper ordering, storage, fitting and dispensing of DME, as
well as proper documentation and patient follow up. OSMI may
recommend revisions to the Manual, as necessary, from time to time
and shall make such revisions as are necessary and approved by
Provider to tailor the Manual to Provider’s needs.
(3) Educational Programs .
OSMI shall provide in-service training and educational programs for
Provider physicians and staff related to the proper fitting, use
and clinical benefits of DME, upon request of Provider.
(4) Quality Review Activities
. OSMI shall assist Provider in establishing a quality oversight
program and program evaluation standards to promote the efficacy of
DME and related services provided by the Provider.
(5) RehabPlus Solution . OSMI
shall provide RehabPlus Solution services as specified in Exhibit B
hereto. OSMI will provide over-sight and leadership management on
administrative aspects of the Provider’s RehabPlus
Solution.
(b) Billing and Collection
Services . OSMI and Provider acknowledge that billing and
collection for the DME services shall be the sole responsibility of
OSMI. The parties agree that this Agreement shall only be
applicable to the DME services and not to any other services
provided by Provider. OSMI recognizes that Provider may use another
vendor to perform billing services for Provider’s non-DME
services and that OSMI shall have no right or obligations relating
thereto. The RehabPlus Manager, with assistance from and
supervision by Provider, will handle all patient and encounter
information of Provider on services rendered and enter said
information into OSMI’s billing & collection system.
The following information will be required by Provider to process
customer charges:
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Patient’s date of
birth
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Insurance information (copy of
face sheet)
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Front and back of insurance card
(copy)
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Office notes if billing an
unlisted procedure or billing a multiple procedure on the same
day
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Any reasonable additional
information required by OSMI for billing purposes
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Based upon the above information
received from Provider, OSMI shall provide the following billing
and account management services:
(1) Patient Services Billing
: Create claims or invoices, create patient bills, post payments,
perform collection follow-up.
(2) Reporting : A set of
monthly reports will be forwarded to Provider to detail the
activity of the month. OSMI shall keep and maintain a standard
reporting system to provide Provider with the current status of its
outstanding accounts receivable and all other reports reasonably
requested by Provider from time to time. All communications from
and to Provider’s payors and patients shall be available for
Provider’s review upon request. In all events, OSMI will
provide Provider with information requested by Provider within two
(2) business days.
(3) Scope of Services :
OSMI’s services on behalf of Provider will include, among
other things: (a) any and all required preparation,
keypunching and billing of all first-and third-party bills for
professional services rendered by Provider and for DME products
provided by the Provider; (b) submitting completed claims
under appropriate provider numbers to responsible parties;
(c) handling denied claims and revising and resubmitting such
claims for payment from all third party payors, including without
limitation, managed care and insurance companies and governmental
programs; and (d) answering all phone inquiries concerning
claims on behalf of Provider and providing follow up support on
claims.
(4) Claims Submission : All
bills will be sent directly to both first-and third-party payors,
or to whomever Provider so designates (subject to applicable
federal, state and local laws, rules and regulations which may from
time to time be in effect) within five business days of
OSMI’s receipt of the necessary data to perform such billing
(“Billing Period’). If additional data is required to
OSMI to perform the billing, OSMI must request the additional
information in writing within the Billing Period. Upon receipt of
the requested information, OSMI shall submit the bill, as set forth
above, within five (5) days.
(5) Delinquent Accounts :
OSMI and Provider agree that any bills that have not been paid by
the responsible first or third party payor within forty five
(45) days of their receipt shall be deemed delinquent and past
due (“Delinquent Accounts”). OSMI shall use its best
efforts to collect amounts owed on Delinquent Accounts.
(6) Compliance with Applicable
Law and Policies : OSMI shall conduct all of its services
hereunder in accordance with policies of Provider and shall submit
all completed claims under the appropriate provider number (and/or
federal tax identification number) of Provider or its individual
physicians and health care practitioners as directed
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by Provider. OSMI shall perform all
of its services hereunder in accordance with: (i) all
applicable federal and state laws, rules and regulations
(including, without limitation, the Health Insurance Portability
and Accountability Act of 1996 (“HIPAA”), (ii) the
Medicare and the Medicaid programs (to the extent applicable); and
(iii) all commercial and governmental payor rules.
(7) Flow of Funds : OSMI
shall direct and cause all payments due to, or arising from, its
services hereunder to be directed to Provider at an address
designated by Provider. In the event that any payments are
mistakenly sent to OSMI, then OSMI shall promptly forward and
endorse (if necessary) all such payments to Provider. Provider
shall notify OSMI of all payments received within a reasonable time
period. This provision shall survive termination of this
Agreement.
