GENTIVA HEALTH SERVICES INC - 10-K - 20040301 - PART_I
PART I
ITEM 1. BUSINESS
SPECIAL CAUTION REGARDING FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS CONTAINED IN THIS ANNUAL REPORT ON FORM 10-K,
INCLUDING, WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS "BELIEVES,"
"ANTICIPATES," "INTENDS," "EXPECTS," "ASSUMES," "TRENDS" AND SIMILAR
EXPRESSIONS, CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS ARE
BASED UPON THE COMPANY'S CURRENT PLANS, EXPECTATIONS AND PROJECTIONS ABOUT
FUTURE EVENTS. HOWEVER, SUCH STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE
RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, THE FOLLOWING:
o GENERAL ECONOMIC AND BUSINESS CONDITIONS;
o DEMOGRAPHIC CHANGES;
o CHANGES IN, OR FAILURE TO COMPLY WITH, EXISTING GOVERNMENTAL
REGULATIONS;
o LEGISLATIVE PROPOSALS FOR HEALTH CARE REFORM;
o CHANGES IN MEDICARE AND MEDICAID REIMBURSEMENT LEVELS;
o EFFECTS OF COMPETITION IN THE MARKETS THE COMPANY OPERATES IN;
o LIABILITY AND OTHER CLAIMS ASSERTED AGAINST THE COMPANY;
o ABILITY TO ATTRACT AND RETAIN QUALIFIED PERSONNEL;
o AVAILABILITY AND TERMS OF CAPITAL;
o LOSS OF SIGNIFICANT CONTRACTS OR REDUCTION IN REVENUE ASSOCIATED
WITH MAJOR PAYOR SOURCES;
o ABILITY OF CUSTOMERS TO PAY FOR SERVICES;
o A MATERIAL SHIFT IN UTILIZATION WITHIN CAPITATED AGREEMENTS; AND
o CHANGES IN ESTIMATES AND JUDGMENTS ASSOCIATED WITH CRITICAL
ACCOUNTING POLICIES.
FOR A DETAILED DISCUSSION OF THESE AND OTHER FACTORS THAT COULD CAUSE
THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE RESULTS CONTEMPLATED
BY THE FORWARD-LOOKING STATEMENTS, PLEASE REFER TO THE "RISK FACTORS" SECTION IN
THIS ITEM 1, TO "ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" AND ELSEWHERE IN THIS REPORT. THE READER
SHOULD NOT PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY
AS OF THE DATE OF THIS REPORT. EXCEPT AS REQUIRED UNDER THE FEDERAL SECURITIES
LAWS AND THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION
("SEC"), THE COMPANY DOES NOT HAVE ANY INTENTION OR OBLIGATION TO PUBLICLY
RELEASE ANY REVISIONS TO FORWARD-LOOKING STATEMENTS TO REFLECT UNFORESEEN OR
OTHER EVENTS AFTER THE DATE OF THIS REPORT. THE COMPANY HAS PROVIDED A DETAILED
DISCUSSION OF RISK FACTORS WITHIN THIS ANNUAL REPORT ON FORM 10-K AND VARIOUS
FILINGS WITH THE SEC. THE READER IS ENCOURAGED TO REVIEW THESE RISK FACTORS AND
FILINGS.
INTRODUCTION
Gentiva Health Services, Inc. ("Gentiva" or the "Company") provides
home health services throughout most of the United States. Gentiva was
incorporated in the state of Delaware on August 6, 1999 and became an
independent publicly owned company on March 15, 2000, when the common stock of
the Company was issued to the stockholders of Olsten Corporation, a Delaware
corporation ("Olsten"), the former parent corporation of the Company (the
"Split-Off"). Prior to the Split-Off, all of the assets and liabilities of
Olsten's health services business (formerly known as Olsten Health Services)
were transferred to the Company pursuant to a separation agreement and other
agreements among Gentiva, Olsten and Adecco SA ("Adecco").
On June 13, 2002, the Company sold substantially all of the assets of
its specialty pharmaceutical services ("SPS") business to Accredo Health,
Incorporated ("Accredo") and received payment of cash in the amount of $207.5
million (before a $0.9 million reduction resulting from a closing net book value
adjustment) and 5,060,976 shares of Accredo common stock (valued at $262.6
million, based on the closing price of Accredo common stock on the Nasdaq
National Market on June 13, 2002). The cash consideration (less a holdback of
$3.5 million for certain income taxes the Company expected to incur) and the
Accredo common stock were then distributed as a special dividend to the
Company's shareholders.
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Information included in this annual report on Form 10-K refers to the
Company's continuing home health services business, unless the context indicates
otherwise.
HOME HEALTH SERVICES
The Company's home health services business is conducted through more
than 350 direct service delivery units and delivers a wide range of services
principally through its Gentiva(R) Health Services and CareCentrix(R) brands.
The Company operates licensed and Medicare-certified nursing agencies
located in 35 states, substantially all of which are currently accredited by the
Joint Commission on Accreditation of Healthcare Organizations (JCAHO). These
agencies provide various combinations of skilled nursing and therapy services,
paraprofessional nursing services and homemaker services to pediatric, adult and
elder patients. Reimbursement sources include government programs, such as
Medicare and Medicaid, and private sources, such as health insurance plans,
managed care organizations, long term care insurance plans and personal funds.
The Company's nursing operations are organized in five geographic regions, each
staffed with clinical, operational and sales teams. Regions are further
separated into operating areas. Each operating area includes branch locations
through which nursing agencies operate. Each agency is led by a director and is
staffed with clinical and administrative support staff as well as caregivers who
deliver direct patient care. The caregivers are employed on either a full-time
basis or are paid on a per visit, per shift, per diem or per hour basis.
The Company's CareCentrix operations provide an array of
administrative services and coordinate the delivery of home nursing services,
acute and chronic infusion therapies, durable medical equipment, and respiratory
products and services for managed care organizations and health plans. These
administrative services are coordinated within four regional coordination
centers and are delivered through the Company's nursing locations as well as
through an extensive nationwide network of third-party provider locations
credentialed by the Company (nearly 1,900 at December 28, 2003). CareCentrix
accepts case referrals from a wide variety of sources, verifies eligibility and
benefits and transfers case requirements to the credentialed providers for
services to the patient. CareCentrix provides services to its customers,
including the fulfillment of case requirements, care management, provider
credentialing, eligibility and benefits verification, data reporting and
analysis, and coordinated centralized billing for all authorized services
provided to the customer's enrollees. Contracts within CareCentrix are
structured as fee-for-service, whereby a payor is billed on a per usage basis
according to a fee schedule for various services, or as at-risk capitation,
whereby the payor remits a monthly payment to the Company based on the number of
members enrolled in the health plans under the capitation agreement, subject to
certain limitations and coverage guidelines.
The Company's home health services business also delivers services to
its customers through other focused business brands that include Gentiva
Orthopedic Services, a program which provides individualized home orthopedic
rehabilitation services to patients recovering from joint replacement or other
major orthopedic surgery, and Rehab Without Walls(R), which provides home and
community-based therapies for patients with traumatic brain injury,
cerebrovascular accident injury and acquired brain injury, as well as a number
of other complex rehabilitation cases. Other specialty services, including
therapies for patients with balance issues who are prone to injury or immobility
as a result of falling, are in various stages of development.
The Company also provides consulting services to home health agencies
through its Gentiva Business Services unit. These services include billing and
collection activities, web-based caregiver training and credentialing, on-site
agency support and consulting, operational support and individualized strategies
for reduction of days sales outstanding.
PAYORS
Net revenues attributable to major payor sources of reimbursement are
as follows:
FISCAL YEAR
2003 2002 2001
-------- -------- --------
Medicare 22% 21% 21%
Medicaid and Other Government 20 22 23
Commercial Insurance and Other 58 57 56
---- ---- ----
100% 100% 100%
==== ==== ====
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The Company is party to a contract with CIGNA Health Corporation
("Cigna"), pursuant to which the Company provides or contracts with third party
providers to provide home nursing services, acute and chronic infusion
therapies, durable medical equipment, and respiratory products and services to
patients insured by Cigna. For fiscal years 2003, 2002 and 2001, Cigna accounted
for approximately 36 percent, 38 percent and 36 percent, respectively, of the
Company's net revenues.
The Company has extended its relationship with Cigna by entering into
a new national home health care contract effective January 1, 2004, with the new
contract expiring on December 31, 2006. No other commercial payor accounts for
10 percent or more of the Company's net revenues. Net revenues from commercial
payors are primarily generated under fee for service contracts which are
traditionally one year in term and renewable automatically on an annual basis,
unless terminated by either party.
TRADEMARKS
The Company has various trademarks registered with the U.S. Patent and
Trademark Office, including CARECENTRIX(R), GENTIVA(R), GENTIVA and Butterfly
Design(R) , LIFESMART(R) and REHAB WITHOUT WALLS(R), or otherwise in use by the
Company, including CASEMATCH(SM) and SAFE STRIDES(SM). A federally registered
trademark in the United States is effective for ten years subject only to a
required filing and the continued use of the mark by the Company, with the right
of perpetual renewal. A federally registered trademark provides the presumption
of ownership of the mark by the Company in connection with its goods or services
and constitutes constructive notice throughout the United States of such
ownership. Management believes that the Company's name and trademarks are
important to its operations and intends to continue to renew its trademark
registrations.
BUSINESS ENVIRONMENT
Factors that the Company believes have contributed and will contribute
to the development of home health services primarily include recognition that
home health services can be a cost-effective alternative to more expensive
institutional care; aging demographics; increasing consumer awareness and
interest in home health services; the psychological benefits of recuperating
from an illness or accident or receiving care for a chronic condition in one's
own home; and advanced technology that allows more health care procedures to be
provided at home.
The Company is actively pursuing relationships with managed care
organizations to secure additional managed care contracts. The Company believes
that its nationwide network of providers, financial resources, and the quality,
range and cost-effectiveness of its services are important factors as it seeks
opportunities in its managed care relationships in a consolidating home health
services industry. In addition, the Company believes that it has the local
relationships, the knowledge of the regional markets in which it operates, and
the cost-effective, comprehensive services and products required to compete
effectively for managed care contracts and other referrals. The Company offers
the direct and managed provision of care as a single source, which it believes
optimizes utilization.
MARKETING AND SALES
In general, the Company obtains patients and clients through personal
and corporate sales presentations, telephone marketing calls, direct mail
solicitation, referrals from other clients and advertising in a variety of local
and national media, including the Yellow Pages, newspapers, magazines, trade
publications and radio. The Company also maintains an Internet website
(www.gentiva.com) that describes the Company, its services and products.
Marketing efforts also involve personal contact with physicians, hospital
discharge planners, and case managers for managed health care programs, such as
those involving health maintenance organizations and preferred provider
organizations, insurance company representatives and employers with self-funded
employee health benefit programs.
COMPETITIVE POSITION
The home health services industry in which the Company operates is
highly competitive and fragmented. Home health care providers range from
facility-based (hospital, nursing home, rehabilitation facility, government
agency) agencies to independent companies to visiting nurse associations and
nurse registries. They can be not-for-profit organizations or for-profit
organizations. In addition, there are relatively few barriers to
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entry in some of the home health services markets in which the Company operates.
The Company's primary competitors for its home health nursing business are
hospital-based home health agencies, local home health agencies and visiting
nurse associations. Based on information contained in the Center for Medicare
and Medicaid Services website, a government website containing information on
the home health care market in 2002, the Company believes its home health
services business holds approximately a 2 percent to 3 percent market share. The
Company competes with other home health care providers on the basis of
availability of personnel, quality and expertise of services and the value and
price of services. The Company believes that it has a favorable competitive
position, attributable mainly to its nationwide network of providers and the
consistently high quality and targeted services it has provided over the years
to its patients, as well as to its screening and evaluation procedures and
training programs for caregivers.
The Company expects that industry forces will impact it and its
competitors. The Company's competitors will likely strive to improve their
service offerings and price competitiveness. The Company also expects its
competitors to develop new strategic relationships with providers, referral
sources and payors, which could result in increased competition. The
introduction of new and enhanced services, acquisitions and industry
consolidation and the development of strategic relationships by the Company's
competitors could cause a decline in sales or loss of market acceptance of the
Company's services or price competition, or make the Company's services less
attractive.
SOURCE AND AVAILABILITY OF PERSONNEL
To maximize the cost effectiveness and productivity of caregivers, the
Company utilizes customized processes and procedures that have been developed
and refined over the years. Personalized matching to recruit and select
applicants who fit the patients' individual needs is achieved through initial
applicant profiles, personal interviews, skill evaluations and background and
reference checks. In 2003, the Company launched its proprietary CaseMatch(SM)
software scheduling program that gives local Company offices the ability to
identify instantly those caregivers who can be assigned to patient cases.
Caregivers are recruited through a variety of sources, including
advertising in local and national media, job fairs, solicitations on websites,
direct mail and telephone solicitations, as well as referrals obtained directly
from clients and other caregivers. Caregivers are generally paid on a per visit,
per shift, per hour or per diem basis, or are employed on a full-time salaried
basis. The Company, along with its competitors, is currently experiencing a
shortage of licensed professionals. A continued shortage of professionals could
have a material adverse effect on the Company's business.
NUMBER OF PERSONS EMPLOYED
At December 28, 2003, the Company had approximately 3,500 full-time
employees, including approximately 700 salaried caregivers. The Company also
employs caregivers on a temporary basis, as needed, to provide home health
services. In fiscal 2003, the average number of non-salaried caregivers employed
on a weekly basis in its home health services business was approximately 11,600.
The Company believes that its relationships with its employees are generally
good.
OTHER MATTERS
Subsequent to the sale of its specialty pharmaceutical services
business in June 2002, the Company has operated its remaining home health
services business as a single reporting unit. Financial information relating to
the home health services business is found in the consolidated financial
statements of the Company and its subsidiaries which are included in this annual
report.
The Company has historically experienced a seasonal decline in the
demand for its home health services during the third fiscal quarter.
For a discussion of certain regulations to which the Company's
business is subject, see "Regulations" under Item 3, "Legal Proceedings," below.
AVAILABLE INFORMATION
The Company's Internet address is www.gentiva.com. The Company makes
available free of charge on or through its Internet website its annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports, filed or furnished pursuant to Section 13(a) or
15(d) of the
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Securities Exchange Act of 1934, as soon as reasonably practicable after such
material has been filed with, or furnished to, the SEC. The Company also makes
available on or through its website its press releases, an investor
presentation, Section 16 reports and certain corporate governance documents.
RISK FACTORS
THIS ANNUAL REPORT ON FORM 10-K CONTAINS FORWARD-LOOKING STATEMENTS
WHICH INVOLVE A NUMBER OF RISKS, UNCERTAINTIES AND ASSUMPTIONS. ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY INCLUDE, WITHOUT
LIMITATION, THE RISK FACTORS DISCUSSED BELOW AND ELSEWHERE IN THIS ANNUAL
REPORT.
RISKS RELATED TO THE COMPANY'S BUSINESS AND INDUSTRY
THE COMPANY'S GROWTH STRATEGY MAY NOT BE SUCCESSFUL.
The future growth of the Company's business and its future financial
performance will depend on, among other things, its ability to increase its
revenue base through a combination of internal growth and strategic ventures,
including acquisitions. The Company's home health services business experienced
no growth during the fiscal periods from 1998 through 2001. During fiscal 2002
and 2003, revenue from the Company's home health services business grew 5.3
percent and 5.9 percent, respectively; however, future revenue growth cannot be
assured as it is subject to the effects of competition, various risk factors
including the uncertainty of Medicare, Medicaid, and private health insurance
reimbursement, the ability to generate new and retain existing contracts with
major payor sources and the ability to attract and retain qualified personnel.
COMPETITION AMONG HOME HEALTH CARE COMPANIES IS INTENSE.
The home health services industry is highly competitive. The Company
competes with a variety of other companies in providing home health services,
some of which may have greater financial and other resources and may be more
established in their respective communities. Competing companies may offer newer
or different services from those offered by the Company and may thereby attract
customers who are presently receiving the Company's home health services.
THE COST OF HEALTH CARE IS FUNDED SUBSTANTIALLY BY GOVERNMENT AND
PRIVATE INSURANCE PROGRAMS. IF SUCH FUNDING IS REDUCED OR BECOMES
LIMITED OR UNAVAILABLE TO THE COMPANY'S CUSTOMERS, THE COMPANY'S
BUSINESS MAY BE ADVERSELY IMPACTED.
Third-party payors include Medicare, Medicaid and private health
insurance providers. Third-party payors are increasingly challenging prices
charged for health care services. The Company cannot be assured that its
services will be considered cost-effective by third-party payors, that
reimbursement will be available, or that payors' reimbursement policies will not
have a material adverse effect on the Company's ability to sell its services on
a profitable basis, if at all. The Company cannot control reimbursement rates or
policies for a significant portion of its business.
POSSIBLE CHANGES IN THE CASE MIX OF PATIENTS, AS WELL AS PAYOR MIX AND
PAYMENT METHODOLOGIES, MAY HAVE A MATERIAL ADVERSE EFFECT ON THE
COMPANY'S PROFITABILITY.
The sources and amounts of the Company's patient revenues will be
determined by a number of factors, including the mix of patients and the rates
of reimbursement among payors. Changes in the case mix of the patients as well
as payor mix among private pay, Medicare and Medicaid may significantly affect
the Company's profitability. In particular, any significant increase in the
Company's Medicaid population or decrease in Medicaid payments could have a
material adverse effect on its financial position, results of operations and
cash flow, especially if states operating these programs continue to limit, or
more aggressively seek limits on reimbursement rates or service levels.
THE LOSS OF SIGNIFICANT CONTRACTS, AS WELL AS SIGNIFICANT REDUCTIONS
IN MEMBERS COVERED UNDER SUCH CONTRACTS, COULD HAVE A MATERIAL ADVERSE
EFFECT ON THE COMPANY'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The Company has entered into service agreements with a number of
managed care organizations to provide, or contracted with third party providers
to provide, home nursing services, acute and chronic infusion therapies, durable
medical equipment and respiratory products and services to patients insured by
those organizations. One such contract with Cigna accounted for 36 percent of
the Company's total net revenues for the year
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ended December 28, 2003. The Company and Cigna entered into a new home health
care contract effective January 1, 2004 and expiring on December 31, 2006. Under
the termination provisions of the contract, Cigna has the right to terminate the
agreement on December 31, 2005, if it provides 90 days advance written notice to
the Company. If the Cigna contract or any other similar significant contract
were to terminate or if there was a significant decrease in enrolled members
covered under the Company's contract with Cigna or any other organization, it
could materially adversely affect the Company's financial condition and results
of operations.
FURTHER CONSOLIDATION OF MANAGED CARE ORGANIZATIONS AND OTHER
THIRD-PARTY PAYORS MAY ADVERSELY AFFECT THE COMPANY'S PROFITS.
Managed care organizations and other third-party payors have continued
to consolidate in order to enhance their ability to influence the delivery of
health care services. Consequently, the health care needs of a large percentage
of the United States population are increasingly served by a smaller number of
managed care organizations. These organizations generally enter into service
agreements with a limited number of providers for needed services. To the extent
that such organizations terminate the Company as a preferred provider and/or
engage its competitors as a preferred or exclusive provider, the Company's
business could be adversely affected. In addition, private payors, including
managed care payors, could seek to negotiate additional discounted fee
structures or the assumption by health care providers of all or a portion of the
financial risk through prepaid capitation arrangements, thereby potentially
reducing the Company's profitability.
THE COMPANY AND THE HEALTH CARE INDUSTRY CONTINUE TO EXPERIENCE
SHORTAGES IN QUALIFIED HOME HEALTH SERVICE CAREGIVERS.
The Company competes with other health care providers for its
employees. As the demand for home health services continues to exceed the supply
of available and qualified staff, the Company and its competitors have been
forced to offer more attractive wage and benefit packages to these
professionals. Furthermore, the competitive arena for this shrinking labor
market has created turnover as many seek to take advantage of the supply of
available positions, each offering new and more attractive wage and benefit
packages. In addition to the wage pressures inherent in this environment, the
cost of training new employees amid the turnover rates has caused added pressure
on the Company's operating margins.
AN ECONOMIC DOWNTURN, CONTINUED DEFICIT SPENDING BY THE FEDERAL
GOVERNMENT AND STATE BUDGET PRESSURES MAY RESULT IN A REDUCTION IN
REIMBURSEMENT AND COVERED SERVICES.
An economic downturn can have a detrimental effect on state revenues.
Historically, these budget pressures have translated into reductions in state
spending. Given that Medicaid outlays are a significant component of state
budgets, the Company can expect continuing cost containment pressures on
Medicaid outlays for the Company's services in the states in which it operates.
In addition, an economic downturn may also impact the number of enrollees in
managed care programs as well as the profitability of managed care companies,
which could result in reduced reimbursement rates.
Deficit spending by the government as the result of adverse
developments in the economy could lead to increased pressure to reduce
government expenditures for other purposes, including governmentally funded
programs in which the Company participates, such as Medicare and Medicaid.
THE AGREEMENT GOVERNING THE COMPANY'S EXISTING REVOLVING CREDIT
FACILITY CONTAINS, AND FUTURE DEBT AGREEMENTS MAY CONTAIN, VARIOUS
COVENANTS THAT LIMIT THE COMPANY'S DISCRETION IN THE OPERATION OF ITS
BUSINESS.
The agreement and instruments governing the Company's existing
revolving credit facility contain, and the agreements and instruments governing
its future debt agreements may contain, various restrictive covenants that,
among other things, require it to comply with or maintain certain financial
tests and ratios and restrict the Company's ability to:
o incur more debt;
o pay dividends, redeem stock or make other distributions;
o make certain investments;
o create liens;
o enter into transactions with affiliates;
o make acquisitions;
o merge or consolidate; and
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o transfer or sell assets.
In addition, events beyond the Company's control could affect its
ability to comply with and maintain the financial tests and ratios. Any failure
by the Company to comply with or maintain all applicable financial tests and
ratios and to comply with all applicable covenants could result in an event of
default with respect to its existing revolving credit facility or future debt
agreements. This could lead to the acceleration of the maturity of the facility
and the termination of the commitments to make further extension of credit. The
Company has no outstanding debt as of December 28, 2003, but could incur debt in
the future. If the Company were unable to repay debt to its senior lenders,
these lenders could proceed against the collateral securing that debt. Even if
the Company is able to comply with all applicable covenants, the restrictions on
its ability to operate its business at its sole discretion could harm its
business by, among other things, limiting its ability to take advantage of
financing, mergers, acquisitions and other corporate opportunities.
THE COMPANY HAS RISKS RELATED TO OBLIGATIONS UNDER ITS INSURANCE
PROGRAMS.
The Company is obligated for certain costs under various insurance
programs, including employee health and welfare, workers compensation and
professional liability. The Company may be subject to workers compensation
claims and lawsuits alleging negligence or other similar legal claims. The
Company maintains various insurance programs to cover these risks but is
substantially self-insured for most of these claims. The Company also may be
subject to exposure relating to employment law and other related matters for
which the Company does not maintain insurance coverage. The Company believes
that its present insurance coverage and reserves are sufficient to cover
currently estimated exposures; however, there can be no assurance that the
Company will not incur liabilities in excess of recorded reserves or in excess
of its insurance limits.
THE COMPANY HAS RISKS RESULTING FROM THE SALE OF ITS SPS BUSINESS.
The Company has agreed to indemnify Accredo for losses suffered or
incurred by Accredo and its affiliates arising from the retained liabilities of
the Company, breaches of the Company's representations, warranties, covenants or
agreements under the asset purchase agreement between the Company and Accredo
dated January 2, 2002, or agreements delivered pursuant thereto, failure to
deliver good, valid and marketable title to the assets of the SPS business, and
specified tax liabilities of the Company, including those related to the
Company's Split-Off from Olsten. The liabilities retained by the Company include
litigation and causes of action arising prior to the closing of the sale of the
SPS business. These indemnification obligations are discussed in more detail
below under Item 3 "Legal Proceedings - Indemnifications." The Company is unable
to predict the amount, if any, that may be required for it to satisfy its
indemnification obligations under the asset purchase agreement should any claims
arise. Should any significant payment be required, the Company may not have
sufficient funds available to satisfy its potential indemnification obligations
or may not be able to obtain the funds on terms satisfactory to the Company, if
at all.
In addition, with the sale of the SPS business, the Company is no
longer able to deliver specialty pharmaceutical services, including the
distribution of chronic drugs and therapies and the provision of acute infusion
services, directly to payors and managed care providers, but will need to depend
fully on subcontracts with third parties, including Accredo. As a result, the
Company may be more susceptible to fluctuations in volume and in the prices it
pays to third parties for those services. These fluctuations in pricing may add
to the cost of providing the services and, as a result, adversely impact the
Company's profitability.
RISKS RELATED TO HEALTH CARE REGULATION
LEGISLATIVE AND REGULATORY ACTIONS RESULTING IN CHANGES IN
REIMBURSEMENT RATES OR METHODS OF PAYMENT FROM MEDICARE AND MEDICAID,
OR IMPLEMENTATION OF OTHER MEASURES TO REDUCE REIMBURSEMENT FOR THE
COMPANY'S SERVICES, MAY HAVE A MATERIAL ADVERSE EFFECT ON ITS REVENUES
AND OPERATING MARGINS.
In fiscal 2003, 42 percent of the Company's net revenues were
generated from Medicare, and Medicaid and Other Government programs. The health
care industry is experiencing a strong trend toward cost containment, as the
government seeks to impose lower reimbursement and utilization rates and
negotiate reduced payment schedules with providers. These cost containment
measures generally have resulted in reduced rates of reimbursement for services
that the Company provides.
In addition, the timing of payments made under these programs is
subject to regulatory action and governmental budgetary constraints. For certain
Medicaid programs, the time period between submission of claims and payment has
increased. Further, within the statutory framework of the Medicare and Medicaid
programs,
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there are a substantial number of areas subject to administrative rulings and
interpretations that may further affect payments made under those programs.
Additionally, the federal and state governments may in the future reduce the
funds available under those programs or require more stringent utilization and
quality reviews of providers. Moreover, there can be no assurances that
adjustments from Medicare or Medicaid audits will not have a material adverse
effect on the Company.
The Benefits Improvement and Protection Act of 2000 mandates a phase
out of intergovernmental transfer transactions by states whereby states inflate
the payments to certain public facilities to increase federal matching funds.
This action may reduce federal support for a number of state Medicaid plans. The
reduced federal payments may adversely affect aggregate available funds, thereby
requiring states to reduce payments to all providers. The Company operates in
several of the states that will experience a contraction of federal matching
funds. With the repeal of the federal payment standards, there can be no
assurances that budget constraints or other factors will not cause states to
reduce Medicaid reimbursement or that payments will be made on a timely basis,
thereby adversely affecting payments made under these Medicaid programs.
THE COMPANY CONDUCTS BUSINESS IN A HEAVILY REGULATED INDUSTRY, AND
CHANGES IN REGULATIONS AND VIOLATIONS OF REGULATIONS MAY RESULT IN
INCREASED COSTS OR SANCTIONS.
The Company's business is subject to extensive federal, state and, in
some cases, local regulation. Compliance with these regulatory requirements, as
interpreted and amended from time to time, can increase operating costs or
reduce revenue and thereby adversely affect the financial viability of the
Company's business. Because these laws are amended from time to time and are
subject to interpretation, the Company cannot predict when and to what extent
liability may arise. Failure to comply with current or future regulatory
requirements could also result in the imposition of various remedies, including
fines, the revocation of licenses or decertification. Unanticipated increases in
operating costs or reductions in revenue could adversely affect the Company's
liquidity.
THE COMPANY IS SUBJECT TO PERIODIC AUDITS AND REQUESTS FOR INFORMATION
BY THE MEDICARE AND MEDICAID PROGRAMS OR GOVERNMENT AGENCIES, WHICH
HAVE VARIOUS RIGHTS AND REMEDIES AGAINST THE COMPANY IF THEY ASSERT
THAT THE COMPANY HAS OVERCHARGED THE PROGRAMS OR FAILED TO COMPLY WITH
PROGRAM REQUIREMENTS.
The operation of the Company's home health services business is
subject to federal and state laws prohibiting fraud by health care providers,
including laws containing criminal provisions, which prohibit filing false
claims or making false statements in order to receive payment or obtain
certification under Medicare and Medicaid programs, or failing to refund
overpayments or improper payments. Violation of these criminal provisions is a
felony punishable by imprisonment and/or fines. The Company may also be subject
to fines and treble damage claims if it violates the civil provisions that
prohibit knowingly filing a false claim or knowingly using false statements to
obtain payment. State and federal governments are devoting increased attention
and resources to anti-fraud initiatives against health care providers. The
Health Insurance Portability and Accountability Act of 1996 ("HIPAA") and the
Balanced Budget Act of 1997 ("BBA") expanded the penalties for health care
fraud, including broader provisions for the exclusion of providers from the
Medicare and Medicaid programs.
The Company has established policies and procedures that it believes
are sufficient to ensure that it will operate in substantial compliance with
these anti-fraud and abuse requirements, including the Company's Corporate
Integrity Agreement. On April 17, 2003, the Company received a subpoena from the
Department of Health and Human Services, Office of the Inspector General, Office
of Investigations ("OIG"). The subpoena seeks information regarding the
Company's implementation of settlements and corporate integrity agreements
entered into with the government, as well as the Company's treatment on cost
reports of employees engaged in sales and marketing efforts. With respect to the
cost report issues, the government has preliminarily agreed to narrow the scope
of production to the period from January 1, 1998 through September 30, 2000. On
February 17, 2004, the Company received a subpoena from the U.S. Department of
Justice ("DOJ") seeking additional information related to the matters covered by
the OIG subpoena. The Company has provided documents and other information
requested by the OIG pursuant to its subpoena and similarly intends to cooperate
fully with the DOJ subpoena as well as any future OIG or DOJ information
requests. To the Company's knowledge, the government has not filed a complaint
against the Company. While the Company believes that its business practices are
consistent with Medicare and Medicaid programs criteria, those criteria are
often vague and subject to change and interpretation. The imposition of fines,
criminal penalties or program exclusions could have a material adverse effect on
the Company's financial condition, results of operations and cash flows.
- 8 -
THE COMPANY IS ALSO SUBJECT TO FEDERAL AND STATE LAWS THAT GOVERN
FINANCIAL AND OTHER ARRANGEMENTS BETWEEN HEALTH CARE PROVIDERS.
These laws often prohibit certain direct and indirect payments or
fee-splitting arrangements between health care providers that are designed to
encourage the referral of patients to a particular provider for medical products
and services. Furthermore, some states restrict certain business relationships
between physicians and other providers of health care services. Many states
prohibit business corporations from providing, or holding themselves out as a
provider of, medical care. Possible sanctions for violation of any of these
restrictions or prohibitions include loss of licensure or eligibility to
participate in reimbursement programs and civil and criminal penalties. These
laws vary from state to state, are often vague and have seldom been interpreted
by the courts or regulatory agencies.
THE COMPANY FACES ADDITIONAL FEDERAL REQUIREMENTS THAT MANDATE MAJOR
CHANGES IN THE TRANSMISSION AND RETENTION OF HEALTH INFORMATION.
HIPAA was enacted to ensure that employees can retain and at times
transfer their health insurance when they change jobs and to simplify health
care administrative processes. The enactment of HIPAA expanded protection of the
privacy and security of personal medical data and required the adoption of
standards for the exchange of electronic health information. Among the standards
that the Secretary of Health and Human Services has adopted pursuant to HIPAA
are standards for electronic transactions and code sets, unique identifiers for
providers, employers, health plans and individuals, security and electronic
signatures, privacy and enforcement. Although HIPAA was intended to ultimately
reduce administrative expenses and burdens faced within the health care
industry, the Company believes that implementation of this law will result in
additional costs. Failure to comply with HIPAA could result in fines and
penalties that could have a material adverse effect on the Company.
ITEM 2. PROPERTIES
The Company's headquarters is leased and is located at 3 Huntington
Quadrangle 2S, Melville, New York 11747-8943. Other major regional
administrative offices leased by the Company are located in Overland Park,
Kansas; Phoenix, Arizona; Hartford, Connecticut; Tampa, Florida; Endicott, New
York; and Houston, Texas. The Company also maintains leases for other offices
and locations on various terms expiring on various dates.
ITEM 3. LEGAL PROCEEDINGS
LITIGATION
In addition to the matters referenced in this Item 3, the Company is
party to certain legal actions arising in the ordinary course of business
including legal actions arising out of services rendered by its various
operations, personal injury and employment disputes.
COOPER V. GENTIVA CARECENTRIX, INC. t/a/d/b/a/ GENTIVA HEALTH
SERVICES, U.S. District Court (W.D. Penn), Civil Action No. 01-0508. On January
2, 2002, this amended complaint was served on the Company alleging that the
defendant submitted false claims to the government for payment in violation of
the Federal False Claims Act, 31 U.S.C. 3729 et seq., and that the defendant had
wrongfully terminated the plaintiff. The plaintiff claimed that infusion pumps
delivered to patients did not supply the full amount of medication, allegedly
resulting in substandard care. Based on a review of the court's docket sheet,
the plaintiff filed a complaint under seal in March 2001. In October 2001, the
United States government filed a notice with the court declining to intervene in
this matter, and on October 24, 2001, the court ordered that the seal be lifted.
The Company filed its responsive pleading on February 25, 2002, and discovery
has now commenced. The Company has denied the allegations of wrongdoing in the
complaint and is defending itself vigorously in this matter. On May 19, 2003,
the Company filed a motion for summary judgment on the issue of liability. On
February 6, 2004, the court granted partial summary judgment for the Company,
dismissing two of the three claims alleged under the False Claims Act and
denying summary judgment for the Company on the wrongful termination claim. The
parties are completing discovery; therefore, the Company cannot determine a
range of damages, if any, at this time.
- 9 -
GOVERNMENT MATTERS
On April 17, 2003, the Company received a subpoena from the Department
of Health and Human Services, Office of the Inspector General, Office of
Investigations ("OIG"). The subpoena seeks information regarding the Company's
implementation of settlements and corporate integrity agreements entered into
with the government, as well as the Company's treatment on cost reports of
employees engaged in sales and marketing efforts. With respect to the cost
report issues, the government has preliminarily agreed to narrow the scope of
production to the period from January 1, 1998 through September 30, 2000. On
February 17, 2004, the Company received a subpoena from the U.S. Department of
Justice ("DOJ") seeking additional information related to the matters covered by
the OIG subpoena. The Company has provided documents and other information
requested by the OIG pursuant to its subpoena and similarly intends to cooperate
fully with the DOJ subpoena as well as any future OIG or DOJ information
requests. To the Company's knowledge, the government has not filed a complaint
against the Company.
INDEMNIFICATIONS
In connection with the Split-Off, the Company agreed to assume, to the
extent permitted by law, and to indemnify Olsten for, the liabilities, if any,
arising out of the home health services business.
In addition, the Company and Accredo have agreed to indemnify each
other for breaches of representations and warranties of such party or the
non-fulfillment of any covenant or agreement of such party in connection with
the sale of the SPS business. The Company has also agreed to indemnify Accredo
for the retained liabilities and for tax liabilities, and Accredo has agreed to
indemnify the Company for assumed liabilities and the operation of the SPS
business after the closing of the acquisition. The representations and
warranties generally survive for the period of two years after the closing of
the acquisition, which occurred on June 13, 2002, except that:
o representations and warranties related to health care
compliance survive for three years after the closing of the
acquisition;
o representations and warranties related to title of the
assets and sufficiency of assets and employees survive for
the applicable statute of limitations period; and
o representations and warranties related to tax matters
survive until thirty days after the expiration of the
applicable tax statute of limitations period, including any
extensions of the applicable period, subject to certain
exceptions.
Accredo and the Company generally may recover indemnification for a
breach of a representation or warranty only to the extent a party's claim
exceeds $1 million for any individual claim, or exceeds $5 million in the
aggregate, subject to certain conditions and only up to a maximum amount of $100
million.
These indemnification rights are the exclusive remedy from and after
the closing of the acquisition, except for the right to seek specific
performance of any of the agreements in the related asset purchase agreement, in
any case where a party is guilty of fraud in connection with the acquisition,
and with respect to tax liabilities and obligations.
On May 6, 2003, the Company received correspondence from Accredo
giving the Company notice of Accredo's indemnification rights for any breach
under the asset purchase agreement related to the adequacy of the accounts
receivable reserves in accordance with section 8.3 of the asset purchase
agreement; however, no breach of a representation or warranty was asserted
against the Company in the correspondence.
CORPORATE INTEGRITY AGREEMENT
In connection with a July 19, 1999 settlement with various government
agencies, Olsten executed a corporate integrity agreement with the Office of
Inspector General of the Department of Health and Human Services, which will
remain in effect until August 18, 2004. The corporate integrity agreement
applies to the Company's businesses that bill the federal government health
programs directly for services, such as its nursing brand (but excludes the SPS
business), and focuses on issues and training related to cost report
preparation, contracting, medical necessity and billing of claims. Under the
corporate integrity agreement, the Company is required, for example, to maintain
a corporate compliance officer to develop and implement compliance programs, to
retain an independent review organization to perform annual reviews and to
maintain a compliance program and reporting systems, as well as to provide
certain training to employees.
- 10 -
The Company's compliance program is required to be implemented for all
newly established or acquired business units if their type of business is
covered by the corporate integrity agreement. Reports under the integrity
agreement are to be filed annually with the Department of Health and Human
Services, Office of Inspector General. After the corporate integrity agreement
expires, the Company is to file a final annual report with the government. The
Company is in compliance with the corporate integrity agreement and has timely
filed all required reports. If the Company fails to comply with the terms of its
corporate integrity agreement, the Company will be subject to penalties.
REGULATIONS
The Company's business is subject to extensive federal and state
regulations which govern, among other things:
o Medicare, Medicaid, TRICARE (the Department of Defense's managed
health care program for military personnel and their families)
and other government-funded reimbursement programs;
o reporting requirements, certification and licensing standards for
certain home health agencies; and
o in some cases, certificate-of-need requirements.
The Company's compliance with these regulations may affect its
participation in Medicare, Medicaid, TRICARE and other federal health care
programs. The Company is also subject to a variety of federal and state
regulations which prohibit fraud and abuse in the delivery of health care
services. These regulations include, among other things:
o prohibitions against the offering or making of direct or indirect
payments to actual or potential referral sources for obtaining or
influencing patient referrals;
o rules against physicians making referrals under Medicare for
clinical services to a home health agency with which the
physician or his or her immediate family member has certain types
of financial relationships;
o laws against the filing of false claims; and
o laws against making payment or offering items of value to
patients to induce their self-referral to the provider.
As part of the extensive federal and state regulation of the home
health services business and under the Company's corporate integrity agreement,
the Company is subject to periodic audits, examinations and investigations
conducted by, or at the direction of, governmental investigatory and oversight
agencies. Periodic and random audits conducted or directed by these agencies
could result in a delay in receipt, or an adjustment to the amount of
reimbursements due or received under Medicare, Medicaid, TRICARE and other
federal health programs. Violation of the applicable federal and state health
care regulations can result in excluding a health care provider from
participating in the Medicare, Medicaid and/or TRICARE programs and can subject
the provider to substantial civil and/or criminal penalties.
On October 1, 2002, the reduction in home health payment limits
mandated under the Balanced Budget Act of 1997 became effective. The change in
payment limits reduced payments under the Medicare program to home health
agencies for open episodes of care on or after October 1, 2002 by approximately
7 percent. Simultaneous with this reduction, market basket rate increases of 2.1
percent adjusted for certain wage indices were also implemented, resulting in an
overall reduction in reimbursement rates of approximately 4.9 percent. In
addition, Medicare reimbursement related to home health services performed in
specifically defined rural areas of the country was further reduced as the ten
percent rural add-on provision for home health services expired as of April 1,
2003. On October 1, 2003, a market basket rate increase of 3.3 percent became
effective for open episodes of care as of or after that date. The market basket
rate will be reduced 0.8 percent for open episodes of care on or after April 1,
2004. Furthermore, the Medicare reimbursement related to home health services
performed in specifically defined rural areas of the country will increase by 5
percent for a one year period, effective April 1, 2004.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the
fourth quarter of fiscal 2003.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information regarding each of
the Company's executive officers as of February 26, 2004:
EXECUTIVE POSITION AND OFFICES
NAME OFFICER SINCE AGE WITH THE COMPANY
----------------------- ------------- --- ------------------------------------------
Ronald A. Malone 2000 49 Chief Executive Officer and Chairman of
the Board
Vernon A. Perry, Jr. 1999 52 President and Chief Operating Officer
Robert Creamer 2002 45 Senior Vice President, Nursing Operations,
and Chief Information Officer
Mary Morrisey Gabriel 2002 38 Senior Vice President, Sales
John R. Potapchuk 2001 51 Senior Vice President, Chief Financial
Officer, Treasurer and Secretary
Christopher L. Anderson 2001 32 Vice President, Audit Services and Quality
Assurance, and Chief Compliance Officer
Stephen B. Paige 2003 56 Vice President and General Counsel
The executive officers are elected annually by the board of directors.
RONALD A. MALONE
Mr. Malone has served as chief executive officer and chairman of the
board of the Company since June 2002. He served as executive vice president of
the Company from March 2000 to June 2002. Prior to joining the Company, he
served in various positions with Olsten, including executive vice president of
Olsten and president, Olsten Staffing Services, United States and Canada, from
January 1999 to March 2000. From 1994 to December 1998, he served successively
as Olsten's senior vice president, southeast division; senior vice president,
operations; and executive vice president, operations.
VERNON A. PERRY, JR.
Mr. Perry has served as president and chief operating officer of the
Company since June 2002. He served as senior vice president of the Company from
November 1999 to June 2002. From 1996 to 1999, he served as senior vice
president of CareCentrix for Olsten Health Services. He joined Olsten in 1994 as
vice president for business development.
ROBERT CREAMER
Mr. Creamer has served as senior vice president, nursing operations,
of the Company since September 2003 and as the Company's chief information
officer since June 2002. From June 2002 to August 2003, he served as senior vice
president, financial operations, of the Company. Prior thereto he served in
various corporate financial management positions with the Company and Olsten
Health Services, including vice president of finance-CareCentrix, vice president
of financial operations and vice president of finance - Specialty Pharmaceutical
Services. He first joined Olsten in 1991.
- 12 -
MARY MORRISEY GABRIEL
Ms. Morrisey Gabriel has served as senior vice president, sales, of
the Company since July 2002. From March 2000 to June 2002, Ms. Morrisey Gabriel
served as senior vice president of National Accounts/North American Sales of
Adecco, a staffing services company. From 1999 to March 2000, she served as
Olsten's senior vice president of national accounts.
JOHN R. POTAPCHUK
Mr. Potapchuk has served as senior vice president, chief financial
officer, treasurer and secretary of the Company since June 2002. He served as
vice president of finance and controller of the Company from March 2000 to June
2002. He joined Olsten in 1991 and served in various corporate financial
management positions with Olsten Health Services, including vice president and
operations controller and vice president of finance. Prior to that, Mr.
Potapchuk served in senior management positions for PricewaterhouseCoopers LLP
and Deloitte & Touche.
CHRISTOPHER L. ANDERSON
Mr. Anderson has served as the chief compliance officer and vice
president of audit services and quality assurance of the Company since March
2000. He served as chief compliance officer of Olsten from November 1998 to
March 2000.
STEPHEN B. PAIGE
Mr. Paige has served as vice president and general counsel of the
Company since July 2003. From 1997 to 2002, he served as senior vice president,
general counsel and secretary of General Semiconductor, Inc., a technology based
company. Prior thereto, Mr. Paige served in senior legal positions with several
large health care, food ingredient and consumer product companies.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The Company's common stock is quoted on the Nasdaq National Market
under the symbol "GTIV".
The following table sets forth the high and low bid information for
shares of the Company's common stock for each quarter during fiscal 2002 and
2003:
(1) On June 13, 2002, the Company paid a special dividend to its
shareholders consisting of $7.76 cash and 0.19253 shares of Accredo
common stock per share of Gentiva common stock (valued at $9.99 per
- 13 -
share based on the June 13, 2002 closing price of $51.89 per share of
Accredo common stock) following the sale of the Company's SPS business
to Accredo. The total value of the special dividend amounted to $17.75
per share.
HOLDERS
As of February 26, 2004, there were approximately 2,300 holders of
record of the Company's common stock including participants in the Company's
employee stock purchase plan, brokerage firms holding the Company's common stock
in "street name" and other nominees.
DIVIDENDS
Except for the special dividend in cash ($7.76) and in kind (0.19253
shares of Accredo common stock) per share of Gentiva common stock paid in June
2002, the Company has never paid any cash dividends on its common stock. Any
future payments of dividends and the amount of the dividends will be determined
by the board of directors from time to time based on the Company's results of
operations, financial condition, cash requirements, future prospects and other
factors deemed relevant by the Company's board of directors, including any
substantive change in tax treatment under the United States Tax Code. In
addition, the Company's credit facility also contains restrictions on the
Company's ability to declare and pay dividends. See Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
ITEM 6. SELECTED FINANCIAL DATA
The following table provides selected historical consolidated
financial data of the Company as of and for each of the fiscal years in the
five-year period ended December 28, 2003. The data has been derived from the
Company's audited consolidated financial statements. The historical consolidated
financial information presents the Company's results of operations and financial
position as if the Company were a separate entity from Olsten for all years
presented.
In addition, the operating results of the SPS business through the
closing date of the sale to Accredo, including corporate expenses directly
attributable to SPS operations, restructuring and special charges related to the
SPS business, as well as the gain on the sale, net of transaction costs and
related income taxes, are reflected as discontinued operations in the
accompanying consolidated statements of operations. Continuing operations
includes the results of the home health services business, including corporate
expenses that did not directly relate to SPS, as well as restructuring and
special charges. In addition, for fiscal 2000 and 1999, continuing operations
included the health care staffing services business and Canadian operations
which were sold during the fourth quarter of fiscal 2000. Results of all prior
periods have been reclassified to conform to this presentation.
The historical financial information may not be indicative of the
Company's future performance and may not necessarily reflect what the financial
position and results of operations of the Company would have been if the Company
was a separate stand-alone entity during all the years presented.
- 14 -
(in thousands, except per share amounts) FISCAL YEAR ENDED
-----------------------------------------------------------------
2003 2002 2001 2000 1999
--------- --------- --------- --------- ---------
STATEMENT OF OPERATIONS DATA
Net revenues $ 814,029 $ 768,501 $ 729,577 $ 881,765 (8) $ 879,295 (8)
Gross profit 282,042 247,600 (2) 245,660 273,493 (4) 285,402
Selling, general and administrative expenses (259,185) (283,540)(2) (266,322)(3) (356,359)(4) (342,755)(5)
Income (loss) from continuing operations 56,766 (53,543) (13,910) (49,826) (41,077)
Discontinued operations, net of tax (6) - 191,578 34,898 (54,374)(4) 25,991
Cumulative effect of accounting change, net of tax (7) - (187,068) - - -
Net income (loss) 56,766(1) (49,033)(2) 20,988 (3) (104,200)(4) (15,086)(5)
Diluted earnings per share:
Income (loss) from continuing operations $ 2.07 $ (2.05) $ (0.60) $ (2.41) $ (2.02)
Discontinued operations, net of tax - 7.32 1.50 (2.64) 1.28
Cumulative effect of accounting change, net of tax - (7.14) - - -
Net income (loss) 2.07 (1.87) 0.90 (5.05) (0.74)
Weighted average shares outstanding - diluted 27,439 26,183 23,186 20,637 20,345 (9)
BALANCE SHEET DATA (AT END OF YEAR) (10)
Cash items and short-term investments (11) $ 110,013 $ 101,241 $ 107,144 $ 452 $ 2,942
Working capital 136,297 104,339 417,949 348,684 438,536
Total assets 335,088 264,431 849,879 805,484 1,063,015
Long-term debt and other securities - - - 20,000 78,562
Shareholders' equity 177,179 113,048 621,707 566,149 705,291
Common shares outstanding 25,598 26,385 25,639 21,197 20,345 (9)
SPECIAL DIVIDEND PER COMMON SHARE:
Cash - $ 7.76 - - -
Value of Accredo common stock - 9.99 - - -
(1) Net income for fiscal 2003 reflects a tax benefit of $35.0 million
associated with management's decision to reverse the valuation
allowance for deferred tax assets. See Notes 12 and 14 to the
Company's consolidated financial statements.
(2) Net loss in fiscal 2002 reflects restructuring and other special
charges aggregating $46.1 million, of which $6.3 million is recorded
in cost of services sold and $39.8 million is recorded in selling,
general and administrative expenses. See Note 4 to the Company's
consolidated financial statements.
(3) Net income in fiscal 2001 reflects special charges of approximately
$3.0 million in connection with the settlement of the GILE V. OLSTEN
CORPORATION, ET AL. and the STATE OF INDIANA V. QUANTUM HEALTH
RESOURCES, INC. AND OLSTEN HEALTH SERVICES, Inc. lawsuits and for
various other legal costs. These special charges are included in
selling, general and administrative expenses. See Note 4 to the
Company's consolidated financial statements.
(4) Net loss for fiscal 2000 reflects restructuring and other special
charges aggregating $153.2 million, of which $97.0 million related to
discontinued operations and $56.2 million related to continuing
operations. Restructuring and special charges of $8.5 million are
included in cost of services sold and $47.7 million is included in
selling, general and administrative expenses. Net loss for fiscal 2000
also reflects a gain of $36.7 million relating to the sale of the
Company's staffing services business and Canadian operations.
(5) Net loss for fiscal 1999 reflects a restructuring charge of $15.2
million for the realignment of business units as part of a new
restructuring plan. This charge is included in selling, general and
administrative expenses.
(6) For fiscal 2002, the Company sold its SPS business to Accredo in
accordance with the asset purchase agreement, dated January 2, 2002,
with the sale completed on June 13, 2002. As such, the Company has
reflected discontinued operations, including the gain on sale, of
$191.6 million during fiscal 2002. Results for all prior years have
been reclassified to conform to this presentation. See Note 3 to the
Company's consolidated financial statements.
(7) For fiscal 2002, the Company adopted the provisions of SFAS 142
"Goodwill and Other Intangible Assets" and performed a transitional
impairment test, resulting in a non-cash charge of $187.1 million. See
Note 2 to the Company's consolidated financial statements.
(8) Net revenues for fiscal 2000 and 1999 includes net revenues related to
the home health services business of $736.5 million and $727.2
million, respectively.
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(9) Diluted earnings per share and the weighted average shares outstanding
for fiscal year 1999 and common shares outstanding at fiscal year end
1999 have been computed based on 20,345,029 shares of common stock.
Such amount is based on the number of shares of the Company's common
stock issued on March 15, 2000, the date of the split-off. See Note 1
to the Company's consolidated financial statements.
(10) Balance sheet data for fiscal year end 2001, 2000, and 1999 includes
the assets of the SPS business, which was sold to Accredo on June 13,
2002.
(11) Cash items and short-term investments includes restricted cash of
$21.8 million at fiscal year end 2003 and $35.2 million at fiscal year
end 2001.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion and analysis provides information which
management believes is relevant to an assessment and understanding of the
Company's results of operations and financial position. This discussion and
analysis should be read in conjunction with the Company's consolidated financial
statements and related notes included elsewhere in this report.
OVERVIEW
Gentiva is the nation's largest home health care company, based on the
amount of revenues derived from the provision of skilled home nursing services
to patients. The Company generates revenues and profits primarily by providing
patients with direct home health care services, including specialty services and
neuro-rehabilitation services; by delivering national, regional and local
administrative services to managed care organizations and self-insured
employers; and by providing home health care consulting services to independent
and hospital-based home health agencies.
Gentiva's direct home health services to patients include skilled
nursing; physical, occupational, speech and neuro-rehabilitation therapy
services; social work; nutrition; disease management education and help with
daily living activities, as well as other therapies and services. The Company's
specialty services involve physical therapist-led orthopedic rehabilitation
services for patients who have had joint replacements or other major orthopedic
surgery, as well as, commencing in 2003, therapies for patients with balance
issues who are prone to injury or immobility as a result of falling. Gentiva is
also piloting similar specialty programs for cardiopulmonary and wound care
services that are expected to be launched during 2004. The Company's
neuro-rehabilitation services, known as Rehab Without Walls(R), provide home and
community-based therapies for patients with traumatic brain injury,
cerebrovascular accident injury and acquired brain injury, as well as a number
of other complex rehabilitation cases.
Gentiva's national, regional and local administrative services for
managed care organizations and self-insured employers -- provided through its
CareCentrix(R) business unit -- include central access, care coordination,
utilization management, and claims processing. The Company is capable of
coordinating a wide range of home care services, including traditional home
nursing, chronic and acute infusion therapies, and durable medical and
respiratory equipment to member patients of these managed care organizations.
Consulting services to home health agencies are delivered primarily by
the Company's Gentiva Business Services unit. These services include billing and
collection activities, web-based caregiver training and credentialing, on-site
agency support and consulting, operational support, and individualized
strategies for reduction of days sales outstanding.
The Company's services can be delivered across the United States 24
hours a day, 7 days a week. Direct home health services to patients are
delivered through more than 350 owned and operated direct service delivery units
in approximately 250 locations in 35 states. Administrative services for managed
care organizations and self-insured employers are coordinated within four
regional coordination centers. Home care services provided to member patients of
these organizations are delivered through Company-owned and nearly 1,900
third-party credentialed provider locations covering the continental United
States.
Gentiva's revenues are generated primarily from three major payor
sources: the U.S. Medicare program, Medicaid and other state and county
programs, and commercial insurers. Revenue mix by major payor classifications
are as follows:
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FISCAL YEAR
2003 2002 2001
-------- -------- --------
Medicare 22% 21% 21%
Medicaid and Other Government 20 22 23
Commercial Insurance and Other 58 57 56
---- ---- ----
100% 100% 100%
==== ==== ====
The Medicare and Medicaid and related programs are subject to
legislative and other risk factors that can result in fluctuating reimbursement
rates for Gentiva's direct home health services to patients. The commercial
insurance industry is continually seeking ways to control the cost of services
to patients that it covers. One of the ways it seeks to control costs is to
require greater efficiencies from its providers, including home health care
companies.
Despite these risks, Gentiva believes it can operate effectively in
the current health care climate by increasing its volume of Medicare and
commercial insurance business and implementing new business practices,
technologies and other methods to make the Company an even more efficient
provider of services. In fact, Gentiva has made a strategic decision to seek
more business from the Medicare and commercial insurance payor groups. For
example, in 2003, Gentiva's revenue from its Medicare and Commercial Insurance
and Other payor categories increased 10.1 percent and 7.2 percent, respectively,
from the prior year.
Various states have addressed budget pressures by considering or
implementing reductions in various health care programs, including reductions in
rates or changes in patient eligibility requirements. In addition, the Company
has also decided to taper participation in certain Medicaid and other state and
county programs. As a result, Gentiva's 2003 revenue from this payor category
declined 1.3 percent from the prior year.
Gentiva believes that several marketplace factors can contribute to
its future growth. First, the Company is a leader in a highly fragmented home
health care industry populated by approximately 12,000 providers of varying size
and resources. Second, the cost of a home health care visit to a patient can be
significantly lower than the cost of an average day in a hospital or skilled
nursing institution. And third, the demand for home care is expected to grow,
primarily due to an aging U.S. population. The U.S. Centers for Medicare and
Medicaid Services projects that national home health and durable medical
equipment spending will rise from $62.5 billion in 2004 to $103.7 billion by
2012. The U.S. Census Bureau has estimated that the age 65 and older population
will increase more than 50 percent between 2000 and 2020.
The Company expects to capitalize on these positive trends through a
determined set of strategies, as follows: generate balanced growth by focusing
on Medicare and Commercial Insurance business; continue to develop and expand
specialty services for incremental revenue growth; focus on caregiver
recruitment, retention and productivity; and launch technology initiatives that
make Gentiva more efficient and profitable. The Company anticipates executing
these strategies by continuing to expand its sales presence, developing and
marketing its managed care services, making operational improvements and
deploying new technologies, providing employees with leadership training and
instituting retention initiatives, ensuring strong ethics and corporate
governance, and focusing on shareholder value.
Results from these strategies and initiatives began to appear in the
Company's 2003 performance. Gentiva reported 2003 net revenue of $814.0 million,
representing a $45.5 million or 5.9 percent increase from the $768.5 million
reported in fiscal year 2002. The increase was due primarily to a rise in the
volume of Medicare and commercial insurance business mentioned above. Net income
for fiscal 2003 was $56.8 million, or $2.07 per diluted share, which included a
tax benefit of $1.28 per diluted share related to the reversal of a tax
valuation allowance discussed later in this annual report. This compares to a
loss of $49.0 million, or $1.87 per diluted share, including restructuring and
special charges, for the corresponding period of 2002.
During 2003, Gentiva reported positive cash flow from operating
activities of $30.7 million and increased its balance of cash items, restricted
cash and short-term investments at the end of the year to approximately $110
million, compared to approximately $101 million at the end of 2002. The Company
has previously stated that it would evaluate using its cash primarily for the
following purposes: investments contributing to revenue growth, efficiency and
profitability; selective acquisitions; share repurchases; and the possible
future payment of dividends to shareholders. In 2003, Gentiva repurchased a
total of over 1.4 million shares at an average cost of $10.03 per share, for a
total expenditure of over $14.4 million.
- 17 -
Management intends the discussion of the Company's financial condition
and results of operations that follows to provide information that will assist
in understanding the Company's financial statements, the changes in certain key
items in those financial statements from year to year, and the primary factors
that accounted for those changes, as well as how certain accounting principles,
policies and estimates affect its financial statements.
The historical results sections in "Results of Operations" below
present a discussion of the Company's consolidated operating results using the
historical results of Gentiva prepared in accordance with accounting principles
generally accepted in the United States (GAAP) for the fiscal years ended
December 28, 2003, December 29, 2002 and December 30, 2001.
SIGNIFICANT DEVELOPMENTS
On June 13, 2002, the Company sold substantially all of the assets of
its specialty pharmaceutical services ("SPS") business to Accredo Health,
Incorporated ("Accredo") and received payment of cash in the amount of $207.5
million (before a $0.9 million reduction resulting from a closing net book value
adjustment) and 5,060,976 shares of Accredo common stock (valued at $262.6
million, based on the closing price of Accredo common stock on the Nasdaq
National Market on June 13, 2002). The cash consideration, less a holdback of
$3.5 million for certain income taxes the Company expected to incur, and the
Accredo common stock were then distributed as a special dividend to the
Company's shareholders.
The operating results of the SPS business through the closing date of
the sale to Accredo, including corporate expenses directly attributable to SPS
operations, restructuring and special charges related to the SPS business, as
well as the gain on the sale, net of transaction costs and related income taxes,
are reflected as discontinued operations in the accompanying consolidated
statements of operations. Continuing operations includes the results of the home
health services business, including corporate expenses that did not directly
relate to SPS, as well as restructuring and special charges.
YEAR ENDED DECEMBER 28, 2003 COMPARED TO YEAR ENDED DECEMBER 29, 2002
RESULTS OF OPERATIONS
REVENUES
Net revenues increased by $45 million or 5.9 percent to $814 million
during fiscal 2003 as compared to $769 million during fiscal 2002. For fiscal
year 2003, as compared to fiscal year 2002, net revenues from Medicare increased
by $16.4 million or 10.1 percent to $178.7 million. Commercial Insurance and
Other payors net revenues increased by $31.4 million or 7.2 percent to $470.2
million and Medicaid and Other Government payors net revenues decreased $2.3
million or 1.3 percent to $165.2 million.
Medicare revenue growth for fiscal 2003, as compared to fiscal 2002,
was primarily fueled by increases in episodes serviced of 8.7 percent. In
addition, Medicare revenue was positively impacted by (i) $1.6 million due to a
3.3 percent market basket rate increase that became effective for patients on
service on or after October 1, 2003 and (ii) $2.5 million due to the absence of
a revenue adjustment recorded in fiscal 2002 relating to partial episode
payments ("PEPs") as well as various clinical and operational process changes
implemented in late 2003. In comparing the fiscal year 2003 and 2002 periods,
Medicare revenues were negatively impacted by an overall 4.9 percent reduction
in Medicare reimbursement rates (approximately $6.0 million for fiscal 2003),
which became effective for Medicare patients beginning in October 2002, and by
the elimination of the rural add-on provision ($1.4 million for fiscal 2003) for
home health services, which became effective April 1, 2003.
Revenue growth from Commercial Insurance and Other payors was driven
by a combination of pricing and volume increases from existing customers and new
contracts that were signed during the past year. Of the 7.2 percent increase in
net revenues for fiscal 2003, new contracts from Commercial Insurance and Other
payors accounted for 3.3 percent.
Medicaid and Other Government revenues decreased for fiscal year 2003
due to revenue reductions related to more restrictive eligibility requirements
in some states and lower reimbursement rates in certain other states. In
addition, for fiscal 2003, revenues were negatively impacted by the Company's
decision to reduce or terminate its participation in certain low-margin, hourly
Medicaid and state and county programs. Revenues relating to these hourly
Medicaid and state and county programs decreased $8.5 million as compared to
fiscal
- 18 -
year 2002. These decreases were offset somewhat by increases in the intermittent
care Medicaid business in selected states.
GROSS PROFIT
Gross profit was approximately $282 million for fiscal year 2003
compared to $248 million for fiscal year 2002. As a percentage of net revenues,
gross profit margins increased from 32.2 percent for fiscal year 2002 to 34.6
percent for fiscal year 2003.
Gross profit margins for fiscal 2003 as compared to fiscal 2002, were
positively impacted by an increase in Medicare episodes serviced and
improvements in utilization in both the commercial insurance business and
Medicare (1.6 percent), reductions in insurance costs (0.5 percent), the
Medicare market basket rate increase of 3.3 percent that became effective for
patients on service on or after October 1, 2003 (0.2 percent) and the absence of
both a $2.5 million revenue adjustment related to PEPs (0.3 percent) and the
$6.3 million special charge associated with insurance costs that were recorded
in fiscal 2002 (0.8 percent). These increases were partially offset by an
overall 4.9 percent reduction in Medicare reimbursement rates (approximately
$6.0 million or 0.8 percent), which became effective for Medicare patients
beginning October 2002, and the elimination of the rural add-on provision ($1.4
million or 0.2 percent) for home health services which became effective April 1,
2003.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
For fiscal year 2003, selling, general and administrative expenses,
including depreciation and amortization, decreased $24 million or 8.6 percent to
$259 million compared to $283 million for the corresponding period in fiscal
2002. This decrease is related to restructuring and special charges of $46.1
million, of which approximately $40 million was reflected in selling, general
and administrative expenses in the accompanying consolidated statement of
operations for fiscal year 2002. See Note 4 to the consolidated financial
statements for further discussion of the restructuring and special charges.
Excluding these special charges, selling, general and administrative expenses,
including depreciation and amortization, increased $15.4 million for fiscal year
2003.
This increase for fiscal 2003 related to increases in sales and field
administrative expenses due to headcount additions, investments in technology
initiatives and costs relating to training in connection with the implementation
of provisions of the Healthcare Insurance Portability and Accountability Act of
1996 ("HIPAA") and a new software based scheduling system. These increases were
partially offset by reductions in corporate administrative expenses resulting
from restructuring efforts following the sale of the SPS business in the second
quarter of fiscal year 2002. During fiscal 2003, headcount of personnel
dedicated to sales and clinical care coordination efforts increased by
approximately 19 percent while headcount relating to field and administrative
personnel increased by less than 2 percent.
Restructuring and special charges for fiscal year 2002 are summarized
and further described below (in thousands):
FISCAL YEAR ENDED
DECEMBER 29, 2002
Restructuring charges:
Business realignment activities $ 6,813
--------
Special charges:
Option tender offer 21,388
Settlement costs 7,731
Insurance costs 6,300
Asset writedowns and other 3,824
--------
Total special charges 39,243
--------
Total restructuring and special charges $ 46,056
========
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FISCAL 2002
BUSINESS REALIGNMENT ACTIVITIES
The Company recorded charges of $6.8 million during the second quarter
ended June 30, 2002 in connection with a restructuring plan. This plan included
the closing and consolidation of seven field locations and the realignment and
consolidation of certain corporate and administrative support functions due
primarily to the sale of the Company's SPS business. These charges included
employee severance of $0.9 million relating to the termination of 115 employees
in field locations and certain corporate and administrative departments, and
future lease payments and other associated costs of $5.9 million resulting
principally from the consolidation of office space at the Company's corporate
headquarters and a change in estimated future lease obligations and other costs
in excess of sublease rentals relating to a lease for a subsidiary of the
Company's former parent company which the Company agreed to assume in connection
with its Split-Off in March 2000. These charges are reflected in selling,
general and administrative expenses in the accompanying consolidated statement
of operations for the fiscal year ended December 29, 2002 During fiscal year
2002, the Company paid $2.1 million in restructuring costs, leaving
approximately $4.7 million of these restructuring charges unpaid, representing
severance costs of $0.2 million which were to be paid during 2003 and lease and
other associated costs of $4.5 million which will be paid over the remaining
lease terms. During fiscal year 2003, the Company paid $2.4 million in
restructuring costs, leaving approximately $2.3 million of these restructuring
charges unpaid, representing lease and other associated costs which will be paid
over the remaining lease terms.
OPTION TENDER OFFER
During the second quarter ended June 30, 2002, the Company effected a
cash tender offer for all outstanding options to purchase its common stock for
an aggregate option purchase price not to exceed $25 million. In connection with
this tender offer, the Company recorded a charge of $21.4 million during the
second quarter of fiscal 2002, which is reflected in selling, general and
administrative expenses in the accompanying consolidated statement of operations
for fiscal year 2002.
SETTLEMENT COSTS
The Company recorded a $7.7 million charge in the second quarter of
fiscal 2002 to reflect settlement costs relating to the FREDRICKSON V. OLSTEN
HEALTH SERVICES CORP. AND OLSTEN CORPORATION lawsuit as well as estimated
settlement costs related to government inquiries regarding cost reporting
procedures concerning contracted nursing and home health aide costs (see Note 9
to the consolidated financial statements). These costs are reflected in selling,
general and administrative costs in the accompanying consolidated statement of
operations for fiscal year 2002.
INSURANCE COSTS
The Company recorded a special charge of $6.3 million in the second
quarter of fiscal 2002 related primarily to a refinement in the estimation
process used to determine the Company's actuarially computed workers
compensation and professional liability insurance reserves. This special charge
is reflected in cost of services sold in the accompanying consolidated statement
of operations for fiscal year 2002.
ASSET WRITEDOWNS AND OTHER
The Company recorded charges of $3.8 million in the second quarter of
fiscal 2002, consisting primarily of a write-down of inventory and other assets
associated with home medical equipment used in the Company's nursing operations,
and a write-off of deferred debt issuance costs associated with the terminated
credit facility. The charges are reflected in selling, general and
administrative expenses in the accompanying consolidated statement of operations
for fiscal year 2002.
INTEREST INCOME, NET
Net interest income was approximately $0.4 million for fiscal year
2003 and $0.8 million for fiscal year 2002. Net interest income represented
interest income of approximately $1.5 million for fiscal 2003 and $2.4
- 20 -
million for fiscal 2002, partially offset by fees relating to the revolving
credit facility and outstanding letters of credit.
Interest income declined in fiscal 2003 as compared to fiscal 2002 due
to a decline in interest rates on cash, cash equivalents and restricted cash
and, to a lesser extent, a decrease in average cash balances during the year.
Interest expense declined in the fiscal 2003 periods due to reductions in the
average outstanding letters of credit, as well as reductions in fees associated
with the unused portion of the credit facility.
INCOME TAXES
The Company recorded an income tax benefit of $33.5 million in fiscal
2003 compared to an income tax expense of $18.4 million in fiscal 2002.
A federal and state tax benefit was recorded in fiscal 2002, relative
to the loss from continuing operations, offset by a $26.8 million provision
associated with the adoption of SFAS No. 142, as discussed in Note 2 to the
consolidated financial statements, and an adjustment of $5.4 million for tax
audit adjustments. As of December 29, 2002, the Company had federal net
operating loss and tax credit carryforwards of $15 million and maintained a full
valuation allowance against its net deferred tax assets of $63.9 million.
Realization of the deferred tax assets is dependent on generating sufficient
taxable income. During the interim periods of fiscal 2003, a portion of the
valuation allowance ($9.4 million) was utilized to offset a corresponding
decrease in net deferred tax assets. Based on management`s belief that it is
more likely than not that all of the Company's net deferred tax assets will be
realized due to the Company's achieved earnings trends and outlook, the
remaining valuation allowance for net deferred tax assets was reversed resulting
in a tax benefit of $35.0 million recorded in the statement of operations and an
additional credit of $19.5 million relating to the tax benefits associated with
stock compensation was recorded directly to shareholders' equity. At December
28, 2003, current net deferred tax assets were $26.5 million and non-current net
deferred tax assets were $28.0 million. At December 28, 2003, the Company had
federal net operating loss and tax credit carryforwards of $11.8 million. See
Note 12 to the Company's consolidated financial statements.
NET INCOME (LOSS)
The Company recorded net income of $56.8 million or $2.07 per diluted
share in fiscal 2003 compared to a net loss of $49.0 million or ($1.87) per
diluted share in fiscal 2002.
The net loss for fiscal 2002 included a net loss from continuing
operations of $53.5 million or ($2.05) per diluted share, which included $46.1
million of restructuring and special charges, income from discontinued
operations of $191.6 million or $7.32 per diluted share and a net charge of
$187.1 million or ($7.14) per diluted share relating to the cumulative effect of
accounting change for goodwill.
- 21 -
YEAR ENDED DECEMBER 29, 2002 COMPARED TO YEAR ENDED DECEMBER 30, 2001
RESULTS OF OPERATIONS
REVENUES
Net revenues increased by $39 million or 5.3 percent to $769 million
during fiscal 2002 as compared to $730 million during fiscal 2001. This increase
was driven by a combination of increased rates to Commercial Insurance and Other
and certain Medicaid and Other Government payors, increased volume in nursing
patient admissions and an increase in the number of Preferred Provider
Organization enrollees served by the Company's CareCentrix unit, partially
offset by a 4.9 percent net reduction in Medicare reimbursement rates, which
became effective in October 2002.
For fiscal year 2002, as compared to fiscal year 2001, net revenues
from Medicare increased by $9.7 million or 6.3 percent to $162.3 million.
Commercial Insurance and Other payors net revenues increased by $30 million or
7.3 percent to $438.8 million and Medicaid and Other Government payors net
revenues decreased $0.7 million or 0.4 percent to $167.4 million.
GROSS PROFIT
Gross profit was approximately $248 million for fiscal year 2002
compared to $246 million for fiscal year 2001. As a percentage of net revenues,
gross profit margins decreased from 33.7 percent for fiscal year 2001 to 32.2
percent for fiscal year 2002.
The decrease in margin was primarily related to a $6.3 million special
charge relating principally to a refinement in the estimation process used to
determine the Company's actuarially computed workers compensation and
professional liability insurance reserves (see Note 4 to the consolidated
financial statements). This special charge had a negative impact on gross profit
margins of 0.8 percent. In addition to the special charge, the Company also
recorded a revenue adjustment of $2.5 million, which had a 0.3 percent negative
impact on margins, related to a change in the estimated amount of the repayment
to Medicare for partial episode payments ("PEPs") from the inception of the
Prospective Payment System of reimbursement ("PPS") in October 2000 through June
30, 2002. The 4.9 percent net reduction in Medicare reimbursement rates, which
became effective in October 2002, had a negative impact of approximately $2.0
million, or 0.3 percent, on gross profit margins for fiscal year 2002. The
remaining net decrease in gross margin percentage was attributable to various
other factors, including training costs associated with orientation of
additional full-time caregivers, increased insurance costs and changes in
business mix due to growth in the CareCentrix business, which generates a lower
gross margin but also requires lower administrative costs to service the
business, offset by increased rates to Commercial Insurance and Other and
certain Medicaid and Other Government payors.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased $17 million or
6.5 percent to $283 million during fiscal 2002 compared to $266 million during
fiscal 2001. These increases were driven by restructuring and special charges of
$46.1 million during the second quarter ended June 30, 2002, of which
approximately $40 million was reflected in selling, general and administrative
expenses in the accompanying consolidated statement of operations for the fiscal
year ended December 29, 2002, as compared to $3 million of special charges which
were reflected in the consolidated statement of operations for the fiscal year
ended December 30, 2001. These net increases were offset by reductions in
amortization expense ($10 million) due to the implementation of SFAS No. 142 and
net reductions ($10 million) in field and corporate administration expenses as a
result of restructuring efforts and improvements in processes and technology,
partially offset by an increase in selling expenses.
- 22 -
FISCAL 2002
For a further discussion on restructuring and special charges for the
fiscal year ended December 29, 2002, see management's discussion above on
"Selling, General and Administrative Expenses" and "Fiscal 2002," under "Results
of Operations" for the "Year Ended December 28, 2003 Compared to Year Ended
December 29, 2002."
FISCAL 2001
SETTLEMENT COSTS
The Company recorded special charges of approximately $3.0 million
during fiscal 2001 in connection with the settlement of the GILE V. OLSTEN
CORPORATION, ET AL., and the STATE OF INDIANA V. QUANTUM HEALTH RESOURCES, INC.
AND OLSTEN HEALTH SERVICES, INC. lawsuits and for various other legal costs.
These legal matters are further discussed in Note 9 to the consolidated
financial statements. These special charges are reflected in selling, general
and administrative expenses in the accompanying consolidated statement of
operations for fiscal year 2001.
INTEREST EXPENSE, NET
Net interest income (expense) was approximately $0.8 million and
($0.1) million in fiscal 2002 and 2001, respectively. Net interest income for
fiscal 2002 primarily represented interest earned on investments of $2.4 million
offset by fees relating to the revolving credit facility and outstanding letters
of credit. Net interest expense for fiscal 2001 primarily represented fees
relating to the revolving credit facility and outstanding letters of credit and,
for the first half of fiscal 2001, the 10 percent convertible preferred trust
securities, which were redeemed in the third quarter of fiscal 2001, offset by
interest income of approximately $2.8 million.
INCOME TAXES
Income tax expense was $18.4 million in fiscal 2002 compared to an
income tax benefit of $6.8 million in fiscal 2001. A federal and state tax
benefit was recorded in fiscal 2002, relative to the loss from continuing
operations, offset by a $26.8 million provision associated with the adoption of
SFAS No. 142, as discussed in Note 2 to the consolidated financial statements,
and an adjustment of $5.4 million for tax audit adjustments. The Company had a
federal net operating loss carryforward at December 30, 2001 of $89.7 million
that was used in part to offset the gain from the sale of the SPS division. As
of December 29, 2002, the Company had a federal net operating loss carryforward
of $15 million. Net deferred tax assets were $63.9 million at December 29, 2002
and $27 million at December 30, 2001. The increase in deferred tax assets
relates primarily to the adoption of SFAS 142 offset by utilization of a portion
of the federal net operating loss during 2002. At December 29, 2002, the Company
had maintained a full valuation allowance against its net deferred tax asset.
Realization of the deferred tax asset is dependent on generating sufficient
taxable income. See Note 12 to the Company's consolidated financial statements.
NET INCOME (LOSS)
The Company recorded a net loss of $49.0 million or ($1.87) per
diluted share in fiscal 2002 compared to net income of $21.0 million or $0.90
per diluted share in fiscal 2001. The net loss for fiscal 2002 includes a net
loss from continuing operations of $53.5 million or ($2.05) per diluted share,
which included $46.1 million of restructuring and special charges, income from
discontinued operations of $191.6 million or $7.32 per diluted share and a net
charge of $187.1 million or ($7.14) per diluted share relating to the cumulative
effect of accounting change for goodwill. Net income for fiscal 2001 includes a
net loss from continuing operations of $13.9 million or ($0.60) per diluted
share, including special charges, and income from discontinued operations of
$34.9 million or $1.50 per diluted share.
- 23 -
LIQUIDITY AND CAPITAL RESOURCES
LIQUIDITY
The Company's principal source of liquidity is the collection of its
accounts receivable. For healthcare services, the Company grants credit without
collateral to its patients, most of whom are insured under third party
commercial or governmental payor arrangements. Net cash provided by operating
activities increased $12.2 million to $30.7 million in fiscal 2003. This cash
was used to fund capital expenditures of $8.8 million and repurchase shares of
common stock of $14.4 million during fiscal 2003.
Days Sales Outstanding ("DSO") for the home health services business
remained flat at 59 days at December 28, 2003 as compared to December 29, 2002.
Working capital at December 28, 2003 was $136 million, an increase of $32
million as compared to $104 million at December 29, 2002, primarily due to:
o a $9 million increase in cash and cash equivalents, restricted
cash and short-term investments;
o a $8 million increase in accounts receivable;
o a $26 million increase in deferred tax assets relating to the
Company's reversal of the deferred tax asset valuation allowance
as further described in Note 12 to the Company's consolidated
financial statements;
o a $3 million decrease in prepaid expenses and other assets; and
o a $7 million increase in current liabilities, primarily driven by
increases in other accrued expenses ($7 million), cost of claims
incurred but not reported ($1 million), and Medicare liabilities
($1 million), partially offset by a decrease in accounts payable
($1 million) and obligations under insurance programs ($1
million).
The Company participates in the Medicare, Medicaid and other federal
and state healthcare programs. There are certain standards and regulations that
the Company must adhere to in order to continue to participate in these
programs, including compliance with the Company's corporate integrity agreement.
As part of these standards and regulations, the Company is subject to periodic
audits, examinations and investigations conducted by, or at the direction of,
governmental investigatory and oversight agencies. Periodic and random audits
conducted or directed by these agencies could result in a delay or adjustment to
the amount of reimbursements received under these programs. Violation of the
applicable federal and state health care regulations can result in the Company's
exclusion from participating in these programs and can subject the Company to
substantial civil and/or criminal penalties. The Company believes it is
currently in compliance with these standards and regulations.
The Company is party to a contract with CIGNA Health Corporation
("Cigna"), pursuant to which the Company provides or contracts with third party
providers to provide home nursing services, acute and chronic infusion
therapies, durable medical equipment, and respiratory products and services to
patients insured by Cigna. For fiscal years 2003, 2002 and 2001, Cigna accounted
for approximately 36 percent, 38 percent and 36 percent, respectively, of the
Company's total net revenues. The Company has extended its relationship with
Cigna by entering into a new national home health care contract, effective
January 1, 2004. The term of the new contract extends to December 31, 2006, and
automatically renews thereafter for additional one year terms unless terminated.
Under the termination provisions, Cigna has the right to terminate the agreement
on December 31, 2005 if it provides 90 days advance written notice to the
Company, and each party has the right to terminate at the end of each term
thereafter by providing at least 90 days advance written notice prior to the
start of the new term. If Cigna chose to terminate or not renew the contract, or
to significantly modify its use of the Company's services, there could be a
material adverse effect on the Company's cash flow.
The Company's credit facility, which was entered into on June 13,
2002, as amended, as described below, provides up to $55 million in borrowings,
including up to $40 million which is available for letters of credit. The
Company may borrow up to a maximum of 80 percent of the net amount of eligible
accounts receivable, as defined, less any reasonable and customary reserves, as
defined, required by the lender. Borrowing availability under the credit
facility was reduced by $10 million until such quarter in 2003 in which the
trailing 12 month EBITDA, excluding certain restructuring costs and special
charges recorded by the Company during
- 24 -
fiscal 2002, as defined, exceeded $15 million. As of March 30, 2003, the
trailing 12 months EBITDA threshold was achieved and the availability
restriction lifted, effective June 1, 2003.
At the Company's option, the interest rate on borrowings under the
credit facility was based on the London Interbank Offered Rates (LIBOR) plus
3.25 percent or the lender's prime rate plus 1.25 percent. In addition, the
Company was required to pay a fee equal to 2.5 percent per annum of the
aggregate face amount of outstanding letters of credit. Beginning in 2003, the
applicable margin for the LIBOR borrowing, prime rate borrowing and letter of
credit fees decreases by 0.25 percent to 3.0 percent, 1.0 percent, and 2.25
percent, respectively, provided that the Company's trailing 12 month EBITDA,
excluding certain restructuring costs and special charges, as defined, is in
excess of $20 million. The Company was also subject to an unused line fee equal
to 0.50 percent per annum of the average daily difference between the total
revolving credit facility amount, as defined, and the total outstanding
borrowings and letters of credit. Beginning in 2003, the unused credit line fee
decreases to 0.375 percent provided the minimum EBITDA target described above is
achieved. The higher margins and fees are subject to reinstatement in the event
that the Company's trailing 12 month EBITDA falls below $20 million. The Company
met this minimum EBITDA requirement as of March 30, 2003, with the rate
reduction effective June 1, 2003 and continued to meet this requirement as of
December 28, 2003.
Total outstanding letters of credit were $20.8 million as of December
28, 2003. The letters of credit, which expire one year from date of issuance,
were issued to guarantee payments under the Company's workers compensation
program and for certain other commitments. As of December 28, 2003, there were
no borrowings outstanding under the credit facility and the Company had
borrowing capacity under the credit facility, after adjusting for outstanding
letters of credit, of approximately $34 million.
The credit facility, which expires in June 2006, includes certain
covenants requiring the Company to maintain a minimum tangible net worth of
$101.6 million, minimum EBITDA, as defined, and a minimum fixed charge coverage
ratio, as defined. Other covenants in the credit facility include limitation on
mergers, consolidations, acquisitions, indebtedness, liens, distributions
including dividends, capital expenditures, stock repurchases and dispositions of
assets and other limitations with respect to the Company's operations. On August
7, 2003, the credit facility was amended to make covenants relating to
acquisitions and stock repurchases less restrictive, provided that the Company
maintains minimum excess aggregate liquidity, as defined in the amendment, equal
to at least $60 million, and to allow for the disposition of certain assets.
The credit facility further provides that if the agreement is
terminated for any reason, the Company must pay an early termination fee equal
to $275,000 if the facility is terminated during the period from June 13, 2003
to June 12, 2004 and $137,500 if the facility is terminated from June 13, 2004
to June 12, 2005. There is no fee for termination of the facility subsequent to
June 12, 2005. Loans under the credit facility are collateralized by all of the
Company's tangible and intangible personal property, other than equipment.
The credit facility includes provisions, which, if not complied with,
could require early payment by the Company. These include customary default
events, such as failure to comply with financial covenants, insolvency events,
non-payment of scheduled payments, acceleration of other financial obligations
and change in control provisions. In addition, these provisions include an
account obligor, whose accounts are more than 25 percent of all accounts of the
Company over the previous 12-month period, canceling or failing to renew its
contract with the Company and ceasing to recognize the Company as an approved
provider of health care services, or the Company revoking the lending agent's
control over its governmental lockbox accounts. The Company does not have any
trigger events in the credit facility that are tied to changes in its credit
rating or stock price. As of December 28, 2003, the Company was in compliance
with these covenants.
The Company may be subject to workers compensation claims and lawsuits
alleging negligence or other similar legal claims. The Company maintains various
insurance programs to cover this risk but is substantially self-insured for most
of these claims. The Company recognizes its obligations associated with these
programs in the period the claim is incurred. The Company estimates the cost of
both reported claims and claims incurred but not reported, up to specified
deductible limits, based on its own specific historical claims experience and
current enrollment statistics, industry statistics and other information. Such
estimates and the resulting reserves are reviewed and updated periodically.
The Company is responsible for the cost of individual workers
compensation claims and individual professional liability claims up to $500,000
per incident which occurred prior to March 15, 2002 and $1,000,000 per incident
thereafter. The Company also maintains excess liability coverage relating to
professional liability and casualty claims which provides insurance coverage for
individual claims of up to $25,000,000 in excess of
- 25 -
the underlying coverage limits. Payments under the Company's workers
compensation program are guaranteed by letters of credit and segregated
restricted cash balances.
Additional items that could impact the Company's liquidity are
discussed under "Risk Factors" in Item 1 of this annual report on Form 10-K.
CAPITAL EXPENDITURES
The Company's capital expenditures from continuing operations for the
fiscal years 2003, 2002 and 2001 were $8.8 million, $4.1 million and $3.9
million, respectively. The Company intends to make investments and other
expenditures to, among other things, upgrade its computer technology and system
infrastructure. In this regard, management expects that capital expenditures
will range between $12 million and $13.5 million for fiscal 2004. Management
expects that the Company's capital expenditure needs will be met through
operating cash flow and available cash reserves.
CASH RESOURCES AND OBLIGATIONS
The Company had cash, cash equivalents, restricted cash and short-term
investments of approximately $110.0 million as of December 28, 2003. The
restricted cash relates to cash funds of $21.8 million that have been segregated
in a trust account to provide additional collateral and to replace approximately
$7 million of letters of credit and a $5 million surety bond which had been used
as collateral under the Company's insurance programs. Interest on the funds in
the trust account accrues to the Company. The Company, at its option, may access
the cash funds in the trust account by providing equivalent amounts of
alternative security, including letters of credit and surety bonds.
The Company anticipates that repayments to Medicare for partial
episode payments and prior year cost report settlements will be made
periodically through June 2005. These amounts are reflected as Medicare
liabilities in the accompanying consolidated balance sheets.
On May 16, 2003, the Company announced that its Board of Directors had
authorized the Company to repurchase and to formally retire up to 1,000,000
shares of its outstanding common stock. The repurchases were to occur
periodically in the open market or through privately negotiated transactions
based on market conditions and other factors. As of July 23, 2003, the Company
had repurchased all 1,000,000 shares of its common stock at an average cost of
$9.08 per share and at a total cost of approximately $9.1 million. On August 7,
2003, the Company's Board of Directors authorized the Company to repurchase and
formally retire up to an additional 1,500,000 shares of its outstanding common
stock. The repurchases will occur periodically in the open market or through
privately negotiated transactions based on market conditions and other factors.
As of December 28, 2003, the Company had repurchased 438,464 shares at an
average cost of $12.18 per share and a total cost of approximately $5.3 million.
For the period from December 29, 2003 through February 26, 2004, the Company
purchased 199,147 shares at an average cost of $12.77 per share and a total cost
of approximately $2.5 million.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS
At December 28, 2003, the Company had no long-term debt and no
significant capital lease obligations. Future minimum rental commitments for all
non-cancelable leases and purchase obligations at December 28, 2003, are as
follows (in thousands):
PAYMENT DUE BY PERIOD
---------------------------------------------------------
LESS THAN MORE THAN
CONTRACTUAL OBLIGATIONS TOTAL 1 YEAR 1-3 YEARS 4-5 YEARS 5 YEARS
----------------------- -------- --------- --------- --------- ---------
Long-term debt obligations $ - $ - $ - $ - $ -
Capital lease obligations - - - - -
Operating lease obligations 55,135 18,936 24,725 8,652 2,822
Purchase obligations 1,076 1,076 - - -
-------- -------- --------- --------- --------
Total $ 56,211 $ 20,012 $ 24,725 $ 8,652 $ 2,822
======== ======== ========= ========= ========
The Company had total letters of credit outstanding under its credit
facility of approximately $27.6 million at December 29, 2002 and $20.8 million
at December 28, 2003. The letters of credit, which expire one year
- 26 -
from date of issuance, are issued to guarantee payments under the Company's
workers compensation program and for certain other commitments. The Company has
the option to renew these letters of credit or set aside cash funds in a
segregated account to satisfy the Company's obligations as further discussed in
the "Liquidity and Capital Resources" section under the section "Cash Resources
and Obligations".
The Company has no other off-balance sheet arrangements and has not
entered into any transactions involving unconsolidated, limited purpose entities
or commodity contracts.
Management expects that the Company's working capital needs for fiscal
2004 will be met through operating cash flow and its existing cash balances. The
Company may also consider other alternative uses of cash including, among other
things, acquisitions, additional share repurchases and cash dividends. These
uses of cash would require the approval of the Company's Board of Directors and
may require the approval of its lender. If cash flows from operations, cash
resources or availability under the credit facility fall below expectations, the
Company may be forced to delay planned capital expenditures, reduce operating
expenses, seek additional financing or consider alternatives designed to enhance
liquidity.
LITIGATION AND GOVERNMENT MATTERS
The Company is a party to certain legal actions and government
investigations. See Item 3. "Legal Proceedings" and Note 9 to the Company's
consolidated financial statements.
SETTLEMENT ISSUES
PRRB APPEAL
As further described in the Critical Accounting Policies below, the
Company's annual cost reports, which were filed with the CMS, were subject to
audit by the fiscal intermediary engaged by CMS. In connection with the audit of
the Company's 1997 cost reports, the Medicare fiscal intermediary made certain
audit adjustments related to the methodology used by the Company to allocate a
portion of its residual overhead costs. The Company filed cost reports for years
subsequent to 1997 using the fiscal intermediary's methodology. The Company
believed its methodology used to allocate such overhead costs was accurate and
consistent with past practice accepted by the fiscal intermediary; as such, the
Company filed appeals with the Provider Reimbursement Review Board ("PRRB")
concerning this issue with respect to cost reports for the years 1997, 1998 and
1999. The Company's consolidated financial statements for the years 1997, 1998
and 1999 had reflected use of the methodology mandated by the fiscal
intermediary.
In June 2003, the Company and its Medicare fiscal intermediary signed
an Administrative Resolution relating to the issues covered by the appeals
pending before the PRRB. Under the terms of the Administrative Resolution, the
fiscal intermediary agreed to reopen and adjust the Company's cost reports for
the years 1997, 1998 and 1999 using a modified version of the methodology used
by the Company prior to 1997. This modified methodology will also be applied to
cost reports for the year 2000, which are currently under audit. The
Administrative Resolution required that the process to (i) reopen all 1997 cost
reports, (ii) determine the adjustments to allowable costs through the issuance
of Notices of Program Reimbursement ("NPRs") and (iii) make appropriate payments
to the Company, be completed in early 2004. Cost reports relating to years
subsequent to 1997 will be reopened after the process for the 1997 cost reports
is completed.
On February 17, 2004, the fiscal intermediary notified the Company
that it had completed the reopening of all 1997 cost reports and determined that
the adjustment to allowable costs for that year approximated $9 million. As of
February 27, 2004, the majority of the funds relating to this adjustment had
been remitted to the Company; the settlement amount will be recorded as net
revenues during the first quarter of fiscal 2004.
Although the Company believes that it could recover additional funds
as a result of applying the modified methodology discussed above to cost reports
subsequent to 1997, the settlement amounts cannot be specifically determined
until the reopening or audit of each year's cost reports is completed. This is
not expected to occur until the second half of fiscal 2004 or fiscal 2005.
However, in view of changes in reimbursement and the Company's operations in
periods subsequent to 1997, it is likely that future recoveries relating to any
cost report year from 1998 to 2000 will be significantly less than the 1997
settlement.
- 27 -
STOCK-BASED COMPENSATION
Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation" ("SFAS 123"), as amended by SFAS No.
148, "Accounting for Stock-Based Compensation - Transition and Disclosure and
amendment of Financial Accounting Standards Board ("FASB") Statement No. 123"
("SFAS 148") encourages, but does not require, companies to record compensation
cost for stock-based compensation plans at fair value. In addition, SFAS 148
provides alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation, and
amends the disclosure requirements of SFAS 123 to require prominent disclosures
in both annual and interim financial statements about the method of accounting
for stock-based employee compensation and the effect of the method used on
reported results.
The Company has chosen to adopt the disclosure only provisions of SFAS
148 and continue to account for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"), and related
interpretations. Under this approach, the cost of restricted stock awards is
expensed over their vesting period, while the imputed cost of stock option
grants and discounts offered under the Company's Employee Stock Purchase Plan
("ESPP") is disclosed, based on the vesting provisions of the individual grants,
but not charged to expense.
The Company has several stock ownership and compensation plans, which
are described more fully in Note 11 to the consolidated financial statements.
The following table presents net income (loss) and basic and diluted earnings
(loss) per common share, had the Company elected to recognize compensation cost
based on the fair value at the grant dates for stock option awards and discounts
granted for stock purchases under the Company's ESPP, consistent with the method
prescribed by SFAS 123, as amended by SFAS 148:
FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- ----------------- -----------------
Net income (loss) - as reported $ 56,766 $ (49,033) $ 20,988
Add: Stock-based employee compensation
expense included in reported net income, net of tax - 13,160 -
Deduct: Total stock-based compensation expense
determined under fair value based method for
all awards, net of tax (1,575) (5,022) (3,002)
-------- --------- --------
Net income (loss) - pro forma $ 55,191 $ (40,895) $ 17,986
======== ========= ========
Basic income (loss) per share - as reported $ 2.16 $ (1.87) $ 0.90
Basic income (loss) per share - pro forma $ 2.10 $ (1.56) $ 0.78
Diluted income (loss) per share - as reported $ 2.07 $ (1.87) $ 0.90
Diluted income (loss) per share - pro forma $ 2.01 $ (1.56) $ 0.78
GOODWILL AND OTHER INTANGIBLE ASSETS ("SFAS 142")
In June 2001, the FASB issued SFAS No. 142 "Goodwill and Other
Intangible Assets" ("SFAS 142"), which broadens the criteria for recording
intangible assets separate from goodwill. SFAS 142 requires the use of a
non-amortization approach to account for purchased goodwill and certain
intangibles. Under a non-amortization approach, goodwill and certain intangibles
are not amortized into results of operations, but instead are reviewed for
impairment and an impairment charge is recorded in the periods in which the
recorded carrying value of goodwill and certain intangibles is more than its
estimated fair value. The Company adopted SFAS 142 as of the beginning of fiscal
2002. The provisions of SFAS 142 require that a transitional impairment test be
performed as of the beginning of the year the statement is adopted.
Based on the results of the transitional impairment tests, the Company
determined that an impairment loss relating to goodwill had occurred and
recorded a non-cash charge of $187.1 million, net of a deferred tax benefit of
$30.2 million, as cumulative effect of accounting change in the accompanying
consolidated statement of operations for the fiscal year ended December 29,
2002. The deferred tax benefit was recorded by eliminating a deferred tax
liability of $26.8 million and recording a deferred tax asset of approximately
$39 million, offset by an increase in the tax valuation allowance by the same
amount. During fiscal 2002, the Company also recorded a tax benefit of
approximately $3.4 million relating to tax deductible goodwill. See Note 12 to
the consolidated financial statements.
- 28 -
For fiscal year 2001, intangibles, principally goodwill, associated
with acquired businesses were being amortized on a straight-line basis over
periods ranging from 10 to 40 years in accordance with APB Opinion No. 17,
"Intangible Assets" based on a fair value methodology.
The table below presents a reconciliation of reported net income to
adjusted net income as if SFAS 142 was adopted as of January 1, 2001 (in
thousands, except per share amounts).
FOR THE FISCAL YEAR ENDED
DECEMBER 30, 2001
-------------------------------
EARNINGS PER SHARE
NET INCOME BASIC AND DILUTED
---------- ------------------
Reported net income $ 20,988 $ 0.90
Add back: Goodwill amortization, net of tax 10,023 0.43
-------- -------
Adjusted net income $ 31,011 $ 1.33
======== =======
The provisions of SFAS 142 also require that a goodwill impairment
test be performed annually or on the occasion of other events that indicate a
potential impairment. The annual impairment test of goodwill was performed and
indicated that there was no impairment of goodwill as of December 28, 2003.
RECENT ACCOUNTING PRONOUNCEMENTS
In July 2002, the FASB issued SFAS No. 146 "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS 146"), which addresses the
recognition, measurement, and reporting of costs associated with exit or
disposal activities, and supersedes Emerging Issues Task Force ("EITF") Issue
No. 94-3 "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit An Activity (including Certain Costs Incurred in a
Restructuring)" ("EITF 94-3"). The principal difference between SFAS 146 and
EITF 94-3 relates to the requirements for recognition of a liability for a cost
associated with an exit or disposal activity. SFAS 146 requires that a liability
for a cost associated with an exit or disposal activity, including those related
to employee termination benefits and obligations under operating leases and
other contracts, be recognized when the liability is incurred, and not
necessarily the date of an entity's commitment to an exit plan, as under EITF
94-3. SFAS 146 also establishes that the initial measurement of a liability
recognized under SFAS 146 be based on fair value. The provisions of SFAS 146 are
effective for exit or disposal activities that are initiated after December 31,
2002, with early application encouraged. The Company adopted SFAS 146, effective
December 30, 2002. For exit or disposal activities initiated prior to December
30, 2002, the Company followed the accounting guidelines outlined in EITF 94-3.
In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities," as revised in December 2003 ("FIN 46"). FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns or both. Historically, entities generally were not consolidated unless
the entity was controlled through voting interests. FIN 46 also requires
disclosures about variable interest entities that a company is not required to
consolidate but in which it has a significant variable interest. The
consolidation requirements of FIN 46 will apply to variable interest entities as
of March 31, 2004 for the Company. Also, certain disclosure requirements apply
to all financial statements issued after December 31, 2003, regardless of when
the variable interest entity was established. The adoption of this standard is
not expected to have a material impact on the Company's consolidated financial
statements.
IMPACT OF INFLATION
The Company does not believe that inflation has had a material impact
on its results of operations during the past three fiscal years.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions and select accounting policies that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date
- 29 -
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
The most critical estimates relate to revenue recognition, the collectibility of
accounts receivable and related reserves, the cost of claims incurred but not
reported, obligations under workers compensation, professional liability and
employee health and welfare insurance programs and Medicare settlement issues. A
description of the critical accounting policies and a discussion of the
significant estimates and judgments associated with such policies are described
below.
REVENUE RECOGNITION
Under fee-for-service agreements with patients and commercial and
certain government payors, net revenues are recorded based on net realizable
amounts to be received in the period in which the services and products are
provided or delivered. Fee-for-service contracts with commercial payors are
traditionally one year in term and renewable automatically on an annual basis,
unless terminated by either party.
Under capitated arrangements with certain managed care customers, net
revenues are recognized based on a predetermined monthly contractual rate for
each member of the managed care plan regardless of the services provided. Net
revenues generated under capitated agreements were approximately 16 percent, 16
percent, and 15 percent of total net revenues for fiscal 2003, 2002, 2001,
respectively.
Under the Prospective Payment System ("PPS") for Medicare
reimbursement, net revenues are recorded based on a reimbursement rate which
varies based on the severity of the patient's condition, service needs and
certain other factors; revenue is recognized ratably over the period in which
services are provided. Revenue is subject to adjustment during this period if
there are significant changes in the patient's condition during the treatment
period or if the patient is discharged but readmitted to another agency within
the same 60 day episodic period. Medicare billings under PPS are initially
recognized as deferred revenue and are subsequently amortized into revenue over
an average patient treatment period. The process for recognizing revenue to be
recognized under the Medicare program is based on certain assumptions and
judgments, including the average length of time of each treatment as compared to
a standard 60 day episode, the appropriateness of the clinical assessment of
each patient at the time of certification and the level of adjustments to the
fixed reimbursement rate relating to patients who receive a limited number of
visits, have significant changes in condition or are subject to certain other
factors during the episode. Deferred revenue of approximately $5.2 million and
$4.4 million relating to the Medicare PPS program was included in other Medicare
liabilities in the consolidated balance sheets as of December 28, 2003 and
December 29, 2002, respectively.
Revenue adjustments result from differences between estimated and
actual reimbursement amounts, an inability to obtain appropriate billing
documentation or authorizations acceptable to the payor and other reasons
unrelated to credit risk. Revenue adjustments are deducted from gross accounts
receivable. These revenue adjustments are based on significant assumptions and
judgments which are determined by Company management based on historical trends.
Third party settlements resulting in recoveries are recognized as net revenues
in the period in which the funds are received.
COLLECTIBILITY OF ACCOUNTS RECEIVABLE
The process for estimating the ultimate collection of receivables,
particularly with respect to fee-for-service arrangements, involves significant
assumptions and judgments. In this regard, the Company has implemented a
standardized approach to estimate and review the collectibility of its
receivables based on accounts receivable aging trends. Historical collection and
payor reimbursement experience is an integral part of the estimation process
related to determining the allowance for doubtful accounts. In addition, the
Company assesses the current state of its billing functions in order to identify
any known collection or reimbursement issues to determine the impact, if any, on
its reserve estimates, which involve judgment. Revisions in reserve estimates
are recorded as an adjustment to the provision for doubtful accounts which is
reflected in selling, general and administrative expenses in the consolidated
statements of operations. The Company believes that its collection and reserve
processes, along with the monitoring of its billing processes, help to reduce
the risk associated with material revisions to reserve estimates resulting from
adverse changes in collection, reimbursement experience and billing functions.
