Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 1 of 86

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

Blue Cross and Blue Shield of
Georgia, Inc.; Blue Cross of California,
Inc. d/b/a/ Anthem Blue Cross;
Anthem Blue Cross Life and Health
Insurance Company; Rocky Mountain
Hospital and Medical Service, Inc.
d/b/a Anthem Blue Cross and Blue
Shield; Anthem Health Plans, Inc.
d/b/a Anthem Blue Cross and Blue
Shield; Blue Cross Blue Shield
Healthcare Plan of Georgia, Inc.;
Anthem Insurance Companies, Inc.
d/b/a Anthem Blue Cross and Blue
Shield; Anthem Health Plans of
Kentucky, Inc. d/b/a Anthem Blue
Cross and Blue Shield; Anthem Health
Plans of Maine, Inc. d/b/a Anthem
Blue Cross and Blue Shield;
RightCHOICE Managed Care, Inc.;
Healthy Alliance Life Insurance
Company; HMO Missouri, Inc.;
Anthem Health Plans of New
Hampshire, Inc. d/b/a Anthem Blue
Cross and Blue Shield; Empire
HealthChoice Assurance, Inc. d/b/a
Empire Blue Cross and Blue Shield;
Community Insurance Company
d/b/a Anthem Blue Cross and Blue
Shield; Anthem Health Plans of
Virginia, Inc. d/b/a Anthem Blue
Cross and Blue Shield; HMO

THIRD AMENDED COMPLAINT
JURY TRIAL DEMANDED
Civil Action No.:
1:18-cv-01304-MLB

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 2 of 86

Healthkeepers, Inc. d/b/a Anthem
Blue Cross and Blue Shield; Blue Cross
Blue Shield of Wisconsin d/b/a
Anthem Blue Cross and Blue Shield;
Compcare Health Services Insurance
Corporation d/b/a Anthem Blue Cross
and Blue Shield; Blue Cross Blue Shield
of Michigan Mutual Insurance
Company; BCBSM, Inc. d/b/a
BlueCross BlueShield of Minnesota;
Regence BlueCross BlueShield of
Oregon; Regence BlueCross BlueShield
of Utah; Regence BlueShield; and
Regence BlueShield of Idaho,
Plaintiffs,
v.
DL Investment Holdings, LLC f/k/a
Durall Capital Holdings, LLC d/b/a
Chestatee Regional Hospital, Reliance
Laboratory Testing, Inc., Medivance
Billing Serv., Inc., Aaron Durall, Jorge
Perez, and Neisha Carter Zaffuto,
Defendants.

Plaintiffs Blue Cross and Blue Shield of Georgia, Inc. (“BCBS Georgia”);
Blue Cross of California, Inc. d/b/a/ Anthem Blue Cross; Anthem Blue Cross
Life and Health Insurance Company; Rocky Mountain Hospital and Medical
Service, Inc. d/b/a Anthem Blue Cross and Blue Shield; Anthem Health Plans,
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Inc. d/b/a Anthem Blue Cross and Blue Shield; Blue Cross Blue Shield
Healthcare Plan of Georgia, Inc.; Anthem Insurance Companies, Inc. d/b/a
Anthem Blue Cross and Blue Shield; Anthem Health Plans of Kentucky, Inc.
d/b/a Anthem Blue Cross and Blue Shield; Anthem Health Plans of Maine, Inc.
d/b/a Anthem Blue Cross and Blue Shield; RightCHOICE Managed Care, Inc.;
Healthy Alliance Life Insurance Company; HMO Missouri, Inc.; Anthem Health
Plans of New Hampshire, Inc. d/b/a Anthem Blue Cross and Blue Shield;
Empire HealthChoice Assurance, Inc. d/b/a Empire Blue Cross and Blue Shield;
Community Insurance Company d/b/a Anthem Blue Cross and Blue Shield;
Anthem Health Plans of Virginia, Inc. d/b/a Anthem Blue Cross and Blue
Shield; HMO Healthkeepers, Inc. d/b/a Anthem Blue Cross and Blue Shield;
Blue Cross Blue Shield of Wisconsin d/b/a Anthem Blue Cross and Blue Shield;
Compcare Health Services Insurance Corporation d/b/a Anthem Blue Cross and
Blue Shield; Blue Cross Blue Shield of Michigan Mutual Insurance Company;
BCBSM, Inc. d/b/a BlueCross BlueShield of Minnesota; Regence BlueCross
BlueShield of Oregon; Regence BlueCross BlueShield of Utah; Regence
BlueShield; and Regence BlueShield of Idaho (collectively, “Plaintiffs”) by and
through the undersigned counsel, hereby file this Complaint against Defendants
DL Investment Holdings, LLC, which does business as Chestatee Regional
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Hospital, and was formerly known as Durall Capital Holdings, LLC (“Chestatee”
or “Durall Capital”),1 Reliance Laboratory Testing, Inc. (“Reliance Labs”),
Medivance Billing Service, Inc. (“Medivance”), Aaron Durall, Jorge Perez, and
Neisha Carter Zaffuto (collectively, “Defendants”).
Plaintiffs further state and allege as follows:
NATURE OF THE ACTION
1.