(8) Compliance Efforts : OSMI
shall cooperate with the compliance efforts of Provider to ensure
both parties compliance with all applicable federal and state laws,
rules and regulations and with all applicable rules of third party
payers. OSMI will provide Provider with a copy of its compliance
program, and shall do the following:
(i) If OSMI finds evidence of an
erroneous or improper claims (whether due to the conduct of OSMI or
Provider), OSMI shall refrain from the submission of such claim and
promptly (within (10) days) notify Provider.
(ii) OSMI shall fully cooperate with
Provider in instituting appropriate corrective actions if erroneous
or improper claims or overpayments have been identified, including,
but not limited to, assisting in appropriate billing reviews,
submitting corrected bills, or processing.
(c) DME Products . OSMI shall
provide such DME as requested by Provider. All DME products shall
be provided to Provider within such time frames as requested by
Provider
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Obligations of Provider
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(a) Organization and
Operation . Provider shall retain ultimate responsibility for
the proper operation of the Provider. Each party shall comply with
all applicable laws, rules and regulations including, without
limitation, the federal Stark (42 USC 1395nn) and anti-kickback
laws (42 USC 1320-7b).
(b) Provision of Physician
Services . The parties acknowledge and agree that Provider,
through its physicians, shall be responsible for and shall have
complete authority, responsibility, supervision and control over
the provision of all physician services rendered by the Provider,
and that all medical treatments and procedures related to the use
of DME shall be provided and performed exclusively by or under the
supervision of Provider physicians in such manner as Provider
physicians, in their sole discretion, deem appropriate. OSMI shall
have and exercise absolutely no control or supervision over the
provision of physician services.
(c) Engagement of Clinicians
. Provider shall be solely responsible for engaging all physician
and all non-physician personnel necessary to the proper operation
of Provider, other than the RehabPlus Manager provided by OSMI
pursuant to Section 1 above.
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(d) Quality Oversight Program
. Upon request of Provider, OSMI shall provide administrative
assistance to Provider in performing its quality
assurance/utilization review activities.
(e) Liaison . Provider shall
select one or more Provider representatives to serve as liaison(s)
for OSMI regarding RehabPlus billing and operational matters, and
OSMI shall select one or more OSMI representatives to serve as a
liaison for its services hereunder.
(f) Direction and Supervision of
DME-Related Services . Provider shall be solely responsible for
identifying appropriate patients for DME and related services,
certifying the medical necessity of such DME and related services,
scheduling all Provider services (including DME fittings and follow
up appointments) and supervising the services of the RehabPlus
Manager. The parties agree that Provider shall not provide DME to,
and this Agreement shall not apply to, Medicare or Medicaid
patients or any other patients covered by any federal health care
program, except for prosthetics, orthotics, canes, crutches,
walkers and folding manual wheel chairs, to the extent permitted by
all applicable federal, state and local laws, rules and
regulations.
(g) Documentation . Provider
shall be responsible for selecting principal diagnosis and
procedure codes based on Medicare and other applicable payer
standards and guidelines. Provider agrees to comply with all DME
order entry procedures as specified by OSMI and agreed to by
Provider. On a weekly basis, Provider shall forward to OSMI copies
of Explanations of Benefits forms and/or receipts of payment in
order to enable proper updating of patient accounts receivable
ledgers and accounting for total collections.
(h) Licenses, Permits and
Certifications . Provider shall be responsible for obtaining
and maintaining any licenses, permits, certifications and provider
numbers necessary for the Provider to dispense DME within the
Office and bill payers for DME and related services, subject
however, to OSMI’s obligations to assist Provider in such
process as more fully described on Exhibit B hereto.
(i) Financial
Responsibilities . Provider shall, at its sole expense, as
determined appropriate by the Provider:
(1) Provide all necessary Office
space (by lease or otherwise), receptionist services, security
services and utilities as may be required for operation of the
Provider, including the storage, fitting and dispensing of
DME.
(2) Equip and furnish the Office
space within which DME owned by Provider may be stored, fitted and
dispensed.
(3) Arrange any modifications,
maintenance and repairs to the Provider premises, furnishings or
equipment necessary to maintain the Provider in good condition and
in compliance with all applicable legal requirements.
(4) Pay all physician and other
Provider employee salaries and benefits.
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(j) Charges . Provider shall
determine the charges for all DME and related services provided to
Provider patients.
(k) Compliance with Law and
Professional Standards . All of Provider’s duties and
responsibilities hereunder shall be conducted in accordance with
all applicable federal, state and municipal laws, rules and
regulations.
(l) Collection Responsibility and
Payment to OSMI . Provider shall be responsible for:
(1) Maintaining files containing
medical documentation to support claims for which Provider has
requested that OSMI perform billing services.
(2) Forwarding on a weekly basis all
RehabPlus related Explanation of Benefits (EOB) to OSMI from date
of rece