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Agreement Between the District of Columbia Financial Responsibility and Management Assistance Authority and Greater Southeast Community Hospital Corporation I
April 12, 2001

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Press release and summary of contract	Exhibits and Attachments
Lease

April 12, 2001

AGREEMENT BETWEEN THE DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY AND GREATER SOUTHEAST COMMUNITY HOSPITAL CORPORATION I

TABLE OF CONTENTS

1.1 Services
1.2 Non-Discrimination
1.3 Confidentiality of Information
1.4 Organizational Conflicts of Interest
1.5 Recovery Of Debt Owed The District
1.6 Invoicing For and Payment to Contractor
1.7 Health Care Services
1.8 School Health Services
1.9 Other Miscellaneous Health Care Services
1.10 Corrections Health Care Services
1.11 Pharmacy Services
1.12 Health Care Services to Other District Agencies
1.13 Authority Rights In Data
1.14 Press Releases And Other Public Announcements
1.15 Type Of Contract
1.16 Disputes
1.17 Changes
1.18 Term Of Agreement
1.19 Termination By Default
1.20 Indemnification
1.21 Failure to Perform
1.22 Drug Free Workplace (July 1990)
1.23 Taxes Announcement
1.24 Termination For The Convenience Of The Authority
1.25 Assignment
1.26 Waiver Of Rights
1.27 Insurance
1.28 Performance Bond
1.29 Contractor's Working Files
1.30 Financial Standards
1.31 Subcontracting
1.32 Audit And Records
1.33 Independent Contractor
1.34 Appropriation of Funds
1.35 Employment Agreement
1.36 Hiring of District Residents
1.37 Notices
1.38 Compliance
1.39 Representations and Certifications
1.40 Reports Prepared by Contractor
1.41 Maintenance of Effort
1.42 Capital Expenditures
1.43 Financial Representations and Warranties of Contractor
1.44 Operating Committee
1.45 Leases/Subleases

AGREEMENT

This Agreement (the "Agreement") is entered into by and between THE DISTRICT OF COLUMBIA FINANCIAL RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY (the "Authority"), and GREATER SOUTHEAST COMMUNITY HOSPITAL CORPORATION I ("GSCHC"), a Delaware corporation, (collectively, the "Parties") as of this - day of April, 2001 (the "Effective Date").

RECITALS

WHEREAS, the Authority, on behalf of the District of Columbia (the "District"), through a competitive solicitation, sought responses from qualified health care providers to Request for Proposal No. DCFRA#-00-R-039 (the "RFP") to obtain the services of one qualified health care organization to provide comprehensive, integrated and coordinated health care services for the uninsured population of the District, as defined more specifically in the Statement of Work, which is attached hereto as Exhibit A (the "Eligible Uninsured"), as well as for certain other categories of individuals as specified in the attached Statement of Work (Exhibit A);

WHEREAS, GSCHC, an offeror in the solicitation, has been selected as the contractor (the "Contractor") responsible for the oversight and implementation of the daily operations of the Contractor's program;

WHEREAS, Contractor has developed the D.C. Healthcare Alliance program (the "program") as the name of its network of service providers to provide care to the Eligible Uninsured;

WHEREAS, the parties acknowledge and agree that this Agreement is critical to the Authority's obligation to protect the health, safety and welfare of District residents and, accordingly, the Authority is obtaining the personal services of Contractor in furtherance of this obligation;

WHEREAS, this Agreement does not create an entitlement to health care in the recipients of health care services hereunder; and

WHEREAS, the parties desire to have Contractor provide comprehensive, integrated and coordinated health care services to the Eligible Uninsured.

NOW, THEREFORE, in consideration of the premises set forth above and the terms, covenants and conditions set forth below, the Parties mutually agree as follows:

1.1 Services

During the term of the Agreement the Contractor shall provide, or cause to be provided, the Health Care Services, Administrative Services, School Health Services, Other Miscellaneous Health Care Services, Corrections Health Care Services, and Corrections Administrative Services described herein and on the Statement of Work attached hereto as Exhibit A, and incorporated herein by reference.

1.2 Non-Discrimination

Contractor shall not directly or through subcontracts, discriminate on the basis of race, national origin, religion, sex, age, disability, sexual orientation, marital status, personal appearance, family responsibilities, income (provided that such person's income is equal to or less than 200% of the federal poverty level for the purposes of enrollment in this program), Medicaid status, political affiliation, or place of residence in the execution of any health care or administrative duty under this Agreement.

1.3 Confidentiality of Information

1.3.1 All information obtained or developed during the performance of this Agreement, and all conversations between the Authority or the District and the Contractor with regard to the Agreement, shall be held confidential by the Contractor, and shall not be disclosed to a third party in the absence of a written waiver by the Authority, except as may be required by law, provided, however, that any such information may be disclosed to the Contractor's employees, agents and advisors who need to know such information for the sole purpose of effectuating this Agreement, it being understood that such employees, agents and advisors shall be informed by Contractor of the confidential nature of such information, shall be directed by Contractor to treat such information confidential and that Contractor shall be responsible for any breach of this Agreement by such employees, agents and advisors.
1.3.2 All proprietary or confidential information of Contractor obtained or developed during the performance of this Agreement shall be marked "PROPRIETARY AND CONFIDENTIAL" by the Contractor prior to the provision of such information to the Authority. The Authority shall keep all information designated "PROPRIETARY AND CONFIDENTIAL" confidential and shall not disclose such information to a third party in the absence of a written waiver by the Contractor, except as may be required by law.

1.4 Organizational Conflicts of Interest

As an independent contractor of the Authority, the Contractor's primary responsibility and allegiance is to the Authority. Therefore, the Contractor shall take special care to avoid even the appearance of a conflict of interest in its dealings with the Authority. The Contractor shall provide the Authority with a list of past professional relationships with any of the principal contractors, subcontractors, and consultants with which it contracts directly.

1.4.2 An organizational conflict of interest exists when the nature of the work to be performed under the Agreement may:

a. result in an unfair competitive advantage to the Contractor, or

b. impair the Contractor's objectivity in performing the work under the Agreement.

1.4.3 The Contractor warrants that, to the best of the Contractor's knowledge and belief, there are no facts or circumstances which could give rise to an actual or potential conflict of interest or organizational conflict of interest or that the Contractor has disclosed all such information, if any.
1.4.4 The Contractor agrees that if an actual or potential organizational conflict of interest is discovered after award of the Agreement to the Contractor, the Contractor will make a full disclosure in writing to the District of Columbia contracting officer responsible for this Agreement ("the Contracting Officer"). This disclosure shall include a description of actions, which the Contractor has taken or proposes to take, after consultation with the Contracting Officer, to avoid, mitigate, or neutralize the actual or potential conflict.
1.4.5 The Authority may terminate this Agreement for convenience, in whole or in part, if it deems such termination necessary to avoid a conflict of interest or an organizational conflict of interest. If the Contractor becomes aware of a potential conflict of interest after the Effective Date of the Agreement and does not immediately disclose it to the Authority, or if the Contractor misrepresents relevant information to the Contracting Officer, the Authority may terminate this Agreement for default pursuant to Section 1.19.1, debar the Contractor from any/all future Authority or District contracting, or pursue such other remedies as may be permitted by law or the Agreement.
1.4.6 The Contractor agrees to insert in any subcontract or consultant agreement hereunder, provisions which shall conform substantially to the language of this Section 1.4.

1.5 Recovery Of Debt Owed The District

The Contractor hereby agrees that the District of Columbia or the Authority at any time may use all or any portion of any consideration or refund due to the Contractor under this Agreement to satisfy, in whole or in part, any debt due to the Authority or the District by Contractor.