Since 2016, Defendants have engaged in a widespread fraudulent

scheme to enrich themselves at Plaintiffs’ expense by billing for laboratory
services that were not payable, were fraudulent, were in violation of contracts
between BCBS Georgia and Chestatee Regional Hospital, and were unlawful.
2.

Chestatee Regional Hospital is a 49-bed hospital located in

Dahlonega, Georgia.
3.

Until August 2016, Chestatee Regional Hospital was owned by

Southern Health Corporation of Dahlonega.

“Chestatee” and “Durall Capital” refer to Defendant DL Investment Holdings, LLC f/k/a Durall
Capital Holdings, LLC, the entity that acquired Chestatee Regional Hospital in August 2016 and does
business under that name. Where used, “Durall Capital” refers to this entity prior to its acquisition of
Chestatee Regional Hospital.
1

“Chestatee Regional Hospital” refers to the hospital in Dahlonega, Georgia, including prior to its
purchase by Durall Capital or when distinguishing between the off-site operations of Durall Capital (in
Florida) and the on-site operations of the hospital (in Georgia) after the acquisition.

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4.

BCBS Georgia’s relationship with Southern Health Corporation of

Dahlonega was governed by three contracts. The contracts made Chestatee
Regional Hospital an in-network provider in BCBS Georgia’s provider network
and established the rates at which BCBS Georgia would reimburse Chestatee
Regional Hospital for the provision of medically necessary services to enrollees
of health plans offered by BCBS Georgia and its affiliates.
5.

In August 2016, Durall Capital purchased Chestatee Regional

Hospital for $15 million.
6.

BCBS Georgia allowed Southern Health Corporation of Dahlonega

to assign its rights, duties, and obligations under the contracts to Durall Capital.
7.

Unbeknownst to BCBS Georgia, as soon as Durall Capital took

control of Chestatee Regional Hospital, Durall Capital agreed with Reliance Labs,
an out-of-network toxicology laboratory located in Sunrise, Florida, to
fraudulently bill BCBS Georgia for tests performed at and by Reliance Labs as if
the tests had been performed at and by Chestatee Regional Hospital.
8.

When providers ordered the tests, they ordered them from Reliance

Labs, not from Chestatee Regional Hospital.
9.

Providers shipped their patients’ specimens to Reliance Labs’ facility

in Florida, not to Chestatee Regional Hospital’s facility in Georgia.
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10.

Reliance Labs performed the tests in Florida and reported the results

to providers through a Reliance Labs online portal.
11.

After testing the patient specimens, Reliance Labs sent some of them

to hospitals controlled by Aaron Durall, including Chestatee. The hospitals
tested some portion of the specimens, but the tests provided no clinical value
because (a) they were less sophisticated than the tests already conducted on the
specimens at Reliance Labs and (b) providers received test results from Reliance
Labs, not from the hospitals. Upon information and belief, the specimens were
re-tested at the hospitals to make it appear as though the hospitals were more
involved in the testing than they actually were.
12.

Chestatee, Reliance Labs, Aaron Durall, and the other Defendants

billed the tests to Plaintiffs through Chestatee because BCBS Georgia’s contracts
with Chestatee entitled it to substantially more than Reliance Labs would receive
for tests that it performed.
13.

Aaron Durall is the President of Reliance Labs, the Chief Executive

Officer of Chestatee, and the Manager of Durall Capital. He arranged for Durall
Capital’s acquisition of Chestatee Regional Hospital, and caused Chestatee and
Reliance Labs to act together in furtherance of this fraudulent scheme.

