Structuring Telemedicine Agreements for Healthcare Organizations, Physician Groups and Telemedicine Practitioners

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Structuring Telemedicine Agreements for Healthcare Organizations, Physician Groups and Telemedicine Practitioners Navigating Regulatory Compliance and Corporate Practice of Medicine Issues, Negotiating Key Provisions WEDNESDAY, SEPTEMBER 27, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Marshall E. Jackson, Jr., McDermott Will & Emery, Washington, D.C. Ryan S. Johnson, Shareholder, Fredrikson & Byron, Minneapolis Erin S. Whaley, Partner, Troutman Sanders, Richmond, Va. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Disclaimer The information contained herein is for educational purposes only. Participants should seek counsel when drafting legal agreements.

6 LIFE SCIENCES Structuring Telemedicine Agreements for Healthcare Organizations, Physician Groups and Telemedicine Practitioners Marshall E. Jackson, Jr. McDermott Will & Emery, LLP Ryan S. Johnson Fredrikson & Byron P.A. Erin S. Whaley Troutman Sanders LLP 2017 McDermott Will & Emery LLP. McDermott operates its practice through separate legal entities in each of the countries where it has offices. This communication may be considered attorney advertising. Previous results are not a guarantee of future outcome.

7 Telemedicine in the Digital Health Ecosystem Each is an interrelated and integrated component of a digital ecosystem The lines of distinction between each can be blurry and solutions are rapidly becoming combinations of two or more of these components 7

8 Defining Telemedicine The use of medical information exchanged from one site to another via electronic communications to improve a patient s clinical health status. ~ American Medical Association Interactive services: Real-time interaction between provider and patient, via phone, video chat or text for diagnosis, consultation, treatment, education and care management Remote monitoring: Devices used to monitor patients, chronic diseases, record vital signs and improve medication adherence Store-and-forward: Transmission of medical data, such as images, to a physician for assessment Examples: Telestroke Teleradiology Tele-ICU Teledermatology Home Health: remote monitoring Consultations/second opinions (P2P or DTC) 8

9 Telemedicine Patient Engagement Platform Example: Tele-Behavioral Encounter 9

10 Drivers of Innovation Provider Interest Keeping up with patients Quality Population health management demands Building the brand New and Innovative Players Software and hardware entrepreneurs Consumer facing and provider facing technology developers Attracted to the massive health care market Consumers Ease of use Convenience Accessibility Quality Next great thing Comfort using technology Employers Improve health of employees Lower healthcare costs Increase accessibility Decrease absenteeism and presenteeism Recruitment tool Payors Lower cost Consumer demand Population health management demands 10

11 Example Business Models Equipment and Software Producers Provide the tools needed to facilitate telemedicine encounters Potential manufacturers of medical devices Telemedicine Companies Provide healthcare services Direct to consumer; extension of existing providers; insurance benefit; wellness; etc. Traditional Providers More specialized uses (e.g., telestroke; tele-icu; second opinion; etc.) Telemedicine a part of a larger platform Institution to Institution; Clinician to Clinician 11

12 Legal and Regulatory Considerations Technology Contracting and Development Privacy and Security IP/Data Strategies Care Delivery Considerations FDA/Regulatory Reimbursement / Payment Strategy Commercialization Strategy Investment & M&A Licensing and Collaborations 12

13 Legal and Regulatory Considerations Licensure (including non-physician professionals) Informed Consent Scope of Practice and Standard of Care (including remote prescribing) Privacy and Security Revenue Model Fraud and Abuse Reimbursement Consumer protection laws (FTC and state AGs) Risk Mitigation Corporate Practice of Medicine Medical Device Regulations 13

14 Types of Agreements Telemedicine Services Agreement Credentialing and Privileging Agreement Equipment Lease or Purchase Agreement Technology or Software Licensing or Purchase Agreement Technology Service Agreement Data Use Agreement Business Associate Agreement Management Services Agreement Collaborative or Supervising Agreement Website Terms of Use and Privacy Policy 14

