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HomeMy WebLinkAboutRES 93-215 �73 - 45- RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF BEAUMONT: THAT the City Manager be and he is hereby authorized to enter into a contract with Memorial Health Network,Inc.DB/A Memorial HealthNet to provide claims administration for the City's medical insurance program. The contract is substantially in the form of Exhibit "A" attached hereto. PASSED BY THE CITY COUNCIL of the City of Beaumont this the 51A,& day of 1993. - Mayor - ■ ADMINISTRATIVE AND CASE MANAGEMENT SERVICES AGREEMENT EXHIBIT "A" ADMINISTRATIVE AND CASE MANAGEMENT SERVICES AGREEMENT This Agreement is entered into this st day of 1993, between , whose address is (hereinafter referred to as the 'Employer") and Memorial Health Network, Inc. , a Texas corporation whose address is 9494 Southwest Freeway, Box 500, Houston, Texas 77074, (hereinafter referred to as "HealthNet") to be effective on , 1993. WHEREAS, the Employer has adopted an employee health benefit plan known as the Employee Benefit Plan ("Plan") for certain employees and their dependents; and WHEREAS, the Employer has requested HealthNet to provide administrative services for the Plan, and HealthNet has agreed to provide such services for the Plan, in accordance with the terms of this Agreement; NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement and other goods and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows : DEFINITIONS A. "Benefits" as used herein shall be defined as those medical or health care services and resulting expenses of Covered Persons reimbursed or paid for by the Employer. B. "Case Management Services" as used herein shall refer to Preadmission Evaluation and Continued Stay Review, and any other services set forth in this Agreement necessarily associated with same. C. "Continued Stay Review" as used herein- shall be defined as a form of patient care review which will occur during the Covered Person's hospitalization and will consist of a review of the medical necessity for hospitalizations longer than the originally recommended length of stay for purposes of reimbursement or payment by the Employer. D. "Covered Persons" as used herein shall mean those employees of the Employer, and their dependents as described in the Plan, who are covered under the Plan for health benefit claims with respect to which HealthNet has mutually agreed with the Employer to provide the services hereunder. E, "Discharge Pl anni of i nedd as an eevaluation of Mnpatientt'ac to care herein shall be de admissions to identify patients for whom treatment in an alternative setting is appropriate for the individual patients' needs and of acceptable quality. "Plan" as used herein shall refer to the employee health benefit F. plan of the Employer, and any subsequent amendments or changes thereto. ' G. "Plan Document" as used herein shall refer to the copy of the Plan which is currently in effect. H. "Preadmission Evaluation" as used herein shall be defined as an evaluation of the medical necessity and length of stay assignment of a proposed inpatient hospital admission of a Covered Person for purposes of reimbursement or payment by the Employer. I . "Reimbursement Criteria" as used herein , shall refer to the benefits provisions of the Plan Document. J . "Second Surgical Opinion" as used herein shall mean a service in which HealthNet coordinates the securing of a timely and appropriate second medical opinion when a non-emergency elective surgical procedure is recommended by the treating surgeon . K. "Med Value" as used herein shall refer to the most recent published standards of the Med Value applicable to review of hospitalizations . 1 L. "Unfavorable Recommendation" as used herein shall refer to a recommendation or determination for purposes of reimbursement or ' payment by the Employer that proposed admission to or continued stay in a hospital does not meet reimbursement criteria. ' M. "Working Day" as used herein shall be defined as any one day, Monday through Friday, excluding holidays observed by HealthNet. N. "Complete claim" as used herein shall be defined as HealthNet having obtained or being provided with all information necessary to, process a claim. SECTION 1 - ADMINISTRATIVE SERVICES HealthNet shall provide the Employer with the following services as t reasonably required for the administration and operation of the Plan in accordance with the terms and provisions set forth in the Plan Document and such amendments thereto and in accordance with this Agreement: A. Development, Communication, and Installation 1 . Recommendations as to initial development and design of the i Plan and Plan Document and future revisions thereof. l 2. Provide assistance in the enrollment and communication process as requested by Employer. The responsibilit of conducting enrollment meetings and obtaining competed enrollment forms is the Employer's. 3. Assistance in preparation of employee communications material related to the Plan. 4. Preparation of benefit booklets for each employee. Printing and duplicating costs will be at the Employer's expense. 