- 30 -
COST OF CLAIMS INCURRED BUT NOT REPORTED
Under capitated arrangements with managed care customers, the Company
estimates the cost of claims incurred but not reported based on applying
actuarial assumptions, historical patterns of utilization to authorized levels
of service, current enrollment statistics and other information. Under
fee-for-service arrangements with certain managed care customers, the Company
also estimates the cost of claims incurred but not reported and the estimated
revenue relating thereto in situations in which the Company is responsible for
care management and patient services are performed by a non-affiliated provider.
The estimate of cost of claims incurred but not reported involves
significant assumptions and judgments which relate to and may vary depending on
the services authorized at each of the Company's regional coordination centers,
historical patterns of service utilization and payment trends. These assumptions
and judgments are evaluated on a quarterly basis and changes in estimated
liabilities for costs of claims incurred but not reported are determined based
on such evaluation.
OBLIGATIONS UNDER INSURANCE PROGRAMS
The Company is obligated for certain costs under various insurance
programs, including workers compensation and professional liability and employee
health and welfare.
The Company may be subject to workers compensation claims and lawsuits
alleging negligence or other similar legal claims. The Company maintains various
insurance programs to cover this risk but is substantially self-insured for most
of these claims. The Company recognizes its obligations associated with these
programs in the period the claim is incurred. The cost of both reported claims
and claims incurred but not reported, up to specified deductible limits, have
generally been estimated based on historical data, industry statistics, the
Company's own home health specific historical claims experience, current
enrollment statistics and other information. Such estimates and the resulting
reserves are reviewed and updated periodically.
For the fiscal year ended December 29, 2002, the Company recorded a
special charge of $6.3 million relating primarily to a refinement in the
estimation process used to determine the Company's actuarially computed workers
compensation and professional liability reserves. Management believes that, as a
result of this refinement, sufficient data exists to allow the Company to more
heavily rely on its own home health specific historical claims experience in
determining the Company's estimates of workers compensation and professional
liability reserves. Previously the Company utilized insurance industry actuarial
information, as well as the Company's historical claims experience in developing
reserve estimates.
The Company maintains insurance coverage on individual claims. The
Company is responsible for the cost of individual workers compensation claims
and individual professional liability claims up to $500,000 per incident which
occurred prior to March 15, 2002 and $1,000,000 per incident thereafter. The
Company also maintains excess liability coverage relating to professional
liability and casualty claims which provides insurance coverage for individual
claims of up to $25,000,000 in excess of the underlying coverage limits.
Payments under the Company's workers compensation program are guaranteed by
letters of credit and segregated restricted cash balances. During the fiscal
year 2003, the Company segregated $21.8 million of cash funds in a trust account
to replace certain letters of credit and surety bonds. Interest on the funds in
the trust account accrues to the Company.
The Company, at its option, may terminate the trust agreement by
providing equivalent amounts of alternative security allowed under the program,
including letters of credit and surety bonds. The Company believes that its
present insurance coverage and reserves are sufficient to cover currently
estimated exposures, but there can be no assurance that the Company will not
incur liabilities in excess of recorded reserves or in excess of its insurance
limits.
MEDICARE SETTLEMENT ISSUES
- 31 -
Prior to October 1, 2000, reimbursement of Medicare home care nursing
services was based on reasonable, allowable costs incurred in providing services
to eligible beneficiaries subject to both per visit and per beneficiary limits
in accordance with the Interim Payment System established through the Balanced
Budget Act of 1997. These costs were reported in annual cost reports which were
filed with the Centers for Medicare and Medicaid Services ("CMS") and were
subject to audit by the fiscal intermediary engaged by CMS. The fiscal
intermediary has not finalized its audit of the fiscal 2000 cost reports.
Furthermore, settled cost reports relating to certain years prior to fiscal 2000
could be subject to reopening of the audit process by the fiscal intermediary.
Although management believes that established reserves are sufficient, it is
possible that adjustments resulting from such audits could result in adjustments
to the consolidated financial statements that exceed established reserves.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company had no interest rate exposure on fixed rate debt or other
market risk at December 28, 2003.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and financial statement schedule
set forth in Part IV, Item 15 (a) (1) and (2) of this report are incorporated by
reference into this Item 8.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no such changes or disagreements.
ITEM 9A. CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.
The Company's Chief Executive Officer and Chief Financial Officer have
evaluated the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as defined in the Securities Exchange Act of
1934 ("Exchange Act") Rule 13a-15(e)) as of the end of the period covered by
this report. Based on that evaluation, the Company's Chief Executive Officer and
Chief Financial Officer have concluded that the Company's disclosure controls
and procedures are adequate and effective to ensure that information required to
be disclosed by the Company in reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported within required
time periods.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING.
As required by the Exchange Act Rule 13a-15(d), the Company's Chief
Executive Officer and Chief Financial Officer evaluated the Company's internal
control over financial reporting to determine whether any change occurred during
the quarter ended December 28, 2003 that has materially affected, or is
reasonably likely to materially affect, the Company's internal control over
financial reporting. Based on that evaluation, there has been no such change
during such quarter.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information required by this item regarding the directors of the
Company is incorporated herein by reference to information under the captions
"Proposal 1 Election of Directors" and "Board of Directors and Committees" to be
contained in the Company's Proxy Statement to be filed with the SEC with regard
to the Company's 2004 Annual Meeting of Shareholders ("2004 Proxy Statement").
See also the information regarding executive officers of the Company at the end
of PART I hereof.
Certain other information required by this item is incorporated herein
by reference to information under the caption "Section 16(a) Beneficial
Ownership Reporting Compliance" to be contained in the Company's 2004 Proxy
Statement.
- 32 -
The Company has adopted a Code of Ethics for Senior Financial Officers
("Code of Ethics") that applies to the Company's Chief Executive Officer, Chief
Financial Officer and Principal Accounting Officer or Controller. A copy of the
Code of Ethics is posted on its Internet website www.gentiva.com under the
"Investor Relations" section. In the event that the Company makes any amendment
to, or grants any waiver from, a provision of the Code of Ethics that requires
disclosure under applicable SEC rules, the Company intends to disclose such
amendment or waiver on its website.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item concerning executive compensation
and compensation of directors is incorporated herein by reference to information
under the captions "Executive Compensation" and "Board of Directors and
Committees," respectively, to be contained in the Company's 2004 Proxy
Statement.
ITEM 12. SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Information required by this item regarding the security ownership of
certain beneficial owners and management of the Company is incorporated herein
by reference to information under the caption "Security Ownership of Certain
Beneficial Owners and Management" to be contained in the Company's 2004 Proxy
Statement.
Certain other information required by this item regarding securities
authorized for issuance under the Company's equity compensation plans is
incorporated herein by reference to information under the caption "Equity
Compensation Plan Information" to be contained in the Company's 2004 Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There are no such relationships or transactions.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Information regarding principal accountant fees and services is
incorporated herein by reference to information under the caption "Proposal 2
Appointment of Independent Public Accountants" to be contained in the Company's
2004 Proxy Statement.
- 33 -
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) FINANCIAL STATEMENTS
PAGE NO.
--------
o Report of Independent Auditors................................................................. F-2
o Consolidated Balance Sheets as of December 28, 2003 and December 29, 2002...................... F-3
o Consolidated Statements of Operations for the three years ended December 28, 2003.............. F-4
o Consolidated Statements of Changes in Shareholders' Equity for the three years ended
December 28, 2003.............................................................................. F-5
o Consolidated Statements of Cash Flows for the three years ended December 28, 2003.............. F-6
o Notes to Consolidated Financial Statements..................................................... F-7
(a)(2) FINANCIAL STATEMENT SCHEDULE
o Schedule II - Valuation and Qualifying Accounts for the three years ended December 28, 2003.... F-27
(a)(3) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Restated Certificate of Incorporation of Company(1)
3.2 Certificate of Correction to Certificate of Incorporation, filed with
the Delaware Secretary of State on July 1, 2002(2)
3.3 Restated By-Laws of Company(2)
4.1 Specimen of common stock(4)
4.2 Form of Certificate of Designation of Series A Junior Participating
Preferred Stock(1)
4.3 Form of Certificate of Designation of Series A Cumulative Non-Voting
Redeemable Preferred Stock(3)
10.1 Separation Agreement dated August 17, 1999 among Olsten Corporation,
Aaronco Corp. and Adecco SA(1)
10.2 Omnibus Amendment No. 1 dated October 7, 1999 by and among Olsten
Corporation, Aaronco Corp., Adecco SA and Olsten Health Services
Holding Corp.(1)
- 34 -
10.3 Omnibus Amendment No. 2 dated January 18, 2000 by and among Olsten
Corporation, Adecco SA, Olsten Health Services Holding Corp., the
Company and Staffing Acquisition Corporation (1)
10.4 Form of Rights Agreement dated March 2, 2000 between the Company and
EquiServe Trust Company, N.A., as rights agent(3)
10.5 Company's Executive Officers Bonus Plan(1)*
10.6 Company's 1999 Stock Incentive Plan(5)*
10.7 Company's Stock & Deferred Compensation Plan for Non-Employee
Directors, as amended and restated as of April 1, 2000 (5)*
10.8 Company's Stock & Deferred Compensation Plan for Non-Employee
Directors, as amended and restated as of January 1, 2004+*
10.9 Company's Employee Stock Purchase Plan (1)*
10.10 Company's Nonqualified Retirement and Savings Plan and First, Second,
Third and Fourth Amendments thereto+*
10.11 Form of Change in Control Agreement with Executive Officers of
Company(2) *
10.12 Form of Severance Agreement with Executive Officers of Company (2)*
10.13 Employment Agreement with Ronald A. Malone (6)*
10.14 Change in Control Agreement with Ronald A. Malone (2)*
10.15 Loan and Security Agreement dated June 13, 2002 by and between Fleet
Capital Corporation, as Administrative Agent, on behalf of the lenders
named therein, Fleet Securities, Inc., as Arranger, Gentiva Health
Services, Inc., Gentiva Health Services Holding Corp. and the
subsidiaries named therein (7)
10.16 First Amendment and Consent Agreement dated August 7, 2003 to Loan and
Security Agreement dated June 13, 2002 by and between Fleet Capital
Corporation, as Administrative Agent on behalf of the lenders named
therein, Fleet Securities, Inc., as Arranger, Gentiva Health Services,
Inc., Gentiva Health Services Holding Corp. and the subsidiaries named
therein (8)
10.17 Second Amendment dated November 26, 2003 to Loan and Security
Agreement dated June 13, 2002 by and between Fleet Capital
Corporation, as Administrative Agent on behalf of the lenders named
therein, Fleet Securities, Inc., as Arranger, Gentiva Health Services,
Inc., Gentiva Health Services Holding Corp. and the subsidiaries named
therein+
10.18 Third Amendment and Joinder dated February 25, 2004 to Loan and
Security Agreement dated June 13, 2002 by and between Fleet Capital
Corporation, as Administrative Agent on behalf of the lenders named
therein, Fleet Securities, Inc., as Arranger, Gentiva Health
Services., Inc., Gentiva Health Services Holding Corp. and the
subsidiaries named therein.+
10.19 Asset Purchase Agreement dated as of January 2, 2002 by and between
Accredo Health, Incorporated, the Company and the Sellers named
therein (9)
- 35 -
10.20 National Home Care Provider Agreement between CIGNA Health Corporation
and Gentiva CareCentrix, Inc. dated January 1, 1996, as amended (10)
(confidential treatment requested as to portions of this document)
10.21 Amendment dated January 1, 2003 to National Home Care Provider
Agreement between CIGNA Health Corporation and Gentiva CareCentrix,
Inc. dated January 1, 1996, as amended (6) (confidential treatment
requested as to portions of this document)
10.22 Managed Care Alliance Agreement between CIGNA Health Corporation and
Gentiva CareCentrix, Inc. entered into as of January 1, 2004
+(confidential treatment requested as to portions of this document)
10.23 Consulting Agreement dated as of July 1, 2002 between Gail R. Wilensky
and Gentiva Health Services (USA), Inc. (11)*
10.24 Amendment dated August 7, 2003 to Consulting Agreement dated as of
July 1, 2002 between Gail R. Wilensky and Gentiva Health Services
(USA), Inc. (8)*
21. List of Subsidiaries of Company +
23. Consent of PricewaterhouseCoopers LLP, independent accountants +
31.1 Certification of Chief Executive Officer dated March 1, 2004 pursuant
to Rule 13a-14(a)+
31.2 Certification of Chief Financial Officer dated March 1, 2004 pursuant
to Rule 13a-14(a)+
32.1 Certification of Chief Executive Officer dated March 1, 2004 pursuant
to 18 U.S.C. Section 1350+
32.2 Certification of Chief Financial Officer dated March 1, 2004 pursuant
to 18 U.S.C. Section 1350+
----------
(1) Incorporated herein by reference to Amendment No. 2 to the
Registration Statement of Company on Form S-4 dated January 19, 2000
(File No. 333-88663).
(2) Incorporated herein by reference to Form 10-Q of Company for quarterly
period ended June 30, 2002.
(3) Incorporated herein by reference to Amendment No. 3 to the
Registration Statement of Company on Form S-4 dated February 4, 2000
(File No. 333-88663).
(4) Incorporated herein by reference to Amendment No. 4 to the
Registration Statement of Company on Form S-4 dated February 9, 2000
(File No. 333-88663).
(5) Incorporated herein by reference to Form 10-K of Company for the
fiscal year ended January 2, 2000.
(6) Incorporated herein by reference to Form 10-K of Company for the
fiscal year ended December 29, 2002.
(7) Incorporated herein by reference to Form 8-K of Company dated June 13,
2002 and filed June 21, 2002.
(8) Incorporated herein by reference to Form 10-Q of Company for quarterly
period ended September 28, 2003.
(9) Incorporated herein by reference to definitive Proxy Statement of
Company dated May 10, 2002.
(10) Incorporated herein by reference to Form 10-Q of Company for quarterly
period ended September 29, 2002.
- 36 -
(11) Incorporated herein by reference to Form 10-Q of Company for quarterly
period ended March 30, 2003.
* Management contract or compensatory plan or arrangement
+ Filed herewith
(b) REPORTS ON FORM 8-K
On October 30, 2003, the Company furnished a report on Form 8-K (i)
furnishing in Item 7 as an exhibit a press release covering the Company's 2003
third quarter consolidated earnings and (ii) reporting in Item 12 the issuance
of the Company's press release on the subject of its 2003 third quarter
consolidated earnings.
- 37 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GENTIVA HEALTH SERVICES, INC.
Date: March 1, 2004 By: /s/ RONALD A. MALONE
--------------------
Ronald A. Malone
Chief Executive Officer and Chairman of the
Board
Pursuant to the requirements of Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: March 1, 2004 By: /s/ RONALD A. MALONE
--------------------
Ronald A. Malone
Chief Executive Officer and Chairman of the
Board and Director (Principal Executive
Officer)
Date: March 1, 2004 By: /s/ JOHN R. POTAPCHUK
---------------------
John R. Potapchuk
Senior Vice President, Chief Financial
Officer, Treasurer and Secretary (Principal
Financial and Accounting Officer)
Date: March 1, 2004 By: /s/ EDWARD A. BLECHSCHMIDT
--------------------------
Edward A. Blechschmidt
Director
Date: March 1, 2004 By: /s/ VICTOR F. GANZI
-------------------
Victor F. Ganzi
Director
Date: March 1, 2004 By: /s/ STUART R. LEVINE
--------------------
Stuart R. Levine
Director
Date: March 1, 2004 By: /s/ MARY O'NEIL MUNDINGER
-------------------------
Mary O'Neil Mundinger
Director
Date: March 1, 2004 By: /s/ STUART OLSTEN
-----------------
Stuart Olsten
Director
Date: March 1, 2004 By: /s/ RAYMOND S. TROUBH
---------------------
Raymond S. Troubh
Director
Date: March 1, 2004 By: /s/ JOSH S. WESTON
------------------
Josh S. Weston
Director
Date: March 1, 2004 By: /s/ GAIL R. WILENSKY
--------------------
Gail R. Wilensky
Director
- 38 -
GENTIVA HEALTH SERVICES, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE NO.
--------
Report of Independent Auditors....................................................................... F-2
Consolidated Balance Sheets as of December 28, 2003 and December 29, 2002............................ F-3
Consolidated Statements of Operations for the three years ended December 28, 2003.................... F-4
Consolidated Statements of Changes in Shareholders' Equity for the three years ended
December 28, 2003................................................................................. F-5
Consolidated Statements of Cash Flows for the three years ended December 28, 2003.................... F-6
Notes to Consolidated Financial Statements........................................................... F-7
Schedule II - Valuation and Qualifying Accounts for the three years ended December 28, 2003.......... F-27
F-1
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of
Gentiva Health Services, Inc. and Subsidiaries:
In our opinion, the consolidated financial statements listed in the index
appearing under Item 15 (a)(1) present fairly, in all material respects, the
financial position of Gentiva Health Services, Inc. and Subsidiaries (the
"Company") at December 28, 2003 and December 29, 2002, and the results of their
operations and their cash flows for each of the three years in the period ended
December 28, 2003 in conformity with accounting principles generally accepted in
the United States of America. In addition, in our opinion, the financial
statement schedule listed in the index appearing under Item 15(a)(2) presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As discussed in Note 2 to the consolidated financial statements, the Company
adopted SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), which
changed the method of accounting for goodwill and other intangible assets
effective December 31, 2001.
/s/ PRICEWATERHOUSECOOPERS LLP
------------------------------
PricewaterhouseCoopers LLP
Stamford, Connecticut
February 6, 2004, except for Note 9, as to which the date is February 27, 2004
F-2
GENTIVA HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
DECEMBER 28, 2003 DECEMBER 29, 2002
----------------- -----------------
ASSETS
Current assets:
Cash and cash equivalents $ 78,263 $ 101,241
Restricted cash 21,750 -
Short-term investments 10,000 -
Receivables, less allowance for doubtful accounts of
$7,936 and $9,032 in 2003 and 2002, respectively 132,998 125,078
Deferred tax assets 26,464 752
Prepaid expenses and other current assets 6,524 9,782
--------- ---------
Total current assets 275,999 236,853
Fixed assets, net 15,135 13,025
Deferred tax assets, net 28,025 -
Other assets 15,929 14,553
--------- ---------
Total assets $ 335,088 $ 264,431
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 16,079 $ 16,865
Payroll and related taxes 12,932 12,377
Medicare liabilities 12,736 11,880
Cost of claims incurred but not reported 28,525 27,899
Obligations under insurance programs 37,200 37,829
Other accrued expenses 32,230 25,664
--------- ---------
Total current liabilities 139,702 132,514
Other liabilities 18,207 18,869
Shareholders' equity:
Common stock, $.10 par value; authorized 100,000,000
shares; issued and outstanding 25,598,301 and
26,385,210 shares, in 2003 and 2002, respectively 2,560 2,639
Additional paid-in capital 270,468 263,024
Accumulated deficit (95,849) (152,615)
--------- ---------
Total shareholders' equity 177,179 113,048
--------- ---------
Total liabilities and shareholders' equity $ 335,088 $ 264,431
========= =========
See notes to consolidated financial statements.
F-3
GENTIVA HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- ----------------- -----------------
Net revenues $ 814,029 $ 768,501 $ 729,577
Cost of services sold 531,987 520,901 483,917
---------- ---------- ----------
Gross profit 282,042 247,600 245,660
Selling, general and administrative expenses (252,334) (276,355) (247,581)
Depreciation and amortization (6,851) (7,185) (18,741)
---------- ---------- ----------
Operating income (loss) 22,857 (35,940) (20,662)
Interest income (expense), net 441 834 (63)
---------- ---------- ----------
Income (loss) before income taxes from continuing
operations 23,298 (35,106) (20,725)
Income tax benefit (expense) 33,468 (18,437) 6,815
---------- ---------- ----------
Income (loss) from continuing operations 56,766 (53,543) (13,910)
Discontinued operations, net of tax - 191,578 34,898
---------- ---------- ----------
Income before cumulative effect of accounting change 56,766 138,035 20,988
Cumulative effect of accounting change, net of tax - (187,068) -
---------- ---------- ----------
Net income (loss) $ 56,766 $ (49,033) $ 20,988
========== ========== ==========
Basic earnings per share:
Income (loss) from continuing operations $ 2.16 $ (2.05) $ (0.60)
Discontinued operations, net of tax - 7.32 1.50
Cumulative effect of accounting change, net of tax - (7.14) -
---------- ---------- ----------
Net income (loss) $ 2.16 $ (1.87) $ 0.90
========== ========== ==========
Weighted average shares outstanding 26,262 26,183 23,186
========== ========== ==========
Diluted earnings per share:
Income (loss) from continuing operations $ 2.07 $ (2.05) $ (0.60)
Discontinued operations, net of tax - 7.32 1.50
Cumulative effect of accounting change, net of tax - (7.14) -
---------- ---------- ----------
Net income (loss) $ 2.07 $ (1.87) $ 0.90
========== ========== ==========
Weighted average shares outstanding 27,439 26,183 23,186
========== ========== ==========
See notes to consolidated financial statements.
F-4
GENTIVA HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE YEARS ENDED DECEMBER 28, 2003
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
ACCUMULATED
COMMON STOCK ADDITIONAL OTHER
-------------------------- PAID-IN ACCUMULATED COMPREHENSIVE
SHARES AMOUNT CAPITAL DEFICIT INCOME (LOSS) TOTAL
------------ ------------ ------------ ------------ ------------- -----------
Balance at December 31, 2000 21,196,693 $ 2,120 $ 689,163 $ (124,570) $ (564) $ 566,149
Comprehensive income:
Net income 20,988 - 20,988
Realized gain on investments - 564 564
------------ ------------ ------------ ------------ --------- -----------
Subtotal - - - 20,988 564 21,552
Conversion of Gentiva-obligated man-
datorily redeemable convertible
securities of a subsidiary holding
solely Gentiva debentures 2,146,105 214 19,786 - - 20,000
Issuance of stock upon exercise of
stock options and under stock plans
for employees and directors 2,295,996 230 13,776 - - 14,006
------------ ------------ ------------ ------------ --------- -----------
Balance at December 30, 2001 25,638,794 $ 2,564 $ 722,725 $ (103,582) $ - $ 621,707
Comprehensive loss:
Net loss - - - (49,033) - (49,033)
Dividends paid ($17.75 per share) - - (466,597) - - (466,597)
Issuance of stock upon exercise of
stock options and under stock plans
for employees and directors 746,416 75 6,896 - - 6,971
------------ ------------ ------------ ------------ --------- -----------
Balance at December 29, 2002 26,385,210 $ 2,639 $ 263,024 $ (152,615) $ - $ 113,048
Comprehensive income:
Net income 56,766 56,766
Income tax benefits associated with
stock-based compensation 19,454 - 19,454
Issuance of stock upon exercise of
stock options and under stock plans
for employees and directors 651,555 65 2,271 - 2,336
Repurchase of common stock at cost (1,438,464) (144) (14,281) - (14,425)
------------ ------------ ------------ ------------ --------- -----------
Balance at December 28, 2003 25,598,301 $ 2,560 $ 270,468 $ (95,849) $ - $ 177,179
============ ============ ============ ============ ========= ===========
See notes to consolidated financial statements
F-5
GENTIVA HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
FOR THE FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- ----------------- -----------------
OPERATING ACTIVITIES:
Net income (loss) $ 56,766 $ (49,033) $ 20,988
Adjustments to reconcile net income (loss) to net cash
provided by operating activities
Income from discontinued operations - (191,578) (34,898)
Cumulative effect of accounting change - 187,068 -
Depreciation and amortization 6,851 7,185 18,741
Provision for doubtful accounts 7,684 4,936 5,120
(Gain) loss on sale / disposal of businesses and
fixed assets (209) 951 (255)
Stock option tender offer - 21,388 -
Deferred income tax (benefit) expense (35,035) 12,837 -
Changes in assets and liabilities, net of
acquisitions/divestitures
Accounts receivable (15,604) 10,281 32,655
Prepaid expenses and other current assets 3,048 7,825 2,610
Current liabilities 7,065 6,393 (11,702)
Change in net assets held for sale - 3,300 57,711
Other, net 137 (3,024) 827
----------- ----------- -----------
Net cash provided by operating activities 30,703 18,529 91,797
----------- ----------- -----------
INVESTING ACTIVITIES:
Purchase of fixed assets - continuing operations (8,777) (4,116) (3,864)
Purchase of fixed assets - discontinued operations - (2,121) (6,203)
Proceeds from sale of assets / business 200 206,564 475
Acquisition of businesses (1,300) - -
Purchase of short-term investments (24,900) - -
Maturities of short-term investments 14,935 - -
Withdrawal from (deposits into) restricted cash (21,750) 35,164 (35,164)
----------- ----------- -----------
Net cash (used in) provided by investing activities (41,592) 235,491 (44,756)
----------- ----------- -----------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 2,336 6,971 14,006
Repurchases of common stock (14,425) - -
Debt issuance costs - (1,321) -
Cash distribution to shareholders - (203,983) -
Payments for stock option tender - (21,388) -
Advance (paid to) / received from Medicare program - (5,038) 20,878
Decrease in book overdrafts - - (10,379)
----------- ----------- -----------
Net cash (used in) provided by financing activities (12,089) (224,759) 24,505
----------- ----------- -----------
Net change in cash and cash equivalents (22,978) 29,261 71,546
Cash and cash equivalents at beginning of period 101,241 71,980 434
----------- ----------- -----------
Cash and cash equivalents at end of period $ 78,263 $ 101,241 $ 71,980
=========== =========== ===========
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES
For fiscal year 2003, in connection with the reversal of the valuation
allowance, deferred tax benefits associated with stock compensation deductions
of $19.5 million have been credited to shareholders' equity.
For fiscal year 2002, in connection with the sale of the Company's Specialty
Pharmaceutical Services business on June 13, 2002, the Company received
5,060,976 shares of common stock of Accredo Health, Incorporated, which were
subsequently distributed to the Company's shareholders.
In fiscal 2001, $20 million of the Company's convertible preferred trust
securities were converted to common stock.
See notes to consolidated financial statements.
F-6
GENTIVA HEALTH SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BACKGROUND AND BASIS OF PRESENTATION
Gentiva Health Services, Inc. ("Gentiva" or the "Company") provides
home health services throughout most of the United States. Gentiva was
incorporated in the state of Delaware on August 6, 1999 and became an
independent publicly owned company on March 15, 2000, when the common stock of
the Company was issued to the stockholders of Olsten Corporation ("Olsten"), the
former parent corporation of the Company (the "Split-Off"). Continuing
operations for all periods presented comprise the operating results of the home
health services business, including, for fiscal 2002 and 2001, restructuring and
other special charges as described in Note 4.
On June 13, 2002, the Company sold substantially all of the assets of
its specialty pharmaceutical services ("SPS") business to Accredo Health,
Incorporated ("Accredo") and issued a special dividend to its shareholders as
further described in Note 3. The operating results of the SPS business through
the closing date of the sale to Accredo, including corporate expenses directly
attributable to SPS operations, restructuring and special charges related to the
SPS business, as well as the gain on the sale, net of transaction costs and
related income taxes, are reflected as discontinued operations in the
accompanying consolidated statements of operations.
The Company adopted the provisions of Statement of Financial
Accounting Standard ("SFAS") No. 142, "Goodwill and Other Intangible Assets" as
of the beginning of fiscal 2002. In connection with this adoption, the Company
recorded a non-cash charge, net of taxes, as a cumulative effect of accounting
change in the accompanying consolidated statement of operations in fiscal 2002
as described in Note 2.
NOTE 2. SUMMARY OF CRITICAL AND OTHER SIGNIFICANT ACCOUNTING POLICIES
CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany balances
and transactions have been eliminated. The Company's fiscal year ends on the
Sunday nearest to December 31st, which was December 28, 2003 for fiscal 2003,
December 29, 2002 for fiscal 2002 and December 30, 2001 for fiscal 2001.
ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions and select accounting policies that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
The most critical estimates relate to revenue recognition, the
collectibility of accounts receivable and related reserves, the cost of claims
incurred but not reported, obligations under workers compensation, professional
liability and employee health and welfare insurance programs and Medicare
settlement issues.
A description of the critical and other significant accounting
policies and a discussion of the significant estimates and judgments associated
with such policies are described below.
CRITICAL ACCOUNTING POLICIES
REVENUE RECOGNITION
Under fee-for-service agreements with patients and commercial and
certain government payors, net revenues are recorded based on net realizable
amounts to be received in the period in which the services and products are
provided or delivered. Fee-for-service contracts with commercial payors are
traditionally one year in term and renewable automatically on an annual basis,
unless terminated by either party.
Under capitated arrangements with certain managed care customers, net
revenues are recognized based on a predetermined monthly contractual rate for
each member of the managed care plan regardless of the ser-
F-7
vices provided. Net revenues generated under capitated agreements were
approximately 16 percent, 16 percent, and 15 percent of total net revenues for
fiscal 2003, 2002, 2001, respectively.
Under the Prospective Payment System ("PPS") for Medicare
reimbursement, net revenues are recorded based on a reimbursement rate which
varies based on the severity of the patient's condition, service needs and
certain other factors; revenue is recognized ratably over the period in which
services are provided. Revenue is subject to adjustment during this period if
there are significant changes in the patient's condition during the treatment
period or if the patient is discharged but readmitted to another agency within
the same 60 day episodic period. Medicare billings under PPS are initially
recognized as deferred revenue and are subsequently amortized into revenue over
an average patient treatment period. The process for recognizing revenue to be
recognized under the Medicare program is based on certain assumptions and
judgments, including the average length of time of each treatment as compared to
a standard 60 day episode, the appropriateness of the clinical assessment of
each patient at the time of certification and the level of adjustments to the
fixed reimbursement rate relating to patients who receive a limited number of
visits, have significant changes in condition or are subject to certain other
factors during the episode. Deferred revenue of approximately $5.2 million and
$4.4 million relating to the Medicare PPS program was included in other Medicare
liabilities in the consolidated balance sheets as of December 28, 2003 and
December 29, 2002, respectively.
Revenue adjustments result from differences between estimated and
actual reimbursement amounts, an inability to obtain appropriate billing
documentation or authorizations acceptable to the payor and other reasons
unrelated to credit risk. Revenue adjustments are deducted from gross accounts
receivable. These revenue adjustments are based on significant assumptions and
judgments which are determined by Company management based on historical trends.
Third party settlements resulting in recoveries are recognized as net revenues
in the period in which the funds are received.
Net revenues attributable to major payor sources of reimbursement are
as follows:
FISCAL YEAR
2003 2002 2001
-------- -------- ---------
Medicare 22% 21% 21%
Medicaid and Other Government 20 22 23
Commercial Insurance and Other 58 57 56
--- --- ---
100% 100% 100%
=== === ===
The Company is party to a contract with CIGNA Health Corporation
("Cigna"), pursuant to which the Company provides or contracts with third party
providers to provide home nursing services, acute and chronic infusion
therapies, durable medical equipment, and respiratory products and services to
patients insured by Cigna. For fiscal years 2003, 2002 and 2001, Cigna accounted
for approximately 36 percent, 38 percent and 36 percent, respectively, of the
Company's total net revenues. The Company has extended its relationship with
Cigna by entering into a new national home health care contract, effective
January 1, 2004, with the new contract expiring on December 31, 2006. No other
commercial payor accounts for 10 percent or more of the Company's net revenues.
COLLECTIBILITY OF ACCOUNTS RECEIVABLE
The process for estimating the ultimate collection of receivables,
particularly with respect to fee-for-service arrangements, involves significant
assumptions and judgments. In this regard, the Company has implemented a
standardized approach to estimate and review the collectibility of its
receivables based on accounts receivable aging trends. Historical collection and
payor reimbursement experience is an integral part of the estimation process
related to determining the allowance for doubtful accounts. In addition, the
Company assesses the current state of its billing functions in order to identify
any known collection or reimbursement issues to determine the impact, if any, on
its reserve estimates, which involve judgment. Revisions in reserve estimates
are recorded as an adjustment to the provision for doubtful accounts which is
reflected in selling, general and administrative expenses in the consolidated
statements of operations. The Company believes that its collection and reserve
processes, along with the monitoring of its billing processes, help to reduce
the risk associated with material revisions to reserve estimates resulting from
adverse changes in collection, reimbursement experience and billing functions.
F-8
COST OF CLAIMS INCURRED BUT NOT REPORTED
Under capitated arrangements with managed care customers, the Company
estimates the cost of claims incurred but not reported based on applying
actuarial assumptions, historical patterns of utilization to authorized levels
of service, current enrollment statistics and other information. Under
fee-for-service arrangements with certain managed care customers, the Company
also estimates the cost of claims incurred but not reported and the estimated
revenue relating thereto in situations in which the Company is responsible for
care management and patient services are performed by a non-affiliated provider.
The estimate of cost of claims incurred but not reported involves
significant assumptions and judgments which relate to and may vary depending on
the services authorized at each of the Company's regional coordination centers,
historical patterns of service utilization and payment trends. These assumptions
and judgments are evaluated on a quarterly basis and changes in estimated
liabilities for costs of claims incurred but not reported are determined based
on such evaluation.
OBLIGATIONS UNDER INSURANCE PROGRAMS
The Company is obligated for certain costs under various insurance
programs, including workers compensation, professional liability and employee
health and welfare.
The Company may be subject to workers compensation claims and lawsuits
alleging negligence or other similar legal claims. The Company maintains various
insurance programs to cover this risk but is substantially self-insured for most
of these claims. The Company recognizes its obligations associated with these
programs in the period the claim is incurred. The cost of both reported claims
and claims incurred but not reported, up to specified deductible limits, have
generally been estimated based on historical data, industry statistics, the
Company's own home health specific historical claims experience, current
enrollment statistics and other information. Such estimates and the resulting
reserves are reviewed and updated periodically.
For the fiscal year ended December 29, 2002, the Company recorded a
special charge of $6.3 million relating primarily to a refinement in the
estimation process used to determine the Company's actuarially computed workers
compensation and professional liability reserves. Management believes that, as a
result of this refinement, sufficient data exists to allow the Company to more
heavily rely on its own home health specific historical claims experience in
determining the Company's estimates of workers compensation and professional
liability reserves. Previously the Company utilized insurance industry actuarial
information, as well as the Company's historical claims experience in developing
reserve estimates.
The Company maintains insurance coverage on individual claims. The
Company is responsible for the cost of individual workers compensation claims
and individual professional liability claims up to $500,000 per incident which
occurred prior to March 15, 2002 and $1,000,000 per incident thereafter. The
Company also maintains excess liability coverage relating to professional
liability and casualty claims which provides insurance coverage for individual
claims of up to $25,000,000 in excess of the underlying coverage limits.
Payments under the Company's workers compensation program are guaranteed by
letters of credit and segregated restricted cash balances.
The Company believes that its present insurance coverage and reserves
are sufficient to cover currently estimated exposures, but there can be no
assurance that the Company will not incur liabilities in excess of recorded
reserves or in excess of its insurance limits.
MEDICARE SETTLEMENT ISSUES
Prior to October 1, 2000, reimbursement of Medicare home care nursing
services was based on reasonable, allowable costs incurred in providing services
to eligible beneficiaries subject to both per visit and per beneficiary limits
in accordance with the Interim Payment System established through the Balanced
Budget Act of 1997. These costs were reported in annual cost reports which were
filed with the Centers for Medicare and Medicaid Services ("CMS") and were
subject to audit by the fiscal intermediary engaged by CMS. The fiscal
intermediary has not finalized its audit of the fiscal 2000 cost reports.
Furthermore, settled cost reports relating to certain years prior to fiscal 2000
could be subject to reopening of the audit process by the fiscal intermediary.
Although management believes that established reserves are sufficient, it is
possible that adjustments resulting from such audits could result in adjustments
to the consolidated financial statements that exceed established reserves.
F-9
OTHER SIGNIFICANT ACCOUNTING POLICIES
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
The Company considers all investments with an original maturity of
three months or less on their acquisition date to be cash equivalents.
Restricted cash represents segregated cash funds in a trust account designated
as collateral under the Company's insurance programs. Interest on the trust
account funds accrue to the Company. The Company, at its option, may access the
cash funds in the trust account by providing equivalent amounts of alternative
security.
SHORT-TERM INVESTMENTS
The Company classifies investments with an original maturity of more
than three months and less than one year on the acquisition date as short-term
investments in accordance with SFAS No. 115 "Accounting for Certain Investments
in Debt and Equity Securities". Short-term investments are classified as "held
to maturity" investments and are reported at amortized cost which approximates
fair value.
FIXED ASSETS
Fixed assets, including costs of Company developed software, are
stated at cost and depreciated over the estimated useful lives of the assets
using the straight-line method. Leasehold improvements are amortized over the
shorter of the life of the lease or the life of the improvement.
GOODWILL AND OTHER INTANGIBLE ASSETS ("SFAS 142")
In June 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142"), which broadens
the criteria for recording intangible assets separate from goodwill. SFAS 142
requires the use of a non-amortization approach to account for purchased
goodwill and certain intangibles. Under a non-amortization approach, goodwill
and certain intangibles are not amortized into results of operations, but
instead are reviewed for impairment and an impairment charge is recorded in the
periods in which the recorded carrying value of goodwill and certain intangibles
is more than its estimated fair value. The Company adopted SFAS 142 as of the
beginning of fiscal 2002. The provisions of SFAS 142 require that a transitional
impairment test be performed as of the beginning of the year the statement is
adopted.
Based on the results of the transitional impairment tests, the Company
determined that an impairment loss relating to goodwill had occurred and
recorded a non-cash charge of $187.1 million, net of a deferred tax benefit of
$30.2 million, as cumulative effect of accounting change in the accompanying
consolidated statement of operations for the fiscal year ended December 29,
2002. The deferred tax benefit was recorded by eliminating a deferred tax
liability of $26.8 million and recording a deferred tax asset of approximately
$39 million, offset by an increase in the tax valuation allowance by the same
amount. During fiscal 2002, the Company also recorded a tax benefit of
approximately $3.4 million relating to tax deductible goodwill. See Note 12 to
the consolidated financial statements.
For fiscal year 2001, intangibles, principally goodwill, associated
with acquired businesses were being amortized on a straight-line basis over
periods ranging from 10 to 40 years in accordance with APB Opinion No. 17,
"Intangible Assets" based on a fair value methodology.
The table below presents a reconciliation of reported net income to
adjusted net income as if SFAS 142 was adopted as of January 1, 2001 (in
thousands, except per share amounts):
F-10
FOR THE FISCAL YEAR ENDED
DECEMBER 30, 2001
-------------------------------
EARNINGS PER SHARE
NET INCOME BASIC AND DILUTED
---------- ------------------
Reported net income $ 20,988 $ 0.90
Add back: Goodwill amortization, net of tax 10,023 0.43
---------- --------
Adjusted net income $ 31,011 $ 1.33
========== ========
The provisions of SFAS 142 also require that a goodwill impairment
test be performed annually or on the occasion of other events that indicate a
potential impairment. The annual impairment test of goodwill was performed and
indicated that there was no impairment of goodwill as of December 28, 2003.
ACCOUNTING FOR IMPAIRMENT AND DISPOSAL OF LONG-LIVED ASSETS
The Company evaluates the possible impairment of its long-lived
assets, including intangible assets which are amortized pursuant to the
provisions of SFAS 142, under SFAS No. 144, "Accounting for Impairment or
Disposal of Long-Lived Assets" ("SFAS 144"). The Company reviews the
recoverability of its long-lived assets when events or changes in circumstances
occur that indicate that the carrying value of the asset may not be recoverable.
Evaluation of possible impairment is based on the Company's ability to recover
the asset from the expected future pretax cash flows (undiscounted and without
interest charges) of the related operations. If the expected undiscounted pretax
cash flows are less than the carrying amount of such asset, an impairment loss
is recognized for the difference between the estimated fair value and carrying
amount of the asset.
STOCK-BASED COMPENSATION PLANS
SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"),
as amended by SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure - an amendment of FASB No. 123" ("SFAS 148")
encourages, but does not require, companies to record compensation cost for
stock-based compensation plans at fair value. In addition, SFAS 148 provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock-based employee compensation, and amends the
disclosure requirements of SFAS 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results.
The Company has chosen to adopt the disclosure only provisions of SFAS
No. 148 and continues to account for stock-based compensation using the
intrinsic value method prescribed in Accounting Principles Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and related
interpretations. Under this approach, the imputed cost of stock option grants
and discounts offered under the Company's Employee Stock Purchase Plan ("ESPP")
is disclosed, based on the vesting provisions of the individual grants, but not
charged to expense. See Note 11.
EARNINGS PER SHARE
Basic and diluted earnings (loss) per share for each period presented
has been computed by dividing the net income (loss) by the weighted average
number of shares outstanding for each respective period. The computations of the
basic and diluted per share amounts for the Company's continuing operations were
as follows (in thousands, except per share amounts):
F-11
FOR THE FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- ----------------- -----------------
Income (loss) from continuing operations $ 56,766 $ (53,543) $ (13,910)
===========================================================================================================
Basic weighted average common
shares outstanding 26,262 26,183 23,186
Shares issuable upon the assumed exercise of
stock options and in connection with the ESPP
using the treasury stock method 1,177 - -
----------- ---------- -----------
Diluted weighted average common
shares outstanding 27,439 26,183 23,186
----------- ---------- -----------
===========================================================================================================
Income (loss) from continuing operations
per common share:
Basic $ 2.16 $ (2.05) $ (0.60)
Diluted $ 2.07 $ (2.05) $ (0.60)
===========================================================================================================
The weighted average number of shares outstanding of 23,186,000 for
fiscal year 2001 included 2,146,105 shares of common stock issued upon
conversion of $20 million of the 10 percent convertible preferred trust
securities from the date of conversion as discussed in Note 7.
For fiscal years 2002 and 2001, in accordance with SFAS No. 128
"Earnings Per Share," the number of common shares used in computing the diluted
earnings (loss) per share for continuing operations was used for discontinued
operations, cumulative effect of accounting change and net income (loss), even
though the impact was antidilutive.
The computation of diluted earnings (loss) per share from continuing
operations for fiscal year 2002 excluded an incremental 1,592,000 shares that
would be issuable upon the assumed exercise of stock options and in connection
with the ESPP using the treasury stock method, since their inclusion would be
antidilutive on earnings.
For fiscal year 2001, due to the antidilutive effect on loss from
continuing operations, the diluted earnings (loss) per share computation
excluded the effect of (i) an incremental 1,454,000 shares that would have been
issued if the 10 percent convertible preferred trust securities were converted
at the beginning of the year and (ii) 1,229,000 shares that would be issuable
upon the assumed exercise of stock options under the treasury stock method.
INCOME TAXES
The Company uses the asset and liability approach to account for
income taxes. Under this method, deferred tax assets and liabilities are
recognized for the expected future tax consequences of differences between the
carrying amounts of assets and liabilities and their respective tax bases using
tax rates in effect for the year in which the differences are expected to
reverse. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period when the change is enacted.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument represents the amount at
which the instrument could be exchanged in a current transaction between willing
parties, other than in a forced sale or liquidation. Significant differences can
arise between the fair value and carrying amount of financial instruments that
are recognized at historical amounts.
The carrying amounts of the Company's cash and cash equivalents,
restricted cash, short-term investments, accounts receivable, accounts payable
and certain other current liabilities approximate fair value because of their
short maturity.
F-12
DEBT ISSUANCE COSTS
The Company amortizes deferred debt issuance costs over the term of
its credit facility.
In April 2002, the FASB issued SFAS No. 145 "Rescission of FASB
Statements No. 4, 44 and 64, Amendment of FASB Statements No. 13, and Technical
Correction" ("SFAS 145"). SFAS 145 rescinded SFAS No. 4 "Reporting Gains and
Losses from Extinguishment of Debt" ("SFAS 4"), SFAS No. 44 "Accounting for
Intangible Assets of Motor Carriers" ("SFAS 44") and SFAS No. 64
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements" ("SFAS 64")
and amended SFAS No. 13 "Accounting for Leases" ("SFAS 13"). This statement
updates, clarifies and simplifies existing accounting pronouncements. As a
result of rescinding SFAS 4 and SFAS 64, the criteria in APB Opinion No. 30
"Reporting the Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions" will be used to determine whether gains and losses from
extinguishment of debt receive extraordinary item treatment. The Company adopted
SFAS 145, effective April 1, 2002. During the fiscal year ended December 29,
2002, the impact of this adoption resulted in the Company recognizing a
write-off of approximately $1.5 million of deferred debt issuance costs
associated with the terminated credit facility which is reflected in selling,
general and administrative expenses in the accompanying consolidated statement
of operations and is further discussed in Note 4.
RECLASSIFICATION
Certain reclassifications have been made to the 2002 and 2001
consolidated financial statements to conform to current year presentation.
RECENT ACCOUNTING PRONOUNCEMENTS
In July 2002, the FASB issued SFAS No. 146 "Accounting for Costs
Associated with Exit or Disposal Activities" ("SFAS 146"), which addresses the
recognition, measurement, and reporting of costs associated with exit or
disposal activities, and supersedes Emerging Issues Task Force ("EITF") Issue
No. 94-3 "Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit An Activity (including Certain Costs Incurred in a
Restructuring)" ("EITF 94-3"). The principal difference between SFAS 146 and
EITF 94-3 relates to the requirements for recognition of a liability for a cost
associated with an exit or disposal activity. SFAS 146 requires that a liability
for a cost associated with an exit or disposal activity, including those related
to employee termination benefits and obligations under operating leases and
other contracts, be recognized when the liability is incurred, and not
necessarily the date of an entity's commitment to an exit plan, as under EITF
94-3. SFAS 146 also establishes that the initial measurement of a liability
recognized under SFAS 146 be based on fair value. The provisions of SFAS 146 are
effective for exit or disposal activities that are initiated after December 31,
2002, with early application encouraged. The Company adopted SFAS 146, effective
December 30, 2002. For exit or disposal activities initiated prior to December
30, 2002, the Company followed the accounting guidelines outlined in EITF 94-3.
In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities," as revised in December 2003 ("FIN 46"). FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns or both. Historically, entities generally were not consolidated unless
the entity was controlled through voting interests. FIN 46 also requires
disclosures about variable interest entities that a company is not required to
consolidate but in which it has a significant variable interest. The
consolidation requirements of FIN 46 will apply to variable interest entities as
of March 31, 2004 for the Company. Also, certain disclosure requirements apply
to all financial statements issued after December 31, 2003, regardless of when
the variable interest entity was established. The adoption of this standard is
not expected to have a material impact on the Company's consolidated financial
statements.
NOTE 3. ACQUISITIONS AND DISPOSITIONS
ACQUISITION OF FIRST HOME CARE BUSINESS
On March 28, 2003, the Company completed the purchase of certain
assets and the business of First Home Care - Houston, Inc. and FHCH, Inc.
pursuant to an asset purchase agreement for cash consideration of $1.3 million.
The purchase price allocation consisted of goodwill of $1.2 million and assets
and other intangibles of $0.1 million.
F-13
SALE OF SPECIALTY PHARMACEUTICAL SERVICES BUSINESS
On June 13, 2002, the Company consummated the sale of its SPS business
to Accredo (the "SPS Sale"). The SPS Sale was effected pursuant to an asset
purchase agreement (the "Asset Purchase Agreement") dated January 2, 2002,
between Gentiva, Accredo and certain of Gentiva's subsidiaries named therein.
Pursuant to the terms of the Asset Purchase Agreement, Accredo
acquired the SPS business in consideration for:
o the payment to the Company of a cash amount equal to $207.5
million (before a $0.9 million reduction resulting from a closing
net book value adjustment); and
o 5,060,976 shares of Accredo common stock.
Based on the closing price of the Accredo common stock on June 13,
2002 ($51.89 per share), the value of the stock consideration was $262.6
million.
In connection with the SPS Sale, the Company's Board of Directors
declared a dividend, payable to shareholders of record on June 13, 2002, of all
the common stock consideration and substantially all the cash consideration
received from Accredo. The cash consideration received by the Company before the
closing net book value adjustment was $207.5 million; however, the amount
distributed to the Company's shareholders was reduced by $3.5 million to $204
million as a holdback for income taxes the Company expected to incur on the
proceeds received in excess of $460 million as detailed in the Company's proxy
statement, dated May 10, 2002. The special dividend, which was delivered to the
distribution agent on June 13, 2002 for payment to the Company's shareholders,
resulted in shareholders of record on the record date receiving $7.76 in cash
and 0.19253 shares of Accredo common stock (valued at $9.99 per share based on
the June 13, 2002 closing price of $51.89 per share of Accredo common stock) for
each share of Gentiva common stock held. The total value of the special dividend
amounted to $17.75 per share. Cash was paid in lieu of fractional shares.
In connection with the SPS sale, the Company incurred $16.2 million in
transaction costs which related to investment banking fees, legal and accounting
costs, change in control and other employee related payments and miscellaneous
other costs. SPS revenues and operating results for the periods presented were
as follows (in thousands):
FOR THE FISCAL YEAR ENDED
-------------------------------------
DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- -----------------
Net revenues $ 323,319 $ 648,110
========== ==========
Operating results of discontinued SPS business:
Income before income taxes $ 11,238 $ 43,588
Income tax expense (1,313) (8,690)
---------- ----------
Net income 9,925 34,898
---------- ----------
Gain on disposal of SPS business, including
transaction costs of $16.2 million for fiscal
year 2002 205,355 -
Income tax expense (23,702) -
---------- ----------
Gain on disposal, net of tax 181,653 -
---------- ----------
Discontinued operations, net of tax $ 191,578 $ 34,898
========== ==========
NOTE 4. RESTRUCTURING AND OTHER SPECIAL CHARGES
During fiscal 2002 and 2001, the Company recorded restructuring and
other special charges aggregating $46.1 million and $3.0 million, respectively.
F-14
FISCAL 2002
BUSINESS REALIGNMENT ACTIVITIES
The Company recorded charges of $6.8 million during the second quarter
ended June 30, 2002 in connection with a restructuring plan. This plan included
the closing and consolidation of seven field locations and the realignment and
consolidation of certain corporate and administrative support functions due
primarily to the sale of the Company's SPS business. These charges included
employee severance of $0.9 million relating to the termination of 115 employees
in field locations and certain corporate and administrative departments, and
future lease payments and other associated costs of $5.9 million resulting
principally from the consolidation of office space at the Company's corporate
headquarters and a change in estimated future lease obligations and other costs
in excess of sublease rentals relating to a lease for a subsidiary of the
Company's former parent company which the Company agreed to assume in connection
with its Split-Off in March 2000. These charges were reflected in selling,
general and administrative expenses in the accompanying consolidated statement
of operations for the fiscal year ended December 29, 2002. The major components
of the restructuring charges as well as the activity during fiscal years 2003
and 2002 were as follows (in thousands):
COMPENSATION
AND SEVERANCE FACILITY LEASE
COSTS AND OTHER COSTS TOTAL
--------------- ----------------- --------------
FISCAL 2002 CHARGE $ 920 $ 5,893 $ 6,813
Cash expenditures (726) (1,348) (2,074)
-------- --------- ---------
Balance at December 29, 2002 194 4,545 4,739
Cash expenditures (194) (2,239) (2,433)
-------- --------- ---------
Balance at December 28, 2003 $ - $ 2,306 $ 2,306
======== ========= =========
The balance of unpaid charges, which will be paid over the remaining
lease terms, was included in other accrued expenses in the consolidated balance
sheets.
OPTION TENDER OFFER
During the second quarter ended June 30, 2002, the Company effected a
cash tender offer for all outstanding options to purchase its common stock for
an aggregate option purchase price not to exceed $25 million. In connection with
this tender offer, the Company recorded a charge of $21.4 million during the
second quarter of fiscal 2002, which is reflected in selling, general and
administrative expenses in the accompanying consolidated statement of operations
for the fiscal year ended December 29, 2002.
SETTLEMENT COSTS
The Company recorded a $7.7 million charge in the second quarter of
fiscal 2002 to reflect settlement costs relating to the FREDRICKSON V. OLSTEN
HEALTH SERVICES CORP. AND OLSTEN CORPORATION lawsuit as well as estimated
settlement costs related to government inquiries regarding cost reporting
procedures concerning contracted nursing and home health aide costs (see Note
9). These costs are reflected in selling, general and administrative costs in
the accompanying consolidated statement of operations for the fiscal year ended
December 29, 2002.
INSURANCE COSTS
The Company recorded a special charge of $6.3 million in the second
quarter of fiscal 2002 related primarily to a refinement in the estimation
process used to determine the Company's actuarially computed workers
compensation and professional liability insurance reserves. This special charge
is reflected in cost of services sold in the accompanying consolidated statement
of operations for the fiscal year ended December 29, 2002.
F-15
ASSET WRITEDOWNS AND OTHER
The Company recorded charges of $3.8 million in the second quarter of
fiscal 2002, consisting primarily of a write-down of inventory and other assets
associated with home medical equipment used in the Company's nursing operations,
and a write-off of deferred debt issuance costs associated with the terminated
credit facility. The charges are reflected in selling, general and
administrative expenses in the accompanying consolidated statement of operations
for the fiscal year ended December 29, 2002.
FISCAL 2001
SETTLEMENT COSTS
The Company recorded special charges of approximately $3.0 million
during fiscal 2001 in connection with the settlement of the GILE V. OLSTEN
CORPORATION, ET AL., and the STATE OF INDIANA V. QUANTUM HEALTH RESOURCES, INC.
AND OLSTEN HEALTH SERVICES, INC. lawsuits and for various other legal costs.
These legal matters are further discussed in Note 9. These special charges are
reflected in selling, general and administrative expenses in the accompanying
consolidated statement of operations for the fiscal year ended December 30,
2001.
NOTE 5. FIXED ASSETS, NET
(IN THOUSANDS) USEFUL LIVES DECEMBER 28, 2003 DECEMBER 29, 2002
------------------------------- ------------ ----------------- -----------------
Computer equipment and software 3-5 Years $ 43,786 $ 44,582
Furniture and fixtures 5 Years 20,031 19,337
Leasehold improvements Lease Term 9,166 10,224
Machinery and equipment 5 Years 391 171
----------- -----------
73,374 74,314
Less accumulated depreciation (58,239) (61,289)
----------- -----------
$ 15,135 $ 13,025
=========== ===========
Depreciation expense relating to continuing operations was
approximately $6.9 million in fiscal 2003, $7.2 million in fiscal 2002 and $8.7
million in fiscal 2001.
NOTE 6. LONG-TERM DEBT
The Company's credit facility, which was entered into on June 13,
2002, as amended, as described below, provides up to $55 million in borrowings,
including up to $40 million which is available for letters of credit. The
Company may borrow up to a maximum of 80 percent of the net amount of eligible
accounts receivable, as defined, less any reasonable and customary reserves, as
defined, required by the lender. Borrowing availability under the credit
facility was reduced by $10 million until such quarter in 2003 in which the
trailing 12 month EBITDA, excluding certain restructuring costs and special
charges, as defined, exceeded $15 million. As of March 30, 2003, the trailing 12
month EBITDA threshold was achieved and the availability restriction lifted,
effective June 1, 2003.
At the Company's option, the interest rate on borrowings under the
credit facility was based on the London Interbank Offered Rates (LIBOR) plus
3.25 percent or the lender's prime rate plus 1.25 percent. In addition, the
Company was required to pay a fee equal to 2.5 percent per annum of the
aggregate face amount of outstanding letters of credit. Beginning in 2003, the
applicable margin for the LIBOR borrowing, prime rate borrowing and letter of
credit fees decreases by 0.25 percent to 3.0 percent, 1.0 percent, and 2.25
percent, respectively, provided that the Company's trailing 12 month EBITDA,
excluding certain restructuring costs and special charges, as defined, is in
excess of $20 million. The Company was also subject to an unused line fee equal
to 0.50 percent per annum of the average daily difference between the total
revolving credit facility amount and the total outstanding borrowings and
letters of credit. Beginning in 2003, the unused credit line fee decreases to
0.375 percent provided the minimum EBITDA target described above is achieved.
The higher margins and fees are subject to reinstatement in the event that the
Company's trailing 12 month EBITDA falls below $20 million. The Company met this
minimum EBITDA requirement as of March 30, 2003, with the rate reduction
effective June 1, 2003, and continued to meet this requirement as of December
28, 2003.
F-16
The credit facility, which expires in June 2006, includes certain
covenants requiring the Company to maintain a minimum tangible net worth of
$101.6 million, minimum EBITDA, as defined, and a minimum fixed charge coverage
ratio, as defined. Other covenants in the credit facility include limitation on
mergers, consolidations, acquisitions, indebtedness, liens, distributions
including dividends, capital expenditures, stock repurchases and dispositions of
assets and other limitations with respect to the Company's operations. On August
7, 2003, the Company's credit facility was amended to make covenants relating to
acquisitions and stock repurchases less restrictive, provided that the Company
maintains minimum excess aggregate liquidity, as defined in the amendment, equal
to at least $60 million, and to allow for the disposition of certain assets.
The credit facility further provides that if the agreement is
terminated for any reason, the Company must pay an early termination fee equal
to $275,000 if the facility is terminated during the period from June 13, 2003
to June 12, 2004 and $137,500 if the facility is terminated from June 13, 2004
to June 12, 2005. There is no fee for termination of the facility subsequent to
June 12, 2005. Loans under the credit facility are collateralized by all of the
Company's tangible and intangible personal property, other than equipment. As of
December 28, 2003, the Company was in compliance with these covenants.
Total outstanding letters of credit were approximately $20.8 million
at December 28, 2003 and $27.6 million at December 29, 2002. The letters of
credit, which expire one year from date of issuance, were issued to guarantee
payments under the Company's workers compensation program and for certain other
commitments. There were no borrowings outstanding under the credit facility as
of December 28, 2003.
During fiscal year 2003, the Company entered into a trust agreement
and segregated $21.8 million of cash funds in a trust account to provide
additional collateral and to replace approximately $7 million of letters of
credit and a $5 million surety bond which had been used as collateral under the
Company's insurance programs. These funds are reported as restricted cash in the
accompanying consolidated balance sheet as of December 28, 2003. Interest on the
funds in the trust account accrues to the Company. The Company, at its option,
may access the cash funds in the trust account by providing equivalent amounts
of alternative security, including letters of credit and surety bonds.
The Company has no other off-balance sheet arrangements and has not
entered into any transactions involving unconsolidated, limited purpose entities
or commodity contracts.
Net interest income was approximately $0.4 million for the fiscal year
ended December 28, 2003 and $0.8 million for the fiscal year ended December 29,
2002. Net interest income represented interest income of approximately $1.5
million for fiscal 2003 and $2.4 million for fiscal 2002, partially offset by
fees relating to the revolving credit facility and outstanding letters of
credit.
NOTE 7. MANDATORILY REDEEMABLE AND OTHER SECURITIES
GENTIVA OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF A SUBSIDIARY
TRUST
On March 15, 2000, certain of the Company's and Olsten's directors,
officers and management and other related parties and other investors purchased
$20 million of 10 percent convertible trust preferred securities issued by a
Trust, of which the Company owned all the common equity. Simultaneously and in
connection with the issuance by the Trust of the convertible trust preferred
securities, the Company issued to the Trust $20 million of its 10 percent
convertible subordinated debentures. The convertible preferred trust securities
were mandatorily redeemable on March 15, 2005 and optionally redeemable after
March 15, 2001 at a declining premium over face amount. The convertible
subordinated debentures had the same terms as the convertible trust preferred
securities, including, but not limited to, maturity, interest, conversion and
redemption price.
The Trust which issued the convertible trust preferred securities was
a special purpose trust. The Trust's operations were limited to issuing the
convertible trust preferred securities and holding the Company's convertible
subordinated debentures. The Trust could pay dividends only to the extent that
the Company paid interest on its convertible subordinated debentures.
If the Company announced the redemption of its convertible
subordinated debentures and, as a result, the Trust intended to redeem the
convertible preferred trust securities, the holders of the preferred trust
securities had the option to convert their securities into the Company's common
stock at a conversion price of $9.319219 until two days before the scheduled
redemption date.
F-17
On August 7, 2001, the Company's Board of Directors authorized the
Company to call for the redemption of its 10 percent convertible subordinated
debentures on or about September 14, 2001 at a redemption price of 108 percent
of the original principal amount of the debentures in accordance with the terms
of an Indenture dated March 15, 2000, between the Company and Wilmington Trust
Company. All of the holders of the preferred trust securities opted to convert
their securities into the Company's common stock. During fiscal year 2001, the
Company issued 2,146,105 shares of common stock upon the conversion of $20
million of the convertible preferred trust securities. No convertible preferred
trust securities remained outstanding for redemption.
CUMULATIVE PREFERRED STOCK
The Company's authorized capital stock includes 25,000,000 shares of
preferred stock, $.01 par value, of which 1,000 shares have been designated
Series A Cumulative Non-voting Redeemable Preferred Stock ("cumulative preferred
stock"). On March 10, 2000, 100 shares of cumulative preferred stock were issued
for proceeds of $100,000. Holders of the cumulative preferred stock were
entitled to receive cumulative cash dividends at an annual rate of LIBOR plus 2
percent on the stated liquidation preference of $1,000 per share, payable
quarterly in arrears out of assets legally available for payment of dividends.
The shares of preferred stock that were issued on March 10, 2000 were redeemed
on June 12, 2002 at a redemption price of $1,000 per share.
NOTE 8. SHAREHOLDERS' EQUITY
On May 16, 2003, the Company announced that its Board of Directors had
authorized the Company to repurchase and formally retire up to 1,000,000 shares
of its outstanding common stock. The repurchases were to occur periodically in
the open market or through privately negotiated transactions based on market
conditions and other factors. As of July 23, 2003, the Company had repurchased
the authorized 1,000,000 shares of its common stock at an average cost of $9.08
per share and a total cost of approximately $9.1 million.
On August 7, 2003, the Company's Board of Directors authorized the
Company to repurchase and formally retire up to an additional 1,500,000 shares
of its outstanding common stock. The repurchases will occur periodically in the
open market or through privately negotiated transactions based on market
conditions and other factors. As of December 28, 2003, the Company had
repurchased 438,464 shares at an average cost of $12.18 per share and a total
cost of approximately $5.3 million.
NOTE 9. LEGAL MATTERS
LITIGATION
In addition to the matters referenced in this Note 9, the Company is
party to certain legal actions arising in the ordinary course of business
including legal actions arising out of services rendered by its various
operations, personal injury and employment disputes.
COOPER V. GENTIVA CARECENTRIX, INC. T/A/D/B/A/ GENTIVA HEALTH
SERVICES, U.S. District Court (W.D. Penn), Civil Action No. 01-0508. On January
2, 2002, this amended complaint was served on the Company alleging that the
defendant submitted false claims to the government for payment in violation of
the Federal False Claims Act, 31 U.S.C. 3729 et seq., and that the defendant had
wrongfully terminated the plaintiff. The plaintiff claimed that infusion pumps
delivered to patients did not supply the full amount of medication, allegedly
resulting in substandard care. Based on a review of the court's docket sheet,
the plaintiff filed a complaint under seal in March 2001. In October 2001, the
United States government filed a notice with the court declining to intervene in
this matter, and on October 24, 2001, the court ordered that the seal be lifted.
The Company filed its responsive pleading on February 25, 2002, and discovery
has now commenced. The Company has denied the allegations of wrongdoing in the
complaint and is defending itself vigorously in this matter. On May 19, 2003,
the Company filed a motion for summary judgment on the issue of liability. On
February 6, 2004, the court granted partial summary judgment for the Company,
dismissing two of the three claims alleged under the False Claims Act and
denying summary judgment for the Company on the wrongful termination claim. The
parties are completing discovery; therefore, the Company cannot determine a
range of damages, if any, at this time.
Other litigation matters that were settled in fiscal 2002 and 2001 are
discussed below.
FISCAL 2002
F-18
FREDRICKSON V. OLSTEN HEALTH SERVICES CORP. AND OLSTEN CORPORATION,
Case No. 01C.A.116, Court of Appeals, Seventh Appellate District, Mahoning
County, Ohio. In November 2000, the jury in this age-discrimination lawsuit
returned a verdict in favor of the plaintiff against Olsten consisting of
$675,000 in compensatory damages, $30 million in punitive damages and an
undetermined amount of attorneys' fees. The jury found that, although Olsten had
lawfully terminated the plaintiff's employment, its failure to transfer or
rehire the plaintiff rendered Olsten liable to the plaintiff. Following
post-trial motion practice by both parties, the trial court, in May 2001, denied
all post-trial motions, and entered judgment for the plaintiff for the full
amount of compensatory and punitive damages, and awarded the plaintiff reduced
attorney's fees of $247,938. In June 2001, defendants timely filed a Notice of
Appeal with the Court of Appeals, and the Company posted a supersedeas bond for
the full amount of the judgment, plus interest. This matter has been settled,
and settlement costs were recorded as part of special charges during the second
quarter of fiscal 2002 (see Note 4). The supersedeas bond was released and the
restricted cash of $35.2 million was released to the Company in September 2002.
FISCAL 2001
In GILE V. OLSTEN CORPORATION, ET AL., U.S. District Court for the
Central District of California, No. 97-9363-NM, plaintiff filed an age
discrimination suit against Olsten Corporation, Olsten Health Services, and a
certain individual in December 1997. The defendants denied the allegations of
discrimination on the basis that plaintiff's termination was part of a reduction
in force. The individual defendant was dismissed from the action, and the
remaining corporate defendants filed a motion for summary judgment that was
granted by the District Court in February 1999. The plaintiff appealed the
District Court's order to the Ninth Circuit Court of Appeals and in December
2000, the Court of Appeals issued its ruling which reversed the District Court
and remanded the case for trial. On or about June 19, 2001, the Company and the
plaintiff agreed to settle this matter and entered into a confidential
settlement agreement with full release.
In July 1999, the Indiana Attorney General's Office filed a lawsuit
against Olsten in Indiana Superior Court, captioned STATE OF INDIANA V. QUANTUM
HEALTH RESOURCES, INC. AND OLSTEN HEALTH SERVICES, Inc., No. 49D029907CP001011,
alleging that Olsten was overpaid by Medicaid, failed to properly disclose
information to Medicaid and engaged in improper billing. The alleged violations
predated Olsten's acquisition of Quantum Health Resources in June 1996. The
lawsuit sought unspecified monetary damages, double or treble damages, penalties
and investigative costs. The parties resolved this matter during fiscal 2001
pursuant to a confidential settlement agreement and full release. There is no
ongoing obligation on the part of the Company arising from this settlement.
INDEMNIFICATIONS
In connection with the Split-Off, the Company agreed to assume, to the
extent permitted by law, and to indemnify Olsten for, the liabilities, if any,
arising out of the above proceedings and other liabilities arising out of the
home health services business, including any such liabilities arising after the
Split-Off in connection with the government matters described below.
In addition, the Company and Accredo have agreed to indemnify each
other for breaches of representations and warranties of such party or the
non-fulfillment of any covenant or agreement of such party in connection with
the sale of the specialty pharmaceutical services business. The Company has also
agreed to indemnify Accredo for the retained liabilities and for tax
liabilities, and Accredo has agreed to indemnify the Company for assumed
liabilities and the operation of the SPS business after the closing of the
acquisition. The representations and warranties generally survive for the period
of two years after the closing of the acquisition, which occurred on June 13,
2002, except that:
o representations and warranties related to health care compliance
survive for three years after the closing of the acquisition;
o representations and warranties related to title of the assets and
sufficiency of assets and employees survive for the applicable
statute of limitations period; and
o representations and warranties related to tax matters survive
until thirty days after the expiration of the applicable tax
statute of limitations period, including any extensions of the
applicable period, subject to certain exceptions.
F-19
Accredo and the Company may recover indemnification for a breach of a
representation or warranty only to the extent a party's claim exceeds $1 million
for any individual claim or exceeds $5 million in the aggregate, subject to
certain conditions and only up to a maximum amount of $100 million.
These indemnification rights are the exclusive remedy from and after
the closing of the acquisition, except for the right to seek specific
performance of any of the agreements in the related asset purchase agreement, in
any case where a party is guilty of fraud in connection with the acquisition,
and with respect to tax liabilities and obligations.
On May 6, 2003, the Company received correspondence from Accredo
giving the Company notice of Accredo's indemnification rights for any breach
under the asset purchase agreement related to the adequacy of the accounts
receivable reserves in accordance with section 8.3 of the asset purchase
agreement; however, no breach of a representation or warranty was asserted
against the Company in the correspondence.
GOVERNMENT MATTERS
PRRB APPEAL
As further described in the Critical Accounting Policies section in
Note 2, the Company's annual cost reports, which were filed with the CMS, were
subject to audit by the fiscal intermediary engaged by CMS. In connection with
the audit of the Company's 1997 cost reports, the Medicare fiscal intermediary
made certain audit adjustments related to the methodology used by the Company to
allocate a portion of its residual overhead costs. The Company filed cost
reports for years subsequent to 1997 using the fiscal intermediary's
methodology. The Company believed its methodology used to allocate such overhead
costs was accurate and consistent with past practice accepted by the fiscal
intermediary; as such, the Company filed appeals with the Provider Reimbursement
Review Board ("PRRB") concerning this issue with respect to cost reports for the
years 1997, 1998 and 1999. The Company's consolidated financial statements for
the years 1997, 1998 and 1999 had reflected use of the methodology mandated by
the fiscal intermediary.
In June 2003, the Company and its Medicare fiscal intermediary signed
an Administrative Resolution relating to the issues covered by the appeals
pending before the PRRB. Under the terms of the Administrative Resolution, the
fiscal intermediary agreed to reopen and adjust the Company's cost reports for
the years 1997, 1998 and 1999 using a modified version of the methodology used
by the Company prior to 1997. This modified methodology will also be applied to
cost reports for the year 2000, which are currently under audit. The
Administrative Resolution required that the process to (i) reopen all 1997 cost
reports, (ii) determine the adjustments to allowable costs through the issuance
of Notices of Program Reimbursement ("NPRs") and (iii) make appropriate payments
to the Company, be completed in early 2004. Cost reports relating to years
subsequent to 1997 will be reopened after the process for the 1997 cost reports
is completed.
On February 17, 2004, the fiscal intermediary notified the Company
that it had completed the reopening of all 1997 cost reports and determined that
the adjustment to allowable costs for that year approximated $9 million. As of
February 27, 2004, the majority of the funds relating to this adjustment had
been remitted to the Company; the settlement amount will be recorded as net
revenues during the first quarter of fiscal 2004.
Although the Company believes that it could recover additional funds
as a result of applying the modified methodology discussed above to cost reports
subsequent to 1997, the settlement amounts cannot be specifically determined
until the reopening or audit of each year's cost reports is completed. This is
not expected to occur until the second half of fiscal 2004 or fiscal 2005.
However, in view of changes in reimbursement and the Company's operations in
periods subsequent to 1997, it is likely that future recoveries relating to any
cost report year from 1998 to 2000 will be significantly less than the 1997
settlement.
SUBPOENAS
On April 17, 2003, the Company received a subpoena from the Department
of Health and Human Services, Office of the Inspector General, Office of
Investigations ("OIG"). The subpoena seeks information regarding the Company's
implementation of settlements and corporate integrity agreements entered into
with the government, as well as the Company's treatment on cost reports of
employees engaged in sales and marketing efforts. With respect to the cost
report issues, the government has preliminarily agreed to narrow the scope of
production to the period from January 1, 1998 through September 30, 2000. On
February 17, 2004, the Company received a subpoena from the U.S. Department of
Justice ("DOJ") seeking additional information related to
F-20
the matters covered by the OIG subpoena. The Company has provided documents and
other information requested by the OIG pursuant to its subpoena and similarly
intends to cooperate fully with the DOJ subpoena as well as any future OIG or
DOJ information requests. To the Company's knowledge, the government has not
filed a complaint against the Company.
In February 2000, the Company received a document subpoena from the
Department of Health and Human Services, Office of the Inspector General, Office
of Investigations. The subpoena related to its agencies' cost reporting
procedures concerning contracted nursing and home health aide costs. This matter
has been settled and settlement costs were recorded as part of special charges
during the second quarter of fiscal 2002. (See Note 4).
NOTE 10. COMMITMENTS
The Company rents certain properties under non-cancelable, long-term
operating leases, which expire at various dates. Certain of these leases require
additional payments for taxes, insurance and maintenance and, in many cases,
provide for renewal options. Rent expense under all leases was $15.3 million in
2003, $16.2 million in 2002 and $18.5 million in 2001.
Future minimum rental commitments and sublease rentals for all
non-cancelable leases having an initial or remaining term in excess of one year
at December 28, 2003, are as follows (in thousands):
In addition, the Company has purchase obligations due in fiscal 2004
of approximately $1.1 million.
NOTE 11. STOCK PLANS
In 1999, the Company adopted the 1999 Stock Incentive Plan ("1999
Plan") under which 5 million shares of common stock were reserved for issuance
upon exercise of options thereunder. The maximum total number of shares of
common stock for which grants may be made to any employee, consultant or
director under the 1999 plan in any calendar year is 300,000. These options may
be awarded in the form of incentive stock options ("ISOs") or non-qualified
stock options ("NQSOs"). The option price of an ISO and NQSO cannot be less than
100 percent and 85 percent, respectively, of the fair market value at the date
of grant. As of December 28, 2003, the Company had 1,476,698 shares available
for issuance under the 1999 Plan.
In 1999, the Company adopted the Stock & Deferred Compensation Plan
for Non-Employee Directors, which provided for payment of annual retainer fees
to non-employee directors, up to 50 percent of which such directors might elect
to receive in cash and the remainder of which would be paid in the form of
shares of common stock of the Company and also allowed deferral of such payment
of shares until termination of director's service. The plan was amended and
restated on January 1, 2004 and now provides for the deferral of annual retainer
fees under the plan only into stock units which are to be paid to non-employee
directors as shares of the Company's common stock upon termination of a
director's service. The total number of shares of common stock reserved for
issuance under this plan is 150,000, of which 81,441 shares were available for
future grants as of December 28, 2003. During fiscal 2003, 2002 and 2001, the
Company issued 7,575 shares, 11,928 shares and 3,370 shares, respectively, under
the plan. As of December 28, 2003, 36,246 shares were deferred.
In 1999, the Company adopted an employee stock purchase plan ("ESPP").
All employees of the Company, who have been employed for at least eight months
and whose customary employment exceeds twenty hours per week, are eligible to
purchase stock under this plan. The Compensation, Corporate Governance and
Nominating Committee of the Company's Board of Directors administers the plan
and has the power to determine the terms and conditions of each offering of
common stock. The purchase price of the shares under the plan is the lesser of
85 percent of the fair market value of the Company's common stock on the first
business day or the last business day of the six month offering period.
Employees may purchase shares having a fair market
F-21
value of up to $25,000 per calendar year. The maximum number of shares of common
stock that may be sold to any employee in any offering, however, will generally
be 10 percent of that employee's compensation during the period of the offering.
A total of 1,200,000 shares of common stock are reserved for issuance under the
employee stock purchase plan, of which 498,534 shares were available for future
issuance as of December 28, 2003. During fiscal 2003, 2002 and 2001, the Company
issued 280,664 shares, 166,003 shares and 112,014 shares, respectively, under
the plan.
Effective with the sale of the SPS business, the Company commenced a
cash tender offer for all of the outstanding options to purchase its common
stock. The tender offer resulted in 1,253,141 options being tendered and
accepted by the Company with 463,829 options remaining outstanding. To preserve
the aggregate intrinsic value of the options, the outstanding options were
converted to new Gentiva options at the ratio of 1 to 3.369, resulting in
converted options of 1,562,646. The exercise price of a new Gentiva stock option
represented 29.7 percent of the corresponding option, pre-conversion.
A summary of Gentiva stock options for fiscal 2003, fiscal 2002 and
fiscal 2001 is presented below:
2003 2002 2001
--------------------------- --------------------------- ---------------------------
WEIGHTED WEIGHTED WEIGHTED
STOCK AVERAGE STOCK AVERAGE STOCK AVERAGE
OPTIONS EXERCISE PRICE OPTIONS EXERCISE PRICE OPTIONS EXERCISE PRICE
--------- -------------- ---------- -------------- ---------- --------------
Options outstanding, beginning of year 2,549,667 $ 4.75 2,346,600 $ 8.61 3,689,006 $ 6.09
Granted 740,900 8.85 1,152,700 7.54 939,000 13.22
Exercised (452,338) 2.12 (665,040) 7.73 (2,156,796) 6.22
Cancelled/forfeitures (151,933) 7.99 (594,098) 8.52 (124,610) 10.04
Tendered options - - (1,253,141) 8.54 - -
Converted to new Gentiva options - - 1,562,646 2.63 - -
--------- -------- ---------- -------- ---------- ---------
Options outstanding, end of year 2,686,296 $ 6.14 2,549,667 $ 4.75 2,346,600 $ 8.61
========= ======== ========== ======== ========== =========
Options exercisable, end of year 1,345,570 $ 4.07 1,421,567 $ 2.53 838,168 $ 5.82
========= ======== ========== ======== ========== =========
The following table summarizes information about Gentiva stock options
outstanding at December 28, 2003:
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------------------- -----------------------
NUMBER WEIGHTED WEIGHTED NUMBER WEIGHTED
AT AVERAGE AVERAGE AT AVERAGE
DECEMBER 28, EXERCISE REMAINING DECEMBER 28, EXERCISE
RANGE OF EXERCISE PRICE 2003 PRICE CONTRACTUAL LIFE 2003 PRICE
----------------------- -------------- -------- ---------------- ------------ --------
$1.07 to $1.30 54,234 $ 1.22 4.74 54,234 $ 1.22
$1.65 to $1.74 380,281 1.69 6.20 380,281 1.69
$2.02 to $2.95 59,454 2.27 3.02 59,454 2.27
$3.55 to $3.91 493,527 3.89 6.86 493,527 3.89
$7.50 to $7.50 956,800 7.50 8.46 330,873 7.50
$8.10 to $8.60 63,100 8.44 8.67 27,201 8.38
$8.74 to $9.75 678,900 8.86 9.06 - -
--------- ------- ---- --------- -------
$1.07 to $9.75 2,686,296 $ 6.14 7.81 1,345,570 $ 4.07
========= ======= ==== ========= =======
The Company has chosen to adopt the disclosure only provisions of SFAS
148 and continue to account for stock-based compensation using the intrinsic
value method prescribed in APB 25, and related interpretations. Under this
approach, the cost of restricted stock awards is expensed over their vesting
period, while the imputed cost of stock option grants and discounts offered
under the Company's ESPP is disclosed, based on the vesting provisions of the
individual grants, but not charged to expense.
The weighted average fair values of the Company's stock options,
granted during 2003, 2002 and 2001, calculated using the Black-Scholes option
pricing model, and other assumptions are as follows:
F-22
FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- ----------------- -----------------
Risk-free interest rate 3.51% 4.15% 4.88%
Expected volatility 60% 38% 65%
Expected life 6 years 5 years 5 years
Contractual life 10 years 10 years 10 years
Expected dividend yield 0% 0% 0%
Weighted average fair value
of options granted $ 5.24 $ 3.02 $ 7.76
Pro forma compensation expense is calculated for the fair value of the
employee's purchase rights, under the ESPP, using the Black-Scholes model.
Assumptions for the fiscal 2003 and fiscal 2002 are as follows:
FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002
--------------------------- ---------------------------
1ST OFFERING 2ND OFFERING 1ST OFFERING 2ND OFFERING
PERIOD PERIOD PERIOD PERIOD
------------ ------------ ------------ ------------
Risk-free interest rate: 1.25% 0.97% 1.89% 1.77%
Expected volatility 32% 29% 60% 60%
Expected life 0.5 years 0.5 years 0.5 years 0.5 years
Expected dividend yield 0% 0% 0% 0%
The following table presents net income (loss) and basic and diluted
earnings (loss) per common share, had the Company elected to recognize
compensation cost based on the fair value at the grant dates for stock option
awards and discounts granted for stock purchases under the Company's ESPP,
consistent with the method prescribed by SFAS 123, as amended by SFAS 148:
FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- ----------------- -----------------
Net income (loss) - as reported $ 56,766 $ (49,033) $ 20,988
Add: Stock-based employee compensation
expense included in reported net income, net of tax - 13,160 -
Deduct: Total stock-based compensation expense
determined under fair value based method for
all awards, net of tax (1,575) (5,022) (3,002)
----------- ---------- -----------
Net income (loss) - pro forma $ 55,191 $ (40,895) $ 17,986
=========== ========== ===========
Basic income (loss) per share - as reported $ 2.16 $ (1.87) $ 0.90
Basic income (loss) per share - pro forma $ 2.10 $ (1.56) $ 0.78
Diluted income (loss) per share - as reported $ 2.07 $ (1.87) $ 0.90
Diluted income (loss) per share - pro forma $ 2.01 $ (1.56) $ 0.78
On December 31, 2003, the Company issued 992,100 stock options at an
exercise price of $12.87 per share and issued 125,039 shares under its ESPP.
NOTE 12. INCOME TAXES
Comparative analyses of the provision (benefit) for income taxes
follows (in thousands):
F-23
FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- ----------------- -----------------
Current
Federal $ - $ 5,600 $ (6,632)
State and local 1,567 - (183)
----------- ---------- -----------
1,567 5,600 (6,815)
----------- ---------- -----------
Deferred
Federal (31,875) 10,114 -
State and local (3,160) 2,723 -
----------- ---------- -----------
(35,035) 12,837 -
----------- ---------- -----------
Provision for income taxes $ (33,468) $ 18,437 $ (6,815)
=========== ========== ===========
A reconciliation of the differences between income taxes computed at
federal statutory rate and provisions (benefits) for income taxes for each year
are as follows (in thousands):
FISCAL YEAR ENDED
---------------------------------------------------------
DECEMBER 28, 2003 DECEMBER 29, 2002 DECEMBER 30, 2001
----------------- ----------------- -----------------
Income taxes computed at Federal statutory tax rate $ 8,162 $ (12,287) $ (7,254)
State income taxes, net of Federal benefit 1,019 (1,770) (119)
Nondeductible meals and entertainment 167 155 232
Income tax audit adjustments (177) 5,439 -
Deferred rate differential 1,142 - -
Decrease in Federal valuation allowance (44,438) - -
Valuation allowance adjustment for adoption of SFAS 142 - 26,859 -
Amortization of intangibles - - 623
Other 657 41 (297)
---------- ----------- --------
$ (33,468) $ 18,437 $ (6,815)
========== =========== ========
The federal income tax rate reconciliation schedule above includes only
components associated with continuing operations.
Deferred tax assets and deferred tax liabilities are as follows (in
thousands):
DECEMBER 28, 2003 DECEMBER 29, 2002
----------------- -----------------
Deferred tax assets
Reserves and allowances $ 21,290 $ 24,543
Net operating loss and other carryforwards (Federal and state) 4,966 5,993
Intangible assets 29,085 33,202
Depreciation 23 332
Other 208 574
Less: Valuation allowance - (63,892)
---------- ----------
Total deferred tax assets 55,572 752
Deferred tax liabilities
Capitalized software (1,083) (752)
---------- ----------
Net deferred tax assets $ 54,489 $ -
========== ==========
At December 28, 2003, net deferred tax assets of $26.5 million and
$28.0 million were recorded in current assets and noncurrent assets,
respectively, in the accompanying consolidated balance sheet. At December 29,
2002, deferred tax assets of $0.8 million were included in current assets and
deferred tax liabilities of $0.8 million were included in other liabilities in
the consolidated balance sheet.
The Company had maintained a valuation allowance for its deferred tax
assets as of December 29, 2002 since the absence of historical pre-tax income
created uncertainty about the Company's ability to realize tax benefits in
future years. During the interim periods of fiscal 2003, a portion of the
valuation allowance ($9.4 million) was utilized to offset a corresponding
decrease in net deferred tax assets. The remaining valuation allowance was
reversed at the end of fiscal 2003 based on management's belief that it is more
likely than not that all of the Company's net deferred tax assets will be
realized due to the Company's achieved earnings trends and outlook. In this
regard, $35.0 million was recorded as an income tax benefit in the accompanying
statement of
F-24
operations for fiscal 2003 and $19.5 million was credited directly to
shareholders' equity at December 28, 2003 to reflect the portion of the
valuation allowance associated with stock compensation tax benefits.
As of December 28, 2003, the Company's net operating losses and tax
credit carryforwards for income tax purposes were approximately $11.1 million
and $0.7 million, respectively.
Income tax payments, including payments associated with discontinued
operations, were $1.6 million, $7.6 million and $0.7 million for fiscal years
2003, 2002 and 2001, respectively.
NOTE 13. BENEFIT PLANS FOR PERMANENT EMPLOYEES
The Company maintains qualified and non-qualified defined contribution
retirement plans for its salaried employees, which provide for a partial match
of employee savings under the plans and for discretionary profit-sharing
contributions based on employee compensation. With respect to the Company's
non-qualified defined contribution retirement plan for salaried employees, all
pre-tax contributions, matching contributions and profit sharing contributions
(and the earnings therein) are held in a Rabbi Trust and are subject to the
claims of the general, unsecured creditors of the Company. All post-tax
contributions are held in a secular trust and are not subject to the claims of
the creditors of the Company. The fair value of the assets held in the Rabbi
Trust and the liability to plan participants as of December 28, 2003 and
December 29, 2002 totaling approximately $10.0 million and $9.0 million,
respectively, are included in other assets and other liabilities on the
accompanying consolidated balance sheets.
Company contributions under the defined contribution plans were
approximately $1.8 million in 2003, $2.0 million in 2002 and $2.7 million in
2001.
F-25
NOTE 14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
(in thousands, except per share amounts)
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
--------- --------- --------- ---------
YEAR ENDED DECEMBER 28, 2003
Net revenues $ 202,016 $ 208,446 $ 199,698 $ 203,869
Gross profit 68,766 69,624 69,241 74,411
Net income 5,201 5,247 4,547 41,771(1)
Earnings Per Share:
Net income - basic 0.19 0.20 0.18 1.62
Net income - diluted 0.19 0.19 0.17 1.53
Weighted average shares outstanding:
Basic 26,696 26,530 25,972 25,852
Diluted 27,772 27,490 27,098 27,225
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
--------- --------- --------- ---------
YEAR ENDED DECEMBER 29, 2002
Net revenues $ 192,799 $ 195,623 $ 188,443 $ 191,636
Gross profit 63,613 56,731 (2) 63,545 63,711
Income (loss) from continuing operations (25,914) (33,678)(2) 2,738 3,311
Discontinued operations, net of tax (4) 7,188 184,953 (563) -
Income (loss) before cumulative effect of accounting change (18,726) 151,275 2,175 3,311
Cumulative effect of accounting change, net of tax (3) (190,468) - 1,392 2,008
Net income (loss) (3) (4) (209,194) 151,275 3,567 5,319
Earnings Per Share:
Basic:
Income (loss) from continuing operations (1.00) (1.29) 0.10 0.12
Discontinued operations, net of tax 0.28 7.08 (0.02) -
Income (loss) before cumulative effect of accounting change (0.72) 5.79 0.08 0.12
Net income (loss) (8.10) 5.79 0.14 0.20
Diluted:
Income (loss) from continuing operations (1.00) (1.29) 0.10 0.12
Discontinued operations, net of tax 0.28 7.08 (0.02) -
Income (loss) before cumulative effect of accounting change (0.72) 5.79 0.08 0.12
Net income (loss) (8.10) 5.79 0.13 0.19
Weighted average shares outstanding:
Basic 25,842 26,143 26,365 26,380
Diluted 25,842 26,143 27,483 27,432
(1) During the fourth quarter of fiscal 2003, the Company recorded a tax
benefit of $35.0 million associated with management's decision to
reverse the valuation allowance for deferred tax assets. See Note 12
for further discussion.
(2) During the second quarter of 2002, the Company also recorded
restructuring and special charges aggregating $46.1 million, of which
$6.3 million is recorded in cost of services sold and $39.8 million is
recorded in selling, general and administrative expenses. See Note 4
for further discussion.
(3) For fiscal year 2002, the Company adopted the provisions of SFAS 142
"Goodwill and Other Intangible Assets" and performed a transitional
impairment test, resulting in a non-cash charge, net of tax,for the
first quarter of 2002 of $190.5 million, with related tax benefits of
$1.4 million and $2.0 million recorded in third quarter and fourth
quarter of fiscal 2002, respectively. See Note 2 for further
discussion.
(4) During the fiscal year 2002, the Company sold its SPS business to
Accredo in accordance with the asset purchase agreement, dated January
2, 2002, with the sale completed on June 13, 2002. As such, the
Company has reflected discontinued operations, including the gain on
sale, of $7.2 million, $185.0 million and ($0.6) million in the first
quarter, second quarter and third quarter of fiscal 2002,
respectively. See Note 3 for further discussion.
F-26
GENTIVA HEALTH SERVICES, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED DECEMBER 28, 2003
(IN THOUSANDS)
ADDITIONS
BALANCE AT CHARGED TO BALANCE
BEGINNING OF COSTS AND AT END
PERIOD EXPENSES DEDUCTIONS OF PERIOD
------------ ---------- ---------- ---------
Allowance for Doubtful Accounts:
For the Year Ended December 28, 2003 $ 9,032 $ 7,684 $ (8,780) $ 7,936
For the Year Ended December 29, 2002 10,831 4,936 (6,735) 9,032
For the Year Ended December 30, 2001 18,456 5,120 (12,745) 10,831
F-27
EXHIBIT 10.8
GENTIVA HEALTH SERVICES, INC.
STOCK & DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(As Amended and Restated as of January 1, 2004)
SECTION 1. INTRODUCTION.
The Gentiva Health Services, Inc. Stock & Deferred Compensation Plan for
Non-Employee Directors (the "Plan") provides for the deferral of a portion of
the annual retainer fees payable to non-employee directors of Gentiva Health
Services, Inc. into Units which are deemed invested in Shares. The Plan is
intended to encourage qualified individuals to accept nominations as directors
of Gentiva Health Services, Inc. and to strengthen the mutuality of interest
between the non-employee directors and Gentiva Health Services, Inc.'s other
shareholders.
SECTION 2. DEFINITIONS.
For purposes of the Plan, the following terms shall be defined as set forth
below:
(a) "Annual Shareholders Meeting" means the annual general meeting of the
Company's shareholders.
(b) "Board" means the Board of Directors of the Company.
(c) "Calculation Date" means the date as of which the number of Units to
be credited to an Account is to be calculated. Generally, the
Calculation Dates shall be March 1, June 1, September 1 and December
1; PROVIDED, HOWEVER, that if a person shall become a Director other
than at an Annual Shareholders Meeting, the first Calculation Date
applicable to such Director shall be the Director's first day of
service; and PROVIDED, FURTHER, that for purposes of calculating the
number of Units allocable to the $11,250 additional retainer described
in Section 4(a), the Calculation Date shall be January 2, 2004.
(d) "Code" means the Internal Revenue Code of 1986, as amended from time
to time. References to any provision of the Code shall be deemed to
include successor provisions thereto and regulations thereunder.
(e) "Company" means Gentiva Health Services, Inc., a corporation organized
under the laws of Delaware, or any successor corporation.
(f) "Director" means a member of the Board who is not employed by the
Company or any of its subsidiaries.
(g) "Plan" means this Stock & Deferred Compensation Plan for Non-Employee
Directors.
(h) "Plan Benefits" means the benefits described in Section 6 hereof.
(i) "Plan Year" means a period of approximately twelve months beginning on
the date of the Annual Shareholders Meeting for a year and ending on
the day immediately preceding the Annual Shareholders Meeting in the
following year.
(j) "Shares" means Common Stock, $0.10 par value per share, of the
Company.
(k) "Unit" means a contractual right, denominated in Shares, to receive
Shares of the Company, as described in this Plan.
SECTION 3. ADMINISTRATION.
The Plan shall be administered by the Board. The Board shall have full
authority to construe and interpret the Plan, and any action of the Board with
respect to the Plan shall be final, conclusive, and binding on all persons.
Subject to adjustment as provided in Section 7(g) hereof, the total number of
Shares reserved for issuance under the Plan shall be 150,000.
SECTION 4. ANNUAL RETAINER DEFERRED INTO UNITS.
(a) GENERAL. Beginning with the first Annual Shareholders Meeting held
after the Effective Date of this Plan, the portion of each Director's annual
retainer fee to be deferred into Units for a Plan Year shall be $30,000. For the
period from the Effective Date until the date of the first Annual Shareholders
Meeting held after the Effective Date, each Director shall receive an additional
retainer equal to $11,250. The additional retainer shall be deferred into Units
as described in this Section 4.
(b) CALCULATING THE NUMBER OF UNITS. The number of Units to be deferred and
credited to a Director's Account as of any Calculation Date shall be $7,500 (or
in the case of a person who becomes a Director other than at an Annual
Shareholder Meeting, a pro-rated amount based on the number of days in the
calculation period the person will be a Director) divided by the average closing
price of Shares on the principal stock exchange or stock market on which the
Shares may be listed or admitted to trading for the ten trading days immediately
preceding the Calculation Date, and the resulting quotient shall be rounded to
the nearest whole Unit.
SECTION 5. UNIT ACCOUNTS.
2
The Company shall maintain a Unit account (an "Account") for each Director.
Units will be credited to each such Account as follows:
(a) CREDITING OF UNITS. Units shall be credited as of the Calculation Date.
(b) DIVIDEND EQUIVALENTS. If any dividends are payable on Shares, dividend
equivalents, equal to the dividend that would have been payable on the Units
credited to a Director's Account as if such Units had constituted Shares, shall
be paid to the Director in cash at the time the corresponding dividends are paid
on Shares.
SECTION 6. PLAN BENEFITS.
(a) FORM. The Plan Benefit of a Director shall consist of Shares equal in
number to the Units in the Director's Account. Any fractional Unit shall be paid
in cash.
(b) DISTRIBUTION.
(i) The Plan Benefit of a Director shall be distributed either (A) in
a single lump sum at the time of termination of the Director's
service on the Board, (B) in a single lump sum up to one year
after termination of the Director's service on the Board, or (C)
with respect to Units credited prior to January 1, 2004 only, in
up to three annual installments beginning at the time of
termination of the Director's service on the Board. Each Director
may elect the time of distribution in accordance with the
previous sentence, and such election must be made in the form
designated by the Company from time to time and must be made
within 10 days after the Director first becomes eligible to
participate in the Plan (and with respect to Units credited after
January 1, 2004 within 10 days after such date). A Director's
election shall be irrevocable once filed with the Company;
PROVIDED, HOWEVER, that a Director may file a new election as to
the time of distribution if such election is filed at least one
year in advance of termination of service on the Board. In the
absence of a timely election by a Director hereunder, the
Director shall be deemed to have elected to have his or her Plan
Benefit distributed in a single lump sum at the time of
termination of the Director's service on the Board.
(ii) In the case of the death of a Director, the Director's Plan
Benefit shall be distributed, within a reasonable time as
determined by the Company, after the Director's death to the
Director's beneficiary or beneficiaries, as specified by the
Director on a form furnished by and filed with the Secretary of
the Company. If no beneficiary has been designated by the
Director or if no beneficiary survives the Director, the
undistributed balance of his or her Plan Benefit shall be
distributed to the Director's surviving spouse as beneficiary if
such spouse is still living or, if not living, in equal shares to
the then living children of the Director as beneficiaries or, if
none, to the Director's estate as beneficiary.
3
SECTION 7. GENERAL.
(a) NONTRANSFERABILITY. Except as provided in Section 6(b)(ii), no payment
of any Plan Benefit of a Director shall be anticipated, assigned, attached,
garnished, optioned, transferred or made subject to any creditor's process,
whether voluntarily or involuntarily or by operation of law. Any act in
violation of this subsection shall be void.
(b) COMPLIANCE WITH LEGAL AND TRADING REQUIREMENTS. The Plan shall be
subject to all applicable laws, rules and regulations, including, but not
limited to, federal and state laws, rules and regulations, and to such approvals
by any regulatory or governmental agency as may be required. No provision of the
Plan shall be interpreted or construed to obligate the Company to register any
Shares under federal or state securities laws. The transfer by a Director of
Shares distributed pursuant to the Plan will be subject to such restrictions as
the Company deems necessary or desirable in connection with federal or state
securities laws, and Share certificates will bear a legend setting forth any
such restriction.
(c) TAXES. The Company is authorized to withhold from any payment made
under this Plan any amounts of withholding and other taxes due in connection
therewith, and to take such other action as the Company may deem advisable to
enable the Company and a Director to satisfy obligations for the payment of any
withholding taxes and other tax obligations relating thereto.
(d) AMENDMENT. The Board may amend, alter, suspend, discontinue, or
terminate the Plan (including, without limitation, amending the dollar amount
set forth in Section 4(a) hereof) without the consent of shareholders of the
Company or individual Directors; PROVIDED, HOWEVER, that, without the consent of
an affected Director, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may materially impair the rights or, in any other
manner, materially and adversely affect the rights of such Director hereunder.
(e) UNFUNDED STATUS OF AWARDS. This Plan is intended to constitute an
"unfunded" plan of deferred compensation. With respect to any payments not yet
made to a Director, nothing contained in the Plan shall give any such Director
any rights that are greater than those of a general creditor of the Company;
PROVIDED, HOWEVER, that the Company may authorize the creation of trusts or make
other arrangements to meet the Company's obligations under the Plan to deliver
cash, or other property pursuant to any award, which trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan unless
the Company otherwise determines with the consent of each affected Director.
(f) NONEXCLUSIVITY OF THE PLAN. The adoption of the Plan by the Board shall
not be construed as creating any limitations on the power of the Board to adopt
such other compensation arrangements as it may deem desirable, including,
without limitation, the granting of options on Shares and other awards otherwise
than
4
under the Plan, and such arrangements may be either applicable generally or only
in specific cases.
(g) ADJUSTMENTS. In the event that subsequent to the Effective Date any
dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other such change, affects the Shares such that they are
increased or decreased or changed into or exchanged for a different number or
kind of Shares, other securities of the Company or of another corporation or
other consideration, then in order to maintain the proportionate interest of the
Directors and preserve the value of the Directors' Units and to maintain the
value of the Plan, there shall automatically be substituted (i) for each Unit a
new unit and (ii) for the number of Shares set forth in Section 3 above a number
of Shares or other consideration, in the case of (i) and (ii) above,
representing the number and kind of Shares, other securities or other
consideration into which each outstanding Share shall be changed or for which
each such Share shall be exchanged. The substituted units shall be subject to
the same terms and conditions as the original Units.
(h) NO RIGHT TO REMAIN ON THE BOARD. Neither the Plan nor the crediting of
Units under the Plan shall be deemed to give any individual a right to remain a
director of the Company or create any obligation on the part of the Board to
nominate any Director for reelection by the shareholders of the Company.
(i) GOVERNING LAW. The validity, construction, and effect of the Plan shall
be determined in accordance with the laws of the State of New York, without
giving effect to principles of conflict of laws thereof,
(j) EFFECTIVE DATE. The Plan shall become effective, as amended and
restated, on January 1, 2004 (the "Effective Date").
(k) TITLES AND HEADINGS. The titles and headings of the Sections in the
Plan are for convenience of reference only. In the event of any conflict, the
text of the Plan, rather than such titles or headings, shall control.
5
Exhibit 10.10
GENTIVA HEALTH SERVICES, INC.
NONQUALIFIED RETIREMENT AND SAVINGS PLAN
Effective March 15, 2000
GENTIVA HEALTH SERVICES, INC.