1.6 Invoicing For and Payment to Contractor

1.6.1 During the term of this Agreement, the Authority shall pay, or cause to be paid, to its Disbursing Agent (as defined below) on a monthly basis in advance the budgeted amounts set forth in this Agreement for Health Care Services (as defined in Section 4 of Exhibit A), Administrative Services (as defined in Section 5 of Exhibit A), Supplemental Administrative Services (as set forth in Section 1.7.2 hereof), School Health Services (as defined in Section 6 of Exhibit A), Other Miscellaneous Health Care Services (as defined in Section 7 of Exhibit A), Corrections Health Care Services (as defined in Section 8 of Exhibit A), Corrections Administrative Services (as defined in Section 8 of Exhibit A), and Pharmacy Services (as defined in Section 4.6 of Exhibit A). The Disbursing Agent shall be responsible for making payment to the Contractor or its designee(s) for services provided pursuant to this Agreement. Notwithstanding the monthly transfer of funds to the Disbursing Agent, the Authority shall retain title to and control of such funds until such time as the funds have been disbursed to Contractor or its designee(s) by the Disbursing Agent pursuant to instructions given by the Authority. In addition, any payments made by the Disbursing Agent to Contractor or its designee(s) for Health Care Services, Administrative Services, Corrections Health Care Services or Corrections Administrative Services shall remain subject to the reconciliation provisions set forth in this Agreement.
1.6.2 Contractor or its designee(s) shall, on a biweekly basis, submit to the Disbursing Agent invoices containing claims relating to Health Care Services and Corrections Health Care Services, and shall submit to the Disbursing Agent invoices for Administrative Services, Supplemental Administrative Services, Corrections Administrative Services, School Health Services, Other Miscellaneous Health Care Services and Pharmacy Services that have been provided by Contractor or its designee(s) pursuant to the terms of this Agreement. Prior to submission of invoices containing claims for Health Care Services and Corrections Health Care Services, Contractor or its designee(s) shall have reviewed the eligibility of such claims for reimbursement under this Agreement and approved the submission of such claims, and shall provide the Disbursing Agent with information describing and summarizing the claims that are being submitted for reimbursement.
1.6.3 Except as otherwise specifically set forth in this Agreement, all invoices must be submitted by the Contractor or its designee(s) to the Disbursing Agent in original form with three (3) copies, must be signed by an officer or principal of the Contractor or its designee(s), and must certify that the amounts being billed submitted for reimbursement are correct and proper. To be correct and proper, invoices must contain the name of the Contractor, the address, the telephone number, contract number, the task order number, the purchase order number, the period of performance, the Federal ID number, the D-U-N-S number, the address to which payment must be mailed, and must clearly indicate the charges for which the Contractor is seeking payment. All charges must be in accordance with the costs as awarded. Invoices failing to comply with these requirements may result in a delay of payment to the Contractor.
1.6.4 For the purposes of this Agreement, the Disbursing Agent shall be [Insert name of Disbursing Agent]. The Authority shall be solely responsible for all costs and expenses related to the Disbursing Agent.
1.6.5 Invoices shall be submitted to:
Disbursing Agent:
[Name ]
[Address]
[City, State, Zip]

District of Columbia Government
Department Of Health
825 North Capitol Street, N.W.
Washington, D.C. 20001
Attn: Contracting Officer Technical Representative
(Contract No: DCFRA 00-039)

1.6.6 A copy of any invoice sent to the Disbursing Agent and the District of Columbia Government shall also be sent to the Authority's Chief Financial Officer at DCFRA, 441 Fourth Street, NW, Suite 570, Washington, DC 20001 The Contractor acknowledges that services performed in excess of the amount authorized under this Agreement will not be paid, except as otherwise agreed to in writing by the Authority pursuant to Section 1.17 hereof. The Contractor shall carefully monitor contracted payment rates and utilization incurred in the performance of the Agreement and advise the Disbursing Agent, the Contract Administrator, the Contracting Officer Technical Representative (COTR), and the Contract Officer in writing once the Contractor, or its designee(s), has invoiced in excess of 75% of the Health Care Services Amount or 75% of the School Health Services Amount or 75% of the Corrections Services Amount for a particular
Contract Year. The Authority shall not be responsible for rendering payment under the Agreement. Subject to limitations of Section 1.34 hereof, payment shall be the responsibility of the District of Columbia government.
1.6.7 Any interest accruing on the District's account(s) that are accessed by the Disbursing Agent for the purposes set forth in this Agreement shall be calculated by the Disbursing Agent and paid to the Contractor pursuant to the schedule for Budget Reconciliations set forth in Section 1.7.4.3.
1.6.8 Exhibit H, sets forth the total estimated amount which may be payable to Contractor or its designee(s) during the First Contract Year, as well as the estimated amount which may be payable to Contractor or its designee(s) during the initial term of the Agreement and any renewal terms, for services provided pursuant to this Agreement.

1.7 Health Care Services

1.7.1 Capitalized terms in this Agreement shall have the following meanings:

1.7.1.1 "Actual Costs" shall mean the Payment Rates specified for each type of Health Care Service for any particular Contract Year multiplied by the Actual Utilization for the same Contract Year.
1.7.1.2 "Actual Utilization" shall mean the actual number of inpatient hospital discharges (as adjusted by the inpatient hospital casemix index and the inpatient hospital outlier percentage); the actual number of visits; or the actual number of procedures, as appropriate.
1.7.1.3 "Adjusted Health Care Services Amount (AHCSA)" shall mean the Health Care Services Amount for any particular Contract Year after application of the adjustments set forth in Section 1.7.4.
1.7.1.4 "Adjusted Administrative Services Amount" shall mean twelve percent (12%) of the Adjusted Health Care Services Amount.
1.7.1.5 "Adjusted Payment Rates" shall mean the amounts derived for any Contract Year pursuant to the calculations set forth in Section 1.7.7.
1.7.1.6 "Administrative Services Amount" shall mean twelve percent (12%) of the Health Care Services Amount during any Contract Year.
1.7.1.7 "Contract Year" shall mean any of the Contract Years defined in the Agreement.
1.7.1.8 "Expected Utilization" for any particular Contract Year shall mean the service-specific Actual Utilization for the prior Contract Year (including, for inpatient hospital discharges, the effect of applying the actual casemix index and the actual outlier adjustment to the number of discharges). The Expected Utilization for the First Contract Year is set forth in Exhibit E.
1.7.1.9 "First Contract Year" shall mean the period commencing on May l, 2001 and ending on April 30, 2002; the "Second Contract Year" shall mean the period commencing on May 1, 2002 and ending on April 30, 2003; the "Third Contract Year" shall mean the period commencing on May 1, 2003 and ending on April 30, 2004; the "Fourth Contract Year" shall meant the period commencing on May 1, 2004 and ending on April 30, 2005; and the "Fifth Contract Year" shall mean the period commencing on May 1, 2005 and ending on April 30, 2006.]
1.7.1.10 "Health Care Services Amount (HCSA)" shall mean the annual amount budgeted for payment to the Contractor for the provision of Health Care Services to Eligible Uninsureds. The HCSA is determined by multiplying the Payment Rates for any particular Contract Year by the Expected Utilization for that Contract Year and summing the results of these service-specific computations.
1.7.1.11 "Index Factor" for any Contract Year shall mean the simple, unweighted average of the change in the U.S. CPIU for All Items and the change in the U.S. CPI-U (Medical Care), as reported by the Bureau of Labor Statistics, for the twelve months ended as of the immediately preceding December. For example, the change measured in these equally weighted items for the twelve months ended as of December 2001 will be compared to the equally weighted average of these items for the twelve months ended as of December 2000 to determine the Index Factor to be applied to the Contract Year that is scheduled to begin on May 1, 2002.

1.7.1.12 "Monthly Administrative Services Amount" shall mean one-twelfth of the Administrative Services Amount for any Contract Year.