5. Design and provide medical coverage identification cards for Covered Persons . 6. Development and design of forms and procedures for processing requests for Benefits payments . B. Reports and Records 1. Preparation of such accounting reports as are reasonably necessary for the financial management and administrative control of the Plan including: a. projections of initial and renewal unit cost and total cost; b. listings of Benefits paid, grouped by Covered Person and by health care provider; C. coordination of Benefits; d. reasonable and customary charge guidelines as promulgated by HIAA Data Bank or by such other organization as HealthNet shall determine to be appropriate; e. stop loss reports showing the relationship of Benefits paid to stop loss insurance coverage, on both: 1. ) case level (aggregate) , and 2. ) Covered Person level (individual ) if purchased; and f. such other reports mutuall agreed to in writing between the Employer and HeOthNet in accord with this Agreement. 2. Assistance with preparation of any Summary Plan Description, Summary Annual Report or other items required for reporting and disclosure under Title I , Part I of the Employee Retirement Income Security Act of 1974. C. HealthNet shall for a fee provide the Employer with other special services to which the parties mutually agree in writing in accord with this Agreement. 1 D. Benefit Payments 1 . HealthNet shall , in accordance with the terms of the Plan Document and such amendments thereto and in accord with this Agreement: a. process Benefits claims with respect to Covered Persons and determine the amount due and payable with respect thereto. Process and payment of 80% of all complete clean claims shall be accomplished within ten (10) working da s after receipt of all information required to comp?Y to the claim. b. process any written requests , issues or comments received from Covered Persons on appeals of denied Benefits and forward the information to the Employer for review and decision; j C. upon receipt of the Employer's decision on Benefits appeals, calculate any amount due and payable and make payment or issue a denial notice, all in accordance with written instructions of the Employer; d. issue checks drawn on the Claims Account in payment of Benefits to Covered Persons or to such other person or assignee entitled thereto as instructed by the Employer; e. submit monthly reports of Benefits payments made on behalf of Employer; and f. maintain as confidential pursuant to applicable state and federal law all Benefits payments, reports, and other information and material furnished, obtained or developed in regard to its services under this Agreement. 2. When so directed by the Employer in writing, HealthNet shall suspend payment of Benefits to one or more Covered Persons until resumption of such payments is authorized in writing by the Employer. I I� 3. HealthNet shall maintain for a period of seven (7) years from the date of payment, records of Benefits payments for each Covered Person. All other records and reports prepared and maintained by HealthNet pursuant to this Agreement shall be maintained by HealthNet for a period of seven (7) years after the creation of such report or record, unless such report or record has been delivered to the Employer pursuant to this agreement. After such i period, ali such reports and records in the possession of HealthNet may be destroyed. HealthNet will notify Employer j in writing before any records are destroyed for the purpose of allowing Employer to determine if it desires to obtain i possession of all or any portion of such records. 4. All such reports and records shall be the property of the Employer, but the right of possession of such records and reports shall be and remain with HealthNet during the term of this Agreement. All such records and reports shall be made available for inspection by Employer during normal business hours . Within a reasonable time of completion by HealthNet of its duties under this Agreement, all such records and reports not previously destroyed as permitted by this Agreement shall be turned over to the Employer on request and in exchange for the Employer's receipt therefor. 5. Any protest of a Benefits payment shall be brought to the attention of the Employer as soon as reasonably practicable. 1 6. Handle all telephone inquiries as to the status of a specific claim, eligibility verification and benefits payable. SECTION 2 - CASE MANAGEMENT SERVICES , HealthNet will determine, for purposes of reimbursement and payment by the Employer, whether hospital admissions and lengths of hospital stays might be eligible for reimbursement and provided at the appropriate level of care consistent with professionally recognized standards of quality health care. HealthNet will conduct Preadmission Evaluation and Continued Stay Review activities in i order to assist in determining the level of reimbursement or payment 1 by the Employer pursuant to the Plan. Such activities will be performed only within the U. S.A. . I 1 l - C - A. Services 1. Preadmission Evaluation. HealthNet will conduct Preadmission Evaluation, based on applicable Med Value, on