NONQUALIFIED RETIREMENT AND SAVINGS PLAN
- ii -
2.24 Termination of Employment....................................... 8
2.25 Total Compensation.............................................. 8
2.26 Trust(s)........................................................ 9
2.27 Trustee(s)...................................................... 9
2.28 Unforseeable Emergency.......................................... 10
2.29 Valuation Date(s)............................................... 10
2.30 Year(s) of Service.............................................. 10
ARTICLE III
Eligibility and Participation
3.1 Eligibility..................................................... 10
3.2 Participation................................................... 11
ARTICLE IV
Contributions
4.1 Participant Contributions....................................... 12
4.2 Company or Participating Employer Contributions................. 15
ARTICLE V
Investment and Valuation of Accounts
5.1 Investment of Accounts.......................................... 16
5.2 Determining the Value of Participant Accounts................... 18
ARTICLE VI
Vesting and Forfeitures
6.1 Participant Contributions....................................... 18
6.2 Matching and Profit-Sharing Contributions....................... 18
6.3 Forfeitures..................................................... 19
6.4 Change in Control............................................... 19
ARTICLE VII
Distributions
7.1 In-Service Withdrawals.......................................... 20
7.2 Final Distributions............................................. 20
- iii -
ARTICLE VIII
Leaves of Absence, Layoffs, and Reemployment
8.1 Leaves of Absence and Layoffs................................... 23
8.2 Returning to Work After Termination of Employment............... 24
ARTICLE IX
Participating Employers
9.1 Adoption by Other Employers..................................... 25
9.2 Allocation of Plan and Trust Expenses........................... 26
9.3 Designation of Company as Agent................................. 26
9.4 Employee Transfers.............................................. 26
9.5 Contributions and Forfeitures of Participating Employer......... 27
9.6 Amendments by Participating Employers........................... 27
9.7 Discontinuance of Participation................................. 27
ARTICLE X
Amendment and Termination
10.1 Right to Terminate.............................................. 27
10.2 Continuation of Trust........................................... 28
10.3 Right to Amend.................................................. 28
10.4 Merger or Consolidation......................................... 29
ARTICLE XI
Administration
11.1 Plan Administrator.............................................. 29
11.2 Binding Effect.................................................. 30
11.3 Delegation of Authority......................................... 30
11.4 Plan Records and Expenses....................................... 30
11.5 Limited Liability............................................... 31
11.6 Insolvency...................................................... 31
11.7 Trusts; Funding of Benefits..................................... 32
- iv -
ARTICLE XII
Claims Procedure
12.1 Claims Submission............................................... 33
12.2 Claim Review.................................................... 34
12.3 Right of Appeal................................................. 34
12.4 Review of Appeal................................................ 34
12.5 Designation..................................................... 35
ARTICLE XIII
Miscellaneous
13.1 Headings........................................................ 35
13.2 Uniformity...................................................... 35
13.3 Obligations of the Company and Participating Employers.......... 35
13.4 Insufficiency of Trust Fund..................................... 36
13.5 Contingent Nature of Accounts................................... 36
13.6 Governing Law................................................... 36
13.7 Gender and Number............................................... 36
13.8 Taxes........................................................... 36
13.9 Plan Benefits Nontransferable................................... 37
13.10 Incompetence.................................................... 37
13.11 Identity........................................................ 37
13.12 Other Benefits.................................................. 38
13.13 Construction.................................................... 38
13.14 No Guarantee of Employment...................................... 38
GENTIVA HEALTH SERVICES, INC.
NONQUALIFIED RETIREMENT AND SAVINGS PLAN
ARTICLE I
Background And Purpose
1.1 Background. The Gentiva Health Services, Inc. Nonqualified Retirement and
Savings Plan (the "Plan") was established effective March 15, 2000. The Plan is
an amendment, restatement, merger and continuation of the Olsten Corporation
Nonqualified Retirement and Savings Plan (effective January 1, 1999) and, as
such, includes portions of benefits attributed to employees of Gentiva Health
Services, Inc. (the "Company") and its affiliates that were earned under the
Olsten Corporation Nonqualified Savings Plan for Selected Management Employees;
the Olsten Corporation Nonqualified Retirement Plan for Selected Management
Employees; and the Olsten Corporation Executive Voluntary Deferred Compensation
Plan (together, the "Prior Plans"). Effective March 15, 2000, no further
contributions shall be made to the Prior Plans. As of a date determined by the
Plan Administrator, the assets and liabilities (if any) of the Prior Plans
attributable to employees of the Company or its affiliates shall be transferred
to this Plan.
1.2 Purpose. The Plan was established for the purpose of providing deferred
compensation for a select group of management and highly compensated employees,
as defined in Title I of the Employee Retirement Income Security Act of 1974, as
amended. Participants may make pre-tax and after-tax salary deferrals under the
Plan. In addition, the Participating Employers may match a portion of the
Participant's pre-tax and after-tax salary deferrals. Furthermore, the
Participating Employers may make profit-sharing contributions to the Plan
regardless of whether the Participant has made any deferrals under the Plan.
-2-
1.3 Frozen Benefits. Notwithstanding any provision of this Plan to the
contrary, in all cases, any assets or liabilities transferred to this Plan from
any Prior Plan shall consist solely of frozen benefits accrued under such Prior
Plan.
ARTICLE II
Definitions
2.1 Account(s) means the Participant's Pre-Tax Deferral Account, After-Tax
Deferral Account, Matching Contribution Account, and Profit Sharing Contribution
Account, as determined by the Plan Administrator.
2.2 Approved Leave of Absence means any leave approved by the Participating
Employer, which may or may not include unpaid leaves of absence pursuant to the
Family and Medical Leave Act of 1993.
2.3 Base Salary means the amount paid to an Employee as regular, annual
remuneration for services performed for the Participating Employer, as
determined by the Plan Administrator. Base Salary does not include
Bonus/Incentive Compensation.
2.4 Beneficiary means such beneficiary as the Participant may designate from
time to time in a manner acceptable to the Plan Administrator (which may include
paper, facsimile, electronic or voice response format), to receive any benefit
payable in the event of the Participant's death. Unless otherwise designated,
the Beneficiary with respect to a married Participant shall be the Participant's
surviving spouse. If a Participant has no surviving spouse and has not made a
valid Beneficiary designation hereunder, the Participant's death benefit shall
be paid to the Participant's estate. Beneficiary designations made under the
Olsten Corporation Nonqualified Retirement Savings Plan shall continue in effect
under this Plan until changed by the Participant.
-3-
2.5 Benefits Committee means the committee established by the Company to manage
its various employee benefit plans.
2.6 Bonus/Incentive Compensation means the amount of remuneration for services
paid to an Employee by the Participating Employer as a bonus or incentive in
excess of the Employee's Base Salary, as determined by the Plan Administrator.
2.7 Break-in-Service means:
(a) A Plan Year during which a Participant is not credited with more than
five hundred (500) Hours of Service.
(b) (1) In computing Hours of Service to determine whether a Participant
has a Break in Service, a person shall be credited with up to five
hundred one (501) Hours of Service based on the Participant's previous
customary service with the Participating Employer for any period of
absence from work as a result of:
(A) the Participant's pregnancy;
(B) the birth of the Participant's child;
(C) the placement of a child with the Participant in connection
with the Participant's adoption of such child; or
(D) the Participant's caring for such child for a period
beginning immediately following such birth or placement.
-4-
(2) If the previous customary service cannot be determined, then such
credit shall be at the rate of eight (8) Hours of Service per day.
(c) The Hours of Service credited under subsection (b) shall be
credited in the Plan Year in which the absence from work begins,
if the Participant would be prevented from having a Break in
Service in such Plan Year solely because of the Hours of Service
credited under subsection (b). If the Participant would not be so
prevented from having a Break in Service during the period
described in the preceding sentence, then such Hours of Service
shall be credited in the Plan Year immediately following those in
which such absence from work begins.
(d) No credit shall be given under subsection (b) unless the
Participant furnishes the Plan Administrator with information
necessary to establish that the absence is for one of the reasons
enumerated in subsection (b) and the number of days of such
absence.
2.8 Change in Control means the acquisition by a "person" (as such term is used
in sections 13(d) and 14(d) of the Securities Exchange Act of 1934) of more than
twenty-five percent (25%) of the then outstanding voting stock of the Company,
other than through a transaction arranged by, or with the consent of, the
Company or the Board, or the purchase of at least ten percent (10%) of the then
outstanding shares of voting stock of the Company pursuant to a tender offer or
exchange offer which is opposed by a majority of the members then serving on the
Board. The split off of the Company from Olsten Corporation shall not be treated
as a Change in Control with respect to Participants in the Prior Plans as of the
Effective Date.
2.9 Code means the Internal Revenue Code of 1986, as amended.
-5-
2.10 Company means Gentiva Health Services, Inc., a Delaware corporation, and
its successors.
2.11 Company Contributions means matching contributions and profit sharing
contributions.
2.12 Disability (or Disabled) means a medically determinable physical or mental
impairment that renders a Participant totally disabled. If the Participant
qualifies to receive benefits under the Participating Employer's long term
disability program, the Participant shall be presumed Disabled for purposes of
this Plan. If the Participant does not qualify to receive benefits under the
Participating Employer's long term disability program, the Plan Administrator
may nevertheless determine that the Participant is Disabled for purposes of this
Plan.
2.13 Effective Date of the Plan means March 15, 2000.
2.14 Employee means a full-time, regular employee of a Participating Employer
who is designated as such on the books and records of the Participating
Employer, as determined by the Plan Administrator.
2.15 ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
2.16 Highly Compensated Employee means any Employee who is a management or
highly compensated employee (within the meaning of Title I of ERISA), and who:
(a) is a five percent (5%) owner of the Participating Employer at any time
during the Plan Year or the preceding Plan Year;
-6-
(b) for the preceding Plan Year received Total Compensation in excess of
the amount specified in Code section 414(q)(1)(B)(i); or
(c) for the current Plan Year, the Plan Administrator determines that the
Employee's Total Compensation is expected to exceed the amount specified in
Code section 414(q)(1)(B)(i) and the Employee is not, for such Plan Year,
participating in a plan maintained by a Participating Employer that is
intended to be qualified under Code section 401(a).
2.17 Hours of Service
(a) Hours of Service includes each hour:
(1) for which an individual is paid by, or entitled to pay from, a
Participating Employer for the performance of duties, and
(2) for which an individual is paid, or entitled to pay, by the
Company or Participating Employer with respect to a period of time
during which no duties are performed due to vacation, holiday, or
illness, incapacity, disability, maternity leave, layoff, jury duty,
military duty, or leave of absence (determined in accordance with 29
C.F.R. ss.2530.200b-2(b) and (c)), and
(3) for which back pay, irrespective of mitigation of damages, is
either awarded to an individual or agreed to by the Company or
Participating Employer.
(b) An Hour of Service shall not be credited under more than one paragraph
above. Only five hundred and one (501) Hours of Service will be credited to
an
-7-
individual for any single continuous period of time during which the
individual was paid but rendered no services, even where such period spans
more than one computation period.
(c) An Employee will be credited with forty-five (45) Hours of Service for
each week for which he or she would be credited with one Hour of Service
under the Department of Labor regulations.
(d) Hours of Service shall include employment with the Participating
Employer and with affiliates of the Participating Employer within the
meaning of Code section 1563(a).
2.18 Participant means a Highly Compensated Employee who participates in the
Plan as provided in ARTICLE III.
2.19 Participating Employer
(a) Participating Employer means any entity in the following group that
includes the Company: (i) a controlled group of corporations, within the
meaning of Code section 414(b); (ii) a group of trades or businesses under
common control, within the meaning of Code section 414(c); (iii) an
affiliated service group, within the meaning of Code section 414(m); or
(iv) a trade or business required to be aggregated pursuant to Code section
414(o), provided such entity has adopted this Plan with the permission of
the Plan Administrator.
(b) Entities within the Olsten Corporation's controlled group or affiliated
group through the Effective Date of this Plan shall be treated as
Participating Employers hereunder, such that employment with such entities
shall be counted towards crediting Hours of Service or Years of Service for
purposes of eligibility
-8-
for participation, allocation of contributions, vesting and all other
purposes and compensation from such entities shall be treated as part of
Total Compensation.
2.20 Plan Administrator means the Benefits Committee.
2.21 Plan Year means the period beginning January 1 and ending on the following
December 31 of each year. However, the initial Plan Year shall be the period
from the Effective Date through December 31, 2000.
2.22 Rabbi Trust means the grantor trust instrument established under Code
section 671 and intended to satisfy the requirements of Revenue Procedure 92-64,
which is designated to hold plan assets associated with Participants' Pre-tax
Salary Deferral Account, Matching Contribution Account and Profit Sharing
Contribution Account, and the earnings thereon.
2.23 Secular Trust means the grantor trust instrument established under Code
section 671, which is designated to hold plan assets associated with
Participants' After-Tax Salary Deferral Account and the earnings thereon.
2.24 Termination of Employment means the later of (i) termination of service
with the Participating Employer or (ii) termination of service with InteliStaf
Holdings, Inc.; provided however, that that the Administrator may deem a
Participant to have a Termination of Employment at any time following the
Participant's termination of service with Gentiva. The split off of the Company
from Olsten Corporation shall not be treated as a Termination of Employment for
any Participant hereunder.
-9-
2.25 Total Compensation means:
(a) As determined by the Plan Administrator, all remuneration for services
paid to an Employee by a Participating Employer, as defined in Code section
3401(a) (for purposes of income tax withholding at the source), but
determined without regard to any rules that limit remuneration included in
wages based on the nature and location of employment or the services
performed.
(b) Total Compensation as defined in subsection (a) shall exclude the
following items (even if includable in gross income), as determined by the
Plan Administrator:
(1) reimbursement or other expense allowances;
(2) fringe benefits (cash and noncash);
(3) moving expenses and gross up for taxes;
(4) welfare benefits (including disability income from insurance
policies);
(5) payments on account of severance of the Participant from
employment with a Participating Employer;
(6) payments on account of early retirement of the Participant;
(7) income arising from the grant or exercise of stock options;
-10-
(8) restricted stock awards; and
(9) distributions under this Plan.
2.26 Trust(s) means the assets of the Plan held in trust pursuant to the Rabbi
Trust and/or the Secular Trust.
2.27 Trustee(s) means the Trustee of the Rabbi Trust and/or the Trustee of the
Secular Trust as the context may require, and any successor Trustees.
2.28 Unforeseeable Emergency means a sudden, unexpected event beyond the control
of the Participant that would result in severe financial hardship to the
Participant if early withdrawal were not permitted. The amount of the withdrawal
is limited to the amount necessary to meet the emergency. Examples of
Unforeseeable Emergencies include the Participant's sudden and unexpected
illness or accident (or that of the Participant's dependent), or an
extraordinary and unforeseeable loss of the Participant's property due to
casualty as a result of events beyond the Participant's control. Sending a child
to college or purchasing a new home is not an Unforeseeable Emergency. The Plan
Administrator shall determine whether a particular situation qualifies as an
Unforeseeable Emergency, based on the facts and circumstances of each case.
2.29 Valuation Date(s) means each day the recordkeeper values the balances of
the Participants' Accounts.
2.30 Year(s) of Service means the Plan Year during which an Employee has
completed at least 1,000 Hours of Service. All Years of Service shall be
considered except Years of Service prior to the Plan Year in which the
Participant attained age eighteen (18).
-11-
ARTICLE III
Eligibility And Participation
3.1 Eligibility.
(a) All participants in the Prior Plans who become employed by any entity
within the Company's controlled or affiliated group as of the Effective
Date shall become Participants hereunder as of the Effective Date.
(b) Highly Compensated Employees (i) who are age twenty-one (21) or older;
(ii) who have completed six (6) months of service with a Participating
Employer; (iii) who are employed by a Participating Employer on or after
the Effective Date; (iv) who did not participate in the Prior Plans; and
(v) who are designated by the Plan Administrator as eligible to participate
in the Plan, shall become Participants as of the first day of the first
payroll period of the calendar month occurring on or after the date the
Employee satisfies such eligibility requirements.
(c) The Plan Administrator shall have sole discretion to determine when a
Highly Compensated Employee becomes eligible to participate in the Plan and
the Plan Administrator may take into consideration whether the Highly
Compensated Employee has received sufficient notice of his or her
eligibility to participate in the Plan (such that the Employee may make a
timely election to defer salary within thirty (30) days of first becoming
eligible to participate in the Plan). The Plan Administrator shall also
have sole discretion to determine if an Employee is expected to be a Highly
Compensated Employee in the current Plan Year based on such Employee's
expected Total Compensation for the current Plan Year.
-12-
3.2 Participation. To participate in the Plan, an eligible Highly Compensated
Employee must enroll in the Plan, regardless of whether the Employee elects to
make salary deferral contributions to the Plan. If an Employee fails to enroll
in the Plan, the Plan Administrator shall nevertheless enroll the Employee in
the Plan. Enrollment in the Plan is required in order for the Employee to be
eligible to receive profit sharing contributions hereunder (which are available
to Participants even if the Participant does not make any salary deferral
contributions under the Plan). Participants may enroll in the Plan in any format
acceptable to the Plan Administrator, including, but not limited to, paper,
facsimile, electronic record or voice response record. Participants who enrolled
in the Prior Plans shall be deemed to be enrolled hereunder.
ARTICLE IV
Contributions
4.1 Participant Contributions
(a) Amount. A Participant may defer receipt of the following amounts, in
increments of one percent (1%), under procedures established by the Plan
Administrator; provided, however, that if the Participant's deferrals would
result in insufficient funds being available from which applicable payroll
taxes or other required deductions may be withheld, the Plan Administrator
may require the Participant to reduce his or her deferral amount in order
to facilitate such required withholding:
(1) up to thirty percent (30%) of the Participant's Base Salary on a
pre-tax and/or after-tax basis; and/or
(2) up to seventy-five percent (75%) of the Participant's
Bonus/Incentive Compensation on a pre-tax and/or after-tax basis.
-13-
(b) Deferral Elections.
(1) Elections. In order to elect pre-tax or after-tax salary
deferrals, each eligible Employee shall deliver a salary deferral
election to the Plan Administrator in such form as the Plan
Administrator may accept (including, but not limited to, paper,
facsimile, electronic record or voice response record). Salary
deferral elections shall designate the amount of pre-tax and/or
after-tax Base Salary and Bonus/Incentive Compensation to be deferred,
the Participant's Beneficiary and such other items as the Plan
Administrator may prescribe, such as the date the deferred amount is
to be paid to the Participant. A Participant's deferral election shall
remain in effect until terminated or amended, as provided below.
Pre-tax and after-tax deferral elections in effect for Participants
under the Prior Plans on the Effective Date shall be deemed to
continue hereunder, until changed by the Participant.
(2) Pre-Tax Deferrals.
(A) Except as provided herein, pre-tax salary deferral elections
shall be void unless submitted before the first day of the
calendar year during which the amount to be deferred will be
earned. However, in the Plan Year in which the Employee is first
eligible to participate, such salary deferral election shall be
filed within thirty (30) days of the date on which the Employee
is first eligible to participate in the Plan and such election
shall be with respect to Total Compensation earned from the
Participating Employer during the remainder of such Plan Year.
-14-
(B) A Participant may not terminate or amend his or her pre-tax
salary deferral election for a Plan Year during that Plan Year.
Any termination or amendment of a pre-tax salary deferral
election must be made during an annual open enrollment period and
shall be effective as of the first payroll period of the next
Plan Year following the date the Plan Administrator receives the
Participant's revised salary deferral election.
(C) The Plan Administrator shall credit as a bookkeeping entry to
the Participant's Pre-Tax Salary Deferral Account the amount
designated by the Participant on his or her pre-tax salary
deferral election and any subsequent deemed earnings or losses
thereon; provided however, that all such amounts shall be subject
to the rights of the general unsecured creditors of the
Participating Employer. The Participating Employer shall reduce
the Participant's Total Compensation in accordance with the
provisions of the applicable salary deferral election.
(3) After-Tax Deferrals.
(A) An after-tax salary deferral election may be submitted at any
time; provided, however, that the after-tax deferral election
shall become effective as of the first day of the first payroll
period of the calendar month following the date the Plan
Administrator receives the Participant's salary deferral
election.
(B) A Participant may terminate or amend his or her after-tax
salary deferral election during a Plan Year; provided, however,
that
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such termination or amendment shall become effective as of the
first day of the first payroll period of the calendar month
following the date the Plan Administrator receives the
Participant's revised salary deferral election.
(C) The Plan Administrator shall credit to the Participant's
After-Tax Salary Deferral Account the after-tax deferral amount
designated by the Participant on his or her salary deferral
election and any subsequent earnings or losses thereon.
(c) Corrective Contributions. In the sole discretion of the Plan
Administrator, a Participant may make a special election to defer
additional pre-tax and/or after-tax amounts under the Plan to accommodate
late enrollment in the Plan for a particular Plan Year or other
non-recurring situations (such as transitions between participation in the
Participating Employer's qualified retirement plans and this Plan or in
order to correct errors in the operation of the Plan with respect to
individual circumstances). Such amounts will be deducted from the
Participant's future Total Compensation.
4.2 Company or Participating Employer Contributions.
(a) Matching Contributions.
(1) The Participating Employer may match a Participant's pre-tax
and/or after-tax salary deferrals up to six percent (6%) of the
Participant's Total Compensation. The amount of the match, if any,
will be announced each year and allocated to the Participant's
Matching Contribution Account.
(2) Matching contributions will vest based on the vesting schedule set
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forth in ARTICLE VI.
(3) The Participating Employer shall not contribute any matching
contributions to the Plan on behalf of the Participant during any
period in which the Participant's contributions to the Plan have been
suspended.
(b) Profit-Sharing Contributions.
(1) The Participating Employer may also choose to make a profit
sharing contribution, in addition to, or in lieu of a matching
contribution. If the Participating Employer makes a profit sharing
contribution, only Participants employed by the Participating Employer
on the last day of the Plan Year who have completed one thousand
(1,000) Hours of Service during the Plan Year shall be eligible to
receive an allocation from such profit sharing contribution.
(2) The amount of any profit sharing contribution shall be determined
in the sole discretion of the Participating Employer. The
Participating Employer may vary the amount it contributes to each
Participant's Profit Sharing Contribution Account. For example, the
Participating Employer may contribute a fixed percentage of pay for
earnings up to a certain level and a variable percentage of pay for
earnings above a specified level. The Participating Employer may also
choose other methods to determine the amount of the profit sharing
contribution.
(3) The amount of any profit sharing contribution, if any, will be
announced each Plan Year. Profit sharing contributions will vest based
on the vesting schedule set forth in ARTICLE VI.
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ARTICLE V
Investment And Valuation Of Plan Accounts
5.1 Investment of Accounts
(a) Actual and Deemed Investments. The assets contributed to the Rabbi
Trust shall remain the property of the Participating Employer until
distributions are made to Participants employed by such Participating
Employer. Accordingly, all investments under the Rabbi Trust shall be
deemed investments selected by Participants, rather than actual
investments. The assets contributed to the Secular Trust are treated as the
property of Participants and therefore, investments under the Secular Trust
shall be actual (not deemed) investments. Participants' actual or deemed
investments shall continue in force for subsequent Plan Years until revoked
or changed by the Participant. Investment directions made by Participants
in the Prior Plans as of the Effective Date shall be deemed to continue
hereunder until changed by the Participant.
(b) Investment Direction.
(1) Pre-tax salary deferrals, profit sharing contributions and
matching contributions are invested in accordance with each
Participant's deemed investment directions and after-tax contributions
are invested in accordance with each Participant's actual investment
directions. Participant's Accounts may be invested in any combination
of investment options, in accordance with rules established by the
Plan Administrator.
(2) A Participant may change investment or deemed investment
directions at any time by following the procedures announced from time
to time by the Plan Administrator. Changes in investment direction or
-18-
transfer of account balances, in whole or in part, may be accomplished
in any format acceptable to the Plan Administrator, including, but not
limited to, paper, facsimile, electronic record or voice response
record. The change in investment direction shall be effective only
with respect to subsequent contributions.
(c) Responsibility for Investments
(1) Each Participant is solely responsible for the selection of
investment funds or deemed investment funds for the Participant's
Accounts, subject to such rules as the Plan Administrator may
determine. The Trustees, the Plan Administrator, and the officers,
supervisors and other employees of the Participating Employers are not
empowered to advise Participants as to the manner in which Accounts
should be invested. The fact that an investment fund is available
under the Plan shall not be construed as a recommendation for
investment in that fund.
(2) If a Participant does not direct the investment or deemed
investment of any of his or her Accounts, the Accounts will be treated
as being invested in a money market account selected by the Plan
Administrator until the Participant directs otherwise. Notwithstanding
the preceding sentence, effective January 1, 2000, the default
investment shall be a guaranteed interest account.
5.2 Determining the Value of Participant Accounts. The net value of the
Accounts in the Trusts is determined on each Valuation Date. Any net earnings,
losses and expenses associated with the Participant's Accounts since the
preceding Valuation Date shall be allocated to each Participant's Account.
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ARTICLE VI
Vesting And Forfeitures
6.1 Participant Contributions. Vesting means a nonforfeitable right to receive
the value of the Account. Pre-tax and after-tax salary deferrals and the
earnings thereon are always one hundred percent (100%) vested. Pre-tax salary
deferrals and earnings thereon are subject to the claims of the Company's or
Participating Employer's creditors, as described in Section 11.6.
6.2 Matching and Profit-Sharing Contributions.
(a) Matching and profit sharing contributions begin to vest after
completion of three (3) Years of Service. A Participant's vested percentage
is determined on the basis of Years of Service, as follows:
Years of Service Percentage Vested
---------------- -----------------
Fewer than 3 Years 0%
3 Years but Fewer than 4 Years 33-1/3%
4 Years but Fewer than 5 Years 66-2/3%
5 Years or More 100%
Matching and profit sharing contributions and earnings thereon are subject
to the claims of the Company's or Participating Employer's creditors, as
described in Section 11.6.
(b) Notwithstanding section 6.2(a), Participants become fully vested in the
value of matching and profit sharing contributions upon Disability or death
while employed by a Participating Employer.
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6.3 Forfeitures. If a Participant has a Termination of Employment for any
reason other than death or Disability, he or she will receive the value of his
or her vested Matching Contribution Account and Profit Sharing Contribution
Account and shall forfeit the value of any non-vested Matching and
Profit-Sharing Contributions. The forfeited amount shall be used to reduce
future contributions otherwise required from the Participating Employer.
6.4 Change in Control. Notwithstanding anything to the contrary contained in
the Plan, in the event of a Change in Control, Participants will become fully
vested in the value of matching and profit sharing contributions. Unless the
Plan Administrator provides otherwise, distributions of Participant Accounts
shall be made as soon as practicable following the Change in Control.
ARTICLE VII
Distributions
7.1 In-Service Withdrawals
(a) Unforeseeable Emergency. Subject to section 7.1(c), Participants may
receive an in-service withdrawal of pre-tax salary deferrals and vested
profit sharing and matching contributions (and the earnings thereon) only
in the event of an Unforeseeable Emergency. The amount of any withdrawal
due to an Unforeseeable Emergency is limited to the amount necessary to
ameliorate the emergency, as determined by the Plan Administrator.
(b) After-Tax Salary Deferrals. Subject to section 7.1(c), a Participant
may withdraw any after-tax salary deferrals and the earnings thereon at any
time.
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(c) Number of Withdrawals. The Plan Administrator may restrict the number
of withdrawals permitted in a Plan Year. If such restrictions are imposed,
the Plan Administrator shall notify Participants accordingly.
7.2 Final Distributions.
(a) Distributions During Participant's Lifetime.
(1) Distributions Upon Termination of Employment. Upon Termination of
Employment with the Participating Employer, a Participant will be
entitled to receive the full value of his or her vested Accounts in
accordance with the Participant's election pursuant to Section
7.2(a)(2) below. Subject to Section 7.2(a)(3) below, the time and form
of payment from a Participant's Accounts shall be determined in
accordance with the last valid designation filed by the Participant
with the Plan Administrator. Designations of the time and form of
payment filed by Participants in the Prior Plans as of the Effective
Date shall continue in force hereunder until changed by the
Participant.
(2) Elective Distribution Date and Form of Payment. Participants who
have not experienced a Termination of Employment may designate a
specific date on which to receive (or begin receiving) distributions
from their Plan Accounts. Such payment shall be made (or begin) either
(i) as soon as practicable following the Participant's Termination of
Employment or (ii) on the later of (a) the date the Participant
attains age sixty-five (65) or (b) the date the Participant has a
Termination of Employment. The Participant may also designate whether
the payment shall be in the form of a single, lump sum payment or
approximately equal annual installments, for a period up to ten (10)
years. Subject to Section
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7.2(a)(3) below, designations of elective distribution dates and methods of
distribution may be changed so long as the Participant is employed by a
Participating Employer. Furthermore, the designation of a distribution date and
method of distribution made by Participants in the Prior Plan as of the
Effective Date shall continue in force hereunder until changed by the
Participant.
(3) One Year Designation Period.
(A) For Distributions Made Before January 1, 2000. Except as
provided herein, the designation under Section 7.2(a)(2) above
are only valid if the designation is filed with the Plan
Administrator at least one year before the distributions begin.
Notwithstanding the preceding sentence, the designation under
Section paragraph (2) above shall be valid if the designation is
filed with the Plan Administrator within thirty (30) days after
the date that the Participant is first eligible to participate in
the Plan. If the designation is filed with the Plan Administrator
less than one year before the date the distributions are to begin
and the special rule for the Participant's initial eligibility to
participate in the Plan does not apply, the Participant's
previous designation shall be re-instated. In the event the
Participant does not have any previous designation or if the
Participant does not elect a distribution date and method under
this section 7.2(a), then the Participant shall be deemed to have
elected to receive a single lump sum payment upon Termination of
Employment with the Participating Employer.
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(B) For Distributions Made On or After January 1, 2000. The
designation of the time and form of payment shall only be valid
if (i) the designation is filed with the Plan Administrator at
least six (6) months before the distributions begin and no later
than the last day of the Plan Year before the first Plan Year for
which such designation is to apply; (ii) the designation is filed
with the Plan Administrator during the first thirty (30) days
that the Participant is eligible to participate in the Plan and
the distribution commencement date begins not earlier than the
first day of the calendar year following the date the designation
is filed with the Plan Administrator; or (iii) thirty (30) days
from the date this Plan is effective for eligible employees. If
the Participant's designation does not satisfy the criteria
described in this paragraph, then the Participant's previous
designation shall be re-instated. In the event the Participant
does not have any previous designation or if the Participant does
not elect a distribution date and method under this section
7.2(a), then the Participant shall be deemed to have elected to
receive a single lump sum payment upon Termination of Employment
with the Participating Employer.
(b) Distributions After Participant's Death. Upon a Participant's death,
the balance in full of the Participant's Account shall be payable to the
Participant's Beneficiary in a lump sum as soon as administratively
practicable (generally within sixty (60) days after the Valuation Date
following the Participant's date of death), regardless of whether the
Participant had elected to receive installment payments.
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ARTICLE VIII
Leaves Of Absence, Layoffs, And Reemployment
8.1 Leaves of Absence and Layoffs. A Participant who is laid off or on an
Approved Leave of Absence will still be considered a Participant until he or she
incurs a Break-in-Service.
(a) During periods of layoff, the Participating Employer will not make any
contributions on the Participant's behalf.
(b) During Approved Leaves of Absence, the Participant may receive an
allocation of any profit sharing contribution made by the Participating
Employer for such period.
(c) During periods of layoff or Approved Leaves of Absence, previous
matching and profit sharing contributions made on the Participant's behalf
will continue to vest unless the Participant incurs a Break-in-Service and
all contributions in the Participant's Accounts will continue to reflect
the performance of the investment fund(s) selected by the Participant.
(d) A Participant who receives severance payments from the Participating
Employer shall not be entitled to participate in the Plan during the period
in which such severance benefits are being paid. Accordingly, Participants
shall not be permitted to make any deferral contributions or to receive any
matching or profit sharing contributions with respect to such severance
period.
8.2 Returning to Work After Termination of Employment. If a Participant has a
Termination of Employment and is later rehired, the following provisions shall
apply.
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(a) Participation Upon Re-Employment.
(1) Vested Participants. If the Participant had a vested interest in
any matching and/or profit sharing contributions at the time the
Participant had a Termination of Employment, the Participant will
re-enter the Plan on the first day of the first pay period of the
month following the date the Participant is credited with an Hour of
Service after re-employment with the Participating Employer.
(2) Non-Vested Participants. If the Participant did not have a vested
interest in any matching or profit-sharing contributions at the time
the Participant had a Termination of Employment with the Participating
Employer, then the Participant will re-enter the Plan on the first day
of the first payroll period of the month following the date the
Participant completes six (6) months of service with the Participating
Employer.
(b) Vesting Upon Re-employment. Upon re-employment after a
Break-in-Service, a Participant's previous Years of Service shall be
restored if:
(1) the Participant was vested in any matching or profit sharing
contributions or
(2) the Participant was not vested in any matching or profit sharing
contributions and the number of years of the Participant's
Break-In-Service was less than the greater of five (5) or the number
of Years of Service the Participant had completed before the
Break-in-Service.
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ARTICLE IX
Participating Employers
9.1 Adoption by Other Employers.
(a) Notwithstanding anything herein to the contrary, a Participating
Employer (other than the Company) may, with the consent of the Plan
Administrator and the Trustees, adopt the Plan and all of the provisions
hereof by the execution of a document evidencing such intent and setting
forth the effective date of the Plan with respect to such Participating
Employer.
(b) The Plan Administrator shall have the authority to make any and all
necessary rules or regulations to effectuate the purposes of this section.
(c) The Plan is not intended to be a joint venture between the Company and
any Participating Employer or between any Participating Employers.
(d) Each Participating Employer shall be solely responsible for providing
benefits under the Plan for its own Employees. To the extent amounts are
set aside by the Participating Employer under the Rabbi Trust, such amounts
shall be subject to the claims of creditors of the particular Participating
Employer only, and shall not be subject to the claims of creditors of other
entities participating in the Plan.
9.2 Allocation of Plan and Trust Expenses. Any expenses of the Plan and Trusts
which are to be paid by the Company shall be allocated to the Participating
Employers in the proportion that the total amount in the Trusts attributable to
the Participating Employer's Participants bears to the total assets of the
Trusts.
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9.3 Designation of Company as Agent. Each Participating Employer shall be
deemed irrevocably to have designated the Company as its agent with respect to
all matters affecting the Trustees and the Plan.
9.4 Employee Transfers. The transfer of employment of a Participant from one
Participating Employer to another Participating Employer shall not affect the
Participant's rights under the Plan and the number of the Participant's Years of
Service shall not be deemed to be interrupted. Transfer of employment between
such entities shall not be treated as a Termination of Employment and
distributions shall not be made from the Plan based on such transfer of
employment. The entity to which the Participant is transferred shall thereupon
become obligated hereunder with respect to such Participant in the same manner
as was the entity from which the Participant was transferred.
9.5 Contributions and Forfeitures of Participating Employer. All contributions
made by a Participating Employer shall be determined separately and shall be
paid to the Accounts of the Employees of such Participating Employer, subject to
all of the terms and conditions of the Plan.
9.6 Amendments by Participating Employers. Participating Employers (other than
the Company) do not have the right to amend the Plan in any regard.
9.7 Discontinuance of Participation. A Participating Employer (other than the
Company) shall be permitted to discontinue or terminate its participation in the
Plan at any time, upon giving reasonable advance notice to the Plan
Administrator. At the time of any such discontinuance or termination,
satisfactory evidence thereof shall be delivered to the Trustees and the
Accounts held in the Trusts for the benefit of Employees of the withdrawing
Participating Employer shall be distributed as soon as administratively
feasible, unless the Plan Administrator provides otherwise.
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ARTICLE X
Amendment And Termination
10.1 Right to Terminate. The Company expressly reserves the right to terminate
the Plan in whole or in part without the consent of Participants or
Beneficiaries. Notice of such termination shall be given to each Participant or
Beneficiary.
10.2 Continuation of Trust.
(a) Unless the Plan Administrator directs otherwise, upon the termination
of the Plan in whole or in part with respect to a Participating Employer or
upon the bankruptcy of the Participating Employer, all unvested
Participants shall become one hundred percent (100%) vested in their
benefits under the Plan and distributions shall be made from the Plan as
soon as practicable.
(b) Notwithstanding (a) above, if the Plan Administrator so elects, the
Trusts shall continue if permitted by law. In such event, the Trustees
shall continue to hold and administer the Trusts for the benefit of the
Participants in the same manner and with the same powers, rights, and
privileges as set forth herein; and the Trustees may, in their sole and
absolute discretion, pay to the Participants their respective amounts
either immediately or at a future date in accordance with the provisions in
ARTICLE VII.
10.3 Right to Amend. Except as hereinafter provided, the Benefits Committee
shall have the right to amend the Plan and Trusts at any time and from time to
time but only to the extent that such amendments are required to comply with
changes in the law or such amendments do not increase the costs to the
Participating Employers hereunder. Notwithstanding the preceding sentence, the
Board may amend the Plan and Trusts at any time and from time to time.
Amendments adopted by the Benefits Committee or Board
-29-
shall not (i) increase the responsibilities of the Plan Administrator or the
Trustees without their written consent; or (ii) directly or indirectly reduce
the Participant's vested Accounts. Notwithstanding anything herein to the
contrary, this Plan may be amended at any time if necessary or desirable to
conform the Plan to the Code or any federal statute with respect to employees'
trusts or any regulations or rulings issued pursuant thereto and no such
amendment shall be considered prejudicial to the rights of any Participant or
Beneficiary. Notice of all material amendments shall be given to each
Participant and Beneficiary entitled to receive distributions under the Plan.
10.4 Merger or Consolidation. The Plan may not be merged or consolidated with
any other plan and its assets or liabilities may not be transferred to any other
plan, unless each person entitled to benefits under the Plan would receive a
benefit immediately after the merger, consolidation or transfer which is equal
to or greater than the benefit he or she would have been entitled to receive
immediately before the merger, consolidation or transfer.
ARTICLE XI
Administration
11.1 Plan Administrator. The Plan Administrator shall have the sole authority,
in its absolute discretion:
(a) to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan;
(b) to prescribe the form or forms used in connection with the Plan,
including salary deferral election forms and beneficiary designation forms
(which forms shall be consistent with the terms of the Plan but need not be
identical and which may be in any format acceptable to the Plan
Administrator, including, but not limited to, paper, facsimile, electronic
record or voice response record); and
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(c) to construe and interpret the Plan and any forms used in the operation
of the Plan and the rules of the Plan;
(d) to employ actuaries, accountants, counsel and other persons the Plan
Administrator deems necessary in connection with the administration of the
Plan; and
(e) to take all other necessary and proper actions to fulfill its duties
under the Plan.
11.2 Binding Effect. All decisions, determinations and interpretations of the
Plan Administrator shall be final and binding on all Participants and
Beneficiaries receiving benefits under the Plan.
11.3 Delegation of Authority. The Plan Administrator may delegate its authority
to administer the Plan to any individual(s) as the Plan Administrator may
determine and such individual(s) shall serve solely at the pleasure of the Plan
Administrator. Any individual(s) who are authorized by the Plan Administrator to
administer the Plan shall have the full power to act on behalf of the Plan
Administrator, but shall at all times be subordinate to the Plan Administrator
and the Plan Administrator shall retain ultimate authority for the
administration of the Plan.
11.4 Plan Records and Expenses. The books and records to be maintained for the
purposes of the Plan shall be maintained by the Company's employees subject to
the supervision of the Plan Administrator. All expenses incurred in connection
with the performance of any settlor functions with respect to the Plan and
Trusts, including, but not limited to, the cost of initially establishing the
various Participant Accounts, shall be paid by the Company, and may be allocated
among other Participating Employers, as
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provided in section 9.2. Unless the Company determines otherwise, each
Participant's Accounts shall be charged with a pro-rata share of the
administrative expenses and investment fees incurred by the Plan and Trusts,
including, but not limited to, any annual fees imposed by financial
institutions, brokerage firms or otherwise to maintain such Accounts, provided,
however, that all expenses related to any Participant-directed investment (such
as brokerage fees, commissions or other transaction-specific costs) shall be
deducted from such Participant's Accounts.
11.5 Limited Liability. No member of the Company's Board of Directors or the
Benefits Committee and no employee of any Participating Employer shall be liable
to any person for any action taken or omitted in connection with the
establishment or administration of this Plan, including the receipt of benefits
thereunder, unless attributable to his or her own fraud or willful misconduct,
nor shall any Participating Employer be liable to any person for any such action
unless attributable to fraud or willful misconduct on the part of a director or
employee of the Participating Employer.
11.6 Insolvency.
(a) Should the Participating Employer be considered insolvent (such that
the Participating Employer is unable to pay its debts as they come due) or
subject to a proceeding as a debtor under the United States Bankruptcy
Code, or should the Participating Employer become aware of its pending
insolvency or bankruptcy, the affected entity, acting through its board of
directors or chief executive officer shall give immediate written notice of
such to the Plan Administrator and the Trustees, if any.
(b) Upon receipt of such notice, the Plan Administrator and the Trustees
shall cease to make any payments of matching contributions, profit sharing
contributions, pre-tax contributions and all earnings thereon to
Participants or Beneficiaries of the affected entity and shall hold any and
all assets with respect to those Participants and Beneficiaries for the
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benefit of the general unsecured creditors of the affected entity. For this
purpose, it is expressly provided that such assets of each Participating
Employer which are intended for use in this Plan shall at all times be
available to creditors of such Participating Employer. Accordingly, the
Plan shall be administered on an employer-by-employer basis, such that
accrued liabilities under the Plan on behalf of a particular Participating
Employer's Employees shall always be available to creditors of such
Participating Employer.
11.7 Trusts; Funding of Benefits.
(a) Nothing contained herein shall be deemed to create a trust of any kind
or create any fiduciary relationship. Funds deposited into the Rabbi Trust
shall continue for all purposes to be a part of the general funds of the
Participating Employer and no person other than the Participating Employer
shall, by virtue of the Plan, have any interest in such funds. Except for
amounts held in the Secular Trust, to the extent that any person acquires a
right to receive payments from the Participating Employer under the Plan,
such right shall be no greater than the right of any unsecured general
creditor of the Participating Employer.
(b) Should any insurance contract or other investment be acquired in
connection with the liabilities assumed under this Plan, it is expressly
understood and agreed that the Participants and Beneficiaries shall not
have any right with respect to, or claim against, such assets nor shall any
such purchase be construed to create a trust of any kind or a fiduciary
relationship between the Company, Participating Employers and the
Participants, Beneficiaries or any other person. The Participating Employer
or the Trust(s) shall be the designated owner and beneficiary of any
insurance contract acquired in connection with its obligation under this
Plan.
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(c) Each Participant and Beneficiary shall be required to look to the
provisions of this Plan and to the Participating Employer for enforcement
of any and all benefits under this Plan. Except for amounts held in the
Secular Trust, to the extent any Participant or Beneficiary acquires a
right to receive payment under this Plan, such right shall be no greater
than the right of any unsecured general creditor of the Participating
Employer.
ARTICLE XII
Claims Procedure
12.1 Claims Submission.
(a) All claims for benefits under the Plan by a Participant or Beneficiary,
regardless of the nature of the claim, shall be initially submitted in
writing to the Plan Administrator. Such claims shall be submitted within a
reasonable period of time after the date such benefit was, or was purported
to be, available to the Participant or Beneficiary, with such determination
of reasonableness to be made by the Plan Administrator in its sole
discretion. All claims must adequately state the basis for the claim
including a statement of all pertinent facts and applicable law, except to
the extent expressly waived by the Plan Administrator. The Plan
Administrator may prescribe additional procedural requirements for claims,
not inconsistent herewith.
(b) In the event that a Participant or Beneficiary does not receive any
Plan benefit that is claimed, such Participant or Beneficiary shall be
entitled to consideration and review as provided in this ARTICLE. Such
consideration and review shall be conducted in a manner designed to comply
with ERISA section 503.
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(c) Failure to follow the requirements of this ARTICLE shall result in the
denial of the claim submitted. The Participant or Beneficiary submitting
such deficient claim shall be deemed to have not exhausted his or her
administrative remedies under the Plan.
12.2 Claim Review. Upon receipt of any written claim for benefits, the Plan
Administrator shall be notified and shall give due consideration to the claim
presented. If the claim is denied to any extent by the Plan Administrator, the
Plan Administrator shall furnish the claimant with a written notice setting
forth (in a manner calculated to be understood by the claimant):
(a) the specific reason or reasons for denial of the claim;
(b) a specific reference to the Plan provisions on which the denial is
based;
(c) a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material
or information is necessary; and
(d) an explanation of the provisions of this ARTICLE.
12.3 Right of Appeal. A claimant who has a claim denied under section 12.2 may
appeal for reconsideration of that claim. A request for reconsideration under
this section must be filed by written notice with the Plan Administrator within
sixty (60) days after receipt by the claimant of the notice of denial under
section 12.2.
12.4 Review of Appeal. Upon receipt of an appeal, the Company shall promptly
assign a committee or appropriate officer independent of the Plan Administrator
to review the Plan Administrator's denial of the claim. Such independent
committee or officer shall take action
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to give due consideration to the appeal. Such consideration may include a
hearing of the parties involved, if the committee or officer feels such a
hearing is necessary. In preparing for this appeal, the claimant shall be given
the right to review pertinent documents and the right to submit in writing a
statement of issues and comments. After consideration of the merits of the
appeal, the committee or officer shall issue a written decision which shall be
binding on all parties. The decision shall be written in a manner calculated to
be understood by the claimant and shall specifically state its reasons and
pertinent Plan provisions on which it relies. The decision on the appeal shall
be issued within sixty (60) days after the appeal is filed, except that if a
hearing is held, the decision may be issued within one hundred twenty (120) days
after the appeal is filed.
12.5 Designation. The Plan Administrator may designate one or more of its
members or any other person of its choosing to make any determination otherwise
required to be made by the Plan Administrator under this ARTICLE.
ARTICLE XIII
Miscellaneous
13.1 Headings. The headings in this Plan are for convenience of reference only
and are not to be considered as constructions of the provisions.
13.2 Uniformity. In the exercise of any discretionary power of authority
hereunder, all Participants under similar circumstances shall be treated in a
uniform and non-discriminatory manner.
13.3 Obligations of the Company and Participating Employers. The Participating
Employers expect to continue the Plan in force indefinitely, but continuance of
the Plan is completely voluntary and is not assumed as a contractual obligation
of the Participating Employers. The obligations of the Participating Employers,
which are expressly stated to be
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noncontractual, are limited solely to the making of contributions to the Trusts
provided for herein. The Participating Employers shall only be responsible for
making contributions to the Trusts that correspond to the deferral elections
made by the Participating Employer's Employee's, as well as any profit-sharing
contributions that the Participating Employer may make.
13.4 Insufficiency of Trust Fund. The Participating Employer shall not be liable
in any manner to Participants employed by such Participating Employer and the
Participants' Beneficiaries if the Trusts are insufficient to provide for the
payment of all benefits due to such Participants and Beneficiaries. Such
benefits are to be payable only from the Trusts and only to the extent of the
assets of such Trusts. Any person having any claim under the Plan shall look
solely to the Trusts for payment or satisfaction thereof.
13.5 Contingent Nature of Accounts. Except for amounts held in the Secular
Trust, until the deferred benefits are distributed under the Plan to the
Participants or Beneficiaries, the interest of each Participant in this Plan is
contingent only and is subject to forfeiture as provided hereunder. Title to and
beneficial ownership of any assets, whether cash or investments, which the
Participating Employer may set aside to meet its contingent deferred obligation
hereunder shall at all times remain the property of the Participating Employer
and no Participant or Beneficiary shall under any circumstances acquire any
property interest in any specific assets of the Participating Employer.
13.6 Governing Law. This Plan is made under, and shall be subject to and
governed by, the laws of the State of New York.
13.7 Gender and Number. Words used in the masculine shall be read and construed
in the feminine where applicable. Wherever required, the singular of the word
used in this Plan shall include the plural and the plural may be read in the
singular.
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13.8 Taxes. The Participating Employers have the right to deduct from all
benefits paid under the Plan any taxes required by law to be withheld with
respect to such benefits. The Participating Employers do not represent or
guarantee that any particular federal or state income, payroll, personal
property or other tax consequence will result from participation in this Plan.
Participants should consult their personal tax advisors to determine the tax
consequences of his or her participation in the Plan.
13.9 Plan Benefits Nontransferable. Except for amounts held in the Secular
Trust, the right of any Participant or Beneficiary to any payment hereunder
shall not be subject in any manner to attachment or other legal process for the
debts of such Participant or Beneficiary and any such benefit or payment shall
not be subject to anticipation, alienation, sale, transfer, assignment, pledge
or encumbrance. Any attempt to subject any benefit or payment in whole or in
part to the debts, contracts, liabilities engagements or torts of the
Participant or Beneficiary or any other person, entitled to any such benefit or
payment pursuant to the terms of the Plan shall result, in the discretion of the
Plan Administrator, in the termination of such payment.
13.10 Incompetence. If the Plan Administrator determines that any person to whom
a benefit is payable under the Plan is incompetent by reason of a physical or
mental Disability, the Plan Administrator shall have the power to cause the
payments becoming due to such person to be made to another person for his or her
benefit without the responsibility of the Plan Administrator, the Participating
Employer or Trustees to see to the application of such payments. Any payment
made pursuant to such power shall, as to such payment, operate as a complete
discharge of the Plan Administrator, the Participating Employer and any Trustee.
13.11 Identity. If, at any time, any doubt exists as to the identity of any
person entitled to any payment hereunder or the amount of time of such payment,
the Plan Administrator shall be entitled to hold such sum until such identity or
amount or time is determined or until an order of a court of competent
jurisdiction is obtained. The Plan Administrator shall also be
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entitled to pay such sum into court in accordance with the appropriate rules of
law. Any expenses incurred by the Participating Employer, the Plan Administrator
and any Trustee incident to such proceeding or litigation shall be charged
against the account of the affected Participant.
13.12 Other Benefits. The benefits of each Participant or Beneficiary hereunder
shall be in addition to any benefits paid or payable to the Participant or
Beneficiary under any other pension, disability, annuity or retirement plan.
13.13 Construction. All questions of interpretation, construction or application
arising under this Plan shall be decided by the Plan Administrator whose
decision shall be final and conclusive upon all persons.
13.14 No Guarantee of Employment. Nothing contained herein shall be construed as
a contract of employment or deemed to give any Participant the right to be
retained in the employ of the Participating Employer, or to interfere with the
rights of any such employer to discharge any individual at any time, with or
without cause, except as may be otherwise agreed to in writing or provided by
applicable law.
IN WITNESS WHEREOF, this Plan has been executed effective March 15, 2000.
GENTIVA HEALTH SERVICES, INC.
By: _____________________________
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FIRST AMENDMENT TO THE
GENTIVA HEALTH SERVICES, INC.
NONQUALIFIED DEFERRED COMPENSATION PLAN
WHEREAS, Gentiva Health Services, Inc. (the "Company") maintains the
Gentiva Health Services, Inc. Nonqualified Deferred Compensation Plan (the
"Plan"); and
WHEREAS, Section 10.3 provides that the Benefits Committee may amend the
Plan from time to time, to the extent that the amendment does not result in
increased costs to the Company; and
WHEREAS, the Benefits Committee wishes to amend the Plan to provide
participants with two additional choices with respect to the timing of the
payment of their benefits under the Plan and to change the default rule with
respect to when timing of payments of benefits begins;
NOW THEREFORE, the following sections of the Plan are amended as follows,
effective January 1, 2002:
FIRST
Section 7.1 is amended as follows:
(a) Unforeseeable Emergency. Subject to section 7.1(d), Participants may
receive an in-service withdrawal of pre-tax salary deferrals and vested
profit sharing and matching contributions (and the earnings thereon) in the
event of an Unforeseeable Emergency. The amount of any withdrawal due to an
Unforeseeable Emergency is limited to the amount necessary to ameliorate
the emergency, as determined by the Plan Administrator.
(b) Immediate Distribution. Subject to 7.1(d), Participants may receive an
in-service withdrawal of the total balance of their pre-tax salary
deferrals and vested profit sharing and matching contributions (and
earnings thereon) at any time the Participant so designates on an election
form specified by the Plan Administrator; provided, however, that the
Participant's total balance in the Plan will be reduced by 10% as a penalty
for such early withdrawal. Such payments (and forfeiture of
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the penalty amount) shall be made as soon as practicable following the Plan
Administrator's receipt of the appropriately completed distribution
election form.
(c) After-Tax Salary Deferrals. Subject to section 7.1(d), a Participant
may withdraw any after-tax salary deferrals and the earnings thereon at any
time.
(d) Number of Withdrawals. Notwithstanding the foregoing provisions of this
section 7.1, the Plan Administrator may restrict the number of withdrawals
permitted in a Plan Year.
SECOND
Section 7.2(a)(2) is amended as follows:
(2) Elective Distribution Date and Form of Payment. Participants who
have not experienced a Termination of Employment may designate a
specific date on which to receive (or begin receiving) distributions
from their Plan Accounts. Such payment shall be made (or begin): (i)
as soon as practicable following the Participant's Termination of
Employment; (ii) in the first calendar year that begins after the
calendar year in which the Termination of Employment occurs; or (iii)
on the later of (a) the date the Participant attains age sixty-five
(65) or (b) the date the Participant has a Termination of Employment.
The Participant may also designate whether the payment shall be in the
form of a single, lump sum payment or approximately equal annual
installments, for a period up to ten (10) years. Subject to Section
7.2(a)(3) below, designations of elective distribution dates and
methods of distribution may be changed so long as the Participant is
employed by a Participating Employer. Furthermore, the designation of
a distribution date and method of distribution made by Participants in
the Prior Plan as of the Effective Date shall continue in force
hereunder until changed by the Participant.
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THIRD
Section 7.2(a)(3)(B) is amended as follows:
(B) For Distributions Made On or After January 1, 2000. The
designation of the time and form of payment shall only be valid
if (i) the designation is filed with the Plan Administrator at
least six (6) months before the distributions begin and no later
than the last day of the Plan Year before the first Plan Year for
which such designation is to apply; (ii) the designation is filed
with the Plan Administrator during the first thirty (30) days
that the Participant is eligible to participate in the Plan and
the distribution commencement date begins not earlier than the
first day of the calendar year following the date the designation
is filed with the Plan Administrator; or (iii) the designation is
filed with the Plan Administrator during the first thirty (30)
days from the date this Plan is effective for eligible employees.
If the Participant's designation does not satisfy the criteria
described in this paragraph, then the Participant's previous
designation shall be re-instated. If for any reason the
Participant has not made a valid designation, then the
Participant shall be deemed to have elected to receive a single
lump sum payment in the first calendar year that begins after the
calendar year in which the Termination of Employment with the
Participating Employer occurs.
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IN WITNESS WHEREOF, the Benefits Committee hereby adopts this First
Amendment to the Gentiva Nonqualified Deferred Compensation Plan, effective
January 1, 2002.
BENEFITS COMMITTEE
John Collura
Patty Ma
David Silver
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SECOND AMENDMENT TO THE
GENTIVA HEALTH SERVICES, INC.
NONQUALIFIED RETIREMENT AND SAVINGS PLAN
WHEREAS, Gentiva Health Services, Inc. (the "Company") maintains the
Gentiva Health Services, Inc. Nonqualified Retirement and Savings Plan (the
"Plan"); and
WHEREAS, Section 10.3 provides that the Benefits Committee may amend the
Plan from time to time, to the extent that the amendment does not result in
increased costs to the Company; and
WHEREAS, the Benefits Committee wishes to amend the Plan to provide
participants who will terminate employment with the Company as a result of the
sale of the Company's Specialty Pharmaceutical Services ("SPS") line of business
with the opportunity to elect the form and timing of the distribution of their
Plan benefits and to reinstate the Plan's original default rule with respect to
when payment of benefits begins;
NOW THEREFORE, the following sections of the Plan are amended as follows,
effective January 1, 2002:
FIRST
Section 7.2(a)(2) is amended as follows:
(2) Elective Distribution Date and Form of Payment. Participants who
have not experienced a Termination of Employment may designate a
specific date on which to receive (or begin receiving) distributions
from their Plan Accounts. Such payment shall be made (or begin): (i)
as soon as practicable following the Participant's Termination of
Employment; (ii) in the first calendar year that begins after the
calendar year in which the Termination of Employment occurs; or (iii)
on the later of (a) the date the Participant attains age sixty-five
(65) or (b) the date the Participant has a Termination of Employment.
The Participant may also designate whether the payment shall be in the
form of a single, lump sum payment or approximately equal annual
installments, for a period up to ten (10) years.
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Subject to Section 7.2(a)(3) below, designations of elective
distribution dates and methods of distribution may be changed so long
as the Participant is employed by a Participating Employer.
Furthermore, the designation of a distribution date and method of
distribution made by Participants in the Prior Plan as of the
Effective Date shall continue in force hereunder until changed by the
Participant.
SECOND
Section 7.2(a)(3)(B) is amended as follows:
(B) For Distributions Made On or After January 1, 2000. The
designation of the time and form of payment shall only be valid
if (i) the designation is filed with the Plan Administrator at
least six (6) months before the distributions begin and no later
than the last day of the Plan Year before the first Plan Year for
which such designation is to apply; (ii) the designation is filed
with the Plan Administrator during the first thirty (30) days
that the Participant is eligible to participate in the Plan and
the distribution commencement date begins not earlier than the
first day of the calendar year following the date the designation
is filed with the Plan Administrator; (iii) the designation is
filed with the Plan Administrator during the first thirty (30)
days from the date this Plan is effective for eligible employees;
or (iv) the Participant will terminate employment with the
Company as a result of the sale of the Company's Specialty
Pharmaceutical Services ("SPS") line of business and the
designation is filed with the Plan Administrator no later than
the day before the closing date of the Company's sale of SPS. If
the Participant's designation does not satisfy the criteria
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described in this paragraph, then the Participant's previous
designation shall be re-instated. If for any reason the
Participant has not made a valid designation, then the
Participant shall be deemed to have elected to receive a single
lump sum payment upon Termination of Employment with the
Participating Employer.
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IN WITNESS WHEREOF, the Benefits Committee hereby adopts this Second
Amendment to the Gentiva Nonqualified Retirement and Savings Plan, effective
January 1, 2002.
BENEFITS COMMITTEE
John Collura
Patty Ma
David Silver
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REVISED THIRD AMENDMENT TO THE
GENTIVA HEALTH SERVICES, INC.
NONQUALIFIED RETIREMENT AND SAVINGS PLAN
WHEREAS, Gentiva Health Services, Inc. (the "Company") maintains the
Gentiva Health Services, Inc. Nonqualified Retirement and Savings Plan (the
"Plan"); and
WHEREAS, Section 10.3 provides that the Benefits Committee may amend the
Plan from time to time, to the extent that the amendment does not result in
increased costs to the Company; and
WHEREAS, the Benefits Committee wishes to amend the Plan to provide a
vesting schedule which parallels the matching contribution vesting schedules in
the Gentiva Health Services Qualified Plans;
NOW THEREFORE, the following section of the Plan is amended as follows:
FIRST
Section 6.2 is hereby amended as follows:
(a) Matching and profit sharing contributions and earnings thereon are
subject to the claims of the Company's or Participating Employer's
creditors, as described in Section 11.6. Notwithstanding sections 6.2(b)
and (c), Participants become fully vested in the value of matching and
profit sharing contributions upon Disability or death while employed by a
Participating Employer.
(b) With respect to Participants who experience a termination of
employment before January 1, 2002, the Participant's vested percentage
accrued before January 1, 2002 is determined on the basis of Years of
Service, as follows:
Years of Service Percentage Vested
---------------- -----------------
Fewer than 3 Years 0%
3 Years but Fewer than 4 Years 33-1/3%
4 Years but Fewer than 5 Years 66-2/3%
5 Years or More 100%
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(c) With respect to Participants who have not terminated employment
before January 1, 2002, the Participant's entire vested percentage
(regardless of whether it accrued before January 1, 2002) is determined on
the basis of Years of Service, as follows:
Years of Service Percentage Vested
---------------- -----------------
1 0%
2 25%
3 50%
4 75%
5 100%
SECOND
The effective date of this Revised Third Amendment shall be
January 1, 2002, unless provided otherwise herein.
IN WITNESS WHEREOF, the Benefits Committee hereby adopts this Revised
Third Amendment to the Gentiva Nonqualified Retirement and Savings Plan.
BENEFITS COMMITTEE
John Collura
Patty Ma
David Silver
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FOURTH AMENDMENT TO THE
GENTIVA HEALTH SERVICES, INC.
NONQUALIFIED RETIREMENT AND SAVINGS PLAN
WHEREAS, Gentiva Health Services, Inc. (the "Company") maintains the
Gentiva Health Services, Inc. Nonqualified Retirement and Savings Plan (the
"Plan"); and
WHEREAS, Section 10.3 provides that the Benefits Committee may amend the
Plan from time to time, to the extent that the amendment does not result in
increased costs to the Company; and
WHEREAS, the Benefits Committee wishes to amend the Plan to clarify that
eligible individuals may participate in the Plan immediately upon date of hire
with respect to salary deferral contributions and may begin receiving matching
contributions after completion of six months of service;
NOW THEREFORE, the following section of the Plan is amended as follows:
FIRST
Section 3.1(b) is hereby amended as follows:
(b) (1) Effective April 1, 2001, Highly Compensated Employees (i) who are
age twenty-one (21) or older; (ii) who have completed one hour of service
with a Participating Employer; (iii) who are employed by a Participating
Employer on or after the Effective Date; (iv) who did not participate in
the Prior Plans; and (v) who are designated by the Plan Administrator as
eligible to participate in the Plan, shall become eligible to make salary
deferral contributions under Section 4.1 as soon as administratively
possible following date of hire; provided however, that such Highly
Compensated Employees shall not be eligible to receive Matching
Contributions under Section 4.2(a) until they have completed six (6) months
of service with a Participating Employer.
(2) Prior to April 1, 2001, Highly Compensated Employees
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(i) who are age twenty-one (21) or older; (ii) who have completed six
(6) months of service with a Participating Employer; (iii) who are
employed by a Participating Employer on or after the Effective Date;
(iv) who did not participate in the Prior Plans; and (v) who are
designated by the Plan Administrator as eligible to participate in the
Plan, shall become Participants as of the first day of the first
payroll period of the calendar month occurring on or after the date
the Employee satisfies such eligibility requirements.
SECOND
The effective date of this Fourth Amendment shall be April 1,
2001, unless provided otherwise herein.
IN WITNESS WHEREOF, the Benefits Committee hereby adopts this Fourth
Amendment to the Gentiva Nonqualified Retirement and Savings Plan.
BENEFITS COMMITTEE
John Potapchuk
Doug Dahlgard
Kevin Marrazo
Nick Florio
EXHIBIT 10.17
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Amendment") is made
this 26th day of November, 2003 by and among the lending institutions listed in
Annex I to the Loan Agreement (as defined below) (each a "Lender", and
collectively, "Lenders"), FLEET CAPITAL CORPORATION, a Rhode Island corporation
with an office at 200 Glastonbury Boulevard, Glastonbury, CT 06033, as
administrative agent for the Lenders ("Agent"), and GENTIVA HEALTH SERVICES,
INC., a Delaware corporation with its chief executive office at 3 Huntington
Quadrangle 2S, Melville, NY 11747 (the "Company"), GENTIVA HEALTH SERVICES
HOLDING CORP., a Delaware corporation with its chief executive office at 3
Huntington Quadrangle 2S, Melville, NY 11747 ("GHS"), and each of the Subsidiary
Borrowing Corporations listed on the signature pages hereto, each with a state
of incorporation and chief executive office as listed on the exhibits to the
Loan Agreement (each of the Company, GHS and each Subsidiary Borrowing
Corporation, a "Borrower," and collectively, "Borrowers").
BACKGROUND
A. Borrowers, Agent and Lenders are parties to a certain Loan and Security
Agreement dated June 13, 2002, as amended by that certain First Amendment and
Consent Agreement to Loan and Security Agreement among Agent, Lenders and
Borrowers dated as of August 7, 2003 (as it may heretofore otherwise have been
or may herein or hereafter be modified, amended, restated or replaced from time
to time, the "Loan Agreement") pursuant to which Borrowers established certain
financing arrangements with Lenders including a Revolving Credit Loan facility
and a Letter of Credit facility. The Loan Agreement and all instruments,
documents and agreements executed in connection therewith or related thereto are
referred to herein collectively as the "Existing Loan Documents." All
capitalized terms not otherwise defined herein shall have the meaning ascribed
thereto in the Loan Agreement.
NOW, THEREFORE, with the foregoing Background incorporated by reference and
made a part hereof and intending to be legally bound, the parties agree as
follows:
1. Amendments to Loan Agreement. Upon the effectiveness of this Amendment,
subsection 8.1.9 of the Loan Agreement shall be amended by deleting such
subsection in its entirety and replacing it as follows:
8.1.9 Dissolution of Inactive Subsidiaries. Borrower has and will
continue to use its reasonable best efforts to cause each of the
Inactive Subsidiaries to be legally dissolved prior to December 1,
2004. In no event may any of the Inactive Subsidiaries of Borrower or
a Subsidiary of Borrower hold any assets of any type, other than those
assets specifically transferred by Company as may be necessary to pay
corresponding tax liabilities, without the
Second Amendment to Loan and Security Agreement -- November 2003 1
prior written approval of Agent.
2. Representations and Warranties. To induce Agent and Lenders to enter
into this Amendment, each Borrower warrants, represents and covenants to Agent
and Lenders that:
(i). All warranties and representations made to Agent and Lenders under
the Loan Agreement and the other Existing Loan Documents are true and correct as
to the date hereof.
(ii). The execution and delivery by each Borrower of this Amendment and
the performance by it of the transactions herein contemplated (i) are and will
be within its powers, (ii) have been authorized by all necessary corporate
actions and will not contravene any provision of the certificate or articles of
incorporation or bylaws or other similar corporate governance documents of such
Borrower, and (iii) are not and will not be in contravention of any order of any
court or other agency of government, of law or any other indenture, agreement or
undertaking to which such Borrower is a party or by which the property of such
Borrower is bound, or be in conflict with, result in a breach of, or constitute
(with due notice and/or lapse of time, if applicable) a default under any such
indenture, agreement or undertaking or result in the imposition of any lien,
charge or encumbrance of any nature on any of the properties of such Borrower.
(iii). This Amendment and any assignment, instrument, document, or
agreement executed and delivered in connection herewith, will be valid and
binding on and enforceable against each Borrower in accordance with its
respective terms.
(iv). Both prior to and after giving effect to this Amendment, no
Default, or Event of Default, exists under the Loan Agreement or any of the
other Existing Loan Documents.
(v). Except for actions required by the states of California and
Pennsylvania to effectuate legal dissolution of Chronic Health Management of
California, QHR Southwest Business Trust and QHR Southwest Holdings Corp., no
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or other regulatory body is required in connection
with the due execution, delivery and performance by any Borrower of this
Amendment or the performance by such Borrower of the Loan Agreement, as amended
hereby.
(vi). The name, office, and signature of the officer(s) of each
Borrower signing this Amendment have previously been certified to Agent in the
incumbency and signature certificates of such Borrower heretofore delivered to
Agent.
3. Confirmation of Security Interest. To secure the prompt payment and
performance to Agent and Lenders of the Obligations and satisfaction by
Borrowers of all covenants and undertakings contained in the Loan Agreement and
other Existing Loan Documents, each Borrower hereby reconfirms the grant to
Agent, for the ratable benefit of Lenders, of a continuing security interest in
and Lien upon all of the Collateral owned by such Borrower, whether now owned or
existing or hereafter created, acquired or arising and wherever located, given
to Agent by such Borrower under the Existing Loan Documents. Each such Borrower
hereby confirms and agrees that all such security interests and liens granted to
Agent under the Existing Loan Documents
Second Amendment to Loan and Security Agreement -- November 2003 2
continue in full force and effect and shall continue to secure the Obligations.
All Collateral remains free and clear of any liens other than liens in favor of
Agent, except for Permitted Liens. Nothing herein contained is intended to in
any way impair or limit the validity, priority, and extent of Agent's existing
security interest in and liens upon the Collateral.
4. Effectiveness Conditions. This Amendment shall be effective as of June
12, 2003 upon execution and delivery of this Amendment by all parties hereto and
payment by Borrowers to Agent of all reasonable legal expenses of Agent incurred
in relation to the preparation and execution of this Amendment.
5. Ratification of Existing Loan Documents. Except as expressly set forth
herein, all of the terms and conditions of the Loan Agreement and the other
Existing Loan Documents are hereby ratified and confirmed and continue unchanged
and in full force and effect. All references to the Loan Agreement shall mean
the Loan Agreement as modified by this Amendment.
6. Amendment as Loan Document. Borrowers hereby acknowledge and agree that
this Amendment constitutes a "Loan Document" under the Loan Agreement.
Accordingly, it shall be an Event of Default under the Loan Agreement if (i) any
representation or warranty made by Borrowers under or in connection with this
Amendment shall have been untrue, false or misleading in any material respect
when made, or (ii) Borrowers shall fail to perform or observe any term, covenant
or agreement contained in this Amendment.
7. Reaffirmation by Guarantors. Each Subsidiary Guarantor acknowledges and
agrees that the execution, delivery and performance of this Amendment by Agent,
Lenders and Borrowers, and the carrying out of the provisions hereof and the
consummation of all transactions contemplated hereunder, including without
limitation the waivers and amendments to the Loan Agreement provided for
hereunder, shall not affect or in any way diminish or modify the obligations of
each of them under the Subsidiary Guaranty and Surety Agreement executed by
Subsidiary Guarantors as of June 13, 2002 or any other Existing Loan Document to
which such Subsidiary Guarantor is a party, and each Subsidiary Guarantor
acknowledges and affirms its obligations under the Subsidiary Guaranty and
Surety Agreement and the other Existing Loan Documents.
8. Governing Law. THIS AMENDMENT HAS BEEN NEGOTIATED, EXECUTED AND
DELIVERED AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK. THIS AMENDMENT,
AND ALL MATTERS ARISING OUT OF OR RELATING TO THE LOAN AGREEMENT, ANY OTHER
EXISTING LOAN DOCUMENT, AND/OR THIS AMENDMENT, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
ITS OTHERWISE APPLICABLE CONFLICTS OF LAWS RULES.
9. Waiver of Jury Trial. EACH BORROWER AND EACH SUBSIDIARY GUARANTOR WAIVES
THE RIGHT TO TRIAL BY JURY (WHICH EACH LENDER AND AGENT HEREBY ALSO WAIVES) IN
ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO ANY OF THIS AMENDMENT. EACH BORROWER AND EACH SUBSIDIARY GUARANTOR
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVER WITH ITS LEGAL
COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED
Second Amendment to Loan and Security Agreement -- November 2003 3
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
10. Successors and Assigns. This Amendment, along with each of the Existing
Loan Documents, shall be binding upon and shall benefit Agent, Lenders,
Borrowers and Subsidiary Guarantors and their respective successors and
permitted assigns (as and if permitted under the Loan Agreement).
11. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and such counterparts together shall constitute one and the same respective
agreement. Signatures by facsimile shall bind the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Second Amendment to Loan and Security Agreement -- November 2003 4
IN WITNESS WHEREOF, the parties hereto have duly executed this Second Amendment
and Waiver to Loan and Security Agreement as of the date first written above.
BORROWERS:
GENTIVA HEALTH SERVICES, INC.
By:______________________________
Name: John R. Potapchuk
Title: Senior Vice President and
Chief Financial Officer
GENTIVA HEALTH SERVICES HOLDING CORP.
By:______________________________
Name: John R. Potapchuk
Title: Treasurer
BORROWING SUBSIDIARY CORPORATIONS:
---------------------------------
Gentiva CareCentrix, INC.
Gentiva CareCentrix (Area One) Corp.
Gentiva CareCentrix (Area Two) Corp.
Gentiva CareCentrix (Area Three) Corp.
Gentiva Certified HealthCare Corp.
GENTIVA HEALTH Services (Certified), Inc.
GENTIVA HEALTH Services (USA), Inc.
Gentiva Services of New York, Inc.
New York Healthcare Services, Inc.
OHS Service Corp.
QC-Medi New York, Inc.
Quality Care - USA, Inc.
Quality Managed Care, Inc.
By:______________________________
Name: John R. Potapchuk
Title: Treasurer
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[Borrowers Signature Page to Second Amendment to June 2002 Loan Agreement]
S-1
Second Amendment to Loan and Security Agreement -- November 2003 5
SUBSIDIARY GUARANTORS:
Commonwealth Home Care, Inc.
Kimberly Home Health Care, Inc.
PartnersFirst Management, Inc.
Quantum Care Network, Inc.
Quantum Health Resources, Inc.
The I.V. Clinic, Inc.
The I.V. Clinic II, Inc.
The I.V. Clinic III, Inc.
By:______________________________
Name: John R. Potapchuk
Title: Treasurer
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[Subsidiary Guarantors Signature Page to Second Amendment to
June 2002 Loan Agreement]
S-2
Second Amendment to Loan and Security Agreement -- November 2003 6
AGENT:
FLEET CAPITAL CORPORATION,
as Agent
By:______________________________
Name: Adam Seiden
Title: Vice President
LENDERS:
FLEET CAPITAL CORPORATION,
By:______________________________
Name: Adam Seiden
Title: Vice President
Siemens Financial Services, Inc.
By:______________________________
Name:
Title:
HFG HEALTHCO-4 LLC
By:______________________________
Name:
Title:
[Agent and Lenders Signature Page to Second Amendment to
June 2002 Loan Agreement]
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Second Amendment to Loan and Security Agreement -- November 2003 7
Second Amendment to Loan and Security Agreement -- November 2003 8
EXHIBIT 10.18
THIRD AMENDMENT AND JOINDER TO LOAN AND SECURITY AGREEMENT
This Third Amendment and Joinder to Loan and Security Agreement ("Joinder")
is made this 25th day of February, 2004 by and among by and among the lending
institutions listed in Annex I to the Loan Agreement (as defined below) (each a
"Lender", and collectively, "Lenders"), Fleet Capital Corporation, a Rhode
Island corporation with an office at 200 Glastonbury Boulevard, Glastonbury, CT
06033, as administrative agent for the Lenders ("Agent"), and Gentiva Health
Services, Inc., a Delaware corporation with its chief executive office at 3
Huntington Quadrangle 2S, Melville, NY 11747 (the "Company"), Gentiva Health
Services Holding Corp., a Delaware corporation with its chief executive office
at 3 Huntington Quadrangle 2S, Melville, NY 11747 ("GHS"), and Gentiva
CareCentrix, INC., Gentiva CareCentrix (Area One) Corp., Gentiva CareCentrix
(Area Two) Corp., Gentiva CareCentrix (Area Three) Corp., Gentiva Certified
HealthCare Corp., GENTIVA HEALTH Services (Certified), Inc., GENTIVA HEALTH
Services (USA), Inc., GENTIVA Services of New York, Inc., New York Healthcare
Services, Inc., OHS Service Corp., QC-Medi New York, Inc., QUALITY Care - USA,
Inc., and Quality Managed Care, Inc. (each an "Existing Subsidiary Borrowing
Corporation"), each Existing Subsidiary Borrowing Corporation with a state of
incorporation and chief executive office as listed on the exhibits to the Loan
Agreement (each of the Company, GHS and each Existing Subsidiary Borrowing
Corporation, an "Existing Borrower," and collectively, "Existing Borrowers") and
GENTIVA HEALTH SERVICES IPA, INC., a New York corporation with its chief
executive office at 3 Huntington Quadrangle 2S, Melville, NY 11747 ("New
Borrower"). (The term "Borrowers" as used herein shall refer to the Existing
Borrowers prior to the execution of the execution and delivery hereof and to the
Existing Borrowers and the New Borrower immediately following the execution and
delivery hereof.)
BACKGROUND
A. Existing Borrowers, Agent and Lenders are parties to a certain Loan and
Security Agreement dated June 13, 2002, as amended by that certain First
Amendment and Consent Agreement to Loan and Security Agreement among Agent,
Lenders and Borrowers dated as of August 7, 2003 and that certain Second
Amendment to Loan and Security Agreement among Agent, Lenders and Borrowers
dated as of November 26, 2003 (as it may heretofore otherwise have been or may
herein or hereafter be modified, amended, restated or replaced from time to
time, the "Loan Agreement") pursuant to which Existing Borrowers established
certain financing arrangements with Lenders including a Revolving Credit Loan
facility and a Letter of Credit facility. The Loan Agreement and all
instruments, documents and agreements executed in connection therewith or
related thereto are referred to herein collectively as the "Existing Loan
Documents." All capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Loan Agreement.
B. Effective as of May 31, 2003, Borrowers notified Agent as required under
subsection 8.2.1(iv) of the Loan Agreement that GHS intended to created a new
Subsidiary as of June 30, 2003. On June 30, 2003, GHS formed New Borrower as a
wholly-owned Subsidiary of GHS. Under subsection 8.2.1(iv) of the Loan
Agreement, any Borrower creating such a new Subsidiary must
pledge the capital stock of such newly-created Subsidiary to Agent for the
ratable benefit of the Lenders and cause such newly-created Subsidiary to become
a party to the Loan Agreement as a Subsidiary Borrowing Corporation pursuant to
a joinder agreement acceptable to Agent.
C. Borrowers, Agent and Lenders have also agreed to amend certain
provisions of the Loan Agreement to modify certain requirements of the Borrowers
concerning the delivery of certain reports to Agent.
D. Borrowers, Agent and Lenders have agreed to execute this Joinder to (a)
provide for the joinder of New Borrower as a "Borrower" under the Loan Agreement
and (b) amend certain provisions of the Loan Agreement relating to the
Borrower's reporting requirements.
NOW, THEREFORE, with the foregoing Background incorporated by reference and
made a part hereof and intending to be legally bound, the parties agree as
follows:
1. Joinder.
(a) Agent and Lenders acknowledge having accepted Borrower's letter
dated and delivered February 13, 2004 giving notice effective as of May 31, 2003
of GHS's intention to form New Borrower as a wholly-owned subsidiary of GHS.
(b) Upon the effectiveness of this Joinder, New Borrower joins in,
becomes a Borrower under and assumes and accepts all of the obligations and
acquires all of the rights of a Borrower under the Loan Agreement. All
references to Borrower or Borrowers contained in the Loan Agreement or any other
Existing Loan Document, are immediately upon the effectiveness hereof, hereby
deemed for all purposes to also refer to and include New Borrower as a Borrower.
New Borrower hereby agrees to comply with all of the terms and conditions of the
Loan Agreement as if it were an original signatory thereto.
(c) Without limiting the generality of the provisions of subparagraph
(a) above, New Borrower hereby becomes and is thereby liable, on a joint and
several basis, along with all other Borrowers for all existing and future Loans
and Letters of Credit and any and all other Obligations.
(d) The Exhibits to the Loan Agreement are hereby amended to include the
information contained in the updates to such Exhibits (setting forth the
requisite information relating to New Borrower) contained in Attachment I
hereto.
2. Amendments to Loan Agreement. Upon the effectiveness of this Joinder,
the Loan Agreement shall be amended as follows:
(a) Amendment Concerning Delivery of Annual Projections. Subsection
8.1.5 of the Loan Agreement shall be amended by deleting such subsection in its
entirety and replacing it as follows:
8.1.5 Projections. Not later than sixty (60) days following the end of
each fiscal year of Borrowers, deliver to Agent Projections of Borrowers
for the forthcoming fiscal year of Borrowers, such Projections to be
prepared on a fiscal quarter by fiscal quarter basis.
(b) Amendment Concerning Frequency of Borrowing Base Certificate.
Subsection 8.1.6 of the Loan Agreement shall be amended by deleting such
subsection in its entirety and replacing it as follows:
8.1.6 Borrowing Base Certificate. No later than twenty (20) calendar
days after the last day of each fiscal quarter of Borrowers, Borrowers
shall deliver to Agent a Borrowing Base Certificate in the form of Exhibit
C hereto executed by the Chief Financial Officer of the Company, provided
that Agent or any other Lender may at any time and from time to time
require Borrowers to deliver Borrowing Base Certificates on a more frequent
basis as Agent (or any such other Lender) may determine in the exercise of
its sole discretion.
3. Representations and Warranties. To induce Agent and Lenders to enter
into this Amendment, each Borrower, including without limitation New Borrower,
represents and warrants to Lender that:
(a) All warranties and representations made to Agent and Lenders under
the Loan Agreement and the other Existing Loan Documents (as such warranties and
representation may have been amended pursuant to the amendments to the Exhibits
to the Loan Agreement set forth in Section 1(d) above) are true and correct as
to the date hereof.
(b) The execution and delivery by each Borrower, including without
limitation New Borrower, of this Joinder and the performance by each such
Borrower of the transactions herein contemplated (i) are and will be within its
powers, (ii) have been authorized by all necessary corporate actions and will
not contravene any provision of the certificate or articles of incorporation or
bylaws or other similar corporate governance documents of such Borrower, and
(iii) are not and will not be in contravention of any order of any court or
other agency of government, of law or any other indenture, agreement or
undertaking to which such Borrower is a party or by which the property of such
Borrower is bound, or be in conflict with, result in a breach of, or constitute
(with due notice and/or lapse of time, if applicable) a default under any such
indenture, agreement or undertaking or result in the imposition of any lien,
charge or encumbrance of any nature on any of the properties of such Borrower.
(c) This Joinder, the Amended and Restated Note (as defined below) and
any assignment, instrument, document or agreement executed and delivered in
connection herewith, will
be valid and binding on and enforceable against each Borrower in accordance with
its respective terms.
(d) Both prior and after giving effect to this Amendment, no Default or
Event of Default, other than the Existing Default, exists under the Loan
Agreement or any of the other Existing Loan Documents.
(e) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or other regulatory body is required in
connection with the due execution, delivery and performance by any Borrower,
including without limitation New Borrower, of this Amendment or the performance
by such Borrower of the Loan Agreement, as amended hereby.
(f) The name, office, and signature of the officer(s) of each Borrower
(other than New Borrower) signing this Amendment have previously been certified
to Agent in the incumbency and signature certificates of such Borrower
heretofore delivered to Agent.
4. Collateral. To secure the prompt payment and performance to Agent and
Lenders of the Obligations and satisfaction by Borrowers of all covenants and
undertakings contained in the Loan Agreement and other Existing Loan Documents,
New Borrower hereby grants to Agent, for the ratable benefit of Lenders, a
continuing security interest in and Lien upon all of the Collateral owned by New
Borrower, whether now owned or existing or hereafter created, acquired or
arising and wherever located as more fully provided for in Section 5.1 of the
Loan Agreement. New Borrower hereby irrevocably authorizes Lender at any time to
execute and/or file any UCC-1 financing statements (with or without the
signature of New Borrower) as are necessary, desirable or prudent to perfect
Agent's Lien upon any of the Collateral owned by New Borrower, including without
limitation financing statements that indicate the Collateral as being of an
equal or lesser scope, or with greater or lesser detail, than as set forth in
Section 5.1 of the Loan Agreement, all as more fully provided for in Section 5.3
of the Loan Agreement. Each Existing Borrower hereby reconfirms the grant to
Agent, for the ratable benefit of Lenders, of a continuing security interest in
and Lien upon all of the Collateral owned by such Borrower, whether now owned or
existing or hereafter created, acquired or arising and wherever located, given
to Agent by such Borrower under the Existing Loan Documents and each Borrower
hereby confirms and agrees that all security interests and liens granted to
Agent by any one of them continue in full force and effect and shall continue to
secure the Obligations. All Collateral remains free and clear of any liens other
than liens in favor of Agent, except for Permitted Liens. Nothing herein
contained is intended to in any way impair or limit the validity, priority, and
extent of Agent's existing security interest in and liens upon the Collateral of
any Borrower.
5. Effectiveness Conditions. This Joinder shall be effective, and the New
Borrower shall be deemed a Borrower under the Loan Agreement and Existing Loan
Documents, upon completion of the following conditions precedent (all documents
to be in form and substance satisfactory to Agent and Agent's counsel):
(a) Execution and delivery of this Joinder by all parties hereto;
(b) Execution and delivery of Amended and Restated Revolving Credit
Notes dated as of the date hereof in favor of each Lender (collectively,
"Amended and Restated Notes") by all of the Borrowers (including New Borrower);
(c) Execution and delivery by GHS of a First Amendment to Pledge
Agreement dated as of the date hereof pledging one hundred percent (100%) of the
issued and outstanding capital stock of New Borrower and delivery to Agent of
stock certificates (along with appropriate stock powers endorsed in blank)
representing such pledged stock;
(d) Filing of UCC-1 financing statements against New Borrower in favor
of Agent in such jurisdictions as Agent shall deem necessary, desirable or
prudent;
(e) A Secretary's Certificate of New Borrower (x) containing a
certification of incumbency regarding the officers of New Borrower and (y)
certifying (i) the articles or certificate of incorporation of New Borrower,
(ii) the bylaws of New Borrower and (iii) resolutions or written
actions/consents of the Board of Directors of New Borrower authorizing the
execution of this Joinder, the Amended and Restated Notes and any and all other
documents, instruments and agreements required in connection herewith and
therewith and the performance of the obligations of New Borrower hereunder and
thereunder;
(f) Good Standing Certificates in each jurisdiction where New Borrower
is incorporated and/or qualified to do business;
(g) Written opinion of counsel to New Borrower in form and substance
satisfactory to Agent;
(h) Uniform Commercial Code, judgment, federal and state tax lien
searches against New Borrower showing that the Collateral is not subject to any
liens, claims or encumbrances (other than Permitted Liens); and
(i) Any and all other agreements, instruments and documents requested by
Lender to effectuate and implement the terms hereof and the Existing Loan
Documents.
6. Ratification of Existing Loan Documents. Except as expressly set forth
herein, all of the terms and conditions of the Loan Agreement and Existing Loan
Documents are hereby ratified and confirmed and continue unchanged and in full
force and effect. All references to the Loan Agreement shall mean the Loan
Agreement as modified by this Joinder.
7. Joinder as Loan Document. Borrowers hereby acknowledge and agree that
this Joinder constitutes a "Loan Document" under the Loan Agreement.
Accordingly, it shall be an Event of Default under the Loan Agreement if (i) any
representation or warranty made by Borrowers under or in connection with this
Joinder shall have been untrue, false or misleading in any material respect when
made, or (ii) Borrowers shall fail to perform or observe any term, covenant or
agreement contained in this Joinder.
8. Reaffirmation by Guarantors. Each Subsidiary Guarantor acknowledges and
agrees that the execution, delivery and performance of this Joinder by Agent,
Lenders and Borrowers, and the carrying out of the provisions hereof and the
consummation of all transactions contemplated hereunder, including without
limitation the amendments to the Loan Agreement provided for hereunder, shall
not affect or in any way diminish or modify the obligations of each of them
under the Subsidiary Guaranty and Surety Agreement executed by Subsidiary
Guarantors as of June 13, 2002 or any other Existing Loan Document to which such
Subsidiary Guarantor is a party, and each Subsidiary Guarantor acknowledges and
affirms its obligations under the Subsidiary Guaranty and Surety Agreement and
the other Existing Loan Documents.
9. Governing Law. THIS JOINDER HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED
AT AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK. THIS JOINDER, AND ALL
MATTERS ARISING OUT OF OR RELATING TO THE LOAN AGREEMENT, ANY OTHER EXISTING
LOAN DOCUMENT, AND/OR THIS JOINDER, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ITS
OTHERWISE APPLICABLE CONFLICTS OF LAWS RULES.
10. Waiver of Jury Trial. EACH BORROWER (INCLUDING WITHOUT LIMITATION NEW
BORROWER) AND EACH SUBSIDIARY GUARANTOR WAIVES THE RIGHT TO TRIAL BY JURY (WHICH
EACH LENDER AND AGENT HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THIS JOINDER. EACH
BORROWER (INCLUDING WITHOUT LIMITATION NEW BORROWER) AND EACH SUBSIDIARY
GUARANTOR WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVER WITH
ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS
AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
11. Successors and Assigns. This Joinder, along with each of the Existing
Loan Documents, shall be binding upon and shall benefit Agent, Lenders,
Borrowers and Subsidiary Guarantors and their respective successors and
permitted assigns (as and if permitted under the Loan Agreement).
12. Counterparts. This Joinder may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and such counterparts together shall constitute one and the same respective
agreement. Signature by facsimile shall bind the parties hereto.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have executed this Third Amendment and
Joinder to Loan and Security Agreement the day and year first written above.
EXISTING BORROWERS:
GENTIVA HEALTH SERVICES, INC.
By:______________________________
Name: John R. Potapchuk
Title: Senior Vice President and Chief
Financial Officer
GENTIVA HEALTH SERVICES HOLDING CORP.
Gentiva CareCentrix, INC.
Gentiva CareCentrix (Area One) Corp.
Gentiva CareCentrix (Area Two) Corp.
Gentiva CareCentrix (Area Three) Corp.
Gentiva Certified HealthCare Corp.
GENTIVA HEALTH Services (Certified), Inc.
GENTIVA HEALTH Services (USA), Inc.
Gentiva Services of New York, Inc.
New York Healthcare Services, Inc.
OHS Service Corp.
QC-Medi New York, Inc.
Quality Care - USA, Inc.
Quality Managed Care, Inc.
By:______________________________
Name: John R. Potapchuk
Title: Treasurer
NEW BORROWER:
GENTIVA HEALTH SERVICES IPA, INC.
By:______________________________
Name: John R. Potapchuk
Title: Treasurer
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[Borrowers Signature Page to Third Amendment and Joinder to
June 2002 Loan Agreement]
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SUBSIDIARY GUARANTORS:
Commonwealth Home Care, Inc.
Kimberly Home Health Care, Inc.
PartnersFirst Management, Inc.
Quantum Care Network, Inc.
Quantum Health Resources, Inc.
The I.V. Clinic, Inc.
The I.V. Clinic II, Inc.
The I.V. Clinic III, Inc.
By:______________________________
Name: John R. Potapchuk
Title: Treasurer
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
[Subsidiary Guarantors Signature Page to Third Amendment and Joinder to
June 2002 Loan Agreement]
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AGENT:
FLEET CAPITAL CORPORATION,
as Agent
By:______________________________
Name: Adam Seiden
Title: Vice President
LENDERS:
FLEET CAPITAL CORPORATION,
By:______________________________
Name: Adam Seiden
Title: Vice President
Siemens Financial Services, Inc.
By:______________________________
Name:
Title:
HFG HEALTHCO-5 LLC
By:______________________________
Name:
Title:
[Agent and Lenders Signature Page to Third Amendment and Joinder to
June 2002 Loan Agreement]
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EXHIBIT 10.22
MANAGED CARE ALLIANCE AGREEMENT
CONTENTS
PARTIES 2
PURPOSE 2
I. DEFINITIONS 2
II. PARTIES OBLIGATIONS 6
A. SERVICES 6
B. COMPENSATION AND BILLING 12
C. RECORDS 16
D. PARTICIPANT GRIEVANCE 17
E. INSURANCE AND LIABILITY 17
F. INSPECTIONS 18
G. REPRESENTATIONS 18
H. CONFIDENTIALITY/DAMAGING COMMUNICATIONS 20
I. MARKETING EFFORTS 21
J. REPORTING /DATA ACCESS 20
K. BEST RATE GUARANTEE 22
L. PERFORMANCE GUARANTEES 22
III. MISCELLANEOUS OBLIGATIONS 24
A. INDEPENDENT CONTRACTOR RELATIONSHIP 24
B. TERM OF AGREEMENT 24
C. TERMINATION 25
D. RIGHTS AND OBLIGATIONS UPON TERMINATION 28
E. ASSIGNMENT AND DELEGATION OF DUTIES 29
F. USE OF NAME 29
G. INTERPRETATION 29
H. AMENDMENT 29
I. PROGRAM ATTACHMENTS 30
J. ENTIRE CONTRACT 30
K. NOTICE 30
L. ENFORCEABILITY AND WAIVER 30
M. DISPUTE RESOLUTION 31
N. NON-SOLICITATION 29
MANAGED CARE ALLIANCE AGREEMENT
PARTIES
This Agreement is by and between CIGNA HEALTH CORPORATION, FOR AND ON BEHALF OF
ITS CIGNA AFFILIATES (INDIVIDUALLY AND COLLECTIVELY, "CIGNA") and Gentiva
CareCentrix, Inc. ("MCA") and is entered into as of the Effective Date.
PURPOSE
CIGNA contracts directly or indirectly with Payors, employers, individuals,
insurers, sponsors and others to provide, insure, arrange for or administer the
provision of health care services; CIGNA contracts with physicians, hospitals
and other health care practitioners and entities to provide, arrange for or
administer, at predetermined rates, the delivery of such health care services;
MCA contracts with health care providers to arrange for their provision of
health care services to enrollees in managed health care programs; and
CIGNA and MCA both desire for MCA's participating health care providers to
become Participating Providers under this Agreement and to make available
Covered Services to Participants on the terms and conditions set forth herein.
In consideration of the mutual promises herein, the parties agree as follows:
I. DEFINITIONS
Defined terms are set forth herein and in the Program Attachments.
CIGNA AFFILIATE means any direct or indirect subsidiary of CIGNA Corporation, as
designated by CIGNA.
COINSURANCE means a payment that a Participant is required to make to a
Participating Provider for Covered Services under a Service Agreement, which is
calculated as a percentage of the contracted reimbursement rate of such
services, or, if reimbursement is on a basis other than a fee-for-service
amount, as a percentage of a CIGNA determined fee schedule or as a CIGNA
determined percentage of actual billed charges.
COMPLETE ORDER means all information and physician orders, to the extent
applicable, reasonably required by MCA and/or any applicable Represented
Provider in order to provide or arrange for Covered Home Care Services. MCA
shall have received a Complete Order if MCA has received the information
delineated in EXHIBIT III.
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COPAYMENT OR DEDUCTIBLE means a payment that a Participant is required to make
to a Participating Provider under a Service Agreement, which is calculated as a
fixed dollar payment.
COVERED HOME CARE SERVICES means the Medically Necessary Home Health Services,
Home Infusion Therapy Services and Home Medical Equipment/Durable Medical
Equipment provided to a Participant in accordance with a Service Agreement. It
also includes the following services with respect to Participants receiving
Covered Home Care services:
(a) training and education;
(b) family orientation;
(c) family/caregiver training, if required;
(d) instructional literature; and
(e) oxygen patient assessments, if required.
COVERED SERVICES means those health care services/supplies provided to a
Participant in accordance with a Service Agreement. The term Covered Services
includes Covered Home Care Services.
EMERGENCY means a condition for which Emergency Services are required.
EMERGENCY SERVICES are as defined in each applicable Service Agreement.
HOME CARE SERVICES means those Home Health Services, Home Infusion Therapy
Services, Home Medical Equipment, as defined below, appropriately and safely
(see Exhibit IX Safe Home Care Admission Criteria) provided in a Home Setting
(except that Home Infusion Therapy Services includes the administration of the
first dose of home infusion therapies in a controlled medical setting for the
purpose of managing potential acute anaphylactic reactions, and Home Medical
Equipment includes medical equipment used in the Home Setting, except in
preparation for hospital discharge), subject to the conditions and limitations
of this Agreement:
HOME HEALTH SERVICES means those skilled services and related services and
supplies used in conjunction with those skilled services, ordered by a
physician for a Participant who is homebound due to a disabling condition,
and who requires skilled care, which are safely (see Exhibit IX: Safe Home
Care Admission Criteria) and appropriately provided in a Home Setting,
including: skilled nursing services rendered by a registered professional
nurse, licensed practical nurse or licensed vocational nurse; home health
aide services; physical, occupational, speech and respiratory therapy;
dietary and nutritional services; medical social services; and family
caregiver training and education. Home Health Services does not mean
hospice services.
HOME INFUSION THERAPY SERVICES means intravenously administered,
subcutaneously administered or self-injected drugs and medications
prescribed by a physician for a Participant (including all services
and supplies necessary for such administrations), which are
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administered in the Home Setting. Home Infusion Therapy Services
includes the administration of the first dose of home infusion
therapies in a controlled medical setting for the purpose of
managing potential acute anaphylactic reactions. Home Infusion
Therapy Services do not include those medications which are provided
under a Participant's prescription drug benefit program such as
oral, rectal, ophthalmic, subdermal, sublingual and topical agents,
self-injected medications which are covered under a Participant's
prescription drug benefit program (such as anti-diabetic agents and
certain subcutaneous medications) and medications not generally
considered home infusion therapy (such as skeletal muscle relaxants,
anti-psychotics, anti-convulsants, diagnostic agents, vaccines and
hormones (except growth hormone)), fertility agents, and
intra-articular steroids. Home Infusion Therapy Services do not
include the intra-spinal, intra-articular, or intra-ventricular
administration of medications, unless infused via implanted closed
delivery system such as a synchromed pump. Home Infusion Therapy
Services include blood products, such as whole blood and platelets,
home chemotherapy, and insertion of PICC line catheters and
management of implantable, programmable infusion devices (i.e.
Syncromed pump) only to the extent such products are appropriately
and safely (see Exhibit IX: Safe Home Care Admission Criteria)
provided in a Home Setting.
HOME MEDICAL EQUIPMENT (HME)/DURABLE MEDICAL EQUIPMENT (DME) means equipment
that can stand repeated use, is primarily and customarily used to serve a
medical purpose, and is generally not useful to a Participant in the absence of
an illness or injury. It is ordered or prescribed by a physician for a
Participant (including all services, training, supplies, maintenance and repairs
necessary for use of such equipment) including durable medical equipment,
respiratory therapy equipment, and oxygen and is provided in accordance with
Exhibit XIII (DME Guidelines Grid).
HOME SETTING means the Participant's primary place of residence or the residence
where Participant is receiving Home Care Services.
MEDICALLY NECESSARY means those Covered Services which under the terms of the
applicable Service Agreement are "Medically Necessary". Covered Services must be
"Medically Necessary."
PARTICIPANT means any individual, or eligible dependent of such individual,
whether referred to as "Insured," "Subscriber," "Member," "Participant,"
"Enrollee," "Dependent" or otherwise, who is eligible to receive Home Care
Services pursuant to a Service Agreement.
PARTICIPATING HOSPITAL means a hospital that has a direct or indirect
contractual agreement with CIGNA with regard to the particular Program under
which the Participant is covered and to which a Participating Provider may admit
Participants for care and treatment in accordance with Program Requirements.
PARTICIPATING PROVIDER means a hospital, a physician or any other health care
practitioner or entity that has a direct or indirect contractual
4
arrangement with CIGNA to provide Covered Services with regard to the particular
Program under which the Participant is covered and includes, but is not limited
to Represented Providers.
PAYOR means CIGNA or such other entity which, pursuant to a Service Agreement,
funds, administers, offers or insures Covered Services and which has agreed to
act as Payor in accordance with this Agreement.
PRE-QUALIFIED MATERNITY STAY means a maternity hospital stay of 48 hours for
vaginal delivery birth, or 96 hours for caesarean section birth, that does not
require prior authorization.
PROGRAM means the Health Maintenance Organization (HMO), Preferred Provider
Organization (PPO) or other types of health care or administrative services
which are provided or arranged by CIGNA or CIGNA Affiliates and which are
specifically described in applicable Program Attachments and Program
Requirements. It is understood that the Health Maintenance Organization (HMO)
Program includes not only benefit plans provided under service agreements by
licensed HMOs, but insured or self-funded managed care plans administered by
Connecticut General Life Insurance Company and referred to by various names
including "FlexCare," "Network," "Network Open Access", and "Network Open Access
Plus."
PROGRAM REQUIREMENTS means the rules and procedures that establish conditions to
be followed by Participating Providers with respect to Programs, copies of which
have been provided to MCA. Reference to Program Requirements includes the
Summary of Program Requirements distributed by CIGNA.
QUALITY MANAGEMENT means the programs established and operated by CIGNA or its
designee relating to the quality of Covered Services provided to Participants.
REPRESENTED PROVIDER means a home health care, infusion therapy, durable medical
equipment, or other like provider: (a) who or which is employed by, associated
with or otherwise contracted with MCA; (b) who or which both MCA and CIGNA have
agreed may provide services pursuant to this Agreement; (c) who or which has
completed an MCA Application (which has been approved by CIGNA and a copy of
which is attached in Exhibit I.) and has satisfied applicable credentialing
criteria; and (d) who or which has agreed with MCA to be subject to the
requirements of this Agreement to the extent applicable to Represented Provider.
ROUTINE CARE means services required greater than 4 hours from receipt of
Complete Order (see Exhibit III), directed by physician orders with regard to
start of care requested date.
SERVICE AGREEMENT means those agreements among CIGNA or a CIGNA Affiliate, and
an employer, insurer, labor union, trust or other organization or entity, or an
individual, that specifies services to be provided to or for the benefit of, or
arranged for or reimbursed to, or
5
for the benefit of Participants, the terms and conditions under which those
services are to be provided or reimbursed, and is consistent with Program
Requirements.
STAT CARE means services applied in the homecare setting for existing patients
only, where care or professional response is required in less than 2 hours.
URGENT CARE means services required, as directed by physician orders, within 4
hours from receipt of a Complete Order (see EXHIBIT III). Services which will be
considered urgent for the purposes of this agreement shall include the
following; nebulizers, glucometers for newly diagnosed non-hospitalized
diabetic, hydration therapy for pregnant members with diagnosis of hyperemesis,
hydration therapy for pediatric members, Bili-lights and infusion therapies with
less than an every 12 hour dosing schedule. Urgent care services also include
same day discharges requiring oxygen and pain management. Urgent care services
are not intended to replace appropriate discharge planning when the Participant
has been in the facility for greater than 23 hours. Inappropriate utilization of
same day and urgent request for same day hospital discharge will be monitored.
UTILIZATION MANAGEMENT means the processes to review and determine whether
certain health care services provided, or to be provided, to Participants are in
accordance with Program Requirements.
II. PARTIES OBLIGATIONS
A. SERVICES
1. MCA, Represented Providers and CIGNA shall act in accordance
with the terms of this Agreement and applicable Program
Attachments and Program Requirements. Except as otherwise
stated in this Agreement, the rates set forth in this
Agreement shall be payment in full for all services provided
to Participants pursuant to this Agreement.