1.7.1.13 "Monthly Health Care Services Amount" shall mean one-twelfth of the Health Care Services Amount for any Contract Year.
1.7.1.14 "Payment Rates" shall mean the rates that the Authority budgets for payment per unit of services s (Le., per discharge, visit, procedure, etc.) in the various categories of Health Care Services in any particular Contract Year, as set forth on Exhibit E for the First Contract Year and as adjusted pursuant to this Agreement.

1.7.2 To supplement the Administrative Services Fee for the start-up and operation of the program (the "Supplemental Administrative Services"), the Authority will pay to the Contractor a supplemental administrative services fee (the "Supplemental Administrative Services Fee"), in an amount not to exceed One Million Five Hundred Thousand Dollars ($1,500,000.00), payable in equal installments on a monthly basis, during the First Contract Year only.
1.7.3 Notwithstanding anything contained herein to the contrary, during the First Contract Year, the payments to Contractor for Health Care Services and Administrative Services shall not in combination exceed Sixty Six Million, Two Hundred and Seventy-Six Thousand, Two Hundred and Forty-Four Dollars ($66,276,244). Contractor acknowledges and agrees that payments to Contractor under this Agreement may be comprised of any combination of District of Columbia funds.
1.7.4 In the event that the Actual Utilization for the First Contract Year differs from the Expected Utilization, the following payment adjustments shall be made:

1.7.4.1 If the Actual Costs are greater than the Health Care Services Amount, the Contractor will be paid an amount equal to the Health Care Services Amount plus fifty percent (50%) of the amount by which the Actual Costs were greater than the Health Care Services Amount; provided, however, that if the Actual Costs are more than one hundred and twenty percent (120%) of the Health Care Services Amount, the parties to this Agreement will use best efforts to negotiate additional payments, if any, that will be made by the Authority to the Contractor for costs beyond the 120% threshold.
1.7.4.2 If the Actual Costs are less than the Health Care Services Amount, the Contractor will be paid the Adjusted Health Care Services Amount. The Adjusted Health Care Services Amount will be equal to the Health Care Services Amount minus fifty percent (50%) of the amount by which the Health Care Services Amount exceeded Actual Costs; provided, however, that if the Actual Costs are less than eighty percent (80%) of the Health Care Services Amount, the Contractor will be paid for its Actual Costs plus fifty percent (50%) of the difference between the Health Care Services Amount and eighty percent (80%) of the Health Care Services Amount. For example, if the HCSA for a particular Contract Year was $50,000,000, and the Actual Costs for that same year were only $30,000,000, the Contractor would be entitled to receive $35,000,000 (i.e., $30,000,000 + .5[$50,000,000-($50,000,000 x .80)] = $35,000,000). The parties will use best efforts to negotiate appropriate adjustments, if any, to this amount for the purpose of establishing the Health Care Services Amount for the subsequent Contract Year.
1.7.4.3 The Contractor shall perform the initial computations necessary to (a) determine the Actual Costs, the Actual Utilization, the Adjusted Payment Rates and the Adjusted Health Care Services Amount; (b) compare the Actual Costs to the Health Care Services Amount; (c) to determine the amounts due from one party to the other, and the need for additional negotiations if the Actual Cost differs from the Health Care Services Amount by more than twenty percent (20%); and (d) determine the Payment Rates, Expected Utilization and Health Care Services Amount for the next Contract Year. The Contractor shall include reasonable estimates of "Incurred But Not Reported Claims" (IBNR) in these computations and shall describe the IBNR formulae used in making the IBNR estimates. The Budget Reconciliations for the First Contract Year, and the calculation of the Health Care Services Amount, the Expected Utilization and the Payment Rates for the Second Contract Year, will be adjusted as necessary to reflect the fact that the Contractor will not be providing Health Care Services for the entire twelve month period during the First Contract Year. The Contractor shall perform these computations (the "Budget Reconciliations") and provide them to the Authority within sixty (60) days after the end of the second quarter of any Contract Year, and within ninety (90) days after the end of any Contract Year. The Authority shall review these Budget Reconciliations and, the parties shall meet to discuss the computations and any adjustments that may be needed within sixty (60) days after the Contractor provides the Budget Reconciliations to the Authority. Any payments or repayments that are due pursuant to this process will be made by check (or by other mutually acceptable means) by the owing party to the other party within the sixty (60) days after the computations are submitted by Contractor to the Authority.

1.7.5 The Health Care Services Amount and the Administrative Services Amount for the Second Contract Year, and for subsequent Contract Years shall be determined as follows:

1.7.5.1 The Health Care Services Amount for the Second Contract Year shall be equal to the Adjusted Health Care Services Amount for the First Contract Year multiplied by the Index Factor specified in Section 1.7.1.11; the Health Care Services Amount for the Third Contract Year shall be equal to the Adjusted Health Care Services Amount for the Second Contract Year multiplied by the Index Factor specified in Section 1.7.1.11; and so on in this manner for each subsequent Contract Year.
1.7.5.2 The Administrative Services Amount shall be equal to twelve percent (12%) of the Health Care Services Amount for the Second Contract Year; and the Administrative Services Amount for each subsequent Contract Year shall be equal to twelve percent (12%) of the Health Care Services Amount for each of those respective Contract Years.
1.7.6 The amounts payable for Health Care Services and for Adjusted Administrative Services for each subsequent Contract Year shall be equal to the sum of the Adjusted Health Care Services Amount and the Adjusted Administrative Services Amount for the particular Contract Year.
1.7.7 The Actual Costs incurred in any Contract Year will be computed by multiplying the Actual Utilization for the Contract Year by the Payment Rates for the Contract Year. The Adjusted Payment Rates for any item or service for any Contract Year shall be the amount derived by dividing the Adjusted Health Care Services Amount for that Contract Year by the Actual Utilization for any item or service for that Contract Year.
1.7.8 The Contractor agrees that it will pay at least ninety percent (90%) of the Adjusted Health Care Services Amount it receives under this Agreement to the licensed health care facilities and/or health care professionals who provide Health Care Services pursuant to this Agreement.
1.7.9 The Contractor acknowledges and agrees that the District may expand other government-funded health care programs for District residents and that the expansion of such programs or the creation of new programs may cause the Actual Utilization of Health Care Services to decrease. In such case, the parties hereby acknowledge and agree that they will mutually agree upon an appropriate reduction in the Health Care Services Amount established under this Agreement to reflect decreased utilization levels.

1.8 School Health Services

1.8.1 The Contractor shall provide, or arrange for the provision of, the School Health Services and related administrative services described in Section 6 of Exhibit A.
1.8.2 During the First Contract Year, the Contractor or its designee(s) shall be paid the School Health Services Amount set forth on Exhibit F, payable in twelve (12) equal monthly installments for School Health Services and related administrative services that are performed pursuant to this Agreement.
1.8.3 The Contractor or its designee(s) shall submit monthly invoices for the Monthly School Health Services Amount set forth on Exhibit F, to the Disbursing Agent in the same manner as invoices are submitted by Contractor or its designee(s) for Health Care Services.
1.8.4 The School Health Services Amount paid to Contractor or its designee(s) during the Second Contract Year, and for any subsequent Contract Year, will be adjusted by multiplying the total amount paid during the prior Contract Year by the Index Factor.

1.9 Other Miscellaneous Health Care Services

The Contractor or its designee(s) shall bill the Disbursing Agent and shall be paid for any Other Miscellaneous Health Care Services (as defined in Section 7 of Exhibit A that are performed by Contractor or its designee(s) pursuant to this Agreement. Specifically, the Contractor or its designee(s) shall submit invoices to the Disbursing Agent based on the Other Miscellaneous Health Care Services provided in the same manner and at the same times as invoices are submitted by Contractor or its designee(s) for Health Care Services.