all hospitalizations upon request of a Covered Person, or the Employer. ' Hospitalization admissions are divided into two types: Nonemergency elective admission, defined here as admissions that can be scheduled in advance where no impairment of activity or organ damage would be expected to result from advanced scheduling; and - Emergency hospitalizations, defined here as admissions necessitated by the sudden onset of a medical condition manifesting itself by acute symptoms of severity to create an immediate life-threatening or a system-threatening situation for the patient which could result in death or irreversible damage to any organ if treatment is delayed. An admission that results from the onset of active labor shall also be considered an emergency admission . Evaluation shall be provided without unnecessary disruption to either the patient or health care provider to the fullest extent possible. 1 Before or during each reported hospitalization, authorized HealthNet personnel will evaluate the proposed treatment plan as to medical appropriateness and necessity for the purposes of reimbursement or payment by the Employer and 1 identify treatment which could be performed on an outpatient basis . All admissions for which reimbursement criteria, based on ' the information available to HealthNet, can be confirmed, nonemergency or emergency, will be assigned a recommended ' length of stay based on the request of the Covered Person's attending physician area norms for the diagnosis or procedure, other health problems of the Covered Person, the age of the Covered Person, and other relevant factors . If ! the reimbursement criteria cannot be confirmed, HealthNet shall promptly forward an Unfavorable Recommendation to the Employer for final decision regarding payment. 2. Continued Stay Review. HealthNet will conduct Continued Stay Review, based on applicable Med Value, on all hospitalizations which are longer than the originally recommended length of stay. In the course of Continued Stay Review, HealthNet will determine, for purposes of reimbursement or payment by the Employer, whether an Iextension of the length of stay may be eligible 1 for reimbursement and appropriate and, if so, will assign a new recommended length of stay. HealthNet will not recommend approval of reimbursement or payment of the expenses for any continued hospitalization where the attending physician, although medically and logistically possible to do so, does not provide HealthNet with the medical reason for the continued hospitalization. If the extension is confirmed by HealthNet as being potentially eligible for reimbursement and appropriate, HealthNet will then assign a new recommended length of stay. HealthNet shall promptly inform the Covered Person, his attending physician and the hospital of each new recommended length of stay or denial thereof. If the reimbursement criteria of an extended length of stay cannot be confirmed, HealthNet shall forward an Unfavorable Recommendation to the Employer for final decision regarding payment. 3 . Discharge Planning and Large Claim Case Manaq m.g HealthNet will conduct Discharge Planning and Large Claim Case Management on any unusual cases or diagnoses that traditionally result in large claims . Social service consultation is obtained for specific disease categories upon admission in an effort to expedite discharge in a timely fashion. Arrangements for an alternative setting for care will be investigated and the family, nursing unit if appropriate, and attending physician will be contacted to verify the individual patients specific post-discharge treatment needs . HealthNet will coordinate with Social Services in making preliminary plans for the alternative setting to which the patient will be moved upon discharge and then coordinate with the patient, the family and hospital staff. 4. Second Sur ical Opinion. HealthNet will suggest that a Second Surgical Opinion be obtained if the planned procedure might be performed in an alternate setting, might not meet the Plan's reimbursement criteria, or is listed by the Employer as a procedure that requires ' a Second Surgical Opinion. At the Covered Person's or Employer's request HealthNet will provide a list of three or more physicians ' names in the appropriate surgical specialty who can perform the required examination . HealthNet will arrange for an appointment with the physician of the Covered Person's or Employer's choosing if so requested. A report from the second physician must be communicated to HealthNet prior to admission to a hospital or performance of the planned procedure, whichever occurs first. B. Responsibility and authority 1 . It is understood by all parties that any advice, evaluations , reviews, or recommendations by HealthNet regarding Case Management Services are solely for the purpose of assisting in the determination of reimbursement or payment by the Employer for services under the Plan . HealthNet shall have no participation in or responsibilities for the medical or health care provided by Covered Person's attending physician or any other health care providers. Further, HealthNet shall not serve