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VWN eMedical Group Practice Management Agreement

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Legal Agreement for medical doctors drafted by Arent Fox

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Page 1: VWN eMedical Group Practice Management Agreement

COMPREHENSIVE PRACTICE MANAGEMENT AGREEMENT

This AGREEMENT (hereinafter the “Agreement”) is made and entered into as of this the ____ day of ____________ 2002 by and among _______________________, M.D., a licensed physician, (hereinafter “PHYSICIAN”) and VWN eMedical Group, LLC, a Georgia Limited Liability Company (hereinafter by name or as “MSO”).

WHEREAS, PHYSICIAN is engaged in the private practice of medicine;

WHEREAS, PHYSICIAN is fully licensed to practice medicine or has a telemedical license in the state(s) of _________________, _______________, _______________.

WHEREAS, PHYSICIAN believes that obtaining professional marketing, administrative, and operating assistance will enable him/her to concentrate more fully on the practice of medicine and, therefore, enable him/her to provide high quality medical services more efficiently;

WHEREAS, the MSO operates one or more web sites that allow visitors who seek physician services to submit requests for on-line medical consultations with licensed physicians in connection with certain medical conditions;

WHEREAS, the MSO is able to efficiently and cost effectively arrange for the exchange of information between the web site visitor and the PHYSICIAN;

WHEREAS, the MSO is able to facilitate in a cost effective and efficient manner the dispensing of prescription medications that may be prescribed in connection with PHYSICIAN’s exercise of his/her medical judgment to issue a prescription through certain U.S. licensed pharmacies;

WHEREAS, the MSO has developed various systems for management, billing and collection, strategic planning and marketing of medical practices and desires to provide PHYSICIAN the services of a management services organization;

WHEREAS, PHYSICIAN desires the MSO to provide him/her with marketing services through MSO’s web sites (the “Marketing Services”);

WHEREAS, PHYSICIAN desires the MSO to provide him/her with billing and collection, strategic planning and other administrative services, as well as services related to facilitation of prescription fulfillment for his/her patients (collectively, the “Management Services”);

WHEREAS, the MSO is willing to provide the Marketing Services and the Management Services to PHYSICIAN on the terms and conditions set forth in this Agreement; and

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WHEREAS, none of the services rendered by PHYSICIAN to patients nor the prescription medications shall be billed to Medicare, Medicaid or any federal or state funded health benefit program.

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

I. ENGAGEMENT AND AUTHORITY OF MSO.

1.1 Engagement.

(a) PHYSICIAN hereby engages the MSO to provide, and the MSO hereby agrees to provide the Marketing Services to PHYSICIAN subject to the terms and conditions hereof.

(b) PHYSICIAN hereby agrees to engage the MSO to provide, and the MSO hereby agrees to provide, the Management Services to PHYSICIAN subject to the terms and conditions hereof.

1.2 PHYSICIAN’s Control over Professional Services. The parties acknowledge and agree that PHYSICIAN, personally or through any of his/her professional employees or agents, shall have complete control over the provision of all professional medical services provided by PHYSICIAN, including any decision regarding whether a patient should receive a prescription medication that such patient requests.

1.3 Independent Contractor Status. In performing its duties hereunder, MSO and its employees and agents shall at all times be and remain, and at all times act as an independent contractor to the PHYSICIAN, and MSO is not and shall not act as a partner, agent or employee of, or in joint venture with the PHYSICIAN. No party shall have the authority to bind the other party or parties, contractually or otherwise, except as specifically authorized in this Agreement. In addition, MSO and its agents shall not have any claim under this Agreement, or otherwise, against the PHYSICIAN for vacation pay, sick leave, unemployment insurance, worker’s compensation, disability benefits or employee benefits of any kind.

1.4 Other Professionals. No provision of this Agreement shall limit the MSO’s right, authority or ability under applicable law to contract with other physician’s or professional corporations, or to contract with or enter into any other arrangement with any healthcare professional to provide Marketing Services and Management Services.