1.10 Corrections Health Care Services

1.10.1 The Contractor shall provide or arrange for the provision of Corrections Health Care Services and related Corrections Administrative Services, as described in Section 8 of Exhibit A to the Department of Corrections.
1.10.2 During the First Contract Year, the Contractor ox its designee(s) shall bill the Disbursing Agent and shall be paid for the Corrections Health Care Services and related Corrections Administrative Services, as defined in Section 8 of Exhibit A, that are provided pursuant to this Agreement. For each subsequent Contract Year, the Contractor and the Department of Corrections shall meet at least ninety (90) days prior to the start of the Contract Year and mutually agree upon the amount of Corrections Health Care Services and Corrections Administrative Services estimated to be provided by Contractor during such Contract Year.
1.10.3 The Corrections Health Care Services Amount shall be as set forth on Exhibit G. The Corrections Administrative Services Amount shall be as set forth on Exhibit G.
1.10.4 The Contractor or its designee(s) shall submit invoices to the Disbursing Agent based on the Corrections Health Care Services provided, in the same manner and at the same times as invoices are submitted by Contractor or its designee(s) for Health Care Services.
1.10.5 The Contractor shall carefully monitor the contracted payment rates and utilization incurred in the performance of the Agreement and advise the Disbursing Agent, Contract Administrator, the COTR, and the Contract Officer when reaching 75% of the total annual Corrections Health Care Services Amount and related Corrections Administrative Services Amount. The Authority shall render payment or cause payment to be rendered to Contractor for the Corrections Services Amount out of appropriations made available to the Department of Corrections.
1.10.6 The Parties shall perform semi-annual reconciliations between the actual and budgeted levels of Corrections Health Care Services and Corrections Administrative Services. The first reconciliation shall occur within sixty (60) days after the close of the second quarter during each Contract Year (the "Mid-Year Reconciliation") and a final reconciliation shall occur within one hundred and twenty (120) days after the end of each Contract Year (the "Final Reconciliation").
1.10.7 The actual level of Corrections Health Care Services provided during any six (6) month period shall be determined by multiplying the Payment Rates, as adjusted for the applicable Contract Year, by the actual level of utilization for such six (6) month period. Contractor shall be paid for any Corrections Health Care Services and Corrections Administrative Services provided in excess of expected utilization, if any, at the same rates, within thirty (30) days of the Mid-Year Reconciliation or Final Reconciliation. If actual utilization was less than expected utilization, Contractor shall refund any excess payments to the Department of Corrections of the District of Columbia within thirty (30) days of the MidYear Reconciliation or Final Reconciliation.
1.10.8 The Contractor shall not be required to provide Corrections Health Care Services or Corrections Administrative Services in excess of the amounts set forth on Exhibit G.

1.11 Pharmacy Services

1.11.1 The Contractor shall provide, or arrange for the provision of, the pharmacy services described in Section 4.6 of Exhibit A (the "Pharmacy Services").
1.11.2 During the First Contract Year of this Agreement, the Contractor or its designee(s) shall be paid an amount not to exceed Three Million Four Hundred Thousand Dollars ($3,400,000.00), payable in twelve (12) equal monthly installments for the provision of Pharmacy Services pursuant to this Agreement.
1.11.3 The Contractor or its designee(s) shall submit bi-weekly invoices for the Pharmacy Services to the Disbursing Agent. Such invoices shall set forth the amounts expended by Contractor or its designee(s) for the acquisition of pharmaceuticals and shall set forth the dispensing fee (not to exceed $3.75 per prescription) for prescriptions that have been filled by the Contractor or its designee(s).
1.11.4 During the ninety (90) day period ("Evaluation Period") commencing on the Effective Date the Contractor or its designee(s) shall evaluate its ability to provide the Pharmacy Services at the amounts stated herein. In the event that the Contractor determines that it is unable to provide the Pharmacy Services for the amounts set forth herein, the parties shall attempt to renegotiate such amounts in good faith. If the parties fail to reach agreement on the amounts required to provide the Pharmacy Services within thirty (30) days of the expiration of the Evaluation Period, the Contractor shall discontinue the provision of Pharmacy Services hereunder. Discontinuation of the provision of Pharmacy Services pursuant to this Section 1.11 shall not be deemed to be a default under this Agreement.

1.12 Health Care Services to Other District Agencies

Upon request, the Contractor shall provide Health Care Services to Other District Agencies (as defined in Section 9 of Exhibit A . Such services shall be provided at the same payment rates as set forth in this Agreement.

1.13 Authority Rights In Data

All information and documentation supplied to the Contractor by the Authority or by the District, or technical reports and memoranda produced by the Contractor in the performance of this Agreement, shall be the sole property of the Authority and the District. The Contractor retains ownership of intellectual property and personal documents used in- the performance of this Agreement (except to the extent created or generated -as a result of this Agreement). All data produced by the Contractor are works made for hire and are the sole property of the Authority and the District, and except as otherwise required to be maintained by Contractor pursuant to applicable law, shall be returned to the Authority or the District following any termination or expiration of this Agreement. Except as required hereunder or as required by law or regulation, the Contractor shall not publish or reproduce such data in whole or in part or in any manner or form, or authorize others to do so, or make any other use of such data, without the written consent of the Authority until such time as the Authority or the District may have released such data to the public provided, however, that during the term of this Agreement, Contractor shall have the right to maintain and utilize any such data for the sole purpose of fulfilling the requirements of this Agreement.

1.14 Press Releases And Other Public Announcements

The Contractor shall not issue any press releases or make other public announcements of any sort with respect to the subject matter of this Agreement without prior written permission of the Authority.

1.15 Type Of Contract

This Agreement is a "Fixed Price Incentive Based Redetermination" contract.

1.16 Disputes

All disputes arising under or relating to this Agreement shall be resolved as provided herein. Either party may bring a dispute to the attention of the Contracting Officer at any time by submitting a written description of the dispute to the Contracting Officer.

1.16.1 Prior to the assignment of this Agreement by the Authority to the District, all disputes shall be resolved by the Contracting Officer, whose authority shall be final and not subject to protest or review. The Contracting Officer shall use best efforts to resolve any dispute within ninety (90) days from the date of Contracting Officer's receipt of all information relevant to the resolution of such dispute.
1.16.2 Following the assignment of this Agreement by the Authority to the District, or any other governmental authority, all disputes shall be resolved in accordance with the dispute resolution procedures set forth in the D.C. Code procurement provisions.

1.17 Changes

The Contracting Officer may, at any time, by written order, and without notice to the surety, if any, make changes in the Agreement within the general scope hereof. Any claim for adjustment pursuant to a change requested under this Section 1.17 shall be asserted within thirty (30) days from the date the change is offered, provided, however, that the Contracting Officer, if he or she determines that the facts justify such action, may receive, consider and adjust any such claim asserted at any time prior to the date of the annual reconciliation of the Agreement. If the parties fail to agree upon the adjustment to be made, the dispute shall be determined as provided in Section 1.16 hereof. Nothing in this clause shall excuse the Contractor from proceeding with the Agreement as changed. Provisional payments may be made by the Authority on a monthly basis for services of Contractor under this Section, subject to interim or final reconciliation by the Authority.

1.18 Term Of Agreement

The term of this Agreement shall commence upon execution of this Agreement by the authorized parties. The duration of the Agreement will be for an initial term commencing on May 1, 2001 and ending on April 30, 2006, and the Agreement shall automatically renew for two (2) additional two (2) year terms unless either party notifies the other party in writing at least ninety (90) days prior to any such term.