15 Contract Considerations: Provision of Services Map out the telemedicine practice standards for the desired license and ensure an understanding of what can and can t be done by providers treating patients in that state What services will be provided? Which types of providers will provide the service? At which location (if facility based) and when? Will the other contracting party assist in the implementation of the service? If so, to what extent. Will support staff be designated to facilitate telemedicine services? Who will provide training to the staff? Who will develop any clinical protocols for use by any telemedicine provider and any licensed support staff? Who will ensure maintenance of necessary licenses, accreditation, credentialing? Who is responsible for maintaining patient EHRs? Example language: List of Scheduled Physicians (Attached as Exhibit to Agreement). Party A agrees to provide and Party B agrees to engage Party A for the provision and performance of telemedicine services under the terms and conditions of this Agreement As used in this Agreement, the terms Provider and Providers shall mean all of Party A s employed and contracted physicians or other licensed providers, as set forth in Exhibit A. Modifications to Exhibit Notice of Revised Schedule. Party A shall provide Party B with a revised Exhibit A indicating the name of any new Provider. Removal of Physician. If Party B no longer wishes to receive telemedicine services from a Provider, for reasons not requiring a hearing, Party B shall request Party A remove the Physician from Exhibit A. 15

16 Contract Considerations: Equipment and Technology Telemedicine Services Agreements Purchasing, Installation and Maintenance Who is responsible for purchasing, installing and/or maintaining telemedicine equipment? HIPAA compliance State technology requirements compliance Access to support services, technology updates, what to do if technology goes down Education and Training What education and training is needed to use telemedicine technology and provide telemedicine services? Who will assess education, training and competence? Example language: Party A will provide training prior to commencement of telemedicine services to Party B s designated support staff, nursing staff, and providers, which includes an overview of the provision of care via telemedicine, review of work flow (general to the consult and specific to each discipline), technology overview, and use of the telemedicine equipment and troubleshooting. Vendor Equipment/Software Agreements Licensing Terms Exclusivity, termination provisions, indemnification, etc. Inter-operability Compatible with standard technologies mobile, Mac/PC, browser compatibility, etc. HIPAA compliance Access to support services, technology updates Have vendor represent and warrant technology s compliance with regulatory requirements 16

17 Contract Considerations: Reimbursement Billing Requirements vary by payor / state Who is billing and collecting for telemedicine services rendered to patients? Medicare / Medicaid Do services qualify as covered telemedicine services? Does the arrangement meet the requirements of applicable federal or state healthcare program reimbursement requirements and applicable fraud and abuse laws? Commercial Payors Compensation Does the state require commercial coverage of services provided via telemedicine? Does the billing provider s contracts reflect said coverage and include negotiated payment amounts? Ensure compensation covers all aspects of the arrangement (e.g., provider services, technology/software, maintenance, support services) Analyze compensation with sensitivity to applicable fraud and abuse laws. Example language: In consideration for the telemedicine services provided pursuant to this Agreement, Party B shall pay Party A [$], which the parties believe constitute fair market value based on arms length negotiations and not related in any way to the value or volume of referrals between the Parties. Party B is responsible for billing the professional and, if applicable, technical fees, to the extent permitted by applicable third party payor billing rules. 17

18 Telemedicine and Telehealth Ryan S. Johnson, Esq. (612) Fredrikson & Byron, P.A. 18

19 Licensure Practitioners must meet licensing requirements in the state where the patient is located. Key issue in any telemedicine arrangement. State laws regarding telemedicine vary: Some state licensing laws directly address telemedicine and explicitly define the practice of telemedicine. Some states laws indirectly address telemedicine by defining the practice of medicine to include diagnosing or recommending treatment through electronic means. Some states are silent Fredrikson & Byron, P.A. 19

20 Licensure/Scope of Practice 2017 Fredrikson & Byron, P.A. 20

21 Licensure Some states require full licensure of practitioners providing telehealth services to patients in state. Active or in-state practice requirements Some states have special telemedicine licenses State Licensure Exceptions: Physician-to-physician consults Infrequent or occasional consultations 2017 Fredrikson & Byron, P.A. 21

22 Scope of Practice Use of non-physician practitioners increasing In telemedicine context, this raises issues regarding scope of practice, supervision, and prescriptive authority. Other considerations: Written collaborative agreement requirements Protocols Nurse Licensure Compact 2017 Fredrikson & Byron, P.A. 22

23 Physician Supervision Levels of Supervision: General supervision: Procedure must be furnished under physician s direction and control, but physician s presence not required. Direct supervision: Physician must be present in office suite and immediately available. Personal supervision: Physician must be in attendance in room during procedure Fredrikson & Byron, P.A. 23

24 Physician Supervision Direct supervision/on-site requirements can significantly impact telemedicine arrangements. Is remote supervision acceptable? Non-physician practitioner and patient in same location, but supervising physician off-site. Must review state requirements Physician/non-physician practitioner practice ratios 2017 Fredrikson & Byron, P.A. 24

25 Prescriptive Authority Issues surrounding prescribing medication electronically in connection with telehealth encounters. Permissibility of remote prescribing varies significantly across states State pharmacy statutes and regulations Licensing board policy Medicaid reimbursement policies 2017 Fredrikson & Byron, P.A. 25