II. RESPONSIBILITIES OF THE MSO.

2.1 General. The MSO shall be responsible for the following:

(a) Provision of Management and Marketing Services. The MSO shall maintain, update and monitor one or more Internet websites as it may deem appropriate, to promote PHYSICIAN’s services and to facilitate the PHYSICIAN’s on-line medical consultations for the prescription treatment of certain medical conditions. Visitors to the web

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site who desire treatment shall be able to complete an on-line medical history questionnaire developed by physicians that is intended to elicit sufficient information for a licensed physician to determine whether to prescribe Celebrex (for arthritis), Viagra (for impotence), Propecia (for male pattern baldness), Xenical and Phentermine (for obesity) and such other medication as the MSO and the PHYSICIAN may from time to time determine are appropriate to offer, consistent with applicable laws and regulations.

(b) The MSO shall forward to PHYSICIAN for professional evaluation medical history questionnaires submitted on-line through MSO’s web site. Where the PHYSICIAN’s evaluation of the questionnaire indicates that, in the exercise of his medical judgment, a prescription medication would be appropriate treatment, the PHYSICIAN will issue a prescription to a U.S. licensed pharmacy for fulfillment and shipping to the patient. In the event the PHYSICIAN, in his/her professional judgment, believes more information is necessary to evaluate the patients condition, the PHYSICIAN shall request such additional information from the patient. MSO agrees to provide the communication technology to PHYSICIAN to facilitate the information exchange described above.

(c) Provision of Management Services. The MSO shall provide the Management Services described in more detail below. The MSO shall have the right to delegate any of its duties or obligations, or subcontract any of its services, or any portion thereof under this Agreement.

2.2 Management and Operation. The MSO’s Management Services shall include the following:

(a) Marketing Services. The MSO shall, in consultation with PHYSICIAN, design and implement an advertising and marketing program to promote the services of PHYSICIAN in a manner that both parties deem to be appropriate. The Marketing Services shall be aimed at attracting customers to use the services of PHYSICIAN and to request certain prescription medications, as appropriate.

(b) Fulfillment Services. The MSO shall arrange for and facilitate the prescriptions issued by PHYSICIAN to be filled and dispensed through a duly licensed U.S. pharmacy.

(c) Billing and Collection Services. PHYSICIAN hereby contracts with the MSO to bill, collect and deposit, and the MSO shall be responsible for billing and collecting and depositing, in its accounts payments for all medical services rendered by PHYSICIAN to his/her patients (including negotiations with and collections from insurance companies, HMOs, PPOs and other third-party payors (other than Medicare or Medicaid or any federal or state funded health benefit program)). MSO will collect these fees on an assignment from PHYSICIAN.

(d) Collection of Revenues and Payment of Expenses. All monies collected on behalf of PHYSICIAN by the MSO pursuant to Section 2.3(c) shall be deposited directly into an MSO bank account (the “MSO Account”), which shall be in the MSO’s name, and the MSO shall make all appropriate disbursements therefrom. MSO shall account for and track all monies collected on behalf of PHYSICIAN that are deposited into the MSO Account. From the funds

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collected and deposited in the MSO Account, PHYSICIAN agrees to pay MSO a management fee for (i) expenses for MSO’s provision of Management Services and (ii) the compensation due for facilitating the fulfillment of prescription drugs and (iii) compensation for MSO’s Marketing Services. PHYSICIAN agrees to compensate MSO for its services pursuant to Section 4.1.

III. OBLIGATIONS OF PHYSICIAN.

During the term of this Agreement, PHYSICIAN shall be responsible for the following:

3.1 Professional Responsibilities of PHYSICIAN. PHYSICIAN shall be responsible for (i) the employment and professional supervision of all medical staff; (ii) the provision of all medical services to patients of PHYSICIAN; (iii) the adoption of all professional and clinical policies and protocols; and (iv) all other acts with respect to the operation of PHYSICIAN’s practice which constitute the practice of medicine under the laws and regulations of the state(s) in which PHYSICIAN is licensed.

3.2 Standards. Medical services provided by PHYSICIAN shall be consistent with the applicable statutes and regulations of the [State of Georgia], the prevailing community standards of care in PHYSICIAN locale, federal laws and regulations, and the policies and procedures of the PHYSICIAN’s practice. Deficiencies discovered in the performance of any personnel or in the quality of medical care provided in connection with PHYSICIAN’s professional services furnished to patients identified to PHYSICIAN by MSO under this Agreement shall be reported immediately to the MSO by PHYSICIAN, and appropriate steps shall be taken by PHYSICIAN at once to remedy such deficiencies. Failure to remedy such deficiencies in a timely fashion shall provide MSO with grounds to assert a breach of this Agreement.