1.19 Termination By Default

1.19.1 The Authority may by written notice of default to the Contractor, terminate this Agreement in whole or in part in any of the following circumstances:

1.19.1.1 If the Contractor fails to perform the services within the time specified in this Agreement or any extension, fails to perform any of the other provisions of this Agreement, or so fails to make progress as to endanger performance of this Agreement in accordance with its terms and fails to submit a corrective action plan to the Contracting Officer within a period of fifteen (15) days (or such longer period as the Contracting Officer may authorize in writing) after receipt of notice of noncompliance from the Contracting Officer specifying such failure; or

1.19.1.2 If the Contractor fails to complete any corrective action plan within the time frame established by the Contracting Officer for the cure of any failures to perform under this Agreement.

1.19.2 If this Agreement is terminated as provided in this Section 1.19, the Authority, in addition to any other rights provided in this Agreement, may require the Contractor to transfer title and deliver to the Authority or the District, in the manner and to the extent directed by the Contracting Officer, any and all data, documentation and other information that the Contractor has specifically produced or acquired or obtained for the performance of this Agreement. Upon direction of the Contracting Officer, the Contractor shall also protect and preserve property in its possession in which the Authority or District has an interest. Payment for services provided pursuant to this Agreement shall be at the price set forth in the Agreement. The Authority or the District may withhold from amounts otherwise due the Contractor such sum as the Contracting Officer determines to be reasonably necessary to protect the Authority or the District against loss because of default, outstanding damages the Authority or District may incur, or outstanding liens or claims of former lien holders.
1.19.3 If, after notice of termination pursuant to the provisions of this Section 1.19, it is determined that the Contractor was not in default, or that the default was excusable pursuant to the provisions of this Section 1.19, the rights and obligations of the parties shall be determined as if the notice of termination had been issued for the convenience of the Authority pursuant to Section 1.24 hereof.
1.19.4 The rights and remedies of the Authority provided in this Section 1.19 are in addition to any other rights and remedies provided by law or under this Agreement.

1.20 Indemnification

1.20.1 The Contractor shall indemnify and hold harmless the Authority and the District and all their officers, agents and servants against any and all claims or liability arising from or based on, or as consequence of or result of, any negligent act, omission or default of the Contractor, its employees, or its subcontractors, in the performance of this Agreement.
1.20.2 Monies due or becoming due the Contractor under this Agreement may be retained by the Authority or the District as necessary to satisfy any other outstanding claim -- i.e., other than monies due under this Agreement -- that the Authority or the District may have against the Contractor.

1.21 Failure to Perform

Except for defaults of Contractor's subcontractors at any tier, no Party shall be liable for any default or delay in the performance of its obligations under this Agreement (i) if and to the extent such default or delay is caused, directly or indirectly, by: fire, flood, earthquake, elements of nature or acts of God; riots, civil disorders or rebellions; or any other cause beyond the control of such party, (ii) provided the non-performing party is without fault in causing such default or delay, and such default or delay could not have been prevented by reasonable precautions and cannot reasonably be circumvented by the non-performing party through the use of reasonable and commercially feasible alternate sources.

1.22 Drug Free Workplace (July 1990)

1.22.1 Definitions used in this Section 1.22 are as follows:

1.22.1.1 "Controlled substance" means a controlled substance as defined in schedules I through V of Section 202 of the Controlled Substances Act (21 U.S.C. 812) and as further defined in the regulation at 21 CFR 1308.11 - 1308.15.

1.22.1.2 "Conviction" means a finding of guilt (including a plea of no contest) or imposition of sentence, or both, by any judicial body charged with the responsibility to determine violations of the Federal or State criminal drug statutes.

1.22.1.3 "Criminal drug statute" means a Federal or Non-Federal criminal statute involving the manufacture, distribution, dispensing, possession, or use of any controlled substance.

1.22.1.4 "Drug-free workplace" means the site(s) for the performance of work done by the Contractor in connection with this Agreement at which employees of the Contractors are prohibited from engaging in the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance.
1.22.1.5 "Employee" means an employee of Contractor directly engaged in the performance of work under a Government contract. "Directly engaged" is defined to include all direct cost employees and all other Contractor employees who have other than a minimal impact or involvement in Agreement performance.

1.22.1.6 "Individual" means a Contractor that has no more than one employee including the Contractor.

1.22.2 The Contractor, shall, within thirty (30) calendar days of award:

1.22.2.1 Publish a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the Contractor's workplace and specifying the actions that will be taken against employees for violations of each prohibition;
1.22.2.2 Establish an on going drug-free awareness program to inform such employees about:

1.22.2.2.1 the dangers of drug abuse in the workplace;

1.22.2.2.2 the Contractor's policy of maintaining a drug free workplace;
1.22.2.2.3 any available drug counseling, rehabilitation and employee assistance programs; and
1.22.2.2.4 the penalties that may be imposed upon employees for drug abuse violations occurring in the workplace.
1.22.2.3 Provide all employees engaged in the performance of the Agreement with a copy of the statement required by this Section 1.22;
1.22.2.4 Notify such employees, in writing, of the statement required in this Section 1.22 that as a condition of continued employment on this Agreement, the employee will abide by the terms of the statement and notify the Contractor in writing of the employee's conviction for a criminal drug statute for a violation occurring in the workplace no later than five (5) calendar days after such conviction.
1.22.2.5 The Contractor should notify the Contracting Officer, in writing, within ten (10) calendar days after receiving notice under this Section, from an employee or otherwise receiving actual notice of such conviction. The notice shall include the position and the title of the employee;
1.22.2.6 Within thirty (30) calendar days after receiving notice under this Section 1.22 of a conviction, take one of the following actions with respect to any employee who is convicted of a drug abuse violation occurring in the workplace:

1.22.2.6.1 Take appropriate personnel action against such employee up to and including termination; or
1.22.2.6.2 Require such employee to satisfactorily participate in a drug abuse assistance or rehabilitation program approved for such purpose by a Federal, State or local health, law enforcement or other appropriate agency.
1.22.2.7 Make a good faith effort to maintain a drug-free workplace through implementation of this Section 1.22.
1.22.2.8 In addition to other remedies available to the Government, the Contractor's failure to comply with the requirements of this Section may render the Contractor subject to suspension of payments under the Agreement, termination of the Agreement for default, and suspension or debarment.

1.23 Taxes

The Authority and the Government of the District of Columbia are exempt from, and will not pay, Federal Excise Taxes and D.C. Sales and Use Tax.

1.24 Termination For The Convenience Of The Authority

The parties acknowledge and agree that the provisions of this Agreement are bargained for by the Authority and critical to its governmental authority and obligation to provide for the health, safety and welfare of District residents. The Authority may terminate performance of work under this Agreement in whole or in part if it determines that termination is in the Authority's interest or in the interest of District residents. Delivering a Notice of Termination to the Contractor shall effect such termination. In the event of termination, the Contractor shall be paid for work performed, but no payment shall be made for work not performed. The Contractor shall:

1.24.1 Place no further subcontracts or orders (referred to as subcontracts in this clause) for materials, services, or facilities, except as necessary to complete the continued portion of the Agreement.
1.24.2 Except as otherwise instructed by the Authority or the District, terminate all subcontracts to the extent they relate to the work terminated.
1.24.3 Assign to the Authority or District, as directed by the Contracting Officer, all rights, title and interest of the Contractor under the subcontracts terminated, in which case the Authority or District shall have the right and obligation to settle or pay any termination settlement proposal arising out of those terminations.
1.24.4 With approval or ratification to the extent required by the Contracting Officer, settle all outstanding liabilities and termination settlement proposals arising from the termination of subcontracts. The approval or ratification will be final for purposes of this clause.
1.24.5 As directed by the Contracting Officer, transfer title and deliver to the Authority or the District (i) the fabricated or unfabricated parts, work in process, completed work, supplies, and other materials produced or acquired for the work terminated, and (ii) the completed or partially completed plans, drawings, information, and other property that, if the Agreement has been completed, would be required to be furnished to the District.