26 Prescriptive Authority State prescribing requirements that create biggest hurdles in telemedicine context: Face-to-face encounter Physical examination Existing physician-patient relationship Controlled substances Efforts to clarify requirements/change law and accommodate online consultations Fredrikson & Byron, P.A. 26

27 Privacy and Security HIPAA HITECH State Laws and Regulations 2017 Fredrikson & Byron, P.A. 27

28 Privacy and Security HIPAA s Applicability Covered Entities Business Associates Protected Health Information Individually identifiable information (written, electronic, or oral) created or received by a provider; Relating to an individual s health, provision of health care to an individual, or payment for health care; That identifies the individual or provides a reasonable basis to identify the individual Fredrikson & Byron, P.A. 28

29 Privacy and Security Telemedicine providers billing for telemedicine services must comply with HIPAA and state confidentiality and privacy rules for protection of protected health information ensure policies and procedures are in place to prevent unauthorized use or disclosure provide notice of a breach when needed 2017 Fredrikson & Byron, P.A. 29

30 Privacy and Security Telemedicine Providers must maintain: Business Associate Agreements Patient Consents Patient Rights for Telehealth Encounters Forms 2017 Fredrikson & Byron, P.A. 30

31 Business Associates Who is a Business Associate? person, other than a workforce member, who creates, receives, maintains, or transmits PHI on behalf of a Covered Entity, or who provides services to or for the Covered Entity, which involves the disclosure of PHI Business Associates are directly and contractually liable for violations of HIPAA rules and regulations Fredrikson & Byron, P.A. 31

32 Business Associate Agreements Required Provisions Optional Provisions 2017 Fredrikson & Byron, P.A. 32

33 Privacy and Security HIPAA Security Rule Requires implementation of administrative, physical, and technical safeguards to protect electronic PHI. Covered entities and business associates must: Ensure the confidentiality, integrity and availability of ephi that it creates, receives, maintains or transmits; Protect against reasonably anticipated threats or hazards to the security or integrity of ephi; Protect against impermissible uses or disclosures; and Ensure compliance by all workforce members Fredrikson & Byron, P.A. 33

34 Privacy and Security Must also consider state laws that apply to telemedicine arrangements. Applicable state laws may be more stringent than HIPAA. Some states have recordkeeping and privacy laws relating specifically to telehealth encounters Fredrikson & Byron, P.A. 34

35 Corporate Practice of Medicine 2017 Fredrikson & Byron, P.A. 35

36 Corporate Practice of Medicine Corporate practice of medicine ( CPM ) doctrine prohibits corporations from employing medical professionals or owning/controlling medical practices. Intended to prevent lay persons from exerting control or influence over physician medical decision-making. CPM prohibition has been widely criticized Fredrikson & Byron, P.A. 36

37 Corporate Practice of Medicine Based on state statute, case law, attorney general opinions, board policies, etc. Enforcement of CPM prohibition varies Some states are more active (e.g., CA, NY) Exceptions vary by state Hospitals Entities owned solely by licensed professionals 2017 Fredrikson & Byron, P.A. 37

38 Corporate Practice of Medicine Potential ramifications for CPM violations 2017 Fredrikson & Byron, P.A. 38

39 Corporate Practice of Medicine Potential solutions to CPM problem: If state CPM prohibition applies to telemedicine arrangement, management company model may be an option. Professional entity is responsible for clinical functions. Management company is responsible for nonclinical functions under management services agreement Fredrikson & Byron, P.A. 39

40 Fee-Splitting Many States Prohibit Fee-Splitting Perceived danger of allowing professionals and non-professionals to share in income from professional services: Temptation to maximize profit through medically unnecessary services. Temptation to limit medically necessary services to maximize income Fredrikson & Byron, P.A. 40

41 Federal Anti-Kickback Statute Prohibits offering, paying, soliciting or receiving any remuneration in return for business for which payment may be made under a federal health care program; or inducing purchases, leases, orders or arranging for any good or service or item paid for by a federal health care program. Remuneration includes kickbacks, bribes and rebates, cash or in kind, direct or indirect Fredrikson & Byron, P.A. 41

42 Federal Anti-Kickback Statute Potential penalties for violations of antikickback statute: Criminal and civil penalties Imprisonment Civil Monetary Penalties False Claims Act exposure 2017 Fredrikson & Byron, P.A. 42

43 Federal Anti-Kickback Statute Telemedicine relationships requiring antikickback analysis: Relationships with supervising/collaborating physicians Relationships with other entities (management company, telemedicine entity, equipment/technology vendor, etc.) 2017 Fredrikson & Byron, P.A. 43