as a consultant, partner or supervisor of any physician or other health care provider engaged in providing medical or health care to a Covered Person. .. Any and all treatment decisions and medical or health care remain the sole prerogative and responsibility of the attending physician or other health care providers based on his/her independent professional judgment. Regardless of any advice, evaluations, reviews , or recommendations involving Case Management Services (except as they may affect reimbursement or payment by the Employer) , all Covered Persons shall be informed by i HealthNet n writing of their rights to the following: - Select an alternate setting or type of health care facility for performance of any medical or other health care service; - Seek whatever medical or other health care they may choose; - Remain in health care facilities for longer periods of time than approved; and - Select any health care provider of their choosing . 2. HealthNet shall have no obligation to provide Case Management Services with regard to a Covered Person for whom the Employer has not, as requested, provided HealthNet with the Covered Person's valid written authorization for access to and disclosure of confidential information concerning the Covered Person, as set forth in this Agreement. Further, HealthNet shall have no obligation to provide Case Management Services with regard to - a Covered Person for whom HealthNet is denied access to necessary or sufficient information about the Covered Person, either from the attending physician, health care facility, other health care providers , or the Covered Person. HealthNet shall make a good faith effort to obtain such information. . E C. Review personnel 1. HealthNet shall utilize physician advisors to supervise review by qualified professional nursing staff and to conduct that portion of evaluation or review appropriate, in HealthNet's sole discretion, for a physician. HealthNet shall be free to contract with or assign review, reconsideration or any other obligations of HealthNet to physicians or other health care providers of its choice. HealthNet shall be solely responsible for any compensation 1 of said individuals, unless otherwise provided herein or agreed upon by the parties . E 2. Only physician reviewers will be permitted to make Unfavorable Recommendations . 3. Physician reviewers will not review cases under their own care or under the care of physicians or health care providers with whom they are partners or business associates . D. Reconsiderations 1. HealthNet shall orally notify . the following parties: Covered Person, attending physician and the hospital (where appropriate) of any Unfavorable Recommendation as promptly as is reasonably possible following the recommendation. This will be followed by timely written notification to the Covered Person which shall inform the Covered Person of his or her right to request reconsideration of the Unfavorable Recommendation by HealthNet. 2. Where a request for reconsideration is received, HealthNet shall have a physician (other than the physician reviewer who made the initial Unfavorable Recommendation) review the matter. HealthNet may utilize its own. physicians for such reconsideration or may utilize physicians or physician groups under contract with HealthNet. When the Covered Person for whom an Unfavorable Recommendation has been made is currently hospitalized, HealthNet shall use - its best efforts to complete ' reconsideration within three (3) days; when the reconsideration is requested after the Covered Person has been discharged, HealthNet shall complete reconsideration within sixty (60) days . Written results of the reconsideration will be forwarded to the Employer and if affirmed will be forwarded to the attending physician and Covered Person . Nothing herein shall limit the Covered ' Person's right to proceed under the ERISA claims review procedure of the Plan. i E i E, Printed materials HealthNet will , at its own expense, print, inventory and supply all forms and materials necessary and required to install and i administer Case Management Services, provided that the Employer shall reimburse HealthNet for the expenses required for HealthNet to make any changes in such materials specifically requested by the Employer and to print and inventory any materials not routinely provided to the Employer by HealthNet, or as may be provided elsewhere in this Agreement. F. Obligations of the Employer In addition to other services referenced elsewhere in this Agreement, the Employer will : 1. Provide a liaison with HealthNet for communication and discussion of appropriate matters , including implementation, promotion and utilization of Case Management Services and to communicate final decisions regarding Unfavorable Recommendations by HealthNet before such are communicated to the Covered Person and the attending physician. 2. Provide all Covered Persons with written information regarding the Plan, including specified provisions on the requirements of Preadmission Evaluation and Continued Stay Review, the obligations of Covered Persons, and the participation and role of HealthNet, through distribution of written material either provided by or approved by HealthNet. 