1.25 Assignment

The Contractor may not assign its rights and obligations under this Agreement in whole or in part. At any time, upon written notice to Contractor, the Authority may assign all its rights and obligations under this Agreement to the District of Columbia, or any governmental or organizational unit thereof, whereupon the Authority will be no longer a party to or liable under this Agreement. With respect to proceedings pursuant to Section 365 of 11 U.S.C. et. seq. of the United States Bankruptcy Code, the Parties acknowledge that the Authority selected the Contractor based on its unique abilities and qualifications to provide the services contemplated hereunder, and further that this Agreement is of a personal services nature. This provision is necessary and critical because the purpose of this Agreement is to provide for the health, safety and welfare of residents of the District of Columbia.

1.26 Waiver Of Rights

The failure of the Authority or the Contractor to insist upon strict performance of the terms and conditions of this Agreement, or to exercise any rights or remedies, shall not be construed as a waiver of that party's rights to any exercise of such rights, or to rely on any such terms or conditions at any time thereafter.

1.27 Insurance

At all times during the performance of this Agreement, the Contractor shall carry insurance of the types and in the minimum amounts required by law and present evidence thereof to the Contracting Officer upon execution of this Agreement.

1.28 Performance Bond

Contractor or its parent, Doctors Community Healthcare Corporation, must have in place sufficient financial reserves to ensure against any unexpected changes in the Contractor's financial condition. This financial assurance shall be met, in part, by a performance bond equal to the value of two months of the Monthly Administrative Services Amount and two months of the Monthly Health Services Amount. The Contractor shall provide the performance bond for review and approval by the Authority, in its sole discretion, prior to execution of this Agreement.

1.29 Contractor's Working Files

The Contractor must maintain working files on all work performed under this Agreement. The Contracting Officer can require that the Contractor provide the Authority or the District with access to the working files or all such information contained in the working files.

1.30 Financial Standards

1.30.1 Contractor shall provide the following financial information upon execution of this Agreement:

1.30.1.1 Audited financial statements for the three most recent fiscal years for which statements are available. The statements must include a balance sheet, statement of revenue and expenses, and a statement of cash flows. Statements must include the auditors' opinion, the notes to the financial statements and management letters submitted by the auditor to the Contractor. If no audited financial statements are available, the Contractor shall explain the reason and submit unaudited financial statements, prepared in accordance with Generally Accepted Accounting Principles ("GAAP") and containing information comparable to the information that would be provided in the footnotes of audited financial statements.
1.30.1.2 Unaudited financial statements prepared in accordance with Generally Accepted Accounting Principles ("GAAP") and containing information comparable to the information that would be provided in the footnotes of audited financial statements, for the period between the last month covered by the audited statements required above and the month before this Agreement was executed. Such statements shall include an analysis and evaluation of future financial condition and stability and provide sources of credit that are available to the Contractor.
1.30.2 The Contractor shall provide financial information delineated above for all of its primary subcontractors. The Contractor and its primary subcontractors shall provide audited financials within one hundred fifty (150) days after the fiscal year end.
1.30.3 Contractor must present information that establishes its possession of the financial resources and protections that are commensurate with the financial responsibilities, opportunities and risks that are inherent in this project, as set forth in Section 1.43.

1.31 Subcontracting

The Contractor shall advise the Contracting Officer before awarding any subcontracts above twenty-five thousand dollars ($25,000). All subcontracts executed by Contractor above twenty-five thousand dollars ($25,000) are subject to the approval of the Contracting Officer. Such subcontracts shall be submitted to the Contracting Officer for approval. The Contracting Officer shall approve or disapprove the subcontract in writing within ten (10) business days of receipt of the subcontract from Contractor. In the event that the subcontract has not been approved or disapproved in writing within (10) business days of receipt by the Contracting Officer, the subcontract shall be deemed to have been approved. The Contractor and its primary subcontractors shall include in all subcontracts a provision that requires the subcontractor to look solely to the Contractor for payment for services rendered thereunder. Further, each subcontract shall contain a provision that upon termination of this Agreement for any reason, such subcontract shall be freely assignable to the Authority or the District, at the option of the Authority or the District.

1.32 Audit And Records

At any time during the term of this Agreement, and for three (3) years thereafter, the Authority may audit the Contractor's and any subcontractor's invoices and all payments and reimbursements, patient-specific data comparable to that contained on forms UB-92 and HCFA 1500, listing of patients, performance records, cost records, and proposals, reports and all other information and data pertaining this Agreement. The Contractor shall provide and shall cause any subcontractor to provide the information requested by the Authority within thirty (30) days. The Authority may reduce any payment by an amount(s) reasonably determined to constitute unallowable payments.

1.33 Independent Contractor

In performing work under this Agreement, the Contractor is acting solely as an independent contractor and not as an employee or agent of the Authority. Specifically, the Contractor is forbidden from representing itself to third parties as an Authority employee or agent, including District of Columbia government officials and employees; determining Authority policy; independently interpreting Authority policies or regulations on behalf of the Authority; purporting to issue orders or take other action on behalf of the Authority; and preparing documents on Authority letterhead. The Contractor shall include a comparable provision in any subcontract entered into in connection with this Agreement.

1.34 Appropriation of Funds

The Authority's and District's liability under this Agreement is contingent upon the future availability of appropriated funds with which to make payment for Agreement purposes. The Authority's and District's liability for the payment hereunder shall not arise unless and until such appropriation shall have been provided. The Contractor shall not be liable to perform any services under this Agreement if the payment to the Contractor pursuant to this Agreement is not appropriated.

1.35 Employment Agreement

The Contractor recognizes that one of the primary goals of the District government is the creation of job opportunities for District residents. Accordingly, the Contractor agrees to pursue the District's following goals for utilization of residents of the District of Columbia with respect to this Agreement and in compliance with Mayor's Order 83-265. (1) at least fifty-one percent (51 %) of all jobs created are to be performed by employees who are residents of the District of Columbia and (2) at least fifty-one percent (51 %) of apprentices and trainees employed shall be residents of the District of Columbia registered in programs approved by the D.C. Apprenticeship Council. The Contractor also agrees to notify all prospective subcontractors, prior to execution of any contractual agreements, that the subcontractors are expected to implement Mayor's Order 83265 in their own employment practices. The Contractor understands and will comply with the requirements of the Volunteer Apprenticeship Act of 1978, D.C. Code Section 36-401 et. seq. and the First Source Employment Agreement Act of 1984., D.C. Code 1-1161 et seq.

1.36 Hiring of District Residents

All new employment resulting from this Agreement or subcontracts hereto, as defined in Mayor's Order 83-265 and implementing instructions, shall include the following basic goals and objectives for utilization of residents of the District of Columbia in each project's labor force:

1.36.1 at least fifty-one percent (51 %) of all jobs created are to be performed by employees who are residents of the District of Columbia.
1.36.2 at least fifty-one percent (51%) of apprentices and trainees employed shall be residents of the District of Columbia registered in programs approved by the District of Columbia Apprenticeship Council. The Contractor shall negotiate an Employment Agreement with the District of Columbia Department of Employment Services for jobs created as a result of this Agreement. The Department of Employment Services shall be the Contractor's first source of referral for qualified applicants, trainees and other workers in the implementation of employment goals contained in this Section 1.36.