2. Subject to the terms and condition of this Agreement, MCA
shall:
(a) Arrange for the provision of Home Care
Services to Participants;
(b) Require Represented Providers to accept,
treat, and otherwise render Covered Services
to Participants in the same manner, in
accordance with the same standards, and with
the same availability, as offered to other
like patients.
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(c) not close its network to any new
Participants unless CIGNA expressly consents
to such closure;
3. In no event shall MCA or Represented Providers be required to
accept, treat, arrange for, or otherwise be obligated to
render Home Care Services to Participants under this
Agreement, even if medically appropriate, if:
(a) the provision of such services to Participant
would pose risk of bodily harm to the Participant
or caregiver personnel of Represented Provider;
(b) the provision of such services to Participant
would be in violation of MCA's or Represented
Provider's applicable license requirements or
other applicable laws, and/or MCA policies,
including but not limited to admission and
discharge policies or discrimination policies;
(c) MCA has not received the essential information to
process a referral;
(d) Participant repeatedly rejects the provision of
services by a qualified Represented Provider
selected by MCA and/or CIGNA as mutually agreed.
MCA and Represented Providers shall not differentiate or
discriminate in the treatment of any Participant because
of race, color, national origin, ancestry, religion,
sex, marital status, sexual orientation, age, health
status, handicap or source of payment.
4. MCA shall be bound by, and MCA shall require Represented
Providers to be bound by, and comply with, the provisions of
applicable state and federal laws, regulations, credentialing
and recredentialing requirements of the National Committee for
Quality Assurance ("NCQA") or of another appropriate
accrediting body designated by CIGNA, and Program
Requirements. MCA and its Represented Providers shall maintain
all licenses and certifications required in order to perform
the obligations set forth herein. MCA shall comply and require
Represented Providers to comply with the requirements of, and
shall cooperate with, Utilization Management and Quality
Management.
5. MCA shall establish and maintain a panel of Represented
Providers adequate in size, composition and distribution, as
determined by CIGNA, to accommodate the Covered Services
required by Participants (the "required Represented Provider
panel"). Should CIGNA reasonably determine that the number,
composition or distribution of Represented Providers is not
7
adequate, then CIGNA shall notify MCA of the deficiency. MCA
shall have sixty (60) days from the date of the notice to
contract with sufficient Represented Providers to resolve the
deficiency, but if MCA fails to do so, then CIGNA may
designate sufficient Participating Providers as Represented
Providers until such time as MCA contracts with the necessary
Represented Providers and MCA is financially responsible for
any such Covered Home Care Services delivered to participants
until such time as MCA contracts with the necessary
Represented Providers.
MCA understands and agrees that, to the extent that Covered
Services are rendered under this Agreement to CIGNA's
commercial HMO Participants (including "FlexCare",
"Gatekeeper", "Open Access" and "Open Access Plus"
participants) or to Participants in CIGNA's Medicare and
Medicaid Programs, such services shall only be rendered by
those Participating Providers in the required Represented
Provider panel located within CIGNA's authorized service area.
MCA further agrees that it shall secure binding agreements
with the required Represented Provider panel three (3) weeks
prior to the Effective Date of this Agreement. In the event
that MCA has failed to do so, the Effective Date of this
Agreement shall be delayed as determined by CIGNA.
6. Upon request, MCA will provide CIGNA with the data elements
set forth in Exhibit II for each Represented Provider. MCA
further agrees to update CIGNA on any changes to Represented
Provider data elements as soon as possible but no less
frequently than monthly. MCA will provide CIGNA with thirty
(30) days advance notice of all other additions to its panel
of Represented Providers. In recognition of CIGNA's need to
communicate changes to Participants, MCA shall not make any
material changes in the location or hours of operation of its
panel of Represented Providers without first providing sixty
(60) days advance written notice to CIGNA. In addition, MCA
shall provide CIGNA with sixty (60) days advance written
notice of the termination of a Represented Provider, or any
other circumstance (e.g. death or cessation of operations,
loss of licensure, etc.) that results in the Represented
Provider ceasing to provide Covered Services to Participants
under this Agreement. Notwithstanding the foregoing, in the
event that the Represented Provider's participation under this
Agreement is terminated for cause and in situations where MCA
does not have sixty (60) days advance notice of such
termination, MCA shall notify CIGNA in writing of such
termination as soon as possible but no later than five (5)
days after learning of such termination.
7. MCA shall maintain agreements with each of its Represented
Providers, in the form attached hereto as Exhibit I, requiring
Represented Providers to comply with all of the terms and
conditions of this Agreement to the extent applicable. The
8
form of MCA's standard agreement with Represented Providers
and any material amendments thereto comply with applicable law
and must be approved in advance by CIGNA. Each of such
agreements shall include, among other things, the following:
a. a Participant hold harmless provision satisfactory to
CIGNA, consistent with applicable law and which
provides, among other things, that in no event,
including but not limited to nonpayment by MCA, MCA's
insolvency or breach of MCA's agreement with the
Represented Provider, shall Represented Provider bill,
charge, collect a deposit from, seek compensation,
remuneration or reimbursement from or have any recourse
against Participant, Payor (if Payor has made payments
in accordance with this Agreement) or parties other than
MCA for Covered Services provided pursuant to this
Agreement;
b. if payments for Covered Services rendered hereunder are
directed to MCA who, in turn, distributes payments to
Represented Providers:
i. a provision obligating Represented Providers to
notify CIGNA immediately of any payment defaults
by MCA relating to services rendered hereunder;
and
ii. a provision obligating Represented Providers, in
the event of such payment default by MCA and at
CIGNA's option, to continue rendering Covered
Services hereunder so long as payments due
Represented Providers for Covered Services
rendered after CIGNA's exercise of such option are
made directly to Represented Providers by Payor
and until a date specified by CIGNA but no later
than one hundred twenty (120) days after CIGNA's
exercise of such option. Represented Providers
shall agree that any such payments during such
time period shall be made, at CIGNA's election,
either in accordance with the reimbursement terms
set forth in Represented Providers' agreements
with MCA or in accordance with CIGNA's maximum fee
schedule in effect at the time of service.
c. a provision or provisions obligating Represented
Providers to be available to provide Covered Home Care
Services to those patients designated by Gentiva, which
during the term of this Agreement would include
Participants.
d. any other provisions required by applicable law or
regulation; and
e. a provision wherein the Represented Provider
acknowledges and agrees that the Represented Provider's
participation agreement with MCA does not contain any
financial incentive
9
or make any payment that acts directly or indirectly as
an inducement to limit Medically Necessary services.
Upon request, MCA shall make available to CIGNA and to any
applicable regulatory authority a copy of each of its provider
agreements with Represented Providers.
8. For referrals, Represented Providers shall refer Participants
to Represented Providers or other Participating Providers
except in the case of an Emergency or as otherwise described
in applicable Program Requirements or as otherwise required by
law.
9. Represented Providers shall be credentialed and recredentialed
in accordance with the procedures set forth in Exhibit XII to
this Agreement.
10. MCA shall provide trained service personnel to answer
questions from CIGNA and to assist CIGNA in responding to
complaints from Payors, Participants, and Participating
Providers. MCA shall promptly respond to all such inquiries
and complaints in accordance with the Joint Complaint
Management Process created by MCA and CIGNA, attached in
Exhibit XI.
11. CIGNA shall perform administrative, accounting, enrollment,
eligibility verification and other functions necessary for the
administration and operation of the Programs. CIGNA shall
provide MCA with information and data reasonably necessary to
carry out the terms and conditions of this Agreement and for
operation of the Programs. CIGNA shall establish a system of
Participant identification, communicate Program Requirements
to MCA or Represented Providers, as applicable, and identify
Represented Providers to Payors and Participants.
12. CIGNA shall contract, directly or indirectly, with Payors who
agree to pay in accordance with this Agreement for Covered
Services rendered by Represented Providers.
13. CIGNA shall, upon specific request by MCA, identify the Payor
responsible for payment of Covered Services.
14. Prior to the start date with respect to each of the entities
described in Exhibit XIV and any subsequent entities added by
amendment: (a) MCA shall obtain CIGNA's approval of MCA's list
of participating home care providers (which may include both
MCA affiliates and Represented Providers) who will render
Covered Home Care Services under this Agreement; (b) MCA shall
satisfy CIGNA that it has established a home care services
network adequate in size, composition and distribution to
accommodate the Covered Home Care Services required by
Participants; (c) the parties shall agree upon a plan to
ensure appropriate and sensitive transitioning of Participants
already receiving Covered Home Care Services such that there
is no disruption of care which would be detrimental to such
Participants; and (d) the parties
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shall be satisfied that adequate management systems are in
place. CIGNA's financial obligations for payment of Covered
Home Care Services rendered hereunder shall not commence with
respect to a Service Area until the agreed upon start date for
such Service Area. MCA shall not eliminate or change
Represented Providers or a MCA location without sixty (60)
days' prior written notice to CIGNA, except to the extent MCA
is required to do so for cause and, in any such case, MCA
shall notify CIGNA of such change as soon as practicable.
15. MCA shall require Represented Providers providing Home Medical
Equipment to provide Home Medical Equipment in good working
order and condition and ensure that Home Medical Equipment has
been properly cleaned and disinfected between uses. MCA shall
arrange for at MCA's expense all necessary on-site maintenance
and/or repair for Home Medical Equipment (including provision
of all necessary parts, mechanisms and devices) in order to
maintain the Home Medical Equipment in good condition and
working order; provided that such maintenance and/or repair is
required as a result of normal wear and tear (as defined by
warranty), or a defect in, the Home Medical Equipment. MCA
shall require Represented Providers to provide or arrange for
twenty-four (24) hour per day, seven (7) day per week
maintenance and repair service, provided however, that
Represented Provider may elect to pick up the Home Medical
Equipment needing maintenance and/or repair and replace it
with Home Medical Equipment in operable condition, rather than
repair the Home Medical Equipment immediately.
16. MCA shall require Represented Providers to maintain an
accurate inventory of solutions, medications, drugs, Home
Medical Equipment and ancillary supplies, as applicable, for
each Participant, to the extent necessary to provide Covered
Home Care Services under this Agreement, and shall make these
inventory records available to CIGNA upon request.
17. MCA shall ensure that its facilities and employees, and
require that the facilities and employees of its Represented
Providers, maintain a neat, clean and professional appearance
at all times.
18. MCA will dedicate on a full-time basis (and part-time, as
required) the services of appropriate personnel to coordinate
the implementation of this Agreement on both local and
national levels, and to manage the day-to-day work
relationship with CIGNA. MCA will meet with designated CIGNA
personnel upon request to review MCA performance, Participant
utilization and quality improvement initiatives.
19. MCA will educate CIGNA case managers and CIGNA discharge
planners on the capabilities of home care providers. MCA will
identify potential home care candidates as early as possible
in the hospital stay and prepare for the discharge. CIGNA and
MCA acknowledge that none of the activities of their
respective
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personnel described in this section will substitute for the
discharge planning obligations imposed on Participating
Hospitals by Medicare and/or Medicaid.
20. MCA and CIGNA agree to meet on at least a quarterly basis to
assist CIGNA in staying abreast of innovations in home care
services (including drug protocols) and to work with CIGNA to
see that these services are being appropriately applied to
Participants.
21. MCA will dedicate personnel to travel to any Service Area
location or to CIGNA Health Corporation's home office on
twenty-four hours notice to resolve CIGNA's repeated
dissatisfaction with MCA. Said personnel will include at least
one officer of MCA, if requested by CIGNA.
22. MCA will provide a mutually agreed upon number of home and
community care specialists whose responsibilities will include
the items listed in Exhibit VI, (Guidelines for Home &
Community Care Specialists). The Home and Community Care
Specialists will be located in a CIGNA Health Facilitation
Center or other Health Facilitation Satellite location, as
mutually agreed, and shall have responsibility for a
geographic region, as defined by CIGNA. The Home and Community
Care Specialist will be an employee of MCA and the costs for
such staffing are included in the rates set forth in the
exhibits to the Program Attachments to this Agreement.
23. MCA shall deliver Covered Home Care Services to Participants;
Routine, Stat and/or Urgent in accordance with the terms of
this Agreement. In those instances where the Covered Home Care
Service(s) referred to MCA is to be rendered by a Represented
Provider, MCA shall immediately notify the Represented
Provider of the referral and, to the extent applicable, the
Represented Provider shall immediately attempt to make contact
with the referring physician and immediately return phone
calls from the referring physician in order to confirm the
physician order.
24. Effective January 1, 2004, subject to state regulations,
medical appropriateness and availability of personnel, MCA may
arrange for physical therapy assistants (PTA) to provide
services to Participants.
B. COMPENSATION AND BILLING
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1. For Covered Services provided to or arranged for Participants
by MCA and/or Represented Providers consistent with the terms
of this Agreement, and for all other obligations hereunder,
CIGNA or its designee shall make payments to MCA as set forth
in this Section B and in accordance with the applicable
Program Attachments. For all fee-for-service charges, CIGNA
shall pay MCA within thirty (30) days following receipt of a
clean claim submitted by MCA.
2. MCA and Represented Providers shall comply with the following
limitations on billing Participants:
a. MCA hereby agrees and shall require its Represented
Providers to agree that in no event, including, but not
limited to non-payment by CIGNA, CIGNA's insolvency or
breach of this Agreement, shall MCA or any Represented
Provider bill, charge, collect a deposit from, seek
compensation, remuneration or reimbursement from, or
have any recourse against Participants or persons other
than CIGNA or MCA for Home Care Services. This provision
shall not prohibit collection of (i) any applicable
Copayments, Deductibles or Coinsurance; (ii) payments
for services provided to a patient who is no longer
eligible to receive Home Care Services, including but
not limited to Participants that have reached their
benefit limit; or (iii) payments for services provided
to Participants that are not Home Care Services.
b. MCA further agrees that this provision shall survive the
termination of this Agreement regardless of the cause
giving rise to such termination and shall be construed
to be for the benefit of Participants, and that this
provision supersedes any oral or written agreement to
the contrary now existing or hereafter entered into
between MCA or Represented Providers and the Participant
or persons acting on the Participant's behalf.
c. Any modification, additions, or deletion to the
provisions of this hold harmless clause shall become
effective on a date no earlier than fifteen (15) days
after the applicable state regulatory agency has
received written notice of such proposed change.
d. MCA shall not charge, and MCA shall require that its
Represented Providers not charge, a Participant for a
service which is not Medically Necessary unless, in
advance of the provision of such service, the
Participant is notified that the service may not be
covered and the Participant acknowledges in writing that
he or she shall be responsible for payment of charges
for such service.
3. MCA or Represented Provider may bill an individual directly
for any services provided following the date the individual
ceases to be a Participant and for non-covered services
delivered to Participants on a fee-for-service basis. Payor
has no obligation under this
13
Agreement to pay for services rendered to individuals
following the date the individual ceases to be a Participant.
MCA may also bill a Participant for any applicable copayments,
deductibles, coinsurance, or other ancillary charges.
4. The following provisions apply regarding coordination of
benefits:
a. CIGNA and MCA agree to cooperate to exchange information
relating to coordination of benefits with regard to any
Participant for whom MCA's Represented Providers are
providing services.
b. With respect to those services reimbursed on a capitated
basis:
1. Certain claims for services rendered to
Participants are claims for which another payor
may be primarily responsible under coordination of
benefits rules. MCA may pursue and process any
such coordination of benefits claims which relate
to services provided by MCA's Represented
Providers and, in so doing, shall comply with the
primary payor's applicable billing rules,
including, but not limited to, any of the primary
payor's limitations on billing Participants.
2. When Payor is other than primary under applicable
coordination of benefits rules, Payor shall not be
obligated to pay any amounts in addition to the
capitation amounts paid pursuant to this
Agreement, and MCA and its Represented Providers
agree to reimburse the Participant any CIGNA
Copayments, Coinsurance or Deductibles collected
from the Participants, that should not have been
collected, upon request by CIGNA or the
Participant. In the event that MCA or its
Represented Providers fail to reimburse such
amounts within sixty (60) days of notification by
CIGNA that such amounts are due and owing, CIGNA
shall have the right to deduct any such amounts
from any amounts payable under this Agreement and
reimburse the Participant; provided that CIGNA
advise MCA in writing of the accounts from which
the deduction was taken.
3. When Payor is primary under applicable
coordination of benefits rules, MCA shall consider
the compensation set forth in this Agreement as
payment in full for Covered Services rendered to
Participants and shall not seek additional
reimbursement from any secondary payors except as
required by law.
c. With respect to those services reimbursed on a
fee-for-service basis:
i. Certain claims for services rendered to
Participants are claims for which another
payor may be primarily responsible under
coordination of benefit rules. MCA
14
may pursue and process any such coordination
of benefits claims and, in so doing, shall
comply with the primary payor's applicable
billing rules, including, but not limited
to, any of the primary payor's limitations
on billing Participants.
ii. When Payor is other than primary under
applicable coordination of benefits rules,
Payor will pay no greater amount than that
which, when added to amounts payable to MCA
from other sources under the applicable
coordination of benefit rules, equals one
hundred percent of the MCA's reimbursement
for Covered Services pursuant to this
Agreement.
iii. When Payor is primary under applicable
coordination of benefit rules, Payor will
pay amounts due pursuant to this Agreement
without regard for the obligations of any
secondary payors.
5. Upon reasonable notice and during regular business hours,
CIGNA or its designee shall have the right to inspect, review
and make copies of, at CIGNA's expense, all records maintained
by MCA and its Represented Providers with respect to all
payments received by MCA and its Represented Providers from
all sources for Covered Services rendered to Participants
during the term of this Agreement. CIGNA or its designee shall
have the right to conduct periodic audits of such records and
may audit its own records to determine if amounts have been
properly paid under this Agreement. CIGNA shall provide MCA
with the results of any such audits and any amounts determined
to be due and owing as a result of such audits shall be
promptly paid or, at the option of the party to whom such
amounts are owed, offset against amounts due and owing by such
party hereunder; provided that CIGNA shall notify MCA in
writing of the accounts from which any deductions are taken or
offsets are made against. This provision shall survive the
termination of this Agreement.
6. If MCA or its Represented Providers inappropriately refer a
Participant to a non-Participating Provider in a non-Emergency
situation, and thereby causes the Participant to become
responsible for the charges of the non-Participating Provider,
CIGNA or a CIGNA Affiliate may, in its sole discretion,
satisfy the obligation of the Participant to the
non-Participating Provider. If this occurs, CIGNA may offset
the amount paid on behalf of the Participant against the
future compensation payable to MCA or its Represented
Providers; provided that CIGNA shall notify MCA in writing of
the accounts from which any deductions are taken or offsets
are made against.
7. MCA and its Represented Providers shall not directly or
indirectly bill for or seek to collect from Payor any
15
additional payment for Covered Services beyond the amount
required to be paid under this agreement except pursuant to a
written request for an appeal or adjustment filed with CIGNA
within one hundred eighty (180) days from the date of Payor's
payment or explanation of benefits. This provision does not
affect any rights MCA might have for reimbursement under any
periodic risk sharing settlements described elsewhere in this
Agreement.
8. For Home Medical Equipment, MCA agrees to a rental cap at
purchase price. Payor shall pay a fee equal to one (1) month's
rental charge every six (6) months to compensate for the cost
of maintaining the equipment. MCA or Represented Provider, as
applicable, shall retain title to the equipment.
Notwithstanding the foregoing, oxygen, other
respiratory-related equipment and services, and low air-loss
beds will not be eligible for rental cap. Payor may continue
to rent the equipment until the rental cap is met or purchase
the piece of equipment with a maximum of two (2) months rental
payments applied to the purchase price.
9. CIGNA shall provide MCA with any applicable limitations on
coverage for Covered Home Care Services to Participants under
specific Programs.
10. Provider waives any right to interest required to be paid to
it under any state law or regulation requiring the payment of
claims within a specified period of time it being understood
that CIGNA's payment obligations are governed entirely by the
terms of this Agreement.
C. RECORDS
1. CIGNA, MCA and Represented Providers agree that clinical
records of Participants and any other records containing
individually identifiable information with respect to
Participants shall be regarded as confidential and each shall
comply with all applicable federal and state laws and
regulations regarding such records. This provision shall
survive the termination of this Agreement.
2. MCA or Represented Providers shall maintain and furnish such
records and documents as may be required by applicable laws,
regulations and CIGNA's Program Requirements. All of such
records shall be maintained for the period of time required by
applicable law. MCA and Represented Providers shall cooperate
with CIGNA to facilitate the information and record exchanges
necessary for Quality Management, Utilization Management, peer
review, or other programs required for CIGNA's operations.
3. MCA and Represented Providers shall provide CIGNA, its
designee and duly authorized third parties, including, but not
16
limited to, applicable governmental regulatory agencies, with
reasonable access during regular business hours to specified
clinical and medical records related to Covered Services
rendered to Participants under this Agreement. Such access
shall be provided within the time frames specified by the
governmental regulatory authority requesting such access or,
if such access is requested by CIGNA only, upon reasonable
notice by CIGNA. This provision shall survive the termination
of this Agreement.
4. MCA and its Represented Providers shall cooperate in
connection with any transfers of Participants' medical records
required when Represented Providers cease rendering services
to a Participant whether during the term of this Agreement or
after termination of this Agreement. MCA and its Represented
Providers shall provide copies of such records at no charge.
5. MCA and Represented Providers shall cooperate with CIGNA in
the development and maintenance of statistical data, records
and procedures in support of Quality Management, Utilization
Management and other applicable Program Requirements.
6. MCA and CIGNA shall maintain the confidentiality of all
confidential information regarding Participants in accordance
with any applicable laws and regulations. MCA shall require
Represented Providers to obtain Participant's consent to the
disclosure of all records and information necessary to MCA to
carry out its utilization management, quality improvement,
claims management and payment and other relevant programs and
to allow MCA to disclose such information to CIGNA for such
purposes. CIGNA agrees to abide by the confidentiality
obligations set forth in this Agreement and in the
Confidentiality Agreement attached hereto as Exhibit XX and
incorporated herein with respect to any private and/or medical
record information of Participants disclosed by MCA to CIGNA
pursuant to this Agreement.
7. CIGNA agrees to indemnify and hold MCA and Represented
Providers harmless for any claim by a Participant for a breach
of confidentiality that results from MCA's or Represented
Provider's adherence to this Section C and provided that MCA
and/or Represented Provider has complied with all the
requirements of this Section C and the Business Associates
Agreement between MCA and CIGNA.
D. PARTICIPANT GRIEVANCE
MCA and its Represented Providers shall cooperate with CIGNA in the
implementation of its Participant grievance procedure and
17
shall assist CIGNA in taking appropriate corrective action. MCA and
its Represented Providers shall comply with all final determinations
made by CIGNA pursuant to such grievance procedure.
E. INSURANCE AND LIABILITY
1. Throughout the term of this Agreement, MCA shall maintain at
MCA's expense general and professional liability coverage in a
form and amount acceptable to CIGNA. MCA shall require each
Represented Provider to maintain such coverages in a form and
amount acceptable to CIGNA. MCA or Represented Providers shall
give CIGNA certificates of insurance evidencing the coverages
described herein upon request. MCA or Represented Providers
shall give CIGNA immediate written notice of cancellation,
modification or termination of any such insurances. MCA or
Represented Providers shall give CIGNA prompt written notice
of any professional liability claims against MCA's or any of
its Represented Providers' liability coverage. The Delegated
Credentialing Agreement is made part of this agreement in
Exhibit XII.
2. MCA shall require that Represented Providers notify MCA
immediately, and MCA shall notify CIGNA as soon as it receives
notice (i) if there is a material change affecting Represented
Provider's or any of Represented Provider's personnel's
licensure, accreditation or certification, which would affect
the provision of services to Participants under this Agreement
or (ii) if a professional, regulatory or legal body (a) serves
formal notice that it may take any action due to deficiencies,
poor performance or failure to comply with standards, rules or
regulations imposed by such professional or regulatory body or
(b) initiates an investigation which is material.
F. INSPECTIONS
Upon reasonable notice and at reasonable hours, CIGNA or its agents
may inspect MCA's or Represented Providers' premises and operations
to ensure that they are adequate to meet Participants' needs.
G. REPRESENTATIONS
1. MCA and each Represented Provider represent and warrant that
the information set forth in the CIGNA Application, or MCA
Application acceptable to CIGNA, is true and correct to the
best of MCA's knowledge. MCA shall promptly notify CIGNA of
any changes in the information contained in any Represented
Provider's Application within thirty (30) days of such change.
2. MCA represents and warrants that only Participating Providers
will be allowed to provide Covered Services under this
Agreement, unless otherwise allowed by this agreement.
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3. MCA will provide evidence of Represented Providers' agreement
to abide by the terms of this Agreement upon request.
4. CIGNA makes no representations or guarantees concerning the
number of Participants it can or will refer to MCA and its
Represented Providers under this Agreement. CIGNA reserves the
right to direct business to selected contracted providers in
specified geographic areas. See Exhibit XXI for a listing of
these areas.
5. CIGNA and MCA acknowledge and agree that:
a. this Agreement is a negotiated, armslength transaction
in which each party was represented by counsel and has
chosen to enter of its own free will;
b. Each party fully understands the reimbursement
arrangement outlined in this Agreement and believes that
it represents a mutually beneficial financial
arrangement; and
c. neither this Agreement nor any of MCA's participation
agreements with its Represented Providers contains any
financial incentive or makes any payment that acts
directly or indirectly as an inducement to limit
Medically Necessary services.
6. CIGNA and MCA acknowledge(s) and agree(s) that:
a. Utilization Management decision making for services
rendered under this Agreement shall be based only on
appropriateness of care and service;
b. practitioners or other individuals conducting
Utilization Management are not compensated for denials
of Covered Services; and
c. financial incentives for Utilization Management decision
makers do not encourage denials of Covered Services.
7. CIGNA shall cause its affiliate Intracorp to refer to MCA all
CIGNA PPO Program Participants referred to or identified by
Intracorp to utilize Covered Home Care Services when the
utilization review/case management contract applicable to the
Participant is between CIGNA and the party with which CIGNA
has the Service Agreement.
8. Subject to the exclusions and limitations set forth in Exhibit
XXI, and with respect to the HMO, Gatekeeper and PPO Programs
only, CIGNA agrees that during the term of this Agreement, it
shall not contract with any third party for the provision of
Covered Home Care Services which are the subject of this
Agreement in those Service Areas for which MCA shall have
19
commenced rendering Covered Home Care Services which are
subject to this Agreement and for which all transitioning care
has been completed. This provision will not prohibit or
restrict CIGNA from contracting with others with regard to
services which MCA does not or can not provide or arrange for
or for services not included within the scope of this
Agreement.
9. CIGNA designates MCA as CIGNA's preferred provider for
provision of hemophilia factor products, and agrees to limit
Factor providers to Gentiva Health Services and those
commercial vendors currently under contract as well as CIGNA
Tel-Drug.
10. Effective January 1, 2004, MCA will use all reasonable
commercial efforts to arrange for the provision of CPAP and
CPAP supplies via direct shipment to the Participant's home.
MCA shall provide the appropriate support intervention to
include clinic, telephonic or in home support. CIGNA shall
establish criteria for appropriate respiratory therapist
intervention and assist MCA in enforcing that criteria.
11. Effective January 1, 2004 CIGNA will make all reasonable
efforts to advise MCA, in advance, of material health care
initiatives, including but not limited to medical management
and disease management initiatives, that have the potential to
impact the utilization of Home Care Services during the term
of the Agreement. MCA agrees to collaborate with CIGNA to
maximize the potential of CIGNA initiatives. CIGNA agrees to
discuss with MCA and consider the impact of newly developed
home care programs that may increase/decrease utilization of
Home Care Services activity reflected in the base period used
to establish the capitation rate for the impacted period.
12. CIGNA will provide to MCA a quarterly retrospective claims
paid report within 120 days following the end of each quarter,
to include the HMO, FLEXCARE, PPO and Indemnity populations.
MCA will review retrospective claims paid reports provided by
CIGNA for the purpose of identifying providers of covered
services not subcontracted with MCA. MCA shall use reasonable
commercial efforts, as evidenced by contracting results.
H. CONFIDENTIALITY/DAMAGING COMMUNICATIONS
1. The parties acknowledge that, as a result of this Agreement,
each may have access to certain trade secrets and other
confidential and proprietary information of the other. MCA,
Represented Providers and CIGNA shall hold such trade secrets
and other confidential and proprietary information, including
the terms and conditions of this Agreement, in confidence and
20
shall not use or disclose such information, either by
publication or otherwise, to any person without the prior
written consent of the other party except as may be required
by law and except as may be required to fulfill the rights and
obligations set forth in this Agreement. With respect to
CIGNA, such confidential and proprietary information shall
include, without limitation, the Program Attachments, Program
Requirements, client lists, and any and all data or
information made known to MCA relating to the services
rendered to Participants under this Agreement. This provision
shall not be construed to prohibit CIGNA from disclosing
information to CIGNA Affiliates. In addition, this provision
shall not be construed to prohibit CIGNA from disclosing
information to the agents or subcontractors of CIGNA or of
CIGNA Affiliates or from disclosing the terms and conditions
of this Agreement, including reimbursement rates, to existing
or potential customers of CIGNA or of CIGNA Affiliates or
their representatives, provided that CIGNA is acting in
accordance with the terms of the Confidentiality Agreement
attached hereto and incorporated herein as Exhibit XX
(Confidentiality Agreement). This provision shall survive the
termination of this Agreement.
2. Neither CIGNA or MCA shall issue (and MCA will require that
its Represented Providers not issue) any disparaging
communications which would interfere with or otherwise damage
any of the other party's existing or potential contractual
relationships.
3. Nothing in subsections 1. or 2. above shall be construed to
prohibit:
a. communications necessary or appropriate for the delivery
of health care services;
b. communications to Participants regarding treatment
alternatives regardless of the provisions or limitations
of the Participant's coverage;
c. communications to Participants regarding applicable
rights to appeal coverage determinations;
d. communications to Participants identifying the type of
reimbursement arrangement under which MCA and its
Represented Providers are compensated for Covered
Services under this Agreement (i.e. fee-for-service,
capitation, etc.), excluding any communications with
regard to the applicable rates of reimbursement; or
e. any other communications expressly protected under
applicable state or federal statute or regulation.
21
I. MARKETING EFFORTS
MCA agrees to participate in CIGNA's marketing efforts with respect
to its various Programs to the extent agreed upon by the parties.
J. REPORTING/DATA ACCESS
1. MCA's compensation for the reports, studies, information
exchanges and data access delineated in this section and
associated exhibits is fully incorporated in the rates
and/or fee schedules defined in each Program Attachment
and associated exhibits attached hereto. MCA shall
receive no additional compensation for the reports,
studies, information exchanges and data access.
2. MCA agrees to collect data necessary to complete each
report listed in Exhibit VIII.
3. MCA agrees to provide CIGNA with reports, in a form and
format mutually agreed upon by both parties, and in
accordance with the report timeline set forth in Exhibit
VIII attached hereto and incorporated herein. Said
reports shall be consolidated reports, incorporating all
data from MCA and its Represented Providers.
4. MCA will maintain a quality assurance program (including
process improvement initiatives) on Participants on a
quarterly basis, and report to CIGNA the results of such
initiatives each quarter. CIGNA may conduct home care
service satisfaction surveys on Participants,
Represented Providers and CIGNA personnel and will
supply MCA with the results of any such satisfaction
surveys. The format of the quality assurance initiatives
shall be mutually developed by the parties. The format
of the home care service satisfaction surveys will be
developed by CIGNA with input from MCA.
5. MCA agrees to furnish ad hoc reports to CIGNA upon
reasonable request by CIGNA to an individual designated
by MCA. MCA agrees to provide most simple ad hoc reports
requested within 2 to 5 working days.
6. MCA agrees to submit electronic utilization data to
CIGNA on Participants as needed.
7. MCA agrees to share with CIGNA all on-line data and all
information relating to Participants, including but not
limited to, intake, patient status, utilization,
outcomes, clinical records, billing and cost
information, subject to any applicable confidentiality
obligations set forth in this Agreement.
22
8. The parties acknowledge and agree that all of the aggregate
data and reports specified in this Agreement relating to
Participants and referenced in this Section or elsewhere in
this Agreement:
a. shall be jointly owned by CIGNA and MCA;
b. with respect to such data, information, studies and
reports which identify the other party, Participants or
parties with whom CIGNA has Service Agreements by name,
shall not be used, disclosed or sold by either party
(unless such identity shall have been deleted) except as
otherwise agreed. This provision shall not apply:
(i) to the extent the use or disclosure of such data,
information, studies, or reports is required to
fulfill obligations hereunder, obligations to
Participants and parties with whom CIGNA has
Service Agreements or any other obligation imposed
by law provided that such disclosure is permitted
by the terms of this Agreement or the
Confidentiality Agreement (Exhibit XX); or
(ii) with respect to usage of such data, information,
studies and reports for internal measurement
purposes.
This provision shall survive the termination of this Agreement
and shall not prohibit disclosures by either party to its
subsidiaries or affiliates except as otherwise set forth in
this Agreement and the Confidentiality Agreement (Exhibit XX).
Upon request by CIGNA and free of charge, MCA will provide
CIGNA with copies of all materials sold by MCA to third
parties containing such data, information, studies and
reports.
K. BEST RATE GUARANTEE
MCA warrants that the rates, terms and benefits granted by MCA
as set forth in this Agreement, viewing the package of
services hereunder as a whole, are equivalent to, or better
than, the rates, terms, benefits being offered by MCA to any
company in any area which is contained within or overlaps a
CIGNA Service Area which purchases services similar to those
provided under this Agreement, viewing the package of such
services as a whole. If MCA, during the term of this
Agreement, enters into agreements with any other company which
provides greater benefits or more favorable terms or rates
with respect to like obligations of MCA and like rights of
CIGNA, viewing the package of services provided hereunder as a
whole, MCA shall notify
23
CIGNA immediately upon consummation of such agreement and at
least 30 days prior to the effective date of such agreement.
This Agreement shall thereupon be deemed automatically amended
to provide the same advantages to CIGNA. This provision shall
be enforceable to the extent permitted by applicable law.
L. PERFORMANCE GUARANTEES
MCA shall perform its obligations under this Agreement in
accordance with the standards set forth in Exhibit VII. In the
event that MCA fails to achieve a performance standard set
forth in Exhibit VII, the amounts due MCA as set forth in the
Program Attachments of this Agreement shall be reduced in
accordance with the formula set forth in Exhibit VII.
III. MISCELLANEOUS OBLIGATIONS
A. INDEPENDENT CONTRACTOR RELATIONSHIP
1. This Agreement is not intended to create nor shall be
construed to create any relationship between CIGNA and MCA
other than that of independent entities contracting for the
purpose of effecting provisions of this Agreement. Neither
party nor any of their representatives shall be construed to
be the agent, employer, employee or representative of the
other.
2. Nothing in this Agreement, including MCA and its Represented
Providers' participation in the Quality Management and
Utilization Management process, shall be construed to
interfere with or in any way affect Represented Provider's
obligation to exercise independent medical judgement in
rendering health care services to Participants.
B. TERM OF AGREEMENT
This Agreement shall be in full force and effect for a three (3)
year period and terminating on December 31, 2006. Notwithstanding
the foregoing, CIGNA may terminate this agreement effective December
31, 2005 by providing MCA with no less than ninety (90) days advance
written notice of its intention to terminate this Agreement. If
CIGNA does not provide such written notice, then the Agreement shall
continue in full force and effect. Thereafter, this Agreement shall
automatically renew for consecutive one year terms without any
further action by either party, unless either party elects not to
renew this Agreement by providing at least ninety (90) days advance
written notice to the other party, prior to the commencement of the
next term.
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Notwithstanding the expiration or non-renewal of this Agreement
pursuant to this Section B., this Agreement shall continue in effect
with respect to those Payors covered under Service Agreements in
effect as of the end of the term of this Agreement or the notice
period, as applicable, but not to exceed twelve months from the
effective date of termination or expiration.
The parties shall establish capitation rates for year 2005 and 2006
in accordance with the methodology as set forth in Exhibit XXIV. All
fee-for-service rates for 2005 and 2006 will be limited to a maximum
inflation adjustments, set forth in Exhibit XXIV. MCA will provide
to CIGNA the information necessary to establish a capitation rate
for 2005 and 2006 no later than November 1st of 2004 and 2005,
respectively. In the event that the parties are unable to reach an
agreement as to new rates for 2006, either party may terminate this
Agreement at any time after December 31, 2005 by giving notice to
the other party at least ninety (90) days in advance of the
termination specified in such notice. During the notice period (90
days), the 2005 rates shall continue in force for that period.
C. TERMINATION
1. FOR CAUSE. This Agreement may not be terminated for cause,
except to the extent provided in subsections a. and b. below.
All other claims, disputes, controversies, or breaches shall
not be cause for termination of this Agreement, but rather
shall be resolved through the Dispute Resolution process
described in Section III. M.
a. MCA may terminate this Agreement for cause:
1. immediately upon written notice to CIGNA if:
i. CIGNA ceases to engage in all business
activities;
ii. CIGNA files a petition for bankruptcy or any
other insolvency, rehabilitation,
conservation or liquidation proceeding under
state or federal law; or
iii. Any bankruptcy, insolvency or liquidation
proceeding is commenced against CIGNA, which
proceeding is (a) not contested by CIGNA or
(b) if contested by CIGNA, is not dismissed
within sixty (60) days after commencement.
2. upon sixty (60) days advance written notice to
CIGNA if:
i. CIGNA fails to adhere to any final
determination of an arbitrator or, if
applicable, the determination of a majority
of the arbitrators, within the time frame
established by the arbitrator(s), in
accordance with
25
the Dispute Resolution procedures pursuant
to Section III M;
ii. CIGNA fails, without cause, to pay
substantially all undisputed amounts due to
MCA under this Agreement for more than sixty
(60) days after the later of the due date or
written notice by MCA. If CIGNA in good
faith disputes that monies are due to MCA
under this Agreement, then the notice of
termination shall not be effective and this
Agreement shall remain in effect, subject to
sub-subsection i. above; or
iii. Any material change or alteration by CIGNA
of the Program Requirements is unacceptable
to MCA, providing that (a) MCA gives CIGNA
notice of rejection of such action within
thirty (30) days of receipt by MCA of
CIGNA's notice concerning the change or
alteration; and (b) CIGNA does not withdraw
the change or alteration to the Program
Requirements or the parties do not reach an
agreement with regard to a mutually
acceptable change or alteration to the
Program Requirements within thirty (30) days
of receipt by CIGNA of MCA's notice of
rejection.
b. CIGNA may terminate this Agreement for cause:
1. immediately upon written notice to MCA if:
i. MCA's license to engage in any business
contemplated under this Agreement is
revoked, after exhaustion of all appeal
rights (so long as MCA is operating while
the appeal rights are being exhausted);
ii. MCA ceases to engage in all business
activities;
iii. MCA ceases to be in compliance with
applicable federal or state laws,
regulations or ordinances, a violation of
which would materially impact the ability of
MCA to conduct its business, to perform its
obligations under this Agreement, to accept
reimbursement on the basis described in this
Agreement, or to own or control its assets;
iv. MCA files a petition for bankruptcy or any
other insolvency, rehabilitation,
conservation or liquidation proceeding under
state or federal law;
v. Any bankruptcy, insolvency or liquidation
proceeding is commenced against MCA, which
proceeding is (a) not contested by MCA or
(b) if contested by MCA, is not
26
dismissed within sixty (60) days after
commencement; or
vi. MCA merges into, becomes a subsidiary or
wholly owned affiliate of or is otherwise
acquired, in whole or in part, by any other
entity.
2. upon sixty (60) days advance written notice to MCA
if:
i. MCA fails to adhere to any final
determination of an arbitrator or, if
applicable, the determination of a majority
of the arbitrators, within the time frame
established by the arbitrator(s), in
accordance with the dispute resolution
procedures outlined in section III M below;
ii. MCA fails to comply with the requirements of
Utilization Management and Quality
Management;
iii. MCA fails to maintain any guarantee of
provision of Covered Services as required in
this Agreement;
iv. MCA fails to correct any deficiency
identified by CIGNA in the performance of
MCA's responsibilities with respect to any
of the functions delegated to MCA under this
Agreement within sixty (60) days of
notification of such deficiency or,
thereafter, fails to maintain compliance
with such responsibilities; or
v. MCA is in default of its payment obligations
to any Represented Provider with respect to
services rendered under this Agreement and
fails to cure such default within ten (10)
days of notification by CIGNA. If CIGNA
elects to terminate this Agreement pursuant
to this provision, during the time between
CIGNA's election to terminate and the
effective date of termination, CIGNA may
elect to direct any and all payments due MCA
hereunder directly to Represented Providers.
Such payments shall be made, at CIGNA's
election, either in accordance with the
reimbursement arrangements set forth in
MCA's provider agreements with its
Represented Providers or in accordance with
CIGNA's maximum fee schedule in effect at
the time of service. Payor's payment
obligations to MCA hereunder shall be
reduced to the extent of such payments.
2. SERVICES UPON TERMINATION. Upon termination of this Agreement,
MCA through its Represented Providers shall
27
continue to provide Covered Services for specific conditions
for which a Participant was under Represented Provider's care
at the time of such termination so long as Participant retains
eligibility under a Service Agreement, until the earlier of
completion of such services, CIGNA's provision for the
assumption of such treatment by another provider, or the
expiration of twelve (12) months. MCA shall be compensated for
Covered Services provided to any such Participant in
accordance with the compensation arrangements under this
Agreement until sixty (60) days following termination, and
compensation thereafter for continued services authorized by
CIGNA shall at the existing fee for service rates. MCA and its
Represented Providers have no obligation under this Agreement
to provide services to individuals who cease to be
Participants.
3. SERVICES AFTER CESSATION OF CIGNA OPERATIONS. In the event of
CIGNA's insolvency or other cessation of operations, MCA shall
continue to provide Covered Services to Participants through
the period for which premium has been paid. MCA shall continue
to provide Covered Services to Participants confined in an
inpatient facility on the date of insolvency or other
cessation of operations until their discharge. MCA further
agrees that this Section i) shall survive termination of this
Agreement regardless of cause; ii) supersedes any contrary
agreement regarding continuation of Covered Services, after
cessation of operations; and iii) shall not be modified
without the prior written approval of the applicable state or
federal governmental authorities. In no event, however, shall
MCA be obligated to continue to provide services to
Participants under this Agreement for a period of longer than
thirty (30) days or as otherwise required by applicable law.
4. AMENDMENT OF MCA AGREEMENTS. If this Agreement is terminated
or otherwise expires for any reason other than material breach
of its terms by CIGNA, MCA shall cooperate with CIGNA to
provide CIGNA with information necessary to communicate with
Represented Providers directly regarding CIGNA Participants
then receiving Covered Services from Represented Providers. At
CIGNA's option, amend MCA's participation agreements with
Represented Providers to make CIGNA a party to those
agreements for one year beyond the date of termination of this
Agreement. CIGNA shall prepare the amendment on behalf of MCA.
MCA will cooperate with CIGNA in the implementation of, and in
taking any or all action requested by CIGNA to effectuate,
said amendments. Notwithstanding the foregoing, MCA shall not
be required to amend its participation agreements with
Represented Providers as set forth in this section in the
event that this Agreement is terminated by MCA due to material
breach of its terms by CIGNA. This provision shall survive the
termination of this Agreement.
28
5. TERMINATION OF INDIVIDUAL REPRESENTED PROVIDERS. Upon request
by CIGNA, MCA shall prohibit a Represented Provider from
continuing to provide services to Participants under this
Agreement. MCA shall take such action within ninety (90) days
of the receipt of CIGNA's request, unless CIGNA requests
immediate action by MCA.
D. RIGHTS AND OBLIGATIONS UPON TERMINATION
Upon termination of this Agreement for any reason, the rights of
each party hereunder shall terminate, except as otherwise provided
in this Agreement including any Program Attachment to this
Agreement. Any such termination, however, shall not release MCA,
Represented Providers or CIGNA from obligations under this Agreement
prior to the effective date of termination. MCA agrees that for a
period of two (2) years following termination of this Agreement by
CIGNA, MCA shall not reapply for participation in CIGNA's provider
network, unless otherwise agreed by CIGNA.
E. ASSIGNMENT AND DELEGATION OF DUTIES
Neither CIGNA nor MCA may assign duties, rights or interests under
this Agreement unless the other party shall so approve by written
consent. It is expressly understood by the parties that CIGNA and
MCA may perform its obligations under this Agreement through their
affiliates.
F. USE OF NAME
MCA agrees that CIGNA may include descriptive information relating
to MCA and its Represented Providers in literature distributed to
existing or potential Participants, Participating Providers and
customers of CIGNA or a CIGNA Affiliate. Such information shall
include, but not be limited to: Represented Providers' names, office
telephone numbers, addresses, specialties, board certifications and
hospital affiliations. MCA's use of CIGNA's name or CIGNA
Affiliate's name, or any other use of MCA's or its Represented
Providers' names by CIGNA shall be upon prior written approval or as
the parties may agree.
G. INTERPRETATION
The validity, enforceability and interpretation of this Agreement
shall be governed by any applicable federal law and by the
applicable laws of the state in which MCA and its Represented
Providers are licensed and have rendered Covered Services.
29
H. AMENDMENT
1. CIGNA may amend this Agreement and Program Attachments by
providing prior written notice to MCA. Failure of MCA to
object in writing to any such proposed amendment within sixty
(60) days following receipt of notice shall constitute MCA's
acceptance thereof. Notification to CIGNA of rejection of any
proposed amendment means that this Agreement shall remain in
force without the proposed amendment.
2. Notwithstanding the foregoing, in the event that state or
federal law or regulation, or an arbitration or judicial
interpretation of same, should change, alter or modify the
present services, levels of payments to CIGNA or MCA,
standards of eligibility of Participants, or any operations of
CIGNA or MCA, such that the terms, benefits and conditions of
this Agreement must be changed accordingly, then upon notice
from CIGNA or MCA, the other party shall continue to perform
under this Agreement as modified. In this regard, the parties
specifically acknowledge the importance of the financial
arrangements described herein and, therefore, agree, in the
event that the financial arrangements are deemed invalid or
unenforceable, the parties shall use best efforts to preserve
the underlying economic and financial arrangements to the
maximum extent possible. In the event that the parties are
unable to reach agreement, then the financial terms shall be
set pursuant to the dispute resolution process, giving full
effect to the intent of the parties as described in this
subsection.
3. Except as provided above, amendments to this Agreement shall
be agreed to in advance in writing by CIGNA and MCA.
I. PROGRAM ATTACHMENTS
The Program Attachments and Exhibits hereto are a part of this
Agreement and their terms shall supersede those of other parts of
this Agreement in the event of a conflict.
J. ENTIRE CONTRACT
This Agreement together with all Program Attachments and Exhibits
contains all the terms and conditions agreed upon by the parties,
and supersedes all other agreements, express or implied, regarding
the subject matter.
K. NOTICE
Any notice required hereunder shall be in writing and shall be sent
by United States mail, postage prepaid, to CIGNA and MCA at the
addresses set forth below:
Al Perry, President and COO
30
3 Huntington Quadrangle 2S
Melville, NY 11747
If to CIGNA: CIGNA HealthCare
National Contracting
900 Cottage Grove Road, A-136
Hartford, CT 06152
And CIGNA HealthCare
Legal Department
900 Cottage Grove Road, W-26
Hartford, CT 06152
L. ENFORCEABILITY AND WAIVER
The invalidity and nonenforceability of any term or provision of
this Agreement shall in no way affect the validity or enforceability
of any other term or provision. The waiver by either party of a
breach of any provision of this Agreement shall not operate as or be
construed as a waiver of any subsequent breach thereof.
M. DISPUTE RESOLUTION
1. Any disputes between the parties arising with respect to the
performance or interpretation of the Agreement shall first be
resolved in accordance with the dispute resolution procedures
outlined in the Program Requirements .
2. In the event that a dispute is not resolved through the
aforementioned process, the parties shall attempt in good
faith to resolve the dispute promptly by negotiation between
designated representatives of the parties who have authority
to settle the dispute. If the matter has not been resolved
within sixty (60) days of a party's request for negotiation,
either party may initiate arbitration by providing written
notice to the other party.
3. If a party initiates arbitration as provided above, the
proceeding shall be governed by the Rules of the American
Arbitration Association then in effect and shall be held in
the jurisdiction of MCA's domicile. The parties will jointly
appoint a mutually acceptable arbitrator. If the parties are
unable to agree upon such an arbitrator within thirty (30)
days after a party has given the other party written notice of
its desire to submit a dispute for arbitration, then either
party may apply to the American Arbitration Association for
the appointment of an arbitrator or, if such Association is
not then in existence or does not desire to act in the matter,
each party shall appoint an arbitrator of its choice. The
appointed arbitrators will select a third arbitrator, and the
panel of three arbitrators will hear the parties and settle
31
the dispute. Each party shall assume its own costs, but the
compensation and expenses of the arbitrator(s) and any
administrative fees or costs shall be borne equally by the
parties. Arbitration shall be the exclusive remedy for the
settlement of disputes arising under this Agreement. The
decision of the arbitrator(s) shall be final, conclusive and
binding, and no action at law or in equity may be instituted
by either party other than to enforce the award of the
arbitrator(s). Judgment upon the award rendered by the
arbitrator(s) may be entered in any court of competent
jurisdiction.
N. NON-SOLICITATION
During the term of this Agreement and for a period of one (1) year
from the date of termination, MCA shall not solicit Participants to
enroll in any other insurance or health coverage or alternative
delivery system, nor shall CIGNA or MCA actively solicit any
employees of the other to be employed by or contracted with the
other party in any capacity related to services to be performed
under this Agreement during this Agreement, and for a period of one
(1) year thereafter without the other party's written consent.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
32
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the
EFFECTIVE DATE.
EFFECTIVE DATE: CIGNA
January 1, 2004 By: /s/ William Lamoreaux
----------------------------
Title: Senior Vice President
Address: 900 Cottage Grove Road
Hartford, CT 06152
Date Signed: 12/12/03
MCA
Gentiva Health Services, Inc.
Please print or type name
By: /s/ Vernon A. Perry
----------------------------
Signature
Title: President
Address
300 Huntington Quadrangle 2S
Melville, NY 11747
Federal Tax Identification Number
11-3454103
Date Signed: 12/8/03
Under penalties of perjury, by executing this Agreement above, MCA hereby
certifies that 1) the taxpayer identification number set forth above is the
correct taxpayer identification number; and 2) MCA is not subject to backup
withholding because it a) is exempt from backup withholding; or b) has not been
notified by the Internal Revenue Service (IRS) that it is subject to backup
withholding as a result of a failure to report all interest or dividends; or c)
the IRS has notified MCA that it is no longer subject to backup withholding.
GTKP EXB - 1
GENTIVA CONTRACT EXHIBITS
I. REPRESENTED PROVIDER AGREEMENT
II. REQUIRED ENCOUNTER DATA ELEMENTS
III. INFORMATION REQUIRED FOR A COMPLETE ORDER
IV. CLEAN CLAIM DATA REQUIREMENTS
V. GENTIVA CARECENTRIX SUBSIDIARIES
VI. GUIDELINES FOR HOME & COMMUNITY CARE SPECIALIST
VII. PERFORMANCE METRICS
VIII. REPORTING TIMELINE
IX. SAFE HOME CARE ADMISSION CRITERIA
X. REPRESENTED PROVIDER REQUIRED DATA ELEMENTS
XI. JOINT COMPLAINT MANAGEMENT PROCESS
XII. 2003 STANDARDS FOR DELEGATION OF CREDENTIALING
XIII. DME GUIDELINES GRID
XIV. PARTICIPATING CIGNA SUBSIDIARIES & AFFILIATES
XV. HOME HEALTH CARE BENEFIT CLARIFICATION GUIDELINE
XVI. STANDARDS FOR DELEGATION OF CLINICAL SERVICE MANAGEMENT ACTIVITIES
XVII. EXCLUSIONS DOCUMENT
XVIII. CLINICAL SERVICE MANAGEMENT DELEGATION GRID
XIX. MCA REPRESENTED PROVIDER APPLICATION
XX. CONFIDENTIALITY AGREEMENT
XXI. CIGNA NATIONAL CAPITATION HMO MARKET EXCLUSIONS
XXII. STANDARDS FOR DELEGATION OF UTILIZATION MANAGEMENT ACTIVITIES FOR
CIGNA HEALTHCARE OF TEXAS, INC.
XXIII. MANAGED CARE ALLIANCE AGREEMENT CREDENTIALING PROCESSES
XXIV. FUTURE YEARS RATE METHODOLOGY
EXHIBIT I
REPRESENTED PROVIDER AGREEMENT
GENTIVA CARECENTRIX
PROVIDER AGREEMENT
THIS PROVIDER AGREEMENT is entered into as of this ____ day of
_______2003, by and between ________________ located in ________________
("PROVIDER") and Gentiva CareCentrix, Inc., located in Melville, New York
("GENTIVA").
PROVIDER's federal tax ID number: ________________________________.
GENTIVA has entered into agreements with certain managed care entities
("Payors") which may require that health care services be delivered to their
respective enrollees;
GENTIVA desires to contract with PROVIDER to be available to provide
certain of those services, and PROVIDER is willing to provide such services to
the managed care patients designated by GENTIVA.
NOW THEREFORE, PROVIDER and GENTIVA agree to the following terms and
conditions.
1. RESPONSIBILITIES OF PROVIDER.
1.01 GENERAL. PROVIDER shall, to the extent requested by GENTIVA, sell the
home care services described on Schedule A hereto (the "Services") to GENTIVA.
PROVIDER shall coordinate the provision of Services to patients pursuant to this
Agreement with all other providers involved in each such patient's care. GENTIVA
is not required to purchase any minimum amount of Services. Upon GENTIVA's
request for Services, PROVIDER assumes full responsibility for accepting the
patient to home care and for the provision of the Services.
1.02 QUALIFICATIONS. PROVIDER represents and warrants that:
(a) All of PROVIDER's employees, agents and representatives hold and
shall continue to hold all federal, state and local licenses, registrations,
certifications and training required by law, regulation and accreditation
standards in order to render the Services pursuant to this Agreement. All RNs,
LPNs, Pharmacists, Pharmacy Techs, PTs, OTs, MSWs and other professional and
paraprofessional personnel providing the Services on behalf of PROVIDER must be
qualified and have demonstrated competency,
clinical experience and training in each type of clinical service they will
provide. At GENTIVA's request, PROVIDER shall provide to GENTIVA copies of
applicable licenses and other evidence of qualifications.
(b) PROVIDER is duly licensed to provide the Services and shall
furnish to GENTIVA copies of PROVIDER's valid license, certificate and
accreditation applicable to the Services and itemized in Schedule A hereto. In
lieu of such accreditation, PROVIDER must demonstrate substantial evidence of
compliance with current JCAHO, CHAP, CARF OR ACHC accreditation standards.
1.03 PERFORMANCE STANDARDS. PROVIDER shall render the Services with the
same standard of care, skill and diligence customarily used by similar providers
in the community in which such services are rendered, and shall comply with all
of the standards, terms and conditions set forth on Schedule A and all relevant
standards, policies and procedures of GENTIVA (including those set forth in the
Provider Manual) and PROVIDER. PROVIDER shall ensure that its employees maintain
a neat, clean and professional appearance at all times.
1.04 QUALITY MANAGEMENT. PROVIDER shall fully cooperate with GENTIVA in
GENTIVA's quality management, utilization review, outcomes monitoring, client
satisfaction, complaint/grievance, credentialing and recredentialing programs,
including participating in any meetings deemed appropriate by GENTIVA. Nothing
in this Agreement shall render GENTIVA responsible for the manner or means by
which PROVIDER renders the Services nor shall in any way affect PROVIDER's
obligation to exercise independent medical judgment in rendering health care
services to patients.
1.05 PERSONNEL CANCELLATION. After Services have been scheduled and
confirmed, PROVIDER is responsible for delivery of the Service, and shall, in
the event of any personnel cancellation, supply a qualified caregiver
replacement of PROVIDER. In the event that PROVIDER cannot service the patient,
PROVIDER shall notify GENTIVA immediately of cancellation.
1.06 COMPLIANCE WITH LAWS AND ACCREDITATION BODIES; NOTICE OF CERTAIN
ACTIONS.
(a) PROVIDER shall comply with all applicable federal, state and
local laws, rules and regulations, and if applicable, JCAHO or CHAP (or CARF)
(or ACHC) accreditation standards. PROVIDER shall cooperate with GENTIVA in
responding to JCAHO or CHAP (or CARF) (or ACHC) inquiries, including without
limitation surveys of PROVIDER premises and records by JCAHO or CHAP (or CARF)
(or ACHC).
(b) PROVIDER shall notify GENTIVA immediately (i) if there is a
change affecting PROVIDER's or any PROVIDER's personnel's licensure,
accreditation or certification, or (ii) if a professional, regulatory or legal
body (x) serves formal notice that it may take any action due to deficiencies,
poor performance or failure to comply with standards, rules or regulations
imposed by such professional or regulatory body or (y) initiates an
investigation which is material. PROVIDER shall give GENTIVA prompt written
notice of any claims against PROVIDER's professional liability coverage relating
to quality of care issues.
(c) To the extent that the rates charged by PROVIDER pursuant to
Schedule B hereof represent a discount or reduction in the amount PROVIDER
generally charges for the Services, the parties agree to comply at all times
with the provisions of 42 C.F.R. Section 1001.952(h), commonly known as the
"discount safe harbor."
1.07 INCIDENT REPORTS AND COMPLAINTS. PROVIDER shall inform GENTIVA
immediately of any incident or circumstance relating to any Services which
adversely affects the health or safety of a Payor's enrollee, and/or of
PROVIDER's receipt of any oral or written complaint relating to Services
provided hereunder. PROVIDER shall provide copies to GENTIVA of an incident
report and such other information related to any such incident and shall fully
cooperate with GENTIVA in any investigation of such incident or complaint.
1.08 UNSATISFACTORY PERSONNEL. If GENTIVA reasonably determines that any
PROVIDER personnel is unsatisfactory, GENTIVA may require PROVIDER to not use
designated personnel, or require personnel to leave a patient's home or other
care delivery site, (and in such case shall notify PROVIDER promptly). In any
such case, GENTIVA's obligation to compensate PROVIDER shall be limited to the
number of hours actually worked or the Services actually provided, and PROVIDER
shall not reassign the individual to provide Services under this Agreement
without the prior approval of GENTIVA.
1.09 SUBSTITUTION.
(a) If any service not listed in Schedule A is required by GENTIVA,
PROVIDER shall use reasonable efforts to provide such service and adjust its
fees as mutually agreed.
(b) PROVIDER shall utilize generic drugs whenever possible and
appropriate.
1.10 WARRANTIES. (a) PROVIDER warrants that the Services including any
product(s) delivered in connection with the Services, when used in accordance
with the directions provided by PROVIDER, are fit for the intended purpose and
indications described in the labeling, that all
labeling is accurate, legible and can reasonably be expected to be understood by
the patient receiving the Services and that all equipment (if any) provided
under this Agreement shall be in good working order and condition, and properly
cleaned and disinfected between uses.
(b) To the extent that PROVIDER provides any equipment hereunder,
PROVIDER shall provide or arrange for at PROVIDER's expense all necessary
on-site maintenance and/or repair for equipment (including provision of all
necessary parts, mechanisms and devices) in order to maintain the equipment in
good condition and working order. PROVIDER shall provide or arrange for
twenty-four (24) hour per day, seven (7) day per week maintenance and repair
service by trained, competent and experienced personnel; provided however, that
PROVIDER may elect to pick up the equipment needing maintenance and/or repair
and replace it with equipment in operable condition, rather than repair the
equipment immediately. PROVIDER shall, upon GENTIVA's request, furnish copies of
all applicable inspection reports, manufacturer's operating manuals,
instructions and related materials relating to the equipment.
1.11 ACCURATE INFORMATION. PROVIDER represents and warrants that all
information (including without limitation information contained in the
application materials) which PROVIDER has furnished to GENTIVA to induce GENTIVA
to enter into this Agreement with PROVIDER is true and accurate, and that
PROVIDER shall promptly notify GENTIVA of any change in the information
contained in such materials.
1.12 REPORTS. PROVIDER shall prepare, maintain and deliver to GENTIVA any
reports and documentation specified in the Provider Manual or otherwise
reasonably requested in writing by GENTIVA including without limitation,
pertaining to accurate inventories of solutions, medications, drugs, equipment
and ancillary supplies for each patient provided by PROVIDER hereunder, and a
listing of all equipment in use by each patient, provided by PROVIDER, including
the number of months patients have had the equipment.
1.13 ADDITIONAL PAYOR SOURCES. PROVIDER shall promptly notify GENTIVA when
it becomes aware of any additional primary or secondary payor sources for any
patient.
1.14 EMPLOYER OBLIGATIONS. PROVIDER shall maintain full responsibility as
employer of its personnel for payment of their wages and other compensation, and
for any applicable mandatory withholdings and contributions such as federal,
state and local income taxes, social security taxes, worker's compensation,
unemployment and disability coverages.
2. RESPONSIBILITIES OF GENTIVA.
2.01 GENERAL. For each patient for whom GENTIVA requests Services, GENTIVA
shall deliver by facsimile to PROVIDER a written authorization confirming a
telephone request for service by next business day, and for services provided in
an emergency GENTIVA shall provide authorization by next business day.
2.02 REQUESTS FOR PERSONNEL. GENTIVA shall attempt to request personnel at
least 24 hours prior to reporting time and shall provide information regarding
reporting time and assignment to PROVIDER at the time of the initial call.
2.03 PAYMENTS. GENTIVA shall compensate PROVIDER as provided in Article 3
below.
3. COMPENSATION.
3.01 INVOICES. PROVIDER shall provide GENTIVA with monthly invoices (on
HCFA 1500 or UB92 forms) with an itemization of all Services requested by
GENTIVA during the previous month. PROVIDER shall not bill any Payor directly
unless PROVIDER shall have obtained GENTIVA's advance written consent in each
instance.
3.02 RATES. GENTIVA shall pay to PROVIDER the rates set forth in SCHEDULE
B for the Services provided in accordance with this Agreement. These rates are
all inclusive and PROVIDER shall receive no additional compensation for reports,
information exchanges, or other services contemplated by this Agreement.
3.03 PAYMENT TERMS. GENTIVA shall pay PROVIDER the undisputed invoiced
amount under this Agreement within forty five (45) days from GENTIVA's receipt
of a properly completed invoice from PROVIDER.
3.04 NON-COVERED SERVICES AND REIMBURSEMENT TO GENTIVA. Notwithstanding
the foregoing, GENTIVA shall not be obligated to pay for and PROVIDER shall be
required to reimburse to GENTIVA any payment made for any Services (a) that were
not (i) requested by GENTIVA (except for any emergency services), or (ii) in
accordance with GENTIVA's written authorization, or (iii) in accordance with the
physician plan of care; (b) for which a properly completed invoice is not
received by GENTIVA within 45 days of the date the Services are rendered; (c)
until such time as GENTIVA shall have received from PROVIDER the reports and
documentation referred to in Section 1.12; (d) delivered to a patient not
enrolled in
the Payor health plan at the time Services were delivered; or (e) if the
respective Payor was not the primary payor at the time Services were delivered.
3.05 HOLD HARMLESS.
(a) PROVIDER agrees that in no event, including but not limited to
nonpayment by GENTIVA, insolvency of GENTIVA or breach of this Agreement, shall
PROVIDER bill, charge, collect a deposit from, seek compensation, remuneration
or reimbursement from, or have any recourse against a patient or persons acting
on his/their behalf for Services provided hereunder. This provision does not
prohibit PROVIDER from collecting fees for non-covered services delivered to
patients, subject to subsection (b) below. PROVIDER shall not collect any
applicable Co-payment, deductible or coinsurance (determined as a percentage of
charges) from patients.
(b) When PROVIDER has been notified in advance that a particular
service is not medically necessary, PROVIDER shall not charge the patient for
such service unless, in advance of the provision of such service, PROVIDER has
notified the patient that the service is not covered and the patient
acknowledges in writing that he or she shall be responsible for payment of
charges for such services.
(c) PROVIDER agrees that the provisions of this Section 3.05 shall
survive the termination of this Agreement regardless of the reason for
termination, and shall be construed for the benefit of the patients, and that
this provision supersedes any oral or written agreement to the contrary now
existing or hereafter entered into. Any modification to the provisions of this
Section shall become effective 15 days after the applicable regulatory authority
shall have received written notice of such proposed changes.
4. TERM AND TERMINATION.
4.01 (a) TERM. Upon execution by both parties, this Agreement shall be in
effect for one (1) year from the date first written above and thereafter shall
automatically renew for subsequent one year terms.
(b) TERMINATION. (i) Either party may terminate this Agreement if
any warranty, representation or material covenant of the other party contained
herein is untrue or is breached during the term hereof, and any such breach is
not cured to the satisfaction of the other party within fifteen (15) days after
receipt of the written notice from the nonbreaching party; (ii) either party, at
its option, may terminate this Agreement at any time upon 90 days written notice
to the other party,
and (iii) PROVIDER may terminate this Agreement during the first thirty (30)
days after the date of this Agreement if PROVIDER objects to the terms and
conditions set forth in GENTIVA's Provider Manual. If PROVIDER does not
terminate this Agreement during the first thirty (30) day period, then PROVIDER
shall have waived its right to terminate this Agreement based on objections to
the Provider Manual.
4.02 ORDERLY TERMINATION. Upon termination of this Agreement, PROVIDER
shall reasonably cooperate with GENTIVA to ensure that patients are not left
without medically necessary care. PROVIDER shall, at GENTIVA's request, continue
to provide the Services to any patient receiving the Services at the time of
such termination for thirty (30) days thereafter and GENTIVA shall pay PROVIDER
in accordance with the rates hereunder.
5. MISCELLANEOUS TERMS.
5.01 INDEMNIFICATION.
(a) GENTIVA and PROVIDER ("Indemnitor") shall each defend, indemnify
and hold the other party ("Indemnitee") harmless and each of Indemnitee's
officers, directors, employees, agents and stockholders (the "Indemnitee
Parties"), from and against any and all claims, liabilities, losses, damages,
costs or expenses of any kind (including reasonable attorney's fees and
disbursements) ("Indemnified Amounts") incurred by the Indemnitee Parties as a
result of Indemnitor's performance under this Agreement, but only to the extent
that such Indemnified Amounts are caused by the negligence or other wrongful act
or omission of Indemnitor.
(b) Indemnitee shall notify the Indemnitor in writing of the
assertion of any claim, or the commencement of any suit, action or proceeding by
any party in respect of which indemnity may be sought under this Agreement
within thirty (30) days of such assertion or commencement. Failure to notify the
other party shall result in the waiver of indemnity rights with respect to such
claim, suit, action or proceeding, but only to the extent that the Indemnitor is
prejudiced by such failure. The parties shall cooperate with each other in the
defense of any such claim, suit, action or proceeding.
5.02 CORPORATE INTEGRITY COMPLIANCE. PROVIDER represents and warrants that
currently, and throughout the term of this Agreement (including any extended
term), (I) neither PROVIDER, nor any of its employees or agents who may perform
any of the services or obligations under this Agreement ("PROVIDER
Individuals"), shall (A) have been convicted of a criminal offense that would
trigger exclusion pursuant to 42 USC 1320a-7(a) or (b) unless such entity or
individual has been
reinstated, or (B) be listed by a Federal agency as currently suspended,
debarred, excluded or otherwise ineligible for Federal program participation
(including as reflected on the Cumulative Sanctions Report of the United States
Health and Human Services Office of the Inspector General's, or the United
States General Services Administration's List of Parties Excluded from Federal
Procurement and Non-Procurement Programs). Any breach of this representation and
warranty shall result in immediate termination of this Agreement with respect to
the affected individual or entity, in addition to any other available remedies.
5.03 INSURANCE.
(a) Each party shall maintain at its sole expense the following
insurances: (i) general liability coverages (including without limitation
product liability and contractual liability), in an amount not less than One
Million Dollars ($1,000,000) each occurrence and Two Million Dollars
($2,000,000) in the aggregate, for bodily injury and property damage; (ii)
professional liability (medical malpractice) coverage in the amount of One
Million Dollars ($1,000,000) each occurrence and Three Million Dollars
($3,000,000) in the aggregate (iii) statutory workers' compensation coverage
meeting all state and local requirements, including employers' liability
coverage in an amount not less than One Million Dollars ($1,000,000) per person;
(iv) automobile liability insurance for owned, non-owned and hired automobiles
with a minimum combined single limit of One Million Dollars ($1,000,000) for
bodily injury and property damage each occurrence and (v) a client fidelity (3rd
party) bond in the amount of Fifty Thousand Dollars ( $50,000). All Represented
Providers shall at minimum maintain limits in accordance with those required by
the state(s) where the Represented Provider is licensed.
(b) PROVIDER agrees to ensure that any nurse, pharmacist or other
licensed professional who performs an activity pursuant to this Agreement on its
behalf and is not an employee of PROVIDER carry the same insurance coverages
PROVIDER is required to maintain. This includes but is not limited to (i)
malpractice liability insurance in an amount not less than One Million Dollars
($1,000,000) per occurrence and Three Million Dollars ($3,000,000) in the
aggregate and (ii) general liability insurance in an amount not less than One
Million Dollars ($1,000,000) each occurrence and Two Million Dollars
($2,000,000) in the aggregate, for bodily injury and property damage.
(c) The general liability policy shall name Gentiva as an additional
insured and be endorsed to cover liability assumed by the PROVIDER under the
indemnity provisions of this Agreement. With respect to the workers'
compensation policy, PROVIDER shall require the carrier to waive all rights of
subrogation against Gentiva. Each party shall give the other immediate notice of
any changes in the policy of insurance or
self-insurance maintained under this Agreement. Each party shall require any
insurer to give the party at least 30 days' advance notice of any cancellation,
lapse, termination, or amendment of any policy of insurance. In the event that
coverage is of a claims-made variety, each party shall continue to maintain
policies of insurance in effect to cover claims that occur during the term of
this Agreement for a period of 5 years beyond the term or any renewal term of
this Agreement. Failure to maintain such coverage shall be grounds for
termination of this Agreement for cause, and the breaching party shall indemnify
the other party for any loss incurred as a result of the breaching party's
failure to maintain such coverage, which obligation to indemnify shall survive
termination of this Agreement.
5.04 ASSIGNMENT/SUBCONTRACTING. Neither party may assign or subcontract
its rights or obligations under this Agreement without the prior written consent
of the other party which shall not be unreasonably withheld or delayed,
provided, however, either party may assign this Agreement to any entity owned by
or under common control with such party. The assigning party shall remain fully
responsible for compliance with this Agreement.
5.05 ACCESS TO BOOKS AND RECORDS.
(a) During the term of this Agreement and for three (3) years
following termination of this Agreement, GENTIVA and its duly authorized agents,
during regular business hours and upon reasonable notice and demand, shall have
access to all information and records related to Services rendered by PROVIDER
under this Agreement or to the effectiveness of GENTIVA's utilization
management, quality improvement, claims management and payment and other
programs.
(b) For at least five (5) years after the date of delivery of
service, PROVIDER shall maintain and readily make available to government
agencies with regulatory authority, medical and administrative records relating
to Services, pursuant to applicable law or regulation.
5.06 NON-DISCLOSURE AND CONFIDENTIALITY; NON-SOLICITATION.
(a) PROVIDER shall not disclose the terms of this Agreement,
including but not limited to any fee schedule, without the prior written consent
of GENTIVA.
(b) PROVIDER and GENTIVA shall maintain the confidentiality of all
confidential information regarding patients in accordance with any
applicable laws and regulations. PROVIDER shall provide GENTIVA with all records
and information necessary to carry out GENTIVA's utilization management, quality
improvement, claims management and payment and other relevant programs (and
shall obtain any consents which may be required to allow such disclosure to
GENTIVA and to allow GENTIVA to disclose such information to third parties for
such purposes).
(c) PROVIDER acknowledges that in order to provide the Services
hereunder, it may from time to time receive proprietary or confidential
information from GENTIVA, including without limitation, patient identification,
customer and client identification and lists, accounts, business operating
methods, programs, policies, procedures and forms. PROVIDER shall keep such
information confidential and (unless otherwise required by law) shall not
disclose it to any person except as authorized in writing by GENTIVA.
(d) During the term of this Agreement, PROVIDER shall not request,
advise, or solicit any client, customer, supplier, or patients serviced by
PROVIDER pursuant to this Agreement to curtail, terminate or cancel their
relationship with GENTIVA.
(e) PROVIDER shall not make any public announcement or press release
with respect to its relationship to GENTIVA described in this Agreement or any
other matter in connection with this Agreement, without the prior written
consent of GENTIVA.
(f) The provisions of this Section shall survive the termination of
this Agreement. PROVIDER acknowledges that if the provisions of this Section are
breached, the damage to GENTIVA shall be irreparable and thereby shall entitle
GENTIVA to obtain immediate and permanent injunctive relief restraining PROVIDER
from such breach or threatened breach of the provisions hereof, without need to
post any bond. PROVIDER further acknowledges that such injunctive relief is in
addition to any other legal or equitable remedies GENTIVA may be entitled to
under this Agreement.
5.07 PROTECTED HEALTH INFORMATION: Gentiva and Provider agree that all
member individually identifiable health-related information ("Protected Health
Information") shall be used and disclosed only as permitted by applicable state
and federal laws, including without limitation applicable Administrative
Simplification provisions of the Health Insurance Portability and Accountability
Act of 1996 and regulations promulgated there-under ("HIPAA"). Gentiva and
Provider shall also adopt and maintain procedures consistent with applicable law
to safeguard the security and confidentiality of Protected Health Information.
Provider shall cooperate and assist Payer and/or Gentiva as needed to obtain all
necessary or required patient consents in compliance with applicable state and
federal law. Except as required to carry out Provider's obligations under this
Agreement, Provider shall not disclose, sell or otherwise transfer or provide
any Protected Health Information or other Confidential Information on any
individually identifiable patient basis to any third party. In no event shall
Provider sell any Protected Health Information or other Confidential Information
of Payer or Gentiva, whether or not such information is individually
identifying.
5.08 USE OF NAME. Neither party may use any trade name or service mark of
the other party or any material protected by patents, trademarks or copyrights
without the express written permission of the other party, except that either
party may list the other party in any relevant directory of services and related
marketing materials of such party, or, in GENTIVA's case, of any Payor
Directories.
5.09 INDEPENDENT CONTRACTORS. The parties enter into this Agreement as
independent contractors, and nothing contained in this Agreement shall be
construed to create a partnership, joint venture, agency or employment
relationship between the parties or any of their respective officers, directors
or employees.
5.10 CORPORATE COMPLIANCE PROGRAM. GENTIVA maintains a voluntary corporate
compliance program to detect and prevent illegal and unethical activities.
PROVIDER confirms that it has been informed of GENTIVA corporate compliance
hotline (1-888-9NOTIFY) for reporting suspected fraud, abuse or other illegal or
unethical activities, and will assure that all employees or agents of GENTIVA
who may perform any of the services or obligations under this Agreement are
informed of the same and instructed to report accordingly.
5.11 OWNERSHIP AND USE OF DATA AND INFORMATION. GENTIVA shall own all
data, documents, software programs and other information generated in the
performance of this Agreement, including all patient information submitted by
PROVIDER pursuant to Section 5.05(b) above. These provisions shall not prohibit
PROVIDER from owning data specific to its patients and created by PROVIDER.
Subject to the confidentiality obligations under this Agreement and those
imposed by law, GENTIVA shall have the right to use any such information in the
general course of its business.
5.12 AMENDMENT AND WAIVER.
(a) Subject to the provisions of subsection (b) of this Section, no
amendment, modification or supplement of this Agreement, and no waiver hereunder
shall be valid or binding unless set forth in writing and duly executed by a
duly authorized signatory of the party against whom
enforcement of the amendment, modification, supplement or waiver is sought.
Waiver by either party of an event of default or breach of the provisions of
this Agreement shall not constitute a waiver of any other event of default or
breach or right, nor of the same event of default or breach or right on a future
occasion.
(b) GENTIVA may modify any provision of this Agreement upon thirty
(30) days prior written notice to PROVIDER. PROVIDER shall be deemed to have
accepted GENTIVA's modification if PROVIDER fails to object to such
modification, in writing, within the thirty (30) day notice period. In the case
of modifications that materially affect the responsibilities or rights of
PROVIDER, PROVIDER shall have the right to terminate this Agreement on thirty
(30) days prior written notice to GENTIVA delivered within the 30 day notice
period referred in the preceding sentence. Amendments required by legislative,
regulatory or other legal authority, as reasonably determined by GENTIVA, shall
not require the consent of GENTIVA or the PROVIDER and shall be effective
immediately upon PROVIDER's receipt of notice of amendment.
5.13 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties, supersedes all discussions and writings by and between the
parties which may have occurred prior to or contemporaneously with entering into
this Agreement and shall be binding upon and inure to the benefit of the parties
and their permitted successors and assigns.
5.14 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York.
5.15 SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable under current or future laws, the remainder of the
provisions of this Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, as long as the invalid provision is
not material to the overall purpose and operation of this Agreement.
5.16 NOTICES. Notices provided hereunder shall be given in writing and
sent to the addresses below by hand delivery; facsimile, certified mail, return
receipt requested; or nationally recognized overnight courier. Any address or
name specified may be changed by a notice given by the addressee to the other
party in accordance with this Section. Any notice of demand or other
communication shall be deemed given and effective as of the date of receipt.
PROVIDER shall notify GENTIVA in writing within seven days after the
occurrence of:
a. A change of the PROVIDER'S business address or of any
Represented PROVIDER'S address, including any relocation or
elimination of a location.
b. The termination, reduction or cancellation of the insurance
coverages required under this Agreement;
c. Any material changes in the Providers ownership, to the extent
that the ownership or control of the Provider changes by
twenty percent (20%) or more;
d. Any situation which might materially affect the Group's or a
Represented PROVIDER'S ability to carry out the duties under
this Agreement or to meet any Credentialing/Re-Credentialing
criteria.
5.17 HEADINGS. The headings in this Agreement are for convenience only and
shall not be considered a part hereof or affect the construction or
interpretation of any provisions of this Agreement.
5.18 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall constitute but one and the same
instrument.
5.19 SURVIVAL OF OBLIGATIONS. Termination of this Agreement for any cause
shall not release either party from any liability which at the time of
termination has already accrued to the other party or which thereafter may
accrue in respect to any act or omission occurring prior to termination from any
obligation which is expressly stated herein to survive termination.
5.20 NON-DISCRIMINATION. Neither PROVIDER or GENTIVA shall discriminate in
employment or provision of services with respect to age, race, color, religion,
veteran status, sex, national origin, disability, source of payment or any other
category protected by law.
5.21 ARBITRATION. Any dispute relating to this Agreement shall be settled
by binding arbitration conducted in accordance with the Health Care Arbitration
Rules of the NHLA Alternative Dispute Resolution Services.
5.22 MEDICARE PROVISIONS. GENTIVA may request that PROVIDER provide
services to enrollees PAYOR's Medicare+Choice plan ("PAYOR PLAN") and PROVIDER
recognizes that federal regulations impose certain requirements on all
providers, including PROVIDER, rendering services to individuals enrolled in
Medicare+Choice plans. Therefore, PROVIDER shall comply with all of the
standards, terms and conditions set forth on Schedule C.
THEREFORE, the authorized representatives of the parties have executed
this Agreement as of the date first written above.
In addition to the terms and conditions identified in previous sections of the
Provider Agreement, PROVIDER agrees to the provisions contained in this
schedule:
A. SERVICES TO BE PROVIDED
1. Home Health Agency
[ ] Skilled Nursing [ ] Pediatric Specialty
[ ] Therapists [ ] Homemakers/Companions
[ ] Rehab Paraprofessional [ ] Medical Social Workers
[ ] Home Health Aides/PCW [ ] Live-in
[ ] Other ________________
2. Home Infusion Therapy
[ ] Infusion Products
[ ] Full Service
[ ] Ambulatory Center
6. Women's Health Services
[ ] High Risk OB - Level 1 [ ] Low Risk OB
[ ] High Risk OB - Level 2 [ ] Prenatal Education
[ ] High Risk OB - Level 3 [ ] HUAM
8. Quality Assurance/Quality Improvement Program
[ ] Proof of Quality Assurance/Quality Improvement Program
9. Other - specify ____________________________________________
B. REQUIRED QUALIFICATIONS
Evidence of meeting the following qualifications shall be presented:
YES NO
--- --
1. Valid State Pharmacy license as required. _____ _____
2. Valid individual pharmacist licenses as required. _____ _____
3. DEA Registration as required. _____ _____
4. Sterile area/clean room certifications as required. _____ _____
5. Valid unrestricted state operating license or
certificate as required. _____ _____
6. Medicare Home Health Agency Certification
(may be waived if other credentials are acceptable
to GENTIVA). _____ _____
7. Accreditation by JCAHO, CHAP, ACHC (or CARF for Rehab)
(may be waived if other credentials are acceptable
to GENTIVA). _____ _____
8. Medicare/Medicaid Sanctions _____ _____
9. Adequate Professional and General Liability Insurance _____ _____
C. PERFORMANCE STANDARDS
The PROVIDER agrees to adhere to the following standards of performance:
1. Submit changes in the following to the Provider Relations Department
in Melville, New York within a timely manner:
a. Address(es).
b. Telephone number(s).
c. Name of key organizational contact(s).
d. Name(s) of key local operations contact(s).
e. Accreditation status.
f. Legal status; i.e., pending or newly active litigation
relative to cases, only.
g. Licensing status.
h. Liability insurance coverage.
i. Days/hours of operation.
j. Certification status.
k. Service/product capabilities.
l. Addition/closure of operation/business site.
2. Maintain 24-HOUR ON-CALL COVERAGE 7 DAYS PER WEEK and respond to
patient and/or contacts within 30 MINUTES of call after regular
business hours and on holidays (unless otherwise specified by
contract).
3. Notify the Care Manager IMMEDIATELY if not able to service a
referred case.
4. Start care and assessment with in 24 HOURS following acceptance of
referral and comply with any other requirements of the individual
health plans serviced and individual case needs.
5. Notify the Care Manager IMMEDIATELY if assessment must be delayed.
6. Notify the Care Manager within 2 HOURS of assessment if unable to
service the case.
7. Render no services unless so authorized by the referring Care
Manager and ordered by the primary physician except in emergencies
(see #19.).
8. Notify the Care Manager of additional sources of reimbursement upon
their identification.
9. Provide after hours (on call) home visits as appropriate and
necessary in situations which cannot be resolved by telephone
consultation.
10. Notify the Care Manager of changes in patient/family status WITHIN
ONE (1) BUSINESS DAY upon occurrence/identification, including
illness, hospitalization, death or other change affecting continued
service delivery.
11. Follow/report patient status, progress and projected and actual date
of discharge given hospitalization/institutionalization while on
service.
12. Respond to all requests for contact from personnel WITHIN ONE (1)
BUSINESS DAY.
13. Notify the Care Manager of patient, family, physician, health plan
Case Manager complaint(s) upon occurrence and in accordance with the
parameters established in the section of the Provider Manual on
Complaint Management.
14. Submit/report discharge data to the Care Manager WITHIN ONE (1)
BUSINESS DAY of completion of service/product delivery.
15. Routinely submit requests for care reauthorization no later than 24
HOURS prior to completion of authorized care and obtain physician
orders for reauthorized services/products.
16. Contact the Care Manager within TWO (2) BUSINESS DAYS providing
unauthorized emergency care on a non business day or after business
hour.
17. Submit documentation as follows:
a. Confirmation of care within 24 HOURS of start of care.
b. Physician's orders and other clinical documentation upon
confirmation of start of care and reauthorization request.
c. Objective reason(s) for reauthorization of care prior to
completion of authorized care.
d. Discharge summary within 24 HOURS of completing
service/product delivery.
e. Assessment reports, progress reports, organizational forms, or
other organizational documents within 48 HOURS of request by
the Care Manager.
18. Report adverse incidents, as defined in Problem Management Section
of GENTIVA's Provider Manual, to the Care Manager within 24 hours of
occurrence.
19. Respond to grievances/complaints filed against the Provider within 2
BUSINESS DAYS and pursue timely resolution acceptable to GENTIVA
staff.
20. SUBMIT NO BILLING TO THE HEALTH PLAN for services/products delivered
to patients unless specifically notified to do so by the GENTIVA .
21. Treat all patients, families, physicians, health plan
representatives, other providers and personnel with respect, dignity
and professionalism.
D. ADDITIONAL EVALUATION
Provider performance also is evaluated by:
1. Patient, physician and customer satisfaction.
2. Accurate and timely billing.
3. Presence/absence of adverse clinical incidents.
4. Presence/absence of provider-related complaints/grievances from
patients, physicians and/or health plan customers.
In the event of any conflict between these performance standards and any
Payor(s) requirements which are more stringent or restrictive than these
performance standards, the Payor(s) requirements shall control and be binding.
SCHEDULE B
TO PROVIDER AGREEMENT
REIMBURSEMENT SCHEDULE (SEE ATTACHED)
PROVIDER to check applicable category and attach corresponding fee schedule.
B.1 [ ] Home Health Care
B.2 [ ] Home Infusion Therapy
B.3 [ ] Hospice
B.4 [ ] Home Medical Equipment
B.5 [ ] Respiratory Services
B.6 [ ] Women's Health Services
B.7 [ ] Medical Rehabilitation Services
B.8 [ ] Other: (Specify)_____________________________
SCHEDULE C
TO PROVIDER AGREEMENT
MEDICARE+CHOICE PROVISIONS
1. ADDITIONAL PROVISIONS. GENTIVA and PROVIDER agree to the following
provisions:
A. COMPLIANCE WITH LAWS. PROVIDER shall comply with and is subject to
all applicable Medicare program rules and regulations, as
implemented and as amended by the Health Care Financing
Administration ("HCFA"), including without limitation federal and
state regulatory agencies' rights to audit PROVIDER's operations,
books, records and other documentation related to PROVIDER's
obligations under the Agreement, as well as all other federal and
state laws, rules and regulations applicable to individuals and
entities receiving federal funds, including without limitation Title
VI of the Civil Rights Act of 1964, The Age Discrimination Act of
1975, The Americans With Disabilities Act and The Rehabilitation Act
of 1973. PROVIDER shall require that all health care professionals
employed by or under contract with PROVIDER to render health
services under the Agreement comply with this provision.
B. FEDERAL FUNDS. PROVIDER acknowledges that payment from PAYOR PLAN to
GENTIVA for services to Medicare+Choice enrollees is derived in
whole or in part from federal funds received by PAYOR PLAN from
HCFA, and that PROVIDER shall be subject to those laws, rules and
regulations applicable to individuals and entities receiving federal
funds.
C. RECORD MAINTENANCE AND CONFIDENTIALITY. In order to ensure
compliance under the Agreement, PROVIDER acknowledges and agrees to
retain all contracts, books, documents, papers and other records
related to the provision of services to Medicare members and/or as
related to PROVIDER's obligations under the Agreement for a period
of not less than 6 years. PROVIDER agrees to safeguard the privacy
of any information that identifies a particular enrollee, maintain
records in a timely and accurate manner, ensure timely access by
enrollees to the records at a reasonable time and in a reasonable
manner upon written request by the enrollee.
D. RIGHT TO INSPECT. PROVIDER agrees to give the United States
Department of Health and Human Services, the Comptroller General of
the United States, or their designees, the right to audit, evaluate,
and inspect books, contracts, medical records, patient care
documentation, or other records related to the care of Medicare +
Choice patients for a period of no less than six (6) years from the
final date of the contract period or the completion of any audit,
whichever is later, which period may be extended only in accordance
with the terms of 42 CFR 422.502(e)(4).
E. DATA COLLECTION/ ACCURATE INFORMATION. With respect to
Medicare+Choice patients, PROVIDER acknowledges that PAYOR PLAN is
required by HCFA to maintain a health information system that
collects, analyzes and integrates all data necessary to compile,
evaluate and report certain statistical data related to costs,
utilization and quality, and such other matters as HCFA may require
from time to time. PROVIDER hereby agrees to submit to GENTIVA or
PAYOR PLAN, upon request, all information and/or data necessary for
PAYOR PLAN to fulfill these obligations, and within the timeframes
specified by GENTIVA or PAYOR PLAN to meet HCFA requirements.
PROVIDER hereby represents and warrants that all data including, but
not limited to, encounter data and other information submitted to
GENTIVA by PROVIDER shall be truthful, reliable, accurate and
complete, and upon request by GENTIVA, PROVIDER agrees to certify
that such information is truthful, reliable, accurate and complete.
PROVIDER further agrees to hold harmless and indemnify GENTIVA and
PAYOR for any fines or penalties they may incur due to PROVIDER's
submission of inaccurate or incomplete data.
F. PATIENT COMMUNICATIONS. The parties acknowledge and agree that
nothing contained in the Agreement is intended to interfere with or
hinder communications between health care PROVIDER(s) and members
regarding patient treatment. PROVIDER(s) will discuss with member
their health status and all medical care and treatment options which
PROVIDER and/or the member's treating physician deems clinically
necessary and appropriate, regardless of any coverage or payment
determination(s) made or to be made by PAYOR or GENTIVA.
G. MEDICALLY NECESSARY SERVICES. Nothing contained herein is intended
by GENTIVA to be a financial incentive or payment that directly or
indirectly acts as an inducement for PROVIDER to limit Medically
Necessary services.
H. NON-DISCRIMINATION. PROVIDER will not discriminate against any
enrollee on the basis of any factor related to health status,
including without limitation medical condition, including mental and
physical illness, claims experience, receipt of health care, medical
history, genetic information, evidence of insurability, including
conditions arising out of acts of domestic violence, or disability.
PROVIDER agrees to observe the provisions of Title VI of the Civil
Rights Act of 1964, the Age Discrimination Act of 1975 and the
Americans with Disabilities Act.
I. COOPERATION. PROVIDER agrees to cooperate with any independent
quality review and improvement organization utilized by or under
contract with PAYOR PLAN pertaining to the provision of services for
Medicare + Choice enrollees. PROVIDER shall comply with applicable
GENTIVA and PAYOR policies and, if requested by GENTIVA, shall
cooperate in developing and implementing medical policy, quality
assurance programs, and medical management programs applied to
Medicare + Choice enrollees.
J. PARTICIPATION IN MEDICARE. PROVIDER hereby represents that PROVIDER
and all employees, subcontractors and/or independent contractors of
PROVIDER providing or who will provide services under the Agreement,
including without limitation health care, utilization review,
medical social work and/or administrative services, each maintains
full participation status in the Medicare program and/or is not
excluded from participation in the Medicare program. GENTIVA may
terminate the Agreement immediately upon PROVIDER'S failure to
adhere to the terms of this provision.
K. STANDARDS OF CARE. HMO and GENTIVA agree to provide all covered
benefits to Medicare + Choice enrollees in a manner consistent with
professionally recognized standards of care.
L. ADDITIONAL TERMINATION PROVISIONS. Notwithstanding any provision in
the Agreement, the following termination provisions shall apply to
PROVIDER if rendering services to Medicare+Choice enrollees:
(i) GENTIVA may terminate the Agreement immediately upon
request of PAYOR due to PROVIDER'S loss or suspension of
licensure or certification, or sanction by Medicare.
(ii) GENTIVA may terminate the Agreement upon thirty (30)
days prior written notice to PROVIDER for PROVIDER'S
failure to cooperate and/or comply with any of the
provisions of the Agreement
(iii) If PROVIDER wishes to terminate the Agreement without
cause, it must provide the other party with no less than
sixty (60) days prior written notice, given in
accordance with the terms of the Notice provision of the
Agreement.
M. DELEGATION REQUIREMENTS. PROVIDER understands and acknowledges that
if any of the PAYOR PLAN'S activities or responsibilities under its
contract with HCFA, related to the provision of services to
Medicare+Choice enrollees, are delegated to other parties, the
following requirements apply to any related entity, contractor,
subcontractor, or provider:
(i) Written arrangements must specify delegated activities
and reporting responsibilities.
(ii) Written arrangements must either provide for revocation
of the delegation activities and reporting requirements
or specify other remedies in instances where HCFA or the
PAYOR PLAN determine that such parties have not
performed satisfactorily.
(iii) Written arrangements must specify that the performance
of the parties is monitored by the PAYOR PLAN on an
ongoing basis.
(iv) Written arrangements must specify that the credentialing
process will be reviewed and approved by the M+C
organization and the M+C organization must audit the
credentialing process on an ongoing basis.
(v) All contracts or written arrangements must specify that
the related entity, contractor, or subcontractor must
comply with all applicable Medicare laws, regulations,
and HCFA instructions.
N. APPEALS. PROVIDER will adhere to Medicare's appeals procedure for
Medicare+Choice enrollees, including the procedures for expedited
appeals. PROVIDER shall gather and forward information on enrollee
appeals to GENTIVA or PAYOR to the extent required by law or
regulation so as to enable PAYOR PLAN to meet the HCFA required
timeframes for grievances and appeals.
O. COMPLIANCE WITH POLICIES. To the extent that a Medicare + Choice
requirement is found in a policy, the Provider Manual or other
procedural guide of GENTIVA and/or PAYOR PLAN and is not otherwise
specified in the Agreement, PROVIDER will comply with those
policies, manuals and procedures with regard to the provision of
care to Medicare + Choice enrollees. Written notice of material
changes to applicable policies, including the Provider Manual, shall
be provided to PROVIDER prior to the effective date of such changes.
P. FAILURE TO COMPLY. If GENTIVA denies payment to PROVIDER due to
PROVIDER'S failure to comply with any of the provisions of the
Agreement, PROVIDER shall not bill the enrollee for the denied
amounts.
Q. AMENDMENT. GENTIVA may amend this Attachment as needed to comply
with applicable state and federal laws, rules and regulations, and
shall provide PROVIDER with written notice of such amendment and its
effective date. Unless required by such law, rule or regulation,
PROVIDER'S signature will not be required to implement such
amendment.
EXHIBIT II
REQUIRED ENCOUNTER DATA ELEMENTS
Provider (including Provider's Subcontractors) shall provide CIGNA with the
following standard data elements for each service encounter with respect to
Covered Home Care Services rendered under this Agreement:
o Patient Name, Address, Phone, Date of Birth
o Insured's Name, Address, Phone, Date of Birth
o Healthplan Identifier
o Group Number
o Date of Service
o Primary and Secondary ICD-9 Codes
o CPT-4, HCPCS, or Unique CIGNA Billing Codes
o Tax ID #
o Charge to CIGNA
o Service, Drug, Equipment Description
o Unit of Measure
o Referring Physician or Other Referral Source Name
o Place of Service
o Any other data element agreed upon by the parties during the term of
this Agreement
EXHIBIT III
INFORMATION REQUIRED FOR A COMPLETE ORDER
o Requested Start of Care (SOC)/Actual Start of Care Date
o Last Name, First Name, MI, Phone #
o Address where service is to be rendered, including the phone #and
zip code
o Facility, Facility Discharge Date
o Facility Name, Phone #
o Date of Birth/Age, Sex, SS#, Marital Status
o Ordering Physician (who will follow patient in the community, Office
Phone #)
o Type of Home Care Personnel
o Home Medical Equipment
o Infusion Product
o All pertinent diagnoses and/or surgical procedures with onset and/or
exacerbation dates
o Allergies
o Specific Orders/Treatment (including frequency, type of dressing,
drug, dosage, etc.) Note: subcontractor must contact physician
and/or physician's agent directly to validate all orders.
o Has client taken ordered drugs(s) before? Y, N, comment
o Venous/other access-established? Y, N, if Yes, date placed, type
ordered, gauge if applicable (1st dose given?)
o Anaphylaxis Order - Y, not applicable (1st dose)
o Anaphylaxis medications/dosage/route (1st dose)
o Primary Plan, ID#
EXHIBIT IV.
CLEAN CLAIM SUBMISSION REQUIREMENTS
All MCA's must comply with these requirements in order to transmit claims. Below
is a list of the minimum data elements required to successfully transmit a claim
to CIGNA HealthCare:
o Billing provider name, address and tax identification number
o Rendering provider name, address and tax identification number
o Employee number (9 numeric SSN/ID. If not 9 digits, MUST be zero
filled to equal 9 digits)
o Employee first and last name
o Patient first name
o Patient date of birth
o Patient account number
o Diagnosis code
o Procedure/Revenue Code
o Anesthesia Minutes/Units
o Number of days when dates of service are not equal
o Billed Amount (cannot be zeros)
o Place of Service/Bill Type
o First date of injury for accident claims
o Date first consulted to verify pre-existing conditions
If the above data elements are not submitted by the provider of service, the
Claim Processor must reject the claim back to the MCA for correction and
resubmission.
EXHIBIT V.
GENTIVA CARECENTRIX SUBSIDIARIES
o Gentiva Health Services (USA), Inc.
o Gentiva Health Services (Certified), Inc.
o Gentiva Certified Healthcare Corp.
o New York Healthcare Services, Inc.
o QC Medi - New York, Inc.
o Quality Care-USA, Inc.
o Gentiva Services of New York, Inc.
EXHIBIT VI.
GUIDELINES FOR HOME & COMMUNITY CARE SPECIALIST
SUMMARY: Analyzes utilization data, identifying areas for improvement, and
provides recommendations to CIGNA Care Center management staff on homecare
recovery and treatment. Works with Health Services Director and CIGNA Physician
Advisor on the development of action plans to address areas for improvement.
Educates and serves as a clinical resource on the safe and appropriate use of
home care. Works under moderate supervision.
ESSENTIAL DUTIES AND RESPONSIBILITIES:
Analyzes utilization data, identifying areas for improvement, and provides
recommendations to CIGNA Care Center management staff on homecare recovery and
treatment. Works with Health Services Director and CIGNA Physician Advisor on
the development of action plans to address areas for improvement. Provides
regular reports on progress towards resolution.
Educates and serves as a clinical resource on the safe and appropriate use of
home care. Provides and/or coordinates training and education for CIGNA staff
regarding new services or technology appropriate for the home care setting.
Supports communication and promotion of existing and new programs by CIGNA
providers through collaborative relationships with Gentiva CareCentrix vendors
located in the same geographic community.
May facilitate communication between CareCentrix, the vendor of service and
patients/clients to remove potential barriers on appropriate discharges. Ensures
a coordinated discharge plan for CareCentrix services on complex cases.
Supports the CIGNA and Gentiva Provider Relations Teams in ensuring all vendors
and providers understand goals related to home health utilization objectives.
Participates in ongoing quality assessment/improvement activities as directed.
Tracks and trends all issues and complaints in accordance with joint CIGNA and
CareCentrix's quality management programs using both an individual and a
population-based issue resolution approach. Provides information that enables
root cause analysis and preparation of reports. Assists in identifying
opportunities for improvement.
Participates in discussions with other Regional HUB colleagues to review
operational processes and procedures and shares best practices among the HUB
sites. Participates in local organizations to keep abreast of current
developments in the healthcare market.
Participates in special projects and performs related other duties as assigned.
QUALIFICATION REQUIREMENTS: To perform this job successfully, an individual must
be able to perform each essential duty satisfactorily. The requirements listed
below are representative of the knowledge, skill, and/or ability required.
Reasonable accommodations may be made to enable individuals with disabilities to
perform the essential functions.
EDUCATION AND/OR EXPERIENCE:
Current RN license in the state of residence plus a minimum of five years
experience in homecare or related industry, with an emphasis in managed care
carrier relations. Strong understanding of the concepts of utilization
management and ability to provide recommendations to managed care carriers.
Thorough knowledge of homecare and related federal and state regulations.
Excellent communication, decision, and organization skills and including
computer skills required.
EXHIBIT VII.
PERFORMANCE METRICS
2003
AREAS OF PERFORMANCE ANNUAL STANDARD OF PERFORMANCE MAXIMUM RISK
*
* Confidential Treatment Requested
EXHIBIT VIII
REPORTING TIMELINES
--------------------------------------------------------------------------------
REPORT CATEGORY EXPECTED DELIVERY DATES
--------------------------------------------------------------------------------
Annual Quality Program Evaluation Due Annually in March
--------------------------------------------------------------------------------
Quality Program Description Due Annually in March
--------------------------------------------------------------------------------
Quality Workplan Due Annually in March
--------------------------------------------------------------------------------
Utilization Management Program Description Due Annually in March
--------------------------------------------------------------------------------
Utilization Management Workplan Due Annually in March
--------------------------------------------------------------------------------
Annual UM Program Evaluation Due Annually in March
--------------------------------------------------------------------------------
Start of Care Statistics Ongoing, Due Quarterly, 45 days
post end of quarter
--------------------------------------------------------------------------------
Telephone Statistics Ongoing, Due Quarterly, 45 days
post end of quarter
--------------------------------------------------------------------------------
Complaint Statistics Ongoing, Due Quarterly, 45 days
post end of quarter
--------------------------------------------------------------------------------
Credentialed/Recredentialed Providers Reporting Ongoing, Due Quarterly,
45 days post end of quarter
--------------------------------------------------------------------------------
Terminated Providers Ongoing, Due Quarterly, 45 days
post end of quarter
--------------------------------------------------------------------------------
Patient Satisfaction Report due Annually, by August
--------------------------------------------------------------------------------
Referral Source Satisfaction Annual reporting separated from
the complaint statistics.