3. Provide HealthNet with valid written authorization of all Covered Persons, or the adult responsible for any - minor Covered Person, for any and all physicians and health care providers to release confidential information to HealthNet and to allow HealthNet access to and the right to inspect and/or copy any confidential information, including but not limited to patient records of the Covered Person . 4. Provide an exclusion in the Plan for expenses that are not medically necessary. 5 . The Employer will provide HealthNet a listing of all Covered Persons as of the effective date of the Plan. This listing shall be revised and updated by HealthNet. The Employyer will submit additions, terminations or any other eligibility changes monthly to HealthNet on/or before the 10th day of each month during the term of this agreement. r G, Reporting, Records and Confidentiality M1, HealthNet will furnish to Employer periodic statistical reports on a schedule as reasonably requested by Employer. The formats of these reports will be similar to the examples which are attached and labeled j 2. HealthNet will maintain records related to the Case Management Services for the greater of seven (7) years or I the period of time required by law. Such records shall i remain confidential . HealthNet will adhere to all laws regarding privacy of any data or records concerning the Covered Persons and HealthNet will safeguard to the extent reasonably possible such data from access by unauthorized individuals . HealthNet will notify Employer in writing before any records are destroyed for the purpose of allowing Employer to determine if it desires to obtain possession of all or any portion of such records . 3 . HealthNet agrees that neither HealthNet nor any of its employees , contracting physicians , or agents shall make any disclosure of information identifiable to a particular patient, beyond those disclosures necessary to fulfill its obligations pursuant to this Agreement, unless valid written authorization to release such information is provided by the Covered Person, or adult responsible for a minor Covered Person, or pursuant to statute, valid subpoena or court order. ' SECTION 3 - FINANCIAL ARRANGEMENTS A. The Employer will provide HealthNet a listing of all Covered Persons as of the effective date of the Plan. This listing will ' indicate dependents and all other coverages under the Plan. The Employer will submit additions, terminations or any other eligibility changes monthly to HealthNet on/or before the 10th day of each month during the term of this agreement. B. Employer shall establish, in the Employer's name, a zero balance bank checking account into which the Employer shall , as required, transfer such funds as are required to pay Benefits under the Plan (the "Claims Account") . ' C. In receiving and disbursing funds pursuant to this Section 3, HealthNet shall act only as the payment agent of the Employer, and shall in no way: (i assume any risks with respect for payments of Benefits; or ii ) be obligated to pav any Benefits from funds other than funds provided by the Employer for such purpose. 1 I SECTION 4 - PREFERRED PROVIDERS A. At the time of execution of this Agreement, HealthNet shall provide the Employer with a list of health care providers and facilities that have agreed to follow certain administrative practices established by HealthNet (the "Provider List") , from which list the Employer may select some or all of the preferred health care providers for the Plan. The Provider List shall be revised by HealthNet at least once per your or at such times and at such intervals as HealthNet and Employer mutually agree. In the event the Employer should elect to delete a provider from the list distributed to Covered Persons , the physician will be notified but will continue to receive reimbursement as a preferred provider for thirty (30) days following notification to Covered Persons . Employer shall note be responsible for determining the qualifications or credentials of any provider on the Provider List submitted by HealthNet. B. HealthNet shall rovide a list of referred providers in the form of a booklet for each covered employee, plus an extra 1 supply for new hires, equivalent to 5% of the current number of employees . Any additional books will be at the Employer's i expense. I C. HealthNet shall provide the Employer at least quarterly such nonconfidential efficiency review and other utilization data covering health care rendered to Covered Persons as is reasonably requested by the Employer and reasonably available to HealthNet. D. Nothing contained in this Agreement shall constitute a warranty, representation or guarantee by HealthNet as to the availability of or the quantity or quality of the health care services to be provided by the providers or facilities set forth on the Providers List or any revision thereto, and HealthNet shall have no liability to the Employer or any Covered Person with respect to such availability, quantity or quality. SECTION 5 - FEES A. In consideration for the services