44 Federal Anti-Kickback Statute No issue if federal health care program reimbursement is not involved. BUT remember to consider state antikickback prohibitions. Safe harbor protection space rental, equipment rental, personal services and management contracts, etc, Advisory opinions 2017 Fredrikson & Byron, P.A. 44

45 Self-Referral Prohibitions Federal Stark law prohibits a physician from making a referral for designated health services ( DHS ) to an entity with which the physician (or an immediate family member) has a financial relationship, unless one of its many exceptions applies. Stark also prohibits entities from submitting claims for DHS provided pursuant to a prohibited referral Fredrikson & Byron, P.A. 45

46 Self-Referral Prohibitions Stark is a strict liability statute, meaning that the intent of the parties is irrelevant for purposes of determining whether the law has been violated. Stark provides for monetary penalties and requires the refund of amounts paid for illegally referred DHS Fredrikson & Byron, P.A. 46

47 Self-Referral Telemedicine arrangements that involve free/discounted equipment or services, volume discounts, per-click payments, or advertisements should be analyzed for possible self-referral issues Possible exceptions: lease arrangements personal services arrangements, etc. Remember state law 2017 Fredrikson & Byron, P.A. 47

48 Patient/Physician Relationship State Law Governs Establishment of Relationship Informed Consent requirements when and how obtained 2017 Fredrikson & Byron, P.A. 48

49 Risk Allocation & Mitigation in Telehealth Contracts Erin Whaley Partner

50 Reps, Warranties and Disclaimers Vendor shall: (a) perform the Services using personnel of required skill, experience and qualifications and in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and shall devote adequate resources to meet its obligations under this Agreement; (b) comply in all material respects with all applicable federal, state and local laws, statutes, ordinances, rules and regulations within the United States and shall hold all permits, licenses and similar authority necessary for Vendor s business and the performance of Services hereunder; (c) ensure that the Services will be free of any time bomb, viruses, trap doors, back doors or other code which destroys, erases, damages or disrupts the normal operations of, or allows for unauthorized access to, protected health information; (d) DISCLAIMER OF WARRANTIES. VENDOR DOES NOT WARRANT THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE. ALL INFORMATION, MATERIALS, AND SERVICES ARE PROVIDED TO CUSTOMER AS IS. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, VENDOR HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. Performance Warranty Can be customized for the specific services being rendered If there are SLAs, add that Services will be provided in accordance with the SLAs 50

51 Reps, Warranties and Disclaimers Vendor shall: (a) perform the Services using personnel of required skill, experience and qualifications and in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and shall devote adequate resources to meet its obligations under this Agreement; (b) comply in all material respects with all applicable federal, state and local laws, statutes, ordinances, rules and regulations within the United States and shall hold all permits, licenses and similar authority necessary for Vendor s business and the performance of Services hereunder; (c) ensure that the Services will be free of any time bomb, viruses, trap doors, back doors or other code which destroys, erases, damages or disrupts the normal operations of, or allows for unauthorized access to, protected health information; (d) DISCLAIMER OF WARRANTIES. VENDOR DOES NOT WARRANT THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE. ALL INFORMATION, MATERIALS, AND SERVICES ARE PROVIDED TO CUSTOMER AS IS. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, VENDOR HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. Compliance with Laws Warranty Can list specific laws or remain broad Knowledge or level of effort qualifiers 51

52 Reps, Warranties and Disclaimers Vendor shall: (a) perform the Services using personnel of required skill, experience and qualifications and in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and shall devote adequate resources to meet its obligations under this Agreement; (b) comply in all material respects with all applicable federal, state and local laws, statutes, ordinances, rules and regulations within the United States and shall hold all permits, licenses and similar authority necessary for Vendor s business and the performance of Services hereunder; (c) ensure that the Services will be free of any time bomb, viruses, trap doors, back doors or other code which destroys, erases, damages or disrupts the normal operations of, or allows for unauthorized access to, protected health information; (d) DISCLAIMER OF WARRANTIES. VENDOR DOES NOT WARRANT THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE. ALL INFORMATION, MATERIALS, AND SERVICES ARE PROVIDED TO CUSTOMER AS IS. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, VENDOR HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. Security Warranty Not necessary for professional services only Customize for specific type of software involved (app vs. hardware) 52