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14.

Aaron Durall and Chestatee engaged Defendant Jorge Perez to assist

in the management of the scheme.
15.

Aaron Durall, Chestatee, and Reliance Labs engaged Medivance to

handle billing, medical records, and collections. Medivance submitted the claims
to Plaintiffs on behalf of the other Defendants.
16.

Neisha Carter Zaffuto is President of Medivance and oversaw and

directed the submission of the claims to Plaintiffs.
17.

The Defendants conspired to bill Plaintiffs for the tests as if they had

been ordered from and performed by Chestatee, when in fact they were ordered
from and performed by Reliance Labs. The conspiracy was designed to take
advantage of Chestatee’s in-network status and favorable reimbursement rates.
18.

The tests at issue are predominantly for urine-drug testing, but also

include other forms of testing.
19.

The Defendants’ scheme is known as “pass-through billing.”

20.

The Defendants leveraged a nationwide network of providers and

laboratories who referred their patients’ specimens. Some providers provided
patients’ specimens in exchange for a cut of the amount that Chestatee was
reimbursed by Plaintiffs.

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21.

The patients were never present at Chestatee, were never treated by

Chestatee-credentialed providers, and were often in treatment hundreds or
thousands of miles from Chestatee. Their only connection to Chestatee was that
the Defendants billed their tests through the hospital in order to misuse
Chestatee’s in-network status and reimbursement rate.
22.

If Reliance Labs billed the tests directly to Plaintiffs, many would

not have been paid. Any tests that were paid would have been paid at materially
lower rates.
23.

The increased volume of urine-drug testing claims billed by

Chestatee because of this scheme is staggering. Specifically, in the year before
the Defendants implemented their scheme, Chestatee billed about 30 urine-drug
testing claims per month to BCBS Georgia. In the year after the Defendants
implemented their scheme, Chestatee billed an average of about 4,800 urine-drug
testing claims per month to BCBS Georgia (an increase of 16,000%).
24.

Urine-drug testing also became the majority of the claims that

Chestatee submitted to BCBS Georgia. Specifically, between the start of the
scheme and late 2017, Chestatee billed BCBS Georgia an average of $12.7 million
per month for urine-drug testing, when it billed BCBS Georgia only about $1.2
million per month for all other hospital claims.
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25.

Defendants implemented the pass-through scheme even though

they knew that the claims were not payable, were fraudulent, were in violation
of Chestatee’s contracts with BCBS Georgia, and were otherwise unlawful.
26.

Plaintiffs seek compensation and equitable relief for the injuries that

they have incurred because of Defendants’ conduct. Plaintiffs also seek the
imposition of punitive damages, and request injunctive relief (a) prohibiting
Defendants from further perpetrating the scheme and (b) requiring Chestatee to
comply with its contractual obligations to BCBS Georgia.
JURISDICTION AND VENUE
27.

This Court has subject-matter jurisdiction over this action pursuant

to 28 U.S.C. § 1332, because the matter in controversy is in excess of $75,000,
exclusive of interest and costs, and is between citizens of different states.
28.

This Court also has subject-matter jurisdiction over this action

pursuant to 28 U.S.C. § 1331, because Plaintiffs’ claims arise under the
Constitution, laws, or treaties of the United States.
29.

The Court has supplemental jurisdiction over the state law claims

pursuant to 28 U.S.C. § 1367, because the state law claims are so related to the
claims within the Court’s original jurisdiction that they form part of the same
case or controversy under Article III of the United States Constitution.
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30.

Venue is proper in this District pursuant to 28 U.S.C. § 1391(b)(2)

because a substantial part of the events or omissions giving rise to the claims
asserted herein occurred in this District.
THE PARTIES
PLAINTIFFS
31.

Plaintiff Blue Cross and Blue Shield of Georgia, Inc. is incorporated

and headquartered in Georgia.
32.

Plaintiff Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. is

incorporated and headquartered in Georgia.
33.

Plaintiff Blue Cross of California d/b/a Anthem Blue Cross is

incorporated and headquartered in California.
34.

Plaintiff Anthem Blue Cross Life and Health Insurance Company is

incorporated and headquartered in California.
35.

