IMG Bulletin September 17, 2008 As you may be aware, providers in Tulare County recently received a letter from the California Medical Association (CMA) and the Tulare County Medical Society (TCMS) in regards to the upcoming changes with Anthem Blue Cross Medi-Cal. In particular, the letter discusses contracting options and hi-lights portions of Independence Medical Group’s (IMG) contract that they (CMA and TCMS) feel you should pay special attention to. We would like to take this opportunity to address the concerns that are mentioned. We thank CMA and TCMS for its unbiased review of IMG’s contract. CMA & TCMS Comment #1 The agreement references several manuals, programs and policies. Physicians are advised to obtain copies of and carefully review the following: Quality Management Program §1.26 and §5.2 Utilization Management Program §1.30, §5.3 Pharmaceutical Formulary §2.16 IMG Response Our policies and procedures, which are standard for managed care companies, have all been reviewed and approved by Anthem Blue Cross. These policies and procedures are VERY large (several hundred pages) and are available for review in our Visalia office. Formulary information is provided by Anthem Blue Cross, not IMG. If you need formulary information, we will gladly assist in obtaining it from Anthem Blue Cross.

CMA & TCMS Comment #2 §2.1, Accessibility of Care, requires physician to comply with Group’s criteria regarding access to care, including waiting and response times, as outlined in Exhibit C. Physicians are advised to review this criteria and ensure that the practice can comply with its requirements. IMG Response The “Accessibility of Care” criteria listed are the standards that IMG, and any other contracted IPA, is required by Anthem Blue Cross to follow. We understand that there are exceptions. If we are made aware of the exceptions, we will happily work with the provider on a solution. 218 N. Conyer St., Suite B; Visalia, CA 93291 www.imgipa.com Phone: 559-802-1105 Fax: 559-750-4081

CMA & TCMS Comment #3 §2.2, Availability and Provision of Services, requires the physician to comply with "any of Group’s or Payor’s performance programs, including, but not limited to, customer service, quality of service, utilization requirements, health education, utilization of Group’s hospitalist program, use of Preferred Panel as directed by Group, disease management, and any new programs implemented by Group and/or Payors, as well as any new Product Lines developed by Payors." Physicians are advised to obtain a copy of and review each of these programs. This provision also requires physicians to participate with Independent Medical Group’s contracted health plans on an "all product" basis. IMG Response Our performance programs are developed to ensure we are in compliance with our contractual obligations with Anthem Blue Cross. Our policies and procedures are available for review in our Visalia office. They have all been approved by Anthem Blue Cross. In addition, a revised Exhibit B is available for download on our web site www.imgipa.com.

CMA & TCMS Comment #4 §2.5.2, Coverage, states that in the event the physician refers a patient to another provider to provide services that Provider is contractually obligated to provide as a capitated provider, the Provider is " solely responsible to pay any Associate Provider." IMG Response This is not an issue as IMG is not paying capitation in Tulare County. This is one of the reasons we advocate fee-for-service. This language is only in IMG’s contract in the event a provider prefers capitation.

CMA & TCMS Comment #5 §2.8, Encounter Reporting, requires physician to submit to IPA electronically encounter data for all services within 30 days from the date of service. Such reporting must be in accordance with HEDIS. Physicians are advised to review this criteria and ensure that the practice can comply with its requirements. IMG Response This is not an issue as IMG is not paying capitation in Tulare County. This is one of the reasons we advocate fee-for-service. This language is only in IMG’s contract in the event a provider prefers capitation.

218 N. Conyer St., Suite B; Visalia, CA 93291 www.imgipa.com Phone: 559-802-1105 Fax: 559-750-4081

CMA & TCMS Comment #6 §3.1.1, Compensation Formula, authorizes the IPA to deduct from the physician’s capitation payments in the event another physician provides the services. IMG Response This is not an issue as IMG is not paying capitation in Tulare County. This is one of the reasons we advocate fee-for-service. This language is only in IMG’s contract in the event a provider prefers capitation.