53 Reps, Warranties and Disclaimers Vendor shall: (a) perform the Services using personnel of required skill, experience and qualifications and in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and shall devote adequate resources to meet its obligations under this Agreement; (b) comply in all material respects with all applicable federal, state and local laws, statutes, ordinances, rules and regulations within the United States and shall hold all permits, licenses and similar authority necessary for Vendor s business and the performance of Services hereunder; (c) ensure that the Services will be free of any time bomb, viruses, trap doors, back doors or other code which destroys, erases, damages or disrupts the normal operations of, or allows for unauthorized access to, protected health information; (d) DISCLAIMER OF WARRANTIES. VENDOR DOES NOT WARRANT THE SERVICES WILL BE UNINTERRUPTED OR ERROR-FREE. ALL INFORMATION, MATERIALS, AND SERVICES ARE PROVIDED TO CUSTOMER AS IS. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, VENDOR HEREBY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. Disclaimers are relatively standard Often paired with limitation of liability Example is basic but may be much more detailed 53

54 Indemnification Vendor shall indemnify and hold harmless Customer, its successors and assigns, from and against any and all liabilities, losses, claims, suits, causes of action, demands, costs, damages, expenses (including, without limitation, court costs, reasonable attorneys fees and expenses, costs of travel, interest expense and amounts paid in compromise or settlement of any losses, claims or suits), judgments or obligations arising or resulting from or in connection with (i) a breach by Vendor of this Agreement or (ii) any third party claim, demand, suit or proceeding against Customer, or any of its respective officers, directors, employees, agents and third party vendors for infringement or misappropriation of such third party's intellectual property rights arising from any software provided by Vendor to Customer hereunder. Vendor shall at its expense: (i) procure the right for Customer to continue using the infringing software, or (ii) promptly replace the infringing software with a non-infringing version of equivalent function, features, characteristics and performance or (iii) modify the software to be non-infringing without detracting from function or performance. Each Party (the Indemnifying Party ) agrees to defend, indemnify and hold the other party (the Indemnified Party ) harmless from and against any and all losses, liabilities, damages, expenses, bodily injuries, costs or obligations of any kind (including reasonable attorneys fees and disbursements) ( Losses ) from any third party claim, suit, action or proceeding (each, a Claim ) to the extent arising from the Indemnifying Party s material breach of any representation or warranty set forth in this Agreement. Vendor will also indemnify Customer for any Claims alleging medical malpractice by Vendor Providers in connection with a Vendor Provider s performance of the Services, or that Vendor s intellectual property infringes any intellectual property rights of a third party. The Indemnifying Party s obligation with respect to Losses shall be subject to the Limitation of Liability. Vendor shall protect, indemnify and save Customer and the directors, officers, shareholders and employees of Customer harmless from and against any and all liability and expense of any kind, arising from injuries or damages to persons or property in connection with the provision of the Services, unless such liability results solely from the willful misconduct of Manager and/or its directors, officers, shareholders, employees or agents. 54

55 Indemnification Vendor shall indemnify and hold harmless Customer, its successors and assigns, from and against any and all liabilities, losses, claims, suits, causes of action, demands, costs, damages, expenses (including, without limitation, court costs, reasonable attorneys fees and expenses, costs of travel, interest expense and amounts paid in compromise or settlement of any losses, claims or suits), judgments or obligations arising or resulting from or in connection with (i) a breach by Vendor of this Agreement or (ii) any third party claim, demand, suit or proceeding against Customer, or any of its respective officers, directors, employees, agents and third party vendors for infringement or misappropriation of such third party's intellectual property rights arising from any software provided by Vendor to Customer hereunder. Vendor shall at its expense: (i) procure the right for Customer to continue using the infringing software, or (ii) promptly replace the infringing software with a non-infringing version of equivalent function, features, characteristics and performance or (iii) modify the software to be non-infringing without detracting from function or performance. Each Party (the Indemnifying Party ) agrees to defend, indemnify and hold the other party (the Indemnified Party ) harmless from and against any and all losses, liabilities, damages, expenses, bodily injuries, costs or obligations of any kind (including reasonable attorneys fees and disbursements) ( Losses ) from any third party claim, suit, action or proceeding (each, a Claim ) to the extent arising from the Indemnifying Party s material breach of any representation or warranty set forth in this Agreement. Vendor will also indemnify Customer for any Claims alleging medical malpractice by Vendor Providers in connection with a Vendor Provider s performance of the Services, or that Vendor s intellectual property infringes any intellectual property rights of a third party. The Indemnifying Party s obligation with respect to Losses shall be subject to the Limitation of Liability. Vendor shall protect, indemnify and save Customer and the directors, officers, shareholders and employees of Customer harmless from and against any and all liability and expense of any kind, arising from injuries or damages to persons or property in connection with the provision of the Services, unless such liability results solely from the willful misconduct of Manager and/or its directors, officers, shareholders, employees or agents. 55