--------------------------------------------------------------------------------
Utilization Management Report Ongoing, Due Quarterly, 45 days
post end of quarter
--------------------------------------------------------------------------------
Missing Information Report Weekly
--------------------------------------------------------------------------------
FFS Qtrly PM/PM Reports Ongoing, Due Quarterly, 45 days
post end of quarter
--------------------------------------------------------------------------------
AR--Aging Report Bi-Weekly
--------------------------------------------------------------------------------
Weekly Reports (admit, discharge, auths) Weekly
--------------------------------------------------------------------------------
Pended report for non-urgent FFS Weekly
authorizations
--------------------------------------------------------------------------------
CIGNA Inclusion / Exclusion Grids Monthly
--------------------------------------------------------------------------------
CIGNA Capitation Payment Report Monthly
--------------------------------------------------------------------------------
CIGNA Leakage Report Quarterly
--------------------------------------------------------------------------------
EXHIBIT IX
SAFE HOMECARE ADMISSION CRITERIA
Acceptance of patients for home care services is to be based on the following
criteria, and medical, nursing, psychosocial, and other information provided by
the physician responsible for the overall plan of treatment, and other
individuals involved in a patients care. Patients will be accepted for care
regardless of age, race, color, national origin, religion, sex, disability,
being a qualified disabled veteran, being a qualified veteran of the Vietnam
era, or any other category protected by law, or decisions regarding advance
directives:
1. Adequacy and suitability of personnel and resources to provide service in
accordance with the needs of the patient and the physician's Plan of
Treatment (if required). Not having adequate or suitable personnel and
resources to provide the necessary service(s) does not however relieve MCA
from the financial obligation and responsibility to provide such
service(s).
2. Attitudes and coping ability of the patient and/ or family towards
providing care at home.
3. Reasonable expectation that the patient's overall medical, nursing,
rehabilitative, and social needs can be adequately met in his/her place of
residence, including a plan to meet any medical emergencies that may
arise.
4. Adequate physical facilities in the patient's residence for the safe
delivery of service.
5. Availability and willingness of family members or other support services
to follow through with the overall plan of care as necessary. The parents
or guardians must assume responsibility for the care of a child.
6. Availability and willingness of a primary physician, or authorized
professional to provide an overall Plan of Treatment if physician orders
are required.
7. Patient resides within the geographic area serviced by this agreement.
8. Staff personal safety is not at risk.
9. The following patients are ineligible for admission to home care services
(appropriate referrals to treatment facilities or other community
resources will be made):
o Patients with a history of intractable violent behavior or homicidal
ideation
o Patients exhibiting active suicidal behavior or considered a danger
to themselves or others
o Patients unable to obtain food or shelter
o Patients/families persisting in discriminatory job orders
EXHIBIT X
REPRESENTED PROVIDER REQUIRED DATA ELEMENTS
Reports shall be provided to CIGNA on a quarterly basis containing the following
Provider Data Elements:
o PROVIDER NAME
o PROVIDER LOCATION/ADDRESS
o CITY, STATE AND ZIP
o TELEPHONE NUMBER
o SERVICE TYPE INDICATOR (HIT, HME, RESP, THH)
o MEDICARE A INDICATOR
o MEDICARE B INDICATOR
o MEDICARE A PROVIDER NUMBER
o STATUS
o ORIGINAL CREDENTIALING DATE
o DATE RECREDENTIALING COMPLETED
o TERMINATION DATE
o TERMINATION REASON CODE
EXHIBIT XI.
JOINT COMPLAINT MANAGEMENT PROCESS
COMPLAINT WORKFLOW
GENTIVA CARECENTRIX
(Definition of Complaint: Any expression of dissatisfaction, oral or written)
Shaded areas are steps in process that involve Gentiva
[GRAPHIC OF WORKFLOW CHART]
* Physician calling on behalf of member or vendor calling with issue that has
impacted quality of care or service to member
** Real-time Issue--Any issue relating to coordinating and ensuring appropriate
current patient service/care.
COMPLAINT WORKFLOW
CIGNA HEALTHCARE
(Definition of Complaint: Any expression of dissatisfaction, oral or written)
Shaded areas are steps in process that involve Gentiva
[GRAPHIC OF WORKFLOW CHART]
* Physician calling on behalf of member or vendor calling with issue that has
impacted quality of care or service to member
** Real-time Issue--Any issue relating to coordinating and ensuring appropriate
current patient service/care.
EXHIBIT XII.
2003 STANDARDS FOR DELEGATION OF
CREDENTIALING ACTIVITIES
[Any and all capitalized terms not defined herein shall have the same meaning as
in the managed care provider agreement between CIGNA and the delegatee (the
"Agreement").]
I. GENERAL CONSIDERATIONS
A. Delegatee shall be responsible for credentialing and recredentialing
all providers permitted to provide Covered Services to Participants under
the Agreement (the "Represented Providers"). Delegatee shall not
subcontract any of its credentialing and recredentialing responsibilities
except with the prior written consent of CIGNA. If delegatee subdelegates
credentialing/recredentialing functions to another entity, CIGNA must
approve the extent of the subdelegation and review the file oversight
conducted by the entity as well as the delegatee's evaluation of the
subdelegated organization's credentialing/recredentialing policies and
procedures. Any subcontractor approved by CIGNA shall be required to agree
in writing to comply with all standards applicable to delegatee with
regard to the subcontracted services.
B. Delegatee shall maintain a credentialing committee comprised of
appropriately qualified persons, including primary care and specialist
network providers, who shall be responsible for credentialing all
Represented Providers.
C. Delegatee's credentialing/recredentialing program shall be in
writing. Such program must be reviewed and approved by delegatee's review
body and by CIGNA both prior to the delegation hereunder and annually
thereafter. Delegatee shall not materially modify its
credentialing/recredentialing program without CIGNA's prior written
approval which approval shall not be unreasonably withheld.
D. Delegatee's credentialing/recredentialing program shall, at a
minimum, satisfy the standards of an appropriate accrediting body or set
of standards designated by CIGNA (i.e. NCQA, JCAHO, URAC etc.), the
requirements established by CIGNA herein and in the Agreement, and any
requirements set forth in applicable federal and state laws and
regulations.
E. Delegatee shall maintain adequate professional liability coverage
relating to delegatee's credentialing/recredentialing activities. Such
coverage shall be consistent with CIGNA standards for such coverage.
F. CIGNA reserves the right to disapprove, terminate, or suspend any of
delegatee's Represented Providers from providing Covered Services to
Participants if the Represented Provider does not meet the credentialing
requirements set forth herein.
G. Delegatee shall credential each Represented Provider in accordance
with the requirements set forth herein and shall recredential each
initially credentialed Represented Provider in accordance with such
requirements at least 1) every three years; or 2) as often as is mandated
by applicable state or federal law; whichever is more frequent.
H. For non-contracted home health care providers that may from time to
time provide services in order to meet immediate demands, Delegatee shall
establish a process acceptable to CIGNA to ensure that Represented
Provider has an unrestricted license, as appropriate for the state in
which the Represented Provider practices, has adequate professional and
general liability insurance coverage and has an acceptable malpractice
claims history as indicated through verifying Medicare/Medicaid sanctions
or other appropriate reporting agency or data bank identified by CIGNA.
Delegatee shall notify CIGNA if a non-credentialed Represented Provider is
used to fulfill a service requirement. If a Represented Provider provides
services to more than two different parties within a 60 day period,
Delegatee must implement a full credentialing process as outlined below
with that Represented Provider.
I. Delegatee shall maintain a process acceptable to CIGNA which audits
and evaluates delegatee's performance of its credentialing obligations
hereunder. Delegatee shall report to CIGNA the results of any such
evaluations, including audits by designated third parties, in a format and
in time frames acceptable to CIGNA, and shall promptly correct any
deficiencies identified.
J. CIGNA and applicable governmental regulatory authorities and
accrediting bodies shall have the right to audit delegatee's credentialing
and recredentialing activities, including delegatee's credentialing and
recredentialing files. Delegatee shall cooperate with any such audits.
CIGNA's audits shall be conducted at least once a year or as needed. CIGNA
will provide delegatee with a written report detailing the findings with
respect to any such audits. If such audits reveal any deficiencies,
delegatee shall implement policies and/or procedures to address the
deficiencies identified in such audit within 60 days of CIGNA's submission
of the report detailing such deficiencies. Failure to provide CIGNA with
evidence that delegatee has implemented such policies and/or procedures to
address any such identified deficiency within the 60 day time period may
be cause for revocation of the delegation hereunder or termination of the
Agreement.
K. If CIGNA determines that delegatee cannot meet its credentialing
obligations set forth herein, CIGNA may elect to assume responsibility for
such activities. If CIGNA elects to assume responsibility for such
activities, the rates set forth in the Agreement shall be adjusted to the
extent necessary, and delegatee shall cooperate and provide to CIGNA any
information necessary to perform such activities.
L. Delegatee shall maintain appropriate records with respect to all
credentialing and recredentialing activities hereunder for the duration of
the Agreement and six years thereafter. All information relating to
delegatee's credentialing and recredentialing activities hereunder shall
be confidential, shall not be disclosed to any third parties except as
required by applicable law or to fulfill delegatee's obligations
hereunder, and shall be maintained in such a manner so that such
information shall be protected from discovery and use in judicial or
administrative proceedings to the fullest extent possible under applicable
law, including, but not limited to, applicable state peer review laws. In
the event that delegatee receives a subpoena, civil investigative demand
or other similar process requesting disclosure of information relating to
its credentialing and recredentialing activities hereunder, delegatee
shall immediately notify CIGNA of such subpoena, demand or process so as
to afford CIGNA with an adequate opportunity to
seek an appropriate protective order should it choose to do so.
M. This exhibit and all information provided by CIGNA to delegatee
pertaining to CIGNA's delegation of credentialing activities to delegatee
is confidential and proprietary information and subject to the protections
set forth in the confidentiality provision contained in the Agreement. In
the event that delegatee receives a subpoena, civil investigative demand
or other similar process requesting disclosure of such confidential and
proprietary information, delegatee shall immediately notify CIGNA of such
subpoena, demand or process so as to afford CIGNA with an adequate
opportunity to seek an appropriate protective order should it choose to do
so.
N. Delegatee shall indemnify, defend and hold harmless CIGNA and its
affiliates from and against any and all liability, fines, penalties,
damages and expense, including reasonable defense costs and legal fees,
incurred by CIGNA or its affiliates in connection with claims or actions
of any nature, governmental examinations, enforcement actions or other
administrative proceedings arising from delegatee's failure to perform its
obligations under these Standards.
II. CREDENTIALING REQUIREMENTS
A. Delegatee will ensure that all Represented Providers are in
compliance with the delegatee's credentialing requirements, which, at a
minimum, shall include those requirements set forth below. In addition,
delegatee will meet all timelines for requirements as required by CIGNA.
Any exceptions to the credentialing requirements set forth below must be
approved by CIGNA prior to the Represented Provider providing Covered
Services to CIGNA Participants. Any such requests for exceptions shall
only be forwarded to CIGNA for review after delegatee's credentialing
committee has completed its review of the provider. Delegatee shall
forward to CIGNA all information required by CIGNA in connection with
those providers for whom an exception is requested.
FACILITY/ANCILLARY PROVIDER CREDENTIALING
1. The Chief Operating Officer, Administrator or other appropriate
designated health care facility or ancillary provider representative
shall sign the Represented Provider's application for participation
which signature must serve to attest to the accuracy and
completeness of the credentials, operational, financial and quality
information summarized in the application and must serve as a
release authorizing external verification of credentials.
2. All Represented Providers shall be licensed without restriction and
have all licenses necessary to do business in each state in which
they are providing services.
3. All Represented Providers shall maintain appropriate professional
and general liability coverage, with minimum limits of liability as
acceptable to CIGNA or other, greater, minimum limits that may be
required by the state where the Represented Provider is licensed:
Professional Liability Coverage
Type of Facility Per Occurrence Aggregate
---------------- -------------- -----------
Home Health $1,000,000 $3,000,000
GENERAL LIABILITY COVERAGE
Type of Facility Per Occurrence Aggregate
---------------- -------------- -----------
Home Health $1,000,000 $3,000,000
4. All Represented Providers shall have a satisfactory professional
liability history.
5. The Joint Commission on Accreditation of Healthcare Organizations
("JCAHO") or the American Osteopathic Association must accredit all
hospital Represented Providers. The Commission on Accreditation of
Rehabilitation Facilities must accredit rehabilitation facilities.
JCAHO, the Community Health Accreditation Program or the
Accreditation Commission for Health Care, Inc. must accredit home
health agencies. Nursing homes must be accredited by JCAHO. JCAHO or
the Accreditation Association for Ambulatory Health Care must
accredit ambulatory centers for Ambulatory Health Care. The
foregoing accreditations shall not be required in those locations
where the attainment of the applicable accreditation is not the
community standard. In these instances, on-site assessments meeting
CIGNA requirements must be conducted. Delegatee may substitute a CMS
(HCFA) review or a State Department of Health review for the site
visit if delegatee obtains the CMS/State Department of Health report
and the CMS/State Department of Health review meets CIGNA's
standards.
6. All Represented Providers must maintain an ongoing quality
assurance/quality improvement plan designed to monitor and evaluate
the quality and appropriateness of patient/resident care, pursue
opportunities to improve patient/resident care, and resolve
identified problems.
7. The inclusion of the Represented Provider in CIGNA's provider
network must be consistent with CIGNA's business requirements as
identified by CIGNA to delegatee.
8. The delegatee's application for participation shall include
satisfactory answers to the following questions:
Has the Represented Provider ever had or does it currently have:
a. Revocations, suspensions or sanctions under the Medicare or
Medicaid programs?
b. Professional liability insurance cancellation in the past five
years?
c. General liability insurance cancellation in the past five
years?
d. State licensing investigations or actions?
Any "yes" answers must be accompanied by an explanation.
9. Delegatee will obtain documents as listed below for all Represented
Providers as part of their application for participation:
a. Current state professional license
b. Documentation of current state sanctions, restrictions on
licensure, or limitations on scope of practice
c. Documentation of sanction activity by either the Medicare or
the Medicaid programs in the past 3 years.
d. Proof of professional liability and general liability
insurance
e. The following professional liability information:
(1) The number of pending claims
(2) The precise facts of each legal action brought against
the Represented Provider in the past six years and the
resolution of such action (i.e., withdrawn, dismissed,
judgment, or settlement), including the amounts of
settlements and judgments.
f. Proof of accreditation, if applicable
B. Delegatee shall require Represented Providers to agree to notify
delegatee promptly of any material change in the information on the
Represented Provider's application for participation.
C. Delegatee shall not credential any provider who:
1) Has been denied participating provider status by CIGNA, or
2) Has had his/her participating provider status terminated by
CIGNA for cause
3) Within the last two (2) years, has terminated a CIGNA
Healthcare provider contract. Any requests for credentialing
from any such provider shall be forwarded to CIGNA and shall
not be acted on further by the delegatee.
FACILITY/ANCILLARY PROVIDER RECREDENTIALING
Delegatee shall recredential every Represented Provider in accordance with the
timeframes specified in Section I.G. above employing the same criteria set forth
in the facility/ancillary provider credentialing section of this document.
V. CONFIDENTIALITY OF INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION
To the extent applicable, delegatee shall comply with all federal and state laws
and regulations relating to the confidentiality of medical records and other
individually identifiable health information, including, but not limited to, the
requirements specified below.
A. Definitions Applicable to this Confidentiality Section
"Confidential Information" shall mean (a) Individually Identifiable Health
Information that is (i) transmitted by Electronic Media, (ii) maintained
in any medium constituting Electronic Media; or (iii) transmitted or
maintained in any other form or medium and (b) any Nonpublic Personal
Financial Information, as that term is defined by the NAIC Model Privacy
of Consumer Financial and Health Information Regulation (2000) issued
pursuant to the Gramm Leach Bliley Act. "Confidential Information" shall
not include (i) education records covered by the Family Educational Right
and Privacy Act, as amended, 20 U.S.C. Section 1232g and (ii) records
described in 20 U.S.C. Section 1232g(a)(4)(B)(iv).
"Designated Record Set" shall mean a group of records maintained by or for
CIGNA or a CIGNA Affiliate that is (i) the medical records and billing
records about individuals maintained by or for
CIGNA or a CIGNA Affiliate, (ii) the enrollment, payment, claims
adjudication, and case or medical management record systems maintained by
or for a health plan; or (iii) used, in whole or in part, by or for CIGNA
or a CIGNA Affiliate to make decisions about individuals. As used herein,
the term "Record" means any item, collection, or grouping of information
that includes Confidential Information and is maintained, collected, used,
or disseminated by or for CIGNA or a CIGNA Affiliate.
"Electronic Media" shall mean the mode of electronic transmissions. It
includes the Internet, extranet (using Internet technology to link a
business with information only accessible to collaborating parties),
leased lines, dial-up lines, private networks, and those transmissions
that are physically moved from one location to another using magnetic
tape, disk, or compact disk media.
"Individually Identifiable Health Information" shall mean information that
is a subset of health information, including demographic information
collected from an individual, and
(i) is created or received by a health care provider, health plan,
employer, or health care clearinghouse; and
(ii) relates to the past, present, or future physical or mental health or
condition of an individual; the provision of health care to an
individual; or the past, present or future payment for the provision
of health care to an individual; and (a) identifies the individual,
or (b) with respect to which there is a reasonable basis to believe
the information can be used to identify the individual; and
(iii) relates to identifiable non-health information including but not
limited to an individual's address, phone number and/or Social
Security number.
"Privacy Standards" shall mean (a) the Health Insurance Portability and
Accountability Act of 1996 and the regulations promulgated thereunder,
including the Standard for Privacy of Individually Identifiable Health
Information, 45 C.F.R. Parts 160 and 164, (b) the Gramm Leach Bliley Act
and any applicable regulations governing privacy and confidentiality
promulgated thereunder, and (c) other federal or state laws or regulations
governing the use, disclosure, confidentiality, security or privacy of
Confidential Information or other personally identifiable information.
"Secretary" shall mean the Secretary of the Department of Health and Human
Services.
B. USE OF CONFIDENTIAL INFORMATION.
Delegatee may use Confidential Information to carry out the obligations of
delegatee as set forth in the Agreement and these Standards or as required
by federal or state law, subject to the provisions of Sections C. through
N., below. Delegatee shall ensure that its directors, officers, employees,
contractors and agents do not use Confidential Information received from
CIGNA or a CIGNA Affiliate in any manner that would constitute a violation
of the Privacy Standards if used in a similar manner by CIGNA or a CIGNA
Affiliate. Delegatee shall not use Confidential Information for the
purpose of creating de-identified information that will be used for any
purpose other than to carry out the obligations of delegatee set forth in
the Agreement and these Standards or as required by federal or state law.
C. DISCLOSURE OF CONFIDENTIAL INFORMATION.
Delegatee and its directors, officers, employees, contractors and agents
shall not disclose Confidential Information received from CIGNA or a CIGNA
Affiliate other than as is necessary to carry out the obligations of
delegatee as set forth in the Agreement or these Standards or as required
by federal or state law, subject to the provisions of Sections C. through
N., below. Confidential Information shall not be disclosed in any manner
that would constitute a violation of the Privacy Standards if disclosed in
a similar manner by CIGNA or a CIGNA Affiliate.
D. SAFEGUARDS AGAINST MISUSE OF INFORMATION.
Delegatee agrees that it will implement all appropriate safeguards to
prevent the use or disclosure of Confidential Information in any manner
other than pursuant to the terms and conditions of the Agreement and these
Standards.
E. REPORTING OF DISCLOSURES OF CONFIDENTIAL INFORMATION.
Delegatee shall, within five (5) days of becoming aware of a loss, a
suspected loss, or disclosure of Confidential Information in violation of
the Agreement or these Standards by delegatee, its officers, directors,
employees, contractors or agents or by a third party to which delegatee
disclosed Confidential Information pursuant to Section C. of this
Agreement, report any such disclosure to CIGNA's Privacy and Security
Officers. This requirement will also apply to any loss, or suspected loss,
of Confidential Information.
F. AGREEMENTS WITH THIRD PARTIES.
Delegatee shall enter into an agreement with any agent, subcontractor or
other third party that will have access to Confidential Information that
is received from, created or received by delegatee on behalf of CIGNA or a
CIGNA Affiliate pursuant to which such third party agrees to be bound by
the same restrictions, terms and conditions that apply to delegatee with
respect to such Confidential Information as set forth in the Agreement and
these Standards. Under such agreement, the third party shall (a) provide
reasonable assurances that such Confidential Information will be held
confidential as provided in the Agreement and these Standards, (b)
provide reasonable assurances that such Confidential Information will be
disclosed only as required by federal or state law or for the purposes for
which it was disclosed to such third party, and (c) immediately notify
delegatee of any breaches of the confidentiality of the Confidential
Information, to the extent it has obtained knowledge of such breach.
G. ACCESS TO INFORMATION.
Within five (5) business days of a request by CIGNA or a CIGNA Affiliate
for access to Confidential Information about an individual contained in a
Designated Record Set, delegatee shall make available to CIGNA or a CIGNA
Affiliate such Confidential Information for so long as such information is
maintained in the Designated Record Set. In the event any individual
requests access to Confidential Information directly from delegatee,
delegatee may not deny access to the Confidential Information requested.
Rather, delegatee shall, within two (2) business days, forward such
request to CIGNA.
H. AVAILABILITY OF CONFIDENTIAL INFORMATION FOR AMENDMENT.
Within ten (10) business days of receipt of a request from CIGNA or a
CIGNA Affiliate for the amendment of an individual's Confidential
Information or a record regarding an individual contained in a Designated
Record Set (for so long as the Confidential Information is maintained in
the Designated Record Set), delegatee shall provide such information to
CIGNA or the CIGNA Affiliate for amendment and incorporate any such
amendments in the Confidential Information as required by 45 C.F.R.
Section 164.526. In the event that the request for the amendment of
Confidential Information is made directly to the delegatee, delegatee may
not deny the requested amendment. Rather, delegatee shall, within two (2)
business days, forward such request to CIGNA.
I. AUDIT.
Upon reasonable notice, CIGNA or a CIGNA Affiliate may audit and inspect
delegatee's internal practices and the books and records in delegatee's
possession for the purpose of assessing delegatee's use and disclosure of
Confidential Information received from CIGNA or a CIGNA Affiliate or
created by delegatee on behalf of CIGNA or a CIGNA Affiliate. Such books
and records shall be made available to CIGNA or a CIGNA Affiliate for its
audit or inspection during regular business hours.
J. ACCOUNTING OF DISCLOSURES.
Within ten business (10) days of notice by CIGNA or a CIGNA Affiliate to
delegatee that it has received a request for an accounting of disclosures
of Confidential Information regarding an individual during the six (6)
years prior to the date on which the accounting was requested, Delegatee
shall make available to CIGNA or the CIGNA Affiliate such information as
is in delegatee's possession and is required for CIGNA or the CIGNA
Affiliate to make the accounting required by 45 C.F.R. Section 164.528. At
a minimum, delegatee shall provide CIGNA or the CIGNA Affiliate with the
following information: (i) the date of the disclosure, (ii) the name of
the entity or person who received the Confidential Information, and if
known, the address of such entity or person, (iii) a brief description of
the Confidential Information disclosed, and (iv) a brief statement of the
purpose of such disclosure that includes an explanation of the basis for
such disclosure. In the event the request for an accounting is delivered
directly to delegatee, delegatee shall within two (2) business days
forward such request to CIGNA. It shall be CIGNA's or the CIGNA
Affiliate's responsibility to prepare and deliver any such accounting
requested. Delegatee hereby agrees to implement an appropriate
recordkeeping process to enable it to comply with the requirements of this
Section.
K. AVAILABILITY OF BOOKS AND RECORDS.
Delegatee hereby agrees to make its internal practices, books and records
relating to the use and disclosure of Confidential Information received
from, created or received by delegatee on behalf of CIGNA or a CIGNA
Affiliate available to the Secretary for purposes of determining CIGNA's
or a CIGNA Affiliate's and delegatee's compliance with the Privacy
Standards.
L. MAINTENANCE AND DESTRUCTION OF RECORDS AFTER TERMINATION.
Upon termination of the Agreement and at CIGNA's sole option, delegatee
shall be required to either a) return to CIGNA or a CIGNA Affiliate all
Confidential Information received from, created or received on behalf of
CIGNA or a CIGNA Affiliate in all forms without retaining any copies; or
b) maintain all such Confidential Information consistent with the
requirements of this Section V. for the period of time such information is
required to be maintained by applicable law after which time delegatee
shall destroy all such information in all forms maintained and shall not
retain any copies of such information, or, if such destruction is not
feasible, extend the protections of this Section V. to such information
and limit further uses and disclosures to those purposes that make the
return or destruction of such information infeasible.
M. AUTHORIZATION TO TERMINATE.
Delegatee hereby authorizes CIGNA to terminate the Agreement if CIGNA
determines that delegatee has violated a material term of this Section V.
N. Indemnification
Delegatee will defend, indemnify and hold harmless CIGNA and its
affiliates and their directors, officers, and employees from any claims,
loss, cost (including reasonable attorneys' fees and court costs) or
liability resulting from delegatee's breach of this Section V.
Delegatee acknowledges receipt of CIGNA's above Standards and, in accordance
with the Agreement, will comply with the terms and conditions set forth herein.
Delegatee's Name
By
Its
(insert CIGNA entity on provider agreement with delegatee (i.e. healthplan name
or Connecticut General Life Insurance Company)________________
By
Its
EXHIBIT XIII.
DME GUIDELINES GRID
DURABLE MEDICAL EQUIPMENT (DME) is defined as equipment that can stand repeated
use, is primarily and customarily used to serve a medical purpose, and is
generally not useful to a person in the absence of an illness or injury. DME
items have the following characteristics:
1. The equipment is prescribed by a physician;
2. The equipment meets the definition of DME;
3. The equipment is necessary and reasonable for the treatment of a patient's
illness or injury.
4. The equipment is manufactured primarily for use in the home environment
but is not limited to use in the home. Portable equipment for use outside
the home may be covered as an alternative to a stationery unit when the
cost of the portable unit is equal to or less than the stationery unit and
the member's medical condition supports the need for the equipment
periodically outside the home setting. Equipment intended for extended use
in the home, but which is appropriately delivered for use and education in
an inpatient environment for up to five days will be delivered to the
member either in the inpatient environment prior to discharge , or in the
member's home prior to an admission. Ventilators will be provided in the
inpatient setting for up to two week prior to a member's discharge to
home.
5. Institutional equipment requested by CIGNA to be provided by Gentiva in an
inpatient facility for use in the facility when the equipment is not part
of the discharge plan for use in the member's home, or when the member is
not a permanent resident of the facility, is not covered under the
member's DME benefit. Initial attempts should be made to have the facility
provide the equipment as part of their facility charges. When this cannot
be accomplished, Gentiva will contact contracte vendors to obtain the
requested equipment for CIGNA on a DISCOUNT FFS basis. If the health plan
is not available to issue the FFS authorization (week-ends and after
hours) the request will be sent to the health plan and it is expected that
a FFS authorization number will be issued by the health plan. It should be
noted that Home Medical Equipment vendors do not have all institutional
type equipment in stock and there may be a need to special order the
equipment
HOME: The home is defined as either the member's home; the home of a family
member or primary care giver within the national CIGNA/ Gentiva service area.
Member's who have been permanently admitted to an inpatient skilled nursing
facility or inpatient hospice and who have changed their home address to that of
the SNF or hospice will have the SNF or hospice defined as their home. DME
covered under cap in the home would be covered under cap in these facilities.
PRODUCTS. A listing of the most common items, or group of items, that are or may
be perceived as home medical equipment. This listing, while reasonably complete
is not intended to quantify the entire spectrum of products that may be
considered DME either now or in the future. Installation of equipment that
requires attachment to the structure of the home or making home modifications
(construction/renovation) is not the responsibility of GENTIVA Care Centrix.
COVERAGE CRITERIA. Conditions under which DME coverage is justified. These
guidelines are a combination of Medicare guidelines, CIGNA benefit
interpretations, and DME industry standards. Equipment noted as "not covered"
only refer to coverage under the DME capitation, but may be covered under other
benefit plans such as pharmacy, consumable medical supplies, external prosthetic
appliances or hospital benefits. EFFORTS SHOULD BE MADE TO PROVIDE "NOT COVERED"
ITEMS ON A DISCOUNT FEE FOR SERVICE BASIS TO ASSIST IN MEETING CIGNA
AND PATIENT'S NEEDS. ITEMS MAY HAVE SEPARATE COVERAGE GUIDELINES NOTED FOR
MEDICARE COVERAGE ISSUES AND ARE IDENTIFIED BY ITALICS.
HCPC. Medicare HCFA Common Procedure Coding system. For reference only, note
that the existence of a Medicare code does not indicate coverage or
reimbursement acceptance.
DIAGNOSIS. These are typical diagnosis indicated for each type of DME; this list
is a general guideline and is not exhaustive of all potential qualifying
diagnosis.
SITE OF SERVICE, TRAINING AND SUPPLIES. A listing of common industry practices
that are the minimal accepted levels noting how equipment is to be delivered to
the patient (or picked up), who is responsible for patient education and how it
is accomplished, and which accessories and supplies are included in the DME
benefit. Minimum standards will be adjusted on a state by state basis to meet
legal and regulatory requirements. Supplies listed as included reflect capitated
coverage only, fee for service and Medicare will generally pay additional
charges for supplies used with CPAP, BiPAP, ventilators, enteral pumps, suction
pumps, and CPM.
BRAND SUPPLIED. When completed, it will list typical manufacturers and their
model numbers as specific examples of items provided for these product
descriptions, but are not considered inclusive of all products that could be
offered. If there is an established clinical need for a model number or product
other than those listed it will be considered under capitated coverage.
RENT/PURCHASE. Used internally at GENTIVA CareCentrix to determine the
appropriate time to make the financial decision when it is more cost effective
to purchase equipment versus ongoing rental. Patients' diagnosis, prognosis,
level of care and equipment maintenance needs will be the key factors. All
discount FFS equivalent rental amounts will be applied to the purchase price of
any purchased equipment.
COVERAGE STATEMENTS FOR GENERAL CATEGORIES. General policies for coverage of
items that may fall under multiple benefits are listed beginning on page 39, are
unique in their requirements, or are generally excluded from all coverage. Many
of these items can be purchased at local drug stores, hardware stores or retail
outlets.
SITE OF SERVICE DEFINITIONS
CATEGORY I (PRODUCT ONLY) - Delivered to patients home by small package delivery
service (i.e. UPS or U.S. mail) is an acceptable site of service if:
Consumer agrees to small package delivery via telephone or in writing.
1. Meets patients or caregivers requirements for timeliness, same day
delivery may incur additional charges;
2. Is a purchase item only;
3. Requires minimal or no assembly;
4. Setup and training can be easily accomplished via written (or video)
instruction;
5. Is a supply reorder; and
6. Is easily transported and can sustain shipping and handling.
CATEGORY II (PRODUCT AND SERVICE, OUTPATIENT) - Items can be picked up at DME
provider or from PCP (consigned from contracted DME provider) location if:
1. It meets the patients or caregivers requirements for timeliness;
2. Requires specialized fitting and measurement that can be best accomplished
in a professional environment;
3. May be a stat or rush order;
4. Needs minimal patient or caregiver training (or training completed at
physicians office);
5. Requires a written physician order upon pickup;
6. Can easily be transported;
7. Includes all category I items.
CATEGORY III (PRODUCT AND SERVICE AT PATIENTS HOME) - Delivered by DME company
employee (clinical staff if noted) to patients residence if:
1. Patient or caregiver training required;
2. Clinical assistance required;
3. Is too bulky for easy transport;
4. Is considered a hazardous material;
5. Is a stat or rush order (may apply to all categories)
6. Requires installation and setup;
7. Requires an environmental site inspection;
8. Includes category II items where customer pickup cannot be accomplished;
This option may include delivery to physician office or hospital.
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
AMBULATORY EQUIPMENT
------------------------------------------------------------------------------------------------------------------------
o NOTE:
o MORE THAN ONE PIECE OF AMBULATORY
EQUIPMENT MAY BE APPROPRIATE IF
MEMBER IS EXPECTED TO IMPROVE
DURING REHABILITATION OR IF THE
DIAGNOSIS AND/OR PROGNOSIS
INDICATES DETERIORATION IN MEDICAL
CONDITION.
CANE o Patient has impaired ambulation and E0100 -Joint pain Category I
OR there is potential for ambulation. E0105 -Osteoarthritis
QUAD CANE o Replacement may be available due to -Osteoporosis
patient growth (children) Or change -Rheumatoid arthritis
in the medical condition. -Parkinson's disease
-Multiple sclerosis (ms)
-Congestive heart failure
-Cerebral palsy
-Intracerebral hemorrhage
------------------------------------------------------------------------------------------------------------------------
CRUTCHES o Patient has impaired ambulation and E0112 -Fracture of: Ankle, knee, Category I
there is potential for ambulation. E0114 femur or foot
o Replacement may be available due to E0110 -Cerebral palsy
patient growth (children) And E0111 -Joint pain
change in medical condition.
------------------------------------------------------------------------------------------------------------------------
WALKERS o Patient has impaired ambulation and E0130 -Fracture of: Tibia, fibula, Category I
there is potential for ambulation ankle, knee, or foot.
and requires additional stability -Rheumatoid arthritis
not provided by canes and crutches. -Parkinson's disease
o Baskets, trays, and cup holders are -Multiple sclerosis (ms)
considered convenience items and -Congestive heart failure
are not covered. -Cerebral palsy
o Replacement is available for any -Intracerebral hemorrhage
covered DME item for growth or -Severe neurological
change in medical condition. disorder
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
AMBULATORY EQUIPMENT
-------------------------------------------------
CANE Guardian xxxx Purchase only
OR Guardian xxxx
QUAD CANE
-------------------------------------------------
CRUTCHES Guardian xxxx Purchase only
Lumex xxxx
-------------------------------------------------
WALKERS Guardian xxxx Purchase only
Lumex xxxx
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
WALKER o Patient has impaired ambulation and E0143 -Obesity Category I
WITH WHEELS there is potential for ambulation. -Muscular dystrophy (MD)
o Patient requires additional -Rheumatoid arthritis
stability not provided by canes and -Parkinson's disease
crutches. -Multiple sclerosis (ms)
o Wheeled feature approved if patient -Congestive heart failure
lacks the strength to lift the -Cerebral palsy
walker. -Intracerebral hemorrhage
o Baskets, trays, and cup holders are -Fractures of: tibia,
considered convenience items and fibula, ankle, knee or
are not covered. foot.
o Replacement is available due to
patient growth or change in medical
condition..
------------------------------------------------------------------------------------------------------------------------
HEAVY DUTY, Generally not covered, May be covered E0147 -Gross Obesity Category II
MULTIPLE only: -Severe neurologic disorders
BRAKING o when patient has severe neurologic
SYSTEM, WHEEL disorders or;
RESISTANCE o restricted use of one hand.
WALKER Baskets, trays and cup holders are
not covered.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
WALKER Guardian Purchase only
WITH WHEELS XXXX
Lumex XXXX
-------------------------------------------------
HEAVY DUTY, Guardian Purchase only
MULTIPLE Lumex
BRAKING Winnie walker
SYSTEM, WHEEL Etac
RESISTANCE Invacare
WALKER
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
AMBULATORY EQUIPMENT, CONTINUED
------------------------------------------------------------------------------------------------------------------------
WHITE CANE Not stocked by DME suppliers. Provided
by the Association for the Blind. Refer
the requestor to the local Association
for the Blind.
------------------------------------------------------------------------------------------------------------------------
AMBULATORY Pads, grips and tips are included with A4635
EQUIPMENT the initial provision of equipment. A4636
ACCESSORIES Replacement supplies included for NORMAL A4637
wear & tear.
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
COMMODES
------------------------------------------------------------------------------------------------------------------------
COMMODE, Patient must be confined to: E0163 -Obesity Category I
STANDARD OR -Muscular dystrophy (MD)
THREE IN ONE o one level of their home environment -Rheumatoid arthritis
where there is no bathroom on that -Parkinson's disease
floor. -Multiple sclerosis (ms)
o Unable to ambulate without the -Congestive heart failure
assistance of a walker or cane. -Cerebral palsy
o Unable to transition from sitting -Intracerebral hemorrhage
to standing without stand-by assist -Fractures of: tibia,
o Padded commodes are appropriate fibula, ankle, knee or
for people with decubiti/ severe foot.
emaciation.. -Hemiplegia
------------------------------------------------------------------------------------------------------------------------
COMMODE Drop arm commodes are covered when: E0165 Same as above Category I
DROP ARM o Special requirements exist
necessitating the feature to be
used to facilitate patient
transfers or;
o if the patient requires extra
width.
------------------------------------------------------------------------------------------------------------------------
COMMODE, Not covered, wheeled commode chairs are E0164 Category II
WHEELED OR not considered medically necessary. E0166
ALL PURPOSE
------------------------------------------------------------------------------------------------------------------------
SITZ BATH Patient has infection or injury of E0160 Hemorrhoids Category I
perineal area. E0161 Pilonidal cyst
Post- delivery lacerations
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
AMBULATORY EQUIPMENT, CONTINUED
-------------------------------------------------
WHITE CANE
-------------------------------------------------
AMBULATORY Purchase only
EQUIPMENT
ACCESSORIES
-------------------------------------------------
-------------------------------------------------
COMMODES
-------------------------------------------------
COMMODE, Guardian XXX Purchase only
STANDARD OR Lumex XXX
THREE IN ONE Invacare XXX
Temco XXX
-------------------------------------------------
COMMODE Guardian Purchase only
DROP ARM Lumex
-------------------------------------------------
COMMODE, .
WHEELED OR
ALL PURPOSE
-------------------------------------------------
SITZ BATH Duromed Purchase only
Graham Field
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
HOSPITAL BEDS & ACCESSORIES
------------------------------------------------------------------------------------------------------------------------
HOSPITAL BED Manual beds are no longer provided. See
MANUAL, guidelines for semi-electric beds.
FIXED HEIGHT
WITH
SIDE-RAILS
AND
MATTRESS.
------------------------------------------------------------------------------------------------------------------------
HOSPITAL BED Manual beds are no longer provided. See
MANUAL, guidelines for semi-electric beds.
VARIABLE
HEIGHT
WITH
SIDE-RAILS
AND
MATTRESS.
------------------------------------------------------------------------------------------------------------------------
HOSPITAL BED, o Patient requires a hospital bed for E0260 Acute cardio pulmonary Category III
SEMI-ELECTRIC use of traction equipment that can conditions,
WITH manual only be used with a hospital type Arthritis,
height bed. Or, Back disorders,
adjustment o Patient requires specific position Neuromuscular or
SIDE-RAILS of the body as part of a medical Cerebrovascular disorders
AND MATTRESS treatment plan or pain relief for such as MS, MD, CP, CVA
at least one month. Or, Fractures
o Patient requires immediate and/or Guilliam Barre
frequent changes in body position Paralysis
o Patient is unable to independently Polio
turn or get out of bed without Lower extremity injury.
assistance of elevating head of Coma.
bed, bed rails or trapeze bar Decubitus ulcers
o Patient is unable to toilet Extreme weakness
independently
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
HOSPITAL BEDS & ACCESSORIES
-------------------------------------------------
HOSPITAL BED
MANUAL,
FIXED HEIGHT
WITH
SIDE-RAILS
AND
MATTRESS.
-------------------------------------------------
HOSPITAL BED
MANUAL,
VARIABLE
HEIGHT
WITH
SIDE-RAILS
AND
MATTRESS.
-------------------------------------------------
HOSPITAL BED, Invacare XXX Same as
SEMI-ELECTRIC Joerns XXX above
WITH manual Smith Davis
height XXX
adjustment
SIDE-RAILS
AND MATTRESS
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
HOSPITAL BEDS & ACCESSORIES, CONTINUED
------------------------------------------------------------------------------------------------------------------------
HOSPITAL BED, A full electric bed is covered only in E0265 Stroke with hemiplegia Category III
FULL ELECTRIC those instances where the member's Paraplegia
WITH medical condition requires complete Qaudraplegia
SIDE-RAILS care, or extensive skilled services, Guilliam Barre
AND and the member is on a regimen of Severe advanced
MATTRESS complete bedrest. or is a full lift from neuromuscular disease.
bed to chair.
------------------------------------------------------------------------------------------------------------------------
HOSPITAL BED Covered if the patient meets the basic E0305 Same as above Category III
SIDE-RAILS, requirements for a hospital bed and E0310
FULL OR condition requires side rails.
HALF LENGTH
------------------------------------------------------------------------------------------------------------------------
SIDE-RAILS, Not covered, not primarily medical in
HOMESTYLE nature.
------------------------------------------------------------------------------------------------------------------------
OVERBED Not covered, comfort or convenience E0274
TABLE item, not primarily medical in nature.
------------------------------------------------------------------------------------------------------------------------
TRAPEZE o Covered if the requirements for a E0910 Hemiplegia Category III
BARS, hospital bed are met and; Lumbago
o Patient has a specific condition Osteoporosis
(osteoporosis, hemiplegia)and Sciatica
confined to bed AND; Senile dementia
o patient needs to sit up due to a Spondylosis, lumbosacral
respiratory condition OR;
o needs to change body position due
to medical condition OR;
o provide assistance getting in and
out of bed.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
HOSPITAL BEDS & ACCESSORIES, CONTINUED
-------------------------------------------------
HOSPITAL BED,
FULL ELECTRIC
WITH
SIDE-RAILS
AND
MATTRESS
-------------------------------------------------
HOSPITAL BED Invacare Same as above
SIDE-RAILS, Lumex
FULL OR Temco
HALF LENGTH Smith Davis
-------------------------------------------------
SIDE-RAILS,
HOMESTYLE
-------------------------------------------------
OVERBED
TABLE
-------------------------------------------------
TRAPEZE Lumex Same as above
BARS, Invacare
Temco
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
HOSPITAL BEDS & ACCESSORIES, CONTINUED
------------------------------------------------------------------------------------------------------------------------
TRACTION o Covered if patient has orthopedic E0840 Back disorder Category II, training
EQUIPMENT impairment requiring traction E0850 Backache, unspecified on equipment setup is
equipment, which prevents E0860 Disc, intervertebral done by patient
ambulation during its period of disorder service technician.
use. (Collars and supports usable E0870 Lumbago Supplies such as
during ambulation would E0880 Osteoporosis pelvic belt, head
be considered under O&P benefit.) E0900 Sciatica halter, rope, and
o Systems such as Pronex, Saunders, Spine, cervical disorder weight bag included.
Granberg, and Lossing are not
covered unless a standard brand
(see column 6) traction has been
tried and shown to be ineffective.
------------------------------------------------------------------------------------------------------------------------
FRACTURE o Covered if patient meets E0920 Same as above Category III
FRAME requirements for trapeze bar E0930
and /or traction equipment E0946
E0947
E0948
------------------------------------------------------------------------------------------------------------------------
BED BOARD Not covered, not medical in nature E0273 Category I
------------------------------------------------------------------------------------------------------------------------
BED CRADLE Covered for burn patients or other E0280 Category I
medical/surgical situations where
contact with bed linens should be
limited, such as extensive skin graft
------------------------------------------------------------------------------------------------------------------------
PADS FOR Not covered, a comfort item not
SIDERAILS primarily medical in nature.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
HOSPITAL BEDS & ACCESSORIES, CONTINUED
-------------------------------------------------
TRACTION Invacare Purchase only
EQUIPMENT Duromed
Graham field
-------------------------------------------------
FRACTURE Invacare Same as
FRAME hospital bed
-------------------------------------------------
BED BOARD
-------------------------------------------------
BED CRADLE Guardian
(blanketeze)
-------------------------------------------------
PADS FOR
SIDERAILS
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
PATIENT LIFTING DEVICES
------------------------------------------------------------------------------------------------------------------------
PATIENT o If transfer between bed and chair E0630 Category III,
LIFTS/Hoyer or commode requires the full Acute cardio-pulmonal training and setup on
type. assistance of more than one person Alzheimer's disease equipment is done by
who routinely lives in the home and Arthritis patient service
is responsible for providing care Back disorders technician. Sling or
CP, MS, MD, COPD seat for lift is
Cerebrovascular accident included. Bathing
Chronic brain syndrome accessories and scale
Coma, decubitis ulcers are not covered.
Diabetes w/complications
Emphysema
Fractures
Guillain barre syndrome
Heart, post myocardial
infarction
Lung disease
Myasthenia gravis
Paraplegia, quadriplegia
Parkinson's disease
Polymyositis
Spine, cervical injuries
------------------------------------------------------------------------------------------------------------------------
BATHTUB LIFT Not covered, only standard Hoyer E0625
lift is covered..See above.
------------------------------------------------------------------------------------------------------------------------
PATIENT LIFT, Not covered, institutional item not E0635
ELECTRIC suitable for home use.
------------------------------------------------------------------------------------------------------------------------
SEAT LIFT Not covered, not primarily medical in E0627 Osteoarthritis Category III
CHAIR nature. Rheumatoid arthritis
Muscular dystrophy
Central nervous system &
degenerative disease
------------------------------------------------------------------------------------------------------------------------
STAIR OR Not covered, convenience item which is
PORCH LIFT not primarily medical in nature.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
PATIENT LIFTING DEVICES
-------------------------------------------------
PATIENT Guardian Rent initially,
LIFTS/Hoyer Lumex if patients'
type. Invacare condition is
stable and
long term
(longer than 1
year) then
purchase
should be
considered.
-------------------------------------------------
BATHTUB LIFT
-------------------------------------------------
PATIENT LIFT,
ELECTRIC
-------------------------------------------------
SEAT LIFT Pride
CHAIR Penox
ADI
Golden
technologies
-------------------------------------------------
STAIR OR
PORCH LIFT
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
STANDING Prone standers are covered for Cerebral Covered limited to diagnosis
TABLE or Palsy, or other advanced neuro-muscular of Cerebral Palsy or other
PRONE degenerative disease when requested as advanced neuro-muscular
STANDER part of a physical or occupational degenerative disease when
therapy program. Or as replacement due requested as part of a
to growth or change in condition physical or occupational
therapy program or
replacement due to growth or
change in conditon.
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
DECUBITIS CARE EQUIPMENT
------------------------------------------------------------------------------------------------------------------------
FLOTATION o Covered if patient has or is E0196 Category III
MATTRESS, highly susceptible to decubitis E0187 Acute cardio-pulmonal
GEL AND ulcers and the PCP will be Alzheimer's disease
WATER supervising the equipment's use in Arthritis
connection with the course of Back disorders
treatment; CP, MS, MD, COPD
o Bed or chair confinement may Cerebrovascular accident
demonstrate the need for equipment. Chronic brain syndrome
Coma, decubitis ulcers
Diabetes w/complications
Emphysema
Fractures
Guillain barre syndrome
Heart, post myocardial
infarction
Lung disease
Myasthenia gravis
Paraplegia, quadriplegia
Parkinson's disease
Polymyositis
Spine, cervical injuries
------------------------------------------------------------------------------------------------------------------------
DRY PRESSURE Same as floatation mattress E0184 Same as above Category III
MATTRESS
------------------------------------------------------------------------------------------------------------------------
DRY PRESSURE Considered a consumable and comfort item E0199 Category I
PAD FOR and is not a covered benefit. .
MATTRESS
(EGGCRATE)
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
STANDING
TABLE or
PRONE
STANDER
-------------------------------------------------
-------------------------------------------------
DECUBITIS CARE EQUIPMENT
-------------------------------------------------
FLOTATION Lumex Rent only
MATTRESS, Lotus
GEL AND Graham field
WATER
-------------------------------------------------
DRY PRESSURE BG industries Rent only
MATTRESS Span America
-------------------------------------------------
DRY PRESSURE
PAD FOR
MATTRESS
(EGGCRATE)
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
ALTERNATING Same as flotation mattress. E0180 Same as above Category III
PRESSURE
PUMP AND PAD
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
DECUBITIS CARE EQUIPMENT, CONTINUED
------------------------------------------------------------------------------------------------------------------------
ALTERNATING Covered if the following criteria are E0277 Same as above Category III
PRESSURE met :
MATTRESS a) criterion 1,2 & 3
b) criterion 4, or
c) criterion 5 & 6
1. Multiple stage II pressure ulcers
located on the trunk or pelvis;
2. Patient has been on a comprehensive
ulcer treatment program for at least
the past month which has included the
use of an appropriate group I (above
items) support surface;
3. The ulcers have worsened or remained
the same over the past month;
4. Large or multiple stage III or iv
pressure ulcers on the trunk or pelvis;
5. Recent myocutaneous flap or skin
graft for a pressure ulcer on the trunk
or pelvis (within 60 days);
6. Patient has been on a group 2 or 3
support service immediately prior to a
recent discharge from hospital or
nursing facility (within 30 days).
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
ALTERNATING Grant Rent only
PRESSURE Gaymar
PUMP AND PAD Huntleigh
Bioclinic
-------------------------------------------------
-------------------------------------------------
DECUBITIS CARE EQUIPMENT, CONTINUED
-------------------------------------------------
ALTERNATING Huntleigh Rental only
PRESSURE Bioclinic
MATTRESS KCI
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
DECUBITIS CARE EQUIPMENT, CONTINUED
------------------------------------------------------------------------------------------------------------------------
Roho or Rik Same as above K0413 Same as above Category III
MATTRESS
------------------------------------------------------------------------------------------------------------------------
Air Mattress Air mattress overlays are covered only
Overlays when the overlay fits the bed the member
has in their home, and the cost of the
overlay alone, does not exceed the cost
of the standard air mattress .
------------------------------------------------------------------------------------------------------------------------
POWERED AIR Same as above E0193 Same as above Category III
FLOTATION
BED (LOW AIR
LOSS)
------------------------------------------------------------------------------------------------------------------------
AIR FLUIDIZED GSA excludes air fluidized beds from the E0194 Same as above Category III
BED benefit. Not covered.
------------------------------------------------------------------------------------------------------------------------
HYPERBARIC Not covered as home durable medical
CHAMBER equipment.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
DECUBITIS CARE EQUIPMENT, CONTINUED
-------------------------------------------------
Roho or Rik Crown Rental only
MATTRESS Rik
-------------------------------------------------
Air Mattress
Overlays
-------------------------------------------------
POWERED AIR Huntleigh Rental only
FLOTATION Bioclinic
BED (LOW AIR & KCI
LOSS)
-------------------------------------------------
AIR FLUIDIZED KCI Rental only
BED
-------------------------------------------------
HYPERBARIC
CHAMBER
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
WOUND Negative Pressure Wound Therapy
VACUUM or Vacuum-Assisted Closure, COVERAGE LIMITED TO THE
DEVICES including a FDA-approved pump FOLLOWING DIAGNOSES:
(i.e., VAC(R), Kinetic Concepts
Inc., San Antonio, TX) and CHRONIC STAGE III OR STAGE
supplies, may be covered when IV PRESSURE ULCERS OR,
the treating physician's request
and supporting documentation CHRONIC DIABETIC NEUROPATHIC
establish the following: ULCERS, OR
COMPLICATIONS OF A
o The ulcer, as described below, SURGICALLY CREATED WOUND
demonstrates a lack of improvement* (e.g., DEHISCENCE) OR A
despite: TRAUMATIC WOUND
1. Treatment with the following
complete wound therapy program:
o At least weekly visits
with written documentation
in the member's medical
record of evaluation and
care by a licensed medical
professional and at least
monthly documentation of
the wound's measurements;
AND
o Application of moist
topical dressings; AND
o Serial sharp, chemical
and/or mechanical
debridement of necrotic
tissue as appropriate;
AND
o Provision for adequate
nutritional status as
documented by a serum
albumin of > 3.0 g/dl
during the month prior to
the use of negative
pressure wound therapy.
AND
1. The member has one of the
following:
a) CHRONIC STAGE III OR STAGE IV
PRESSURE ULCERS; AND
o The ulcer has demonstrated
a lack of improvement* and
remains full thickness
despite consistent
application of all of the
following for at least the
last two (2) continuous
months prior to initiating
vacuum-assisted wound
closure:
o The member has been
appropriately turned and
positioned; AND
o The member has used an
appropriate pressure
relief device (e.g., low
air loss bed, alternating
pressure mattress) for
pressure ulcers on the
posterior trunk or pelvis;
AND
o The member's moisture and
incontinence have been
appropriately maintained.
OR
a) CHRONIC DIABETIC NEUROPATHIC
ULCERS; AND
o The ulcer has demonstrated
a lack of improvement*
despite the consistent
application of all of the
following for at least the
last two (2) continuous
months prior to initiating
vacuum-assisted wound
closure:
o The member has been on a
comprehensive diabetic
management program; AND
o The member has had
appropriate foot care,
including an attempt to
reduce pressure on a foot
ulcer; AND
o The member has been
non-weight bearing as
appropriate.
OR
a) CHRONIC VENOUS STASIS ULCERS;
AND
o The ulcer has demonstrated
a lack of improvement*
despite the consistent
application of all of the
following for at least the
last two (2) continuous
months prior to initiating
vacuum-assisted wound
closure:
o Compression
garments/dressings have
been consistently applied;
AND
o Leg elevation and
ambulation have been
encouraged.
*LACK OF IMPROVEMENT IS DEFINED
AS A LACK OF PROGRESS IN
QUANTITATIVE MEASUREMENTS OF
WOUND CHARACTERISTICS INCLUDING
WOUND LENGTH, AND WIDTH
(SURFACE AREA), AND DEPTH
MEASUREMENTS MEASURED IN
CENTIMETERS, AND AMOUNT OF
EXUDATE (DRAINAGE), SERIALLY
OBSERVED AND DOCUMENTED OVER A
SPECIFIC TIME INTERVAL.
OR
o The member has complications of a
surgically created wound (e.g.,
dehiscence) or a traumatic wound
(e.g., pre-operative flap or
graft) where there is
documentation of the medical
necessity for accelerated
formation of granulation tissue
which cannot be achieved by other
topical wound treatments (e.g.,
the member has comorbidities that
will not allow for healing times
achievable with other topical
wound treatments).
CONTRAINDICATIONS
According to the manufacturer, KCI USA
Inc., contraindications to V.A.C.(R)use
includes any of the following:
o The presence in the wound of
necrotic tissue with eschar,
unless effective debridement has
occurred
o Untreated osteomyelitis within the
vicinity of the wound;
o Cancer present in the wound;
o The presence of a fistula to an
organ or body cavity within the
vicinity of the wound.
It should be used cautiously in
patients with active bleeding,
difficult wound hemostasis, and
patients who are on
anticoagulants.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
WOUND KCI
VACUUM
DEVICES
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
DIABETIC CARE
------------------------------------------------------------------------------------------------------------------------
GLUCOMETERS The Roche glucometer is the preferred E0607 Diabetes mellitus, also with If training has been
Glucometer. Roche dextrosticks are the E0609 ketoacidosis completed by PCP or
CIGNA formulary brand. Members who want Vision difficulties hospital staff then
to have their dextrosticks covered under Circulatory difficulties category I, otherwise
their formulary level of coverage should category II. Initial
use Roche glucometers. supplies included
with glucometer.
Standard device is covered for: Ongoing supplies may
o Type I, Type II or Gestational be covered under
diabetes; pharmacy benefit.
o Special features such as large MEDICARE COVERS TEST
read-out or audio are covered for STRIPS AND LANCETS
visual impairments. UNDER HME BENEFIT.
o Continuous monitoring devices are
not covered as they do not replace
the need for intermittent glucose
monitoring using a standard
glucometer.
Alternative site or compact glucometers
may be provided as an alternative to,
not in addition to a standard
glucometers at the member or physician
request
------------------------------------------------------------------------------------------------------------------------
INJECTORS, May be covered as an alternative to an
NEEDLELESS insulin pump in children under age 16
who require three or more insulin
injections to maintain a normal blood
sugar.
------------------------------------------------------------------------------------------------------------------------
Diabetic NEEDLES, LANCETS, ALCOHOL WIPES, INSULIN
supplies. ETC ARE COVERED UNDER THE MEMBER'S
PHARMACY PLAN AND NOT SUPPLIED THROUGH
GENTIVA. MEDICALLY NECESSARY DIABETIC
SHOES MAY BE COVERED UNDER THE MEMBER'S
ORTHOTIC COVERAGE. CHECK PLAN LANGUAGE
AND REFER TO LOCAL ORTHOTIC VENDOR.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
DIABETIC CARE
-------------------------------------------------
GLUCOMETERS Lifescan Purchase only
Medisense
Boehringer
Mannheim
-------------------------------------------------
INJECTORS,
NEEDLELESS
-------------------------------------------------
Diabetic
supplies.
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
VACUUM Not covered under DME.
ERECTION
DEVICES
(erectaids)
------------------------------------------------------------------------------------------------------------------------
EXTERNAL Covered if prescribed by a physician E0784 Same as above Category III,
AMBULATORY and; delivery should be
INFUSION o the patient is injecting insulin coordinated with
PUMP FOR three times daily and has PCP to handle
INSULIN experienced difficulty training. Supplies
in controlling blood sugar levels included.
on less than three insulin
injections every day.. The member
does not need to attempt a fourth
injection prior to coverage,
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
CPM
------------------------------------------------------------------------------------------------------------------------
CONTINUOUS Covered: E0935 Total knee replacement Category III,
PASSIVE o For patients who have TKR or ACL ACL repair delivery and training
MOTION repair and and total duration only performed by patient
EXERCISE up to 3 weeks. service technician.
(CPM) KNEE o The 3 week limit may be repeated if CPM softgoods
a second surgery is required. CPM (fleece) included.
is also covered for members
requiring joint manipulation after
a surgical procedure as a method
to prevent further adhesions or
repeat surgery.
------------------------------------------------------------------------------------------------------------------------
CPM, HAND, Not Covered
WRIST, ANKLE
& SHOULDER
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
VACUUM
ERECTION
DEVICES
(erectaids)
-------------------------------------------------
EXTERNAL Minimed Purchase
AMBULATORY Disetronics only.,
INFUSION
PUMP FOR
INSULIN
-------------------------------------------------
-------------------------------------------------
CPM
-------------------------------------------------
CONTINUOUS Therakinetics Rental only
PASSIVE Sutter
MOTION Stryker
EXERCISE
(CPM) KNEE
-------------------------------------------------
CPM, HAND,
WRIST, ANKLE
& SHOULDER
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
COMPRESSION THERAPY
------------------------------------------------------------------------------------------------------------------------
LYMPHEDEMA Covered only for patients with E0650 Lymphedema of extremities Category II, delivery
PUMPS, lymphedema postoperative to a generally caused by: and training
NON-SEGMENTAL mastectomy, or lymphedema of the Spread of malignant tumors performed by patient
(single tube extremities which has been unresponsive Radical surgical procedures service technician.
with set to physical therapy and manual Post radiation fibrosis Pneumatic appliance
level of compression techniques. Filarlasis (sleeve) included.
pressure),
COMPRESSION Dual sleeves are covered when a member Post inflammatory thrombosis
PUMP requires therapy on both limbs. The goal Milroy's disease
of compression therapy is to allow the Congenital lymphedema
member to become more active due to Mastectomy
decreased edema. The prolonged bedrest
required to treat bilateral lymphedema
with a single sleeve is considered
couterproductive.
------------------------------------------------------------------------------------------------------------------------
LYMPHEDEMA Same as above. Segmental pump has E0651 Same as above Same as above
PUMP, multiple outflow ports which lead to
SEGMENTAL distinct segments on the appliance which
inflates sequentially.
------------------------------------------------------------------------------------------------------------------------
LYMPHEDEMA Covered if above therapy has been tried E0652 Same as above Same as above
PUMP, and not successful or patient's lesion
SEGMENTAL W/ requires limited pressure to be applied
CALIBRATED to a specific area.
GRADIENT Pump has a regulator on each outflow
PRESSURE port that can deliver a specified
pressure to each segment.
------------------------------------------------------------------------------------------------------------------------
COMPRESSION Consumable item, not covered under DME
STOCKINGS benefit.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
COMPRESSION THERAPY
-------------------------------------------------
LYMPHEDEMA Jobst Rent initially,
PUMPS, Kendall if patients'
NON-SEGMENTAL condition is
(single tube stable and
with set long term
level of (longer then
pressure), 1 year) then
COMPRESSION purchase
PUMP should be
considered.
-------------------------------------------------
LYMPHEDEMA Jobst Same as above
PUMP, Kendall
SEGMENTAL Talley
Multicom
-------------------------------------------------
LYMPHEDEMA Jobst Same as above
PUMP, Kendall
SEGMENTAL W/ Talley
CALIBRATED Multicom
GRADIENT
PRESSURE
-------------------------------------------------
COMPRESSION
STOCKINGS
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
STIMULATORS
------------------------------------------------------------------------------------------------------------------------
DRIONIC Not covered, not primarily medical in
DEVICES nature
------------------------------------------------------------------------------------------------------------------------
TRANSCUTANEOUS Standard unit is covered for chronic E0720 Back injury Category II, fitting
ELECTRONIC pain. E0730 Sciatica and electrode
NERVE Pain in thoracic spine placement to be
STIMULATOR Injury to shoulder completed by
(TENS) Disc, intervertebral physician or physical
disorder therapy department.
Osteoporosis, or any other Initial setup of
condition resulting in supplies to include
chronic pain. lead wires, and
one-month supply of
electrodes,
conductive paste and
batteries. Ongoing
supplies included.
------------------------------------------------------------------------------------------------------------------------
MUSCLE Covered for patients with following E0745 Diffuse muscle atrophy Same as above
STIMULATOR diagnosis. Hip replacement
o Standard units (two channel,) must
be utilized for a two week period,
and proven ineffective prior to
the four channel stimulator being
covered..
------------------------------------------------------------------------------------------------------------------------
MUSCLE Not covered, additional features are
STIMULATOR, primarily institutional in nature.
INTERFERENTIAL
PROGRAMMABLE
------------------------------------------------------------------------------------------------------------------------
THERAPEUTIC Not covered, technology not yet proven
ELECTRICAL to have significant medical benefit
STIMULATION primarily used for pediatric cerebral
(TES) palsy.
------------------------------------------------------------------------------------------------------------------------
STIMULATOR, Not covered, technology not yet proven E0755
SALIVARY and alternative therapies exist.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
STIMULATORS
-------------------------------------------------
DRIONIC
DEVICES
-------------------------------------------------
TRANSCUTANEOUS Empi Rent to
ELECTRONIC Staodyne purchase
NERVE Graham field
STIMULATOR
(TENS)
-------------------------------------------------
MUSCLE Same as above Same as above
STIMULATOR
-------------------------------------------------
MUSCLE
STIMULATOR,
INTERFERENTIAL
PROGRAMMABLE
-------------------------------------------------
THERAPEUTIC
ELECTRICAL
STIMULATION
(TES)
-------------------------------------------------
STIMULATOR,
SALIVARY
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
HOLTER Holter monitors are diagnostic and not
MONITOR covered under DME, they are core medical
(ELECTRO- and should not accrue to the members DME
CARDIO- max.. Gentiva is not the delivery
RECORDER), channel for diagnostic test or
diagnostic equipment.
------------------------------------------------------------------------------------------------------------------------
BONE GROWTH o Covered for a long bone fracture E0747 Nonunion of long bone Category III
STIMULATOR & that will not be healed in 120 E0748 fractures longer than 120
ULTRASOUND days, days.
o Covered for healing of
post-operative spinal fusion in Spinal fusion in members who
patients AT RISK FOR failure to heal smoke tobacco.,
due to cigarette/ tobacco abuse.
No trial period is required for
patients with an identified risk
factor.
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
ENTERAL
------------------------------------------------------------------------------------------------------------------------
ENTERAL PUMPS B9002 Ulcerative colitis Category III,
(food pumps) o Covered under the DME benefit when Gastrointestinal cancer training and setup by
a member is dependent upon tube Abnormal loss of weight trained patient
feedings for nutritional support. Ischemic bowel disease service technician.
o Portable pumps are covered in lieu Nausea/vomiting . SNV required if
of stationary pumps if condition Alzheimer's disease training not done in
requires continuous feeding and/or Dysphasia facility Ongoing
the member is able to leave the CVA supplies and
home for prolonged periods such as Short gut syndrome nutritionals may be
for physician office visits or Jaw fracture delivered by small
medical therapies. package courier.
Supplies for gravity
feeding are also
covered as long as
patient meets pump
criteria.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
HOLTER
MONITOR
(ELECTRO-
CARDIO-
RECORDEr),
-------------------------------------------------
BONE GROWTH EBI
STIMULATOR & Orthologic
ULTRASOUND Bio electron
Exogen
-------------------------------------------------
-------------------------------------------------
ENTERAL
-------------------------------------------------
ENTERAL PUMPS Sherwood Rent initially,
(food pumps) medical if patients
Ross labs condition is
Corpak stable and
Mead Johnson long term
(longer than
1 year) then
purchase
should be
considered
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
HEAT, LIGHT & COLD THERAPY
------------------------------------------------------------------------------------------------------------------------
DIATHERMY Not covered, institutional use only
UNITS
------------------------------------------------------------------------------------------------------------------------
HEAT LAMPS Not covered, not primarily medical in E0200 Category II
nature. E0205
------------------------------------------------------------------------------------------------------------------------
HEATING PADS Not covered, considered a comfort item E0210
not primarily medical in nature. E0215
E0238
------------------------------------------------------------------------------------------------------------------------
SAD lights Not covered under medical plan.
------------------------------------------------------------------------------------------------------------------------
ULTRAVIOLET Covered for selected patients with E0690 Generalized Refractory Category III, setup
PANEL LIGHTS, Refractory psoriasis; psoriasis performed by trained
o MD must justify treatment at home service technician.
versus alternate sites (e.g.
Outpatient department at hospital).
Panel lights should be considered,
if several discrete body areas
can be treated individually.
Cabinet style should be reserved
for members with extensive
involvement > 54% of body surface
area.
------------------------------------------------------------------------------------------------------------------------
HYDROCOLLATOR Not covered, not essential to the E0225
UNIT administration of moist heat therapy. E0239
------------------------------------------------------------------------------------------------------------------------
COLD Not covered, treatment can be
THERAPY UNIT accomplished using alternative methods
(cryotherapy) (i.e., Ice packs).
------------------------------------------------------------------------------------------------------------------------
PARAFFIN Not covered, not generally considered E0235
BATH effective therapy by the medical
UNITS profession.
(portable)
------------------------------------------------------------------------------------------------------------------------
WHIRLPOOLS Portable whirlpools are covered in the E1300 Wounds of an extremity
home only when required as part of a E1310 requiring home debridement.
home physicial therapy program for wound
care & debridement of a wound on an
extremity.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
HEAT, LIGHT & COLD THERAPY
-------------------------------------------------
DIATHERMY
UNITS
-------------------------------------------------
HEAT LAMPS Brandt Rent only,
Graham Field unless under
$200.
-------------------------------------------------
HEATING PADS
-------------------------------------------------
SAD lights
-------------------------------------------------
ULTRAVIOLET National Purchase only
PANEL LIGHTS, biologic
-------------------------------------------------
HYDROCOLLATOR
UNIT
-------------------------------------------------
COLD
THERAPY UNIT
(cryotherapy)
-------------------------------------------------
PARAFFIN Purchase only
BATH
UNITS
(portable)
-------------------------------------------------
WHIRLPOOLS
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIRS
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, o Covered if the member is K0001 Unilateral BK or AK Category II
STANDARD functionally disabled and requires amputation
assistance beyond the use of a cane Bilateral AK or BK
for ambulation. amputation
Rheumatoid arthritis
Osteoarthritis
Paraplegia
ALS, MS, CP, MD, CHF
Quadriplegia
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Same as above based on ability of K0003 Same as above Category II
LIGHTWEIGHT caregiver and/or patient to handle
(less than wheelchair in and outside of home in
36 lbs) tranport of patient or chair
o
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, K0005 ALS, CP, MD, ms Category II
ULTRALIGHT o Quadriplegia
(less than o These are generally considered to Paraplegia
30 lbs w/adj. be sport chairs, Customization for
Rear axle) sport or athletic activities is not
a covered benefit. Ultralight
wheelchairs are only covered when
the patient's condition has reached
a point where they are still able
to operate a wheelchair but can
only manage propelling an ultra-
light weight chair.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
WHEELCHAIRS
-------------------------------------------------
WHEELCHAIR, Everest & Rent
STANDARD Jennings initially, if
Invacare patients
Gendron condition is
Sunrise Medical stable and
Pogon long term
Maclaren (longer then
Wheelring 1 year) then
purchase
should be
considered
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
LIGHTWEIGHT
(less than
36 lbs)
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
ULTRALIGHT
(less than
30 lbs w/adj.
Rear axle)
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIRS
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Same as standard wheelchair AND; K0002 Ms, CHF, MD Category II
HEMI o chair is needed to enable the Hemiplegia
patient to place feet on the ground Intracerebral hemorrhage
for propulsion or short stature Parkinson's disease
(5' 4" or less)
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Same as standard wheelchair AND; K0100 Unilateral or bilateral AK Category II
AMPUTEE o must have one of the following or BK amputation
(or amputee diagnosis
adapter)
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Same as standard wheelchair AND; E0958 Category II
ONE ARM DRIVE o patient only has use of one hand or
(or adapter) arm.
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Same as standard wheelchair, AND; K0006 Same as standard wheelchair Category II
HEAVY DUTY o patient must weigh over 250 lbs. Or
can not fit into width of standard
wheelchair
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Same as above AND; K0007 Same as standard wheelchair Category II
EXTRA o patient must weigh over 300 lbs.
HEAVY DUTY
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Same as standard wheelchair AND; K0028 Same as standard wheelchair Category II
RECLINING o patient must be in wheelchair at
BACK least 4 hrs per day AND;
o patient must have at least one of
the following: quadriplegia, fixed
hip angle, trunk or leg casts,
extensor tone of trunk muscles;
o Patient needs to be in recumbent
position two or more times per day
AND;
o Requires frequent position change.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
WHEELCHAIRS
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
HEMI
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
AMPUTEE
(or amputee
adapter)
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
ONE ARM DRIVE
(or adapter)
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
HEAVY DUTY
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
EXTRA
HEAVY DUTY
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
RECLINING
BACK
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIRS, CONTINUED
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Covered if ALL the following conditions K0011 ALS, MS, MD, only when the Category II,
POWER DRIVE are met: K0012 member's physical condition batteries included.
o Meets standard AND; requires this level of a Battery replacement
o Patient is unable to operate a wheelchair at the time of limited to once every
Wheelchair manually; the request. Power twelve months.
o Patient is able to safely operate wheelchairs will not be
the controls; covered in "anticipation" of
o Patient has severe weakness or possible future (greater
other conditions affecting the than three months) need.
Upper body due to neuro or muscular Paraplegia
condition, usually totally Quadriplegia,
non-ambulatory and reasonably
independant.
o
------------------------------------------------------------------------------------------------------------------------
THREE Three wheeled scooters may be provided E1230 Same as above
WHEELED POWER as an alternative to a wheel chair when
OPERATED the patient has a condition for which
VEHICLE they are confined to bed/chair OR unable
(scooter) to endure ambulation more than 20 feet
OR has fallen repeatedly within home
and functional ability would improve
AND;
o They are unable to operate WC
manually AND; are able to safely
operate the controls
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
WHEELCHAIRS, CONTINUED
-------------------------------------------------
WHEELCHAIR, Same as above Same as above
POWER DRIVE
-------------------------------------------------
THREE Pride Same as above
WHEELED POWER Orthokinetics
OPERATED Amigo
VEHICLE Hoveround
(scooter)
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIRS, CONTINUED
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR Not covered.
W/STANDING
FEATURE
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR, Covered when patient meets standard K0009 ALS, ms, MD Category II, fitting,
CUSTOM wheelchair criteria AND; K0014 Paraplegia delivery and setup
o the features are not readily Quadriplegia performed by rehab
available in manufacturers standard technician trained in
product offering. seating and
o Must be uniquely constructed or positioning.
substantially modified for the Nonstandard features
specific patient AND; such as special
o Assessment or fitting is required. colors or upholstery
designs that are not
medical in nature are
not covered.
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR Covered if patient has or is highly E0962 Paraplegia Category I
CUSHION, FOAM susceptible to pressure sores. E0963 Quadriplegia
o Foam cushions are not covered E0964 Decubitus ulcer
when used for comfort and E0965 Alzheimer's disease
convenience. ALS, CVA
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR Same as above E0178 Same as above Category I
CUSHION, GEL
FLOTATION
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
WHEELCHAIRS, CONTINUED
-------------------------------------------------
WHEELCHAIR
W/STANDING
FEATURE
-------------------------------------------------
WHEELCHAIR, Pride Purchase only
CUSTOM Invacare
Quickie designs
Everest &
Jennings
Hoveround
-------------------------------------------------
WHEELCHAIR Bioclinic Purchase only
CUSHION, FOAM Mason
-------------------------------------------------
WHEELCHAIR Lumex Purchase only
CUSHION, GEL Jay medical
FLOTATION Lotus
Action
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIRS, CONTINUED
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR Same as above E0192 Same as above Category II
CUSHION,
LOW
EQUALIZATION
& POSITIONING
PAD
------------------------------------------------------------------------------------------------------------------------
WHEELCHAIR
ACCESSORIES o Items such as cupholders, backpacks,
trays, ashtrays, are convenience
items and are not covered.
o Items such as elevating legrests,
detachable arms, anti-tipping
devices, and oxygen tank
attachment, are typical of covered
items when required for a unique
medical condition or functional
limitation of the patient.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
WHEELCHAIRS, CONTINUED
-------------------------------------------------
WHEELCHAIR Jay medical Purchase only
CUSHION, Roho
LOW
EQUALIZATION
& POSITIONING
PAD
-------------------------------------------------
WHEELCHAIR
ACCESSORIES
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
NEWBORN CARE
------------------------------------------------------------------------------------------------------------------------
PHOTOTHERAPY Covered if patient has following E0202 Jaundice Category III,
BILILIGHTS diagnosis AND Infant is; delivery and
BILIBLANKET o 24-48 hrs old if total bili is equipment training
at least 12; performed by patient
o 49-72 hours old if total bili is service technician.
at least 15; Confirmation of
o Over 72 hours old if total bili caregiver ability to
is at least 17. receive equipment
o Bilirubin greater than 25 is not training by
considered to be safe for treatment nonclinincal staff
in the home. should be discussed
o Two types of equipment exist for with PCP. IF the PCP
this therapy; box lights where the has additional
infant is placed inside of the unit concerns an RN home
(similar in size to an incubator) health visit should
or blanket style where the infant also be scheduled.
is wrapped with a panel of CPR training, if any,
fiberoptic lights. to be done at
o The blanket style is more readily hospital prior to
available both units provide discharge. Supplies
medically efficacious therapy. included in the
o Double lights or lights and rental price.
blanket are appropriate for
infants who are not responsive to
therapy with a single modality, or
whose bilirubin is begnning to
increase rather than decrease.
o
------------------------------------------------------------------------------------------------------------------------
BREAST Covered only if the infant will remain Infant has cleft palate or
PUMPS hospitalized for more than seven days similar condition inhibiting
post discharge of mother; or for the ability to suckle.
following infant diagnosis. Battery
operated unit is model of choice.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
NEWBORN CARE
-------------------------------------------------
PHOTOTHERAPY Ohmeda XXX Rental only
BILILIGHTS Fiberoptic
BILIBLANKET (wallaby)
Physician Eng.
Products
-------------------------------------------------
BREAST
PUMPS
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
INCUBATOR Covered for premature infants less then Category III. Product
4 pounds in body weight. may not be available
in all areas.
------------------------------------------------------------------------------------------------------------------------
APNEA MONITOR Covered If one of the following exists: Category III,
W/MEMORY = o preterm with pathologic apnea; delivery and setup
standard unit. o preterm infant who could be performed by clinical
discharged from the hospital but staff. CPR training
has immature respiratory control to be done at
with feeding; hospital prior to
o infant discharged with trach. discharge. Supplies
included. Check with
PCP for need for RN
skilled home health
visit.
o ;Apnea monitors for infants
soley because the parents have
previously had a child with SIDS
are not covered. Check with state
social workers for state coverage
of apnea monitors for siblings of
children with SIDS. Many states
have programs to provide these
monitors. Inform Parents and
physicians about state and/or
community programs to obtain
monitors if available.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
INCUBATOR
-------------------------------------------------
APNEA MONITOR Corometrics Rental only
W/MEMORY = Aequitron
standard unit. Healthdyne
Edentec
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------------
DIAGNOSTICS
------------------------------------------------------------------------------------------------------------------------------
PNEUMOGRAM Pneumograms are diagnostic and not
AND SLEEP covered under DME,, they are core
STUDIES medical and should not accrue to the
members DME max..
------------------------------------------------------------------------------------------------------------------------------
OXIMETRY Covered when used as a monitoring and Category III, setup
alarm device; Anyone on a ventilator; and training
o Not covered under DME benefit premies on active therapy performed by clinical
when used as a diagnostic tool for apnea; Infants with staff.
o Gentiva will provide "spot broncho-pulmonary dysplasia.
checks" for members on chronic O2 Infants, or comatose adults
to ascertain the continuing medical with trachs
necessity for oxygen in the home members with advanced
every 60-90 days. pulmonary disease such as
pulmonary hypertension or
pulmonary fibrosis who are
on an active lung transplant
waiting list
------------------------------------------------------------------------------------------------------------------------------
BLOOD Covered only for the following A4660 Pregnancy induced Category I.
PRESSURE diagnosis: A4663 hypertension
UNIT o Pregnancy induced hypertension A4670
only. Digital or manual units are
covered based on member/ physician
preference.
o Dynamap continuous monitoring
equipment is not covered in the
home setting. This is
institutional equipment.
------------------------------------------------------------------------------------------------------------------------------
BIOFEEDBACK Not a covered benefit. E0746
(electromyography)
Incontinence
Alarms
------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------------
DIAGNOSTICS
-------------------------------------------------------
PNEUMOGRAM
AND SLEEP
STUDIES
-------------------------------------------------------
OXIMETRY Nelcor Puritan
Bennett
-------------------------------------------------------
BLOOD Omron Purchase only.
PRESSURE Labtron
UNIT
-------------------------------------------------------
BIOFEEDBACK
(electromyography)
Incontinence
Alarms
-------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
RESPIRATORY
------------------------------------------------------------------------------------------------------------------------
Aerochamber Not covered as DME. May be covered under
the member's pharmacy plan. Check
pharmacy and Well Aware program.
------------------------------------------------------------------------------------------------------------------------
AIR CLEANER Not covered, environmental control
(PURIFIER) equipment, not primarily medical in
(electrostatic nature.
machines)
------------------------------------------------------------------------------------------------------------------------
DEHUMIDIFIERS Not covered, environmental control unit;
(room type) not medical in nature.
------------------------------------------------------------------------------------------------------------------------
VAPORIZERS Not covered, considered a comfort item E0605
not primarily medical in nature.
------------------------------------------------------------------------------------------------------------------------
NEBULIZER Covered if patient's ability to breathe E0570 Pneumonia viral or bacterial Category I,
w/compressor is impaired and has difficulties in CHF, COPD, instruction may
expectorating sputum or copious Black lung include videotape,
secretions. Asthma initial
A portable unit may be covered in lieu Chronic bronchitis administration set
of a stationary unit. Emphysema included in setup,
Asbestosis ongoing supplies
included. Medication
for nebulizer, MDI's
and accessories (i.e.
Aerochamber) does not
fall under hme
benefit.
------------------------------------------------------------------------------------------------------------------------
NEBULIZER, Ultrasonic Nebulizer with compressor is E0575 Same as above Same as above
ULTRASONIC appropriate and acceptable medication
delivery system.
o Covered for delivery of
Pentamidine.
o Requests for utrasonic nebulizers
other than for administration of
Pentamadine should be referred to
the healthplan medical director if
the ordering physician is not
satisified with a standard
nebulizer as a delivery system.
Ultrasonic nebulizers are not
covered under the capitated
agreement.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
RESPIRATORY
-------------------------------------------------
Aerochamber
-------------------------------------------------
AIR CLEANER
(PURIFIER)
(electrostatic
machines)
-------------------------------------------------
DEHUMIDIFIERS
(room type)
-------------------------------------------------
VAPORIZERS
-------------------------------------------------
NEBULIZER Devilbiss Purchase only
w/compressor (pulmoaide)
Mada medical
Invacare
Healthdyne
Caire
-------------------------------------------------
NEBULIZER, Same as above Purchase only
ULTRASONIC
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
PEAK FLOW Not covered as DME. Refer to the E1399
METER healthplan for Well Aware program.
------------------------------------------------------------------------------------------------------------------------
SPIROMETER Not covered under HME, not readily
available for use in the home.
------------------------------------------------------------------------------------------------------------------------
COMPRESSOR, Same as nebulizer,AND; E0565 Same as above Same as above
AIR o The patient requires higher air
pressure (50 psi) to nebulize
thicker medications (i.e.
Pentamidine) and realize deeper
lung penetration.
------------------------------------------------------------------------------------------------------------------------
IPPB Covered if the patients ability to E0550 Same as above Category III
breathe is severely impaired. May
require a special order as this is not
a service traditionally supplied in the
home.
------------------------------------------------------------------------------------------------------------------------
SUCTION UNITS Covered for patients with one or more of E0600 Lung cancer Category II, training
(aspirators) the following : Tracheostomy and setup done by
Gomcos o Difficulty raising or clearing Quadriplegia clinical staff,
secretions; Viral or bacterial pneumonia suction canister,
o Cancer or surgery of the throat; Emphysema suction tubes and
o Dysfunction of the swallowing Bronchiectasis tubing are included.
muscles; CF, CP, CHF, Trachea care supplies
o Unconscious or in obtunded state; Black lung are not covered.
o Tracheostomy. Cancer of the throat
o Gomco suction units will be Coma
provided at the physician's
request. Note this item may be
difficult to locate and an
alternative may need to be
provided while Gentiva locates an
available unit.
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SUCTION Portable units are covered in lieu of
UNITS, stationery units when the member's
PORTABLE condition requires intermittent suction
OR AC/DC outside the home; I,e for physician
visits of visits for outpatient
activities.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
PEAK FLOW
METER
-------------------------------------------------
SPIROMETER
-------------------------------------------------
COMPRESSOR, Same as above Rent initially,
AIR if patients
condition is
stable and
long term
(longer then 1
year) then
purchase
should be
considered
-------------------------------------------------
IPPB Puritan Bennett Same as above
AP4 or AP5
-------------------------------------------------
SUCTION UNITS Schuco Same as above
(aspirators) Devilbiss
Gomcos Mada medical
-------------------------------------------------
-------------------------------------------------
SUCTION
UNITS,
PORTABLE
OR AC/DC
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Croup Tent Not covered as home DME. Insititutional
in nature.
------------------------------------------------------------------------------------------------------------------------
OXYGEN TENT Covered if patient's ability to breathe E0455 Croup Category III, initial
is impaired. setup and instruction
performed by
clinician. Disposable
supplies included
------------------------------------------------------------------------------------------------------------------------
PERCUSSOR Not covered, consider physical therapy E0480 CF, COPD, Category II, training
for acute exacerbations. Black lung disease and setup performed
Chronic bronchitis by clinical staff.
Emphysema
Asthma
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
Croup Tent
-------------------------------------------------
OXYGEN TENT Allied Rental only
-------------------------------------------------
PERCUSSOR Puritan Bennett Purchase only
General
physiotherapy
Graham field
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
RESPIRATORY, CONTINUED
------------------------------------------------------------------------------------------------------------------------
ThAIRapy Cystic Fibrosis.
Vest(TM) ThAIRapy Vests are limited to coverage
for members with Cystic Fibrosis
requiring chest percussion at least
three (3) times a day or more
frequently.
------------------------------------------------------------------------------------------------------------------------
POSTURAL Not covered. E0606
DRAINAGE
BOARD
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
RESPIRATORY, CONTINUED
-------------------------------------------------
ThAIRapy ThAirapy vest Rent initially,
Vest(TM) if patients
condition is
stable and
long term
(longer then
1 year) then
purchase
should be
considered
-------------------------------------------------
POSTURAL
DRAINAGE
BOARD
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
CPAP Sleep Study results: E0601 Obstructive sleep apnea Category III,
An RDI (or AHI) [ ] 15 K0193 (OSA) delivery and setup
OR performed by clinical
(Any two of the following) staff, initial
and RDI of 10-14 supplies (mask,
greater than 20 episodes of oxygen headgear, and tubing)
desaturation to <85% or any one included. Replacement
episode of desaturation <70% supplies included.
Type II second degree heart block Specialty masks such
or Pause > 3 seconds or ventricular as full face or
tachycardia at a rate > 140/bpm silicone are covered
with a duration of > 15 seconds. if standard mask or
a. Excessive daytime pillows have been
sleepiness that has been tried and failed.
document through the use of
Multiple Sleep Latency Testing
OR and Epworth Scale Score >
10.
o REQUESTS FOR cpap IN CHILDREN
AGE 12 AND UNDER SHOULD BE
REFERRED TO THE Healthplan
Medical Director for review.
If approved cover under cap
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
CPAP Devilbiss Rent for
Healthdyne first month,
Respironics if patient is
Sullivan compliant and
is receiving
therapeutic
benefit then
convert to
purchase.
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
BIPAP,DPAP & Same as above AND; E0452 Obstructive sleep apnea Same as above
self-titrating o Patient did not respond to or was K0194 syndrome
CPAP non-tolerant of CPAP. ** If a
member failed cpap in a lab and
was successful with bipap in a lab
and the doctor ordered bipap,, and
the member met the AHI
requirements then BIPAP will be
provided as the initial system.
o CPAP failed to stop the regression
of the patients' disorder.
o BiPAP may be used for diagnosis
other then OSA such as ventilatory
support, if requested follow
coverage guidelines for ventilator.
------------------------------------------------------------------------------------------------------------------------
HUMIDIFIER Covered if patient qualifies for CPAP K0268
FOR CPAP therapy and MD determines humidification
is needed.
Heated humidifier covered on a rental
basis if member is unable to tolerate
standard humidifier in the home.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
BIPAP,DPAP & Respironics Same as above
self-titrating
CPAP
-------------------------------------------------
HUMIDIFIER Respironics Same as above
FOR CPAP Healthdyne
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
RESPIRATORY, CONTINUED
------------------------------------------------------------------------------------------------------------------------
HELIOX Not covered under the DME benefit, this Swollen vocal cords
special mixture of oxygen and helium is
considered a drug.
May be covered under a pharmacy
benefit.
------------------------------------------------------------------------------------------------------------------------
MECHANICAL Covered, if other treatment options have Neuromuscular disease Category III,
INSUFFLATION- been tried and failed including: Thoracic restrictive disease delivery and setup
EXSUFFLATION o Chest percussion therapy, both Chronic respiratory failure performed by clinical
manual and pneumatic; following COPD staff.
o suctioning and;
o drug therapy.
------------------------------------------------------------------------------------------------------------------------
VENTILATOR & Covered for patients with the following E0450 Neuromuscular disease Category III,
NPPV diagnosis: E0453 Thoracic restrictive disease delivery and
(NASAL E0460 Chronic respiratory failure setup performed by
POSITIVE When negative pressure ventilator is following COPD clinical staff,
PRESSURE used chest shell/wrap is included. ventilator circuits
VENTILATION) and trachea tubes
included in the
ongoing rental price,
single patient use
Ambu bag included.
Backup emergency use
ventilator included
only for ventilator
dependent patients.
Trachea care kits are
not covered.
------------------------------------------------------------------------------------------------------------------------
HUMIDIFIER Covered if patient qualifies for
W/ HEATER ventilator therapy or receives oxygen
therapy via a trach tube.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
RESPIRATORY, CONTINUED
-------------------------------------------------
HELIOX
-------------------------------------------------
MECHANICAL
INSUFFLATION-
EXSUFFLATION
-------------------------------------------------
VENTILATOR & Aequitron Requires
NPPV Lifecare frequent
(NASAL Bear medical maintenance
POSITIVE and
PRESSURE servicing,
VENTILATION) rental only.
-------------------------------------------------
HUMIDIFIER Hudson Same as above
W/ HEATER Fisher Paykel
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
RESPIRATORY, CONTINUED
------------------------------------------------------------------------------------------------------------------------
OXYGEN E1400 Chronic bronchitis Category III,
CONCENTRATOR E1401 Emphysema delivery and
E1402 Asthma equipment training
An arterial blood gas or oxygen E1403 COPD performed by patient
saturation result is required to E1404 Black lung disease service technician.
demonstrate the medical necessity of Acute pulmonary heart Emergency backup unit
oxygen. disease included in rental
On room air the member should have a PO CHF price. Canula,
2 of 55 or less; or an SaO2 of 88% or Lung cancer humidifier and tubing
less at rest. Acute cor pulmonale included.
Members who desat to a PaO2 of 56-59
or SaO2 of 88% are appropriate for
oxygen .
Members who have a prescription for
oxygen, but who have a blood gas result
obtained while on oxygen, should have
the results referred for medical
review. If the Pa O2 on oxygen
corresponds to a Pa O2 of 55 or less or
an exercise value of 55- 59 then oxygen
is medically appropriate.Standby oxygen
will be covered for children or adults
who do not meet medical necessity
indications for regular oxygen
coverage, when medical records show
significant desaturation during
suctioning or seiziure activity.
Children age 10 and under who desat
rapidly to 90 or below with any of
these activities, should have an oxygen
supply for rapid response/
resuscitation.
------------------------------------------------------------------------------------------------------------------------
OXYGEN SYSTEM Same as above E0424 Same as above Category III,
GAS (with delivery and
regulator equipment training
& stand) performed by patient
service technician.
Canula, humidifier
and tubing included.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
RESPIRATORY,
CONTINUED
-------------------------------------------------
OXYGEN Devilbiss Rental only,
CONCENTRATOR Healthdyne requires
Airsep frequent
Invacare maintenance
and servicing,
-------------------------------------------------
OXYGEN SYSTEM Mada medical Same as above
GAS (with Contemporary
regulator products
& stand) Hudson
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
PORTABLE GAS E0431 Same as above Category III,
OXYGEN SYSTEM delivery and
(with equipment training
regulator performed by patient
and cart) service technician.
Canula, humidifier
and tubing included.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
PORTABLE GAS Mada medical Same as above
OXYGEN SYSTEM Contemporary
(with products
regulator Hudson
and cart)
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
RESPIRATORY, CONTINUED
------------------------------------------------------------------------------------------------------------------------
OXYGEN E0439 Same as above Category III,
SYSTEM, LIQUID E0434 delivery and
(includes base equipment training
system and performed by patient
portable unit) service technician.
Canula, humidifier
and tubing included.
------------------------------------------------------------------------------------------------------------------------
PORTABLE GAS THE VENDOR IS EXPECTED TO TEST MEMBER Same as above Category III,
OXYGEN SYSTEM, ON A CONSERVATION DEVICE TO ENSURE delivery and
Lightweight W/ APPROPRIATE SATURATION LEVEL CAN BE equipment training
Conservation REACHED. performed by patient
Device service technician.
Canula, humidifier
and tubing included.
------------------------------------------------------------------------------------------------------------------------
OXYGEN As above. Same as above Category III,
CONSERVATION delivery and
DEVICE equipment training
performed by patient
service technician.
Canula, humidifier
and tubing included.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
RESPIRATORY, CONTINUED
-------------------------------------------------
OXYGEN Caire Same as above
SYSTEM, LIQUID Puritan Bennett
(includes base Invacare
system and Penox
portable unit)
-------------------------------------------------
PORTABLE GAS Chad
OXYGEN SYSTEM, therapeutics
Lightweight W/
Conservation
Device
-------------------------------------------------
OXYGEN Penox
CONSERVATION Mada medical
DEVICE Chad
therapeutics
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
CONSUMABLE Not covered under the DME benefit, these A codes
SUPPLIES are nonreusable for single patient use;
urologicals o these may be supplied by Gentiva
wound care upon request under a fee for
incontinence service arrangement or as part of a
ostomy home health visit by a nurse.
diabetic o Diabetic strips are covered under
pharmacy benefit.
o Examples of non- covered
consumables include:
o Dressing supplies in the
absence of a skilled need.
o Doughnuts
o Bathmats
o Incontinence supplies
including catheters in the
absence of a skilled need.
o Eye pads
o Pillows
o Ostomy supplies * may be
covered as a separate benefit.
Refer to local or 800
consumable vendor.
------------------------------------------------------------------------------------------------------------------------
Sterile Saline Sterile saline and water in quantities
or sterile of >60cc used for irrigation is
water for considered a legend item and should be
irrigation. obtained through the pharmacy benefit.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
MISCELLANEOUS
-------------------------------------------------
-------------------------------------------------
CONSUMABLE
SUPPLIES
urologicals
wound care
incontinence
ostomy
diabetic
-------------------------------------------------
Sterile Saline
or sterile
water for
irrigation.
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
ORTHOTICS Not covered under the DME benefit, refer
AND to external prosthetic appliance
PROSTHETICS benefit.
(braces, o A prosthetic item is usually
supports, defined as something that replaces
collars & a part of the body;
splints o an Orthotic is an item that shores
up a weakened body part.
o Exampes:
o custom molded seating for
wheelchairs
o -Mastectomy bras,
o Stump stocks,
o heel cups,
o girdles,
o halos,
o insoles,
o arch supports,
o vests,
o rib belts,
o gauntlet,
o collars,
o boots,
o elastic wrap,
o shoes,
o support hose,
o slings,
o supports,
o braces,
o trusses,
splints
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
ORTHOTICS
AND
PROSTHETICS
(braces,
supports,
collars &
splints
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
MISCELLANEOUS
------------------------------------------------------------------------------------------------------------------------
AIDS TO DAILY Not covered, primarily convenience items
LIVING (ADL), not primarily medical in nature.
SELF-HELP o This includes items such as;
ITEMS. reachers, dressing aids, eating
aids, writing utensils, transfer
boards, stethoscopes,
thermometers, sphygmomanometers
(blood pressure cuff or digital
monitor), safety belts and
personal hygiene items.
------------------------------------------------------------------------------------------------------------------------
EQUIPMENT Repairs are covered to make the E1350 Category II, if
REPAIRS equipment serviceable unless caused patient is ambulatory
by abuse or improper use of and equipment is
equipment. category I or II then
o Equipment under manufacturer every effort should
warranty may have to be sent to be made for equipment
manufacturer for repair or to be brought to
replacement. Repair cost limited provider location for
to replacement value of equipment. repair.
Items such as compressors, tires,
upholstery, will be
repaired/replaced no more
frequently than the expected life
of the particular component and is
subject to any DME plan maximums.
o Adjustments for growth or changes
in condition are covered within
plan benefit limits, Standard
loaner equipment will be provided
when a members equipment needs to
be sent out for repair; or repair
is delayed waiting for parts or
service.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
MISCELLANEOUS
-------------------------------------------------
AIDS TO DAILY
LIVING (ADL),
SELF-HELP
ITEMS.
-------------------------------------------------
EQUIPMENT
REPAIRS
-------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
SITE OF SERVICE,
PRODUCTS COVERAGE CRITERIA HCPC EXAMPLE OF DIAGNOSES TRAINING, SUPPLIES
------------------------------------------------------------------------------------------------------------------------
BATHROOM Not covered, considered comfort or
EQUIPMENT; convenience items which are not
BATH BENCH primarily medical in nature.
TRANSFER Raised toilet seats are covered post
BENCH, GRAB total hip or total knee replacement or
BARS, TOILET similar surgery/ medical condition where
RAILS, a member is physically incapable of
RAISED TOILET either lowering themselves or raising
SEATS themselves from a standard home toilet.
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------
USUAL
BRAND RENT -
PRODUCTS SUPPLIED PURCHASE
-------------------------------------------------
BATHROOM
EQUIPMENT;
BATH BENCH
TRANSFER
BENCH, GRAB
BARS, TOILET
RAILS,
RAISED TOILET
SEATS
-------------------------------------------------
EXHIBIT XIV.
PARTICIPATING CIGNA SUBSIDIARIES AND AFFILIATES
Connecticut General Life Insurance Company
CIGNA HEALTHCARE MID-ATLANTIC, INC.
CIGNA HEALTHCARE OF ARIZONA, INC.
CIGNA HEALTHCARE OF CALIFORNIA, INC.
CIGNA HEALTHCARE OF COLORADO, INC.
CIGNA HEALTHCARE OF CONNECTICUT, INC.
CIGNA HEALTHCARE OF DELAWARE, INC.
CIGNA HEALTHCARE OF FLORIDA, INC.
CIGNA HEALTHCARE OF GEORGIA, INC.
CIGNA HEALTHCARE OF ILLINOIS, INC.
CIGNA HEALTHCARE OF INDIANA, INC.
CIGNA HEALTHCARE OF LOUISIANA, INC.
CIGNA HEALTHCARE OF MAINE, INC.
CIGNA HEALTHCARE OF MASSACHUSETTS, INC.
CIGNA HEALTHCARE OF NEW HAMPSHIRE, INC.
CIGNA HEALTHCARE OF NEW JERSEY, INC.
CIGNA HEALTHCARE OF NEW YORK, INC.
CIGNA HEALTHCARE OF NORTH CAROLINA, INC.
CIGNA HEALTHCARE OF OHIO, INC.
CIGNA HEALTHCARE OF PENNSYLVANIA, INC.
CIGNA HEALTHCARE OF SOUTH CAROLINA, INC.
CIGNA HEALTHCARE OF ST. LOUIS, INC.
CIGNA HEALTHCARE OF TENNESSEE, INC.
CIGNA HEALTHCARE OF TEXAS, INC.
CIGNA HEALTHCARE OF UTAH, INC.
CIGNA HEALTHCARE OF VIRGINIA, INC.
EXHIBIT XV.
HOME HEALTH CARE BENEFIT CLARIFICATION GUIDELINES
TABLE OF CONTENTS
o Benefit Clarification Examples
o Medical Interpretation for Chronic and Hourly Cases
o Home Health Decision Process
HOME HEALTH CARE BENEFIT CLARIFICATION GUIDELINES
STANDARD GSA
HOME HEALTH SERVICES
Home health services when you:
o Require skilled care;
o Are unable to obtain the required care as an ambulatory outpatient;
and
o Do not require confinement in a hospital or Other Participating
Health Care Facility.
Home health services are provided only if the Healthplan Medical Director
has determined that the home is a medically appropriate and cost-effective
setting. If you are a minor or an adult who is dependent upon others for
non-skilled care (e.g., bathing, eating, toileting), home health services
will only be provided for you during times when there is a family member
or care giver present in the home to meet your non-skilled care needs.
Home health services are those skilled health care services that can be
provided during intermittent visits of two hours or less by Other
Participating Health Professionals. Necessary consumable medical supplies,
home infusion therapy, and durable medical equipment administered or used
by Other Participating Health Professionals in providing home health
services are covered. Home health services do not include services of a
person who is a member of your family or your dependent's family or who
normally resides in your house or your dependent's house. Physical,
occupational, and speech therapy provided in the home are subject to the
benefit limitations described under "Short-term Rehabilitative Therapy".
END STATE PPO TEMPLATE
COVERED EXPENSES
HOME HEALTH CARE SERVICES
o CHARGES MADE FOR HOME HEALTH CARE SERVICES WHEN YOU:
o REQUIRE SKILLED CARE;
o ARE UNABLE TO OBTAIN THE REQUIRED CARE AS AN AMBULATORY
OUTPATIENT; AND
o DO NOT REQUIRE CONFINEMENT IN A HOSPITAL OR OTHER HEALTH CARE
FACILITY.
HOME HEALTH CARE SERVICES ARE PROVIDED UNDER THE TERMS OF A HOME HEALTH CARE
PLAN FOR THE PERSON NAMED IN THAT PLAN.
IF YOU ARE A MINOR OR AN ADULT WHO IS DEPENDENT UPON OTHERS FOR NON-SKILLED
CARE (E.G. BATHING, EATING, TOILETING), HOME HEALTH CARE SERVICES WILL ONLY BE
PROVIDED FOR YOU DURING TIMES WHEN THERE IS A FAMILY MEMBER OR CARE GIVER
PRESENT IN THE HOME TO MEET YOUR NON-SKILLED CARE NEEDS.