CMA & TCMS Comment #7 §3.6, Eligibility, requires physician to verify eligibility prior to providing services. The provision further states that "if the Plan terminates, or retroactively terminates, an Enrollee’s coverage, then the Enrollee is ultimately responsible for reimbursement of rendered Contracted Services, and Provider will look to Enrollee for reimbursement of said services." California law prohibits health plans and their contracting medical groups/IPAs from rescinding an authorization or verification of eligibility after the physician has provided the service in good faith and pursuant to the verification of eligibility (Health & Safety Code §13671.8). IMG Response IMG fully complies with AB 1324 and will not retroactively rescind authorizations.

CMA & TCMS Comment #8 §9.2, Amendments, states that the Group will provide 30 days notice of an amendment to the contract and that if Provider does not contest the proposed amendment within 30 days, the change shall become effective. California law requires health plans and their contracting medical groups/IPAs to provide at least 45 days prior notice of a material change to a contract (Health & Safety Code §1375.7). Further, plans that contact with physicians for Medi-Cal on a fee-for-service basis must provide a minimum of ninety (90) days notice of its intent to make a material change to the contract. IMG Response IMG’s contract states that changes due to “legislative, regulatory or legal requirements” will be “effective immediately on the effective date thereof”. Laws often are enacted after IMG’s contract is published. IMG will update these time-frames on the next contract revision.

218 N. Conyer St., Suite B; Visalia, CA 93291 www.imgipa.com Phone: 559-802-1105 Fax: 559-750-4081

CMA & TCMS Comment #9 Compensation Exhibit, Section I and II, Physicians are advised to review the proposed compensation carefully to determine if the fees proposed cover the physician’s cost to provide these services. With regards to fee schedules based on Medicare or a percentage of RBRVS, physicians are advised to seek clarification as to the year Medicare utilized, if the area GPCI is applied, and if the fee schedule is updated on an annual basis consistent with Medicare. For immunizations and injections, physicians should determine if the fee schedule proposed covers the physician’s cost to acquire, store, and insure the immunizations and injections. IMG Response We are happy to go over the details of the compensation exhibit directly with the provider.

CMA & TCMS Comment #10 Compensation Exhibit, Section IV, states that the contracted fee schedule "may be adjusted by Group upon providing Provider with 30 days prior written notice of any such modification to such fees. California law requires health plans and their contracting medical groups/IPAs to provide 45 days prior notice of a material change to a contract (Health & Safety Code §1375.7). Plans that contact with physicians for Medi-Cal on a fee-for-service basis must provide a minimum of ninety (90) days notice of its intent to change a material change to the contract. IMG Response IMG’s contract states that changes due to “legislative, regulatory or legal requirements” will be “effective immediately on the effective date thereof”. IMG will update these time-frames on the next contract revision.

CMA & TCMS Comment #11 Exhibit A, Primary Care Services and Compensation, includes the services that are to be provided by primary care physicians. Physicians should review this information carefully to ensure that he/she can provide the listed services. IMG Response Exhibit A lists services that a Primary Care Physician can provide if he/she chooses, he/she does not have to provide everything on the list. As stated in the exhibit, services provided depend upon the abilities of the provider.

218 N. Conyer St., Suite B; Visalia, CA 93291 www.imgipa.com Phone: 559-802-1105 Fax: 559-750-4081

CMA & TCMS Comment #12 Exhibit B, Plans, includes a list of health plans contracted with Independence Medical Group. Physicians are advised that by becoming a contracted provider with the IPA, they will also become participating providers with the health plans listed in Exhibit B, including Aetna HMO, Blue Cross HMO, Blue Cross Medi-Cal, Blue Shield, Health Net HMO, Health Net Medi-Cal, Health Net Seniority Plus, PacifiCare HMO and Secure Horizons. IMG Response In Tulare County, IMG is only contracted with Anthem Blue Cross Medi-Cal. A revised exhibit reflecting this can be found on our website, www.imgipa.com. The other listed health plans are only contracted with IMG in Kern County. We thank the CMA and TCMS for their review of our contract. As always, if you have any questions, please feel free to contact us at 559-802-1105. You can also contact us through our web site www.imgipa.com or email [email protected]. We are available to meet with you at your convenience and address any additional questions or concerns that you may have. Independence Medical Group 218 N. Conyer Street, Suite B Visalia, CA 93291 Phone: 559-802-1105 Fax: 559-750-4081 Email: [email protected] Web: www.imgipa.com

218 N. Conyer St., Suite B; Visalia, CA 93291 www.imgipa.com Phone: 559-802-1105 Fax: 559-750-4081