56 Indemnification Vendor shall indemnify and hold harmless Customer, its successors and assigns, from and against any and all liabilities, losses, claims, suits, causes of action, demands, costs, damages, expenses (including, without limitation, court costs, reasonable attorneys fees and expenses, costs of travel, interest expense and amounts paid in compromise or settlement of any losses, claims or suits), judgments or obligations arising or resulting from or in connection with (i) a breach by Vendor of this Agreement or (ii) any third party claim, demand, suit or proceeding against Customer, or any of its respective officers, directors, employees, agents and third party vendors for infringement or misappropriation of such third party's intellectual property rights arising from any software provided by Vendor to Customer hereunder. Vendor shall at its expense: (i) procure the right for Customer to continue using the infringing software, or (ii) promptly replace the infringing software with a non-infringing version of equivalent function, features, characteristics and performance or (iii) modify the software to be non-infringing without detracting from function or performance. Each Party (the Indemnifying Party ) agrees to defend, indemnify and hold the other party (the Indemnified Party ) harmless from and against any and all losses, liabilities, damages, expenses, bodily injuries, costs or obligations of any kind (including reasonable attorneys fees and disbursements) ( Losses ) from any third party claim, suit, action or proceeding (each, a Claim ) to the extent arising from the Indemnifying Party s material breach of any representation or warranty set forth in this Agreement. Vendor will also indemnify Customer for any Claims alleging medical malpractice by Vendor Providers in connection with a Vendor Provider s performance of the Services, or that Vendor s intellectual property infringes any intellectual property rights of a third party. The Indemnifying Party s obligation with respect to Losses shall be subject to the Limitation of Liability. Vendor shall protect, indemnify and save Customer and the directors, officers, shareholders and employees of Customer harmless from and against any and all liability and expense of any kind, arising from injuries or damages to persons or property in connection with the provision of the Services, unless such liability results solely from the willful misconduct of Manager and/or its directors, officers, shareholders, employees or agents. 56

57 Indemnification Vendor shall indemnify and hold harmless Customer, its successors and assigns, from and against any and all liabilities, losses, claims, suits, causes of action, demands, costs, damages, expenses (including, without limitation, court costs, reasonable attorneys fees and expenses, costs of travel, interest expense and amounts paid in compromise or settlement of any losses, claims or suits), judgments or obligations arising or resulting from or in connection with (i) a breach by Vendor of this Agreement or (ii) any third party claim, demand, suit or proceeding against Customer, or any of its respective officers, directors, employees, agents and third party vendors for infringement or misappropriation of such third party's intellectual property rights arising from any software provided by Vendor to Customer hereunder. Vendor shall at its expense: (i) procure the right for Customer to continue using the infringing software, or (ii) promptly replace the infringing software with a non-infringing version of equivalent function, features, characteristics and performance or (iii) modify the software to be non-infringing without detracting from function or performance. Each Party (the Indemnifying Party ) agrees to defend, indemnify and hold the other party (the Indemnified Party ) harmless from and against any and all losses, liabilities, damages, expenses, bodily injuries, costs or obligations of any kind (including reasonable attorneys fees and disbursements) ( Losses ) from any third party claim, suit, action or proceeding (each, a Claim ) to the extent arising from the Indemnifying Party s material breach of any representation or warranty set forth in this Agreement. Vendor will also indemnify Customer for any Claims alleging medical malpractice by Vendor Providers in connection with a Vendor Provider s performance of the Services, or that Vendor s intellectual property infringes any intellectual property rights of a third party. The Indemnifying Party s obligation with respect to Losses shall be subject to the Limitation of Liability. Vendor shall protect, indemnify and save Customer and the directors, officers, shareholders and employees of Customer harmless from and against any and all liability and expense of any kind, arising from injuries or damages to persons or property in connection with the provision of the Services, unless such liability results solely from the willful misconduct of Customer and/or its directors, officers, shareholders, employees or agents. 57