provided by HealthNet hereunder, the Employer shall pay HealthNet $ per medical plan participant per month, and an additional $ per dental plan participant each month for claims administrative services . Case management services (HealthTrack) will be $ - per plan participant per month. Preferred Provider Organization services will be $ per plan participant per month. This fee will apply only to the plan participants who have reasonable access to the HealthNet Preferred Provider Organization facilities and physicians . Additionally, Employer shall pa HealthNet an initial fee of $ for each COBRA Election letter sent to a terminated employee, and a monthly fee equal to ( %) of the premium billed to COBRA participants . Such payments shall be due and payable on or before the 10th day of the month for which the payment is made. B. Notwithstanding the foregoing paragraph A of this Section, HealthNet shall have the right to change any fee or other charge under this Agreement on any anniversary date of this Agreement Nb giving not less than thirty (30) days prior written notice to the Employer. Any changes in any fee under this Agreement shall apply to periods occurring subsequent to the second anniversary date of this Agreement after the notice of such change, unless otherwise agreed to in writing by the parties hereto. C. Employer shall reimburse HealthNet for reasonable charges or fees of attending physicians, health care facilities, health care providers or other outside vendors for access to and/or for providing information required or requested by HealthNet in cost effectively managing the Employer's Plan . D. Employer shall pay HealthNet a one-time set-up fee of $ E. Employer shall reimburse HealthNet for the reasonable cost of printing blank claim check forms, duplicating, printing and/or binding costs of personalized forms, benefit booklets or other materials specifically requested by Employer. The initial supply of identification cards for Covered Persons , standard enrollment forms and standard claim forms will be provided by HealthNet at no cost to Employer. SECTION 6 - STATUS OF HEALTHNET A. HealthNet shall be and shall operate as an independent contractor supplying services to the Employer under this Agreement, and HealthNet shall not have any authority to bind or obligate the Employer to any contractual obligations of any nature. HealthNet shall have full and complete control over its operations related to its performance under this Agreement. B. It is further understood and agreed that HealthNet shall not have discretionary authority or discretionary control respecting management or administration of the Plan or any trust fund related thereto and shall not have authority to nor exercise any control respecting management or disposition of the assets of the Plan or any trust fund related thereto and shall not render or have authority or responsibility to render, direct or indirect investment advice with respect to any monies or other property of the Plan or any trust fund related thereto. C. It is acknowledged and agreed that HealthNet is not a successor to any other prior employee benefits administrator(s) or insurance carrier(s) and shall not at any time be held liable for any action or default of such predecessors or their agents or of any other person who was connected in any way with the previous performance of services for or with respect to the Plan . For the purposes of the Employee Retirement Income Security Act of 1974 and of any state legislation of similar nature, the Employer shall be deemed the administrator and sponsor of the Plan . SECTION 7 - INDEMNITY A, HealthNet agrees to save, hold harmless and indemnify Employer, its related corporations, their employees , directors, representatives , a ents, successors and assigns , from and against any and al � liability, claims, damages, suits, losses, costs, including attorneys fees, and expenses related to, directly or indirectly, or arising from or growing out of, the ' wrongful or negligent acts or omissions of HealthNet, or any of its officers, directors, related corporations, employees, contract physicians, agents or representatives in the performance of services under this Agreement. Employer agrees to save, hold harmless and indemnify HealthNet, its related corporations , its officers, directors, employees , representatives, agents , successors and assigns , from and against any and all liability, claims, damages, suits, losses , costs including attorneys fees, and expenses related to, directly or indirectly, or arising from or growing out of, the wrongful or negligent acts or omissions of Employer, any of its officers, directors , employees, agents or representatives as required by the terms of this Agreement. f B. The rights of indemnification provided in this Section shall be in addition to any rights to which Employer or HealthNet or any officer, director, employee, contract physician, agent or representative of either party may be entitled by contract or as a matter of law, and shall extend to their respective successors , heirs and legal representatives . C. Nothing in this Agreement or this Section