HOME HEALTH CARE SERVICES ARE THOSE SKILLED HEALTH CARE SERVICES THAT CAN BE
PROVIDED DURING INTERMITTENT VISITS OF 2 HOURS OR LESS BY OTHER HEALTH CARE
PROFESSIONALS. NECESSARY CONSUMABLE MEDICAL SUPPLIES, HOME INFUSION THERAPY, AND
DURABLE MEDICAL EQUIPMENT ADMINISTERED OR USED BY OTHER HEALTH CARE
PROFESSIONALS IN PROVIDING HOME HEALTH CARE SERVICES ARE COVERED. HOME HEALTH
CARE SERVICES DO NOT INCLUDE SERVICES OF A PERSON WHO IS A MEMBER OF YOUR FAMILY
OR YOUR DEPENDENT'S FAMILY OR WHO NORMALLY RESIDES IN YOUR HOUSE OR YOUR
DEPENDENT'S HOUSE. PHYSICAL, OCCUPATIONAL, AND SPEECH THERAPY
PROVIDED IN THE HOME ARE SUBJECT TO THE BENEFIT LIMITATIONS DESCRIBED UNDER
"SHORT-TERM REHABILITATIVE THERAPY".
OTHER HEALTH CARE FACILITIES ARE FACILITIES OTHER THAN A HOSPITAL OR A
HOSPICE FACILITY. EXAMPLES OF OTHER HEALTH CARE FACILITIES INCLUDE, BUT ARE NOT
LIMITED TO, LICENSED SKILLED NURSING FACILITIES, REHABILITATION HOSPITALS AND
SUB-ACUTE FACILITIES.
OTHER HEALTH CARE PROFESSIONALS INCLUDE AN INDIVIDUAL, OTHER THAN A PHYSICIAN
WHO IS LICENSED OR OTHERWISE AUTHORIZED UNDER THE APPLICABLE STATE LAW TO
DELIVER MEDICAL SERVICES. OTHER HEALTH CARE PROFESSIONALS INCLUDE, BUT ARE NOT
LIMITED TO PHYSICAL THERAPISTS, HOME HEALTH AIDES AND NURSES.
WHAT IS COVERED UNDER THE BENEFIT LANGUAGE?
o Skilled services which can be provided through INTERMITTENT two hour
visits will be covered.
o WOUND CARE
o SKILLED ASSESSMENTS
o SKILLED INTERMITTENT THERAPIES
o SKILLED REHABILITATIVE SERVICES- *REHAB SERVICES IN THE HOME
SETTING ARE SUBJECT TO, AND ACCRUE TO THE STR BENEFIT LIMITS
o ETC.
o Skilled visits of two hours or less necessary to provide
intermittent monitoring and/or education or training for supportive
family caregivers are covered.
o DIABETICS
o MEMBERS WITH SELF INJECTABLES
o INFANTS REQUIRING BILI-LIGHTS WHERE PARENTAL COMPLIANCE &
UNDERSTANDING REQUIRES VALIDATION.
o ETC.
o Skilled visits of two hours or less by a participating social worker
to assist the family with long term planning and access to social
services are covered.
o Services of home health aides are covered only when the home health
aide is used in direct support of a skilled visit. Only skilled
visits are covered in the home
WHAT IS NOT COVERED UNDER THE BENEFIT LANGUAGE?
o Skilled services which are continuous in nature; i.e. airway
maintenance, continuous monitoring, are not covered under the new
benefit.
*
WHAT SHOULD CIGNA IN COORDINATION WITH GENTIVA/CARECENTRIX DO WHEN A MEMBER
HAS A MEDICAL NEED WHICH SUPPORTS SERVICES BEYOND THE BENEFIT LANGUAGE ?
The case manager should discuss the participant's skilled needs, covered
services and gaps with the participant or the participant's
spouse/parent/guardian. The case manager should work with the family to
determine what resources might be available to fill gaps in services. The
new case management tools for CHILDREN WITH SPECIAL HEALTH CARE NEEDS or
END STAGE MALIGNANCIES offer suggestions on resources available to assist
with care for these populations. In addition, potential resources include:
o the family as a caregiver
o other private insurance coverage
o Medicare
o Medicaid
o Children's Health Services
o SSI
o Medicaid waiver programs
The case manager should assist families with obtaining the necessary forms
and information to apply for eligible programs. A consult with a home
health social worker should be considered to assist with identification of
additional community resources. All plans and activities to assist with
alternative coverage should be fully documented in the case management
notes.
Any gaps in services which remain after a full review of all existing
programs MUST be discussed with the Healthplan Medical Director prior to
initiating any authorization of services which exceed benefit definitions.
DURABLE MEDICAL EQUIPMENT] GSA TEMPLATE
[Purchase or rental of durable medical equipment that is ordered or
prescribed by a Participating Physician and provided by a vendor approved
by the Healthplan. Coverage for repair, replacement or duplicate equipment
is not covered except when replacement or revision is necessary due to
growth, change in medical condition, or mechanical defect covered by
manufacter's warranty .
Durable medical equipment is defined as items which are designed for and
able to withstand repeated use by more than one person; customarily serve
a medical purpose; generally are not useful in the absence of illness or
injury; are appropriate for use in the home; and are not disposable. Such
equipment includes, but is not limited to, crutches, hospital beds, wheel
chairs, ventillators, and dialysis machines.
Unless covered in connection with the services described in the "Inpatient
Services at Other Participating Health Care Facilities" or "Home Health
Services" provisions, the following are SPECIFICALLY EXCLUDED:
o Hygienic or self-help items or equipment;
o Items or equipment primarily used for comfort or convenience such as
bathtub chairs, safety grab bars, stair gliders or elevators,
over-the-bed tables, saunas or exercise equipment;
o Environmental control equipment, such as air purifiers, room
humidifiers and electrostatic machines;
o Institutional equipment, such as air fluidized beds and diathermy
machines;
o Elastic stockings and wigs;
o Equipment used for the purpose of participation in sports or other
recreational activities, including, but not limited to orthotics,
braces and splints;
o Items, such as auto tilt chairs, paraffin bath units and stationary
whirlpool baths, which are not generally accepted by the medical
profession as being therapeutically effective;
o Items which under normal use would constitute a fixture to real
property, such as ramps, railings, and grab bars.]
DURABLE MEDICAL EQUIPMENT PPO TEMPLATE
o CHARGES MADE FOR THE PURCHASE OR RENTAL OF DURABLE MEDICAL EQUIPMENT
PROVIDED BY A VENDOR APPROVED BY CG. COVERAGE FOR THE REPAIR,
REPLACEMENT OR DUPLICATE EQUIPMENT IS NOT COVERED EXCEPT WHEN
REPLACEMENT OR REVISION IS NECESSARY DUE TO GROWTH, CHANGE IN MEDICAL
CONDITION OR MECHANICAL DEFECT COVERED BY MANUFACTER'S WARRANTY.
DURABLE MEDICAL EQUIPMENT IS DEFINED AS ITEMS WHICH ARE DESIGNED FOR
AND ABLE TO WITHSTAND REPEATED USE BY MORE THAN ONE PERSON, CUSTOMARILY
SERVE A MEDICAL PURPOSE, GENERALLY ARE NOT USEFUL IN THE ABSENCE OF
INJURY OR SICKNESS, ARE APPROPRIATE FOR USE IN THE HOME, AND ARE NOT
DISPOSABLE. SUCH EQUIPMENT INCLUDES, BUT IS NOT LIMITED TO: CRUTCHES,
HOSPITAL BEDS, WHEEL CHAIRS, VENTILLATORS, AND DIALYSIS MACHINES.
UNLESS COVERED IN CONNECTION WITH THE SERVICES DESCRIBED IN ANOTHER
SECTION OF THIS CERTIFICATE, THE FOLLOWING ARE SPECIFICALLY EXCLUDED:
o HYGIENIC OR SELF-HELP ITEMS OR EQUIPMENT;
o ITEMS OR EQUIPMENT THAT ARE PRIMARILY USED FOR COMFORT OR
CONVENIENCE, SUCH AS BATHTUB CHAIRS, SAFETY GRAB BARS, STAIR
GLIDERS OR ELEVATORS, OVER-THE-BED TABLES, SAUNAS OR EXERCISE
EQUIPMENT;
o ENVIRONMENTAL CONTROL EQUIPMENT, SUCH AS AIR PURIFIERS, ROOM
HUMIDIFIERS AND ELECTROSTATIC MACHINES;
o INSTITUTIONAL EQUIPMENT, SUCH AS AIR FLUIDIZED BEDS AND DIATHERMY
MACHINES;
o ELASTIC STOCKINGS AND WIGS;
o IN SPORTS OR OTHER RECREATIONAL ACTIVITIES INCLUDING, BUT NOT
LIMITED TO, ORTHOTICS, BRACES AND SPLINTS;
o ITEMS, SUCH AS AUTO TILT CHAIRS, PARAFFIN BATH UNITS AND
WHIRLPOOL BATHS, WHICH ARE NOT GENERALLY ACCEPTED BY THE MEDICAL
PROFESSION AS BEING THERAPEUTICALLY EFFECTIVE;
o ITEMS WHICH UNDER NORMAL USE WOULD CONSTITUTE A FIXTURE TO REAL
PROPERTY, SUCH AS RAMPS, RAILINGS, AND GRAB BARS.
COVERAGE IS SUBJECT TO THE MAXIMUM SHOWN IN THE SCHEDULE.
Refer to the DME Grid for information on specific pieces of durable
medical equipment.
WHAT IS THE APPROPRIATE UTILIZATION OF HOME HEALTH AIDES AS A COVERED SERVICE?
Home health aides are covered when utilized in support of a skilled service.
This would include assisting the skilled professional to turn, position, or
mobilize a patient during a skilled visit; i.e. dressing changes, wound
assessment, and physical therapy. Hygienic measures or skin care provided during
a skilled visit as part of the preparation for assessment or nursing / medical
procedures, would be appropriate utilization of a home health aide. However,
daily bathing, skin care, or assisting with dressing and activities of daily
life would be considered custodial care.
Home health aide services not provided in support of a skilled visit are not
considered to meet the requirements for benefit coverage and therefore, would
not be covered under capitation with Gentiva. Home health aide services for
cooking, cleaning, or direct custodial care are not covered benefits under GSA
or FlexCare and are not covered under capitation with Gentiva. Home health aides
requested for safety issues, or to assist with a patients ability to rest or
conserve energy are also not a covered benefit or covered under capitated with
Gentiva.
WHEN IS A PATIENT CONSIDERED PHYSICALLY ABLE TO ATTEND OUTPATIENT SERVICES?
Due to the availability of space, equipment, and regular staff, outpatient
services (i.e. rehabilitation therapy, blood draws and certain IM injectables)
offer the potential for more efficient delivery of care and a greater level of
improvement than may be provided in the home setting. For this reason,
outpatient ambulatory services would be the preferred setting for these types of
services.
Home nursing, or therapy is available for those who are physically unable to
attend an outpatient program. The patient must not be able to leave home without
significant assistance. Lack of transportation does not qualify for home care.
The patient, who poses safety risks due to dizziness, unsteadiness, or muscle
wasting from an illness, may be a candidate for home services under the
capitated agreement with Gentiva. The primary focus should be to transition
patients to outpatient services once they improve should services continue.
GSA language specifically states :
COVERED EXPENSES
HOME HEALTH CARE SERVICES
o CHARGES MADE FOR HOME HEALTH CARE SERVICES WHEN YOU:
o REQUIRE SKILLED CARE;
o ARE UNABLE TO OBTAIN THE REQUIRED CARE AS AN AMBULATORY
OUTPATIENT; AND
o DO NOT REQUIRE CONFINEMENT IN A HOSPITAL OR OTHER HEALTH CARE
FACILITY.
While neither the GSA or FlexCare languages mention the term "homebound" related
to home health care, the definition is generally interpreted to mean the same as
the GSA terminology. However, the Gentiva contract does specifically use this
term - (page 5, definition for Home Health Services) "those services, supplies,
drugs/medications (limited to topical agents for wound care) and equipment
ordered by a physician for a Participant who is home bound due to a disabling
condition.
Home Infusion Therapy Services and skilled nursing services such as wound care,
sterile dressing etc. are covered in the home if provision of these services in
the home is the most optimal place of service for the level of care needed.
WHEN ARE CONSUMABLES COVERED?
There are two situations where consumable supplies are coordinated by Gentiva
and covered under capitation:
1. Other than glucose test strips, consumable medical supplies are covered if
they are necessary for authorized durable medical equipment to function.
Glucose strips are covered under pharmacy, not DME.
2. Consumables are covered when used directly by an authorized skilled home
health professional to provide a skilled service, and are used during that
visit. In the situation where a family member is educated by the nurse to
perform that skilled service between the scheduled skilled visits, the
consumables will also now be covered under cap in an effort to ease
transition to a willing caregiver. Consumables are not covered under
capitation for services, which do not require a skilled level of care.
This includes situations where a patient is independent with care (i.e.
self-catheterization).
Fleet and soap suds enemas
Peroxide
Syringes for nurses to administer injections (excludes specialty or special
order syringes)
Lab tubes, vacutainers and needles for lab work
KY jelly and NG Tubes
Cotton balls and alcohol sponges
Band-Aids
thermometers
sharps containers
NOTE: once there is no need for skilled visits, consumables would not be covered
under capitation with Gentiva.
When are medications, including injectables, covered under capitation?
Self injectable subcutaneous and intramuscular medications are intended to be
coordinated through the pharmacy benefit and so, are not covered under
capitation with Gentiva. Approved Intravenous home infusions are covered under
capitation.
Gentiva and the healthplan staff will make every effort to successfully support
transition of self-injectables to the patient/family within 1-2 teaching visits.
The visits required to teach self-injectables are considered part of the home
care benefit and covered under capitation with Gentiva. In rare situations where
there is resistance by the patient or care giver to learning the skilled
service, Gentiva may need to creatively manage the situation with a care plan
approach which involves the treating physician, family or CHC Case Manager.
Ceredase and Hemophiliac Factor are medications which are specifically mentioned
as covered under our home infusion agreement and must be coordinated through
Gentiva even though the reimbursement has been defined as fee for service.
NON SKILLED SERVICES / CUSTODIAL SERVICES / SELF CARE.
TURNING
POSITIONING
WEIGHING
BATHING
MAINTAINING A BOWEL PROGRAM
OSTOMY CARE**
ileostomy
ureterostomy
colostomy
ADMINISTRATION OF ENEMAS**
ADMINISTRATION OF SUPPOSITORIES**
FEEDING
DRESSING
ASSISTING WITH ACTIVITIES OF DAILY LIVING
AEROSOL THERAPY**
** The patient or family member may perform these services. Home health aides
may not perform these services.
DURABLE MEDICAL EQUIPMENT
- CARE EXPECTED TO BE LIMITED TO TRAINING
FOR EXAMPLE:
LYMPHEDEMA BOOTS
CPAP
NEBULIZERS
APNEA MONITOR
HOME HEALTH DECISION PROCESS
WHAT SERVICES ARE BEING REQUESTED?
Describe all services being requested.
ARE THE SERVICES SKILLED?
Yes. Proceed to determination of medical necessity.
No. Refer participant to other resources (i.e. community or government
programs, self pay options).
CAN THE SERVICES BE PROVIDED THROUGH INTERMITTENT VISITS, OR WILL THE SERVICES
REQUIRE CONTINUOUS SKILLED NURSING IN THE HOME?
The home health benefit only covers intermittent visits. Any request
requiring continuous skilled services needs to be approached from a case
management , care planning perspective. I.e Assess all resources, other coverage
available, family support, finances.. consult a social worker if the member
requires referral for additional programs or funding. I,e medicare/ medicaid.
Discuss limits of coverage with the member/ family and provider.
ARE THE SERVICES MEDICALLY NECESSARY?
Evaluate each service. IV therapy for pneumonia- yes
Nursing assessment for a patient with pneumonia and ALS - yes
Home health aide to stay with patient while family works - no
Continuous skilled nursing for 16 hours a day for suctioning a ventilator
dependent patient- medically necessary= yes, covered benefit = no.
IS THE HOME SETTING THE APPROPRIATE SETTING FOR THIS PATIENT?
Is the patient restricted to the home because of physical
limitations?--yes
Is a mobile patient receiving home therapy verses the more appropriate
outpatient facility?--no
Are home services being requested over outpatient for convenience?-- no
Note: this does not apply to home infusion, which has no restrictions on the
patient's mobility.
WHAT SERVICES WILL BE PROVIDED, AND FOR HOW LONG?
Those services that are skilled, medically necessary, and appropriate for
the home setting will be provided.
Short-term rehabilitation services are subject to the plan design benefit
limitations. Remember the STR benefit maximum applies to all places of
service. Inpatient rehab + home rehab + outpatient rehab = maximum. All
places of service accrue to one maximum. The member does not have separate
benefits for each place of service.
All services will be reviewed for continued appropriateness on a regular
basis.
WHAT SHOULD THE HEALTHPLAN'S GOAL BE IN PROVIDING HOME HEALTH SERVICES?
In a managed care environment, our efforts at controlling costs include
providing services at the least intensive appropriate level of care. There
are many "skilled services" which a family / patient / or caregiver may
assume after training by a nursing professional. Our efforts should be
aimed in that
direction. However, CIGNA and Gentiva recognize that individual patients
and families will require different levels of support to achieve the
desired outcomes. We cannot force a layperson to assume skilled care.
WHAT IF THE PATIENT LIVES ALONE OR HAS NO WILLING CAREGIVER AVAILABLE TO ASSUME
RESPONSIBILITY?
Patients who are physically incapable of assuming responsibility for their
own care in an emergency situation, or who have no willing care giver
available on an emergency basis, are not considered appropriate for home
health services primarily for safety issues.
IS THE CARE, AND THE NEED FOR CARE BEING EVALUATED ON A REGULAR BASIS BY GENTIVA
CareCentrix ?
The care and the need for care are being evaluated on a regular basis at
two to three levels. Home health services are initially received at the
Gentiva CareCentrix level. The authorization for the services are then
distributed to a local agency. Often, CareCentrix will authorize visits
for a limited number of days, as a process to ensure feedback on the
progress of the care. The skilled personnel providing the care should
continuously evaluate the care. Any patients meeting CIGNA criteria for
case management should also be receiving regular evaluations by the CIGNA
Case Manager.
What questions are being asked when the care/ services are being
periodically reevaluated?
What is the primary diagnosis driving the service?
Are the services skilled?
Are the services medically necessary?
Is the home the most appropriate location for the services for this
individual patient?
Is the patient responding to the skilled services?
Is there a primary care giver available?
WHAT IF THE PATIENT IS NOT RESPONDING TO THE SKILLED SERVICE (I.E. NO
IMPROVEMENT, OR WORSENING CONDITION)?
1. The home health agency providing the service is the primary reviewer of
progress. In those situations where a patient is showing no progress, or
unexpectedly deteriorating, the home health agency / Home Health Nurse,
would contact the Primary Care Physician to review the plan of care.
2. The home health agency and the PCP would update the patient care plan. A
date for re-evaluation of patient progress would be determined.
3. Based on the patient's condition and progress, the home health agency may
continue regular contact with the PCP.
4. In those situations where the home health agency is concerned about the
medical appropriateness of the care plan, the home health agency should
contact the Care Manager at Gentiva CareCentrix. The Gentiva CareCentrix
Care Manager will contact the local CIGNA healthplan Health Services Nurse
or Medical Director.
5. The CHC Nurse Reviewer or Medical Director should review the case and
discuss the care plan with the PCP.
6. The results of the discussion between CHC medical management and the PCP
should be communicated to the Care Manager at Gentiva CareCentrix.
7. In those situations where Gentiva and CIGNA cannot come to agreement, a
Homecare Review Panel consisting of both CIGNA and Gentiva corporate staff
is available for emergent, urgent, and regular weekly review.
8. If agreement has still not been reached regarding the medical management
of the case, the situation should be elevated to the Corporate Medical
Directors at CHC and Gentiva for review.
EXHIBIT XVI
STANDARDS FOR DELEGATION OF
CLINICAL SERVICE MANAGEMENT ACTIVITIES
FOR GENTIVA CARECENTRIX, INC. /("CIGNA") (the "Standards")
[Any and all capitalized terms not defined herein shall have the same
meaning as in the managed care provider agreement between CIGNA and
Gentiva CareCentrix (MCA)
1. MCA shall be subject to a pre-contract site review and
evaluation of its Clinical Service Management Program ("Clinical Service
Management Program") for all delegated activities.
2. MCA shall maintain a written Clinical Service Management
Program description which includes:
A. a description of MCA's 1) policies/procedures to evaluate Medical
Necessity, 2) use of nationally recognized and locally approved
criteria and information sources; and 3) process to review and
approve services;
B. a description of MCA's mechanism to periodically update the Clinical
Service Management Program description and the Clinical Service
Management Program's policies and procedures;
C. documented evidence of approval of MCA's Clinical Service Management
Program by MCA's appropriate body of governance;
D. a description of the roles and functions of MCA's Clinical Service
Management Program to include a definition of the roles and
responsibilities of MCA's Clinical Service Management Program staff;
E. evidence demonstrating an active, current work plan which responds
to identified opportunities for improvement and action steps, as
well as a process for, and evidence of, an annual evaluation of the
Clinical Service Management Program.
MCA shall provide annual reports as specified: (i.) Clinical Service
management Program Description and Work Plan by March 31st of the
current year, (ii.) A written evaluation of MCA's Clinical Service
Management Program for the previous year by March 31st of the
current year.
F. a description of the transition process when benefits end or a
Represented Provider's participation in the network terminates.
3. The MCA's Clinical Service Management Program must have been
operational for at least the 12-month period preceding the effective date
of the delegation, as defined herein.
4. The MCA's Clinical Service Management Program shall at a
minimum comply in all respects with the requirements of an appropriate
accrediting body designated by CIGNA (i.e. NCQA, JCAHO, etc.), the
requirements established by CIGNA herein and in the Agreement and the
requirements of applicable federal and state laws and regulations. MCA
shall maintain all applicable
licensures and certifications required to perform the Clinical Services
Management Program activities. MCA shall maintain appropriate records with
respect to all Clinical Service Management Program activities for the
duration of the Agreement and seven years thereafter.
5. MCA shall maintain professional liability coverage in the
amount of 1 million per occurrence and 3 million aggregate, amounts less
than these required amounts will be subject to approval by CIGNA. MCA
shall not subcontract any of its clinical management responsibilities
under its agreement with CIGNA unless otherwise agreed in writing by
CIGNA. Any subcontractor approved by CIGNA shall be required to agree in
writing to comply with all standards applicable to MCA with regard to the
subcontracted services.
6. MCA shall provide CIGNA with a copy of its written Clinical
Service Management Program description upon request. Such Clinical Service
Management Program description shall be submitted to CIGNA for review and
approval prior to the effective date of the contract and annually
thereafter and shall not be materially modified without CIGNA's prior
written approval.
7. The role of MCA and its Represented Providers is limited to
performing certain activities contracted by CIGNA using standards
delivered by CIGNA, and which are in compliance with applicable federal
and state laws and regulations. MCA hereby agrees to perform those
activities identified by an "X" in the MCA column below and understands
and acknowledges that its performance of such activities is subject to
CIGNA's oversight and monitoring.
----------------------------------------------------------
ACTIVITIES MCA CIGNA
----------------------------------------------------------
Medical Policy Adoption of Criteria X X
----------------------------------------------------------
Precertification - Inpatient Approvals X
----------------------------------------------------------
Precertification - Inpatient Denials X
----------------------------------------------------------
Precertification - Outpatient Approvals X
----------------------------------------------------------
Precertification - Outpatient Denials X
----------------------------------------------------------
Concurrent Review* - Approvals X
----------------------------------------------------------
Concurrent Review* - Denials X
----------------------------------------------------------
Discharge Planning X
----------------------------------------------------------
Retrospective - Inpatient Approvals X
----------------------------------------------------------
Retrospective - Outpatient Approvals X
----------------------------------------------------------
Retrospective - Outpatient Denials X
----------------------------------------------------------
Referral Management - Approvals X
----------------------------------------------------------
Referral Management - Denials X
----------------------------------------------------------
Out-of-Area Management X
----------------------------------------------------------
Case Management* - Approvals X
----------------------------------------------------------
Case Management* - Denials X
----------------------------------------------------------
Disease Management X
----------------------------------------------------------
Denials Benefit Coverage X
----------------------------------------------------------
Appeals - First Level X
----------------------------------------------------------
Member Satisfaction w/ UM X
----------------------------------------------------------
Provider Satisfaction w/ UM X
----------------------------------------------------------
Pharmacy Management X
----------------------------------------------------------
----------------------------------------------------------
ACTIVITIES MCA CIGNA
----------------------------------------------------------
Member Communication X
----------------------------------------------------------
Monitoring Quality and Timeliness of X X
Decisions
----------------------------------------------------------
Inter-rater Reliability X
----------------------------------------------------------
Technology Assessment X
----------------------------------------------------------
* Definitions:
CONCURRENT REVIEW- An assessment that determines medical necessity or
appropriateness of services as they are being rendered, such as an
assessment of the need for continued inpatient care for hospitalized
patients.
CASE MANAGEMENT- A process for identifying covered persons with specific
health care needs in order to facilitate the development and implementation
of a plan that efficiently uses health care resources to achieve optimum
member outcome.
RETROSPECTIVE REVIEW- Assessment of the appropriateness of medical services
on a case by case or aggregate basis after the services have been provided.
8. With respect to each request for medical services for which
the MCA delivers hereunder, MCA shall apply the clinical service criteria
set forth in the Service Agreement applicable to the Participant for whom
medical services have been requested. Criteria shall be applied based on
the needs of the individual patient. Criteria shall be objective and
applied consistently based on the needs of the individual patient.
9. All information relating to MCA's Clinical Service Management
Program activities hereunder shall be confidential, shall not be disclosed
to any third parties except as required by applicable federal and state
law and except as required to fulfill MCA's clinical management
responsibilities hereunder, and shall be maintained in such a manner so
that such information shall be protected from discovery and use in
judicial or administrative proceedings to the fullest extent possible
under applicable federal and state law. In the event that MCA receives a
subpoena, civil investigative demand or other similar process requesting
disclosure of information relating to its Clinical Service Management
Program activities hereunder, MCA shall immediately notify CIGNA of such
subpoena, demand or process so as to afford CIGNA with an adequate
opportunity to seek an appropriate protective order should it choose to do
so.
10. This exhibit, all information provided by CIGNA to MCA
pertaining to CIGNA's contract with MCA and all data made known to MCA
relating to services rendered to Participants under the Agreement is
confidential and proprietary information subject to the protections set
forth in the confidentiality provision contained in MCA's Agreement with
CIGNA. In the event that MCA receives a subpoena, civil investigative
demand or other similar process requesting disclosure of such confidential
and proprietary information, MCA shall immediately notify CIGNA of such
subpoena, demand or process so as to afford CIGNA with an adequate
opportunity to seek an appropriate protective order should it choose to do
so.
11. MCA shall have a national medical director who provides
oversight of the Clinical Service management Program. In states which
mandate that the medical director making decisions must be licensed to
practice medicine in referenced states, MCA shall access CIGNA HealthCare
Medical Directors identified by CIGNA on consultant basis.
12. For non-contracted home health care providers that may from
time to time provide services in order to meet immediate demand, MCA shall
establish a process acceptable to CIGNA to ensure that Provider has an
unrestricted license, as appropriate, in the state which the Provider
practices, has adequate professional and general liability insurance
coverage and has an acceptable malpractice claims history as indicated
through verifying Medicare/Medicaid Sanctions or other appropriate
reporting agency or data bank identified by CIGNA. MCA will notify CIGNA
if a non-credentialed Provider is used to fulfill a service requirement
need. If a Provider provides services to more than two different members
within a 60-day period, MCA must implement a full credentialing process
for that Provider.
13. All Clinical Service Management Program activities shall be
supervised by appropriately qualified professionals including:
A. Use of a national medical director who will provide oversight of the
Clinical Service Management Program and assist with the development
of policies.
B. Use of CIGNA board certified specialists to assist in determining
Medical Necessity and in preparing documentation to support the
decision.
13. Total Clinical Service management Program staff ratios (including nurses)
will be maintained to enable MCA to provide a level of service to be
compliant with NCQA Standards for delivery, documentation and turn around
time.
Non-clinical staff shall utilize protocols and criteria approved by the
Medical Director and shall not make medical appropriateness/necessity
decisions. All decisions of the non-clinical staff shall be supervised by
clinical staff.
MCA shall maintain appropriate levels of telephone line staffing for the
clinical servcie management activities required to be performed hereunder
and shall satisfy the following standards: (a) the overall abandonment
rate for the pre-certification telephone line shall be 5% or less; (b) the
average speed of answer for the pre-certification telephone line shall be
less than 30 seconds; (c) telephone prompts shall be clear and user
friendly; and (d) a telephone message after hours shall give normal
business hours information and after hours instructions.
14. MCA shall maintain a set of mutually agreed upon written clinical service
management decision protocols that are based on reasonable available
medical evidence, are acceptable to and consistent with CIGNA protocols
and indicate that:
A. criteria for appropriateness of medical services are clearly
documented, communicated to participating physicians, and available
to the physician and Participants upon request;
B. an appropriate mechanism is present for checking the consistency of
application of criteria across physician and non-physician reviewers
at least annually and opportunities for improvement are identified
and resolved; and
C. an appropriate mechanism is present for updating and approving
review criteria periodically, actively practicing practitioners are
involved in the development and adoption of the criteria and the
time of the update is specified in protocol or policy.
15. In connection with all Clinical Service Management Program activities
hereunder, MCA shall obtain all necessary information, including pertinent
clinical information, and consult with the treating physician, as
appropriate, and document such efforts. Urgent home health care services,
as defined within the MCA agreement, must be covered where such services
are necessary to the prudent care of the patient.
16. The Healthplan retains responsibility for rendering the final coverage
determination on all services denied for medical necessity. MCA shall
notify CIGNA as expeditiously as possible, but no later than the same
business day, of any recommendation for denial of coverage. The
notification shall include:
A. documentation indicating who recommended denial, why, and any
medical information used to render the recommendation;
B. documentation that an explanation is provided to the applicable
Represented Provider via telephone of the recommended denial. The
MCA shall not send any written communication, either via US mail or
facsimile, to the requesting provider.
17. CIGNA will notify the MCA, the requesting provider, the PCP, and the
Participant via letter which includes all information required by
applicable federal and state law.
18. CIGNA will process all requests for appeals, whether expedited or
standard. In connection with any such appeal, the MCA shall assist and
cooperate with CIGNA and shall promptly provide all documentation
reasonably requested by CIGNA to meet all accreditation and regulatory
timeframe requirements.
A. MCA shall make no denials for experimental/investigative reasons
unless such denials have been discussed with and approved by CIGNA.
19. MCA's Clinical Service management Program decisions shall be made in a
timely manner.
A. MCA's Clinical Service Management Program policies and procedures
shall clearly define the maximum time frames for Clinical Service
Management Program decisions. All Clinical Service Management
Program decisions shall be made within the time frames that allow
CIGNA to satisfy all applicable federal and state legal
requirements, whichever time frame is earlier (i.e. Department of
Labor, Department of Insurance, Department of Corporations, HCFA,
etc.). MCA shall implement adequate coverage arrangements to ensure
compliance with applicable federal and state legal requirements at
all times, including, but not limited to, adequate after hours,
weekend and holiday coverage.
B. MCA shall implement an appropriate mechanism to monitor and document
timeliness of decisions which shall include:
(1) Documentation to show urgent requests are responded to within
24 hours, or within the time frame required by applicable
federal and state law, if earlier; and
(2) Documentation to show routine requests are responded to within
one working day, or within the time frame required by
applicable federal and state law or regulatory authorities, if
earlier
(3) The MCA shall monitor and analyze its compliance with
timeliness requirements on a quarterly basis and take prompt
action to meet or improve adherence to such requirements.
20. Except as otherwise agreed by CIGNA, CIGNA shall retain responsibility for
responding to Participant inquiries or complaints. MCA shall notify CIGNA
Member Services within 24 hours of any complaint or grievance filed with
MCA by or on behalf of any Participant.
21. The MCA shall maintain a system acceptable to CIGNA to track
authorizations, to evaluate the MCA's compliance with CIGNA's contract
requirements as set forth in Represented Provider Agreement and herein, to
monitor providers for inappropriate clinical service and to evaluate
Participant satisfaction and provider satisfaction, and other measures of
evaluation agreed upon by the parties. MCA shall submit reports to CIGNA,
in a format acceptable to CIGNA, on a quarterly basis reflecting the MCA's
performance under these measures of evaluation, including an action plan
which addresses opportunities for improvement when applicable.
22. CIGNA, its designee and any applicable governmental authorities or
accrediting bodies shall have the right to conduct periodic audits of the
MCA's Clinical Management service Program activities upon reasonable prior
notice, and the MCA shall cooperate with any such audits. In addition, the
MCA's performance of its Clinical Service Management Program activities
hereunder may be measured by CIGNA at least annually. The MCA shall
cooperate with any such audits and shall provide any and all information
reasonably requested by CIGNA in connection with such audits. Applicable
performance measures include but are not limited to:
(a) Participant concerns, complaints and grievances which
relate to the UM Process do not exceed .10 per 1000
average eligible members per quarter for individual
healthplans and for the CIGNA national rate. A
"participant concern" is identified as any oral or
written expression of dissatisfaction from a participant
or participant's representative such as a physician,
guardian or family member.
(b) audits of Clinical Service Management Program activities
show compliance with CIGNA, and applicable federal,
state and accreditation requirements.
23. CIGNA will provide MCA with a written report detailing its findings with
respect to any such audits. If such audits reveal any deficiencies, MCA
shall correct any deficiencies identified in such audit within 60 days of
CIGNA's submission of the report detailing such deficiencies. Failure to
correct any identified deficiencies within such 60 day period may be cause
for revocation of the delegation set forth herein.
24. MCA shall provide CIGNA with evidence of an appropriate internal control
environment acceptable to CIGNA of MCA's Clinical Service Management
Program operations on an annual basis.
25. MCA shall prepare and provide such periodic reports or other data as is
reasonably requested by CIGNA relating to MCA's Clinical Service
Management Program activities in association with Participant's receiving
services from Represented Providers. MCA shall participate in Clinical
Service Management Program oversight activities (i.e., committee meetings,
report submission) to the extent reasonably required by CIGNA and at least
quarterly. MCA shall provide CIGNA with any adverse event/sentinel
diagnosis information relating to Participants within two business days of
MCA's receipt of such information.
26. MCA shall have a process in place to ensure appropriate utilization of
services including identifying areas of over utilization and under
utilization including: monitoring different types of data, establishing
thresholds, conducting quantitative analysis and comparison to thresholds
and working with CIGNA to implement actions to address issues that are
identified by CIGNA or by the MCA.
27. If CIGNA determines that MCA cannot meet its Clinical Service Management
Program obligations, CIGNA may elect to assume responsibility for such
activities. If CIGNA elects to assume responsibility for such activities,
the rates set forth in the Agreement shall be adjusted to the extent
necessary, and MCA shall cooperate and provide to CIGNA any information
reasonably required to perform such activities.
28. All referrals shall be to Represented Providers, except where an Emergency
requires otherwise or as otherwise required by applicable federal and
state law. Except in an urgent/emergent situation, MCA shall require all
Represented Providers to obtain authorization from MCA prior to rendering
home health services. Or as otherwise required by applicable federal and
state law.
29. All electronic data which MCA maintains concerning the detail of all
Clinical Service Management Program activities made hereunder shall be
made available and submitted to CIGNA using ANSI standard transaction
formats or another mutually agreeable format in compliance with applicable
state and federal law including, but not limited to, the Health Insurance
Portability and Accountability Act (HIPAA) and Administrative
Simplification. Such data shall be submitted to CIGNA at least monthly. If
a non-ANSI format is agreed upon, MCA shall cooperate with CIGNA in the
development of the transmission format, frequency and protocol.
30. MCA shall maintain evidence that MCA distributes a statement to all
employees, and Represented Providers involved in Clinical Service
Management Program activities, affirming the following:
A. Clinical service decision making is based only on appropriateness of
care and service.
B. The MCA does not compensate practitioners/providers/employees for
denials.
C. The MCA does not offer incentives to encourage denials.
D. The need for special concern about under utilization.
MCA shall indemnify, defend and hold harmless CIGNA and its affiliates from and
against any and all liability, fines, penalties, damages and expense, including
reasonable defense costs and legal fees, incurred by CIGNA in
connection with claims or actions of any nature, governmental examinations,
enforcement actions or other administrative proceedings, arising from MCA's
failure to perform its obligations under these Standards
A. Confidentiality
MCA shall comply with all applicable federal and state laws
and regulations relating to the confidentiality of medical
records and other individually identifiable health
information, including but not limited to, the requirements
specified below.
B. Definitions Applicable to this Confidentiality Section
"Confidential Information" shall mean (a) Individually
Identifiable Health Information that is (i) transmitted by
Electronic Media, (ii) maintained in any medium constituting
Electronic Media; or (iii) transmitted or maintained in any
other form or medium and (b) any Nonpublic Personal Financial
Information, as that term is defined by the NAIC Model Privacy
of Consumer Financial and Health Information Regulation (2000)
issued pursuant to the Gramm Leach Bliley Act. "Confidential
Information" shall not include (i) education records covered
by the Family Educational Right and Privacy Act, as amended,
20 U.S.C. Section 1232g and (ii) records described in 20
U.S.C. Section 1232g(a)(4)(B)(iv).
"Designated Record Set" shall mean a group of records
maintained by or for CIGNA or a CIGNA Affiliate that is (i)
the medical records and billing records about individuals
maintained by or for CIGNA or a CIGNA Affiliate, (ii) the
enrollment, payment, claims adjudication, and case or medical
management record systems maintained by or for a health plan;
or (iii) used, in whole or in part, by or for CIGNA or a CIGNA
Affiliate to make decisions about individuals. As used herein,
the term "Record" means any item, collection, or grouping of
information that includes Confidential Information and is
maintained, collected, used, or disseminated by or for CIGNA
or a CIGNA Affiliate.
"Electronic Media" shall mean the mode of electronic
transmissions. It includes the Internet, extranet (using
Internet technology to link a business with information only
accessible to collaborating parties), leased lines, dial-up
lines, private networks, and those transmissions that are
physically moved from one location to another using magnetic
tape, disk, or compact disk media.
"Individually Identifiable Health Information" shall mean
information that is a subset of health information, including
demographic information collected from an individual, and
(1) is created or received by a health care provider, health
plan, employer, or health care clearinghouse; and
(2) relates to the past, present, or future physical or
mental health or condition of an individual; the
provision of health care to an individual; or the past,
present or future payment for the provision of health
care to an individual; and (a) identifies the
individual, or (b) with respect to which there is a
reasonable basis to believe the information can be used
to identify the individual; and
(3) relates to identifiable non-health information including
but not limited to an individual's address, phone number
and/or Social Security number.
"Privacy Standards" shall mean (a) the Health Insurance
Portability and Accountability Act of 1996 and the regulations
promulgated thereunder, including the Standard for Privacy of
Individually Identifiable Health Information, 45 C.F.R. Parts
160 and 164, (b) the Gramm Leach Bliley Act and any applicable
regulations governing privacy and confidentiality promulgated
thereunder, and (c) other federal or state laws or regulations
governing the use, disclosure, confidentiality, security or
privacy of Confidential Information or other personally
identifiable information.
"Secretary" shall mean the Secretary of the Department of
Health and Human Services.
C. Use of Confidential Information
MCA may use Confidential Information to carry out the
obligations of MCA set forth in the Agreement and these
Standards or as required by federal or state law, subject to
the provisions of Sections C. through N., below. MCA shall
ensure that its directors, officers, employees, contractors
and agents do not use Confidential Information received from
CIGNA or a CIGNA Affiliate in any manner that would constitute
a violation of the Privacy Standards if used in a similar
manner by CIGNA or a CIGNA Affiliate. MCA shall not use
Confidential Information for the purpose of creating
de-identified information that will be used for any purpose
other than to carry out the obligations of MCA set forth in
the Agreement or these Standards or as required by federal or
state law.
D. Disclosure of Confidential Information
MCA and its directors, officers, employees, contractors and
agents shall not disclose Confidential Information received
from CIGNA or a CIGNA Affiliate other than as is necessary to
carry out the obligations of MCA set forth in the Agreement or
these Standards or as required by federal or state law,
subject to the provisions of Sections C. through N., below.
Confidential Information shall not be disclosed in any manner
that would constitute a violation of the Privacy Standards if
disclosed in a similar manner by CIGNA or a CIGNA Affiliate.
E. Safeguards Against Misuse of Information
MCA agrees that it will implement all appropriate safeguards
to prevent the use or disclosure of Confidential Information
in any manner other than pursuant to the terms and conditions
of the Agreement and these Standards.
F. Reporting of Disclosures of Confidential Information
MCA shall, within five (5) days of becoming aware of a loss, a
suspected loss, or disclosure of
Confidential Information in violation of the Agreement or
these Standards by MCA, its officers, directors, employees,
contractors or agents or by a third party to which MCA
disclosed Confidential Information pursuant to Section C. of
this Agreement, report any such disclosure to CIGNA's Privacy
and Security Officers. This requirement will also apply to any
loss, or suspected loss, of Confidential Information.
G. Agreements with Third Parties
MCA shall enter into an agreement with any agent,
subcontractor or other third party that will have access to
Confidential Information that is received from, created or
received by MCA on behalf of CIGNA or a CIGNA Affiliate
pursuant to which such third party agrees to be bound by the
same restrictions, terms and conditions that apply to MCA
pursuant to this Agreement with respect to such Confidential
Information. Under such agreement, the third party shall (a)
provide reasonable assurances that such Confidential
Information will be held confidential as provided pursuant to
the Agreement and these Standards, (b) provide reasonable
assurances that such Confidential Information will be
disclosed only as required by federal or state law or for the
purposes for which it was disclosed to such third party, and
(c) immediately notify MCA of any breaches of the
confidentiality of the Confidential Information, to the extent
it has obtained knowledge of such breach.
H. Access to Information
Within five (5) business days of a request by CIGNA or a CIGNA
Affiliate for access to Confidential Information about an
individual contained in a Designated Record Set, MCA shall
make available to CIGNA or the CIGNA Affiliate such
Confidential Information for so long as such information is
maintained in the Designated Record Set. In the event any
individual requests access to Confidential Information
directly from MCA, MCA may not deny access to the Confidential
Information requested. Rather, MCA shall, within two (2)
business days, forward such request to CIGNA.
I. Availability of Confidential Information for Amendment
Within ten (10) business days of receipt of a request from
CIGNA or a CIGNA Affiliate for the amendment of an
individual's Confidential Information or a record regarding an
individual contained in a Designated Record Set (for so long
as the Confidential Information is maintained in the
Designated Record Set), MCA shall provide such information to
CIGNA or the CIGNA Affiliate for amendment and incorporate any
such amendments in the Confidential Information as required by
45 C.F.R. Section 164.526. In the event that the request for
the amendment of Confidential Information is made directly to
the MCA, MCA may not deny the requested amendment. Rather, MCA
shall, within two (2) business days, forward such request to
CIGNA.
J. Audit
Upon reasonable notice, CIGNA or a CIGNA Affiliate may audit
and inspect MCA's internal practices and the books and records
in MCA's possession for the purpose of assessing MCA's use and
disclosure of Confidential Information received from CIGNA or
a CIGNA Affiliate or
created by MCA on behalf of CIGNA or a CIGNA Affiliate. Such
books and records shall be made available to CIGNA or a CIGNA
Affiliate for its audit or inspection during regular business
hours.
K. Accounting of Disclosures
Within ten business (10) days of notice by CIGNA or a CIGNA
Affiliate to MCA that it has received a request for an
accounting of disclosures of Confidential Information
regarding an individual during the six (6) years prior to the
date on which the accounting was requested, MCA shall make
available to CIGNA or the CIGNA Affiliate such information as
is in MCA's possession and is required for CIGNA or the CIGNA
Affiliate to make the accounting required by 45 C.F.R. Section
164.528. At a minimum, MCA shall provide CIGNA or the CIGNA
Affiliate with the following information: (i) the date of the
disclosure, (ii) the name of the entity or person who received
the Confidential Information, and if known, the address of
such entity or person, (iii) a brief description of the
Confidential Information disclosed, and (iv) a brief statement
of the purpose of such disclosure that includes an explanation
of the basis for such disclosure. In the event the request for
an accounting is delivered directly to MCA, MCA shall within
two (2) business days forward such request to CIGNA. It shall
be CIGNA's or the applicable CIGNA Affiliate's responsibility
to prepare and deliver any such accounting requested. MCA
hereby agrees to implement an appropriate recordkeeping
process to enable it to comply with the requirements of this
Section.
L. Availability of Books and Records
MCA hereby agrees to make its internal practices, books and
records relating to the use and disclosure of Confidential
Information received from, created or received by MCA on
behalf of CIGNA or a CIGNA Affiliate available to the
Secretary for purposes of determining CIGNA's or CIGNA
Affiliate's and MCA's compliance with the Privacy Standards.
M. Return of Records
Upon termination of the Agreement and at CIGNA's sole option,
MCA shall be required to either a) return to CIGNA or a CIGNA
Affiliate all Confidential Information received from, created
or received on behalf of CIGNA or a CIGNA Affiliate in all
forms without retaining any copies; or b) maintain all such
Confidential Information consistent with the requirements of
this Section 31 for the period of time such information is
required to be maintained by applicable law after which time
MCA shall destroy all such information in all forms maintained
and shall not retain any copies of such information, or if
such destruction is not feasible, extend the protections in
this Section 31to such information and limit further uses and
disclosures to those purposes that make the return or
destruction of such information infeasible.
N. Authorization to Terminate
MCA hereby authorizes CIGNA to terminate the Agreement if
CIGNA determines that MCA has violated a material term of this
Section 31.
O. Indemnification
MCA will defend, indemnify and hold harmless CIGNA and its
affiliates and their directors, officers, and employees from
any claims, loss, cost (including reasonable attorneys' fees
and court costs) or liability resulting from MCA's breach of
this Section 31.
Gentiva CareCentrix acknowledges receipt of CIGNA's above Standards for
Delegation and, in accordance with the Agreement, will comply with the terms and
conditions set forth herein.
Gentiva CareCentrix's Name
By
Its
Date
CIGNA Entity's Name
By
Its
Date
9.
EXHIBIT XVII CONTRACT EXCLUSIONS DOCUMENT
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
DISP
DISP ADL 4544 AIDS DAILY LIVING SUPPLIES EA X
DISP ADL 4544 AIDS DAILY LIVING SUPPLIES PUR X
DISP DIAG 4542 DIAGNOSTIC SUPPLIES EA X
DISP DIAG 4542 DIAGNOSTIC SUPPLIES PUR X
DISP ONC 4545 L8000, MASTECTOMY SUPPLIES EA X
DISP ONC 4545 L8000, MASTECTOMY SUPPLIES PUR X
DISP OT/PT 4546 OT/PT SUPPLIES EA X
DISP OT/PT 4546 OT/PT SUPPLIES PUR X
DISP SKNCARE 4543 SKIN CARE SUPPLIES NOT IN ASSOCIATION WITH HME PUR X
DISP URO 4540 INCONTINENCE SUPPLIES PUR X
HIT
HIT BRM 1087 BIOLOGICAL RESPONSE MODIFIERS THERAPY / INJOT DISP X
(Self Injected Only)
HIT CERZYME 2424 CEREZYME THERAPY - FULL SERVICE PD X
HIT CERZYME 2425 CEREZYME THERAPY - PHARMACY ONLY PD X
HIT FACTOR 1085 FACTOR VIII & IX THERAPY DISP X
HIT HORM 1093 GROWTH HORMONE THERAPY DISP X
HIT REMOD 7725 REMODULIN THERAPY - FULL SERVICE PD X
HIT REMOD 7726 REMODULIN THERAPY - PHARMACY ONLY PD X
HIT SYNAGIS 7013 SYNAGIS DISPENSING FEE DISP X
HME
HME BATH* 2575 BATH BENCH WITH BACK (E0245) PUR X X
HME BATH* 2867 BATH TUB RAIL (E0241), WALL, L-SHAPE PUR X X
HME BATH* 2042 BATH TUB RAIL, FLOOR BASE (E0242) PUR X X
HME BATH* 2862 BATH TUB RAIL, WALL, 12" (E0241) PUR X X
HME BATH* 2863 BATH TUB RAIL, WALL, 16" (E0241) PUR X X
HME BATH* 2864 BATH TUB RAIL, WALL, 18" (E0241) PUR X X
HME BATH* 2865 BATH TUB RAIL, WALL, 24" (E0241) PUR X X
HME BATH* 2866 BATH TUB RAIL, WALL, 36" (E0241) PUR X X
HME BATH* 2043 BATH TUB RAIL, WALL, UNSPECIFIED SIZE PUR X X
HME BATH* 2058 BATH TUB STOOL OR BENCH (E0245) PUR X X
HME BATH* 2053 SITZ BATH CHAIR PUR X X
HME BATH* 2056 TOILET RAIL, EACH (E0243) PUR X
HME BATH* 2578 TRANSFER BENCH, NON-PADDED (E0245) PUR X
HME BATH* 2577 TRANSFER BENCH, PADDED (E0245) PUR X
HME BATH* 2057 TRANSFER TUB RAIL(E0246), ATTACHMENT PUR X
HME BED 2063 AIR FLUIDIZED BED (E0194) PUR X
HME BED 2067 BED ACCESSORIES: BOARDS OR TABLES, ANY TYPE MO X X
HME BED 2067 BED ACCESSORIES: BOARDS OR TABLES, ANY TYPE PUR X X
HME BED 2068 BED BOARD (E1399) MO X X
HME BED 2068 BED BOARD (E1399) PUR X X
HME BED 2069 BED CRADLE, ANY TYPE (E1399) PUR X X
HME BED 2563 BED WEDGE (E1399), 12" PUR X X
HME BED 2856 BEDROOM EQUIPMENT (E1399), CUSTOM PUR X X
HME BED 2082 HOSP BED, INST TYPE, OSCIL, CIRC & STRYKER,
WITH MATTRESS MO X
HME BED 2097 OVER-BED TABLE (*E0274) PUR X
HME BED 2177 PAD, LAMBSWOOL SHEEPSKIN (E0189), ANY SIZE PUR X
HME BED 2217 PAD, SYNTHETIC SHEEPSKIN (A9900) PUR X
HME ENT 7551 BACK-PACK (E1399), FOR PORTABLE ENTERAL PUMP PUR X
HME ENT 7161 FORMULA (B4150) CAT I,SEMI-SYN INTACT
PROT/ISOLATE, CS MIN 192 OZ PUR X
HME ENT 7162 FORMULA (B4151) CAT I, NATURAL INTACT
PROT/ISOLATE, CS MIN 192 OZ PUR X
HME ENT 7163 FORMULA (B4152) CAT II, INTACT PROT/ISOLATE,
CS MIN 192 OZ PUR X
HME ENT 7164 FORMULA (B4153) CAT III, HYDROL PROT AMINO PUR X
ACID, CASE MIN 192 OZ
HME ENT 7165 FORMULA (B4154) CAT IV, DEFINED SPEC METABOL PUR X
NEED,CS MIN 192 OZ
HME MISC BABY/ADULT SCALES X
HME MISC BATH MATS X
HME MISC CENTRIFUGES X
HME MISC COMPRESSION STOCKINGS/REID SLEEVES X
HME MISC CRAFTMATIC BEDS X
HME MISC ENURESIS ALARMS X
HME MISC ERGONOMIC OFFICE CHARIS X
HME MISC EXERCISE EQUIPMENT X
HME MISC GERI CHAIRS X
HME MISC HIP CHAIRS X
HME MISC HYPERBARIC CHAMBER X
HME MISC MAGNETIC THERAPY EQUIPMENT X
HME MISC NEEDLELESS INJECTORS X
HME MISC POSTURPEDIC MATTRESSES X
HME MISC PROTIME TESTER X
HME MISC RECTAL DIALATOR X
HME MISC ROLL ABOUT CHAIRS X
HME MISC SAD LIGHTS X
HME MISC SITZ BATHS X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
HME MISC STANDARD MATTRESSES AND PILLOWS X
HME MISC ULTRASOUND UNITS X
HME MISC VITRECTOMY CHAIRS X
HME MISC WHITE CANES X
HME OTHER 2568 ADAPTER, AC/DC (A9900) PUR X X
HME OTHER 2141 AIR BUBBLE DETECTOR FOR DIALYSIS MO X X
HME OTHER 2141 AIR BUBBLE DETECTOR FOR DIALYSIS PUR X X
HME OTHER 2144 AUTO INTERMITTENT PERITIONEAL DIALYSIS SYS MO X X
HME OTHER 2144 AUTO INTERMITTENT PERITIONEAL DIALYSIS SYS PUR X X
HME OTHER 2145 BATH CONDUCTIVITY METER FOR DIALYSIS MO X X
HME OTHER 2145 BATH CONDUCTIVITY METER FOR DIALYSIS PUR X X
HME OTHER 2552 BATH LIFT (E1399), CUSTOM PUR X X
HME OTHER 2147 BLOOD LEAK DETECTOR FOR DIALYSIS MO X X
HME OTHER 2147 BLOOD LEAK DETECTOR FOR DIALYSIS PUR X X
HME OTHER 2148 BLOOD PUMP FOR DIALYSIS MO X X
HME OTHER 2148 BLOOD PUMP FOR DIALYSIS PUR X X
HME OTHER 2165 BOTTLE, HOT WATER MO X X
HME OTHER 2165 BOTTLE, HOT WATER PUR X X
HME OTHER 7168 BREAST PUMP BATTERY PACK (MEDELA) (A9900) PUR X
HME OTHER 2581 BREAST PUMP, INSTITUTIONAL (E1399) PUR X
HME OTHER 6779 CARDIAC EVENT MONITOR (G0015) MO X X
HME OTHER 2140 CHAIR, ADJ FOR ESRD PATIENTS MO X X
HME OTHER 2140 CHAIR, ADJ FOR ESRD PATIENTS PUR X X
HME OTHER 2560 COLD THERAPY UNIT (E0218) MO X
HME OTHER 2560 COLD THERAPY UNIT (E0218) PD X
HME OTHER 2560 COLD THERAPY UNIT (E0218) PUR X
HME OTHER 2593 COLD THERAPY UNIT, PAD (E1399) PUR X
HME OTHER 2149 COMPACT (PORT) TRAVEL HEMODIALYZER SYS MO X X
HME OTHER 2149 COMPACT (PORT) TRAVEL HEMODIALYZER SYS PUR X X
HME OTHER 2150 CYCLER DIALYSIS MACH FOR PERITONEAL DIALYSIS MO X X
HME OTHER 2150 CYCLER DIALYSIS MACH FOR PERITONEAL DIALYSIS PUR X X
HME OTHER 2151 DEIONIZER WATER PURIFICATION SYS MO X X
HME OTHER 2151 DEIONIZER WATER PURIFICATION SYS PUR X X
HME OTHER 2152 DELIVERY AND/OR INSTALL CHARGES FOR RENAL MO X X
DIALYSIS EQUIP
HME OTHER 2152 DELIVERY AND/OR INSTALL CHARGES FOR RENAL PUR X X
DIALYSIS EQUIP
HME OTHER 2153 DIALYSIS EQUIP, UNSPEC, BY REPORT MO X X
HME OTHER 2153 DIALYSIS EQUIP, UNSPEC, BY REPORT PUR X X
HME OTHER 2104 DYNAMIC ADJ ELBOW EXTENSION/FLEXION DEVICE MO X
HME OTHER 2104 DYNAMIC ADJ ELBOW EXTENSION/FLEXION DEVICE PUR X
HME OTHER 2129 DYNAMIC ADJ EXTENSION/FLEXION DEVICE, SOFT PUR X
INTERFACE MATERIAL
HME OTHER 2106 DYNAMIC ADJ KNEE EXTENSION/FLEXION DEVICE MO X
HME OTHER 2106 DYNAMIC ADJ KNEE EXTENSION/FLEXION DEVICE PUR X
HME OTHER 2108 DYNAMIC ADJ WRIST EXTENSION/FLEXION DEVICE MO X
HME OTHER 2108 DYNAMIC ADJ WRIST EXTENSION/FLEXION DEVICE PUR X
HME OTHER 2109 ELECTROMYOGRAPHY (EMG) (E0746), BIOFEEDBACK MO X X
DEVICE
HME OTHER 2109 ELECTROMYOGRAPHY (EMG) (E0746), BIOFEEDBACK PUR X X
DEVICE
HME OTHER 2110 HARNESS (E0945), EXTREMITY BELT PUR X X
HME OTHER 2223 HEAT COLD WATER (*E0237) CIRCULATING PAD
W/PUMP PUR X X
HME OTHER 2186 HEAT UNIT (E0249), WATER CIRCULATING PAD PUR X X
HME OTHER 2155 HEATING PAD (E0215), ELECTRIC, MOIST PUR X X
HME OTHER 2179 HEATING PAD (E0238), MOIST, NON-ELECTRIC PUR X X
HME OTHER 2156 HEATING PAD, STANDARD (E0210) PUR X X
HME OTHER 2161 HEEL OR ELBOW PROTECTOR, EACH MO X X
HME OTHER 2161 HEEL OR ELBOW PROTECTOR, EACH PUR X X
HME OTHER 2162 HEMODIALYSIS MACH MO X X
HME OTHER 2162 HEMODIALYSIS MACH PUR X X
HME OTHER 6780 HOLTER MONITOR (G0004) MO X X
HME OTHER 2166 HYDROCOLLATOR UNIT, INCLUDING PADS MO X X
HME OTHER 2166 HYDROCOLLATOR UNIT, INCLUDING PADS PUR X X
HME OTHER 2167 HYDROCOLLATOR UNIT, PORT MO X X
HME OTHER 2167 HYDROCOLLATOR UNIT, PORT PUR X X
HME OTHER 2168 ICE CAP OR COLLAR MO X X
HME OTHER 2168 ICE CAP OR COLLAR PUR X X
HME OTHER 2176 KIDNEY, DIALYSATE DELIVERY SYST. KIDNEY MACH MO X X
HME OTHER 2176 KIDNEY, DIALYSATE DELIVERY SYST. KIDNEY MACH PUR X X
HME OTHER 2184 PACEMAKER MONITOR, SELF CONTAINED, WITH
DIG/VIS CHECK SYSTEM MO X X
HME OTHER 2184 PACEMAKER MONITOR, SELF CONTAINED, WITH
DIG/VIS CHECK SYSTEM PUR X X
HME OTHER 2185 PACEMAKER MONITOR, SELF-CONT'D, (WITH AUD
& VIS CHECK SYSTEM) MO X X
HME OTHER 2185 PACEMAKER MONITOR, SELF-CONT'D, (WITH AUD
& VIS CHECK SYSTEM) PUR X X
HME OTHER 2187 PARAFFIN BATH UNIT, PORT (E0235) PUR X
HME OTHER 2191 PATIENT LIFT (E0625), KARTOP, BATHROOM OR
TOILET PUR X X
HME OTHER 2189 PATIENT LIFT (E0635), ELEC W/ SEAT OR SLING PUR X
HME OTHER 2555 PATIENT LIFT, CUSTOM (E1399) PUR X X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
HME OTHER 2102 PILLOW, CERVICAL PUR X X
HME OTHER 2195 PRES ALARM FOR DIALYSIS MO X X
HME OTHER 2195 PRES ALARM FOR DIALYSIS PUR X X
HME OTHER 2199 PUMP (E0236) FOR WATER CIRCULATING PAD PUR X X
HME OTHER 2163 PUMP, HEPARIN INFUSION FOR DIALYSIS MO X X
HME OTHER 2163 PUMP, HEPARIN INFUSION FOR DIALYSIS PUR X X
HME OTHER 2173 PUMP, INFUSION, IMPLANTABLE, NON-PROGRAMMABLE MO X X
HME OTHER 2173 PUMP, INFUSION, IMPLANTABLE, NON-PROGRAMMABLE PUR X X
HME OTHER 2174 PUMP, INFUSION, IMPLANTABLE, PROGRAMMABLE MO X X
HME OTHER 2174 PUMP, INFUSION, IMPLANTABLE, PROGRAMMABLE PUR X X
HME OTHER 2188 PUMP, INFUSION, PARENTERAL, STATIONARY SINGLE
OR MULTI-CHANNEL MO X X
HME OTHER 2188 PUMP, INFUSION, PARENTERAL, STATIONARY SINGLE
OR MULTI-CHANNEL PUR X X
HME OTHER 2200 RECIPROCATING PERITONEAL DIALYSIS SYS MO X X
HME OTHER 2200 RECIPROCATING PERITONEAL DIALYSIS SYS PUR X X
HME OTHER 2201 REPL COMPONENTS FOR OWNED HEMODIALYSIS/ MO X X
PERITONEAL DIAL MACH
HME OTHER 2201 REPL COMPONENTS FOR OWNED HEMODIALYSIS/ PUR X X
PERITONEAL DIAL MACH
HME OTHER 2202 RESTRAINTS (E0710), ANY TYPE (BODY, CHEST, MO X X
WRIST OR ANKLE)
HME OTHER 2202 RESTRAINTS (E0710), ANY TYPE (BODY, CHEST, PUR X X
WRIST OR ANKLE)
HME OTHER 2203 REVERSE OSMOSIS WATER PURIFICATION SYS MO X X
HME OTHER 2203 REVERSE OSMOSIS WATER PURIFICATION SYS PUR X X
HME OTHER 2204 SAFETY EQUIP (E0700) (E.G., BELT, HARNESS OR
VEST FOR VEHICLES MO X X
HME OTHER 2204 SAFETY EQUIP (E0700) (E.G., BELT, HARNESS OR
VEST FOR VEHICLES PUR X X
HME OTHER 2395 SEAT LIFT CHAIR/MOTORIZED (E0627) PUR X X
HME OTHER 2205 SEAT LIFT MECH (E0627) INCORPORATED INTO A PUR X X
COMB LIFT-CHAIR MECH
HME OTHER 2213 SEAT LIFT MECH ONLY, USE W/PATIENT OWNED MO X
FURN-ELEC
HME OTHER 2213 SEAT LIFT MECH ONLY, USE W/PATIENT OWNED PUR X
FURN-ELEC
HME OTHER 2214 SEAT LIFT MECH ONLY, USE W/PATIENT OWNED MO X
FURN-NON-ELEC
HME OTHER 2214 SEAT LIFT MECH ONLY, USE W/PATIENT OWNED PUR X
FURN-NON-ELEC
HME OTHER 2562 SHOWER, HAND HELD (E1399) PUR X X
HME OTHER 2216 SORBENT CARTRIDGES, PER CASE MO X X
HME OTHER 2216 SORBENT CARTRIDGES, PER CASE PUR X X
HME OTHER 2855 THERAPY EQUIPMENT, CUSTOM (E1399) PUR X
HME OTHER 2220 TRANSDUCER PROTECTORS/FLUID BARRIERS, MO X X
ANY SIZE, EACH
HME OTHER 2220 TRANSDUCER PROTECTORS/FLUID BARRIERS, PUR X X
ANY SIZE, EACH
HME OTHER 2221 ULTRAVIOLET CABINET (E0690), APPROPRIATE MO X
FOR HOME USE
HME OTHER 2221 ULTRAVIOLET CABINET (E0690), APPROPRIATE PUR X
FOR HOME USE
HME OTHER 2222 UNIPUNCTURE CONTROL SYS FOR DIALYSIS MO X X
HME OTHER 2222 UNIPUNCTURE CONTROL SYS FOR DIALYSIS PUR X X
HME OTHER 7188 WALKER BASKET VINYL COATED (A9900) PUR X
HME OTHER 7189 WALKER POUCH (A9900) LTWT W/ POCKETS PUR X
HME OTHER 2225 WATER SOFTENING SYS MO X X
HME OTHER 2225 WATER SOFTENING SYS PUR X X
HME OTHER 2226 WEARABLE ARTIFICIAL KIDNEY MO X X
HME OTHER 2226 WEARABLE ARTIFICIAL KIDNEY PUR X X
HME OTHER 2061 WHIRLPOOL (E1399), NON-PORT (BUILT-IN TYPE) PUR X X
HME OTHER 2062 WHIRLPOOL, PORT (OVERTUB TYPE) (E1300) MO X
HME OTHER 2062 WHIRLPOOL, PORT (OVERTUB TYPE) (E1300) PUR X
HME OTHER 6873 WOUND SUCTION DEVICE (K0538) PD X
HME OTHER 7914 DRESSING SET, FOR WOUND SUCTION DEVICE (K0539) PUR X
HME OTHER 7915 CANISTER SET, FOR WOUND SUCTION DEVICE (K0540) PUR X
HME STIM 2157 STIMULATOR (E0755), ELECTRONIC SALIVARY
REFLEX, NON INVASIVE PUR X X
HME STIM 2157 STIMULATOR, ELECTRONIC SALIVARY REFLEX, NON MO X
INVASIVE (E0755)
HME STIM 2123 STIMULATOR, OSTEOGENIC, SURGICALLY IMPLANTED MO X X
HME STIM 2123 STIMULATOR, OSTEOGENIC, SURGICALLY IMPLANTED PUR X X
HME STIM 2172 STIMULATOR, PELVIC FLOOR INCONTINENCE MO X
TREATMENT SYS
HME STIM 2172 STIMULATOR, PELVIC FLOOR INCONTINENCE PUR X
TREATMENT SYS
HME STIM_BO 2124 STIMULATOR, OSTEOGENIC NON-INVASIVE, SPINAL MO X
APPLICATIONS (E0748)
HME STIM_BO 2124 STIMULATOR, OSTEOGENIC NON-INVASIVE, SPINAL PUR X
APPLICATIONS (E0748)
HME STIM_BO 6784 STIMULATOR, OSTEOGENIC, NON - INVA PUR X
HME STIM_BO 2122 STIMULATOR, OSTEOGENIC, NON-INVASIVE (E0747) MO X
HME STIM_BO 2122 STIMULATOR, OSTEOGENIC, NON-INVASIVE (E0747) PUR X
HME STIM_BO 6875 STIMULATOR, OSTEOGENIC, ULTRASOUND PUR X
HME SUP 2607 APPLICATOR COTTON TIP 3" OR 6" N/STRL 1000/BX EA X X
(A4649A)
HME SUP 2607 APPLICATOR COTTON TIP 3" OR 6" N/STRL 1000/BX UN X X
(A4649A)
HME SUP 2608 APPLICATOR COTTON TIP 6" STRL 200/BX SH EA X X
(A4649B)
HME SUP 2608 APPLICATOR COTTON TIP 6" STRL 200/BX SH UN X X
(A4649B)
HME SUP 2609 APPLICATOR, DRESS COTTON UN X X
HME SUP 2611 BAG, URINARY (LEG) UN X X
HME SUP 2616 BELT, RIB EA X X
HME SUP 7173 BREAST PUMP COOLER/CARRIER (A9900) F/LACTINA PUR X X
(MEDELA)
HME SUP 2618 BRIEF, INCONTINENCE EA X X
HME SUP 2624 CATHETER, MENTOR, SELF 408 UN X X
HME SUP 2713 CATHETERIZATION MIRROR, SELF UN X X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
HME SUP 2643 DISINFECTANT, DEM EA X X
HME SUP 2645 DRESSING, LYOFOAM, 3.5X2.5 EA X X
HME SUP 2655 ENTERAL FORMULAE, CAT REPLETE EA X
HME SUP 2661 ENTERAL PEDIASURE W/FI EA X
HME SUP 3713 ERECTION SYSTEM, VACUUM (K0163) EA X
HME SUP 2672 FOAM, RESTON REHAB EA X X
HME SUP 2674 GAUZE SPONGE 4X4 6PLY IV STRL, EACH (A6402) EA X X
HME SUP 2675 GAUZE, MEDICATED PADS EA X X
HME SUP 2673 GAUZE, NON-ADHESIVE, TELFA, 3X4 EA X X
HME SUP 2676 GAUZE, NON-IMPREGNATED EA X X
HME SUP 2677 GAUZE, NON-IMPREGNATED, 16" PAD EA X X
HME SUP 2684 GLOVE EXAM LTX NON-STERILE 100/BX BAX (A4927) UN X X
HME SUP 2678 GLOVE EXAM STERILE 100/BX (A4927) UN X X
HME SUP 2679 GLOVES, EXAM, LARGE EA X X
HME SUP 2680 GLOVES, EXAM, MEDIUM EA X X
HME SUP 2681 GLOVES, EXAM, POWDERLESS, LARGE EA X X
HME SUP 2682 GLOVES, EXAM, POWDERLESS, MEDIUM EA X X
HME SUP 2683 GLOVES, STERILE, POWDERFREE EA X X
HME SUP 2698 LUBRICANT, SURGICAL UN X X
HME SUP 2473 NON-COVERED SUPPLIES EA X X
HME SUP 2605 PREP, ALCOHOL OR PEROXIDE EA X X
HME SUP 2606 PREP, ALCOHOL WIPES UN X X
HME SUP 2644 PREP, HYDROGEN PEROXIDE EA X X
HME SUP 2617 PUMP KIT, BREAST, DOUBLE UN X
HME SUP 2725 REMOVER, ADHESIVE UN X X
HME SUP 2728 SALINE (A7019) 0.9% UNIT DOSE UN X X
HME SUP 2528 SIDE RAIL PADDING (A9900) PUR X
HME SUP 2733 SOLUTION, CONTROL III UN X X
HME SUP 2740 SPONGE, 6PLY, 2X2 UN X X
HME SUP 2741 SPONGE, DRESS IV EA X X
HME SUP 2741 SPONGE, DRESS IV UN X X
HME SUP 2742 STOCKINGS, COMPRESSION UN X X
HME SUP 2749 SUPPLIES, MEDICATION UN X X
HME SUP 2755 TAPE MICROFOAM PER 18 SQ INCHES (A6265) EA X X
HME SUP 2755 TAPE MICROFOAM PER 18 SQ INCHES (A6265) UN X X
HME SUP 2756 TAPE, CLOTH 1/2" UN X X
HME SUP 2757 TAPE, DERMICLEAR UN X X
HME SUP 2758 TAPE, DRESS, DURAPORE, 1" UN X X
HME SUP 2759 TAPE, DRESS, DURAPORE, 2" UN X X
HME SUP 2760 TAPE, DRESS, TRANSPORE, 2" UN X X
HME SUP 2767 TRACH, BRUSH PIPECLEAN UN X X
HME SUP 2768 TRACHTRAY KIT STARTER W/SUPPLIES (A4625) UN X X
HME SUP 2230 TRANSFER BOARD OR DEVICE (E0972) PUR X
HME SUP 2796 VINEGAR UN X X
HME SUP 2797 WATER, STERILE UN X X
HME SUP 2801 WIPES, BABY EA X X
HME SUP 2802 WIPES, SKIN BARRIER UN X X
HME WC-CUST 2247 BATTERY CHARGER (E1066) PUR X
HME WC-CUST 2255 BATTERY, DEEP CYCLE (E1069) PUR X
HME WC-CUST 7604 CUSTOM POWER ADULT W/C ASSESSMENT EA X
HME WC-CUST 7674 CUSTOM W/C REVIEW EA X
HME WC-CUST 2288 SCOOTER, THREE WHEEL, STANDARD (STD) (E1230) MO X
HME WC-CUST 2288 SCOOTER, THREE WHEEL, STANDARD (STD) (E1230) MS X
HME WC-CUST 2288 SCOOTER, THREE WHEEL, STANDARD (STD) (E1230) PUR X
HME WC-CUST 2288 SCOOTER, THREE WHEEL, STANDARD (STD) (E1230) RENPR X
HME WC-CUST 2282 W/C MOTORIZED , FIX ARMS, SWING AWAY DETACH MO X
FOOT RESTS (E1212)
HME WC-CUST 2282 W/C MOTORIZED , FIX ARMS, SWING AWAY DETACH PUR X
FOOT RESTS (E1212)
HME WC-CUST 2279 W/C MOTORIZED, DETACH ARMS , S/AWAY DETACH MO X
FOOT RESTS (E1211)
HME WC-CUST 2279 W/C MOTORIZED, DETACH ARMS , S/AWAY DETACH PUR X
FOOT RESTS (E1211)
HME WC-CUST 2280 W/C MOTORIZED, DETACH ARMS S/AWAY, DETACH MO X
ELEV LEG REST (E1213)
HME WC-CUST 2280 W/C MOTORIZED, DETACH ARMS S/AWAY, DETACH PUR X
ELEV LEG REST (E1213)
HME WC-CUST 2281 W/C MOTORIZED, FIX ARMS, S/AWAY DETACH ELEV MO X
LEG RESTS (E1210)
HME WC-CUST 2281 W/C MOTORIZED, FIX ARMS, S/AWAY DETACH ELEV PUR X
LEG RESTS (E1210)
HME WC-CUST 2287 W/C POWER ATTACHMENT (E1065) PUR X
HME WC-CUST 7768 W/C REPAIRS - CUSTOM (E1340) PUR X
HME WC-CUST 2579 W/C XXWIDE (E1220) MO X
HME WC-CUST 2579 W/C XXWIDE (E1220) MS X
HME WC-CUST 2579 W/C XXWIDE (E1220) PD X
HME WC-CUST 7702 W/C, CUSHION ALTERN8, ALTERNATING CUSHION
(K108) PUR X
HME WC-CUST 7506 W/C, CUSTOM MANUAL ADULT (E1399) PUR X
HME WC-CUST 7504 W/C, CUSTOM MANUAL PEDIATRIC (E1399) PUR X
HME WC-CUST 7507 W/C, CUSTOM POWER ADULT (E1399) PUR X
HME WC-CUST 7505 W/C, CUSTOM POWER PEDIATRIC (E1399) PUR X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
HME WC-STD 2249 BELT, SAFETY (E0979) W/ VELCRO CLOSURE, W/C PUR X
HME WC-STD 2249 BELT, SAFETY W/ VELCRO CLOSURE, W/C (E0979) MO X
HME WC-STD 2292 SAFETY VEST (E0980), W/C PUR X
HME WC-STD 2292 SAFETY VEST, W/C (E0980) MO X
HME WC-STD 2139 TRAY (E0950) MO X
HME WC-STD 2139 TRAY (E0950) PUR X
HME WC-STD 2254 W/C (E1399) COMMODE SEAT PADDED PUR X
HME WC-STD 2254 W/C COMMODE SEAT PADDED (E1399) MO X
HME WC-STD 2283 W/C NARROWING DEVICE MO X
HME WC-STD 2283 W/C NARROWING DEVICE PUR X
HME WC-STD 2231 W/C PART GRADE AID FOR WC MO X
HME WC-STD 2231 W/C PART GRADE AID FOR WC PUR X
HME WDCARE 2536 RX WOUND CARE $1.00,(E1399) EA X
HME MISC NOVA PENS X
HOSP ALL ALL HOSPICE SERVICE X
LAB SUP 1421 SUPPLIES EA X X
* SELF-INECTABLES THAT ARE ADMIXED
WITH DILUENT AND ADMINISTERED VIA
INTRAVENOUS INFUSION ARE INCLUDED IN
MED THE CAPITATION PAYMENT.
MED BRM 7016 ALDESLEUKIN (INTERLEUKIN-2)(22MU VIAL) VIAL X
MED BRM 7705 ANAKINRA (100MG VIAL) VIAL X
MED BRM 7686 DARBEPOEITIN ALFA (0.025 MG/ML) 1ML VIAL VIAL X
MED BRM 7687 DARBEPOEITIN ALFA (0.04 MG/ML) 1ML VIAL VIAL X
MED BRM 7688 DARBEPOEITIN ALFA (0.06 MG/ML) 1ML VIAL VIAL X
MED BRM 7684 DARBEPOEITIN ALFA (0.1 MG/ML) 1ML VIAL VIAL X
MED BRM 7685 DARBEPOEITIN ALFA (0.2 MG/ML) 1ML VIAL VIAL X
MED BRM 7771 DARBEPOETIN ALFA (300MCG PER 1ML VIAL) VIAL X
MED BRM 1487 EPOETIN ALFA UN X
MED BRM 7110 EPOETIN ALFA (10,000 UNIT VIAL) VIAL X
MED BRM 7017 EPOETIN ALFA (2,000 UNIT VIAL) VIAL X
MED BRM 7119 EPOETIN ALFA (20,000 UNIT VIAL) VIAL X
MED BRM 7095 EPOETIN ALFA (4,000 UNIT VIAL) VIAL X
MED BRM 7524 EPOETIN ALFA (40,000 UNIT VIAL) VIAL X
MED BRM 7069 EPOTIN ALFA (3,000 UNIT VIAL) VIAL X
MED BRM 1488 FILGRASTIM (G-CSF) MCG X
MED BRM 7018 FILGRASTIM (G-CSF) (300 MCG VIAL) VIAL X
MED BRM 7070 FILGRASTIM (G-CSF) (480MCG VIAL) VIAL X
MED BRM 7578 FILGRASTIM SINGLEJECT (300MCG PER 0.5ML
SYRINGE) VIAL X
MED BRM 7577 FILGRASTIM SINGLEJECT (480MCG PER 0.8ML
SYRINGE) VIAL X
MED BRM 6805 GLATIRAMER ACETATE MG X
MED BRM 7019 GLATIRAMER ACETATE (20MG VIAL) VIAL X
MED BRM 7020 INTERFERON ALFA 2A (3MU VIAL) VIAL X
MED BRM 7071 INTERFERON ALFA 2A (6MU VIAL) VIAL X
MED BRM 7096 INTERFERON ALFA 2A (9MU VIAL) VIAL X
MED BRM 7097 INTERFERON ALFA 2B (10MU VIAL) VIAL X
MED BRM 7109 INTERFERON ALFA 2B (18 MU VIAL) VIAL X
MED BRM 7117 INTERFERON ALFA 2B (25MU VIAL) VIAL X
MED BRM 7541 INTERFERON ALFA 2B (3MU PER 0.2ML 1.5ML PEN) VIAL X
MED BRM 7021 INTERFERON ALFA 2B (3MU VIAL) VIAL X
MED BRM 7118 INTERFERON ALFA 2B (50 MU VIAL) VIAL X
MED BRM 7538 INTERFERON ALFA 2B (5MU PER 0.2ML 1.5ML PEN) VIAL X
MED BRM 7103 INTERFERON ALFA 2B (5MU VIAL) VIAL X
MED BRM 7514 INTERFERON ALFA 2B (60MU PEN) VIAL X
MED BRM 7497 INTERFERON ALFA 2B 30MU KIT (6 X 5MU VIAL/SRN) KIT X
MED BRM 7680 INTERFERON ALFA 2B KIT (6 X 10MU VIAL/SRN) KIT X
MED BRM 6964 INTERFERON ALFA 2B/RIBAVIRIN 42 CAPS (REBETRON EA X
600 DOSE REDUCE)
MED BRM 6963 INTERFERON ALFA 2B/RIBAVIRIN 70 CAPS (REBETRON EA X
1000 FOR <75KG)
MED BRM 6962 INTERFERON ALFA 2B/RIBAVIRIN 84 CAPS (REBETRON EA X
1200 FOR >75KG)
MED BRM 7022 INTERFERON ALFA N3 (5MU VIAL) VIAL X
MED BRM 7072 INTERFERON ALFACON-1 (15MCG PER 0.5ML VIAL) VIAL X
MED BRM 7023 INTERFERON ALFACON-1 (9MCG PER 0.3ML VIAL) VIAL X
MED BRM 7113 INTERFERON BETA 1A (33 MCG SYR/VIAL) VIAL X
MED BRM 7714 INTERFERON BETA 1A (REBIF)(22MCG PER 0.5ML
SYRINGE) VIAL X
MED BRM 7715 INTERFERON BETA 1A (REBIF)(44MCG PER 0.5ML
SYRINGE) VIAL X
MED BRM 7024 INTERFERON BETA 1A 132MCG KIT (4 X 33MCG
VIALS) KIT X
MED BRM 7025 INTERFERON BETA 1B (0.3MG = 9.6MU VIAL) VIAL X
MED BRM 7026 INTERFERON GAMMA 1B (3MU VIAL) VIAL X
MED BRM 7027 OPRELVEKIN (INTERLEUKIN-11)(5MG VIAL) VIAL X
MED BRM 7713 PEGFILGRASTIM (G-CSF)(6MG PER 0.6ML SYRINGE) VIAL X
MED BRM 7776 PEGINTERFERON ALFA-2A (180 MCG VIAL) VIAL X
MED BRM 7777 PEGINTERFERON ALFA-2A (180 MCG VIAL, 4 VIAL
KIT) VIAL X
MED BRM 7666 PEGINTERFERON ALFA-2B (0.074MG KIT) VIAL X
MED BRM 7601 PEGINTERFERON ALFA-2B (0.118MG KIT) VIAL X
MED BRM 7667 PEGINTERFERON ALFA-2B (0.177MG KIT) VIAL X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
MED BRM 7668 PEGINTERFERON ALFA-2B (0.222MG KIT) VIAL X
MED BRM 1490 SARGRAMOSTIM (GM-CSF) MCG X
MED BRM 7073 SARGRAMOSTIM (GM-CSF) (500MCG VIAL) VIAL X
MED BRM 7028 SARGRAMOSTIM (GM-CSF)(250MCG VIAL) VIAL X
MED CERZYME 7074 ALGLUCERASE (400 UNITS 5ML VIAL) VIAL X
MED CERZYME 7030 ALGLUCERASE (50 UNITS PER 5 ML VIAL) VIAL X
MED CERZYME 7032 IMIGLUCERASE (200 UNIT VIAL) VIAL X
MED CERZYME 7496 IMIGLUCERASE (400 U VIAL) VIAL X
MED CERZYME 7303 IMIGLUCERASE, PER UNIT UN X
MED CHEMO 7908 ALEMTUZUMAB (CAMPATH) 30MG PER VIAL KIT X
(3 VIAL KIT)
MED CHEMO 7140 AMIFOSTINE (3 X 500MG VIAL) VIAL X
MED CHEMO 7139 AMIFOSTINE (500MG VIAL) VIAL X
MED CHEMO 7575 ARSENIC TRIOXIDE (10MG PER 10ML VIAL) VIAL X
MED CHEMO 7481 ASPARAGINASE (10,000 UN VIAL) VIAL X
MED CHEMO 1493 BLEOMYCIN SULFATE UN X
MED CHEMO 7401 BLEOMYCIN SULFATE (15 UNIT VIAL) VIAL X
MED CHEMO 7402 BLEOMYCIN SULFATE (30 UNIT VIAL) VIAL X
MED CHEMO 6791 CARBOPLATIN MG X
MED CHEMO 7404 CARBOPLATIN (150MG VIAL) VIAL X
MED CHEMO 7405 CARBOPLATIN (450MG VIAL) VIAL X
MED CHEMO 7403 CARBOPLATIN (50MG VIAL) VIAL X
MED CHEMO 1494 CARMUSTINE MG X
MED CHEMO 7406 CARMUSTINE (100MG VIAL) VIAL X
MED CHEMO 1495 CISPLATIN MG X
MED CHEMO 7408 CISPLATIN (100MG PER 100ML VIAL) VIAL X
MED CHEMO 7407 CISPLATIN (50MG PER 50ML VIAL) VIAL X
MED CHEMO 1496 CLADRIBINE MG X
MED CHEMO 7409 CLADRIBINE (10MG PER 10ML VIAL) VIAL X
MED CHEMO 1499 DACARBAZINE MG X
MED CHEMO 7419 DACARBAZINE (200MG VIAL) VIAL X
MED CHEMO 1500 DACTINOMYCIN MCG X
MED CHEMO 7420 DACTINOMYCIN (500MCG VIAL) VIAL X
MED CHEMO 7422 DAUNORUBICIN CITRATE LIPOSOME (50MG PER 25ML
VIAL) VIAL X
MED CHEMO 1501 DAUNORUBICIN HYDROCHLORIDE MG X
MED CHEMO 7421 DAUNORUBICIN HYDROCHLORIDE (20MG VIAL) VIAL X
MED CHEMO 6799 DAUNORUBICIN LIPOSOMAL MG X
MED CHEMO 7502 DOCETAXEL (20MG VIAL) VIAL X
MED CHEMO 7503 DOCETAXEL (80MG VIAL) VIAL X
MED CHEMO 2487 DOXIL MG X
MED CHEMO 7423 DOXORUBICIN LIPOSOME (20MG PER 10ML VIAL) VIAL X
MED CHEMO 7769 EPIRUBICIN HYDROCHLORIDE 200MG (100ML VIAL) VIAL X
MED CHEMO 7770 EPIRUBICIN HYDROCHLORIDE 50MG (25ML VIAL) VIAL X
MED CHEMO 1503 ETOPOSIDE MG X
MED CHEMO 7430 ETOPOSIDE (1000MG PER 50ML VIAL) VIAL X
MED CHEMO 7427 ETOPOSIDE (100MG PER 5ML VIAL) VIAL X
MED CHEMO 7428 ETOPOSIDE (150MG PER 7.5ML VIAL) VIAL X
MED CHEMO 7429 ETOPOSIDE (500MG PER 25ML VIAL) VIAL X
MED CHEMO 1504 FLOXURIDINE MG X
MED CHEMO 7431 FLOXURIDINE (500MG VIAL) VIAL X
MED CHEMO 1505 FLUDARABINE PHOSPHATE MG X
MED CHEMO 7432 FLUDARABINE PHOSPHATE (50MG VIAL) VIAL X
MED CHEMO 2853 GEMCITABINE HYDROCHLORIDE MG X
MED CHEMO 7437 GEMCITABINE HYDROCHLORIDE (1000MG VIAL) VIAL X
MED CHEMO 7436 GEMCITABINE HYDROCHLORIDE (200MG VIAL) VIAL X
MED CHEMO 2492 IDARUBICIN MG X
MED CHEMO 2493 IDARUBICIN (MULTIPLE 2ND) MG X
MED CHEMO 7439 IDARUBICIN HYDROCHLORIDE (10MG VIAL) VIAL X
MED CHEMO 7440 IDARUBICIN HYDROCHLORIDE (20MG VIAL) VIAL X
MED CHEMO 7438 IDARUBICIN HYDROCHLORIDE (5MG VIAL) VIAL X
MED CHEMO 7528 IFOSFAMIDE/MESNA (10GM-10GM PER KIT) VIAL X
MED CHEMO 6986 IFOSFAMIDE/MESNA (5GM-3GM PER KIT) VIAL X
MED CHEMO 7531 IFOSFAMIDE/MESNA (6GM-6GM PER KIT) VIAL X
MED CHEMO 6807 IRINOTECAN HYDROCHLORIDE MG X
MED CHEMO 7442 IRINOTECAN HYDROCHLORIDE (100MG PER 5ML VIAL) VIAL X
MED CHEMO 7441 IRINOTECAN HYDROCHLORIDE (40MG PER 2ML VIAL) VIAL X
MED CHEMO 1512 MECHLORETHAMINE HYDROCHLORIDE MG X
MED CHEMO 7446 MECHLORETHAMINE HYDROCHLORIDE (10MG VIAL) VIAL X
MED CHEMO 7765 MELPHALAN VIAL X
MED CHEMO 2411 MESNA MG X
MED CHEMO 7447 MESNA (1000MG PER 10ML VIAL) VIAL X
MED CHEMO 1515 MITOMYCIN MG X
MED CHEMO 7452 MITOMYCIN (20MG VIAL) VIAL X
MED CHEMO 7453 MITOMYCIN (40MG VIAL) VIAL X
MED CHEMO 7451 MITOMYCIN (5MG VIAL) VIAL X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
MED CHEMO 6815 MITOXANTRONE MG X
MED CHEMO 7454 MITOXANTRONE (20MG PER 10ML VIAL) VIAL X
MED CHEMO 7455 MITOXANTRONE (25MG PER 12.5ML VIAL) VIAL X
MED CHEMO 7456 MITOXANTRONE (30MG PER 15ML VIAL) VIAL X
MED CHEMO 7764 OXALIPLATIN (50MG VIAL) VIAL X
MED CHEMO 7761 OXALPLATIN (100MG VIAL) VIAL X
MED CHEMO 1516 PACLITAXEL MG X
MED CHEMO 7458 PACLITAXEL (100.2MG PER 16.7ML VIAL) VIAL X
MED CHEMO 7459 PACLITAXEL (300MG PER 50ML VIAL) VIAL X
MED CHEMO 7457 PACLITAXEL (30MG PER 5ML VIAL) VIAL X
MED CHEMO 1517 PEGASPARGASE UN X
MED CHEMO 7460 PEGASPARGASE (3750 UNITS PER 5ML VIAL) VIAL X
MED CHEMO 1519 PLICAMYCIN MCG X
MED CHEMO 7461 PLICAMYCIN (2500 MCG VIAL) VIAL X
MED CHEMO 7132 RITUXIMAB (100MG PER 10ML VIAL) VIAL X
MED CHEMO 7133 RITUXIMAB (500MG PER 50ML VIAL) VIAL X
MED CHEMO 1520 STREPTOZOCIN MG X
MED CHEMO 7462 STREPTOZOCIN (1GM VIAL) VIAL X
MED CHEMO 1521 TENIPOSIDE MG X
MED CHEMO 7474 TENIPOSIDE (50MG PER 5ML VIAL) VIAL X
MED CHEMO 1522 THIOTEPA MG X
MED CHEMO 7463 THIOTEPA (15MG VIAL) VIAL X
MED CHEMO 2831 TOPOTECAN MG X
MED CHEMO 7464 TOPOTECAN HYDROCHLORIDE (4MG VIAL) VIAL X
MED CHEMO 7501 TRASTUZUMAB (440MG VIAL) VIAL X
MED CHEMO 6679 VINORELBINE TARTRATE MG X
MED CHEMO 7469 VINORELBINE TARTRATE (10MG PER 1ML VIAL) VIAL X
MED CHEMO 7470 VINORELBINE TARTRATE (50MG PER 5ML VIAL) VIAL X
MED ENT 1525 ENTERAL FORMULAE: CALORICALLY DENSE INTACT CAN X
MED ENT 1525 ENTERAL FORMULAE: CALORICALLY DENSE INTACT ML X
MED ENT 1526 ENTERAL FORMULAE: DEFINED FORMULAE FOR SPECIAL
NEEDS CAN X
MED ENT 1526 ENTERAL FORMULAE: DEFINED FORMULAE FOR SPECIAL
NEEDS ML X
MED ENT 1527 ENTERAL FORMULAE: HYDROLYZED PROTEIN/AMINO
ACIDS CAN X
MED ENT 1527 ENTERAL FORMULAE: HYDROLYZED PROTEIN/AMINO
ACIDS ML X
MED ENT 1528 ENTERAL FORMULAE: MODULAR COMPONENTS CAN X
MED ENT 1528 ENTERAL FORMULAE: MODULAR COMPONENTS ML X
MED ENT 1529 ENTERAL FORMULAE: NATURAL INTACT
PROTEIN/PROTEIN CAN X
MED ENT 1529 ENTERAL FORMULAE: NATURAL INTACT
PROTEIN/PROTEIN ML X
MED ENT 2413 ENTERAL FORMULAE: NON-SPECIFIED CAN X
MED ENT 2413 ENTERAL FORMULAE: NON-SPECIFIED ML X
MED ENT 2413 ENTERAL FORMULAE: NON-SPECIFIED PD X
MED ENT 2414 ENTERAL FORMULAE: NON-SPECIFIED - FULL SERVICE CAN X
MED ENT 2414 ENTERAL FORMULAE: NON-SPECIFIED - FULL SERVICE ML X
MED ENT 1530 ENTERAL FORMULAE: SEMI-SYNTHETICS CAN X
MED ENT 1530 ENTERAL FORMULAE: SEMI-SYNTHETICS ML X
MED ENT 1531 ENTERAL FORMULAE: STANDARD NUTRIENTS CAN X
MED ENT 1531 ENTERAL FORMULAE: STANDARD NUTRIENTS ML X
MED FACTOR 6750 ANTIHIBITOR -- PROPLEX UN X
MED FACTOR 6748 ANTIHIBITOR (J7196) AUTOPLEX UN X
MED FACTOR 6749 ANTIHIBITOR (J7196) FEIBA UN X
MED FACTOR 6744 FACTOR IX (J7194) ALFANINE UN X
MED FACTOR 6747 FACTOR IX (J7194) BEBULIN UN X
MED FACTOR 6745 FACTOR IX (J7194) KONYNE UN X
MED FACTOR 6743 FACTOR IX (J7194) MONONINE UN X
MED FACTOR 6746 FACTOR IX (J7194) PROFILNINE UN X
MED FACTOR 6891 FACTOR IX RECOM (J7194) BENEFIX UN X
MED FACTOR 7599 FACTOR VII -- NOVOSEVEN (AUTH IN 1200 OR 4800
QTY) MCG X
MED FACTOR 7134 FACTOR VII (NOVOSEVEN 1200MCG VIAL) VIAL X
MED FACTOR 7135 FACTOR VII (NOVOSEVEN 4800MCG VIAL) VIAL X
MED FACTOR 6739 FACTOR VIII HIPUR (J7190) ALFANATE UN X
MED FACTOR 6741 FACTOR VIII HIPUR (J7190) HUMATE UN X
MED FACTOR 6740 FACTOR VIII HIPUR (J7190) KOATE UN X
MED FACTOR 6742 FACTOR VIII HIPUR (J7191) HYATE UN X
MED FACTOR 6736 FACTOR VIII MONO (J7190) HEMOPHIL UN X
MED FACTOR 6737 FACTOR VIII MONO (J7190) MONOCLATE UN X
MED FACTOR 6738 FACTOR VIII MONO (J7190) RED CROSS METHOD-M UN X
MED FACTOR 7598 FACTOR VIII MONOCLONAL -- MONARC-M UN X
MED FACTOR 6732 FACTOR VIII RECOM (J7192) BIOCLATE UN X
MED FACTOR 6733 FACTOR VIII RECOM (J7192) HELIXATE UN X
MED FACTOR 6735 FACTOR VIII RECOM (J7192) KOGENATE UN X
MED FACTOR 6734 FACTOR VIII RECOM (J7192) RECOMBINATE UN X
MED FACTOR 7909 FACTOR VIII RECOMBINANT - ADVATE UN X
MED FACTOR 7572 FACTOR VIII RECOMBINANT - HELIXATE FS UN X
MED FACTOR 7596 FACTOR VIII RECOMBINANT -- KOGENATE FS UN X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
MED FACTOR 7597 FACTOR VIII RECOMBINANT -- REFACTO UN X
MED HORM 7142 SERMORELIN ACETATE (GH-RELEASING HORMONE)
(0.5MG VIAL) VIAL X
MED HORM 7143 SERMORELIN ACETATE (GH-RELEASING HORMONE)
(1MG VIAL) VIAL X
MED HORM 1489 SOMATREM MG X
MED HORM 7075 SOMATREM (10MG VIAL) VIAL X
MED HORM 7033 SOMATREM (5MG VIAL) VIAL X
MED HORM 7545 SOMATROPIN (.8MG VIAL)(MINIQUICK) VIAL X
MED HORM 7746 SOMATROPIN (0.4MG SYR)(GENOTROPIN) VIAL X
MED HORM 7747 SOMATROPIN (0.6MG SYR)(GENOTROPIN) VIAL X
MED HORM 7748 SOMATROPIN (1.0MG SYR)(GENOTROPIN) VIAL X
MED HORM 7749 SOMATROPIN (1.2MG SYR)(GENOTROPIN) VIAL X
MED HORM 7750 SOMATROPIN (1.4MG SYR)(GENOTROPIN) VIAL X
MED HORM 7751 SOMATROPIN (1.6MG SYR)(GENOTROPIN) VIAL X
MED HORM 7752 SOMATROPIN (1.8MG SYR)(GENOTROPIN) VIAL X
MED HORM 7753 SOMATROPIN (2.0MG SYR)(GENOTROPIN) VIAL X
MED HORM 7744 SOMATROPIN (24MG VIAL)(HUMOTROPE) VIAL X
MED HORM 7754 SOMATROPIN (5MG CARTRIDGE)(NORDITROPIN) VIAL X
MED HORM 7758 SOMATROPIN (5MG VIAL)(HUMOTROPE) VIAL X
MED HORM 7755 SOMATROPIN (5MG/VIAL)(SAIZEN) VIAL X
MED HORM 7757 SOMATROPIN (5MG/VIAL)(SEROSTIM) VIAL X
MED HORM 7743 SOMATROPIN (6MG VIAL)(HUMOTROPE) VIAL X
MED HORM 7756 SOMATROPIN (8.8MG/VIAL)(SAIZEN) VIAL X
MED HORM 6672 SOMATROPIN (RDNA ORIGIN) MG X
MED HORM 7076 SOMATROPIN (RDNA ORIGIN) (10MG VIAL) VIAL X
MED HORM 7115 SOMATROPIN (RDNA ORIGIN) (13.8 MG
CARTRIDGE/VIAL) VIAL X
MED HORM 7114 SOMATROPIN (RDNA ORIGIN) (5.8 MG
CARTRIDGE/VIAL) VIAL X
MED HORM 7034 SOMATROPIN (RDNA ORIGIN) (5MG VIAL) VIAL X
MED HORM 7123 SOMATROPIN (RDNA ORIGIN)(1.5MG CARTRIDGE/VIAL) VIAL X
MED HORM 7559 SOMATROPIN (RDNA ORIGIN)(12MG CARTRIDGE/VIAL) VIAL X
MED HORM 7669 SOMATROPIN (RDNA ORIGIN)(15MG/1.5ML CARTRIDGE) VIAL X
MED HORM 7122 SOMATROPIN (RDNA ORIGIN)(4MG VIAL) VIAL X
MED HORM 7121 SOMATROPIN (RDNA ORIGIN)(6MG VIAL) VIAL X
MED HORM 7124 SOMATROPIN (RDNA ORIGIN)(8 MG VIAL) VIAL X
MED HORM 7741 SOMATROPIN AQ (10MG CARTRIDGE/VIAL)(NUTROPIN) VIAL X
MED HORM 7740 SOMATROPIN AQ (10MG VIAL)(NUTROPIN) VIAL X
MED HORM 7562 SOMATROPIN DEPOT (RDNA ORIGIN) (13.5MG VIAL) VIAL X
MED HORM 7563 SOMATROPIN DEPOT (RDNA ORIGIN) (18MG VIAL) VIAL X
MED HORM 7564 SOMATROPIN DEPOT (RDNA ORIGIN) (22.5MG VIAL) VIAL X
MED INJOT 7035 ACETYLCYSTEINE (10% 10ML VIAL) VIAL X
MED INJOT 7077 ACETYLCYSTEINE (20% 10ML VIAL) VIAL X
MED INJOT 7789 ADALIMUMAB (HUMIRA)(40MG PER 0.8ML SYRINGE) VIAL X
MED INJOT 7912 AGALSIDASE BETA (FABRAZYME) 35MG VIAL VIAL X
MED INJOT 2824 ALBUTEROL INHALER EA X
MED INJOT 6787 ALBUTEROL SULFATE SOLUTION ML X
MED INJOT 7078 ALPROSTADIL (10MCG VIAL) VIAL X
MED INJOT 7098 ALPROSTADIL (20MCG VIAL) VIAL X
MED INJOT 7036 ALPROSTADIL (5MCG VIAL) VIAL X
MED INJOT 7543 ALTEPLASE, RECOMBINANT MG X
MED INJOT 7537 ALTEPLASE, RECOMBINANT (50MG VIAL) VIAL X
MED INJOT 7542 ALTEPLASE, RECOMBINANT (50MG VIAL) VIAL X
MED INJOT 7790 ANAKINRA (KINERET)(100MG PER .67ML SYRINGE) VIAL X
MED INJOT 7397 ATROPINE SULFATE (1MG PER 1ML VIAL) VIAL X
MED INJOT 7015 BACITRACIN (50,000 U VIAL) VIAL X
MED INJOT 7037 BCG VACCINE (50MG VIAL) VIAL X
MED INJOT 2819 BETAMETHASONE PHOSPHATE MG X
MED INJOT 6973 BETAMETHOSONE ACETATE/BETAMETHOSONE SOD PHOS VIAL X
(15MG PER 5ML VIAL)
MED INJOT 6790 BITOLTEROL MESYLATE EA X
MED INJOT 7108 BOTULINUM TOXIN TYPE A (100 UNIT VIAL) VIAL X
MED INJOT 7727 BOTULINUM TOXIN TYPE B (2500 U PER 0.5ML) VIAL X
MED INJOT 2483 CALCITONIN SALMON UN X
MED INJOT 7038 CALCITRIOL (1MCG PER 1 ML VIAL) VIAL X
MED INJOT 2826 CHORIONIC GONADATROPIN (HCG) UN X
MED INJOT 7675 COLCHICINE (1MG VIAL) VIAL X
MED INJOT 7039 CORTICOTROPIN (400 UNITS PER 5ML VIAL) VIAL X
MED INJOT 6884 DALTEPARIN SODIUM MG X
MED INJOT 6884 DALTEPARIN SODIUM UN X
MED INJOT 6937 DANAPAROID SODIUM (750U) VIAL X
MED INJOT 6938 DANAPAROID SODIUM (750U) (MULTIPLE 2ND) VIAL X
MED INJOT 7041 DEPO-TESTADIOL (10ML VIAL) VIAL X
MED INJOT 7532 DESMOPRESSIN (STIMATE) NASAL SPRAY 2.5ML VIAL X
MED INJOT 7079 DESMOPRESSIN ACETATE (15MCG VIAL) VIAL X
MED INJOT 7533 DESMOPRESSIN ACETATE (30MCG PER 2ML VIAL) VIAL X
MED INJOT 7530 DESMOPRESSIN ACETATE (40MCG PER 10ML VIAL) VIAL X
MED INJOT 7042 DESMOPRESSIN ACETATE (4MCG VIAL) VIAL X
MED INJOT 7005 DEXRAZONE (250MG VIAL) VIAL X
MED INJOT 2825 DIMENHYDRINATE MG X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
MED INJOT 7044 DIMERCAPROL (10% 3ML VIAL) VIAL X
MED INJOT 7742 DORNASE ALFA (30AMP/VIAL)(PULMOZYME) VIAL X
MED INJOT 2823 DORNASE ALFA (PULMOZYME) MG X
MED INJOT 1611 ENOXAPRIN SODIUM MG X
MED INJOT 1986 ENOXAPRIN SODIUM (MULTIPLE 2ND) MG X
MED INJOT 6677 ESTRADIOL CYPIONATE MG X
MED INJOT 7045 ESTRADIOL CYPIONATE (25MG VIAL) VIAL X
MED INJOT 7080 ESTRADIOL CYPIONATE (50MG VIAL) VIAL X
MED INJOT 7679 ESTRADIOL MEDROXYPROGESTERONE (0.5ML VIAL) VIAL X
MED INJOT 7046 ESTRADIOL VALERATE (200MG VIAL) VIAL X
MED INJOT 7081 ESTRADIOL VALERATE (400MG VIAL) VIAL X
MED INJOT 7002 ESTROGENS, CONJUGATED (25MG VIAL) VIAL X
MED INJOT 7006 ETANERCEPT 4PK (4 X 25MG) (ENBREL) VIAL X
MED INJOT 7006 ETANERCEPT 4PK (4 X 25MG) (ENBREL) KIT X
MED INJOT 7521 ETHACRYNATE SODIUM (50MG VIAL) VIAL X
MED INJOT 7004 FOLLITROPIN ALFA (75IU VIAL) VIAL X
MED INJOT 7719 FONDAPARINUX SODIUM (2.5MG PER 0.5ML SYRINGE) VIAL X
MED INJOT 7082 GOLD SODIUM THIOMALATE (500MG VIAL) VIAL X
MED INJOT 7048 GOLD SODIUM THIOMALATE (50MG VIAL) VIAL X
MED INJOT 2830 GONADORELIN ACETATE MG X
MED INJOT 7720 GONADORELIN HYDROCHLORIDE (FACTREL)(0.1MG
POWDER) VIAL X
MED INJOT 6959 GONADOTROPIN, CHORIONIC UN X
MED INJOT 7083 GONADOTROPIN, CHORIONIC (10,000 UNIT VIAL) VIAL X
MED INJOT 7049 GONADOTROPIN, CHORIONIC (5,000 UNIT VIAL) VIAL X
MED INJOT 6826 GOSERELIN ACETATE MG X
MED INJOT 6899 HEPATITIS A VACCINE, INACTIVATED P ML X
MED INJOT 7050 HEPATITIS B IMMUNE GLOBULIN (0.5ML VIAL) VIAL X
MED INJOT 7084 HEPATITIS B IMMUNE GLOBULIN (1ML VIAL) VIAL X
MED INJOT 7099 HEPATITIS B IMMUNE GLOBULIN (5ML VIAL) VIAL X
MED INJOT 7051 HISTOPLASMIN (1:100 1ML VIAL) VIAL X
MED INJOT 6676 HISTRELIN ACETATE EA X
MED INJOT 1563 HUMAN INSULIN ML X
MED INJOT 7671 HUMAN INSULIN, LISPRO (100UN/ML 10ML VIAL) VIAL X
MED INJOT 7549 HYALURONATE, SODIUM (20MG PER 2ML VIAL) VIAL X
MED INJOT 1564 HYDROXYPROGESTERONE CAPROATE MG X
MED INJOT 7131 HYLAN POLYMERS A & B (16MG PER 2ML VIAL) VIAL X
MED INJOT 7009 HYLAN POLYMERS A&B (3 X 2ML) VIAL X
MED INJOT 6999 INFLIXIMAB (100MG VIAL) VIAL X
MED INJOT 7000 INFLUENZA VIRUS VACCINE (45MCG VIAL) VIAL X
MED INJOT 6806 IPRATROPIUM BROMIDE EA X
MED INJOT 7697 IRON SUCROSE 100MG (5ML VIAL) VIAL X
MED INJOT 1539 IRRIGATING SOLUTIONS LITER X
MED INJOT 2833 KETOROLAC TROMETHAMINE MG X
MED INJOT 7911 LARONIDASE (ALDURAZYME) 5ML VIAL VIAL X
MED INJOT 1511 LEUPROLIDE ACETATE EA X
MED INJOT 7399 LEUPROLIDE ACETATE -- PED (11.25 MG/VIAL) VIAL X
MED INJOT 7010 LEUPROLIDE ACETATE -- PED (15MG/VIAL) VIAL X
MED INJOT 7007 LEUPROLIDE ACETATE -- PED (7.5MG/VIAL) VIAL X
MED INJOT 6971 LEUPROLIDE ACETATE 11.25 MG EA X
MED INJOT 6855 LEUPROLIDE ACETATE 2.8ML VIAL (5MG/ML) EA X
MED INJOT 6854 LEUPROLIDE ACETATE 3.75 MG EA X
MED INJOT 7762 LEUPROLIDE ACETATE DEPOT (22.5MG) VIAL X
MED INJOT 7672 LEUPROLIDE ACETATE DEPOT (30MG VIAL) VIAL X
MED INJOT 7052 LIVER DERIVATIVE COMPLEX (510MG PER 20ML VIAL) VIAL X
MED INJOT 7085 MEDROXYPROGESTERONE ACETATE (1000MG VIAL) VIAL X
MED INJOT 7053 MEDROXYPROGESTERONE ACETATE (150MG VIAL) VIAL X
MED INJOT 7100 MEDROXYPROGESTERONE ACETATE (4000MG VIAL) VIAL X
MED INJOT 2827 MENOTROPINS (HMG) UN X
MED INJOT 7054 MENOTROPINS (HMG) (75 UNIT VIAL) VIAL X
MED INJOT 6685 METHYLENE BLUE ML X
MED INJOT 7055 METHYLPREDNISOLONE ACETATE (40MG VIAL) VIAL X
MED INJOT 7086 METHYLPREDNISOLONE ACETATE (80MG VIAL) VIAL X
MED INJOT 2499 NANDROLONE DECANOATE MG X
MED INJOT 7571 NEOSTIGMINE METHYLSULFATE (10MG PER 10ML VIAL) VIAL X
MED INJOT 7570 NEOSTIGMINE METHYLSULFATE (5MG PER 10ML VIAL) VIAL X
MED INJOT 2500 OCTREOTIDE MCG X
MED INJOT 7093 OCTREOTIDE ACETATE (100MCG VIAL) VIAL X
MED INJOT 7708 OCTREOTIDE ACETATE (5000MCG VIAL) VIAL X
MED INJOT 7065 OCTREOTIDE ACETATE (50MCG VIAL) VIAL X
MED INJOT 7476 OCTREOTIDE LAR DEPOT (10MG VIAL) VIAL X
MED INJOT 7477 OCTREOTIDE LAR DEPOT (20MG VIAL) VIAL X
MED INJOT 7478 OCTREOTIDE LAR DEPOT (30MG VIAL) VIAL X
MED INJOT 7910 OMALIZUMAB (XOLAIR) 150MG PER VIAL VIAL X
MED INJOT 6972 PALIVIZUMAB (100 MG/VIAL) VIAL X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
MED INJOT 7513 PALIVIZUMAB (50 MG/VIAL) VIAL X
MED INJOT 7087 PAPAVERINE HYDROCHLORIDE (300MG VIAL) VIAL X
MED INJOT 7056 PAPAVERINE HYDROCHLORIDE (60MG VIAL) VIAL X
MED INJOT 7519 PEGADEMASE BOVINE (375 UNITS PER 1.5ML VIAL) VIAL X
MED INJOT 6820 PHENTOLAMINE MESYLATE MG X
MED INJOT 7199 PNEUMOCOCCAL VACCINE (575MCG PER 0.5ML VIAL) VIAL X
MED INJOT 7057 PROGESTERONE IN OIL (500MG VIAL) VIAL X
MED INJOT 6990 SINCALIDE (KINEVAC) (5MCG VIAL) VIAL X
MED INJOT 6821 SUMATRIPTAN SUCCINATE MG X
MED INJOT 7058 SUMATRIPTAN SUCCINATE (6MG VIAL) VIAL X
MED INJOT 7779 TERIPARATIDE (750 MCG PER 3ML VIAL) VIAL X
MED INJOT 2508 TESTOSTERONE MG X
MED INJOT 7059 TESTOSTERONE CYPIONATE (1,000MG VIAL) VIAL X
MED INJOT 7088 TESTOSTERONE CYPIONATE (2,000MG VIAL) VIAL X
MED INJOT 7120 TESTOSTERONE CYPIONATE (200 MG VIAL) VIAL X
MED INJOT 7600 THERACYS BCG VACCINE (81MG) VIAL X
MED INJOT 7014 THYROTROPIN ALFA (2 X 1.1 MG KIT) KIT X
MED INJOT 7677 TINZAPARIN SODIUM (40,000 UNITS PER 2ML VIAL) VIAL X
MED INJOT 7724 TREPROSTINIL SODIUM 10MG/ML VIAL X
MED INJOT 7721 TREPROSTINIL SODIUM 1MG/ML VIAL X
MED INJOT 7722 TREPROSTINIL SODIUM 2.5MG/ML VIAL X
MED INJOT 7723 TREPROSTINIL SODIUM 5MG/ML VIAL X
MED INJOT 7089 TRIAMCINOLONE DIACETATE (200MG VIAL) VIAL X
MED INJOT 7060 TRIAMCINOLONE DIACETATE (40MG VIAL) VIAL X
MED INJOT 7090 UROFOLLITROPIN (150 UNIT VIAL) VIAL X
MED INJOT 7061 UROFOLLITROPIN (75 UNIT VIAL) VIAL X
MED INJOT 7913 ZEMAIRA (1GM PER 50ML VIAL) VIAL X
MED SYNAGIS 6972 PALIVIZUMAB (100 MG/VIAL) MG X
ORTH ALL ALL ORTHOTIC DEVICES / SERVICES (HCPCS WITH
L-CODES) X X
ORTH ARCH SUPPORTS X X
ORTH BOOTS X X
ORTH BRACES X X
ORTH COLLARS X X
ORTH ELASTIC WRAP X X
ORTH GAUNTLET X X
ORTH GIRDLES X X
ORTH HALOS X X
ORTH HEEL CUPS X X
ORTH INSOLES X X
ORTH MASTECTOMY BRAS X X
ORTH RIB BELTS X X
ORTH SHOES X X
ORTH SLINGS X X
ORTH SPLINTS X X
ORTH STUMP SOCKS X X
ORTH SUPPORT HOSE X X
ORTH SUPPORTS X X
ORTH TRUSSES X X
ORTH VESTS X X
PROST ALL ALL PROSTHETIC DEVICES - BODY PART
REPLACEMENTS X X
RESP
RESP EQUIP 2588 MONITOR, VITAL SIGNS (E1399) MO X
RESP EQUIP 6775 OXIMETRY TEST (E1399) PD X
RESP EQUIP 6775 OXIMETRY TEST (E1399) PUR X
RESP EQUIP 2373 PERCUSSOR (E0480), ELEC OR PNEUM, HOME MODEL MO X
RESP EQUIP 2373 PERCUSSOR (E0480), ELEC OR PNEUM, HOME MODEL PUR X
RESP EQUIP 2373 PERCUSSOR (E0480), ELEC OR PNEUM, HOME MODEL RENPR X
RESP EQUIP 2567 PNEUMOGRAM (*E1399) PUR X
RESP EQUIP 2380 POSTURAL DRAINAGE BOARD (E0606) PUR X X
RESP EQUIP 2592 SLEEP STUDY, ADULT (E1399) PUR X
RESP EQUIP 2391 VAPORIZER, ROOM TYPE (E0605) PUR X
RESP MISC AEROCHAMBERS X
RESP MISC AIR PURIFIERS X
RESP MISC CROUP/ O2 TENTS X
RESP MISC INCUBATORS X
RESP MISC IPPB MACHINES X
RESP MISC NASAL ASPIRATORS X
RESP MISC ROOM HUMIDIFIERS/DEHUMIDIFIERS X
RESP MISC VAPORIZERS X
RESP NEB* 2571 NEBULIZER (E0575), ULTRASONIC, AC/DC MO X
RESP NEB* 2571 NEBULIZER (E0575), ULTRASONIC, AC/DC PUR X
RESP NEB* 2571 NEBULIZER (E0575), ULTRASONIC, AC/DC RENPR X
RESP NEB* 2338 NEBULIZER; ULTRASONIC (E0575) MO X
RESP NEB* 2338 NEBULIZER; ULTRASONIC (E0575) PUR X
EXHIBIT XVII. CONTRACT EXCLUSIONS DOCUMENT EXCLUSION CATEGORY
------------------------------------------- -----------------------------------------------------
NOT
DELIVERY MEDICALLY CONTRACTUAL
CAT TYPE CODE DESCRIPT UOM CHANNEL NECESSARY NOT HME DIAGNOSTIC EXCLUSION
----------------------------------------------------------------------------------------------------------------------------------
RESP NEB* 2338 NEBULIZER; ULTRASONIC (E0575) RENPR X
RESP NEB* 2561 PEAK FLOW METER (E1399) PUR X X
RESP OXYGEN 2529 O2 ANALYZER (A9900) MO X
RESP OXYGEN 2529 O2 ANALYZER (A9900) PUR X
RESP VEST_TH 6876 PERCUSSION VEST (A9900), THERAPY PUR X
RESP VEST_TH 6774 THERAPY PERCUSSION, GENERATOR ONLY MO X
RESP VEST_TH 6774 THERAPY PERCUSSION, GENERATOR ONLY PUR X
THH OTHER 2845 X-RAY, CHEST EA X X
THH UNSKILL 1617 COMPANION/LIVE IN PD X
THH UNSKILL 1617 COMPANION/LIVE IN HR X
THH UNSKILL 1617 COMPANION/LIVE IN VI X
THH UNSKILL 1619 HOMEMAKER HR X
THH WDCARE 2548 PRESCRIPTION WOUND CARE EA X
WHS OTHER 2558 CRITICAL PATHWAY, HYPERTENSION PD X
WHS OTHER 2559 CRITICAL PATHWAY, PREECLAMPSIA PD X
WHS SKILLED 1650 HUAM/PERINATAL NURSING SERVICES LEVEL 1 PD X
WHS SKILLED 1651 HUAM/PERINATAL NURSING SERVICES LEVEL 2 PD X
WHS SKILLED 1652 HUAM/PERINATAL NURSING SERVICES LEVEL 3 PD X
WHS SKILLED 1654 POST PARTUM WELL BABY/WELL MOM HR X
WHS SKILLED 1654 POST PARTUM WELL BABY/WELL MOM PD X
EXHIBIT XVIII
CLINICAL SERVICE MANAGEMENT DELEGATION GRID
------------------------------------------------------------------------------------------------------------------------------------
MCA responsibilities CIGNA responsibilities Rationale
------------------------------------------------------------------------------------------------------------------------------------
Eligibility verification Provide regular member updates MCA should periodically verify if the
electronically "ongoing member is still eligible.