58 Restrictive Covenants (a) General. Vendor expressly acknowledges that it will be given access to, and be provided with, business methods, trade secrets and other proprietary information, including without limitation patient lists and business strategies, in connection with Services. Vendor expressly acknowledges and agrees that the Confidential Information is proprietary and confidential and if any of the Confidential Information was imparted to or became known by any persons such disclosure would result in hardship, loss, irreparable injury and damage to Customer, the measurement of which would be difficult, if not impossible, to determine. Accordingly, Vendor expressly agrees that Customer has a legitimate interest in protecting the Confidential Information, that it is necessary for Customer to protect its business from such hardship, loss, irreparable injury and damage, that the following covenants are a reasonable means by which to accomplish those purposes, and that violation of any of the protective covenants contained herein shall constitute a breach of trust and is grounds for immediate termination of this Agreement and for appropriate legal action for damages, enforcement and/or injunction. (b) Restrictions on Soliciting Employees of Customer. Vendor covenants that, during the term of this Agreement and for a period of one (1) year immediately thereafter, irrespective of which party terminates this Agreement, and whether such termination is for cause, Vendor will not, either for itself or for any other person, firm, corporation or other entity, either directly or indirectly (a) induce, or attempt to induce, any employee of Customer or person under contract with Customer (whether leased or otherwise) to terminate his or her employment or hire away or attempt to hire away, any employee or contractor of Customer; or (b) engage in any act or activity which would interfere with or harm any business relationship Customer may have with any employee, contractor, principal, supplier or lessee. (c) Non-Competition Covenant. Commencing with the date of this Agreement and continuing for eighteen (18) months following the cessation of Vendor s engagement with Customer for any reason whatsoever, including the termination or expiration of this Agreement, Vendor shall not, directly or indirectly, (i) at any hospital within a fifty (50) mile radius of Customer s location(s) perform services that are the same as or substantially similar to, and competitive with, those provided by Vendor pursuant to this Agreement. (d) Further Covenants. Vendor acknowledges that Customer has devoted substantial time, money and effort in the development of the Confidential Information and in maintaining the proprietary and confidential nature thereof. Vendor agrees to use its best efforts and exercise utmost diligence to protect and safeguard the Confidential Information. Vendor covenants that, during the term of this Agreement and for a period of five (5) years immediately thereafter, regardless of which party terminates this Agreement and whether such termination is for cause, neither Vendor, nor any of its employees or contractors, will disclose, disseminate or distribute to another, nor induce any other person to disclose, disseminate or distribute, any Confidential Information of Customer, directly or indirectly, whether or not acquired, learned, obtained or developed by Vendor alone or in conjunction with others, nor will Vendor use or cause to be used any Confidential Information in any way except as is required in the course of Vendor s performance of the Services pursuant to the terms of this Agreement. Vendor acknowledges and covenants that all Confidential Information relating to the business of Customer, whether prepared by Vendor or otherwise coming into its possession, shall remain the exclusive property of Customer, shall not be copied or otherwise reproduced in whole or in part, and shall not be removed from the premises of Customer under any circumstances whatsoever without the prior written consent of Customer. Vendor further covenants that all memoranda, notes, records, drawings or other documents made, compiled, acquired or received by Vendor during the term of this Agreement, concerning any business activity, including, but not limited to, management techniques, names of referral sources, names of vendors and suppliers, marketing and sales techniques, and the pricing of products and services, shall, together with all copies, be delivered, in good condition, to Customer, immediately upon termination of this Agreement by either party, or at any time, upon Customer s request. Non-solicitation, non-compete, nondisclosure Reasonableness, time, geographic scope, scope of services State law specific Liquidated damages or buy-out provisions 58

59 Insurance Each of Vendor and Customer shall have and maintain, at the expense of each of them respectively, a policy or policies of comprehensive general liability insurance, malpractice liability insurance and cyber or privacy data breach insurance in an amount reasonably considered as being appropriate by each of them, for the purpose of providing insurance protection for their respective operations. Upon Customer s request, Vendor shall arrange for the provision of certificates or other proof of existing and continuing insurance coverages, including limits, deductibles/self-retention amounts, coverage, and other provisions of such insurances, and shall include with respect to such insurance provision for direct notice from Vendor s insurer to Customer of any proposed changes in limits, deductibles/self-retention amounts, coverages, or other provisions of such insurance, which notice shall be given not less than thirty (30) days prior to the effective date of any such proposed changes. If such direct notice is not possible, notice of any of the circumstances described in the preceding sentence shall be given to Customer not less than thirty (30) days prior to the effective date of any such proposed changes. Vendor shall obtain an extended reporting endorsement for claims in the event policy is cancelled or discontinued. Prior to commencement of operations hereunder, Vendor will purchase and maintain the following minimum insurance as will protect it, its employees, agents, and representatives from any claim which may arise out of Vendor s Services under this Agreement: A.Commercial General Liability Insurance on an Occurrence basis ($1,000,000 per occurrence/$3,000,000 annual aggregate) B.Professional Liability ($1,000,000 per occurrence/$3,000,000 annual aggregate) C.Security/Cyber/Privacy Breach Insurance ($3,000,000 per occurrence/$6,000,000 annual aggregate) Each party will maintain such insurance coverage as is reasonably necessary to support its respective indemnification obligations. Upon written request, each party shall provide evidence of such coverage to the other party. Additionally, Vendor agrees that it will maintain appropriate professional liability insurance and obligate each Vendor Provider to have medical or professional malpractice insurance coverage. All insurance must be with an insurance carrier authorized to do business in the [Customer s state of operation]. 59