3.3 Personal Conduct. PHYSICIAN shall cause each of his employees to avoid all personal acts, habits and usages that might in any way injure, directly or indirectly, the employee’s professional reputation or that of any other employee of PHYSICIAN or PHYSICIAN himself/herself or that might be detrimental to any interest of the MSO.

3.4 Disclosure. During the term of this Agreement, PHYSICIAN agrees to comply, to the extent the same are applicable to PHYSICIAN, with any ownership and other disclosure requirements under Federal and [Georgia] law.

3.5 Assignment of Fees. All sums to which PHYSICIAN may be entitled for medical services rendered by PHYSICIAN to patients who request PHYSICIAN’s services through the MSO shall be, and hereby are, to the extent permitted by applicable law, assigned to the MSO and shall be directly deposited in an MSO Account. PHYSICIAN shall take such other actions as may be necessary to confirm MSO’s rights as set forth herein.

3.6 The PHYSICIAN will review the current medical history questionnaire and will determine if it is adequate to afford the PHYSICIAN the medically necessary information to allow PHYSICIAN to make an independent judgment regarding the on-line prescribing of prescriptive medication. Any changes, modifications, additions or deletions from or to the medical history questionnaire will be provided to PHYSICIAN prior to its use or

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implementation. PHYSICIAN agrees to review any revisions to the medical history questionnaire and notify MSO in writing of any proposed changes.

3.7 Prescriptions. After carefully reviewing the patient’s medical history questionnaire, and after exercising his/her professional judgment, PHYSICIAN shall be responsible for prescribing all medications indicated for treatment of the patient’s reported medical condition. On behalf of PHYSICIAN and his/her patient, the MSO will direct all issued prescriptions to a licensed U.S. pharmacy for fulfillment and delivery to the patient.

3.8 Billing. PHYSICIAN shall be responsible for submitting timely and accurate patient care services information to the MSO for billing purposes. Such patient care services information shall be submitted in a format prescribed by the MSO. PHYSICIAN agrees that MSO is not able to account properly for distribution of patient care service revenues unless PHYSICIAN submits timely and accurate patient care services information to MSO. Documentation, electronic or hard copy form, shall be transmitted by PHYSICIAN to MSO within two (2) weeks of date of service to be considered timely under this Agreement.

3.9 Medical Practice and Administration in Compliance With MSO’s Policies and Procedures. PHYSICIAN hereby agrees that to enable MSO to furnish its Management and Marketing Services in an economical and appropriate fashion, he/she and his/her employees shall comply with the administrative and general policies and procedures outlined by the MSO, which the MSO in its sole discretion may update from time to time.

3.10 Insurance Coverages. PHYSICIAN shall provide, or shall arrange for the provision of, and shall maintain throughout the entire term of this Agreement, professional liability/malpractice insurance coverage on PHYSICIAN and PHYSICIAN’s practice in the minimum amount of One Million and No/100 Dollars ($1,000,000.00) per occurrence and Three Million and No/100 Dollars ($3,000,000.00) annual aggregate within ten (10) business days of signing this Agreement. PHYSICIAN shall provide to the MSO written documentation evidencing such insurance coverage. PHYSICIAN shall, at its sole cost and expense, pay the premium costs of all such professional liability insurance coverage during the term of this Agreement. PHYSICIAN shall provide, or shall arrange for the provision, of and shall maintain throughout the entire term of this Agreement, workers’ compensation insurance coverage on PHYSICIAN and each of his employees and agents, including, but not limited to, all Physicians and medical staff, in the amounts required by law. PHYSICIAN shall provide to the MSO written documentation evidencing such insurance coverage. PHYSICIAN shall, at his sole cost and expense, pay the premium costs of all such workers’ compensation and other applicable insurance coverage. MSO shall not be responsible for any such insurance costs as a result of the Management Services or Marketing Services it provides under this Agreement to PHYSICIAN.