shall be construed to make the Employer or HealthNet, or their respective agents or representatives, liable in situations in which they are otherwise immune from liability. D. HealthNet and its contracting physicians shall at all times maintain appropriate liability insurance applicable to the services to be provided hereunder, and a minimum of $1,000,000 Errors and Omissions coverage will be maintained at all times . SECTION 8 - TERM A. The initial term of this Agreement shall be for a period of one (1) ear from the effective date hereof. Thereafter, - the term of this Agreement shall be extended for successive one (1) year periods, provided that either party hereto may terminate this Agreement at the end of such initial term or any such one (1) year extension term by diving to the other party notice of such termination at least thert (30) days prior to the end of such initial term or such one (1� year extension term. In the absence of 30 days prior written notice, this Agreement will continue until 30 days notice has been provided. B. Notwithstanding any termination of this Agreement for any reason, the remaining obligations of the Employer and HealthNet and - the rights of HealthNet (and its officers, directors, employees, contract physicians, agents and representatives) and Employer (and its officers, directors, employees , agents and representatives) as contained herein shall survive the termination of this Agreement. C. Nothing in this Agreement shall be construed to limit either party's lawful remedies in the event of a material breach of this Agreement. i SECTION 9 - TERMINATION Employer or HealthNet may terminate this Agreement at their discretion during the policy year upon thirty (30) days prior written notice to either party. In the event less than thirty (30) days notice is received, the Employer agrees to pay a penalty equal to one (1) month's total fees . HealthNet agrees to refund one (1) month's total fees if they do not provide thirty (30) days notification of termination. SECTION 10 - LIMITATIONS OF LIABILITIES AND OBLIGATIONS A. HealthNet shall have no responsibility, risk, liability or obligation for funding the Plan. The responsibiIitty and obligation for funding the Plan shall be solely and totally the responsibility of the persons or entities so provided in the Plan. HealthNet shall not be liable for or be required to use its funds for the payment of Benefits under the Plan. HealthNet shall not be responsible or obligated for the collection, preservation, maintenance or investment of any assets or funds f the Plan. HealthNet shall not be considered the insurer or underwriter of the liability of the Employer .to provide Benefits for the Plan's Covered Persons and the Employer shall have the final responsibility and liability for determinations regarding, and payments of, Benefits in accordance with the provisions of the Plan. All review of denied Benefits or Unfavorable Recommendations and final Benefits decisions will be the responsibility of the Employer. The Employer shall be responsible for all expenses of the operation of the Plan, except as provided under this Agreement. HealthNet shall have no responsibility or obligation to take action, legal or otherwise, against any insurer, the Employer, any employee or any other person or entity to enforce provisions of the Plan or otherwise. I i Employer shall designate legal counsel for any claim for Benefits . The defe se of any legal action on on a claim for Benefits shall not be the obligation of HealthNet. HealthNet shall fully cooperate with the legal counsel i designated by the Employer in the event of any litigation files and other under informat on which may be but used limited su h defense. files SECTION N 11 - SUBCONTRACTORS I HealthNet reserves the right to obtain the services of persons or firms having special knowledge or facilities in performing its duties under this Agreement. Employer shall be notified of HealthNet's intent of obtaining such services and reserves the right to accept or reject the choice made, by HealthNet of the provider of such services. Charges for such services, except as provided elsewhere in this Agreement or so agreed by the parties , will be the responsibility of HealthNet. SECTION 12 - EXTENT OF DUTIES• NO LIMITATION OF OTHER BUSINESS HealthNet shall expend such time and resources in connection with its duties hereunder as it, in its sole discretion, shall deem necessary or proper. Nothing in this Agreement shall be construed as limiting or restricting HealthNet's right to engage in any other business activities , including, but not limited to, providing to other parties services similar to those provided by HealthNet hereunder. SECTION 13 - NOTICES Except as otherwise provided herein , all notices , requests , demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given if delivered by-hand, given by prepaid telecopy, telex or telegram or mailed via first-class , postage prepaid, or certified or registered mail to the party to receive such notice, request, demand or communication at such party's address set forth above, provided that any party may change its address for notice by giving to the other party written notice of such change. Any notice given pursuant to this Agreement shall be effective (i ) if delivered by-hand, when delivered; (ii ) if sent by telecopy, telex or telegram, 24 hours after sending; and (iii ) if mailed, three (3) Postal Service Days after mailing. 