------------------------------------------------------------------------------------------------------------------------------------
Benefits verification Respond through customer service inquiries Varying benefit packages
------------------------------------------------------------------------------------------------------------------------------------
Home health, DME and Infusion criteria Clinical Resource Unit feedback and MCA has the expertise in this
development with input from practicing recommendations to MCA related to benefit specialty area.
physicians and approval by their Quality interpretaion in the application of MCA
Committee clinical criteria. CIGNA annual oversight
review and approval of criteria used by
MCA to make review determinations.
------------------------------------------------------------------------------------------------------------------------------------
Central intake for home health, DME and Route calls to MCA Easy for providers and members.
infusion services.
------------------------------------------------------------------------------------------------------------------------------------
Collection of enough clinical information from None Intake must consist of gathering
providers (any extenuating circumstances) to enough information to make a decision
make a coverage determination or evidence to about coverage.
support that efforts were made to obtain the
clinical information.
------------------------------------------------------------------------------------------------------------------------------------
Initial approval of covered services according None
to established criteria and protocols
------------------------------------------------------------------------------------------------------------------------------------
Referral of all urgent requests for Receive the faxed request and respond to Some states have a 1 day turn around
non-covered services or services not meeting MCA within the NCQA timeframes. on all requests once all information
approved clinical criteria requirements to the Make a determination of coverage and is gathered
healthplan within 1 hour of receiving all issue denial letters with proper
pertinent information. Refer non-urgent notification when indicated.
requests of the same to the healthplan the (during initial phase of "partial"
same day. delegation)
------------------------------------------------------------------------------------------------------------------------------------
Send approval letters to all members where state Provide template letters to MCA MCA has real time access to members
mandate exists in compliance with regulatory receiving services.
requirements.
------------------------------------------------------------------------------------------------------------------------------------
Submit all claims and encounters to CIGNA for Track and identify members to CIGNA of CIGNA pays claims and has access all
tracking member benefit limits those reaching benefit limits paid claims for specific member.
------------------------------------------------------------------------------------------------------------------------------------
Submit all claims and encounters to CIGNA for Notify members in writing when they are Same as above
tracking member benefit limits reaching their benefit maximums
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Provide authorizations for ongoing cases None Aspect of managing ongoing care.
according to established criteria and available
benefits.
------------------------------------------------------------------------------------------------------------------------------------
Early identification and referral of complex Accept cases for evaluation by case Important for continuity of care and
cases receiving services to healthplan case management management of ALL aspects of the and
managers according to established criteria members needs
process
------------------------------------------------------------------------------------------------------------------------------------
Refer all experimental or investigational TEC Assessment will review according to CIGNA does not delegate this function.
equipment or services to CIGNA TEC Assessment CIGNA protocols
for evaluation prior to providing the service.
------------------------------------------------------------------------------------------------------------------------------------
Establishes Overutilization and Underutilization Provide oversight of the process Capitated entities must be aware of
thresholds and measures on a regular basis. trends and take action with providers
as necessary.
------------------------------------------------------------------------------------------------------------------------------------
Coordinates pre-certification requirements for Defines which services are non-capitated Some services will not be included in
all non-capitated services and responds to FFS requests to meet NCQA the capitated arrangement and FFS
with the healthplan standards pre-certification may be required.
according to NCQA timelines.
------------------------------------------------------------------------------------------------------------------------------------
Tracks all services that are "rent to Establishes parameters for transitioning More efficiently manage DME costs.
purchase" and transitions to purchase rental items to purchase.
according to contractually agreed upon
parameters.
------------------------------------------------------------------------------------------------------------------------------------
Conducts Network Assessment of the home health Reviews adequacy of the MCA Network in Identifies opportunities based on
network according to the CIGNA membership and combination with member and provider changing membership and customer
unique needs of the membership and reports complaints and satisfaction. satisfaction.
annually to CIGNA.
------------------------------------------------------------------------------------------------------------------------------------
Credentials network providers according to Provide CIGNA standards for credentialing Delegated function.
CIGNA standards. of home health providers
------------------------------------------------------------------------------------------------------------------------------------
EXHIBIT XIX
MCA REPRESENTED PROVIDER APPLICATION
PROPRIETARY AND CONFIDENTIAL
THE PROVIDER CREDENTIALING APPLICATION KIT CONTAINS COMPANY POLICIES RELATED TO
THE PROVIDER NETWORK OF GENTIVA CARECENTRIX.
THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN ARE THE PROPERTY OF AND
SUBJECT TO THE RIGHTS (INCLUDING COPYRIGHT) OF GENTIVA CARECENTRIX. NEITHER THIS
DOCUMENT NOR ITS INFORMATION MAY BE DISCLOSED TO ANYONE OR USED FOR ANY PURPOSE
EXCEPT AS EXPRESSLY AUTHORIZED IN WRITING BY GENTIVA CARECENTRIX. UNAUTHORIZED
DISCLOSURE OR USE MAY RESULT IN CIVIL LIABILITY AND CRIMINAL PENALTIES.
COPYING OF THE KIT CONTENTS, EXCEPT AS DIRECTED FOR SUBMISSION OR OTHERWISE
MAKING THE MATERIALS AVAILABLE TO UNAUTHORIZED PERSONS IS PROHIBITED.
***
(c) 1995 Gentiva CareCentrix All Rights Reserved Printed in USA
TABLE OF CONTENTS
I. Introduction
II. CareCentrix As a Health Care Strategy
III. Gentiva Corporation Background
IV. Mission and Vision Statements
V. Application Instructions
VI. Conditions of Review
VII. Inquiries
VIII. Provider Applicant Application
Section I. Provider Profile and Service Information
Section II. Provider Qualifications
IX. Authorization and Certification Statements
X. Document Transmittal
XI. Provider Agreement
I. INTRODUCTION
Thank you for your interest in becoming a credentialed provider in the
Gentiva CareCentrix national home health care network. We are pleased to
provide you with our PROVIDER CREDENTIALING APPLICATION KIT, which we hope
you will complete and submit for consideration as a member in our
integrated home health care network provider panel.
You may currently have an existing contractual agreement with one or more
Gentiva CareCentrix home health care branches. Those agreements bear no
relationship to our network management line of business. EACH PROVIDER
PARTICIPATING ON OUR INTEGRATED HOME HEALTH CARE NETWORK MUST BE
CREDENTIALED. Therefore, you will need to complete and submit the enclosed
application, which will be used to determine if your organization meets
the established credentialing criteria. If your organization meets the
credentialing criteria, and is selected to participate on our network
provider panel, a contract pertaining to the relationship between your
organization and Gentiva CareCentrix will need to be in place.
Below you will find information regarding our network business strategy, a
description of our network management line of business, the application
and instructions for its completion, rates pertaining to the services
and/or products you provide and an agreement for your signature. Please
read and follow the instructions carefully and return all required
documents to us within the time frame specified in the cover letter.
II. NETWORK MANAGEMENT AS A HEALTH CARE STRATEGY
"Network management" has existed in the United States for many years.
Historically, health management organizations (HMOs) have delegated
responsibility for the administration and management of specific benefits
to contractors with focused expertise in specific clinical areas.
Organizations providing these delegated services to managed health plans
act as surrogates by developing networks of credentialed providers,
designing clinical guidelines, managing utilization and administering
benefits, services and products, evaluating effectiveness and efficiency
and implementing correlated quality improvement initiatives, and reporting
statistical data illustrating results, cost savings and outcomes to health
plan customers.
The need for managed care organizations (MCOs) to further delegate the
development and management of provider networks is clear. As managed care
penetration has increased in the market place, and networks of providers
have developed, the demands upon the MCO have become overwhelming. The
larger the network, the more time, expertise, effort and expense demanded
of the MCO to manage groups of providers for any given coverage plan.
Multiply this by the types and numbers of coverage within any given health
plan and the number of health plans administered within an MCO, and the
challenges faced by the MCO are evident. Therefore, our managed care
customers are seeking new and innovative solutions to this problem. At
Gentiva CareCentrix, we have responded by building the most advanced home
care network available today.
The Gentiva CareCentrix is a separate line of business that we believe
offers a solution essential to the continuum of health care services in
today's managed care arena. It is based upon:
A. Managed care principles
B. A customer-tailored provider panel
C. Administrative simplicity
D. Performance accountability
E. Service consistency
F. Risk sharing
G. A philosophical shift from "vendor" to "provider/partner"
III. GENTIVA BACKGROUND
Gentiva Corporation is headquartered in Melville, New York and is a
publicly held organization providing health care. Gentiva CareCentrix is
in the forefront of two key elements of change: the move to managed care
in the health care delivery system and the corporate restructuring within
a more global economy.
Gentiva CareCentrix has provided home health care services since 1971.
Based upon industry sales, we are the largest home health care provider in
North America. With over 600 locations and 175,000 caregivers throughout
the United States and Canada, we offer a broad range of integrated
services and care for more than 400,000 patients annually.
Our health care division also offers diversified services such as our
Flying Nurses(TM) and centrally coordinated programs to provide specially
skilled health care personnel to support product sales, research and other
clinical needs. We also take pride in being the nation's leading provider
of management services to hospital-based home health agencies.
As the industry's largest home health network manager, we currently
provide a single source for managed nursing, home infusion, home medical
equipment, respiratory therapy, rehabilitation, neonatal, pediatric,
women's health and hospice services. Our network management business,
housed within our health care division has the capacity to accommodate
customer contracts covering more than 20 million lives. Greater than 5
million covered lives fall within capitated arrangements.
We believe we are operating within an environment of great opportunity.
Opportunity for home care and other post-acute health care solutions
currently benefits from rapid growth of an aging population, continued
advances in medical technology, managed care penetration into all aspects
of health care delivery and reimbursement, and the sociological benefits
of services delivered outside of traditional medical settings. As we
continue to enhance and expand our service and information technology, it
is with vision and commitment to our most recently developed line of
business...network management.
IV. MISSION AND VISION
OUR MISSION STATEMENT
Gentiva CareCentrix is a team of dedicated professionals committed to
improving the quality of health care for patients and their families. We
provide value to our entire spectrum of customers by exceeding
expectations, controlling costs and ensuring quality outcomes. We set the
standards that become the benchmark of our industry.
OUR NETWORK VISION STATEMENT
Gentiva CareCentrix will be the premier managed care delivery network. We
will distinguish ourselves by offering customer-focused, specialized
services and programs covering a broad continuum of health care. We are
committed to leading the industry in:
o Managed care o Customer consultation
o Integrated services o High tech excellence
o Information services o The Gold Standard
To make our vision a reality, we will:
o Develop and maintain a national network of qualified providers for
each specialty service in all key markets that ensures services and
product excellence and results in high customer satisfaction
o Develop information systems and processes that support network
management and facilitate information exchange among and between all
network stakeholders
o Implement sales and service strategies for targeted network
customers and key markets that position us as the network manager of
choice
o Expand our network in the post-acute sector through market
assessment, strategic business decisions and alliances
o Collaborate with other industry leaders to develop and report
customer satisfaction and performance measurements that meet the
rigorous requirements of managed care organizations, NCQA and our
own internal standards
V. APPLICATION INSTRUCTIONS {PRIVATE}
GUIDELINES FOR COMPLETING THE APPLICATION
The PROVIDER CREDENTIALING APPLICATION is organized into two (2) major
sections. The following guidelines and instructions are intended to assist
you in both understanding how the data and information you provide will be
used and directing you through the preparation process with a minimum of
difficulty.
We urge you to take this and the next page out of this package and keep it
beside you while responding to each part of the application. We also
encourage you to review this page before mailing your completed
application to ensure that you have met all requirements as defined on
this page and the following set of instructions.
SECTION I, PROVIDER PROFILE AND SERVICE INFORMATION, entails four (4)
pages (12, 13, 14 and 15). It seeks data regarding EACH SERVICE LOCATION
of your organization. The data will be used with data from Section II to
obtain a weighted credentialing score. If you are awarded membership on
our provider panel, the data also will be used to identify and profile
EACH service location participating in care delivery.
For example, using computer software, provider selection for each network
case is based upon first matching patient location zip code to provider
type and location zip code. Therefore, it is vital that you ENTER ALL ZIP
CODES EACH LOCATION IS ABLE TO SERVICE. After bringing up all providers of
your service type by zip code match on the computer screen, the remainder
of data you enter in this section will be used to profile each location's
specific staffing and expertise. Therefore, it is important that you
complete PAGES 12, 13, 14 AND 15, FOR EACH OF YOUR PROVIDER LOCATIONS.
If any of your locations use SUBCONTRACTORS, you must complete SECTION I
FOR EACH SUBCONTRACTOR AND ATTACH BEHIND THE SECTION I COMPLETED FOR THE
CORE LOCATION.
SECTION II, PROVIDER QUALIFICATIONS, seeks information about your
organization AS A WHOLE. You need to complete ONLY ONE (1) SECTION II
REGARDLESS OF THE NUMBER OF PROVIDER LOCATIONS you have. The responses
provided in this Section will be used for purposes of obtaining a
credentialing score.
Complete the application AS APPLICABLE TO THE TYPE OF SERVICES OR PRODUCTS
PROVIDED BY YOUR ORGANIZATION. In some cases, certain parts of one or more
sections may not be applicable. We are aware of this and have adjusted our
credentialing thresholds accordingly. However, all portions of the
application, which are applicable, and all applicable attachments, must be
completed and submitted.
Page 30, APPLICATION DOCUMENT TRANSMITTAL, may be used as a guide to the
attachments required to supplement the application. If one or more of the
attachments is not applicable to your type of organization, please
indicate "NA", or not applicable.
SECTION COMPLETION INSTRUCTIONS
o COMPLETING PROVIDER APPLICATION SECTION I - PROVIDER PROFILE &
SERVICE INFORMATION
o Complete each section as applicable for types of service you wish to
provide.
o Complete (1) PROFILE FOR EACH SITE/LOCATION that will provide care
(PAGES 12, 13, 14 AND 15).
o If you utilize SUB-CONTRACTORS, complete the full profile (PAGES 12,
13, 14 AND 15) for each sub-contractor used and ATTACH TO THE
PROFILE OF THE CORE PROVIDER LOCATION.
o Enter ALL ZIP CODES each service location on PAGE 12.
o Statistical data should accurately reflect AN AVERAGE MONTH of
patient volumes.
o Data of sub-contractors should reflect their full capability and not
be limited to those services/products provided only to your
location.
o COMPLETING PROVIDER SECTION II - PROVIDER QUALIFICATIONS
o Complete ONE SECTION FOR YOUR ENTIRE ORGANIZATION. Mark each column
as applicable to the types of services you wish to provide.
o Fill in the appropriate square in INK to answer each question with a
"yes", a "no" or "not applicable" response unless otherwise
instructed.
o If you attach any explanations or additional information on a
separate piece of paper, AFFIX A CORRESPONDING REFERENCE number to
identify the question to which the response is related. Limit
response length as much as possible.
o COMPLETING THE PROVIDER APPLICATION DOCUMENT TRANSMITTAL
o Collect and submit IN DUPLICATE an original or copy of each and
every APPLICABLE item listed on the form.
o Return TWO (2) COPIES OF THE FORM AND THE APPLICABLE ATTACHMENTS
with your completed application.
o Omissions of applicable data/information will result in rejection of
the application.
o COMPLETING THE PROVIDER AGREEMENT (CONTRACT)
o Review the terms and conditions as stated within the agreement.
o Fill in the accurate LEGAL ENTITY NAME AND LOCATION on PAGE 1. DO
NOT INSERT THE DATE you are completing the application. Upon full
execution of the agreement, Gentiva CareCentrix will insert that
date. Insert your federal tax ID number. IF MORE THAN ONE TAX ID
NUMBER AND/OR LOCATION
WILL BE CONTRACTED, INSERT THE PHRASE, "SEE SCHEDULE D," and attach
a page labeled SCHEDULE D after Schedule B listing EACH LOCATION AND
THE CORRESPONDING FEDERAL TAX ID NUMBER.
o Fill in the appropriate ADDRESS AND FACSIMILE NUMBER FOR MAILING ANY
NOTICE, DEMAND OR OTHER COMMUNICATION TO YOUR ORGANIZATION on PAGE 9
of the agreement.
o Complete all schedules as instructed below. Upon award of provider
status, you will receive under separate cover:
o An EXECUTED AND DATED AGREEMENT with approved changes, and
o A NETWORK PROVIDER MANUAL stipulating conditions of participation in
full.
c. SCHEDULE A: Place a check (X) before each service you intend
to provide.
d. SCHEDULE B: Place a check (X) before the appropriate service
Attach the corresponding reimbursement schedule to Schedule B
o Modification of terms and conditions as given, should be documented
and provide alternate language on the contract or on a separate
sheet of paper with referenced page and clause numbers.
o If in agreement with the terms and conditions of the agreement,
affix the appropriate signature and return in DUPLICATE.
o COMPLETING THE AUTHORIZATION AND CERTIFICATION STATEMENTS
o Review the authorization and certification statements on PAGE 28.
o Affix the appropriate signature, title and date and return IN
DUPLICATE.
o SUBMITTING THE APPLICATION
o Submit the completed application IN DUPLICATE with ONLY those
attachments requested.
o Do not place the application in a binder or other similar hard
cover.
o SUBMIT COMPLETED APPLICATIONS (A THROUGH E AS ABOVE) IN DUPLICATE TO
THE ASSIGNED REVIEWER ON THE COVER LETTER OF THIS APPLICATION.
VI. CONDITIONS OF REVIEW
o Processing of applications will be initiated upon receipt of applications
that are COMPLETE, LEGIBLE AND SUBMITTED IN DUPLICATE AS SPECIFIED ABOVE.
o Applications completed and submitted as instructed shall be reviewed and
processed based upon objective, weighted scoring criteria.
o Applications meeting scoring threshold criteria shall be forwarded to the
Provider Credentialing Committee for review, recommendation and
determination.
o The Provider Credentialing Committee reserves the right to request
additional documentation, information and/or data, including an on-site
visit, to verify application responses.
o The Provider Credentialing Committee shall notify applicants of their
credentialing status within 45 days of receipt of acceptable application
or 5 business days following a final determination.
o All submitted applications and contents therein shall be maintained in
confidence and shall be provided to third parties only as indicated within
the network Credentialing Policies and Procedures.
o Applicants may request information from the Provider Relations Department
regarding Credentialing Policies and Procedures.
Dolores Mulcahy
Provider Relations Manager
Tampa Regional CareCentrix Center
(800) 218-2505
VII. GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION I. PROVIDER PROFILE
LEGAL NAME: OWNER(s) NAME(s)
D/B/A:
ADDRESS:
REMIT TO ADDRESS: CONTACT NAME AND TITLE:
PHYSICIAN OWNERSHIP? [ ] YES [ ] NO
BUSINESS TELEPHONE NO: ( )
24-HR TELEPHONE NO: ( )
FACSIMILE NO: ( )
FEDERAL TAX ID NO _______________
MY OFFICE IS A: [ ] Branch [ ]Satellite of:* [ ] Subcontractor to:* *_______________
Branch Name
TYPE OF PROVIDER: (CHECK ALL THAT APPLY)
[ ] Home Health Agency [ ] HIT - Pediatric [ ] Respiratory Products
[ ] Pediatric HH Agency [ ] Ambulatory Infusion Center [ ] Respiratory Therapy
[ ] Home Medical Equipment [ ] Rehab - Home [ ] Hospice - Facility
[ ] HIT - Nursing [ ] Rehab - Pediatric [ ] Hospice - Home
[ ] HIT - Products [ ] Rehab - Outpatient [ ] Women's Health
[ ] HIT - Full Service [ ] Rehab - Subacute
HOURS OF OPERATION:
M _______ T_______ W_______ T_______ F______ S_______ S_______
ON-CALL ARRANGEMENTS:
[ ] Answering Service [ ] Live Clinician [ ] Voice Mail [ ] On-Call Hrs:
SERVICE AREA: (PLEASE COMPLETE ZIP CODE AND COUNTY TABLE BELOW)
COUNTY ZIP CODES
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION I. PROVIDER PROFILE
ACCREDITATION/CERTIFICATION/LICENSURE
ACCREDITATION SUMMARY (Attach copy of current full accreditation summary report
and result of any focus surveys)
CHECK ALL ACCREDITATIONS THAT YOUR ORGANIZATION CURRENTLY HOLDS:
[ ] JCAHO [ ] CHAP [ ] CARF OTHER _______________________(SPECIFY)_______
INDICATE DATES OF CURRENT ACCREDITATION PERIOD:_____ /_____ to _____/_____
m y m y
INDICATE EFFECTIVE DATES OF LAST ACCREDITATION PERIOD:_____/_____ to _____/_____
m y m y
LIST ALL SERVICES FOR WHICH ACCREDITATION HAS BEEN AWARDED:
[ ] Clinical respiratory [ ] Home health [ ] Personal care/support
[ ] Rehabilitation [ ] Equipment management [ ] Hospice
[ ] Pharmacy [ ] Other____________
INDICATE THE NUMBER OF TYPE I RECOMMENDATIONS RECEIVED FOR MOST CURRENT
ACCREDITATION:_______________
HAVE ALL TYPE 1 RECOMMENDATIONS BEEN RESOLVED TO THE SATISFACTION OF THE
APPROPRIATE ACCREDITING BODY?
[ ] Yes [ ] No IF NO, ATTACH COPY OF ACTION PLAN TO RESOLVE
CERTIFICATION SUMMARY (Attach copy of most recent Medicare/Medicaid
Certification survey reports [where required])
Medicare A Provider #____________________ Effective Date_____________________
Medicare B Provider #____________________ Effective Date_____________________
Medicaid Provider #______________________ Effective Date_____________________
Other____________________________________ Effective Date_____________________
LICENSURE SUMMARY (Attach copy of most recent license survey reports [where
applicable])
LIST ALL LICENSE NUMBER(S) (AS APPLICABLE):
DEA______________________________________ Respiratory________________________
Pharmacy_________________________________ State Business_____________________
HHA/Nursing______________________________ Other______________________________
HME______________________________________ Other______________________________
INSURANCE SUMMARY (Attach copy of insurance certificate)
CARRIER NAME COVERAGE LIMITS
General Liability________________________ ___________________________________
Medical Malpractice______________________ ___________________________________
Employer's Liability_____________________ ___________________________________
Automobile Liability_____________________ ___________________________________
PROVIDE MONTHLY AVERAGE ACTIVE PATIENT STATISTICS FOR EACH LINE ITEM LISTED
UNDER EACH SERVICE TYPE. IF
<1, ENTER 0:
A. PATIENT & SUB-SPECIALTY/PRODUCT CENSUS
--------------------------------------------------------------------------------------------------------
HOME RESPIRATORY HOME MEDICAL
INFUSION THERAPY THERAPY EQUIPMENT
AVG. CASE LOAD AVG. CASE LOAD AVG. CASE LOAD
# pts # pts # pts
--------------------------------------------------------------------------------------------------------
Anti-infective Oxygen Wheelchairs
--------------------------------------------------------------------------------------------------------
Pain management Aerosol medications Ambulatory Aids
--------------------------------------------------------------------------------------------------------
Chemotherapy Apnea Monitor CPM
--------------------------------------------------------------------------------------------------------
TPN Ventilator Orthotics
--------------------------------------------------------------------------------------------------------
Enteral CPAP, BIPAP, BIPAP S/T Prosthetics
--------------------------------------------------------------------------------------------------------
Hydration Trach Care Multiple HME
--------------------------------------------------------------------------------------------------------
IV Cath Access Only Clinical Monitoring/Assessment Phototherapy
--------------------------------------------------------------------------------------------------------
Deferoxamine RT Testing (Sleep Studies, etc.) Custom Equipment
--------------------------------------------------------------------------------------------------------
IVIG Supplies Only Supplies Only
--------------------------------------------------------------------------------------------------------
Steroid Concentrator Beds
--------------------------------------------------------------------------------------------------------
Hemophil Factors REHABILITATION HOSPICE
--------------------------------------------------------------------------------------------------------
Dobutamine AVG. CASE LOAD # PTS AVG. CASE LOAD # PTS
--------------------------------------------------------------------------------------------------------
Ceredase/cerezyme Amputations Cancer
--------------------------------------------------------------------------------------------------------
Colony stimulating factor Burn injuries HIV
--------------------------------------------------------------------------------------------------------
Interferon Cardiac Other (specify)
--------------------------------------------------------------------------------------------------------
Growth Hormone Complex orthopedics Other (specify)
--------------------------------------------------------------------------------------------------------
Multiple Therapy Joint replacements WOMEN'S HEALTH
--------------------------------------------------------------------------------------------------------
Nursing Only Neuromuscular diseases AVG. CASE LOAD # PTS
--------------------------------------------------------------------------------------------------------
Pediatric Infusion Spinal cord injuries High Risk OB - Level I
--------------------------------------------------------------------------------------------------------
Other (specify) Strokes High Risk OB - Level 2
--------------------------------------------------------------------------------------------------------
Traumatic brain injuries High Risk OB - Level 3
--------------------------------------------------------------------------------------------------------
Pediatrics Low Risk OB
--------------------------------------------------------------------------------------------------------
Adults HUAM
--------------------------------------------------------------------------------------------------------
Other (specify) Prenatal Education
--------------------------------------------------------------------------------------------------------
INDICATE NUMBERS AND TYPES OF NON-ADMINISTRATIVE PERSONNEL (DO NOT WRITE IN
SHADED AREAS):
B. FULL TIME EQUIVALENTS BY SERVICE TYPE
----------------------------------------------------------------------------------
CAREGIVER TYPE INFUSION HOME HEALTH REHAB PEDI/NEONATE WOMEN SVCS
----------------------------------------------------------------------------------
EXAMPLE 1 8 2 2 2
----------------------------------------------------------------------------------
RN
----------------------------------------------------------------------------------
HIGH TECH RN
----------------------------------------------------------------------------------
LPN/LVN
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
HHA/PCW
----------------------------------------------------------------------------------
HOMEMAKER/COMP
----------------------------------------------------------------------------------
PHARMACIST
----------------------------------------------------------------------------------
PHARM. TECH
----------------------------------------------------------------------------------
PT
----------------------------------------------------------------------------------
SLP
----------------------------------------------------------------------------------
OT
----------------------------------------------------------------------------------
REHAB PARAPROF
----------------------------------------------------------------------------------
RESP. THERAPIST
----------------------------------------------------------------------------------
MSW
----------------------------------------------------------------------------------
TECHNICIAN
----------------------------------------------------------------------------------
OTHER:
==================================================================================
TOTAL
----------------------------------------------------------------------------------
INDICATE MONTHLY AVERAGE HOURS AND/OR VISITS FOR PAST TWO (2) MONTHS:
C. HOURS/VISITS CENSUS BY SERVICE TYPE TOTAL
---------------------------------------------------------------------------------------------------
CAREGIVER TYPE V/H INFUSION ADULT/GERI REHAB PEDI/NEONATE WOMEN SVCS MO. AVG
---------------------------------------------------------------------------------------------------
EXAMPLE: RN VST 50 77 22 28 24 201*
---------------------------------------------------------------------------------------------------
HRS - 640 - 320 - 960
===================================================================================================
RN HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
HIGH TECH RN HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
LPN/VN HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
PT HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
SLP HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
OT HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
Resp. Therapist HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
CRTT HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
MSW HRS
---------------------------------------------------------------------------------------------------
VST
---------------------------------------------------------------------------------------------------
HHA/PCW HRS
---------------------------------------------------------------------------------------------------
Visit definition: Procedure - specific care rendered in increments that
usually do not exceed two hours.
Hour's definition: Care rendered in blocks of time comprising no less than
four (4) continuous hours.
*Note: For the purpose of completing the table above, DO NOT convert hours
to visits or visits to hours. Also make certain that your numbers are
non-duplicative. For example, if you have a geriatric infusion
Visit count the visit as EITHER geriatric OR infusion not both.
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
MANAGEMENT AND ORGANIZATION Y N N/A Y N N/A Y N N/A Y N N/A
1. Does your organization maintain bylaws, [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
charter, articles of incorporation or constitution
that delineate legal authority and responsibility?
2. Do you maintain written agreements to define [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
the nature and scope of services provided if
subcontracting patient services to other
providers? Respond N/A if not using formally
subcontracted or informally referred patient
services.
o Is your organization in compliance with state [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
and federal employment laws?
4. Has your organization or any employee in your [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
organization ever been involved in any malpractice
suits or decisions? If yes, explain.
o Has your organization been involved in any [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
sanctions, investigations, or limitations of
any kind imposed by any health care
institution, professional health care society,
Medicare, Medicaid, accrediting organization,
managed care organization Better Business
Bureau or regulatory authority within the past
two years and/or have any complaints been
filed with such institutions, societies, or
authorities about your organization within the
past two years? If yes, explain on a separate
sheet of paper and label your response VIII.5.
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
MANAGEMENT AND ORGANIZATION CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
6. Has your organization's license to practice or [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
do business, or your participation in Medicare,
Medicaid, or any managed care organization ever
been suspended, revoked, modified or terminated?
If yes, explain and label your response as VIII.6.
7. Has your organization or any of its employees, [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
owners, directors or officers ever been named as a
defendant in a criminal action or civil false
claims action in the past two years? If yes,
explain and label your response as VIII.7.
QUALITY IMPROVEMENT
8. Do you have a written quality improvement [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
program that is consistent with JCAHO/CHAP/CARF
standards? Attach a current copy of the program
and its results.
9. Do you include a budget line for quality [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
improvement activities?
10. Do you monitor indicators for each service [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
type you provide, e.g. infusion, home health, HME,
respiratory therapy?
11. Do you track compliance with QI indicators, [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
utilize action plans to follow-up with problems
and implement changes as needed to improve
performance?
12. Do you track problems, interventions and [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
resolution of issues apart from QI indicator
monitoring using incident reports and/or problem
logs?
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
QUALITY IMPROVEMENT CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
13. Do you have a formal client satisfaction [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
survey process? Attach a copy of the survey and
results for the past 12 months.
EQUIPMENT MANAGEMENT FOR IV PUMPS
14. Do you have a designated "dirty area" for [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
storage of contaminated, reusable equipment?
15. Do you maintain functionally separate "clean" [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
and "dirty" areas?
16. Can you produce documentation that routine [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
maintenance is performed/completed for all owned,
leased and rented equipment?
17. Is back up equipment available to promote [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
uninterrupted service capability? Specify the type
of back up equipment provided to patient.
18. Is all equipment recalibrated, cleaned and [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
certified by a certified biomedical company or
employed manufacturers' certified technician per
manufacturers' recommendations? Name the
certification firm or technician used.
19. Are written reports submitted at least TWICE [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
YEARLY to the FDA for any illness, injury or death
related to any product or equipment?
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
INFECTION/EXPOSURE CONTROL
SAFETY/HAZARD COMMUNICATION Y N N/A Y N N/A Y N N/A Y N N/A
20. Do you have a designated infection control [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
coordinator?
21. Do you have a designated safety coordinator? [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
22. Do you comply with all OSHA, DOT and FDA [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
standards for hazardous materials management,
transport and disposal?
23. Is a waste container provided to every [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
patient, when appropriate, e.g., Sharps,
infectious, chemotherapy?
24. Are universal precautions practiced by all [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
applicable staff to decrease exposure to risk?
25. Do you document follow up to blood borne [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
pathogen exposure?
26. Are infection rates tracked and reported? [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Attach report for the past twelve (12) months.
OPERATIONS
27. Specify your usual service/product delivery ______hours _______hours ______hours ______hours
time once your organization receives benefit
confirmation or coverage authorization and
confirmed physician orders?
28. Do you track turn around time as part of your [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
performance improvement program?
o GENTIVA CARECENTIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
OPERATIONS CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
29. Do you provide 24-hour answering service? [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
30. Are you capable of processing a referral [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
during non-business hours?
31. Check all staff types available on-call 24 [ ]RPH [ ]RN [ ]RN [ ]Tech
hours a day, 7 days a week. Attach others on a [ ]RN [ ]HHA [ ]Driver [ ]Driver
separate sheet of paper. [ ]Driver [ ]LP/VN [ ]RT
[ ]CRTT
32. Is all patient information, including schedule [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
boards, out of public view, but accessible to all
applicable personnel?
33. Is there a private area available for patient [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
related telephone calls?
34. Is patient/caregiver education provided and [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
documented in the medical record?
35. Do you have documentation of interdisciplinary [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
communication based on patient's clinical status?
36. Are periodic patient assessments performed and [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
communicated to the physician?
37. Do you have an Emergency Preparedness Plan [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
specific to your locale and service types that all
personnel understand and can implement if
required?
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
OPERATIONS CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
38. Have you ever used your Emergency Preparedness [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Plan?
39. Do you have an inventory control process to [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
manage the utilization of medication, supplies and
equipment?
40. Is a current technical and medical reference [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
library maintained to support the services,
medications, supplies and/or equipment provided to
patients?
41. Do you provide delivery service when required? [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
PATIENT RECORDS
42. Are patient records maintained for all [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
patients and all services rendered?
43. Do you document multi-disciplinary care [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
conferences and care coordination with other
providers?
44. Do you document the drug and food allergy [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
status on all patients?
45. Do you develop and maintain a [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
care/treatment/service plan for all patients?
46. Do you maintain a complete medication profile [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
for every patient?
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
PATIENT RECORDS CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
47. Do you maintain a drug-monitoring plan and [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
drug related problem list?
48. Do you maintain a copy of written patient [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
discharge instructions in closed medical records
when appropriate for patients with ongoing health
care or psychosocial needs?
49. Do you conduct patient record reviews as part [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
of your operations and clinical quality assessment
process?
50. Do you have physician orders or prescriptions [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
for each patient and for all services and products
provided?
PERSONNEL PRACTICES
51. Do you maintain current written position [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
descriptions for all employees?
52. Do you have written personnel [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
policies/procedures, e.g., employee handbook?
53. Do you maintain current and complete personnel [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
records for owners and staff?
54. Do all personnel files include signed [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
acknowledgement of a written confidentiality and
conflict of interest policy?
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
PERSONNEL PRACTICES CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
55. Do you maintain documentation of employee [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
training and orientation?
o Do you check and document applicant [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
employment history and references?
57. Do you conduct and document job specific [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
performance evaluations?
58. Do you verify and document, and can you [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
provide upon request, all appropriate licenses or
certifications as required for each specific
job/profession?
59. Do you maintain documentation of [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
qualifications to perform specific job
responsibilities, e.g., discipline-specific SKILLS
CHECKLIST?
60. Do you maintain and document a staff [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
in-service program that teaches and/or reinforces
operational standards, patient and staff safety,
and technological and/or clinical practices
updates? Attach sample in-service calendar for
past year.
61. Do you maintain results of annual TB skin [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
tests or chest X-rays for all employees having
patient contact? Note: More frequent testing may
be required by new OSHA guidelines.
62. Do you document proof of continuing education [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
related to employees' specialty?
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
PERSONNEL PRACTICES CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
o Do you maintain proof of hepatitis [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
immunization (or Hepatitis B Vaccine
Declination) for all staff responsible for
Category 1 procedures?
64. Can you verify and provide upon request, [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
documentation of CPR certification as required for
each specific job?
65. Identify classifications of employees required [ ]RPH [ ]RN [ ]RN [ ]Tech
to maintain CPR certification. Attach others on a [ ]RN [ ]HHA [ ]Driver [ ]Driver
separate sheet of paper. [ ]Driver [ ]LP/VN [ ]RT
[ ]CRTT
66. Do you verify possession of a current driver's [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
license and automobile insurance coverage for all
appropriate employees?
67. Do you have a completed I-9 Immigration form [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
for every applicable employee?
68. Do you maintain and can you provide [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
documentation of employees' health
status/examinations where required by state or
local regulations?
69. Are your personnel practices consistent with [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
an Equal Employment Opportunity and Affirmative
Action philosophy?
PHARMACY COMPOUNDING SERVICES
70. Are your parenteral compounding policies and [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
practices consistent with applicable JCAHO, CHAP,
ASHP and USP standards?
71. Are all IV admixtures done in a laminar flow [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
hood?
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
PHARMACY COMPOUNDING SERVICES CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
o Are all IV admixtures done in a class 100 [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
clean room/environment?
73. Are only IV compounding supplies stored near [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
the hood or in the clear room?
74. Is corrugated cardboard stored outside of hood [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
room?
75. Are chemotherapy drugs stored separately from [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
other drugs?
o Are maintenance logs completed for all [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
hood(s), refrigerator/freezer(s) and
incubator(s)?
77. Is your horizontal laminar hood certified at [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
least annually?
78. Are laminar hood pre-filter inspections done [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
at least every 60 days?
79. Are all biohazard medications compounded in a [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
biological safety cabinet? If you do not provide
chemotherapy, respond N/A to question 79 and 80.
80. Is your biological safety cabinet certified at [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
least every six months?
81. Is a batch quality assurance process part of [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
the pharmacy quality control program?
o GENTIVA CARECENTRIX PROVIDER APPLICATION
SECTION II. PROVIDER QUALIFICATIONS
INFUSION HOME HEALTH CLINICAL HOME
SERVICES AGENCY/REHAB/ RESPIRATORY MEDICAL
PROVIDER THERAPY CO. PROVIDER EQUIPMENT
PHARMACY COMPOUNDING SERVICES CONTINUED Y N N/A Y N N/A Y N N/A Y N N/A
82. Are lot numbers of all pharmaceutical products [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
recorded for each dispensing?
83. Is a drug recall management process [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
established?
84. Are written compounding instructions used for [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
all admixtures?
o Is a Controlled Substance Delivery and [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Disposal process in place for all patients
receiving these drugs?
86. Does a pharmacist verify every verbal [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
prescription PRIOR to dispensing?
87. Is there a pharmacist responsible for [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
selection and supervision of all technical
personnel?
88. Does a pharmacist screen each medication order [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ] [ ]
for potential adverse effects or interactions with
other medications on the complete patient profile?
The applicant authorizes Gentiva CareCentrix or its representative to:
1. Consult with any third party who may have information regarding the
applicant's professional qualifications, credentials, clinical or
service delivery competence or any other matters reasonably having a
bearing on the applicant's satisfactory performance.
2. Inspect or obtain any and all communications, reports, records,
statements, documents, recommendations or disclosures including
without limitation that relating to credit history or financial
standing by or from third parties that may be relevant to
determining applicant's qualification or performance.
3. Review historical claims information with data specific to the
applicant's utilization patterns and compare the applicant's
information with that of its peers,
4. Release said information, as indicated above in numbers 1, 2 and 3,
to payers, hospitals, other healthcare providers and their agents
who solicit such information for the purpose of evaluating network
qualifications.
5. Conduct site visits at the applicant's site to determine the
adequacy of facilities, office/branch procedures and related
compliance to network standards, and
6. Obtain information from the applicant's present and past
professional liability insurance carrier(s).
Upon Gentiva CareCentrix request, the applicant authorizes the release of all
communications, reports, records, statements, documents, recommendations or
disclosures by or from all third parties as may be relevant to the network
and/or its representatives to determine competency.
The applicant certifies that the facts in all parts of this completed
application are accurate and complete to the best of the applicant's knowledge
and understands that if approved as a Network provider, falsified statements
and/or responses on this application may be grounds for dismissal, contract
termination and/or other legal action if indicated. (The applicant certifies
that an authorized representative of the applying organization has read and
understands the accompanying provider credentialing conditions of review.)
THE APPLICANT AND GENTIVA CARECENTRIX MUTUALLY AGREE THAT THE APPLICATION
INFORMATION AND MATERIALS BEING RECEIVED BY EITHER PARTY ARE CONFIDENTIAL AND
ARE INTENDED FOR USE ONLY AS EXPLICITLY STATED. ANY OTHER USE OF INFORMATION AND
MATERIALS BY EITHER PARTY IS EXPRESSLY PROHIBITED.
------------------------------------ -------------------
Authorized Applicant Representative (Typed or Printed) Title
------------------------------------ -------------------
Authorized Signature Date
o Copy of current general and professional liability insurance
certificate.
o Summary of quality improvement program key indicators and quality
improvement results measuring indicators for past two years.
o Copy of one full year of client satisfaction survey results.
o Document describing all litigation; assignment of business;
investigations of business or any directors, officers or employees;
suspension, revocation or limitation of any license, certificates,
provider status.
o Copy of your organization's patient consent form and/or service agreement.
o Any and all documents providing additional explanations as requested for
of the provider qualifications (if applicable).
o Completed Gentiva CareCentirx Provider Application.
o Signed Gentiva CareCentrix Provider Agreement.
o Signed Gentiva CareCentrix authorization and certification statement.
REFERENCES:
1. o Dunn & Bradstreet report or audited financial statement
o Name, address, telephone number and contact name of 2 vendors
o Name, address, telephone number and contact name of 1 payor
o Name and address of 1 bank
o Name, address, telephone number and contact name of 2 referral sources
o Name of largest account by dollar volume
EXHIBIT XX
CONFIDENTIALITY AGREEMENT
CIGNA understands that as part of its relationship with MCA as reflected in a
Managed Care Alliance Agreement dated __________, 2003 (the "Provider
Agreement"), it may be granted access to certain confidential information,
including protected health information, created and/or maintained by MCA. As a
condition of CIGNA's relationship with MCA, CIGNA agrees that all information it
obtains during the course of its relationship with MCA is strictly confidential,
and CIGNA agrees to handle such information in accordance with the following
requirements unless provided otherwise in the Provider Agreement.
1. NONDISCLOSURE/NONUSE. CIGNA agrees to treat all highly sensitive,
confidential and proprietary information, communications, and data pertaining to
MCA and/or MCA's patients, including, but not limited to, clinical and patient
confidential and/or private information (i.e. diagnoses and treatments)
("Protected Health Information"), claim and payment information, and pricing and
costs, (collectively, "Confidential Information"), which may be disclosed to,
received and/or accessed by CIGNA, as confidential. No Confidential Information
will be disclosed directly or indirectly to any other person without first
obtaining the written consent of MCA.
2. DISCLOSURE TO CERTAIN PARTIES. CIGNA may, however, disclose and/or
permit access to certain Confidential Information to those persons directly
under CIGNA's control on a "need to know" basis, provided that all such persons
will be directed and required to maintain the Confidential Information in
confidence at all times, and to sign a Confidentiality and Security Agreement
prior to accessing the Confidential Information. CIGNA agrees to indemnify and
hold harmless MCA from and against any claim or loss sustained by MCA as a
result of the unauthorized release or use of the Confidential Information by any
such person.
3. COPYING CONFIDENTIAL INFORMATION. CIGNA will not make, or permit to
be made, except for the purposes agreed upon, any copies, abstracts, or
summaries of Confidential Information. MCA will retain title to all such
documents and copies thereof.
4. SAFEGUARD. CIGNA agrees to take all reasonable precautions including
the establishment of appropriate security controls and procedures, protection
programs and protocols and disciplines to safeguard the confidential nature of
the Confidential Information; provided, however, CIGNA will not be liable for
disclosure of such information that:
A. has passed into the public domain through no act or omission
of CIGNA;
B. is lawfully received by CIGNA from a third party under no
obligation to keep such information confidential;
C. is required to be disclosed by CIGNA pursuant to an order
issued by a court of law or any federal, state or municipal
regulatory or administrative agency;
D. was in the possession of CIGNA prior to the date of this
Agreement as evidenced by written records kept in the ordinary
course of business by CIGNA or by proof of actual use of CIGNA.
In the event of disclosure as required by law, CIGNA will notify MCA promptly so
that MCA may seek a protective order or other appropriate remedy, and CIGNA will
not oppose action by MCA to obtain any such order or remedy.
5. INJUNCTION. CIGNA acknowledges that failure to comply with the
provisions of this Agreement would cause irreparable harm to MCA and that MCA's
remedy at law for such breach would be inadequate. CIGNA agrees that if there is
any material or threatened breach, MCA may, in addition to any other legal or
equitable remedies available to it, obtain an injunction or restraining order to
enjoin CIGNA from the breach or threatened breach of such covenants, without
need to post bond.
6. ATTORNEY'S FEES. In the event MCA finds it necessary to employ legal
counsel or to bring an action at law or other proceedings against CIGNA to
enforce any of the terms, covenants, or conditions of this Agreement, and MCA
prevails in any such action or other proceeding, MCA will be paid all reasonable
attorney's fees by CIGNA. In the event a judgment is secured by the prevailing
party, all attorney's fees, as determined by the court and not by a jury, will
be included in any such judgement.
7. APPLICABLE LAW. This Agreement and the rights of the parties hereto
will be governed and construed in accordance with the laws of the state of New
York.
8. COMPLIANCE WITH HIPAA. In addition, to the extent required by the
provisions of 42 U.S.C. 1171 et seq. enacted by the Health Insurance Portability
and Accountability Act of 1996 and regulations promulgated thereunder ("HIPAA"),
CIGNA does hereby assure MCA that CIGNA will appropriately safeguard protected
health information made available to or obtained by CIGNA. Without limiting the
obligations of CIGNA otherwise set forth in this Agreement or imposed by
applicable law, CIGNA hereby agrees to comply with applicable requirements of
law relating to Protected Health Information to the extent MCA would be required
to comply with such requirements.
9. AMENDMENT; WAIVER. This Agreement may not be amended except by
written form signed by duly authorized representatives of both parties and
specifically stating that it amends this Agreement and MCA will not be deemed to
have waived any term or provision of this Agreement unless such waiver will be
in writing signed by a duly authorized representative of MCA and specifically
stating that it waives such term or provision. No failure or delay by MCA in
exercising any right hereunder shall operate as a waiver thereof, nor shall any
single or partial waiver preclude any further exercise thereof or of any other
right hereunder.
10. BINDING EFFECT. This Agreement will inure to the benefit of, and
will be binding upon, the parties and their respective successors and assigns.
CIGNA has acknowledged its understanding of and agreement to the mutual promises
written above by executing this Agreement.
CIGNA HEALTH CORPORATION
By:
Name:
Title:
Date:
EXHIBIT XXI
CIGNA NATIONAL CAPITATION
HMO MARKET EXCLUSIONS
CIGNA HEALTHCARE MEMBERS ENROLLED IN MANAGED CARE PRODUCTS (CHMO, FLEX,
AND GATEKEEPER ) IN THE CIGNA HEALTHCARE AFFILIATE MARKETS LISTED BELOW,
ARE EXCLUDED FROM THE TERMS AND CONDITIONS OF THIS AGREEMENT:
CIGNA HealthCare of Massachusetts, Inc.
CIGNA HealthCare of Maine, Inc.
CIGNA HealthCare of North Carolina, Inc.
CIGNA HealthCare of New Hampshire, Inc.
CIGNA HealthCare of California, Inc. (Southern California
Markets only)
EXHIBIT XXII
STANDARDS FOR DELEGATION OF
UTILIZATION MANAGEMENT ACTIVITIES
FOR CIGNA HEALTHCARE OF TEXAS, INC. ("CIGNA") (THE "STANDARDS")
[Any and all capitalized terms not defined herein shall have the same
meaning as in the managed care provider agreement between CIGNA and the
delegatee (the Agreement).]
1. The delegatee shall be subject to a pre-delegation site review and
evaluation of its utilization management program ("UM Program") for all
delegated activities.
2. The delegatee shall maintain a written UM Program description which
includes:
A. a description of delegatee's 1) policies/procedures to evaluate
Medical Necessity, 2) use of nationally recognized and locally
approved criteria and information sources; and 3) process to review
and approve services;
B. a description of delegatee's mechanism to periodically update the UM
Program description and the UM Program's policies and procedures;
C. documented evidence of approval of the delegatee's UM Program by the
delegatee's appropriate body of governance;
D. a description of the roles and functions of delegatee's UM Program
to include a definition of the roles and responsibilities of
delegatee's UM Program staff;
E. evidence demonstrating a utilization management work plan which
responds to identified opportunities for improvement and action
steps, as well as a process for, and evidence of, an annual
evaluation of the UM Program.
The delegatee shall provide annual reports as specified: (i) UM
Program Description and Work Plan by March 31st of the current year.
(ii) A written evaluation of delegatee's UM program for the previous
year by March 31st of the current year.
F. a description which specifically addresses behavioral health care;
and
G. a description of the transition process when benefits end or a
practitioner's participation in the network terminates.
3. The delegatee's UM Program must have been operational for at least the
12-month period preceding the effective date of the delegation.
4. The delegatee's UM Program shall at a minimum comply in all respects with
the requirements of an appropriate accrediting body designated by CIGNA
(i.e. NCQA, JCAHO, etc.), the requirements established by CIGNA herein and
in the Agreement and the requirements of applicable federal and state laws
and regulations. The delegatee shall maintain all applicable licensures
and certifications required to perform the delegated utilization
management activities. The delegatee shall maintain appropriate records
with respect to all utilization management activities for the duration of
the Agreement and seven years thereafter.
5. The delegatee shall maintain adequate professional liability coverage as
determined by CIGNA The delegatee shall not subcontract any of its
utilization management responsibilities under its agreement with CIGNA
unless otherwise agreed in writing by CIGNA. Any subcontractor approved by
CIGNA shall be required to agree in writing to comply with all standards
applicable to delegatee with regard to the subcontracted services.
6. The delegatee shall provide CIGNA with a copy of its written UM Program
description upon request. Such UM Program description shall be submitted
to CIGNA for review and approval prior to the effective date of the
delegation and annually thereafter and shall not be materially modified
without CIGNA's prior written approval.
7. The role of the Delegatee and its subcontractors is limited to performing
certain UM activities delegated by CIGNA using standards approved by
CIGNA, and which are in compliance with applicable federal and state laws
and regulations. Delegatee hereby agrees to perform those UM activities
identified by an "X" in the "Delegatee" column below and understands and
acknowledges that its performance of such delegated UM activities is
subject to CIGNA's oversight and monitoring.
UM ACTIVITIES DELEGATEE CIGNA
--------------------------------------------------------------------------------
Medical Policy Adoption of Criteria X X
--------------------------------------------------------------------------------
Precertification - Inpatient Approvals X
--------------------------------------------------------------------------------
Precertification - Inpatient Denials X
--------------------------------------------------------------------------------
Precertification - Outpatient Approvals X
--------------------------------------------------------------------------------
Precertification - Outpatient Denials X
--------------------------------------------------------------------------------
Concurrent Review*- Approvals X
--------------------------------------------------------------------------------
Concurrent Review*- Denials X
--------------------------------------------------------------------------------
Discharge Planning X
--------------------------------------------------------------------------------
Retrospective - Inpatient Approvals X
--------------------------------------------------------------------------------
Retrospective - Outpatient Approvals X
--------------------------------------------------------------------------------
Retrospective - Outpatient Denials X
--------------------------------------------------------------------------------
Referral Management - Approvals X
--------------------------------------------------------------------------------
Referral Management - Denials X
--------------------------------------------------------------------------------
Out-of-Area Management X
--------------------------------------------------------------------------------
Case Management* - Approvals X
--------------------------------------------------------------------------------
Case Management* - Denials X
--------------------------------------------------------------------------------
Disease Management X
--------------------------------------------------------------------------------
Denials Benefit Coverage X
--------------------------------------------------------------------------------
Appeals - First Level X
--------------------------------------------------------------------------------
Member Satisfaction w/ UM X
--------------------------------------------------------------------------------
Provider Satisfaction w/ UM X
--------------------------------------------------------------------------------
Pharmacy Management X
--------------------------------------------------------------------------------
Member Communication X
--------------------------------------------------------------------------------
Monitoring Quality and Timeliness of X X
Decisions
--------------------------------------------------------------------------------
Inter-rater Reliability X
--------------------------------------------------------------------------------
Technology Assessment X
--------------------------------------------------------------------------------
* Definitions:
CONCURRENT REVIEW- An assessment that determines medical necessity or
appropriateness of services as they are being rendered, such as an assessment
of the need for continued inpatient care for hospitalized patients.
CASE MANAGEMENT- A process for identifying covered persons with specific
health care needs in order to facilitate the development and implementation
of a plan that efficiently uses health care resources to achieve optimum
member outcome.
RETROSPECTIVE REVIEW- Assessment of the appropriateness of medical services
on a case by case or aggregate basis after the services have been provided.
8. With respect to each request for coverage of medical services for which
the delegatee performs utilization management hereunder, the delegatee
shall apply the utilization management criteria set forth in the Service
Agreement applicable to the Participant for whom medical services have
been requested. Criteria shall be objective and applied consistently based
on the needs of the individual patient.
9. All information relating to delegatee's utilization management activities
hereunder shall be confidential, shall not be disclosed to any third
parties except as required by applicable federal and state law and except
as required to fulfill delegatee's utilization management responsibilities
hereunder, and shall be maintained in such a manner so that such
information shall be protected from discovery and use in judicial or
administrative proceedings to the fullest extent possible under applicable
federal and state law. In the event that delegatee receives a subpoena,
civil investigative demand or other similar process requesting disclosure
of information relating to its utilization management activities
hereunder, delegatee shall immediately notify CIGNA of such subpoena,
demand or process so as to afford CIGNA with an adequate opportunity to
seek an appropriate protective order should it choose to do so.
10. This exhibit, all information provided by CIGNA to delegatee pertaining to
CIGNA's delegation of utilization management to delegatee and all data
made known to delegatee relating to services rendered to Participants
under the Agreement is confidential and proprietary information subject to
the protections set forth in the confidentiality provision contained in
delegatee's Agreement with CIGNA. In the event that delegatee receives a
subpoena, civil investigative demand or other similar process requesting
disclosure of such confidential and proprietary information, delegatee
shall immediately notify CIGNA of such subpoena, demand or process so as
to afford CIGNA with an adequate opportunity to seek an appropriate
protective order should it choose to do so.
11. The delegatee shall have a full time medical director who provides
oversight of the UM Program and:
A. is licensed to practice medicine as required by the State of Texas;
B. has a defined scope of responsibilities; and
C. demonstrates evidence of their participation in the utilization
management process.
12. The delegatee shall not authorize coverage for services requested to be
provided by noncredentialed providers unless CIGNA's prior consent is
obtained, except in an emergency.
13. All UM Program activities shall be supervised by appropriately qualified
professionals including:
A. use of a licensed physician to conduct medical review prior to any
denial; and
B. use of board certified specialists to assist in determining Medical
Necessity and in preparing documentation to support the decision.
14. Total UM Program staff ratios (including nurses) shall be at least 1 per
40,000 Participants. The UM Program shall utilize clinical nurses (RN or
LPN/LVN) licensed to practice nursing as required by the State of Texas
with a ratio of at least 1 licensed clinical nurse per 150,000
Participants. The UM Program shall utilize physicians licensed to practice
medicine as required by the State of Texas with a ratio of at least
1:150,000. The Total UM staffing ratio is determined by adding the number
of all clinical and non-clinical staff and dividing by the total number of
Participants.
Non-clinical staff shall utilize protocols and criteria approved by the
Medical Director and shall not make medical appropriateness/necessity
decisions. All decisions of the non-clinical staff shall be supervised by
clinical staff.
Delegatee shall maintain appropriate levels of telephone line staffing for
the utilization management activities required to be performed hereunder
and shall satisfy the following standards: (a) the overall abandonment
rate for the pre-certification telephone line shall be 5% or less; (b) the
average speed of answer for the pre-certification telephone line shall be
less than 30 seconds; (c) telephone prompts shall be clear and user
friendly; and (d) a telephone message after hours shall give normal
business hours information and after hours instructions.
15. The delegatee shall maintain a set of written utilization management
decision protocols that are based on reasonable available medical
evidence, are acceptable to and consistent with CIGNA protocols and
indicate that:
A. criteria for appropriateness of medical services are clearly
documented, communicated to participating physicians, and available
to the physician and Participants upon request;
B. an appropriate mechanism is present for checking the consistency of
application of criteria across physician and non-physician reviewers
at least annually and opportunities for improvement are identified
and resolved; and
C. an appropriate mechanism is present for updating and approving
review criteria periodically, actively practicing practitioners are
involved in the development and adoption of the criteria and the
time of the update is specified in protocol or policy.
16. In connection with all utilization management activities hereunder, the
delegatee shall obtain all necessary information, including pertinent
clinical information, and consult with the treating physician, as
appropriate, and document such efforts. Emergency services, without
precertification, must be covered where such services were necessary to
screen and stabilize Participants in cases where a prudent layperson,
acting reasonably, would have believed an emergency medical condition
existed, when services were authorized by a delegatee representative, or
as otherwise required by applicable federal and state law.
17. The Healthplan retains responsibility for rendering the final coverage
determination on all services denied for medical necessity. The delegatee
shall notify CIGNA as expeditiously as possible, but no later than the
same business day, of any recommendation for denial of coverage. The
notification shall include:
A. documentation indicating who recommended denial, why, and any
medical information used to render the recommendation;
B. documentation that an explanation is provided to the applicable
provider via telephone of the recommended denial. The delegatee
shall not send any written communication, either via US mail or
facsimile, to the requesting provider.
CIGNA will notify the delegatee, the requesting provider, the PCP, and the
Participant via letter which includes all information required by
applicable federal and state law.
CIGNA will process all requests for appeals, whether expedited or
standard. In connection with any such appeal, the delegatee shall assist
and cooperate with CIGNA and shall promptly provide all documentation
reasonably requested by CIGNA to meet all accreditation and regulatory
timeframe requirements. The delegatee shall notify the requesting provider
via telephone of CIGNA's final determination with information regarding
CIGNA's appeal process.
19. Delegatee's UM Program decisions shall be made in a timely manner.
A. Delegatee's UM Program policies and procedures shall clearly define
the maximum time frames for utilization management decisions. All
utilization management decisions shall be made within the time
frames that satisfy all applicable federal and state legal
requirements, whichever time frame is earlier (i.e. Department of
Insurance, Department of Corporations, HCFA, etc.). Delegatee shall
implement adequate coverage arrangements to ensure compliance with
applicable federal and state legal requirements at all times,
including, but not limited to, adequate after hours, weekend and
holiday coverage.
B. Delegatee shall implement an appropriate mechanism to monitor and
document timeliness of decisions which shall include:
(1) Documentation to show Emergency requests are responded to as
soon as possible and no later than within 2 hours, or within
the time frame required by applicable federal and state law,
if earlier;
(2) Documentation to show urgent requests are responded to within
24 hours, or within the time frame required by applicable
federal and state law, if earlier; and
(3) Documentation to show routine requests are responded to within
2 working days, or within the time frame required by
applicable federal and state law, if earlier.
C. The delegatee shall monitor and analyze its compliance with
timeliness requirements on a quarterly basis and take prompt action
to meet or improve adherence to such requirements.
20. Except as otherwise agreed by CIGNA, CIGNA shall retain responsibility for
responding to Participant inquiries or complaints. Delegatee shall notify
CIGNA Member Services within 24 hours of any complaint or grievance filed
with delegatee by or on behalf of any Participant.
21. The delegatee shall maintain a system acceptable to CIGNA to track
authorizations, to evaluate the delegatee's compliance with CIGNA's
utilization management requirements as set forth in the delegatee's
Agreement and herein, to monitor providers for inappropriate utilization
and to evaluate Participant satisfaction and provider satisfaction, and
other measures of evaluation agreed upon by the parties. Delegatee shall
submit reports to CIGNA, in a format acceptable to CIGNA reflecting the
delegatee's performance under these measures of evaluation, including an
action plan which addresses opportunities for improvement when applicable.
On a monthly basis by the 15th of every month for the previous month's
data, delegatee shall provide a report of referral approvals,
non-emergency hospital admissions and elective outpatient procedures to
include the following:
a). Participant Name
b). Participant ID#
c). Date of Request
d). Date of Determination
e). Date of Notification to Provider
f). Services Requested
22. CIGNA, its designee and any applicable governmental authorities or
accrediting bodies shall have the right to conduct periodic audits of the
delegatee's UM Program activities upon reasonable prior notice, and the
delegatee shall cooperate with any such audits. In addition, the
delegatee's performance of its utilization management activities hereunder
may be measured by CIGNA at least annually. The delegatee shall cooperate
with any such audits and shall provide any and all information reasonably
requested by CIGNA in connection with such audits. Applicable performance
measures include but are not limited to:
A. Participant satisfaction survey results which indicate a significant
overall satisfaction with the service provided and document an
improvement process for any specific areas identified with
satisfaction lower than 90%;
B. Participant concerns, complaints and grievances do not exceed CIGNA
averages in any six month period; and
C. audits of utilization management activities show compliance with
CIGNA, federal, state and accreditation requirements.
CIGNA will provide delegatee with a written report detailing its findings
with respect to any such audits. If such audits reveal any deficiencies,
delegatee shall correct any deficiencies identified in such audit within
60 days of CIGNA's submission of the report detailing such deficiencies.
Failure to correct any identified deficiencies within such 60 day period
may be cause for revocation of the delegation set forth herein or
termination of the Agreement.
23. Delegatee shall provide CIGNA with evidence of an appropriate internal
control environment acceptable to CIGNA or a SAS70 audit of delegatee's
utilization management operations on an annual basis.
24. Delegatee shall prepare and provide such periodic reports or other data as
is reasonably requested by CIGNA, state and/or federal regulatory agency
or accrediting entity relating to delegatee's utilization management
activities, within the time frame given by CIGNA or the agency or entity.
Delegatee shall participate in utilization management oversight activities
(i.e., committee meetings, report submission) to the extent reasonably
required by CIGNA. Delegatee shall provide CIGNA with any adverse
event/sentinel diagnosis information relating to Participants within 5
business days of delegatee's receipt of such information.
25. Delegatee shall have a process in place to ensure appropriate utilization
of services including identifying areas of over utilization and under
utilization including: monitoring different types of data, establishing
thresholds, conducting quantitative analysis and comparison to thresholds
and working with CIGNA to implement actions to address issues that are
identified by the CIGNA or by the delegatee.
26. If CIGNA determines that delegatee cannot meet its utilization management
obligations, CIGNA may elect to assume responsibility for such activities.
If CIGNA elects to assume responsibility for such activities, the rates
set forth in the Agreement shall be adjusted to the extent necessary, and
delegatee shall cooperate and provide to CIGNA any information reasonably
required to perform such activities.
27. All referrals shall be to Represented Providers, except where an Emergency
requires otherwise or as otherwise required by applicable federal and
state law. Except in an Emergency or as otherwise required by applicable
federal and state law, delegatee shall require all Represented Providers
to obtain authorization from delegatee prior to hospital admission of any
Participant or outpatient surgical procedures.
28. All electronic data which delegatee maintains concerning the detail of all
utilization management decisions made hereunder shall be made available
and submitted to CIGNA using ANSI standard transaction formats or another
mutually agreeable format in compliance with applicable state and federal
law including, but not limited to, the Health Insurance Portability and
Accountability Act (HIPAA) and Administrative Simplification. Such data
shall be submitted to CIGNA at least monthly. If a non-ANSI format is
agreed upon, delegatee shall cooperate with CIGNA in the development of
the transmission format, frequency and protocol.
29. Delegatee shall maintain evidence that delegatee distributes a statement
to all employees, contracted practitioners and providers affirming the
following:
E. UM decision making is based only on appropriateness of care and
service.
F. The delegatee does not compensate practitioners/providers/employees
for denials.
G. The delegatee does not offer incentives to encourage denials.
H. The need for special concern about under utilization.
30. Delegatee shall indemnify, defend and hold harmless CIGNA and its
affiliates from and against any and all liability, fines, penalties,
damages and expense, including reasonable defense costs and legal fees,
incurred by CIGNA in connection with claims or actions of any nature,
governmental examinations, enforcement actions or other administrative
proceedings, arising from delegatee's failure to perform its obligations
under these Standards.
31. Confidentiality
Delegatee shall comply with all applicable federal and state laws and
regulations relating to the confidentiality of medical records and other
individually identifiable health information, including but not limited
to, the requirements specified below.
A. Definitions Applicable to this Confidentiality Section
"CONFIDENTIAL INFORMATION" shall mean (a) Individually Identifiable Health
Information that is (i) transmitted by Electronic Media, (ii) maintained
in any medium constituting Electronic Media; or (iii) transmitted or
maintained in any other form or medium and (b) any Nonpublic Personal
Financial Information, as that term is defined by the NAIC Model Privacy
of Consumer Financial and Health Information Regulation (2000) issued
pursuant to the Gramm Leach Bliley Act. "Confidential Information" shall
not include (i) education records covered by the Family Educational Right
and Privacy Act, as amended, 20 U.S.C. Section 1232g and (ii) records
described in 20 U.S.C. Section 1232g(a)(4)(B)(iv).
"DESIGNATED RECORD SET" shall mean a group of records maintained by or for
CIGNA or a CIGNA Affiliate that is (i) the medical records and billing
records about individuals maintained by or for CIGNA or a CIGNA Affiliate,
(ii) the enrollment, payment, claims adjudication, and case or medical
management record systems maintained by or for a health plan; or (iii)
used, in whole or in part, by or for CIGNA or a CIGNA Affiliate to make
decisions about individuals. As used herein, the term "RECORD" means any
item, collection, or grouping of information that includes Confidential
Information and is maintained, collected, used, or disseminated by or for
CIGNA or a CIGNA Affiliate.
"ELECTRONIC MEDIA" shall mean the mode of electronic transmissions. It
includes the Internet, extranet (using Internet technology to link a
business with information only accessible to collaborating parties),
leased lines, dial-up lines, private networks, and those transmissions
that are physically moved from one location to another using magnetic
tape, disk, or compact disk media.
"INDIVIDUALLY IDENTIFIABLE HEALTH INFORMATION" shall mean information that
is a subset of health information, including demographic information
collected from an individual, and
(iv) is created or received by a health care provider, health plan,
employer, or health care clearinghouse; and
(v) relates to the past, present, or future physical or mental health or
condition of an individual; the provision of health care to an
individual; or the past, present or future payment for the provision
of health care to an individual; and (a) identifies the individual,
or (b) with respect to which there is a reasonable basis to believe
the information can be used to identify the individual; and
(vi) relates to identifiable non-health information including but not
limited to an individual's address, phone number and/or Social
Security number.
"PRIVACY STANDARDS" shall mean (a) the Health Insurance Portability and
Accountability Act of 1996 and the regulations promulgated thereunder,
including the Standard for Privacy of Individually Identifiable Health
Information, 45 C.F.R. Parts 160 and 164, (b) the Gramm Leach Bliley Act
and any applicable regulations governing privacy and confidentiality
promulgated thereunder, and (c) other federal or state laws or regulations
governing the use, disclosure, confidentiality, security or privacy of
Confidential Information or other personally identifiable information.
"SECRETARY" shall mean the Secretary of the Department of Health and Human
Services.
B. USE OF CONFIDENTIAL INFORMATION.
Delegatee may use Confidential Information to carry out the obligations of
delegatee set forth in the Agreement and these Standards or as required by
federal or state law, subject to the provisions of Sections C. through N.,
below. Delegatee shall ensure that its directors, officers, employees,
contractors and agents do not use Confidential Information received from
CIGNA or a CIGNA Affiliate in any manner that would constitute a violation
of the Privacy Standards if used in a similar manner by CIGNA or a CIGNA
Affiliate. Delegatee shall not use Confidential Information for the
purpose of creating de-identified information that will be used for any
purpose other than to carry out the obligations of delegatee set forth in
the Agreement or these Standards or as required by federal or state law.
C. DISCLOSURE OF CONFIDENTIAL INFORMATION.
Delegatee and its directors, officers, employees, contractors and agents
shall not disclose Confidential Information received from CIGNA or a CIGNA
Affiliate other than as is necessary to carry out the obligations of
delegatee set forth in the Agreement or these Standards or as required by
federal or state law, subject to the provisions of Sections C. through N.,
below. Confidential Information shall not be disclosed in any manner that
would constitute a violation of the Privacy Standards if disclosed in a
similar manner by CIGNA or a CIGNA Affiliate.
D. SAFEGUARDS AGAINST MISUSE OF INFORMATION.
Delegatee agrees that it will implement all appropriate safeguards to
prevent the use or disclosure of Confidential Information in any manner
other than pursuant to the terms and conditions of the Agreement and these
Standards.
E. REPORTING OF DISCLOSURES OF CONFIDENTIAL INFORMATION.
Delegatee shall, within five (5) days of becoming aware of a loss, a
suspected loss, or disclosure of Confidential Information in violation of
the Agreement or these Standards by delegatee, its officers, directors,
employees, contractors or agents or by a third party to which delegatee
disclosed Confidential Information pursuant to Section C. of this
Agreement, report any such disclosure to CIGNA's Privacy and Security
Officers. This requirement will also apply to any loss, or suspected loss,
of Confidential Information.
F. AGREEMENTS WITH THIRD PARTIES.
Delegatee shall enter into an agreement with any agent, subcontractor or
other third party that will have access to Confidential Information that
is received from, created or received by delegatee on behalf of CIGNA or a
CIGNA Affiliate pursuant to which such third party agrees to be bound by
the same restrictions, terms and conditions that apply to delegatee
pursuant to this Agreement with respect to such Confidential Information.
Under such agreement, the third party shall (a) provide reasonable
assurances that such Confidential Information will be held confidential as
provided pursuant to the Agreement and these Standards, (b) provide
reasonable assurances that such Confidential Information will be disclosed
only as required by federal or state law or for the purposes for which it
was disclosed to such third party, and (c) immediately notify delegatee of
any breaches of the confidentiality of the Confidential Information, to
the extent it has obtained knowledge of such breach.
G. ACCESS TO INFORMATION.
Within five (5) business days of a request by CIGNA or a CIGNA Affiliate
for access to Confidential Information about an individual contained in a
Designated Record Set, delegatee shall make available to CIGNA or the
CIGNA Affiliate such Confidential Information for so long as such
information is maintained in the Designated Record Set. In the event any
individual requests access to Confidential Information directly from
delegatee, delegatee may not deny access to the Confidential Information
requested. Rather, delegatee shall, within two (2) business days, forward
such request to CIGNA.
H. AVAILABILITY OF CONFIDENTIAL INFORMATION FOR AMENDMENT.
Within ten (10) business days of receipt of a request from CIGNA or a
CIGNA Affiliate for the amendment of an individual's Confidential
Information or a record regarding an individual contained in a Designated
Record Set (for so long as the Confidential Information is maintained in
the Designated Record Set), delegatee shall provide such information to
CIGNA or the CIGNA Affiliate for amendment and incorporate any such
amendments in the Confidential Information as required by 45 C.F.R.
Section 164.526. In the event that the request for the amendment of
Confidential Information is made directly to the delegatee, delegatee may
not deny the requested amendment. Rather, delegatee shall, within two (2)
business days, forward such request to CIGNA.
I. AUDIT.
Upon reasonable notice, CIGNA or a CIGNA Affiliate may audit and inspect
delegatee's internal practices and the books and records in delegatee's
possession for the purpose of assessing delegatee's use and disclosure of
Confidential Information received from CIGNA or a CIGNA Affiliate or
created by delegatee on behalf of CIGNA or a CIGNA Affiliate. Such books
and records shall be made available to CIGNA or a CIGNA Affiliate for its
audit or inspection during regular business hours.
J. ACCOUNTING OF DISCLOSURES.
Within ten business (10) days of notice by CIGNA or a CIGNA Affiliate to
delegatee that it has received a request for an accounting of disclosures
of Confidential Information regarding an individual during the six (6)
years prior to the date on which the accounting was requested, delegatee
shall make available to CIGNA or the CIGNA Affiliate such information as
is in delegatee's possession and is required for CIGNA or the CIGNA
Affiliate to make the accounting required by 45 C.F.R. Section 164.528. At
a minimum, delegatee shall provide CIGNA or the CIGNA Affiliate with the
following information: (i) the date of the disclosure, (ii) the name of
the entity or person who received the Confidential Information, and if
known, the address of such entity or person, (iii) a brief description of
the Confidential Information disclosed, and (iv) a brief statement of the
purpose of such disclosure that includes an explanation of the basis for
such disclosure. In the event the request for an accounting is delivered
directly to delegatee, delegatee shall within two (2) business days
forward such
request to CIGNA. It shall be CIGNA's or the applicable CIGNA Affiliate's
responsibility to prepare and deliver any such accounting requested.
Delegatee hereby agrees to implement an appropriate record keeping process
to enable it to comply with the requirements of this Section.
K. AVAILABILITY OF BOOKS AND RECORDS.
Delegatee hereby agrees to make its internal practices, books and records
relating to the use and disclosure of Confidential Information received
from, created or received by delegatee on behalf of CIGNA or a CIGNA
Affiliate available to the Secretary for purposes of determining CIGNA's
or CIGNA Affiliate's and delegatee's compliance with the Privacy
Standards.
L. RETURN OF RECORDS.
Upon termination of the Agreement and at CIGNA's sole option, delegatee
shall be required to either a) return to CIGNA or a CIGNA Affiliate all
Confidential Information received from, created or received on behalf of
CIGNA or a CIGNA Affiliate in all forms without retaining any copies; or
b) maintain all such Confidential Information consistent with the
requirements of this Section 31 for the period of time such information is
required to be maintained by applicable law after which time delegatee
shall destroy all such information in all forms maintained and shall not
retain any copies of such information, or if such destruction is not
feasible, extend the protections in this Section 31to such information and
limit further uses and disclosures to those purposes that make the return
or destruction of such information infeasible.
M. AUTHORIZATION TO TERMINATE.
Delegatee hereby authorizes CIGNA to terminate the Agreement if CIGNA
determines that delegatee has violated a material term of this Section 31.
N. INDEMNIFICATION
Delegatee will defend, indemnify and hold harmless CIGNA and its
affiliates and their directors, officers, and employees from any claims,
loss, cost (including reasonable attorneys' fees and court costs) or
liability resulting from delegatee's breach of this Section 31.
Delegatee acknowledges receipt of CIGNA's above Standards for Delegation and, in
accordance with the managed care provider agreement between CIGNA and delegatee,
will comply with the terms and conditions set forth herein.
Delegatee's Name
By
Its
CIGNA HealthCare of ______________ Inc.
By
Its
EXHIBIT XXIII
MANAGED CARE ALLIANCE AGREEMENT
CREDENTIALING
(Delegated Credentialing)
1. MCA shall be responsible for credentialing and recredentialing of all
Represented Providers.
2. MCA's credentialing/recredentialing criteria shall, at a minimum, satisfy
NCQA standards or the standards of another appropriate accrediting body
designated by CIGNA, and the standards established by CIGNA. CIGNA
reserves the right to disapprove, terminate or suspend any of MCA's
Represented Providers if a Represented Provider does not meet CIGNA's
requirements.
3. MCA shall review and externally verify the credentials of every
Represented Provider at least once every three years.
4. MCA shall provide CIGNA with a summary of the credentials of each
Represented Provider in a format acceptable to CIGNA and such other
information as may reasonably be requested by CIGNA from time to time.
5. MCA shall require Represented Providers to represent and warrant that the
information contained in their applications for participation is true and
accurate and to agree to notify MCA promptly of any material change in the
information on such application. MCA shall, in turn, immediately notify
CIGNA of all such changes.
6. CIGNA may audit MCA's credentialing/recredentialing activities, including
MCA's credentialing/recredentialing files. If CIGNA determines that MCA
cannot meet its credentialing obligations set forth herein, CIGNA may
elect to assume responsibility for such activities. If CIGNA elects to
assume responsibility for such activities, the rates set forth in this
Agreement shall be renegotiated by the parties to reflect such change in
responsibility. MCA shall cooperate and provide to CIGNA any information
necessary to perform such activities.
7. MCA acknowledges that the credentialing and recredentialing performed by
MCA pursuant to this Exhibit may be relied upon for Programs for which
CIGNA or a CIGNA Affiliate contracts directly with Participating
Providers.
EXHIBIT XXIV
CIGNA/GENTIVA FUTURE YEARS RATE METHODOLOGY
YEARS 2005/2006
*
* Confidential Treatment Requested
EXHIBITS:
EXHIBIT 1A - REQUIRED DATA ELEMENTS
PROGRAM ATTACHMENTS:
HMO PROGRAM ATTACHMENT - CAPITATION
EXHIBIT A - SCHEDULE OF CAPITATION RATES
EXHIBIT B- MCA PAYMENT RESPONSIBILITY
EXHIBIT C - UTILIZATION MANAGEMENT REQUIREMENTS
HMO PROGRAM ATTACHMENT - FEE FOR SERVICE
EXHIBIT A - REIMBURSEMENT FOR OTHER SERVICES
PPO & INDEMNITY PROGRAM ATTACHMENT
EXHIBIT A - REIMBURSEMENT FOR OTHER SERVICES
GATEKEEPER PROGRAM ATTACHMENT - CAPITATION
EXHIBIT A - SCHEDULE OF CAPITATION RATES
EXHIBIT B - MCA PAYMENT RESPONSIBILITY
EXHIBIT C - UTILIZATION MANAGEMENT REQUIREMENTS
GATEKEEPER PROGRAM ATTACHMENT - FEE FOR SERVICE
EXHIBIT A - REIMBURSEMENT FOR OTHER SERVICES
EXHIBIT 1A
MANAGED CARE ALLIANCE AGREEMENT
REPRESENTED PROVIDER REQUIRED DATA ELEMENTS
Upon request, MCA shall provide CIGNA with the following data elements for each
Represented Provider:
ANCILLARY PROVIDERS
Full Name of Ancillary
Physical Locations (Street Number, Street, Suite Number, City, State, Zip)
Phone Numbers
Billing Addresses and Phone Numbers
Federal Tax ID Number(s)
Ancillary Types (e.g., DME, Lab, Home Health, etc.)
HMO PROGRAM ATTACHMENT
TO
MANAGED CARE ALLIANCE AGREEMENT
(CAPITATION)
PURPOSE
The terms and provisions of this HMO Program Attachment and the Agreement are
applicable to services rendered by MCA's Represented Providers to HMO Program
Participants. As used in this Program Attachment, Participant means a HMO
Program Participant.
I. DEFINITIONS
BASELINE ASSESSMENT means CIGNA's assessment of MCA's capacity to assume the
obligations described in the Agreement and this Program Attachment in
particular.
CAPITATION PAYMENT means a periodic payment for certain covered Home Care
Services that is made to MCA for each Participant who is a member of MCA's
Patient Panel.
CARVED OUT SERVICES means the following services (see Exhibit XIX):
MEDICAL DIRECTOR means a physician designated by CIGNA to manage Quality
Management and Utilization Management responsibilities, or that physician's
designee.
HMO PROGRAM PARTICIPANT means a Participant enrolled in a non-governmental,
fully insured Standard HMO or Point of Service product and which product is
underwritten based on a community rating methodology (i.e. community rating,
community rating by class, adjusted community rating by class). This definition
includes, but is not limited to, Participants covered under commercial HMO and
Open Access plans issued by CIGNA.
PATIENT PANEL means those HMO Program Participants for which MCA will receive a
global Capitation Payment for all Home Care Services rendered.
POINT OF SERVICE means a product offered pursuant to a Service Agreement which
allows the Participant to choose, in addition to Standard HMO benefits, a lower
level of benefits if the Participant receives Home Care Services from (i) a
Participating Provider without a necessary authorization or (ii) from a
non-Participating Provider, at the time such services are sought.
PRIMARY CARE PHYSICIAN means a physician duly licensed to practice medicine who
is a Participating Provider with CIGNA to provide Covered
Services in the field of general medicine, internal medicine, family practice or
pediatrics, and who has agreed to provide primary care physician services to
Participants in accordance with HMO Program Requirements.
STANDARD HMO means a product offered pursuant to a Service Agreement where
Covered Services are available to Participants only from Participating
Providers, except in the case of an Emergency or with the prior authorization of
CIGNA or Affiliate where Covered Services are not available from Participating
Providers.
II. SERVICES AND COMPENSATION
A. COVERED HOME CARE SERVICES
1. MCA, through its Represented Providers, shall provide all Home
Care Services that are required by Participants in MCA's
Patient Panel, for which such Participants are eligible, in
accordance with the terms of this Agreement, this HMO Program
Attachment and HMO Program Requirements. The compensation set
forth in this HMO Program Attachment shall be payment in full
for Home Care Services rendered to HMO Program Participants.
2. MCA, through its Represented Providers, shall arrange to
provide Medically Necessary Home Care Services to Participants
on a 24-hour per day, 7-day per week basis or arrange with
other qualified providers (which meet all CIGNA and MCA
credentialing requirements or other applicable guidelines) to
provide such Medically Necessary Home Care Services to
Participants. MCA shall require that such covering providers
(a) are Participating Providers (unless otherwise agreed); (b)
will not seek compensation from CIGNA for services for which
MCA receives compensation hereunder; and (c) will not bill
Participants for covered Home Care Services under any
circumstances except for (i) Copayments, Deductibles or
Coinsurance; (ii) the provision of services to a patient who
is not eligible to receive Home Care Services, including but
not limited to Participants that have reached their benefit
limit; and (iii) services provided to Participants that are
not Home Care Services. (d) will direct the participant and/or
the Represented Provider to obtain, authorization from CIGNA
prior to all hospitalizations or referrals of Participants,
except in Emergencies or for a Pre-Qualified Maternity Stay or
as otherwise required by law.
3. MCA through its Represented Providers shall provide Home Care
Services to all Participants in MCA's Patient Panel who are
eligible to receive Home Care Services.
4. Subject to the terms and condition of this Agreement, MCA
shall:
a. Arrange for the provision of Home Care Services to
Participants;
b. Require Represented Providers to accept, treat, and
otherwise render covered Home Care Services to
Participants in the same manner, in accordance with
the same standards, and with the same availability, as
offered to other like patients.
c. not close its network to any new Participants unless
CIGNA expressly consents to such closure;
5. In no event shall MCA or Represented Providers be required to
accept, treat, arrange for, or otherwise be obligated to
render Home Care Services to Participants under this
Agreement, even if medically appropriate, if:
(a) the provision of such services to Participant would
pose risk of bodily harm to the Participant or
caregiver personnel of Represented Provider;
(b) the provision of such services to Participant would be
in violation of MCA's or Represented Provider's
applicable license requirements or other applicable
laws, and/or MCA policies, including but not limited
to admission and discharge policies or discrimination
policies;
(c) MCA has not received the essential information to
process a referral;
(d) Participant repeatedly rejects the provision of
services by a qualified Represented Provider selected
by MCA and/or CIGNA has mutually agreed.
(e) MCA and Represented Providers shall not differentiate
or discriminate in the treatment of any Participant
because of race, color,
national origin, ancestry, religion, sex, marital
status, sexual orientation, age, health status,
handicap or source of payment.
6. A CIGNA Participating Physician or CIGNA will notify
Provider's Network Manager of each referral for Covered Home
Care Services for Participants in its Patient Panel. MCA will
provide or arrange to provide for all Medically Necessary
Covered Home Care Services for all such Participants, in
accordance with the authorization and Utilization Management
procedures set forth in Exhibit XVII.
7. MCA and CIGNA will jointly develop clinical pathways to
establish a plan of treatment for more difficult Participant
cases requiring Covered Home Care Services.
B. CAPITATION PAYMENTS
1. On or before the 15th day of each month, CIGNA or its designee
shall pay MCA a monthly Capitation Payment for each
Participant in MCA's Patient Panel. THE CAPITATION PAYMENT
SHALL BE COMPENSATION FOR ALL HOME CARE SERVICES PROVIDED TO
PARTICIPANTS IN THE PATIENT PANEL EXCEPT FOR CARVED OUT
SERVICES as referenced in EXHIBIT XIX. The monthly capitation
rates are set forth in Exhibit A.
2. If a Participant is added to MCA's Patient Panel on or before
the 15th day of a month, a full month's Capitation Payment
will be due for that Participant for that month. There will be
no Capitation Payment due for Participants added after the
15th day of the month.
3. A full month's Capitation Payment will be due for the month of
termination of a Participant if the Participant terminates
after the 15th day of the month. If a Participant terminates
on or before the 15th day of a month, no Capitation Payment
will be due for the month of termination.
4. Where CIGNA, due to information delays, must make a
retroactive addition or deletion to MCA's Patient Panel, a
retroactive capitation adjustment shall be made concurrent
therewith subject to Section II.B.6 of this HMO Program
Attachment. In those instances where a Participant has been
retroactively deleted and has received services from MCA after
the effective date of deletion but prior to CIGNA informing
MCA of
such deletion, MCA may bill participant for such services
rendered.
5. Any amendments of Capitation Payment rates, whether on an
annual basis or upon changes in benefit designs, shall be in
accordance with the amendment provisions of this Agreement, or
as otherwise agreed to in writing by the parties.
6. Capitation Adjustment Process:
a. Where CIGNA, due to information delays, must make a
retroactive addition or deletion to MCA's Patient
Panel, a retroactive capitation adjustment shall not
exceed 6 months, nor shall a retroactive addition be
added greater than 6 months.
b. Services rendered to participants prior to the
capitation period or following the capitation period
may be billed to CIGNA directly, and shall be in
accordance with Exhibit A of the HMO Program
Attachment - Fee For Service, attached hereto.