60 Insurance Each of Vendor and Customer shall have and maintain, at the expense of each of them respectively, a policy or policies of comprehensive general liability insurance, malpractice liability insurance and cyber or privacy data breach insurance in an amount reasonably considered as being appropriate by each of them, for the purpose of providing insurance protection for their respective operations. Upon Customer s request, Vendor shall arrange for the provision of certificates or other proof of existing and continuing insurance coverages, including limits, deductibles/self-retention amounts, coverage, and other provisions of such insurances, and shall include with respect to such insurance provision for direct notice from Vendor s insurer to Customer of any proposed changes in limits, deductibles/self-retention amounts, coverages, or other provisions of such insurance, which notice shall be given not less than thirty (30) days prior to the effective date of any such proposed changes. If such direct notice is not possible, notice of any of the circumstances described in the preceding sentence shall be given to Customer not less than thirty (30) days prior to the effective date of any such proposed changes. Vendor shall obtain an extended reporting endorsement for claims in the event policy is cancelled or discontinued. Prior to commencement of operations hereunder, Vendor will purchase and maintain the following minimum insurance as will protect it, its employees, agents, and representatives from any claim which may arise out of Vendor s Services under this Agreement: A.Commercial General Liability Insurance on an Occurrence basis ($1,000,000 per occurrence/$3,000,000 annual aggregate) B.Professional Liability ($1,000,000 per occurrence/$3,000,000 annual aggregate) C.Security/Cyber/Privacy Breach Insurance ($3,000,000 per occurrence/$6,000,000 annual aggregate) Each party will maintain such insurance coverage as is reasonably necessary to support its respective indemnification obligations. Upon written request, each party shall provide evidence of such coverage to the other party. Additionally, Vendor agrees that it will maintain appropriate professional liability insurance and obligate each Vendor Provider to have medical or professional malpractice insurance coverage. All insurance must be with an insurance carrier authorized to do business in the [Customer s state of operation]. 60

61 Insurance Each of Vendor and Customer shall have and maintain, at the expense of each of them respectively, a policy or policies of comprehensive general liability insurance, malpractice liability insurance and cyber or privacy data breach insurance in an amount reasonably considered as being appropriate by each of them, for the purpose of providing insurance protection for their respective operations. Upon Customer s request, Vendor shall arrange for the provision of certificates or other proof of existing and continuing insurance coverages, including limits, deductibles/self-retention amounts, coverage, and other provisions of such insurances, and shall include with respect to such insurance provision for direct notice from Vendor s insurer to Customer of any proposed changes in limits, deductibles/self-retention amounts, coverages, or other provisions of such insurance, which notice shall be given not less than thirty (30) days prior to the effective date of any such proposed changes. If such direct notice is not possible, notice of any of the circumstances described in the preceding sentence shall be given to Customer not less than thirty (30) days prior to the effective date of any such proposed changes. Vendor shall obtain an extended reporting endorsement for claims in the event policy is cancelled or discontinued. Prior to commencement of operations hereunder, Vendor will purchase and maintain the following minimum insurance as will protect it, its employees, agents, and representatives from any claim which may arise out of Vendor s Services under this Agreement: A.Commercial General Liability Insurance on an Occurrence basis ($1,000,000 per occurrence/$3,000,000 annual aggregate) B.Professional Liability ($1,000,000 per occurrence/$3,000,000 annual aggregate) C.Security/Cyber/Privacy Breach Insurance ($3,000,000 per occurrence/$6,000,000 annual aggregate) Each party will maintain such insurance coverage as is reasonably necessary to support its respective indemnification obligations. Upon written request, each party shall provide evidence of such coverage to the other party. Additionally, Vendor agrees that it will maintain appropriate professional liability insurance and obligate each Vendor Provider to have medical or professional malpractice insurance coverage. All insurance must be with an insurance carrier authorized to do business in the [Customer s state of operation]. 61

62 Questions? Marshall E. Jackson, Jr. McDermott Will & Emery, LLP (202) Ryan S. Johnson Fredrikson & Byron P.A. (612) Erin S. Whaley Troutman Sanders LLP (804)