1 SECTION 14 - GOVERNING LAW: INTERPRETATION: SECTION HEADINGS This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Texas , except as preempted by controlling federal law. The section headings contained herein are for purposes of convenience only, and shall not be deemed to constitute a part of this Agreement or to affect the meaning or tinterpretation of this Agreement in any way. SEUI_I N 15 - SEVERABILITY Should any provision of this Agreement be held unenforceable or invalid under the applicable state or federal law or under the applicable laws or any i other jurisdiction, then the parties hereto agree that such provison shall be deemed modified for purposes of necessarncetoof render Agreement i t 1 a ful in and enforceable, or i f e suchena necessary modification is not possible without materially altering the intention of the parties hereto, then such provision shall be severed herefrom for purposes of performance of this Agreement in such jurisdiction . The validity of the remaining provisions of this Agreement shall not be affected by any such modification or severance. SECTION 16 - ENTIRE AGREEMENT• INCORPORATION BY REFERENCE This Agreement sets forth the entire agreement and understanding of the parties with respect to the subject matter hereof, and supersedes all prior agreements , arrangements and understandings related to the subject matter hereof. No representation, promise, inducement or statement of intention has been made by any party hereto which is not embodied in this Agreement, and no party hereto shall be bound by or liable for any alleged representation, promise, inducement or statement of intention not so set forth . The Plan Document and the various forms written notifications referred to in this Agreement are hereby incorporated by reference in this Agreement. SECTION 17 - BINDING EFFECT: ASSIGNMENT All the terms , provisions , covenants and conditions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors . This Agreement and the rights and obligations of the parties hereto may not be assigned or delegated by either party except as provided herein, except that HealthNet may assign its rights and obligations pursuant to this Agreement to a majority owned subsidiary of HealthNet or to any entity which owns a majority of HealthNet after Prior written notice of the assignment has been given to the Employer. SECTION 18 - AMENDMENT This Agreement may be amended, modified, superseded or cancelled , and any of the terms , provisions, covenants or conditions hereof may be waived, only by a written instrument executed by all parties hereto. 1 "7 _ SECTION 19 - WAIVER No waiver by any party of any condition, or of the breach of any term, provision or covenant contained in this Agreement, in any one or more instances , shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or waiver of any other . condition or of the breach of any other term, provision or covenant. SECTION 20 - COUNTERPARTS This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original , but all of which together shall constitute one and the same instrument. This Agreement shall be binding when one or more counterparts hereof, individually or taken together, shall bear the signature of the parties reflected hereon as signatories . THE PARTIES HERETO acknowledge that each has read the Agreement, understands it, and agrees to be bound by its terms . The parties further agree that this Agreement and any Exhibits constitute the complete and exclusive statement of the Agreement between d parties, except as otherwise specifically set forth herein, an supersedes all proposals oral or written, understandings, representations, warranties, conditions, covenants, and all other communicathereud between the parties relating to the matters to be performed Executed in multiple counterparts on the day and year indicated: MEMORIAL HEALTH NETWORK. INC. . "CONTRACT ADMINISTRATOR" BY. BRIGID PACE NAME VICE PRESIDENT TITLE SIGNATURE DATE 9494 Southwest Freeway, Box 500. Houston . TX 77074 ADDRESS THE STATE OF TEXAS COUNTY OF HARRIS BEFORE ME, the undersigned authority, on this day Personally appeared Brigid Pace, Vice President of MEMORIAL HEALTHNET, known to me to be the person whose name is subscribed to the foregoing instrument, and - acknowledged to me that he executed i the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act land deed of said corporation . GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of 1993 . Notary Public My commission expires : - 19 - "EMPLOYER" BY: NAME TITLE SIGNATURE DATE ADDRESS THE STATE OF TEXAS COUNTY OF BEFORE ME, the undersigned authority, on this day personally appeared • of known to me to be the person whose name is subscribed to t e foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of 1992. Notary Public My commission expires: I WCON1/5/1