IV. FINANCIAL TERMS.

4.1 Management Fee. PHYSICIAN shall pay MSO a Management Fee equal to all sums remaining in the MSO Account after payment of (i) expenses that are MSO’s responsibility as set forth herein, (ii) expenses related to the fulfillment of prescriptions, the purchase price of the prescription medications, and related shipping costs, and (iii) compensation to PHYSICIAN of fifty thousand and 00/100 ($50,000) dollars per annum, paid in equal installments as set forth

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attached hereto. MSO will not withhold any taxes due and payable to PHYSICIAN.

4.2 Responsibility for Expenses. (a) MSO shall be responsible for the expenses of providing its Management Services as set forth in Section 2.2 herein above; and (b) PHYSICIAN shall be responsible for all other expenses associated with the operation of PHYSICIAN’s practice.

V. INDEMNIFICATION.

5.1 PHYSICIAN hereby agrees to indemnify, defend and hold harmless the MSO, and each of the MSO’s officers, directors, shareholders, members, agents and employees, from and against any and all claims, demands, losses, liabilities, actions, lawsuits and other proceedings, judgments and awards, and costs and expenses (including reasonable attorneys’ fees), arising directly or indirectly, in whole or in part, out of any matter related to any breach by PHYSICIAN of this Agreement or any act or omission by PHYSICIAN in its performance of this Agreement, including but not limited to the negligence of PHYSICIAN or PHYSICIAN’s employees. PHYSICIAN shall immediately notify the MSO of any lawsuits or actions, or of any threat thereof, that may become known to PHYSICIAN that might adversely affect any interest of PHYSICIAN or the MSO whatsoever.

VI. REPRESENTATIONS AND WARRANTIES.

6.1 Representations and Warranties of PHYSICIAN. PHYSICIAN makes the following representations and warranties to the MSO:

(a) PHYSICIAN is currently licensed to practice medicine in the State(s) of without restriction and has not been and is not currently subject to any disciplinary or corrective action, a copy of such licenses) is/are attached hereto, and PHYSICIAN agrees to remain current in his/her licensure and shall provide MSO with copies of all renewals of such licenses;

(b) PHYSICIAN has and maintains all federal and state narcotics and controlled substances numbers and licenses necessary to practice medicine, and PHYSICIAN agrees to remain current in his/her licensure and shall provide MSO with copies of all renewals of such licenses;

(c) PHYSICIAN is not in breach of any contract, obligation, or covenant that would affect his ability to perform hereunder and, as a result of entering into this Agreement, will not be in breach any such contract, obligation or covenant.

(d) (i) Except as stated in the attached Schedule 6.1(d), PHYSICIAN’s license to practice medicine in any state or to prescribe controlled substances has never been restricted, suspended or revoked, (ii) PHYSICIAN has not ever been reprimanded, sanctioned or disciplined by any licensing board or state or local medical society or specialty board; (iii) PHYSICIAN has never been denied membership or reappointment to membership on the medical staff of any hospital, has never had hospital medical staff membership or clinical privileges suspended, restricted or revoked and has never voluntarily resigned from any medical

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staff or given up any staff privileges while a disciplinary action or investigation has been pending; (iv) there has never been entered against PHYSICIAN a final judgment in a malpractice action and no action, based on an allegation of malpractice by PHYSICIAN, has ever been settled by payment to the plaintiff; and (v) no claims have been made against PHYSICIAN for any reason whatsoever for the past five years.

6.2 Representations and Warranties of the MSO. The MSO represents and warrants that it has corporate power and authority to enter into this Agreement and perform its obligations under this Agreement, and that the execution, delivery and performance of this Agreement will not breach any contract, obligation or covenant to which it is a party or adversely affect its ability to perform this Agreement.

VII. TERM AND TERMINATION.

7.1 Term. The initial term of this Agreement shall be for a period of one (1) year, commencing on , 20__, and continuing until , 20__, unless terminated earlier pursuant to the terms hereof. Thereafter, the Agreement will automatically renew for successive renewal terms of one year each, unless PHYSICIAN provides the MSO written notice of his intention not to renew the Agreement a minimum of six (6) months prior to the end of the then current term.

7.2 Termination by the MSO. The MSO shall have the right to terminate this Agreement immediately upon written notice to PHYSICIAN, with or without cause.