Plaintiff Rocky Mountain Hospital and Medical Service, Inc. d/b/a

Anthem Blue Cross and Blue Shield, is incorporated and headquartered in
Colorado.
36.

Plaintiff Anthem Health Plans, Inc. d/b/a Anthem Blue Cross and

Blue Shield is incorporated and headquartered in Connecticut.
37.

Plaintiff Anthem Insurance Companies, Inc. d/b/a Anthem Blue
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Cross and Blue Shield is incorporated and headquartered in Indiana.
38.

Plaintiff Anthem Health Plans of Kentucky, Inc. d/b/a Anthem Blue

Cross and Blue Shield is incorporated and headquartered in Kentucky.
39.

Plaintiff Anthem Health Plans of Maine, Inc. d/b/a Anthem Blue

Cross and Blue Shield is incorporated and headquartered in Maine.
40.

Plaintiff RightCHOICE Managed Care, Inc. is incorporated in

Delaware and headquartered in Missouri.
41.

Plaintiff Healthy Alliance Life Insurance Company is incorporated

and headquartered in Missouri.
42.

Plaintiff HMO Missouri, Inc. is incorporated and headquartered in

Missouri.
43.

Plaintiff Anthem Health Plans of New Hampshire, Inc. d/b/a

Anthem Blue Cross and Blue Shield is incorporated and headquartered in New
Hampshire.
44.

Plaintiff Empire HealthChoice Assurance, Inc. d/b/a Empire Blue

Cross and Blue Shield is incorporated and headquartered in New York.
45.

Plaintiff Community Insurance Company d/b/a/ Anthem Blue

Cross and Blue Shield is incorporated and headquartered in Ohio.
46.

Plaintiff Anthem Health Plans of Virginia, Inc. d/b/a/ Anthem Blue
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Cross and Blue Shield is incorporated and headquartered in Virginia.
47.

Plaintiff HMO HealthKeepers, Inc. d/b/a Anthem Blue Cross and

Blue Shield is incorporated and headquartered in Virginia.
48.

Plaintiff Blue Cross Blue Shield of Wisconsin d/b/a Anthem Blue

Cross and Blue Shield is incorporated and headquartered in Wisconsin.
49.

Plaintiff Compcare Health Services Insurance Corporation d/b/a

Anthem Blue Cross and Blue Shield is incorporated and headquartered in
Wisconsin.
50.

Plaintiff Blue Cross Blue Shield of Michigan Mutual Insurance

Company is incorporated and headquartered in Michigan.
51.

Plaintiff BCBSM, Inc. d/b/a BlueCross BlueShield of Minnesota is

incorporated and headquartered in Minnesota.
52.

Plaintiff Regence BlueCross BlueShield of Oregon is incorporated

and headquartered in Oregon.
53.

Plaintiff Regence BlueCross BlueShield of Utah is incorporated and

headquartered in Utah.
54.

Plaintiff Regence BlueShield is incorporated and headquartered in

Washington.
55.

Plaintiff Regence BlueShield of Idaho is incorporated and
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headquartered in Idaho.
DEFENDANTS
56.

Defendant DL Investment Holdings, LLC f/k/a Durall Capital

Holdings, LLC d/b/a Chestatee Regional Hospital, is a Florida limited liability
company. Upon information and belief, all of the members of this entity are
residents of Florida.
57.

Defendant Reliance Laboratory Testing, Inc. is incorporated and

headquartered in Florida. The company operates a toxicology laboratory in
Sunrise, Florida.
58.

Defendant Medivance Billing Service, Inc. is incorporated and

headquartered in Florida. Its headquarters is located in Sunrise, Florida.
59.

Defendant Aaron Durall is a Florida resident and an attorney

admitted to practice in that state.
60.

Defendant Neisha Carter Zaffuto is a Florida resident.

61.

Defendant Jorge Perez is a Florida resident.
THE BCBS PLANS
THE BLUECARD PROGRAM

62.

Plaintiffs are independent licensees (or subsidiaries of independent

licensees) of the Blue Cross and Blue Shield Association (“BCBS Association”).
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63.

Each Plaintiff is a participant in the BCBS Association’s BlueCard

program, which allows members of one licensee’s health plans to obtain
healthcare in another licensee’s service area (e.g., where a member is traveling or
living outside of their home plan’s service area).
64.