1.37 Notices

1.37.1 Notices provided for herein, unless expressly provided for otherwise in this Agreement shall be in writing and may be delivered personally or by placing them in the U.S. mail, first class and certified, return receipt requested, with postage prepaid and addressed as follows:
If to the Authority:
District of Columbia Financial Responsibility and Management
Assistance Authority
441 Fourth Street, N.W., Suite 570N
Washington, D.C. 20001
Attention: Contracting Officer (Contract No. DCFRA #00-C-039)
Tel: 202-504-3400

If to the District:

District of Columbia Government
Department of Health.
825 North Capitol Street, N.E.
Washington, D.C. 20001
Attention: Contracting Officer Technical Representative (Contract No. DCFRA #00-C-039)
Tel: 202-442-5999

If to the Contractor:

Greater Southeast Community Hospital Corporation I
1310 Southern Avenue, SE
Washington D.C. 20032
Attention: Ana Raley, Chief Executive Officer
Attention: Cindy Sehr, Esq., Legal Department
Tel: 202-574-6611

1.38 Compliance

1.38.1 Contractor acknowledges that the Authority, the District and all of their employees and contractors must comply with applicable federal and state laws including, but not limited to, federal and state health care fraud and abuse laws.
1.38.2 Contractor represents and warrants as follows:

1.3 8.2.1 Contractor currently is in compliance with applicable federal and state laws including, but not limited to, federal and state health care fraud and abuse laws;
1.38.2.2 To the best of Contractor's knowledge, Contractor is not a target or subject of a federal or state criminal, civil, or administrative investigation;
1.38.2.3 Contractor is not a party to a criminal, civil or administrative action or proceeding concerning a potential violation of federal or state laws including, but not limited to, federal or state health care fraud and abuse laws; and
1.38.2.4 Contractor currently is not excluded, debarred, or suspended from participating in any federal or state health care program or other federal or state program.
1.38.3 During the term of this Agreement, Contractor shall take reasonable steps to ensure that Contractor conducts its business in compliance with (a) all applicable federal and state laws including, but not limited to, federal and state health care fraud and abuse laws, (b) the policies and procedures adopted by the Authority or the District, and (c) the Standards of Conduct ("Standards") adopted by the Authority or the District.
1.38.4 During the term of this Agreement, Contractor shall promptly notify the Authority in writing in the event that Contractor (a) fails to conduct its business in any material regard with (i) all applicable federal and state laws including, but not limited to, federal and state healthcare fraud and abuse laws, (ii) the Standards, or (iii) the policies and procedures adopted by the Authority or the District, (b) becomes the subject or target of a federal or state criminal, civil, or administrative investigation, (c) becomes a party to a criminal, civil, or administrative action or proceeding concerning a potential violation of any federal or state laws including, but not limited to, federal or state health care fraud and abuse laws, or (d) is excluded, debarred or suspended from participation in any federal or state health care program or other federal or state program.
1.38.5 The failure of Contractor to honor its duties and obligations under Sections 1.38.3 or 1.38.4 shall constitute a material breach of the Agreement; provided, however, that the Authority shall give Contractor written notice of any such breach and an opportunity to cure the breach in its entirety within ten (10) days of the delivery of the written notice. In the event that Contractor does not cure the breach in its entirety within the referenced ten (10) day cure period, the Authority shall be entitled to terminate the Agreement without further notice and to seek damages and any other relief that is otherwise available to the Authority under the Agreement, at law or in equity.
1.38.6 Contractor agrees to indemnify and hold harmless the Authority and the District and all of their officers, agents and servants against any and all claims or liabilities arising from or based on, or as a consequence of or result of (a) any material inaccuracy in the representations and warranties set forth in Section 1.38.2 or (b) the Contractor's failure (or alleged failure) to comply with its duties and obligations under Sections 1.38.3 or 1.38.4.

1.39 Representations and Certifications

All Representations and Certifications included in the Contractor's proposal (including those in the RFP which are accepted by submission of a proposal) are incorporated as a part of this Agreement and, unless otherwise specifically limited in this Agreement, will remain in effect and in full force for the duration of this Agreement.

1.40 Reports Prepared by Contractor

The Contractor shall prepare the technical reports set forth in the Statement of Work, the management reports set forth on Exhibit D, the financial reports set forth in Section 1.30, and such other reports as the Authority may reasonably request from time to time. The reports shall be in a format specified by the Authority and contain such information as requested by the Authority. In the event that any report set forth in this Agreement, the Statement of Work or the attached Schedule, or any other report requested by the Authority, is not provided to the Authority or is not received in a form that is acceptable to the Authority within ten (10) days of the date due, the Authority shall provide written notice to Contractor of such reporting deficiency. If Contractor fails to cure such deficiency within fifteen (15) days of such notice, the Authority may withhold five percent (5%) of the next monthly payment due to Contractor pursuant to Section 1.6 hereof until such time as the report is received by the Authority in a form that is acceptable to the Authority.

1.41 Maintenance of Effort

1.41.1 In addition to the Health Care Services to be provided to Eligible Uninsureds and compensated under this Agreement, the Contractor shall continue to provide at least its historical level of charity care services to residents of the District of Columbia. Such continued charity care shall not be compensated under this Agreement. This amount shall be equal on an annual basis during the term of this Agreement to at least: (a) that portion of the Eight Million Four Hundred Thousand Dollars ($8,400,000.00) of charity care that was provided to District of Columbia residents-- measured at the level of charges reduced to estimated costs by the application of Greater Southeast Community Hospital's (GSCHC's) ratio of costs to charges (RCC) - for the time period during which the $8,400,000.00 of charity care was provided. The Contractor shall present to the Authority, on at least a quarterly basis, such information and data as may be necessary to establish its ongoing compliance with this requirement.
1.41.2 Contractor shall supply the Authority with a report showing the portion of the $8,400,000.00 amount of charity care that was provided to District of Columbia residents and with a copy of the Uncompensated Care (i.e., bad debt and charity care) policies and standards that were in place at GSCHC during the time period in which it supplied the $8,400,000.00 in charity care referred to above. In addition, the Contractor shall notify and discuss with the Authority any proposed changes in those policies and standards during the term of this Agreement and seek the Authority's approval of such changes.
1.41.3 Contractor shall submit UB-92 and HCFA 1500 data elements for all charity care patients who are District of Columbia residents in the same formats and within the same timeframes as required for all Eligible Uninsureds. The amount of charges waived as charity care for these patients shall be reported to the Authority on a patient-specific basis by the Contractor.
1.41.4 The Authority shall have the right to audit GSCHC's charity care accounting practices, standards, policies and utilization and its compliance with this requirement and shall have the right to reduce its payments as needed to offset any under provision of charity care by GSCHC during the term of this Agreement. If the overall volume of services provided by GSCHC to all patients declines by more than ten percent (10%), GSCHC shall have the right to request a proportional downward adjustment in its charity care requirement.
1.41.5 All other providers in the District of Columbia, including program providers, will be expected to continue to provide at least their historical level of charity care (updated by the Annual Payment Rate Index Factor) to District of Columbia residents during the term of the Agreement. The Authority recognizes that the Department of Health has the right to audit these providers' charity care accounting practices, standards, policies and utilization and their compliance with this requirement and shall have the right to reduce their payments as needed to offset any under provision of charity care by them.
1.41.6 For the purpose of monitoring the provision of charity care by GSCHC during any Contract Year, the Authority shall multiply the amount of charity care reported by GSCHC at the charge level by the overall cost to charge ratio (RCC) reported by GSCHC on its most recently filed Medicaid cost report. At the time of the Final Reconciliation, or at the earliest time subsequently possible, the Authority will apply the actual cost to charge ratio (RCC) for GSCHC for the period during which the charity care was provided to determine whether GSCHC met the charity care requirement specified in this Section. If it is found that GSCHC provided less charity care than was required, the Authority shall either require GSCHC to repay the amount by means of a check written to the District within thirty (30) days of such determination by the Authority, or by means of a reduction to upcoming payments that would otherwise be made to Contractor under this Agreement. that would otherwise be applicable to the upcoming Contract Year, or by another mutually satisfactory method.