7.3 Termination by PHYSICIAN. PHYSICIAN shall have the right to terminate this Agreement only upon the occurrence of any “material default” by the MSO, as defined herein. A “material default” by the MSO shall be defined as the material failure of the MSO to perform its duties and obligations hereunder after receiving written notice of such failure to cure the same no later than one hundred eighty (180) days (the “Cure Period”) following such written notice from PHYSICIAN specifying in detail the nature of the material default. In the event that the MSO fails to correct such material default within the Cure Period, PHYSICIAN may terminate this Agreement upon sixty (60) days written notice to the MSO following the Cure Period.

7.4 Final Accounting upon Termination. In the event of a termination of this Agreement for any reason, MSO shall within sixty (60) days after the date of termination, or as soon thereafter as reasonably possible, render a final accounting for monies deposited in and disbursed from the MSO Account. All monies due from either party to the other as a result of such termination, including but not limited to compensation pursuant to Section 4.1 through the date of termination, shall be paid at the time the final accounting is rendered by the MSO.

VIII. RESTRICTIVE COVENANTS.

8.1 PHYSICIAN acknowledges and agrees that the services to be provided by the MSO hereunder are feasible only if PHYSICIAN operates a vigorous medical practice to which the PHYSICIAN devotes his full time and attention. During the term of his/her engagement with MSO, PHYSICIAN agrees not to pursue for his/her own use or benefit or for the use or benefit of any third party, any business opportunity of MSO of which PHYSICIAN became aware during the term of his engagement with MSO.

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During the term of his/her relationship with MSO, PHYSICIAN shall not, for himself/herself or on behalf of another, request, advise, induce or encourage current employees, officers, directors, shareholders or agents of MSO to resign, cease relations with or provide services to any business which is substantially similar to or competitive with the business of MSO.

During the term of his/her engagement by MSO, and for a period of eighteen (18) months thereafter:

(a) PHYSICIAN will not canvas or solicit, or hire any third party or entity to canvas or solicit any of MSO’s customers with whom PHYSICIAN has had material contact during PHYSICIAN’s engagement by MSO with a view to the sale of, or solicitation for orders from, or in a capacity seeking the patronage for, such goods or services as are now being provided to such customers or patients by MSO; and

(b) PHYSICIAN shall not, for himself/herself or on behalf of another, request, advise or encourage any customers, clients or patients of MSO to withdraw, curtail or cancel their orders, or, in any way stop doing business with MSO.

8.2 MSO and PHYSICIAN acknowledge and agree that the remedy at law for any breach or attempted breach of the foregoing provisions in Section 8.1(a) and (b) will be inadequate and that MSO shall be entitled to specific performance, injunctive relief or other equitable relief in the event of a material breach by PHYSICIAN in addition to any other remedies that might be available at law or in equity.

IX. MISCELLANEOUS.

9.1 Severability. The provisions of this Agreement shall not be severable, and if any material provisions shall be determined to be invalid, void or unenforceable in whole or in part for any reason by a court of competent jurisdiction, the MSO shall have the right to terminate this Agreement upon five (5) business days prior written notice.

9.2 Waiver; Consents. No consent or waiver, express or implied, by any party hereto of any breach or default by another party in the performance by the other of its obligations hereunder shall be valid unless in writing, and no such consent or waiver shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance by such other party of the same or any other obligations of such party hereunder. Failure on the part of any party to complain of any act or failure to act of another party or to declare such other party in default, irrespective of how long such failure continues, shall not constitute a waiver by such party of its rights hereunder.

9.3 Governing Law and Forum. This Agreement shall be governed by the laws of the State of Georgia. In the event that it becomes necessary to initiate a legal action to enforce this Agreement or any of the requirements or provisions thereof, such action shall be brought in the Superior Court of Cobb County, or the United States District Court for the Northern District of Georgia, Atlanta, Georgia.

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9.4 Patient Records. As a Management Service to PHYSICIAN, all patient data will reside on MSO’s secure server as custodian for the PHYSICIAN. The PHYSICIAN will have access to patient data for his/her patients and the right to make and hold any written copies. To fulfill its arrangement services obligations under this Agreement, MSO has the right to continuing access and the right to make copies of the patient data in accordance with the patient’s consent. MSO reserves ownership of the data elements and the technology that compose the medical record and its submission, but not the records themselves. The medical records are the property of PHYSICIAN.

