90-1226 Path Co. RESOLUTION
AUTHORIZING EXECUTION OF AN AGREEMENT WITH
PATH CO. , DIB/A PATH HEALTH NETWORK
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN,
ILLINOIS, that Larry L. Rice, City Manager, and Dolonna Mecum,
City Clerk, be and are hereby authorized and directed to
execute an agreement on behalf of the City of Elgin with Path
Co. , d/b/a Path Health Network for a preferred provider
organization plan, a copy of which is attached hereto and made
a part hereof by reference.
s/ George VanDeVoorde
George VanDeVoorde, Mayor
Presented: December 26, 1990
Adopted: December 26, 1990
Vote: Yeas 5 Nays 0
Recorded:
Attest:
s/ Dolonna Mecum
Dolonna Mecum, City Clerk
A
PATH AGREEMENT
This AGREEMENT effective the 1st day of January, 1991 between City of Elgin
hereinafter referred to as the "Corporation, and PATH Co.,d/b/a/PATH Health Network, an
Illinois Business Corporation hereinafter referred to as "PATH".
WITNES SETH:
WHEREAS, PATH possesses a license to conduct business as a preferred provider
organization and is organized to arrange for the provision of cost effective health care services for
Participants in contracting the Corporation's health benefit plans; and
WHEREAS, the Corporation desires to offer Participants the health care services provided
through PATH.
NOW,THEREFORE, in consideration of the mutual promises,covenants and agreements
hereinafter contained, the parties hereto agree as follows:
I. TERM
This Agreement shall be effective from the date that it is entered into and shall remain in full force
and effect for an initial term ending December 31, 1990. Thereafter,this Agreement shall be
automatically extended for successive one (1) year terms unless terminated as hereinafter set forth.
All terms and provisions of this Agreement shall continue in full force and effect during the
extension period(s), except for those contained in subparagraph 3.1C which shall be subject to
modification by mutual agreement.
II. TERMINATION
2.1 A. Either party may terminate this Agreement upon the conclusion of the initial term or upon
the conclusion of any extended one (1) year term by giving at least ninety (90)days prior
written notice.
B. This Agreement also may be terminated by the parties hereto as follows:
1. In the event of the dissolution of PATH or the Corporation, this Agreement shall
be automatically terminated without notice,and,except as provided herein, the
parties shall thereupon be relieved from any and all obligations hereunder,
2. Either party may terminate this Agreement in the event of the insolvency of the
other party, the filing of a petition in bankruptcy by or against the other party, the
appointment of a receiver for the other party or an assignment for the benefit of
creditors. Such termination shall be effective immediately upon the giving of
written notice of termination;
3. If either party shall fail to perform any of the obligations imposed by this
Agreement,or breaches any of the terms of this Agreement,except those covered
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in Section V hereof, the other party shall have the right to cancel this Agreement
by written notice of its election to do so, and such cancellation shall be effective
immediately upon the giving of such notice,except as set forth below. In the event
such notice is based upon a default hereunder by the party receiving such notice,
and if the party receiving such notice shall fail within thirty (30)days to correct the
default specified in such notice or,where any such default is incapable of
correction, to tender reasonable compensation therefor,this Agreement shall
terminate forthwith. Neither party shall be deemed to be in default by reason of
delay or failure due to force majeure;
4. Immediately,upon written notice from either party,in the event of the passage of a
law or promulgation of a regulation or an action or investigation by any regulatory
body which would materially prohibit or adversely affect this Agreement, the
relationship between the parties,or the operation of either party with regard to the
subject of this Agreement.
5. Upon the termination of all or substantially all agreements between PATH and
PREFERRED PROVIDERS.
C. Any termination of this Agreement shall not release the Corporation or PARTICIPANTS
from paying any sum which may then be due and owing to PREFERRED PROVIDERS
or from the obligation to pay PATH the portion of the administrative fee accruing prior to
such termination.
III. OBLIGATIONS OF THE PARTIES
The Corporation agrees to:
3.1 A. Provide PATH a written list of all health benefit plans that will participate under this
Agreement. Corporation will provide information regarding the plan structure,
specifically, deductibles and coinsurance percentages.
B. Instruct its claims administrator:
1 . That claims must be paid within thirty (30)days following receipt of a properly
completed claims payment form for nondisputed claims or the PATH negotiated
fees are not applicable;
2. To prepare an EOB (explanation of benefits) that contains the allowed charges per
the negotiated rate,the amount paid, and the balance due that the employee must
pay to the provider;
3. To provide PATH with a paid health claims data tape as necessary for utilization
and financial analysis.