Chestatee is located in BCBS Georgia’s service area. The claims at

issue were billed by Defendants to BCBS Georgia.
65.

BCBS Georgia then reconciled the cost of the services billed by

Chestatee with the BCBS Association licensee responsible for each member.
66.

As a result, each of the Plaintiffs was harmed by the fraudulent

scheme alleged herein.
ASSIGNMENT OF LEGAL CLAIMS FOR MONEY OWED BY OTHER
LICENSEES OF THE BCBS ASSOCIATION
67.

Other independent licensees of the BCBS Association (who similarly

participate in the BlueCard program) have been injured by this pass-through
scheme in the same way as Plaintiffs.
68.

As a result, the following licensees of the BCBS Association have

assigned to BCBS Georgia their legal claims for money owed as a result of
Defendants’ pass-through-billing scheme (the “Assignor BCBS Plans”): (a) Blue
Cross and Blue Shield of Alabama; (b) USAble Mutual Insurance Company
d/b/a Arkansas Blue Cross and Blue Shield; HMO Partners, Inc. d/b/a Health
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Advantage; (c) Blue Shield of California; (d) CareFirst of Maryland, Inc.,
CareFirst BlueChoice, Inc., CFA, LLC; Group Hospitalization and Medical
Services, Inc.; (e) Blue Cross and Blue Shield of Florida, Inc.; (f) Health Care
Service Corporation; (g) Hawaii Medical Service Association; (h) Highmark, Inc.,
Highmark West Virginia Inc., Highmark BCBSD Inc., and Highmark Choice
Company; (i) Horizon Blue Cross Blue Shield of New Jersey; (j) Blue Cross and
Blue Shield of Kansas, Inc.; (k) Blue Cross of Idaho Health Service, Inc.; (l)
Independence Blue Cross, LLC; (m) Blue Cross and Blue Shield of Kansas City;
(n) Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue
Shield of Louisiana; (o) Blue Cross and Blue Shield of Massachusetts, Inc.; (p)
Blue Cross & Blue Shield of Mississippi, Inc.; (q) Blue Cross and Blue Shield of
Nebraska; (r) Blue Cross and Blue Shield of North Carolina; (s) Noridian Mutual
Insurance Company d/b/a Blue Cross Blue Shield of North Dakota; (t) Premera
Blue Cross; (u) Blue Cross & Blue Shield of Rhode Island; (v) Blue Cross and Blue
Shield of South Carolina; (w) BlueCross BlueShield of Tennessee; (x) Blue Cross
Blue Shield of Wyoming; (y) Blue Cross and Blue Shield of Arizona, Inc.; and
(z) Wellmark, Inc.
69.

The assignments completed by the Assignor BCBS Plans state that

each Assignor BCBS Plan “assigns and transfers to BCBS Georgia the rights, title
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and interest to legal claims for money owed, to the extent permitted by
applicable law, that [the Assignor BCBS Plan] may assert against any individual
or entity, known or unknown, because of their participation in the Chestatee
Pass-Through Scheme.”2
70.

Collectively, Plaintiffs and the Assignor BCBS Plans are referred to

herein as the “BCBS Plans.”
MANAGED CARE AND THE BCBS PLANS
71.

The BCBS Plans are insurers and third-party claims administrators

for group health plans that provide benefits to covered individuals and
dependents.
72.

The BCBS Plans may insure group health plans directly (the “Fully-

Insured Health Plans”). For the Fully-Insured Health Plans, the BCBS Plans
resolve claims and makes benefit payments from their own assets.
73.

The BCBS Plans also provide administrative services to self-funded

group health plans (the “Self-Funded Health Plans”). The BCBS Plans deliver
these services pursuant to Administrative Services Agreements between the
BCBS Plans and the group health plan’s sponsor (usually an employer), which
identify the rights and obligations of each party. Many of the group health plans

2

BCBS Assignor Plan Wellmark, Inc. restricted its assignment to its self-funded plans.

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sponsored by private employers are governed by ERISA, 29 U.S.C. § 100 et seq.
The BCBS Plans provide insurance and/or administrative services to these
employer-sponsored group health plans, including the processing of claims for
reimbursement of medical services provided to the individuals covered by these
benefit plans.
74.