1.42 Capital Expenditures

1.42.1 The Authority shall provide Contractor, through a combination of direct payments and loans, an aggregate amount up to Eleven Million, Eight Hundred Thousand Dollars ($11,800,000.00) for reasonable and necessary capital expenditures made by Contractor to renovate, modify or replace the existing Public Benefit Corporation (PBC) Clinics, D.C. General Hospital and GSCHC. The purpose of such renovations and modifications is to ensure that (i) the PBC Clinics and D.C. General Hospital meet all applicable certification and licensure standards and (ii) GSCHC will be able to accommodate the increased volume of patient care services anticipated hereunder.
1.42.2 Such renovations and modifications at GSCHC shall include, but are not limited to, expansion of the intensive care unit, reopening closed nursing unit(s), addition of a dedicated corrections unit, relocation of the current psychiatric unit, upgrades to the operating rooms, upgrades to the emergency department, and certain patient room modifications on the hospital's eighth floor.
1.42.3 Amounts for approved capital expenditures at GSCHC shall be loaned by Authority to Contractor pursuant to a loan agreement and promissory note, the form of which are attached hereto as Exhibit B and Exhibit C, respectively. Repayment of amounts due from Contractor under the Promissory Note shall be ratably forgiven over the initial term of this Agreement, so long as this Agreement remains in full force and effect. Contractor shall provide Authority with such security interests as the Authority deems reasonably necessary to protect Authority's interests under this Section. Capital attributable to corrections improvements shall be ratably forgiven prior to the forgiveness of other amounts.
1.42.4 Capital expenditures hereunder shall only be reimbursed by Authority if such expenditure has been reviewed in advance and approved in writing by the Authority or its designee. Upon receipt of appropriate documentation evidencing the expenditure of capital or the incurrence of an obligation for purposes that were previously approved in writing pursuant to this Section, the Authority shall reimburse the Contractor within thirty (30) days of receipt of evidence of such expenditure including all supporting documentation, in a. form acceptable to Contracting Officer, through the aforementioned direct payments or loans, as appropriate. Notwithstanding anything contained herein to the contrary, in no event shall the total capital expenditures funded by Authority exceed $11.8 million.

1.43 Financial Representations and Warranties of Contractor

1.43.1 During the term of this Agreement, the Contractor warrants and represents that Contractor and its primary subcontractors shall:

1.43.1.1 Pay ninety five percent (95%) of all claims within thirty (30) days of a claim being considered a clean claim;
1.43.1.2 Pay provider claims of Contractor and primary subcontractors (including, for example, D.C. Chartered Health Plan, Inc.) in the same manner and pursuant to the same time schedule as claims from other providers (and not any more expeditiously);
1.43.1.3 As part of the monthly financial reporting, provide the Authority with notice of additional debt in excess of One Million Dollars ($1,000,000.00). Such notice shall specify the creditor, amount of debt and use of the proceeds of the debt; and
1.43.1.4 Invest at least Three Million Dollars ($3,000,000.00) per year during each Contract Year during the term of this Agreement in capital improvements, fixtures, furnishings or equipment at GSCHC. This requirement shall be cumulative, and Contractor shall be permitted to invest more or less in a particular year, provided, however, that at least One Million Five Hundred Thousand Dollars ($1,500,000.00) is invested each year and at least Fifteen Million Dollars ($15,000,000.00) has been invested prior to the end of the initial five-year term of the Agreement. For the purposes of determining the amount of capital investment that Contractor has made each year to satisfy this requirement, the parties shall not include any capital expenditures or improvements paid for by or on behalf of the Authority or the District of Columbia, including, but not limited to, the capital expenditures referenced in Section 1.42. During the term of this Agreement, the Contractor shall report the above financial information, together with any other information reasonably requested by the Authority, on a monthly basis.

1.43.3 Funds received from the Authority under this Agreement shall be maintained in a segregated, earmarked account and disbursements from such account shall only be made for Health Care Services, other health services subject to this Agreement, and reasonably related administrative expenses incurred in carrying out this Agreement. Disbursements for Health Care Services or other health services shall not be made until such services are rendered and appropriate claims therefor are submitted to Contractor for payment. During the term of this Agreement and for any reconciliation period thereafter, Contractor shall provide the Authority or the District with such other security interests as are deemed reasonably necessary to protect the Authority's interests under this Agreement.
1.43.4 In the event that Contractor fails to comply with any of the requirements of this Section 1.43 within ten (10) days of the date due, the Authority shall provide written notice to Contractor of such deficiency. If Contractor fails to cure such deficiency within fifteen (15) days of such notice, the Authority may withhold five percent (5%) of the next monthly payment due Contractor pursuant to Section 1.6 thereof until such time as the deficiency is corrected in a manner acceptable to the Authority.

1.44 Operating Committee

The Parties agree to convene an operating committee (the "Operating Committee") which shall serve in an advisory capacity to the Authority and the Contractor and shall address operating issues that arise with respect to the implementation of the program and such other matters as may be delegated by the Parties. The Operating Committee shall be comprised of, one (1) person designated by the Contractor, one (1) person designated by the Authority, (1) one person designated by the Department of Health and representatives of primary subcontractors of Contractor, as mutually agreed by the Parties.

1.45 Leases/Subleases

1.45.1 Contractor agrees to execute, within thirty (30) days of the Effective Date, the Master Lease Agreement, and such other leases, subleases and other documents as may be necessary to convey use of the D.C. General Hospital premises and PBC Clinics to Contractor during the term of this Agreement. The Master Lease Agreement to be executed by the parties shall be substantially in the form set forth at Exhibit H.

1.45.2 Provided no default by GSCHC has occurred under this Agreement, GSCHC and/or its directors, officers, contractors, agents, employees, and/or invitees (collectively, "Invitees") shall have the right to enter upon those certain premises (collectively, the "Leased Premises") to be leased by the Authority to GSCHC pursuant to the Master Lease Agreement (the "Lease") during the Early Access Period (as hereinafter defined) for the sole purpose of inspecting the Leased Premises as shall be reasonably necessary to prepare a proposal regarding capital expenditures, as more particularly described in Section 1.42 hereof; provided that (i) GSCHC shall give the Authority not less than one (1) business day's prior written notice before each such entry, (ii) the first such notice shall include sufficient information to permit the Authority to review the scope of the proposed inspection, and (iii) neither GSCHC not its Invitees shall permit any invasive tests on the Leased Premises without the Authority's prior written consent. Any entry onto the Leased Premises shall be at the sole risk, expense, and liability of GSCHC and its Invitees and shall be coordinated with the Authority to ensure that such inspection does not interfere with the operation of any of the Leased Premises.

1.45.3 If the Authority determines that GSCHC or any Invitee is interfering with the operation of the Leased Premises, then the Authority shall have the right to require the offending party to leave such Leased Premises. GSCHC shall: (a) promptly repair any damage resulting from any inspection to the Leased Premises and/or the personal property located therein; (b) fully comply with all applicable laws, (c) permit the Authority to have a representative present during all inspections, (d) promptly furnish to the Authority, if requested, copies of all studies and reports relating to the inspections which are not proprietary in nature, (e) maintain or cause to be maintained at GSCHC's expense insurance as required in the Lease, and (f) indemnify and hold the Authority harmless from and against any and all losses, damages, liabilities, actions, claims, costs and expenses, including court costs and reasonable attorneys' fees, to the extent arising out of or relating to GSCHC's and/or any Invitee's entry into any of the Leased Premises or any part thereof. The "Early Access Period" shall commence on the date of this Agreement and continue for thirty (30) days following the date hereof.

INTENDING TO BE BOUND, the parties execute this Agreement as of the date first above written.

District of Columbia Financial Responsibility and Management Assistance Authority

By: _______________________
Title: _______________________
Print Name: _______________________

Greater Southeast Community Hospital Corporation I