9.5 Regulatory Compliance. The parties agree to conform and adhere to all applicable acts, rules and regulations of any and all state and federal agencies or regulatory bodies. Notwithstanding anything herein to the contrary, the parties mutually agree to strictly comply with any and all other applicable federal and state laws and standards. If there is any change in any federal, state or local law rule, regulation or interpretation which materially and adversely affects any party hereto, including without limitation, a material and adverse change in the economic benefit to be received pursuant to this Agreement, or any court of competent jurisdiction determines that any material provision of this Agreement is invalid, void or unenforceable in whole or in part, then the parties shall use their good faith best efforts to amend this Agreement in a manner that is consistent with any such material change and that substantially preserves for the parties the relative economic benefit of this Agreement. If the parties cannot reach agreement on such amendment prior to the effective date (or within thirty days of a court’s determination) of such material change, this Agreement shall terminate as of such effective date (or such date of determination).

9.6 Remedies. All rights, powers and remedies granted to either party by any particular term of this Agreement are in addition to, and not in limitation of, any rights, powers or remedies that it has under any other term or provision of this Agreement, at common law, in equity, by statute or otherwise. All such rights, powers and remedies may be exercised separately or concurrently, in such order and as often as may be deemed expedient by any party. No delay or omission by any party to exercise any right, power or remedy shall impair such right, power or remedy or be construed to be a waiver of or an acquiescence to any breach or default. A waiver by any party of any breach or default hereunder shall not constitute a waiver of any subsequent breach or default.

9.7 No Medicare/Medicaid Billed Services. The parties understand, acknowledge and agree that none of the professional services rendered by PHYSICIAN to patients for whom PHYSICIAN pays MSO for related Management and Marketing Services, shall be billed to Medicare, Medicaid or any federal or state funded health benefit program.

9.8 Authorization for Agreement. The execution of this Agreement by the MSO and PHYSICIAN has been duly authorized by all necessary resolutions and corporate or partnership action, and this Agreement constitutes the valid and enforceable obligations of the MSO and PHYSICIAN in accordance with its terms.

9.9 Assignment. PHYSICIAN shall not assign this Agreement, or any portion hereof or any monies due or to become due hereunder, without the prior written approval of the MSO. The MSO may assign the Agreement by providing written notice to PHYSICIAN.

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9.10 Successor in Interest. All of the rights, benefits, duties, liabilities and obligations of the parties hereto shall inure to the benefit of and be binding upon the parties and their permitted successors and assigns.

9.11 Modification of Agreement. This Agreement constitutes the entire agreement among the parties hereto relating to the subject matter of this Agreement. Any modification of this Agreement shall be in writing and signed by the parties.

9.12 Headings. The headings of the Sections and Articles of this Agreement are inserted for convenience of reference only and shall not in any manner affect the construction or meaning of anything herein contained or govern the rights or liabilities of the parties hereto.

9.13 Notices. All notices, requests, and communications required or permitted hereunder shall be in writing and shall be sufficiently given and deemed to have been received upon personal delivery or delivery by overnight courier or, if mailed, three (3) days after being placed in the United States mail, postage prepaid, registered or certified mail, receipt requested, addressed to the parties as follows:

As to PHYSICIAN:

As to MSO: VWN eMedical Group, LLC 2000 Powers Ferry Road Suite 405 Marietta, Georgia 30067

Notice of a change in address of one of the parties shall be given in writing to the other parties as provided above.

9.14 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which taken together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the parties have hereunto set their hand as of the day and year first above written.

PHYSICIAN: By: MSO: By: Name Title

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EXHIBIT A

MSO COMPENSATION

The compensation to be paid to MSO for its Management Services and Marketing Services under Section 4.2 shall be paid in equal installments as follows:

MSO shall be compensated in the amount of dollars per annum, paid in equal installments of dollars and ______ /100ths ($_________).

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SCHEDULE 6.1(d)

PHYSICIANS:

CLAIMS AND MEDICAL MALPRACTICE JUDGMENTS,

RESTRICTIONS ON LICENSURE AND MEDICAL STAFF PRIVILEGES

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