The BCBS Plans paid claims to Chestatee for Self-Funded Health

Plans, and seek redress in this lawsuit for those Self-Funded Health Plans.
75.

The BCBS Plans’ agreements with their customers expressly give the

BCBS Plans authority and discretion to recover overpayments on behalf of their
customers.
76.

Accordingly, the BCBS Plans have authority and standing to seek

recovery on behalf of the impacted Self-Funded Health Plans and for payments
made by the Fully-Insured Health Plans.
NETWORK OF PARTICIPATING PROVIDERS
77.

Enrollees of BCBS Plans are considered the BCBS Plans’ “members.”

78.

The BCBS Plans rely upon networks of participating (also known as

“in-network”) healthcare providers. Participating providers contract with BCBS
Plans to accept a negotiated rate for their services, in exchange for, among other
things, increased access to members of BCBS Plans (due to the savings available
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to the BCBS Plans’ members who receive treatment from participating providers)
and increased certainty as to the amount they will be paid by the BCBS Plans.
79.

Non-participating (or “out-of-network”) providers have not

contracted with the BCBS Plans. The reimbursement rates that BCBS Plans are
required to pay non-participating providers are often less than BCBS Plans are
contractually obligated to pay participating providers, and BCBS Plans’ members
are typically personally responsible for a larger share of the cost of those services.
80.

Chestatee is one of BCBS Georgia’s participating providers.

81.

None of the other Defendants are participating providers.
THE BCBS GEORGIA-CHESTATEE CONTRACTS

82.

The claims at issue were submitted to BCBS Georgia under the three

contracts that govern BCBS Georgia’s relationship with Chestatee.
83.

In January 1987, BCBS Georgia entered into a Participating Hospital

Agreement with St. Joseph Hospital of Dahlonega, Inc., d/b/a Chestatee
Regional Hospital (the “PAR Contract”). A true and correct copy of the PAR
Contract, as subsequently amended, is attached as Exhibit A hereto.
84.

In May 1998, HMO Georgia, Inc., a subsidiary of BCBS Georgia,

entered into a Contract with Chestatee Regional Hospital (the “HMO Contract”).
A true and correct copy of the HMO Contract, as amended, is attached as
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Exhibit B hereto.
85.

In May 1998, BCBS Georgia entered into a Hospital Agreement for

Preferred Provider Program with Chestatee Regional Hospital (the “PPO
Contract”).3 A true and correct copy of the PPO Contract, as amended, is
attached as Exhibit C hereto.
86.

On August 19, 2016, the day that Durall Capital acquired Chestatee

Regional Hospital, Southern Health Corporation of Dahlonega assigned the three
contracts (PAR Contract, HMO Contract, and PPO Contract) to Durall Capital.
87.

Unaware of Chestatee’s fraudulent intentions, BCBS Georgia

consented to the assignments.
88.

Through the assignments, Durall Capital agreed “to be bound by all

terms and conditions of” the Contracts, and BCBS Georgia and Durall Capital
agreed that “all other terms and conditions of [the Contracts] remain[ed] in full
force and effect.” (See Exs. A-C.)

3

On December 14, 2018, the Court ordered Plaintiffs to arbitrate its claims arising under the PPO Contract
against Chestatee, Reliance Labs, Medivance, Aaron Durall, and Neisha Carter Zaffuto. (See Dkt. 122.) However,
Plaintiffs claims against Jorge Perez arising under the PPO Contract remain in this action. (Id.)

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THE PAR CONTRACT
89.

The PAR Contract makes clear that BCBS Georgia would reimburse

Chestatee only for hospital services provided by Chestatee to BCBS members.
90.

The PAR Contract states that Chestatee “shall provide Medically

Necessary Hospital Services to Subscribers as provided in the applicable Benefit
Agreement when ordered by a licensed physician or other licensed medical
professionals and are within the bylaws of the hospital.” (Ex. A at ¶ 4.1.)
91.

The first provision relating to BCBS Georgia’s responsibilities under

the PAR Contract states that BCBS Georgia must compensate Chestatee for
“Covered Services rendered to Subscribers pursuant to the provisions of [the PAR
Contract].” (Ex. A at ¶ 5.1. (emphasis added).)
92.

Other relevant provisions of the PAR Contract include:
a.