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C. Pay to PATH:
1. An implementation fee of Five Hundrerd and 00/100($500.00)Dollars.
Implementation includes:
• PATH brochure
• PATH Preferred Provider Directory
• ID stickers if necessary
• Computer set-up
• Review of existing health benefit plan
• One on-site employee meeting
• Service one month prior to service date for employee inquiries.
2. A service fee equal to twenty five (25%)percent of savings per month (savings are
defined as the difference between billed charges and PATH's negotiated rates with
its participating providers).
3. Incurred travel expenses as previously approved by Corporation.
4. Incurred shipping expense for communication materials as previously approved by
Corporation.
5. All other costs and expenses that are directly related to the operation of PATH as
previously approved by the Corporation including the cost of directories on an
annual basis at $1.25 each.
3.2 PATH agrees to:
A. Obtain from preferred providers agreement to accept the negotiated rates as payment in
full for services rendered to employees and allow preferred providers to bill employees
only for applicable deductibles,coinsurance or services not covered by the benefit plan.
The negotiated rates shall be used to determine the maximum amount payable regardless
if the Corporation is primary or secondary when considering coordination of benefits;
B. Provide Corporation with a monthly update of preferred provider roster,including
additions,deletions,and modifications;
C. Provide a quarterly report that summarizes the nature and costs of delivered services.
This report will be available not later than forty-five(45)days after the end of each
quarter,
D. Provide the necessary personnel,by direct employment or independent contractor
agreement, to the extent necessary and appropriate for the operation of the Program;
however,in no event shall PATH engage in the corporate practice of medicine;
E. Obtain professional and public liability insurance coverage with a One Million Dollars
($1,000,000.00)per occurrence limit and a One Million Dollar($1,000,000.00) annual
aggregate limit with respect to PATH's personnel.
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IV. GENERAL COVENANTS AND CONDITIONS
4.1 Billing
A. By the fifth (5th)workday of each month,PATH shall forward to the Corporation an
invoice for the fees described under paragraph 3.1(e)(ii) applicable to the next calendar
month payable by the Corporation and for the costs and expenses incurred by PATH
during the previous calendar month under paragraphs 3.1(e)(iii)-(v). If any amount so
invoiced is not paid within thirty (30)days after receipt of said invoice,the outstanding
balance shall bear simple interest from the due date of said invoice at a rate of eighteen
percent (18%)per annum or lower if state law so requires until such amount is paid in
full. Any amounts thereafter received by PATH shall be applied first to interest accrued
but unpaid and then to the oldest unpaid invoice.
B. The parties agree that if the Corporation fails to pay any such invoice by the fifteenth
(15th) day of the third calendar month following the month the services are provided,
that failure shall be a material breach of this Agreement by the Corporation which shall
give PATH the right to terminate this Agreement by written notice as provided in
paragraph 4.12 hereof. Any such termination of this Agreement by PATH shall not
affect the Corporation's obligation to pay amounts due PATH under this Agreement,but
no such payment shall affect the effectiveness of such termination.
4.2 Confidentiality
The Corporation agrees that it shall not, without the prior written consent of PATH, use,
reproduce,disclose or provide the third parties any confidential documents or information
obtain from or relating to PATH,including but not limited to the following:
A. All documents and other materials,including the proposal,memoranda,manuals,
handbooks, and audio or visual recordings of PATH;
B. All methods,techniques and procedures utilization by PATH; and
C. All trademarks, tradenames and service marks of PATH. Upon termination of this
Agreement by either party for any reason, the Corporation shall immediately return to
PATH any and all of the above items, without retaining copies thereof, and shall remain
obligated not to use,reproduce,disclose or provide such items or information to third
parties; and
D. Negotiated preferred provider rates.
4.3 Medical Records
PATH and the Corporation acknowledge and agree that all medical records developed shall
be the property of PATH. The medical records developed through the Program shall not be
disclosed to the Corporation's personnel without the employee's prior written consent. The
Corporation and PATH agree to comply with all state and federal laws and regulations
governing the release of these records. The parties further agree that they shall indemnify
each other for any and all claims, liability or expenses (including reasonable attorney's fees)
incurred as a result of the wrongful release of these records by their respective employees
and/or agents.