Standard Coordination of Benefits rules shall be
applied. In the event that CIGNA is not identified as
the payor, MCA may bill participant directly for
services rendered during this time.
c. For those Participants in the Providers patient panel,
MCA shall have 120 days following the receipt of the
monthly capitation payment, to notify CIGNA of any
discrepancies in the capitation payment. The
discrepancies shall be determined by the MCA through a
review of the electronic eligibility and capitation
roster documentation supplied by CIGNA. For all
eligibility or capitation roster data that continues
to be in a paper format, CIGNA will use its best
efforts to move to an electronic basis.
d. CIGNA shall investigate and validate capitation errors
and notify Gentiva within 60 days the results of such
investigation.
e. Any necessary adjustments to capitation shall be made
through the next scheduled capitation cycle.
f. All adjustments to capitation payments shall be
provided to MCA in writing, by CIGNA, no less than 30
days prior to the adjustment.
7. MCA guarantees that the Capitation Payment rates set forth in
this Attachment are effective from the Effective Date of this
Agreement. Notwithstanding the foregoing, the parties agree to
meet to discuss possible adjustments to the Capitation Payment
rates should any of the following circumstances occur during
the term of this Attachment:
a. treatments, products, supplies or equipment which are
excluded from Covered Home Care Services for HMO
Program Participants as of the Effective Date on the
basis that they are considered Experimental are no
longer considered Experimental and become a Covered
Home Care Service for such Participants.
b. shifts in treatment sites for Covered Home Care
Service therapies occurring after the Effective Date
result in a material change to the services which are
Covered Home Care Services for HMO Program
Participants.
c. material changes are made to HMO Program Participants'
Service Agreements after the Effective Date such that
there is a material change to those Home Care Services
which are Covered Home Care Services for such
Participants.
d. utilization associated with material changes in
membership from which the base period was derived
after the Effective Date of this Agreement results in
a material change in HMO Program Participant volume
under this Agreement which has a material financial
impact on MCA.
e. Any such adjustment of Capitation Payment rates shall
only be made to the extent required to address the
change in costs directly resulting from the above
changed circumstance.
8. Leakage
a. On a quarterly basis, CIGNA will provide MCA with
leakage reports and the claims for
Covered Home Care Services submitted by providers that
are not Represented Provider's. MCA shall review the
quarterly leakage reports provided by CIGNA to
determine the need to contract with additional
providers so as to reduce the leakage. MCA shall make
a good faith effort to contract with identified
providers in order to reduce the amount of leakage and
it shall act promptly to contract with those providers
identified as appropriate in order to reduce leakage.
In an effort to better manage leakage and overall
utilization, CIGNA will attempt to provide MCA, an
overview of CIGNA's administration of out of network
claims for Covered Home Care Services rendered to
Participants. CIGNA also agrees to review the
feasibility of adopting usual and customary charges
for Covered Home Care Services. MCA commits to provide
CIGNA all reasonable assistance in the development and
implementation of the aforementioned process.
b. The Parties shall meet quarterly (each April, July,
October and January) to review the utilization of
Covered Home Health Services that are not reimbursed
on a capitated basis under this Agreement for the
purpose of identifying opportunities to reduce this
utilization and the Parties shall cooperate in good
faith to effect such actions as they may agree upon to
accomplish this objective.
c. MCA shall meet with those referring physicians
identified by CIGNA to educate them regarding the
service provided by Represented Providers.
9. Insulin Pumps
Effective January 1, 2004, MCA will use all reasonable
commercial efforts to arrange for the provision of
Dana brand devices and supplies for insulin pump
orders on new referral authorizations. For
Participants reimbursed according to a capitation
methodology, MCA will bill CIGNA a fee-for-service
charge for a rate differential for new non-Dana
devices based upon a CIGNA authorization. Supplies for
insulin pumps provided to participants reimbursed
according to a capitation methodology prior to 1/1/04
shall not be subject to a fee for service charge or
consideration. For all other Participants, billing for
pumps and supplies shall be in accordance with the
appropriate fee schedules.
C. REPRESENTED PROVIDER PAYMENT/CLAIM AND ENCOUNTER DATA
Represented Providers shall be reimbursed for covered Home Care
Services rendered in accordance with the requirements set forth in
Exhibit B. MCA shall provide CIGNA with the claim and/or encounter
data as required in Exhibit B.
D. FINANCIAL REPORTS
1. MCA represents and warrants that the information set forth in
the CIGNA Baseline Assessment submitted to CIGNA by MCA prior
to the execution of this Agreement is true and accurate. MCA
shall promptly notify CIGNA of any material changes in the
information contained in such Baseline Assessment within
thirty (30) days of becoming aware of such change.
2. MCA shall provide CIGNA with the following financial reports
on a timely basis: a) MCA's annual audited financial reports,
including, but not limited to, MCA's audited annual income
statement and balance sheet; b) quarterly financial reports
including an income statement, balance sheet and any other
reports identifying payments made to Represented Providers in
the preceding quarter and the incurred but not reported claims
as of the end of the preceding quarter in sufficient detail to
determine if payments have been made in accordance with this
Agreement and applicable law; c) any financial reports
required by applicable regulatory authorities; and d) such
other financial reports as are reasonably requested by CIGNA.
3. MCA shall notify CIGNA immediately of any of MCA's material
payment defaults with respect to any of MCA's creditors if MCA
reasonably determines that any such payment defaults would
affect the provision of services to the HMO Program
Participants.
E. ASSIGNMENT AND IDENTIFICATION OF PARTICIPANTS
MCA shall comply with the requirements of and shall participate in
CIGNA's procedures with respect to the
assignment and identification of Participants as outlined in the HMO
Program Requirements.
F. REIMBURSEMENT OF CIGNA EXPENDITURES
In the event that MCA does not arrange for the provision of Home
Care Services to HMO Program Participants as required by Section
II.A.1 through II.A.4 of this HMO Program Attachment, Payor may
arrange for and/or reimburse for such Home Care Service and shall be
entitled to recover from MCA any expenditure made, or recover any
cost incurred, including, but not limited to, any reasonable
administrative costs, in arranging or reimbursing such covered Home
Care Service. An amount sufficient to compensate for such
expenditures and costs may be deducted from the payments due to MCA
under this Agreement; provided that, CIGNA shall provide MCA with
written notice and full disclosure of costs incurred prior to any
such deductions. This provision shall survive the termination of
this Agreement for a period of one (1) year.
G. OTHER REQUIREMENTS
MCA and its Represented Providers shall use best efforts to
prescribe or authorize the substitution of generic pharmaceuticals
when appropriate and shall cooperate with CIGNA's formulary and HMO
Program Requirements regarding the substitution of generic
pharmaceuticals.
H. TRANSFERS
In a timeframe to be mutually agreed upon the parties, CIGNA will
provide to MCA all information reasonably required by MCA in order
to accomplish transition, but nothing herein shall require MCA to
purchase or assume payments for any Durable Medical Equipment
(DME/HME), which has been previously placed with any Participant.
CIGNA agrees to work with MCA to identify those Participants that
are in possession of DME/HME and for which CIGNA has made payment on
a rental basis for such DME/HME, and advise MCA of the same. MCA
shall be relieved of any obligation to assume financial
responsibility for DME/HME that MCA determines to be DME/HME that is
routinely purchased or converted to purchase, or that does not meet
CIGNA/MCA Durable Medical Equipment Guidelines for Medical
Necessity, and such DME/HME shall be converted to purchase at
CIGNA's expense prior to the transition of Participants to MCA.
However, MCA shall assume responsibility for the continued
maintenance of the DME/HME.
I. LIMITATIONS ON BILLING PARTICIPANTS
1. MCA hereby agrees and shall require its Represented Providers
to agree that in no event, including, but not limited to
non-payment by CIGNA, CIGNA's insolvency or breach of this
Agreement, shall MCA or any Represented Provider bill, charge,
collect a deposit from, seek compensation, remuneration or
reimbursement from, or have any recourse against Participants
or persons other than CIGNA or MCA for Home Care Services.
This provision shall not prohibit collection of (i) any
applicable Copayments, Deductibles or Coinsurance; (ii)
payments for services provided to a patient who is no longer
eligible to receive Home Care Services, including but not
limited to Participants that have reached their benefit limit;
or (iii) payments for services provided to Participants that
are not Home Care Services.
2. MCA further agrees that this provision shall survive the
termination of this Agreement regardless of the cause giving
rise to such termination and shall be construed to be for the
benefit of Participants, and that this provision supersedes
any oral or written agreement to the contrary now existing or
hereafter entered into between MCA or Represented Providers
and the Participant or persons acting on the Participant's
behalf.
3. Any modification, additions, or deletion to the provisions of
this hold harmless clause shall become effective on a date no
earlier than fifteen (15) days after the applicable state
regulatory agency has received written notice of such proposed
change.
4. MCA shall not charge, and MCA shall require that its
Represented Providers not charge, a Participant for a service
which is not Medically Necessary unless in advance of the
provision of such service, the Participant is notified that
the service may not be covered and the Participant
acknowledges in writing that he or she shall be responsible
for payment of charges for such service.
J. UTILIZATION MANAGEMENT
MCA shall perform and comply with the Utilization Management
requirements set forth in Exhibits XVII and XXI.
K. CIGNA VISION/JOINT STEERING COMMITTEE
Any and all services rendered by MCA and its Represented Providers
under this Agreement shall be consistent with CIGNA's vision to
provide or arrange to provide quality health care at a reasonable
cost. Each party agrees to designate representatives, the number and
identity of which shall be agreed upon by the parties, to
participate in a Joint Steering Committee. The Joint Steering
Committee shall meet on a periodic basis, but no less frequently
than twice yearly, for the purpose of discussing the status of each
party's performance under this Agreement and to resolve any
complaints or problems with such performance.
L. GUARANTEE OF PROVISION OF COVERED SERVICES
1. Throughout the term of this Agreement and for six (6) months
following the termination of this Agreement, MCA shall secure
and maintain an irrevocable letter(s) of credit in favor of
CIGNA in an amount and form acceptable to CIGNA, for all
states in which such a letter of credit is required by state
law, regulation, statute, or as required by state
insurance/HMO regulators.
2. CIGNA shall have the right to make immediate demand for
payment under the irrevocable letter(s) of credit in the event
that MCA has failed to pay any amounts due and owing to CIGNA,
Represented Providers or others in accordance with MCA's
obligations under this Agreement.
3. Prior to each anniversary date of this Agreement, CIGNA will
evaluate the adequacy of the amount of the irrevocable
letter(s) of credit by reviewing any and all state laws,
regulations, and statutes. The amount of the irrevocable
letter(s) of credit required to be maintained by MCA for the
next contract year shall be a minimum of the amount equal to
the individual state requirements for the contract year.
4. At least thirty (30) days prior to each anniversary date of
this Agreement, CIGNA will advise MCA of the amount of the
irrevocable letter of credit required to be maintained by MCA
for the next contract year as calculated pursuant to
subsection 3 above. MCA shall secure an irrevocable letter of
credit in such amount and in a form acceptable to CIGNA prior
to the anniversary date.
M. PERFORMANCE FEEDBACK
1. CIGNA may provide feedback to MCA for MCA's own use in
assessing and enhancing Represented Providers' performance
with regard to quality of care, patient satisfaction and
efficient practice.
2. For purposes of providing helpful performance feedback, CIGNA
may perform telephone surveys and analyze medical costs of
Participants in MCA's HMO Patient Panel. Subject to any
applicable confidentiality limitations, CIGNA may also from
time to time review a sample of medical records and provide
performance feedback on past treatment.
N. REIMBURSEMENT FOR COVERED SERVICES RENDERED TO PARTICIPANTS OUTSIDE
OF PATIENT PANEL/OPT OUT SERVICES
In the event that MCA's Represented Providers render Home Care
Services to Participants outside of MCA's Patient Panel or services
covered pursuant to a Participant's opt out benefits, MCA shall be
reimbursed for such services at the rates established in the HMO
Program Attachment - Fee For Service, attached hereto, less
applicable Coinsurance, Copayments and Deductibles. Only those
charges for Home Care Services billed in accordance with CIGNA's
standard claim coding and bundling methodology will be allowed.
O. REPRESENTED PROVIDER ACCEPTANCE OF PAYMENT.
MCA represents and warrants that each and every Represented Provider
has contractually agreed with MCA to accept as payment in full due
from CIGNA and its Affiliates for Home Care Services rendered to
Patient Panel Participants by that Provider the amounts that the
Represented Provider is entitled to receive from MCA. MCA will
indemnify and hold harmless Patient Panel Participants, CIGNA and
its Affiliates from any claim for payment for Home Care Services
rendered to Patient Panel Participants by each Represented Provider,
unless the claim arises from CIGNA's wrongful failure to pay MCA for
Home Care Services.
EXHIBIT A
HMO PROGRAM ATTACHMENT - CAPITATION
SCHEDULE OF CAPITATION RATES
CAPITATION RATES EFFECTIVE 1/1/04 - 12/31/04
These are the capitation rates that apply to services rendered to Patient Panel
Participants enrolled in HMO Programs. An "HMO Program" means a
non-governmental, fully insured HMO or Point of Service product that is
underwritten based on a community rating methodology (i.e. community rating,
community rating by class, adjusted community rating by class).
Gentiva Homehealth
Infusion and DME/HME
Capitation Rate PMPM
All Commercial HMO Capitated *
Affiliates
* Confidential treatment requested
EXHIBIT B
HMO PROGRAM ATTACHMENT - CAPITATION
PAYMENT RESPONSIBILITIES
(MCA distributes payments)
MCA shall pay Represented Providers for covered Home Care Services rendered
hereunder in accordance with this Exhibit and the terms of the Agreement.
1. MCA shall pay Represented Providers for covered Home Care Services
rendered hereunder in accordance with CIGNA's payment administration
standards and any other standards set forth in applicable laws and
regulations, including but not limited to, ERISA. MCA agrees to reimburse
Represented Providers for covered Home Care Services within the time
frames set forth in applicable law AND the time frames specified in MCA's
provider agreements with its Represented Providers. CIGNA may withhold all
or a portion of MCA's reimbursement if MCA repeatedly fails to reimburse
Represented Providers on a timely basis. MCA's obligations with regard to
payment for covered Home Care Services rendered hereunder shall survive
the termination of this Agreement with respect to any covered Home Care
Services rendered by Represented Providers during the term of this
Agreement and with respect to any covered Home Care Services Represented
Providers are obligated by this Agreement to provide after termination of
this Agreement.
2. With reasonable notice, MCA agrees to allow CIGNA representatives to
conduct on-site reviews of MCA's payment administration facilities. Such
reviews shall be for the sole purpose of evaluating MCA's performance of
its payment responsibilities under this Agreement, including, but not
limited to, ascertaining the quality and timeliness of MCA's payment
processing. MCA agrees to correct any deficiencies detected during such
reviews within sixty (60) days of CIGNA's submission of a written report
detailing such deficiencies.
3. If CIGNA determines that MCA cannot meet its payment administration
obligations set forth herein, CIGNA may elect to assume responsibility for
such activities. If CIGNA elects to assume responsibility for such
activities, the rates set forth in this Agreement shall be renegotiated by
the parties to reflect such change in responsibility. MCA shall cooperate
and provide to CIGNA any information necessary to perform such activities.
4. MCA shall be responsible for the production of all applicable tax
reporting documents (e.g., 1099s) for Represented Providers. Such
documents shall be produced in a format and within the time frames set
forth in applicable state and federal laws and/or regulations.
5. MCA shall require that Represented Providers submit claims for covered
Home Care Services rendered to Participants in other Programs for which
CIGNA has retained payment responsibility directly to CIGNA in accordance
with the applicable Program Attachment and Program Requirements.
6. MCA shall produce explanations of payments for Represented Providers with
respect to those services rendered by Represented Providers to
Participants for which an explanation of benefits is customarily provided
or legally required. Such explanations of payments shall be in a format
and contain data elements acceptable to CIGNA.
7. MCA shall develop and deliver training programs for Represented Providers
which outline MCA's billing and reimbursement processes. MCA shall make
best efforts to ensure that Represented Providers avoid submitting
requests for payment to CIGNA for those covered Home Care Services
rendered to Participants for whom MCA has payment responsibility.
8. MCA shall provide CIGNA with encounter data showing all services provided
to each Participant for whom MCA receives Capitation Payments in a format
and frequency mutually acceptable to both parties, but no less frequently
than monthly. CIGNA may elect to withhold payment of MCA's compensation if
MCA fails to submit encounter data in accordance with this Agreement.
EXHIBIT C
HMO PROGRAM ATTACHMENT - CAPITATION
UTILIZATION MANAGEMENT
(partial delegation of utilization management)
1. MCA will assist CIGNA in the implementation of its Utilization Management
program. Any Utilization Management program activities performed by MCA
shall be in accordance with CIGNA's standards, NCQA standards or the
standards of another appropriate accrediting body designated by CIGNA, and
Program Requirements. MCA shall maintain any licensure required in
connection with such activities.
2. MCA shall prepare such periodic reports or other data as reasonably
requested by CIGNA relating to its Utilization Management activities in a
format acceptable to CIGNA.
3. MCA shall not materially modify its Utilization Management activities
without CIGNA's prior approval.
4. CIGNA shall have the right to audit MCA's Utilization Management
activities upon reasonable prior notice. MCA shall cooperate with any such
audits.
5. If CIGNA determines that MCA cannot meet its Utilization Management
obligations set forth herein, CIGNA may elect to assume responsibility for
such activities. If CIGNA elects to assume responsibility for such
activities, the rates set forth in this Agreement shall be renegotiated by
the parties to reflect such change in responsibility. MCA shall cooperate
and provide to CIGNA any information necessary to perform such activities.
6. All referrals shall be to Represented Providers, except where an Emergency
requires otherwise, in other cases where the referral is specifically
authorized by CIGNA's Medical Director or his/her designee or MCA's
medical director, if permitted by CIGNA to make such authorizations, or as
otherwise required by law. Except in an Emergency or for a Pre-Qualified
Maternity Stay or in those instances where prior authorization is
prohibited by federal or state laws or regulations, MCA shall require all
Represented Providers to obtain authorization from CIGNA or MCA, if
permitted by CIGNA to make such authorizations, prior to hospital
admission of any Participant or outpatient surgical procedures.
7. The parties acknowledge and agree that CIGNA or Payor shall have final
decision making authority with regard to appeals of utilization management
decisions.
HMO PROGRAM ATTACHMENT
TO
MANAGED CARE ALLIANCE AGREEMENT
(FEE-FOR-SERVICE)
PURPOSE
The terms and provisions of this HMO Program Attachment and the Agreement are
applicable to services rendered by MCA's Represented Providers to HMO Program
Participants. As used in this Program Attachment, Participant means a HMO
Program Participant.
I. DEFINITIONS
HMO PROGRAM PARTICIPANT means a Participant enrolled in a non-governmental,
fully insured Standard HMO or Point of Service product and which product is
underwritten based on a community rating methodology (i.e. community rating,
community rating by class, adjusted community rating by class). This definition
includes, but is not limited to, Participants covered under commercial HMO and
Open Access and Open Access Plus plans issued by CIGNA.
MEDICAL DIRECTOR means a physician designated by CIGNA to manage Quality
Management and Utilization Management responsibilities, or that physician's
designee.
PATIENT PANEL means those Participants who have been designated or have
otherwise been assigned to one or more of MCA's Represented Providers as the
primary source for certain Covered Services pursuant to a Service Agreement or
HMO Program Requirements, and for which MCA will be reimbursed on a
fee-for-service basis.
POINT OF SERVICE means a product offered pursuant to a Service Agreement which
allows the Participant to choose, in addition to Standard HMO benefits, a lower
level of benefits if the Participant receives Home Care Services from (i) a
Participating Provider without a necessary authorization or (ii) from a
non-Participating Provider, at the time such services are sought.
PRIMARY CARE PHYSICIAN means a physician duly licensed to practice medicine who
is a Participating Provider with CIGNA to provide Covered Services in the field
of general medicine, internal medicine, family practice or pediatrics, and who
has agreed to provide primary care physician services to Participants in
accordance with HMO Program Requirements.
STANDARD HMO means a product offered pursuant to a Service Agreement where
Covered Services are available to Participants only from Participating
Providers, except in the case of an Emergency or with
the prior authorization of CIGNA or Affiliate where Covered Services are not
available from Participating Providers.
II. PARTIES' OBLIGATIONS
A. SERVICES
1. MCA, through its Represented Providers, shall provide all Home
Care Services that are required by Participants in MCA's
Patient Panel, for which such Participants are eligible, in
accordance with the terms of this Agreement, this HMO Program
Attachment and HMO Program Requirements. The compensation set
forth in this HMO Program Attachment shall be payment in full
for Home Care Services rendered to HMO Program Participants.
2. MCA, through its Represented Providers, shall arrange to
provide Medically Necessary Home Care Services to Participants
on a 24-hour per day, 7-day per week basis or arrange with
other qualified providers (which meet all CIGNA and MCA
credentialing requirements or other applicable guidelines) to
provide such Medically Necessary Home Care Services to
Participants. MCA shall require that such covering providers
(a) are Participating Providers (unless otherwise agreed); (b)
will not seek compensation from CIGNA for services for which
MCA receives compensation hereunder; and (c) will not bill
Participants for covered Home Care Services under any
circumstances except for (i) Copayments, Deductibles or
Coinsurance; (ii) the provision of services to a patient who
is not eligible to receive Home Care Services, including but
not limited to Participants that have reached their benefit
limit; and (iii) services provided to Participants that are
not Home Care Services. (d) will direct the participant and/or
the Represented Provider to obtain, authorization from CIGNA
prior to all hospitalizations or referrals of Participants,
except in Emergencies or for a Pre-Qualified Maternity Stay or
as otherwise required by law.
3. MCA through its Represented Providers shall provide Home Care
Services to all Participants in MCA's Patient Panel who are
eligible to receive Home Care Services.
4. Subject to the terms and conditions of this Agreement, MCA
shall:
(a) Arrange for the provision of Home Care Services to
Participants;
(b) Require Represented Providers to accept, treat, and
otherwise render covered Home Care Services to
Participants in the same manner, in accordance with the
same standards, and with the same availability, as
offered to other like patients.
(c) not close its network to any new Participants unless
CIGNA expressly consents to such closure;
In no event shall MCA or Represented Providers be required to
accept, treat, arrange for, or otherwise be obligated to render Home
Care Services to Participants under this Agreement, even if
medically appropriate, if:
(a) the provision of such services to Participant would pose
risk of bodily harm to the Participant or caregiver
personnel of Represented Provider;
(b) the provision of such services to Participant would be
in violation of MCA's or Represented Provider's
applicable license requirements or other applicable
laws, and/or MCA policies, including but not limited to
admission and discharge policies or discrimination
policies;
(c) MCA has not received the essential information to
process a referral;
(d) Participant repeatedly rejects the provision of services
by a qualified Represented Provider selected by MCA
and/or CIGNA has mutually agreed.
MCA and Represented Providers shall not differentiate or
discriminate in the treatment of any Participant because of race,
color, national origin, ancestry, religion, sex, marital status,
sexual orientation, age, health status, handicap or source of
payment.
5. Except in an Emergency or for a Pre-Qualified Maternity Stay
or in those instances where prior authorization is prohibited
by federal or state laws or regulations, prior authorization
by a Participant's
Primary Care Physician or CIGNA as prescribed by HMO Program
Requirements is required for payment of covered Home Care
Services rendered to Participants. All referrals shall be to
Participating Providers, except where an Emergency requires
otherwise, in other cases where Medical Director specifically
authorizes the referral or except as required by law.
B. COMPENSATION AND BILLING
1. Reimbursement for Home Care Services rendered by Represented
Providers shall be in accordance with the following rates,
less applicable Copayments, Deductibles or Coinsurance:
a. Reimbursement for Home Care services arranged by MCA and
rendered by Represented Providers shall be in accordance
with Exhibit A SCHEDULES 1A, 2A, AND 3A attached hereto.
b. MCA will indemnify and hold harmless Payors, CIGNA and
its Affiliates from any claim for payment in excess of
the specified amounts for Home Care Services rendered to
Participants by each Represented Provider, unless the
claim arises from a Payor's wrongful failure to pay MCA
for covered Home Care Services.
2. Payors shall agree to deduct any Copayments, Deductibles, or
Coinsurance required by the Service Agreement from payment
due. Deduction for the Copayment, Deductible or Coinsurance
shall be determined on the basis of the contracted rate.
3. Reimbursement for Home Care Services rendered hereunder shall
be made by CIGNA or its designees to MCA. MCA shall bill for
covered Home Care Services according to the following:
a. MCA shall submit claims on the appropriate claim form
for all covered Home Care Services within one hundred
twenty (120) days of the date those services are
rendered. Claims received after this one hundred twenty
(120) day period may be denied for payment. MCA shall
submit claims to the location described in applicable
Program Requirements.
b. Any amount owing under this Agreement shall be paid
within thirty (30) days after receipt of a complete
claim, unless additional required information is
requested within the thirty (30) day period, or the
claim
involves coordination of benefits, except as otherwise
provided in this Agreement.
4. MCA and its Represented Providers shall not charge a
Participant for a service which is not Medically Necessary
unless, in advance of the provision of such service, the
Participant is notified that the service may not be covered
and the Participant acknowledges in writing that he or she
shall be responsible for payment of charges for such service.
5. MCA will and shall require its Represented Providers to look
solely to Payor for compensation for covered Home Care
Services except for Copayments, Deductibles or Coinsurance.
MCA agrees, for itself and on behalf of each Represented
Provider, that whether or not there is any unresolved dispute
for payment, under no circumstances will MCA or any
Represented Provider directly or indirectly make any charges
or claims, other than for Copayments, Deductibles or
Coinsurance against any Participants or their representatives
for covered Home Care Services and that this provision
survives termination of this Agreement for services rendered
prior to such termination. This provision shall not prohibit
collection of (i) any applicable Copayments, Deductibles, or
Coinsurance, (ii) payments for services provided to a patient
who is no longer eligible to receive Home Care Services,
including but not limited to Participants that have reached
their benefit limit (iii) payment for services provided to
Participants, which are not Home Care Services. This paragraph
is to be interpreted for the benefit of Participants and does
not diminish the obligation of Payor to make payments to
Represented Providers according to the terms of this
Agreement.
6. The rates set forth herein shall apply to all services
rendered to Participants in the HMO Program.
7. Only those charges for Home Care Services billed in accordance
with CIGNA's standard claim coding and bundling methodology
will be allowed.
C. OTHER REQUIREMENTS
MCA and its Represented Providers shall use best efforts to
prescribe or authorize the substitution of generic pharmaceuticals
when appropriate and shall cooperate with CIGNA's formulary and HMO
Program Requirements regarding the substitution of generic
pharmaceuticals.
EXHIBIT A
HMO PROGRAM ATTACHMENT - FEE FOR SERVICE
REIMBURSEMENT FOR OTHER SERVICES
RATE AREA DESIGNATIONS:
--------------------------------------------------------------------------
STATE RATE AREA RATE DESIGNATION
--------------------------------------------------------------------------
Alabama LOW 3
--------------------------------------------------------------------------
Alaska HIGH 1
--------------------------------------------------------------------------
Arizona MEDIUM 2
--------------------------------------------------------------------------
Arkansas LOW 3
--------------------------------------------------------------------------
California HIGH 1
--------------------------------------------------------------------------
Colorado MEDIUM 2
--------------------------------------------------------------------------
Connecticut MEDIUM 2
--------------------------------------------------------------------------
Delaware LOW 3
--------------------------------------------------------------------------
District of Columbia HIGH 1
--------------------------------------------------------------------------
Florida MEDIUM 2
--------------------------------------------------------------------------
Georgia MEDIUM 2
--------------------------------------------------------------------------
Hawaii HIGH 1
--------------------------------------------------------------------------
Idaho LOW 3
--------------------------------------------------------------------------
Illinois HIGH 1
--------------------------------------------------------------------------
Indiana LOW 3
--------------------------------------------------------------------------
Iowa LOW 3
--------------------------------------------------------------------------
Kansas LOW 3
--------------------------------------------------------------------------
Kentucky LOW 3
--------------------------------------------------------------------------
Louisiana MEDIUM 2
--------------------------------------------------------------------------
Maine LOW 3
--------------------------------------------------------------------------
Maryland MEDIUM 2
--------------------------------------------------------------------------
Massachusetts HIGH 1
--------------------------------------------------------------------------
Michigan LOW 3
--------------------------------------------------------------------------
Minnesota LOW 3
--------------------------------------------------------------------------
Mississippi LOW 3
--------------------------------------------------------------------------
Missouri MEDIUM 2
--------------------------------------------------------------------------
Montana LOW 3
--------------------------------------------------------------------------
Nebraska LOW 3
--------------------------------------------------------------------------
Nevada LOW 3
--------------------------------------------------------------------------
New Hampshire LOW 3
--------------------------------------------------------------------------
New Jersey MEDIUM 2
--------------------------------------------------------------------------
New Mexico LOW 3
--------------------------------------------------------------------------
New York MEDIUM 2
--------------------------------------------------------------------------
North Carolina MEDIUM 2
--------------------------------------------------------------------------
North Dakota MEDIUM 2
--------------------------------------------------------------------------
Ohio MEDIUM 2
--------------------------------------------------------------------------
Oklahoma LOW 3
--------------------------------------------------------------------------
Oregon MEDIUM 2
--------------------------------------------------------------------------
Pennsylvania MEDIUM 2
--------------------------------------------------------------------------
Rhode Island MEDIUM 2
--------------------------------------------------------------------------
South Carolina MEDIUM 2
--------------------------------------------------------------------------
--------------------------------------------------------------------------
South Dakota LOW 3
--------------------------------------------------------------------------
Tennessee MEDIUM 2
--------------------------------------------------------------------------
Texas HIGH 1
--------------------------------------------------------------------------
Utah MEDIUM 2
--------------------------------------------------------------------------
Vermont LOW 3
--------------------------------------------------------------------------
Virginia MEDIUM 2
--------------------------------------------------------------------------
Washington MEDIUM 2
--------------------------------------------------------------------------
West Virginia LOW 3
--------------------------------------------------------------------------
Wisconsin LOW 3
--------------------------------------------------------------------------
Wyoming LOW 3
--------------------------------------------------------------------------
TRADITIONAL HOME HEALTH SERVICES:
RATES EFFECTIVE JANUARY 1, 2004 - DECEMBER 31, 2004
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICES HAVE BOTH VISIT AND HOURLY RATES.
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICE HAS HOURLY ONLY RATES.
Notes 3, 4 and 5 apply
-------------------------------------------------------------------
AREA 1 AREA 2 AREA 3
-------------------------------------------------------------------
VISIT HOUR VISIT HOUR VISIT HOUR
--------------------------------------------------------------------------------------------------------------
HOMEMAKER N/A * N/A * N/A *
--------------------------------------------------------------------------------------------------------------
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICE IS PRICED ON A PER DIEM BASIS.
Notes 3, 4 and 5 apply
-------------------------------------------------------------------
AREA 1 AREA 2 AREA 3
-------------------------------------------------------------------
PER DIEM PER DIEM PER DIEM
--------------------------------------------------------------------------------------------------------------
COMPANION/LIVE IN * * *
--------------------------------------------------------------------------------------------------------------
NOTES:
*
*
*
*
*
*
*
*
HOME INFUSION RATES:
RATES EFFECTIVE JANUARY 1, 2004 - DECEMBER 31, 2004
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES EXCLUDE DRUGS. DRUGS ARE
PRICED AS A PERCENTAGE DISCOUNT OFF AWP (IF APPLICABLE), AND THERE IS NO PRICE
DIFFERENCE BETWEEN PRIMARY AND MULTIPLE THERAPIES
--------------------------------------------------------------------------------------------------------------
PRIMARY OR PRIMARY OR PRIMARY OR
MULTIPLE THERAPY MULTIPLE THERAPY MULTIPLE THERAPY
PER DIEM DISPENSING FEE DRUG DISCOUNT OFF AWP
--------------------------------------------------------------------------------------------------------------
Ancillary Drugs * * *
-------------------------------------------------------------------------------------------------------------
Biological Response Modifiers * * *
-------------------------------------------------------------------------------------------------------------
Cardiac (Inotropic) Therapy * * *
-------------------------------------------------------------------------------------------------------------
Chelation Therapy * * *
-------------------------------------------------------------------------------------------------------------
Chemotherapy * * *
-------------------------------------------------------------------------------------------------------------
Enteral Therapy * * *
-------------------------------------------------------------------------------------------------------------
Enzyme Therapy * * *
-------------------------------------------------------------------------------------------------------------
Growth Hormone * * *
-------------------------------------------------------------------------------------------------------------
IV Immune Globulin * * *
-------------------------------------------------------------------------------------------------------------
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES EXCLUDE DRUGS. DRUGS ARE
PRICED AS A PERCENTAGE DISCOUNT OFF AWP, AND THERE IS A PRICE DIFFERENCE BETWEEN
PRIMARY AND MULTIPLE ANTI-INFECTIVE THERAPIES
--------------------------------------------------------------------------------------------------------------
PER DIEM DRUG DISCOUNT OFF AWP
--------------------------------------------------------------------------------------------------------------
Anti-Infectives - Primary Anti-Infective * *
--------------------------------------------------------------------------------------------------------------
Anti-Infectives - Multiple Anti-Infective * *
--------------------------------------------------------------------------------------------------------------
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATE EXCLUDES DRUGS. DRUGS ARE
PRICED PER VIAL, AND THERE IS NO PRICE DIFFERENCE BETWEEN PRIMARY AND MULTIPLE
ANTI-INFECTIVE THERAPIES
--------------------------------------------------------------------------------------------------------------
PRIMARY OR
MULTIPLE THERAPY
PER DIEM COST OF DRUG
--------------------------------------------------------------------------------------------------------------
Flolan Therapy *
--------------------------------------------------------------------------------------------------------------
Flolan 0.5 mg vial *
--------------------------------------------------------------------------------------------------------------
Flolan 1.5 mg vial *
--------------------------------------------------------------------------------------------------------------
Flolan diluent vial *
--------------------------------------------------------------------------------------------------------------
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES INCLUDE DRUGS, AND THERE IS NO
PRICE DIFFERENCE BETWEEN PRIMARY AND MULTIPLE THERAPIES
--------------------------------------------------------------------------------------------------------------
PRIMARY OR
MULTIPLE THERAPY
PER DIEM
--------------------------------------------------------------------------------------------------------------
Enteral Therapy *
--------------------------------------------------------------------------------------------------------------
Hydration Therapy *
--------------------------------------------------------------------------------------------------------------
Total Parenteral Nutrition *
--------------------------------------------------------------------------------------------------------------
PPO & INDEMNITY PROGRAM ATTACHMENT
TO MANAGED CARE ALLIANCE AGREEMENT
PURPOSE
The terms and provisions of this PPO & Indemnity Program Attachment and the
Agreement are applicable to services rendered by MCA's Represented Providers to
PPO & Indemnity Program Participants.
I. PARTIES' OBLIGATIONS
A. COMPENSATION AND BILLING
1. Reimbursement for Home Care Services rendered by Represented
Providers shall be in accordance with the following rates,
less applicable Copayments, Deductibles or Coinsurance:
a. Reimbursement for Home Care services arranged by MCA and
rendered by Represented Providers shall be in accordance
with Exhibit B attached hereto.
b. MCA will indemnify and hold harmless Payors, CIGNA and
its Affiliates from any claim for payment in excess of
the specified amounts for covered Home Care Services
rendered to Participants by each Represented Provider,
unless the claim arises from a Payor's wrongful failure
to pay MCA for covered Home Care Services.
2. Payors shall agree to deduct any Copayments, Deductibles, or
Coinsurance required by the Service Agreement from payment
due. Deduction for the Copayment, Deductible or Coinsurance
shall be determined on the basis of the contracted rate.
3. Reimbursement for Home Care Services rendered hereunder shall
be made by CIGNA or its designees to MCA. MCA shall bill for
covered Home Care Services according to the following:
a. MCA shall submit claims on the appropriate claim form
for all covered Home Care Services within one hundred
twenty (120) days of the date those services are
rendered. Claims received after this one hundred twenty
(120) day period may be denied for payment. MCA shall
submit claims to the location described in applicable
Program Requirements.
b. Any amount owing under this Agreement shall be paid
within thirty (30) days after receipt of a complete
claim, unless additional required information is
requested within the thirty (30) day period, or the
claim involves coordination of benefits, except as
otherwise provided in this Agreement.
4. MCA and its Represented Providers shall not charge a
Participant for a service which is not Medically Necessary
unless the Participant is notified that the service may not be
covered and the Participant acknowledges in writing that he or
she shall be responsible for payment of charges for such
service.
5. MCA will and shall require its Represented Providers to look
solely to Payor for compensation for covered Home Care
Services except for Copayments, Deductibles or Coinsurance.
MCA agrees, for itself and on behalf of each Represented
Provider, that whether or not there is any unresolved dispute
for payment, under no circumstances will MCA or any
Represented Provider directly or indirectly make any charges
or claims, other than for Copayments, Deductibles or
Coinsurance against any Participants or their representatives
for covered Home Care Services and that this provision
survives termination of this Agreement for services rendered
prior to such termination. This provision shall not prohibit
collection of (i) any applicable Copayments, Deductibles, or
Coinsurance, (ii) payments for services provided to a patient
who is no longer eligible to receive Home Care Services,
including but not limited to Participants that have reached
their benefit limit (iii) payment for services provided to
Participants, which are not Home Care Services. This paragraph
is to be interpreted for the benefit of Participants and does
not diminish the obligation of Payor to make payments to
Represented Providers according to the terms of this
Agreement.
6. The rates set forth herein shall apply to all services
rendered to Participants in the PPO Program.
7. Only those charges for Home Care Services billed in accordance
with CIGNA's standard claim coding and bundling methodology
will be allowed.
B. UTILIZATION MANAGEMENT
1. To promote the participation and effectiveness of Utilization
Management, if MCA is responsible for initiating the
pre-certification process as indicated by the Participant's ID
card, MCA or Represented Providers
shall notify CIGNA or its designated Utilization Management
representative of any scheduled homecare admissions at least
forty-eight (48) hours prior to such admission, or as soon as
reasonably possible. MCA or Represented Providers shall notify
the review organization of an Emergency admission(s) within
one (1) working day following the admission(s).
2. Whenever any homecare admission has not been pre-certified,
CIGNA or its designated Utilization Management representative
may conduct retrospective review to determine whether services
provided were Medically Necessary.
3. MCA may appeal a Utilization Management decision in accordance
with the dispute resolution procedure set forth in the
Agreement and Program Requirements.
4. Provider shall evaluate whether each Participant order or
prescription it receives for Covered Home Care Services under
this Program are Medically Necessary, utilizing Utilization
Management guidelines mutually developed by the parties (see
Exhibits XVII AND XX1).
5. Provider will notify CIGNA's Intracorp subsidiary of each
referral it receives for Covered Home Care Services, that
meets case management criteria as defined by MCA and
Intracorp, and will coordinate with Intracorp in the provision
of case management and concurrent inpatient utilization review
services to Participants under this Program. The parties will
determine the specific roles and responsibilities of CIGNA,
Provider and Intracorp with respect to Utilization Management
during the implementation process.
6. CIGNA will review claims submitted for Covered Home Care
Services by Provider and Subcontractors under this Program to
assure that all billed services were Medically Necessary,
based on utilization review criteria mutually developed by
both parties. If an individual at Intracorp (or its successor
function) identified by CIGNA certifies to Provider the
Medical Necessity of a particular service in advance of the
provision of such service, CIGNA shall not retrospectively
deny payment for such service on the basis of Medical
Necessity.
7. Where CIGNA determines billed services not to be Medically
Necessary and denies payment, Provider may appeal the payment
denial in accordance with the appeal procedures described in
the Program Requirements to this Program Attachment.
C. 24 HOUR COVERAGE
Subject to the terms of this agreement, MCA, through its Represented
Providers, shall arrange to provide Medically Necessary Home Care
Services to Participants on a 24-hour per day, 7-day per week basis
or arrange with other qualified providers (which meet all CIGNA and
MCA credentialing requirements and/or other guidelines) to provide
such Medically Necessary Home Care Services to Participants. MCA
shall require that such covering providers (a) are Participating
Providers (unless otherwise agreed); (b) will not seek compensation
from CIGNA for Home Care Services for which MCA or its Represented
Providers receive compensation hereunder; (c) will not bill
Participants for Home Care Services under any circumstances except
for; (i) any applicable Copayments, Deductibles, or Coinsurance,
(ii) payments for services provided to a patient who is no longer
eligible to receive Home Care Services, including but not limited to
Participants that have reached their benefit limit (iii) payment for
services provided to Participants, which are not Home Care Services;
and (d) will direct the Participant and/or Represented Provider to
obtain authorization from CIGNA prior to all hospitalizations or
referrals of Participants, except in Emergencies or as otherwise
required by law.
EXHIBIT A
PPO & INDEMNITY PROGRAM ATTACHMENT
REIMBURSEMENT FOR OTHER SERVICES
RATE AREA DESIGNATIONS:
STATE RATE AREA RATE DESIGNATION
--------------------------------------------------------------------------
Alabama LOW 3
--------------------------------------------------------------------------
Alaska HIGH 1
--------------------------------------------------------------------------
Arizona MEDIUM 2
--------------------------------------------------------------------------
Arkansas LOW 3
--------------------------------------------------------------------------
California HIGH 1
--------------------------------------------------------------------------
Colorado MEDIUM 2
--------------------------------------------------------------------------
Connecticut MEDIUM 2
--------------------------------------------------------------------------
Delaware LOW 3
--------------------------------------------------------------------------
District of Columbia HIGH 1
--------------------------------------------------------------------------
Florida MEDIUM 2
--------------------------------------------------------------------------
Georgia MEDIUM 2
--------------------------------------------------------------------------
Hawaii HIGH 1
--------------------------------------------------------------------------
Idaho LOW 3
--------------------------------------------------------------------------
Illinois HIGH 1
--------------------------------------------------------------------------
Indiana LOW 3
--------------------------------------------------------------------------
Iowa LOW 3
--------------------------------------------------------------------------
Kansas LOW 3
--------------------------------------------------------------------------
Kentucky LOW 3
--------------------------------------------------------------------------
Louisiana MEDIUM 2
--------------------------------------------------------------------------
Maine LOW 3
--------------------------------------------------------------------------
Maryland MEDIUM 2
--------------------------------------------------------------------------
Massachusetts HIGH 1
--------------------------------------------------------------------------
Michigan LOW 3
--------------------------------------------------------------------------
Minnesota LOW 3
--------------------------------------------------------------------------
Mississippi LOW 3
--------------------------------------------------------------------------
Missouri MEDIUM 2
--------------------------------------------------------------------------
Montana LOW 3
--------------------------------------------------------------------------
Nebraska LOW 3
--------------------------------------------------------------------------
Nevada LOW 3
--------------------------------------------------------------------------
New Hampshire LOW 3
--------------------------------------------------------------------------
New Jersey MEDIUM 2
--------------------------------------------------------------------------
New Mexico LOW 3
--------------------------------------------------------------------------
New York MEDIUM 2
--------------------------------------------------------------------------
North Carolina MEDIUM 2
--------------------------------------------------------------------------
North Dakota MEDIUM 2
--------------------------------------------------------------------------
Ohio MEDIUM 2
--------------------------------------------------------------------------
Oklahoma LOW 3
--------------------------------------------------------------------------
Oregon MEDIUM 2
--------------------------------------------------------------------------
Pennsylvania MEDIUM 2
--------------------------------------------------------------------------
Rhode Island MEDIUM 2
--------------------------------------------------------------------------
South Carolina MEDIUM 2
--------------------------------------------------------------------------
South Dakota LOW 3
--------------------------------------------------------------------------------
Tennessee MEDIUM 2
--------------------------------------------------------------------------------
Texas HIGH 1
--------------------------------------------------------------------------------
Utah MEDIUM 2
--------------------------------------------------------------------------------
Vermont LOW 3
--------------------------------------------------------------------------------
Virginia MEDIUM 2
--------------------------------------------------------------------------------
Washington MEDIUM 2
--------------------------------------------------------------------------------
West Virginia LOW 3
--------------------------------------------------------------------------------
Wisconsin LOW 3
--------------------------------------------------------------------------------
Wyoming LOW 3
--------------------------------------------------------------------------------
TRADITIONAL HOME HEALTH SERVICES RATES:
RATES EFFECTIVE JANUARY 1, 2004 - DECEMBER 31, 2004
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICES HAVE BOTH VISIT AND HOURLY RATES.
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICE HAS HOURLY ONLY RATES.
Notes 3, 4 and 5 apply
-------------------------------------------------------------------
AREA 1 AREA 2 AREA 3
-------------------------------------------------------------------
VISIT HOUR VISIT HOUR VISIT HOUR
--------------------------------------------------------------------------------------------------------------
HOMEMAKER * * * * * *
--------------------------------------------------------------------------------------------------------------
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICE IS PRICED ON A PER DIEM BASIS.
Notes 3, 4 and 5 apply
-------------------------------------------------------------------
AREA 1 AREA 2 AREA 3
-------------------------------------------------------------------
PER DIEM PER DIEM PER DIEM
--------------------------------------------------------------------------------------------------------------
COMPANION/LIVE IN * * * * * *
--------------------------------------------------------------------------------------------------------------
NOTES:
*
*
*
*
*
*
*
*
HOME INFUSION RATES:
RATES EFFECTIVE JANUARY 1, 2004 - DECEMBER 31, 2004
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES EXCLUDE DRUGS. DRUGS ARE
PRICED AS A PERCENTAGE DISCOUNT OFF AWP (IF APPLICABLE), AND THERE IS NO PRICE
DIFFERENCE BETWEEN PRIMARY AND MULTIPLE THERAPIES
PRIMARY OR PRIMARY OR PRIMARY OR
MULTIPLE THERAPY MULTIPLE THERAPY MULTIPLE THERAPY
PER DIEM DISPENSING FEE DRUG DISCOUNT OFF AWP
-----------------------------------------------------------------------------------------------------------
Ancillary Drugs * * *
-----------------------------------------------------------------------------------------------------------
Biological Response Modifiers * * *
-----------------------------------------------------------------------------------------------------------
Cardiac (Inotropic) Therapy * * *
-----------------------------------------------------------------------------------------------------------
Chelation Therapy * * *
-----------------------------------------------------------------------------------------------------------
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES EXCLUDE DRUGS. DRUGS ARE
PRICED AS A PERCENTAGE DISCOUNT OFF AWP, AND THERE IS A PRICE DIFFERENCE BETWEEN
PRIMARY AND MULTIPLE ANTI-INFECTIVE THERAPIES
-----------------------------------------------------------------------------------------------------------
PER DIEM DRUG DISCOUNT OFF AWP
-----------------------------------------------------------------------------------------------------------
Anti-Infectives - Primary Anti-Infective * * *
-----------------------------------------------------------------------------------------------------------
Anti-Infectives - Multiple Anti-Infective * * *
-----------------------------------------------------------------------------------------------------------
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATE EXCLUDES DRUGS. DRUGS ARE
PRICED PER VIAL, AND THERE IS NO PRICE DIFFERENCE BETWEEN PRIMARY AND MULTIPLE
ANTI-INFECTIVE THERAPIES
-----------------------------------------------------------------------------------------------------------
PRIMARY OR
MULTIPLE THERAPY
PER DIEM COST OF DRUG
-----------------------------------------------------------------------------------------------------------
Flolan Therapy *
-----------------------------------------------------------------------------------------------------------
Flolan 0.5 mg vial *
-----------------------------------------------------------------------------------------------------------
Flolan 1.5 mg vial *
-----------------------------------------------------------------------------------------------------------
Flolan diluent vial *
-----------------------------------------------------------------------------------------------------------
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES INCLUDE DRUGS, AND THERE IS NO
PRICE DIFFERENCE BETWEEN PRIMARY AND MULTIPLE THERAPIES
-----------------------------------------------------------------------------------------------------------
PRIMARY OR
MULTIPLE THERAPY
PER DIEM
-----------------------------------------------------------------------------------------------------------
Enteral Therapy *
-----------------------------------------------------------------------------------------------------------
Hydration Therapy *
-----------------------------------------------------------------------------------------------------------
Total Parenteral Nutrition *
-----------------------------------------------------------------------------------------------------------
NOTES:
*
*
* Confidential treatment requested
*
*
*
*
*
THE FOLLOWING ARE FOR THE STATED ITEM ONLY. UNLESS OTHERWISE NOTED, NURSING,
SUPPLIES, ETC. ARE NOT INCLUDED.
-----------------------------------------------------------------------------------------------------------
Blood Transfusion per Unit (Tubing, Filters) *
-----------------------------------------------------------------------------------------------------------
Catheter Care Per Diem *
-----------------------------------------------------------------------------------------------------------
Midline Insertion (Catheter & Supplies) *
-----------------------------------------------------------------------------------------------------------
PICC Line Insertion (Catheter & Supplies) *
-----------------------------------------------------------------------------------------------------------
Blood Product *
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
FACTOR CONCENTRATES
-----------------------------------------------------------------------------------------------------------
Vial price Unit Price
-----------------------------------------------------------------------------------------------------------
FACTOR VII
-----------------------------------------------------------------------------------------------------------
Novoseven 1200MCG Vial *
-----------------------------------------------------------------------------------------------------------
Novoseven 4800MCG Vial *
-----------------------------------------------------------------------------------------------------------
Novoseven in 1200MCG or 4800MCG QTY *
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
FACTOR VIII (RECOMBINANT)
-----------------------------------------------------------------------------------------------------------
Recombinate *
-----------------------------------------------------------------------------------------------------------
Kogenate or Helixate *
-----------------------------------------------------------------------------------------------------------
Bioclate *
-----------------------------------------------------------------------------------------------------------
Helixate FS *
-----------------------------------------------------------------------------------------------------------
Kogenate FS *
-----------------------------------------------------------------------------------------------------------
Refacto *
-----------------------------------------------------------------------------------------------------------
Advate *
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
FACTOR VIII (MONOCLONAL)
-----------------------------------------------------------------------------------------------------------
Hemofil-M or A. R. C. Method M *
-----------------------------------------------------------------------------------------------------------
Monoclate P *
-----------------------------------------------------------------------------------------------------------
Monarc-M *
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
FACTOR VIII (OTHER)
-----------------------------------------------------------------------------------------------------------
Koate *
-----------------------------------------------------------------------------------------------------------
Humate *
-----------------------------------------------------------------------------------------------------------
Alphanate SDHT *
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
FACTOR IX (RECOMBINANT)
-----------------------------------------------------------------------------------------------------------
BeneFix *
-----------------------------------------------------------------------------------------------------------
The following may be charged if over and above routine on rental equipment:
----------------------------------------------------------------------------------------------------------------
E1350 E1350 2382 REPAIR OR NON-ROUTINE (E1350) * *
SERVICE REQUIRING SKILL OF A
TECH
----------------------------------------------------------------------------------------------------------------
GATEKEEPER PROGRAM ATTACHMENT
TO
MANAGED CARE ALLIANCE AGREEMENT
(CAPITATION)
PURPOSE
The terms and provisions of this Gatekeeper Program Attachment and the Agreement
are applicable to services rendered by MCA's Represented Providers to Gatekeeper
Program Participants. As used in this Program Attachment, Participant means a
Gatekeeper Program Participant. HMO Program Requirements shall apply to Covered
Services provided to Gatekeeper Program Participants.
I. DEFINITIONS
BASELINE ASSESSMENT means CIGNA's assessment of MCA's capacity to assume the
obligations described in the Agreement and this Program Attachment in
particular.
CAPITATION PAYMENT means a periodic payment for certain covered Home Care
Services that is made to MCA for each Participant who is a member of MCA's
Patient Panel.
CARVED OUT SERVICES means the following services: EXHIBIT XIX.
GATEKEEPER PROGRAM PARTICIPANT means a Participant, other than a HMO Program
Participant, enrolled in either (i) a product which includes fully insured
Standard HMO, Point of Service, or Gatekeeper PPO benefits and which product is
underwritten by a licensed insurance company based on an experience rating
methodology, or (ii) a self funded product which includes Standard HMO, Point of
Service, or Gatekeeper PPO benefits. This definition includes, but is not
limited to, Participants covered under FlexCare, True Access and Open Access
plans insured/administered by Connecticut General Life Insurance Company.
GATEKEEPER PPO means a product offered pursuant to a Service Agreement which
provides the Participant with an incentive to obtain Covered Services from
Participating Providers and which generally requires the Participant to obtain
an authorization from their Primary Care Physician in order to access such
Covered Services from Participating Providers.
HMO PROGRAM PARTICIPANT means a Participant enrolled in a non-governmental,
fully insured Standard HMO or Point of Service product and which product is
underwritten based on a community rating
methodology (i.e. community rating, community rating by class, adjusted
community rating by class). This definition includes, but is not limited to,
Participants covered under commercial HMO and Open Access plans issued by CIGNA.
MEDICAL DIRECTOR means a physician designated by CIGNA to manage Quality
Management and Utilization Management responsibilities, or that physician's
designee.
PATIENT PANEL means those Gatekeeper Program Participants for which MCA will
receive a global Capitation Payment for all Home Care Services rendered.
POINT OF SERVICE means a product offered pursuant to a Service Agreement which
allows the Participant to choose, in addition to Standard HMO benefits, a lower
level of benefits if the Participant receives Covered Services from (i) a
Participating Provider without a necessary authorization or (ii) from a
non-Participating Provider, at the time such services are sought.
PRIMARY CARE PHYSICIAN means a physician duly licensed to practice medicine who
is a Participating Provider with CIGNA to provide Covered Services in the field
of general medicine, internal medicine, family practice or pediatrics, and who
has agreed to provide primary care physician services to Participants in
accordance with HMO Program Requirements.
STANDARD HMO means a product offered pursuant to a Service Agreement where
Covered Services are available to Participants only from Participating
Providers, except in the case of an Emergency or with the prior authorization of
CIGNA or Affiliate where Covered Services are not available from Participating
Providers.
II. SERVICES AND COMPENSATION
A. COVERED HOME CARE SERVICES
1. MCA, through its Represented Providers, shall provide all Home
Care Services that are required by Participants in MCA's
Patient Panel, for which such Participants are eligible, in
accordance with the terms of this Agreement, this Gatekeeper
Program Attachment and HMO Program Requirements. The
compensation set forth in this Gatekeeper Program Attachment
shall be payment in full for Home Care Services rendered to
Gatekeeper Program Participants.
2. MCA, through its Represented Providers, shall arrange to
provide Medically Necessary Home Care Services to
Participants on a 24-hour per day, 7-day per week basis or
arrange with other qualified providers (which meet all CIGNA
and MCA credentialing requirements or other applicable
guidelines) to provide such Medically Necessary Home Care
Services to Participants. MCA shall require that such covering
providers (a) are Participating Providers (unless otherwise
agreed); (b) will not seek compensation from CIGNA for
services for which MCA receives compensation hereunder; and
(c) will not bill Participants for covered Home Care Services
under any circumstances except for (i) Copayments, Deductibles
or Coinsurance; (ii) the provision of services to a patient
who is not eligible to receive Home Care Services, including
but not limited to Participants that have reached their
benefit limit; and (iii) services provided to Participants
that are not Home Care Services. (d) will direct the
participant and/or the Represented Provider to obtain,
authorization from CIGNA prior to all hospitalizations or
referrals of Participants, except in Emergencies or for a
Pre-Qualified Maternity Stay or as otherwise required by law.
3. MCA through its Represented Providers shall provide Home Care
Services to all Participants in MCA's Patient Panel who are
eligible to receive Home Care Services.
4. Subject to the terms and condition of this Agreement, MCA
shall:
a. Arrange for the provision of Home Care Services to
Participants;
b. Require Represented Providers to accept, treat, and
otherwise render covered Home Care Services to
Participants in the same manner, in accordance with the
same standards, and with the same availability, as
offered to other like patients.
c. not close its network to any new Participants unless
CIGNA expressly consents to such closure;
5. In no event shall MCA or Represented Providers be required to
accept, treat, arrange for, or otherwise be obligated to
render Home Care Services to
Participants under this Agreement, even if medically
appropriate, if:
a. the provision of such services to Participant would pose
risk of bodily harm to the Participant or caregiver
personnel of Represented Provider;
b. the provision of such services to Participant would be
in violation of MCA's or Represented Provider's
applicable license requirements or other applicable
laws, and/or MCA policies, including but not limited to
admission and discharge policies or discrimination
policies;
c. MCA has not received the essential information to
process a referral;
d. Participant repeatedly rejects the provision of services
by a qualified Represented Provider selected by MCA
and/or CIGNA has mutually agreed.
e. MCA and Represented Providers shall not differentiate or
discriminate in the treatment of any Participant because
of race, color, national origin, ancestry, religion,
sex, marital status, sexual orientation, age, health
status, handicap or source of payment.
6. A CIGNA Participating Physician or CIGNA will notify MCA of
each referral for Covered Home Care Services for Participants
in its Patient Panel. MCA will provide or arrange to provide
for all Medically Necessary Covered Home Care Services for all
such Participants, in accordance with the authorization and
Utilization Management procedures set forth in Exhibit XVII.
7. MCA and CIGNA will jointly develop clinical pathways to
establish a plan of treatment for more difficult Participant
cases requiring Covered Home Care Services.
B. CAPITATION PAYMENTS
1. On or before the 15th day of each month, CIGNA or its designee
shall pay MCA a monthly Capitation Payment for each
Participant in MCA's Patient Panel. THE CAPITATION PAYMENT
SHALL BE COMPENSATION FOR ALL HOME CARE SERVICES PROVIDED TO
PARTICIPANTS IN THE PATIENT
PANEL EXCEPT FOR CARVED OUT SERVICES as referenced in exhibit
XIX. The monthly capitation rates are set forth in Exhibit A.
2. If a Participant is added to MCA's Patient Panel on or before
the 15th day of a month, a full month's Capitation Payment
will be due for that Participant for that month. There will be
no Capitation Payment due for Participants added after the
15th day of the month.
3. A full month's Capitation Payment will be due for the month of
termination of a Participant if the Participant terminates
after the 15th day of the month. If a Participant terminates
on or before the 15th day of a month, no Capitation Payment
will be due for the month of termination.
4. Where CIGNA, due to information delays, must make a
retroactive addition or deletion to MCA's Patient Panel, a
retroactive capitation adjustment shall be made concurrent
therewith subject to Section II.B.6 of this Gatekeeper Program
Attachment. In those instances where a Participant has been
retroactively deleted and has received services from MCA after
the effective date of deletion but prior to CIGNA informing
MCA of such deletion, MCA may bill participant for such
services rendered.
5. Any amendments of Capitation Payment rates, whether on an
annual basis or upon changes in benefit designs, shall be in
accordance with the amendment provisions of this Agreement, or
as otherwise agreed to in writing by the parties.
6. Capitation Adjustment Process:
a. Where CIGNA, due to information delays, must make
a retroactive addition or deletion to MCA's
Patient Panel, a retroactive capitation adjustment
shall not exceed 6 months, nor shall a retroactive
addition be added greater than 6 months.
b. Services rendered to participants prior to the
capitation period or following the capitation
period may be billed to CIGNA directly, and shall
be in accordance with Exhibit A of the Gatekeeper
Program Attachment - Fee For Service, attached
hereto. Standard
Coordination of Benefits rules shall be applied.
In the event that CIGNA is not identified as the
payor, MCA may bill participant directly for
services rendered during this time.
c. For those Participants in the Providers patient
panel, MCA shall have 120 days following the
receipt of the monthly capitation payment, to
notify CIGNA of any discrepancies in the
capitation payment. The discrepancies shall be
determined by the MCA through a review of the
electronic eligibility and capitation roster
documentation supplied by CIGNA. For all
eligibility or capitation roster data that
continues to be in a paper format, CIGNA will use
its best efforts to move to an electronic basis.
d. CIGNA shall investigate and validate capitation
errors and notify Gentiva within 60 days the
results of such investigation.
e. Any necessary adjustments to capitation shall be
made through the next scheduled capitation cycle.
f. All adjustments to capitation payments shall be
provided to MCA in writing, by CIGNA, no less than
30 days prior to the adjustment.
7. MCA guarantees that the Capitation Payment rates set forth in this
Attachment are effective from the Effective Date of this Agreement.
Notwithstanding the foregoing, the parties agree to meet to discuss
possible adjustments to the Capitation Payment rates should any of
the following circumstances occur during the term of this
Attachment:
a. treatments, products, supplies or equipment which
are excluded from Covered Home Care Services for
Gatekeeper Program Participants as of the
Effective Date on the basis that they are
considered Experimental are no longer considered
Experimental and become a Covered Home Care
Service for such Participants.
b. shifts in treatment sites for Covered Home Care
Service therapies occurring after the
Effective Date result in a material change to the
services which are Covered Home Care Services for
Gatekeeper Program Participants.
c. material changes are made to Gatekeeper Program
Participants' Service Agreements after the
Effective Date such that there is a material
change to those Home Care Services which are
Covered Home Care Services for such Participants.
d. utilization associated with material changes in
membership from which the base period was derived
after the Effective Date of this Agreement results
in a material change in Gatekeeper Program
Participant volume under this Agreement which has
a material financial impact on MCA.
e. Any such adjustment of Capitation Payment rates
shall only be made to the extent required to
address the change in costs directly resulting
from the above changed circumstance.
8. Leakage
a. On a quarterly basis, CIGNA will provide MCA with
leakage reports and the claims for Covered Home
Care Services submitted by providers that are not
Represented Provider's. MCA shall review the
quarterly leakage reports provided by CIGNA to
determine the need to contract with additional
providers so as to reduce the leakage. MCA shall
make a good faith effort to contract with
identified providers in order to reduce the amount
of leakage and it shall act promptly to contract
with those providers identified as appropriate in
order to reduce leakage. In an effort to better
manage leakage and overall utilization, CIGNA will
attempt to provide MCA, an overview of CIGNA's
administration of out of network claims for
Covered Home Care Services rendered to
Participants. CIGNA also agrees to review the
feasibility of adopting usual and customary
charges for Covered Home Care Services. MCA
commits to provide CIGNA all reasonable assistance
in the development and implementation of the
aforementioned process.
b. The Parties shall meet quarterly (each April,
July, October and January) to review the
utilization of Covered Home Health Services that
are not reimbursed on a capitated basis under this
Agreement for the purpose of identifying
opportunities to reduce this utilization and the
Parties shall cooperate in good faith to effect
such actions as they may agree upon to accomplish
this objective.
c. MCA shall meet with those referring physicians
identified by CIGNA to educate them regarding the
service provided by Represented Providers.
9. Insulin Pumps
Effective January 1, 2004, MCA will use all
reasonable commercial efforts to arrange for the
provision of Dana brand devices and supplies for
insulin pump orders on new referral
authorizations. For Participants reimbursed
according to a capitation methodology, MCA will
bill CIGNA a fee-for-service charge for a rate
differential for new non-Dana devices based upon a
CIGNA authorization. Supplies for insulin pumps
provided to participants reimbursed according to a
capitation methodology prior to 1/1/04 shall not
be subject to a fee for service charge or
consideration. For all other Participants, billing
for pumps and supplies shall be in accordance with
the appropriate fee schedules.
C. REPRESENTED PROVIDER PAYMENT/CLAIM AND ENCOUNTER DATA
Represented Providers shall be reimbursed for covered Home Care
Services rendered in accordance with the requirements set forth in
Exhibit B. MCA shall provide CIGNA with the claim and/or encounter
data as required in EXHIBITS II. & IV.
D. FINANCIAL REPORTS
1. MCA represents and warrants that the information set forth in
the CIGNA Baseline Assessment submitted to CIGNA by MCA prior
to the execution of this Agreement
is true and accurate. MCA shall promptly notify CIGNA of any
material changes in the information contained in such Baseline
Assessment within thirty (30) days of becoming aware of such
change.
2. MCA shall provide CIGNA with the following financial reports
on a timely basis: a) MCA's annual audited financial reports,
including, but not limited to, MCA's audited annual income
statement and balance sheet; b) quarterly financial reports
including an income statement, balance sheet and any other
reports identifying payments made to Represented Providers in
the preceding quarter and the incurred but not reported claims
as of the end of the preceding quarter in sufficient detail to
determine if payments have been made in accordance with this
Agreement and applicable law; c) any financial reports
required by applicable regulatory authorities; and d) such
other financial reports as are reasonably requested by CIGNA.
3. MCA shall notify CIGNA immediately of any of MCA's material
payment defaults, with respect to any of MCA's creditors if
MCA reasonably determines that any such payment defaults would
affect the provision of services to the Gatekeeper Program
Participant.
E. ASSIGNMENT AND IDENTIFICATION OF PARTICIPANTS
MCA shall comply with the requirements of and shall participate in
CIGNA's procedures with respect to the assignment and identification
of Participants as outlined in the HMO Program Requirements.
F. REIMBURSEMENT OF CIGNA EXPENDITURES
In the event that MCA does not arrange for the provision of Home
Care Services to Gatekeeper Program Participants as required by
Section II.A.1 through II.A.4 of this Gatekeeper Program Attachment,
Payor may arrange for and/or reimburse for such covered Home Care
Service and shall be entitled to recover from MCA any expenditure
made, or recover any cost incurred, including, but not limited to,
any reasonable administrative costs, in arranging or reimbursing
such covered Home Care Service. An amount sufficient to compensate
for such expenditures and costs may be deducted from the payments
due to MCA under this Agreement. CIGNA shall provide MCA with
written notice and full disclosure of costs incurred prior to any
such
deductions. This provision shall survive the termination of this
Agreement for a period of one year.
G. OTHER REQUIREMENTS
MCA and its Represented Providers shall use best efforts to
prescribe or authorize the substitution of generic pharmaceuticals
when appropriate and shall cooperate with CIGNA's formulary and HMO
Program Requirements regarding the substitution of generic
pharmaceuticals.
H. TRANSFERS
In a timeframe to be mutually agreed upon the parties, CIGNA will
provide to MCA all information reasonably required by MCA in order
to accomplish transition, but nothing herein shall require MCA to
purchase or assume payments for any durable medical equipment
(HME/DME), which has been previously placed with any CIGNA
Participant. CIGNA agrees to work with MCA to identify those
Participants that are in possession of HME/DME and for which CIGNA
has made payment on a rental basis for such DME/HME, and advise MCA
of the same. MCA shall be relieved of any obligation to assume
financial responsibility for DME/HME that MCA determines to be
DME/HME that is routinely purchased or converted to purchase, or
that does not meet CIGNA/MCA Durable Medical Equipment Guidelines
for Medical Necessity, and such DME/HME shall be converted to
purchase at CIGNA's expense prior to the transition of Participants
to MCA. However, MCA shall assume responsibility for the continued
maintenance of the DME/HME.
I. LIMITATIONS ON BILLING PARTICIPANTS
1. MCA hereby agrees and shall require its Represented Providers
to agree that in no event, including, but not limited to
non-payment by CIGNA, CIGNA's insolvency or breach of this
Agreement, shall MCA or any Represented Provider bill, charge,
collect a deposit from, seek compensation, remuneration or
reimbursement from, or have any recourse against Participants
or persons other than CIGNA or MCA for Home Care Services.
This provision shall not prohibit collection of (i) any
applicable Copayments, Deductibles or Coinsurance; (ii)
payments for services provided to a patient who is no longer
eligible to receive Home Care Services, including but not
limited to Participants that have reached their benefit limit;
or (iii) payments for services provided to Participants that
are not Home Care Services.
2. MCA further agrees that this provision shall survive the
termination of this Agreement regardless of the cause giving
rise to such termination and shall be construed to be for the
benefit of Participants, and that this provision supersedes
any oral or written agreement to the contrary now existing or
hereafter entered into between MCA or Represented Providers
and the Participant or persons acting on the Participant's
behalf.
3. Any modification, additions, or deletion to the provisions of
this hold harmless clause shall become effective on a date no
earlier than fifteen (15) days after the applicable state
regulatory agency has received written notice of such proposed
change.
4. MCA shall not charge, and MCA shall require that its
Represented Providers not charge, a Participant for a service
which is not Medically Necessary unless, in advance of the
provision of such service, the Participant is notified that
the service may not be covered and the Participant
acknowledges in writing that he or she shall be responsible
for payment of charges for such service.
J. UTILIZATION MANAGEMENT
MCA shall perform and comply with the Utilization Management
requirements set forth in Exhibits XVII and XXI.
K. CIGNA VISION/JOINT STEERING COMMITTEE
Any and all services rendered by MCA and its Represented Providers
under this Agreement shall be consistent with CIGNA's vision to
provide or arrange to provide quality health care at a reasonable
cost. Each party agrees to designate representatives, the number and
identity of which shall be agreed upon by the parties, to
participate in a Joint Steering Committee. The Joint Steering
Committee shall meet on a periodic basis, but no less frequently
than twice yearly, for the purpose of discussing the status of each
party's performance under this Agreement and to resolve any
complaints or problems with such performance.
L. GUARANTEE OF PROVISION OF COVERED SERVICES
1. Throughout the term of this Agreement and for six (6) months
following the termination of this Agreement, MCA shall secure
and maintain an irrevocable letter(s)
of credit in favor of CIGNA in an amount and form acceptable
to CIGNA, for all states in which such a letter of credit is
required by state law, regulation, statute, or as required by
state insurance/HMO regulators.
2. CIGNA shall have the right to make immediate demand for
payment under the irrevocable letter(s)of credit in the event
that MCA has failed to pay any amounts due and owing to CIGNA,
Represented Providers or others in accordance with MCA's
obligations under this Agreement.
3. Prior to each anniversary date of this Agreement, CIGNA will
evaluate the adequacy of the amount of the irrevocable
letter(s) of credit by reviewing any and all state laws,
regulations, and statutes. The amount of the irrevocable
letter(s) of credit required to be maintained by MCA for the
next contract year shall be a minimum of the amount equal to
the individual state requirements for the contract year.
4. At least thirty (30) days prior to each anniversary date of
this Agreement, CIGNA will advise MCA of the amount of the
irrevocable letter of credit required to be maintained by MCA
for the next contract year as calculated pursuant to
subsection 3 above. MCA shall secure an irrevocable letter of
credit in such amount and in a form acceptable to CIGNA prior
to the anniversary date.
M. PERFORMANCE FEEDBACK
1. CIGNA may provide feedback to MCA for MCA's own use in
assessing and enhancing Represented Providers' performance
with regard to quality of care, patient satisfaction and
efficient practice.
2. For purposes of providing helpful performance feedback, CIGNA
may perform telephone surveys and analyze medical costs of
Participants in MCA's Gatekeeper Patient Panel in comparison
with physician peers. CIGNA may also from time to time review
a sample of medical records and provide performance feedback
on past treatment.
N. REIMBURSEMENT FOR COVERED SERVICES RENDERED TO PARTICIPANTS OUTSIDE
OF PATIENT PANEL/OPT OUT SERVICES
In the event that MCA's Represented Providers render covered Home
Care Services to Participants outside of MCA's Patient Panel or
services covered pursuant to a Participant's opt out benefits, MCA
shall be reimbursed for such services at the rates established in
the Gatekeeper Program Attachment - Fee For Service, attached
hereto, less applicable Coinsurance, Copayments and Deductibles.
Only those charges for covered Home Care Services billed in
accordance with CIGNA's standard claim coding and bundling
methodology will be allowed.
O. REPRESENTED PROVIDER ACCEPTANCE OF PAYMENT.
MCA will indemnify and hold harmless Payors, CIGNA and its
Affiliates from any claim for payment in excess of the specified
amount for covered Home Care Services rendered to Participants by
each Represented Provider, unless the claim arises from a Payor's
wrongful failure to pay MCA for covered Home Care Services.
EXHIBIT A
GATEKEEPER PROGRAM ATTACHMENT - CAPITATION
SCHEDULE OF CAPITATION RATES
CAPITATION RATES EFFECTIVE 1/1/04 - 12/31/04
These are the capitation rates that apply to services rendered to Patient Panel
Participants enrolled in Gatekeeper Programs. A "Gatekeeper Program" means (i) a
product that includes fully insured Standard HMO, Point of Service, or
Gatekeeper PPO benefits and which is underwritten by a licensed insurance
company based on an experience rating methodology, or (ii) a self funded product
which includes Standard HMO, Point of Service, or Gatekeeper PPO benefits. This
definition includes, but is not limited to, Participants covered under FlexCare
plans insured/administered by Connecticut General Life Insurance Company.
Gentiva
HomeHealth,
Infusion,
DME/HME
Capitation
Rates PMPM
All Gatekeeper (FlexCare) Capitated Affiliates *
* Confidential treatment requested
EXHIBIT B
GATEKEEPER PROGRAM ATTACHMENT - CAPITATION
PAYMENT RESPONSIBILITIES
(MCA distributes payments)
MCA shall pay Represented Providers for covered Home Care Services rendered
hereunder in accordance with this Exhibit and the terms of the Agreement.
1. MCA shall pay Represented Providers for covered Home Care Services
rendered hereunder in accordance with CIGNA's payment administration
standards and any other standards set forth in applicable laws and
regulations, including but not limited to, ERISA. MCA agrees to reimburse
Represented Providers for covered Home Care Services within the time
frames set forth in applicable law AND the time frames specified in MCA's
provider agreements with its Represented Providers. CIGNA may withhold all
or a portion of MCA's reimbursement if MCA repeatedly fails to reimburse
Represented Providers on a timely basis. MCA's obligations with regard to
payment for covered Home Care Services rendered hereunder shall survive
the termination of this Agreement with respect to any covered Home Care
Services rendered by Represented Providers during the term of this
Agreement and with respect to any covered Home Care Services Represented
Providers are obligated by this Agreement to provide after termination of
this Agreement.
2. With reasonable notice, MCA agrees to allow CIGNA representatives to
conduct on-site reviews of MCA's payment administration facilities. Such
reviews shall be for the sole purpose of evaluating MCA's performance of
its payment responsibilities under this Agreement, including, but not
limited to, ascertaining the quality and timeliness of MCA's payment
processing. MCA agrees to correct any deficiencies detected during such
reviews within sixty (60) days of CIGNA's submission of a written report
detailing such deficiencies.
3. If CIGNA determines that MCA cannot meet its payment administration
obligations set forth herein, CIGNA may elect to assume responsibility for
such activities. If CIGNA elects to assume responsibility for such
activities, the rates set forth in this Agreement shall be renegotiated by
the parties to reflect such change in responsibility. MCA shall cooperate
and provide to CIGNA any information necessary to perform such activities.
4. MCA shall be responsible for the production of all applicable tax
reporting documents (e.g., 1099s) for Represented Providers. Such
documents shall be produced in a format and within the time frames set
forth in applicable state and federal laws and/or regulations.
5. MCA shall require that Represented Providers submit claims for covered
Home Care Services rendered to Participants in other Programs for which
CIGNA or Payor has retained payment responsibility directly to CIGNA in
accordance with the applicable Program Attachment and Program
Requirements.
6. MCA shall produce explanations of payments for Represented Providers with
respect to those services rendered by Represented Providers to
Participants for which an explanation of benefits is customarily provided
or legally required. Such explanations of payments shall be in a format
and contain data elements acceptable to CIGNA.
7. MCA shall develop and deliver training programs for Represented Providers
which outline MCA's billing and reimbursement processes. MCA shall make
best efforts to ensure that Represented Providers avoid submitting
requests for payment to CIGNA for those covered Home Care Services
rendered to Participants for whom MCA has payment responsibility.
8. MCA shall provide CIGNA with encounter data showing all services provided
to each Participant for whom MCA receives Capitation Payments in a format
and frequency mutually acceptable to both parties, but no less frequently
than monthly. CIGNA may elect to withhold payment of MCA's compensation if
MCA fails to submit encounter data in accordance with this Agreement.
EXHIBIT C
GATEKEEPER PROGRAM ATTACHMENT - CAPITATION
UTILIZATION MANAGEMENT
(partial delegation of utilization management)
1. MCA will assist CIGNA in the implementation of its Utilization Management
program. Any Utilization Management program activities performed by MCA
shall be in accordance with CIGNA's standards, NCQA standards or the
standards of another appropriate accrediting body designated by CIGNA, and
Program Requirements. MCA shall maintain any licensure required in
connection with such activities.
2. MCA shall prepare such periodic reports or other data as reasonably
requested by CIGNA relating to its Utilization Management activities in a
format acceptable to CIGNA.
3. MCA shall not materially modify its Utilization Management activities
without CIGNA's prior approval.
4. CIGNA shall have the right to audit MCA's Utilization Management
activities upon reasonable prior notice. MCA shall cooperate with any such
audits.
5. If CIGNA determines that MCA cannot meet its Utilization Management
obligations set forth herein, CIGNA may elect to assume responsibility for
such activities. If CIGNA elects to assume responsibility for such
activities, the rates set forth in this Agreement shall be renegotiated by
the parties to reflect such change in responsibility. MCA shall cooperate
and provide to CIGNA any information necessary to perform such activities.
6. All referrals shall be to Represented Providers, except where an Emergency
requires otherwise, in other cases where the referral is specifically
authorized by CIGNA's Medical Director or his/her designee or MCA's
medical director, if permitted by CIGNA to make such authorizations, or as
otherwise required by law. Except in an Emergency or for a Pre-Qualified
Maternity Stay or in those instances where prior authorization is
prohibited by federal or state laws or regulations, MCA shall require all
Represented Providers to obtain authorization from CIGNA or MCA, if
permitted by CIGNA to make such authorizations, prior to hospital
admission of any Participant or outpatient surgical procedures.
7. The parties acknowledge and agree that CIGNA or Payor shall have final
decision making authority with regard to appeals of utilization management
decisions.
GATEKEEPER PROGRAM ATTACHMENT
TO
MANAGED CARE ALLIANCE AGREEMENT
(FEE-FOR-SERVICE)
PURPOSE
The terms and provisions of this Gatekeeper Program Attachment and the Agreement
are applicable to services rendered by MCA's Represented Providers to Gatekeeper
Program Participants. As used in this Program Attachment, Participant means a
Gatekeeper Program Participant. HMO Program Requirements shall apply to covered
Home Care Services provided to Gatekeeper Program Participants.
I. DEFINITIONS
GATEKEEPER PROGRAM PARTICIPANT means a Participant, other than a HMO Program
Participant, enrolled in either (i) a product which includes fully insured
Standard HMO, Point of Service, or Gatekeeper PPO benefits and which product is
underwritten by a licensed insurance company based on an experience rating
methodology, or (ii) a self funded product which includes Standard HMO, Point of
Service, or Gatekeeper PPO benefits. This definition includes, but is not
limited to, Participants covered under FlexCare, True Access Open Access and
Open Access Plus plans insured/administered by Connecticut General Life
Insurance Company.
GATEKEEPER PPO means a product offered pursuant to a Service Agreement which
provides the Participant with an incentive to obtain Covered Services from
Participating Providers and which generally requires the Participant to obtain
an authorization from their Primary Care Physician in order to access such
Covered Services from Participating Providers.
HMO PROGRAM PARTICIPANT means a Participant enrolled in a non-governmental,
fully insured Standard HMO or Point of Service product and which product is
underwritten based on a community rating methodology (i.e. community rating,
community rating by class, adjusted community rating by class). This definition
includes, but is not limited to, Participants covered under commercial HMO or
Open Access and Open Access Plus plans issued by CIGNA.
MEDICAL DIRECTOR means a physician designated by CIGNA to manage Quality
Management and Utilization Management responsibilities, or that physician's
designee.
PATIENT PANEL means those Gatekeeper Program Participants who have designated or
have otherwise been assigned to one or more of MCA's
Represented Providers as the primary source for certain Covered Services
pursuant to a Service Agreement or HMO Program Requirements, and for which MCA
will be reimbursed on a fee-for-service basis.
POINT OF SERVICE means a product offered pursuant to a Service Agreement which
allows the Participant to choose, in addition to Standard HMO benefits, a lower
level of benefits if the Participant receives Covered Services from (i) a
Participating Provider without a necessary authorization or (ii) from a
non-Participating Provider, at the time such services are sought.
PRIMARY CARE PHYSICIAN means a physician duly licensed to practice medicine who
is a Participating Provider with CIGNA to provide Covered Services in the fields
of general medicine, internal medicine, family practice or pediatrics, and who
has agreed to provide primary care physician services to Participants in
accordance with HMO Program Requirements.
STANDARD HMO means a product offered pursuant to a Service Agreement where
Covered Services are available to Participants only from Participating
Providers, except in the case of an Emergency or with the prior authorization of
CIGNA or Affiliate where Covered Services are not available from Participating
Providers.
II. PARTIES' OBLIGATIONS
A. SERVICES
1. MCA, through its Represented Providers, shall provide all Home
Care Services that are required by Participants in MCA's
Patient Panel, for which such Participants are eligible, in
accordance with the terms of this Agreement, this Gatekeeper
Program Attachment and HMO Program Requirements. The
compensation set forth in this Gatekeeper Program Attachment
shall be payment in full for Home Care Services rendered to
Gatekeeper Program Participants.
2. MCA, through its Represented Providers, shall arrange to
provide Medically Necessary Home Care Services to Participants
on a 24-hour per day, 7-day per week basis or arrange with
other qualified providers (which meet all CIGNA and MCA
credentialing requirements or other applicable guidelines) to
provide such Medically Necessary Home Care Services to
Participants. MCA shall require that such covering providers
(a) are Participating Providers (unless otherwise agreed); (b)
will not seek compensation from CIGNA for services for which
MCA receives compensation hereunder; and (c)
will not bill Participants for covered Home Care Services
under any circumstances except for (i) Copayments, Deductibles
or Coinsurance; (ii) the provision of services to a patient
who is not eligible to receive Home Care Services, including
but not limited to Participants that have reached their
benefit limit; and (iii) services provided to Participants
that are not Home Care Services. (d) will direct the
participant and/or the Represented Provider to obtain,
authorization from CIGNA prior to all hospitalizations or
referrals of Participants, except in Emergencies or for a
Pre-Qualified Maternity Stay or as otherwise required by law.
3. MCA through its Represented Providers shall provide Home Care
Services to all Participants in MCA's Patient Panel who are
eligible to receive Home Care Services.
4. Subject to the terms and condition of this Agreement, MCA
shall:
(a) Arrange for the provision of Home Care Services to
Participants;
(b) Require Represented Providers to accept, treat,
and otherwise render covered Home Care Services to
Participants in the same manner, in accordance
with the same standards, and with the same
availability, as offered to other like patients.
(c) not close its network to any new Participants
unless CIGNA expressly consents to such closure;
In no event shall MCA or Represented Providers be required to accept,
treat, arrange for, or otherwise be obligated to render Home Care
Services to Participants under this Agreement, even if medically
appropriate, if:
(a) the provision of such services to Participant
would pose risk of bodily harm to the Participant
or caregiver personnel of Represented Provider;
(b) the provision of such services to Participant
would be in violation of MCA's or Represented
Provider's applicable license requirements or
other applicable laws, and/or MCA policies,
including but not limited to admission and
discharge policies or discrimination policies;
(c) MCA has not received the essential information to
process a referral;
(d) Participant repeatedly rejects the provision of
services by a qualified Represented Provider
selected by MCA and/or CIGNA as mutually agreed.
MCA and Represented Providers shall not differentiate or discriminate
in the treatment of any Participant because of race, color, national
origin, ancestry, religion, sex, marital status, sexual orientation,
age, health status, handicap or source of payment.
5. Except in an Emergency or for a Pre-Qualified Maternity Stay
or in those instances where prior authorization is prohibited
by federal or state laws or regulations, prior authorization
by a Participant's Primary Care Physician or CIGNA as
prescribed by HMO Program Requirements is required for payment
of covered Home Care Services rendered to Participants. All
referrals shall be to Participating Providers, except where an
Emergency requires otherwise, in other cases where Medical
Director specifically authorizes the referral or except as
required by law.
B. COMPENSATION AND BILLING
1. Reimbursement for Home Care Services rendered by Represented
Providers shall be in accordance with the following rates,
less applicable Copayments, Deductibles or Coinsurance:
a. Reimbursement for Home Care services arranged by MCA and
rendered by Represented Providers shall be in accordance
with Exhibit A attached hereto.
b. MCA will indemnify and hold harmless Payors, CIGNA and
its Affiliates from any claim for payment in excess of
the specified amounts for Home Care Services rendered to
Participants by each Represented Provider, unless the
claim arises from a Payor's wrongful failure to pay MCA
for covered Home Care Services.
2. Payors shall agree to deduct any Copayments, Deductibles, or
Coinsurance required by the Service Agreement from payment
due. Deduction for the Copayment, Deductible or
Coinsurance shall be determined on the basis of the contracted
rate.
3. Reimbursement for Home Care Services rendered hereunder shall
be made by CIGNA or its designees to MCA. MCA shall bill for
covered Home Care Services according to the following:
a. MCA shall submit claims on the appropriate claim form
for all covered Home Care Services within one hundred
twenty (120) days of the date those services are
rendered. Claims received after this one hundred twenty
(120) day period may be denied for payment. MCA shall
submit claims to the location described in applicable
Program Requirements.
b. Any amount owing under this Agreement shall be paid
within thirty (30) days after receipt of a complete
claim, unless additional required information is
requested within the thirty (30) day period, or the
claim involves coordination of benefits, except as
otherwise provided in this Agreement.
4. MCA and its Represented Providers shall not charge a
Participant for a service which is not Medically Necessary
unless, in advance of the provision of such service, the
Participant is notified that the service may not be covered
and the Participant acknowledges in writing that he or she
shall be responsible for payment of charges for such service.
5. MCA will and shall require its Represented Providers to look
solely to Payor for compensation for covered Home Care
Services except for Copayments, Deductibles or Coinsurance.
MCA agrees, for itself and on behalf of each Represented
Provider, that whether or not there is any unresolved dispute
for payment, under no circumstances will MCA or any
Represented Provider directly or indirectly make any charges
or claims, other than for Copayments, Deductibles or
Coinsurance against any Participants or their representatives
for covered Home Care Services and that this provision
survives termination of this Agreement for services rendered
prior to such termination. This provision shall not prohibit
collection of (i) any applicable Copayments, Deductibles, or
Coinsurance, (ii) payments for services provided to a patient
who is no longer eligible to receive Home Care Services,
including but not limited to Participants that have reached
their benefit limit (iii) payment for services provided to
Participants, which are not Home Care Services. This
paragraph is to be interpreted for the benefit of Participants
and does not diminish the obligation of Payor to make payments
to Represented Providers according to the terms of this
Agreement.
6. The rates set forth herein shall apply to all services
rendered to Participants in the Gatekeeper Program.
7. Only those charges for Home Care Services billed in accordance
with CIGNA's standard claim coding and bundling methodology
will be allowed.
C. OTHER REQUIREMENTS
MCA and its Represented Providers shall use best efforts to prescribe or
authorize the substitution of generic pharmaceuticals when appropriate and
shall cooperate with CIGNA's formulary and HMO Program Requirements
regarding the substitution of generic pharmaceuticals.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
EXHIBIT A
GATEKEEPER PROGRAM ATTACHMENT - FEE FOR SERVICE
REIMBURSEMENT FOR OTHER SERVICES
RATE AREA DESIGNATIONS:
--------------------------------------------------------------------------------
STATE RATE AREA RATE DESIGNATION
--------------------------------------------------------------------------------
Alabama LOW 3
--------------------------------------------------------------------------------
Alaska HIGH 1
--------------------------------------------------------------------------------
Arizona MEDIUM 2
--------------------------------------------------------------------------------
Arkansas LOW 3
--------------------------------------------------------------------------------
California HIGH 1
--------------------------------------------------------------------------------
Colorado MEDIUM 2
--------------------------------------------------------------------------------
Connecticut MEDIUM 2
--------------------------------------------------------------------------------
Delaware LOW 3
--------------------------------------------------------------------------------
District of Columbia HIGH 1
--------------------------------------------------------------------------------
Florida MEDIUM 2
--------------------------------------------------------------------------------
Georgia MEDIUM 2
--------------------------------------------------------------------------------
Hawaii HIGH 1
--------------------------------------------------------------------------------
Idaho LOW 3
--------------------------------------------------------------------------------
Illinois HIGH 1
--------------------------------------------------------------------------------
Indiana LOW 3
--------------------------------------------------------------------------------
Iowa LOW 3
--------------------------------------------------------------------------------
Kansas LOW 3
--------------------------------------------------------------------------------
Kentucky LOW 3
--------------------------------------------------------------------------------
Louisiana MEDIUM 2
--------------------------------------------------------------------------------
Maine LOW 3
--------------------------------------------------------------------------------
Maryland MEDIUM 2
--------------------------------------------------------------------------------
Massachusetts HIGH 1
--------------------------------------------------------------------------------
Michigan LOW 3
--------------------------------------------------------------------------------
Minnesota LOW 3
--------------------------------------------------------------------------------
Mississippi LOW 3
--------------------------------------------------------------------------------
Missouri MEDIUM 2
--------------------------------------------------------------------------------
Montana LOW 3
--------------------------------------------------------------------------------
Nebraska LOW 3
--------------------------------------------------------------------------------
Nevada LOW 3
--------------------------------------------------------------------------------
New Hampshire LOW 3
--------------------------------------------------------------------------------
New Jersey MEDIUM 2
--------------------------------------------------------------------------------
New Mexico LOW 3
--------------------------------------------------------------------------------
New York MEDIUM 2
--------------------------------------------------------------------------------
North Carolina MEDIUM 2
--------------------------------------------------------------------------------
North Dakota MEDIUM 2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Ohio MEDIUM 2
--------------------------------------------------------------------------------
Oklahoma LOW 3
--------------------------------------------------------------------------------
Oregon MEDIUM 2
--------------------------------------------------------------------------------
Pennsylvania MEDIUM 2
--------------------------------------------------------------------------------
Rhode Island MEDIUM 2
--------------------------------------------------------------------------------
South Carolina MEDIUM 2
--------------------------------------------------------------------------------
South Dakota LOW 3
--------------------------------------------------------------------------------
Tennessee MEDIUM 2
--------------------------------------------------------------------------------
Texas HIGH 1
--------------------------------------------------------------------------------
Utah MEDIUM 2
--------------------------------------------------------------------------------
Vermont LOW 3
--------------------------------------------------------------------------------
Virginia MEDIUM 2
--------------------------------------------------------------------------------
Washington MEDIUM 2
--------------------------------------------------------------------------------
West Virginia LOW 3
--------------------------------------------------------------------------------
Wisconsin LOW 3
--------------------------------------------------------------------------------
Wyoming LOW 3
--------------------------------------------------------------------------------
TRADITIONAL HOME HEALTH SERVICES:
RATES EFFECTIVE JANUARY 1, 2004 - DECEMBER 31, 2004
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICES HAVE BOTH VISIT AND HOURLY RATES.
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICE HAS HOURLY ONLY RATES.
Notes 3, 4 and 5 apply
AREA 1 AREA 2 AREA 3
------------------------------------------
VISIT HOUR VISIT HOUR VISIT HOUR
------------------------------------------
HOMEMAKER * * * * * *
--------------------------------------------------------------------------------
THE FOLLOWING TRADITIONAL HOME HEALTH SERVICE IS PRICED ON A PER DIEM BASIS.
Notes 3, 4 and 5 apply
AREA 1 AREA 2 AREA 3
--------------------------------------------------
PER PER PER
DIEM DIEM DIEM
--------------------------------------------------
COMPANION/LIVE IN * * * * * *
--------------------------------------------------------------------------------
NOTES:
*
*
*
*
*
*
*
*
* Confidential treatment requested
HOME INFUSION RATES:
RATES EFFECTIVE JANUARY 1, 2004 - DECEMBER 31, 2004
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES EXCLUDE DRUGS. DRUGS ARE
PRICED AS A PERCENTAGE DISCOUNT OFF AWP (IF APPLICABLE), AND THERE IS NO PRICE
DIFFERENCE BETWEEN PRIMARY AND MULTIPLE THERAPIES
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES EXCLUDE DRUGS. DRUGS ARE
PRICED AS A PERCENTAGE DISCOUNT OFF AWP, AND THERE IS A PRICE DIFFERENCE BETWEEN
PRIMARY AND MULTIPLE ANTI-INFECTIVE THERAPIES
PER DIEM DRUG DISCOUNT OFF AWP
---------------------------------------------------------
Anti-Infectives - Primary Anti-Infective * * *
----------------------------------------------------------------------------------------------------------------
Anti-Infectives - Multiple Anti-Infective * * *
----------------------------------------------------------------------------------------------------------------
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATE EXCLUDES DRUGS. DRUGS ARE
PRICED PER VIAL, AND THERE IS NO PRICE DIFFERENCE BETWEEN PRIMARY AND MULTIPLE
ANTI-INFECTIVE THERAPIES
PRIMARY OR
MULTIPLE THERAPY
PER DIEM COST OF DRUG
---------------------------------------------------------
Flolan Therapy *
------------------------------------------------------------------------------------------------------------
Flolan 0.5 mg vial *
------------------------------------------------------------------------------------------------------------
Flolan 1.5 mg vial *
------------------------------------------------------------------------------------------------------------
Flolan diluent vial *
------------------------------------------------------------------------------------------------------------
* Confidential treatment requested
THE FOLLOWING HOME INFUSION THERAPY SERVICE RATES INCLUDE DRUGS, AND THERE IS NO
PRICE DIFFERENCE BETWEEN PRIMARY AND MULTIPLE THERAPIES
PRIMARY OR
MULTIPLE THERAPY
PER DIEM
---------------------------------------------------------
Enteral Therapy *
------------------------------------------------------------------------------------------------------------
Hydration Therapy *
------------------------------------------------------------------------------------------------------------
Total Parenteral Nutrition *
------------------------------------------------------------------------------------------------------------
NOTES:
*
*
*
*
*
*
*
THE FOLLOWING ARE FOR THE STATED ITEM ONLY. UNLESS OTHERWISE NOTED, NURSING,
SUPPLIES, ETC. ARE NOT INCLUDED.
------------------------------------------------------------------------------------------------------------
Blood Transfusion per Unit (Tubing, Filters) *
------------------------------------------------------------------------------------------------------------
Catheter Care Per Diem *
------------------------------------------------------------------------------------------------------------
Midline Insertion (Catheter & Supplies) *
------------------------------------------------------------------------------------------------------------
PICC Line Insertion (Catheter & Supplies) *
------------------------------------------------------------------------------------------------------------
Blood Product *
------------------------------------------------------------------------------------------------------------
* Confidential treatment requested
FACTOR CONCENTRATES
Vial price Unit Price
-----------------------------------------------------------------------------------------------------------
FACTOR VII
-----------------------------------------------------------------------------------------------------------
Novoseven 1200MCG Vial *
-----------------------------------------------------------------------------------------------------------
Novoseven 4800MCG Vial *
-----------------------------------------------------------------------------------------------------------
Novoseven in 1200MCG or 4800MCG QTY *
-----------------------------------------------------------------------------------------------------------
FACTOR VIII (RECOMBINANT)
-----------------------------------------------------------------------------------------------------------
Recombinate *
-----------------------------------------------------------------------------------------------------------
Kogenate or Helixate *
-----------------------------------------------------------------------------------------------------------
Bioclate *
-----------------------------------------------------------------------------------------------------------
Helixate FS *
-----------------------------------------------------------------------------------------------------------
Kogenate FS *
-----------------------------------------------------------------------------------------------------------
Refacto *
-----------------------------------------------------------------------------------------------------------
Advate *
-----------------------------------------------------------------------------------------------------------
FACTOR VIII (MONOCLONAL)
-----------------------------------------------------------------------------------------------------------
Hemofil-M or A. R. C. Method M *
-----------------------------------------------------------------------------------------------------------
Monoclate P *
-----------------------------------------------------------------------------------------------------------
Monarc-M *
-----------------------------------------------------------------------------------------------------------
FACTOR VIII (OTHER)
-----------------------------------------------------------------------------------------------------------
Koate *
-----------------------------------------------------------------------------------------------------------
Humate *
-----------------------------------------------------------------------------------------------------------
Alphanate SDHT *
-----------------------------------------------------------------------------------------------------------
FACTOR IX (RECOMBINANT)
-----------------------------------------------------------------------------------------------------------
BeneFix *
-----------------------------------------------------------------------------------------------------------
FACTOR IX (MONOCLONAL/HIGH PURITY)
-----------------------------------------------------------------------------------------------------------
Mononine *
-----------------------------------------------------------------------------------------------------------
Alphanine *
-----------------------------------------------------------------------------------------------------------
FACTOR IX (OTHER)
-----------------------------------------------------------------------------------------------------------
Konyne - 80 *
-----------------------------------------------------------------------------------------------------------
Proplex T *
-----------------------------------------------------------------------------------------------------------
Bebulin *
-----------------------------------------------------------------------------------------------------------
Profilnine SD *
-----------------------------------------------------------------------------------------------------------
ANTI-INHIBITOR COMPLEX
-----------------------------------------------------------------------------------------------------------
Autoplex-T *
-----------------------------------------------------------------------------------------------------------
Subsidiary* Jurisdiction of Incorporation
----------- -----------------------------
CCI-ASDS, Inc. Massachusetts
Commonwealth Home Care, Inc. Massachusetts
Gentiva CareCentrix, Inc. Delaware
Gentiva CareCentrix (Area One) Corp. Delaware
Gentiva CareCentrix (Area Two) Corp. Delaware
Gentiva CareCentrix (Area Three) Corp. Delaware
Gentiva Certified Healthcare Corp. Delaware
Gentiva Health Services (Certified), Inc. Delaware
Gentiva Health Services Holding Corp. Delaware
Gentiva Health Services IPA, Inc. New York
Gentiva Health Services (USA), Inc. Delaware
Gentiva Services of New York, Inc. New York
The IV Clinic, Inc. Texas
The IV Clinic II, Inc. Texas
The IV Clinic III, Inc. Texas
Kimberly Home Health Care, Inc. Missouri
New York Healthcare Services, Inc. New York
OHS Service Corp. Texas
Partnersfirst Management, Inc. Florida
QC-Medi-New York, Inc. New York
Quality Care-USA, Inc. New York
Quality Managed Care, Inc. Delaware
Quantum Care Network, Inc. Massachusetts
Quantum Health Resources, Inc. Delaware
QHR Southwest Business Trust Pennsylvania
QHR Southwest Holdings Corp. California
*All subsidiaries do business under the name "Gentiva Health Services" and/or
"Gentiva" except for Gentiva Health Services (USA), Inc., which does business
under the name "Gentiva Rehab Without Walls."
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-3 (No. 333-41284) and in the Post Effective Amendment No. 1
on Form S-8 to Form S-4 (No.333-88663) of Gentiva Health Services, Inc. of our
report dated February 6, 2004, except for Note 9, as to which the date is
February 27, 2004, relating to the consolidated financial statements and
financial statement schedule, which appears in this Form 10-K.
PricewaterhouseCoopers LLP
Stamford, Connecticut
March 1, 2004
EXHIBIT 31.1
CERTIFICATIONS
I, Ronald A. Malone, certify that:
1. I have reviewed this annual report on Form 10-K of Gentiva Health
Services, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: March 1, 2004
/s/ Ronald A. Malone
--------------------
Ronald A. Malone
Chairman and Chief Executive Officer
EXHIBIT 31.2
CERTIFICATIONS
I, John R. Potapchuk, certify that:
1. I have reviewed this annual report on Form 10-K of Gentiva Health
Services, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused
such disclosure controls and procedures to be designed under
our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this
report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(c) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the
registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial
reporting which are reasonably likely to adversely affect
the registrant's ability to record, process, summarize and
report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal control over financial reporting.
Date: March 1, 2004
/s/ John R. Potapchuk
---------------------
John R. Potapchuk
Senior Vice President and
Chief Financial Officer
Furnished (but not filed) as an exhibit to the periodic report
identified in the Certification.
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Gentiva Health Services, Inc. (the
"Company") on Form 10-K for the period ended December 28, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Ronald
A. Malone, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
Date: March 1, 2004 /s/ Ronald A. Malone
--------------------
Ronald A. Malone
Chief Executive Officer
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
Furnished (but not filed) as an exhibit to the periodic report
identified in the Certification.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Gentiva Health Services, Inc. (the
"Company") on Form 10-K for the period ended December 28, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, John R.
Potapchuk, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
Date: March 1, 2004 /s/ John R. Potapchuk
---------------------
John R. Potapchuk
Chief Financial Officer
A signed original of this written statement required by Section 906 has been
provided to the Company and will be retained by the Company and furnished to the
Securities and Exchange Commission or its staff upon request.
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