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4.4 Service Marks
The Corporation acknowledges that The PATH Health Network (or any other name
proprietary to PATH)is a proposed service mark belonging to PATH, and that during the
term of this Agreement only, the Corporation may utilize such in connection with the
program. The manner and appropriateness of the Corporation's use is at all times subject to
the prior approval of PATH. The Corporation shall not cause any documents to be printed
bearing such name without an accompanying mark indicating that such name is proprietary to
PATH and without first obtaining the consent of PATH. The Corporation's use of this
service mark shall inure to the benefit of PATH,and shall not give the Corporation any right
or title therein, and any common law service mark rights acquired as a consequence of the
Corporation's use thereof are hereby assigned exclusively to PATH. At the termination of
this Agreement,the Corporation shall immediately terminate its use of the name.
4.5 PATH Compliance with Regulations
PATH shall conduct its activities and operations in accordance with all rules and regulations
of the Corporation as disclosed to PATH, and applicable state and other governmental
authorities.
4.6 Governmental Regulations
The Corporation shall, at the Corporation's sole expense and cost,comply with the
requirements of all county, municipal, state,federal and other applicable governmental
authorities now in force,or which may be thereafter in force,pertaining to the performance
of this Agreement and shall faithfully observe all municipal and county ordinances, state and
federal statutes now in force or which may hereafter be in force.
4.7 Circumstance Excusing Performance
This Agreement is subject to force majeure,and in the event that either party hereto shall be
prevented from the performance of any act required hereunder by reason of strikes,lockouts,
labor troubles, inability to procure materials, failure of power,fire, winds,Act of God,
restrictive governmental laws or regulations,riots,insurrections,war or other reason of a
like nature not reasonably within the control of the party not performing any of its obligations
under the terms of this Agreement, then performance of such obligation shall be excused for
the period of non-performance and the period for the performance of any such obligations
shall be extended for an equivalent period.
4.8 Inclusion of All Terms and Conditions in Writing
This Agreement and the Exhibits attached hereto embody the whole agreement of the parties.
There are no promises,terms,conditions,or obligations other than those contained herein;
and this Agreement shall supersede all previous communications,representations,or
agreements,either verbal or written,between the parties hereto.
4.9 Written Modification
There shall be no modification of this Agreement,except in writing and executed with the
same formalities of this Agreement.
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4.10 Indemnification
A. PATH expressly agrees to assume the risk of liability for and shall indemnify and hold
harmless the Corporation,its officers, agents, and employees from and against all
claims,causes of actions,damages, suits,judgments,liabilities,losses,and expenses
including damages for the injury or death of any person or persons and damages to any
property resulting from the performance of this Agreement by PATH and due to the
negligence of PATH, its employees and agents.
B. The Corporation expressly agrees to assume the risk of liability for and shall indemnify
and hold harmless PATH,its officers, directors, agents,and employees from and against
all claims, causes of action, damages, suits,judgments,liabilities, losses, and expenses
including damages for the injury or death of any person or persons and damages to any
property resulting from the performance of this Agreement by the Corporation and due to
the negligence of the Corporation,its employees or agents.
4.11 Independent Contractors
PATH and the Corporation are independent entities. Nothing in this Agreement shall be
construed or be deemed to create a relationship of employer and employee or principal and
agent or any relationship other than that of independent parties contracting with each other
solely for the purpose of carrying out the provisions of this Agreement.
4.12 Waiver of Breach
The waiver by a party of a breach of any provision of this Agreement by the other party shall
not operate or be construed as a waiver of any subsequent breach of the same or any other
provision hereof by that party.
4.13 Severability
The provisions of this Agreement shall be severable, and the invalidity of any of such
provisions shall not affect the validity of the other provisions.
4.14 Law
The validity,interpretation and performance of this Agreement shall be determined in
accordance with the laws of the State of Illinois.
4.15 Headings
The headings contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
4.16 Notices
All notices required to be given hereunder shall be made in writing and shall be deemed
sufficiently given if delivered personally or mailed by registered or certified mail addressed
as follows:
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To CORPORATION: City of Elgin
Mr. Olufemi Folarin
Human Resources Director
150 Dexter Court
Elgin,Illinois 60120
To PATH: PATH Health Network
205 W. Touhy Avenue, Suite 200
Park Ridge,Illinois 60068
Attn: Stephen R.Tiwald,President
Copy to: Michael S. McCarthy,Esq.
General Counsel
1775 Dempster
Park Ridge,Illinois 60068
or to such other address as such party shall notify the other in writing as above provided. All
notices sent by mail shall be effective three days from the date of deposit in the U.S.
Mail.
IN WITNESS WHEREOF,each of the parties has caused this Agreement to be duly executed and
delivered as of the day and year first above written.
PATH Co.,d/b/a PATH Health Network A :A•T:
An Illinois Busi ss Corporation / (Seal)
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