Chestatee and BCBS Georgia agreed that the latter would

“pay [Chestatee] directly for Covered Services rendered to Subscribers”
pursuant to the PAR Contract. (Ex. A at ¶ 5.1.)
b.

Chestatee agreed to allow BCBS Georgia to conduct bill and

utilization audits, and to conduct “such other activities as are deemed
mutually necessary to ensure correct payment to [Chestatee] for Covered
Services rendered to a Subscriber.” (Ex. A at ¶ 4.7.)
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c.

The PAR Contract described payment for services not

rendered at Chestatee Regional as being “made in error.” (Ex. A at ¶ 6.4.)
d.

Chestatee was obligated to maintain “all appropriate records

on Subscribers” receiving services at Chestatee. (Ex. A at ¶ 8.1.)
e.

Chestatee agreed that BCBS Georgia would be “permitted to

recover from [Chestatee] amounts due to [BCBS Georgia] because of,”
among other things, “inaccurate payments, including payments based
upon erroneous or incomplete information provided by [Chestatee.]” (Ex.
A at ¶ 6.4.)
f.

Chestatee agreed not to assign its “rights, duties or obligations

of the [Contract],” and not to subcontract the PAR Contract, or any portion
thereof, without written consent from BCBS Georgia. (Ex. A at ¶¶ 13.1–
13.2.)
THE HMO CONTRACT
93.

The HMO Contract establishes the obligations of BCBS Georgia and

Chestatee for the provision of health care services at Chestatee to enrollees of
BCBS Georgia and its affiliates’ health maintenance organization (“HMO”) plans.
94.

The HMO Contract makes clear that BCBS Georgia contracted to

reimburse Chestatee only for services provided by Chestatee.
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95.

The first substantive provision of the HMO Contract, which details

Chestatee’s responsibilities under the Contract, states that Chestatee “shall
provide to Members and Guest Members” in the hospital’s service area “Covered
Services in accordance with this Agreement, when such services are ordered by a
Physician or other licensed health professional.” (Ex. B at ¶ 3.1.)
96.

The first provision relating to BCBS Georgia’s responsibilities states

that BCBS Georgia must compensate Chestatee for “Covered Services rendered
by [Chestatee] to Members[.]” (Ex. B at ¶ 5.2.)
97.

Other relevant provisions of the HMO contract include:
a.

Chestatee agreed to “accept [BCBS Georgia’s payments], as

payment in full for Covered Services.” (Ex. B at ¶ 5.2.)
b.

Chestatee agreed that its “charges for Covered Services

rendered to Members” would not exceed its regular billed charges made to
non-members for the same services. (Ex. B at ¶ 5.3.)
c.

Chestatee agreed to provide, upon request, “all information

reasonably required [by BCBS Georgia], . . . including, but not limited to,
complete and accurate descriptions of health care services performed and
charges made, with diagnoses and procedure codes approved [by BCBS
Georgia].” (Ex. B at ¶ 5.5.)
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d.

Chestatee agreed to use its best efforts to submit all bills for

“Covered Services provided to Members within thirty (30) days after the
services [were] rendered[.]” (Ex. B at ¶ 5.10.)
e.

Chestatee was obligated to maintain records on HMO

members “receiving Covered Services at [Chestatee].” (Ex. B at ¶ 8.1.)
g.

Chestatee agreed that BCBS Georgia would be “permitted to

recover from [Chestatee] . . . amounts paid by [BCBS Georgia] because of,”
among other things, “inaccurate payments, including, but not limited to,
payments based upon erroneous or incomplete information provided by
[Chestatee.]” (Ex. B at ¶ 5.6.)
h.

Chestatee agreed not to assign its “rights, duties or obligations

of the [Contract].” (Ex. B at ¶ 14.2.)
i.

Chestatee agreed to “indemnify and hold [BCBS Georgia]

harmless from any and all liability, loss, damage, claim or expense of any
kind, including costs and attorney’s fees, … which results from negligent
or willful acts or omissions by [Chestatee], its agents or employees
regarding the duties and obligations of [Chestatee] under [the HMO
Contract.]” (Ex. B at ¶ 9.2.)

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j.

Chestatee was required to maintain comprehensive general

liability insurance, and such other insurance as would be necessary to
insure Chestatee and its employees “against any and all claims for
damages arising from the duties and obligations of [the HMO Contract.]”
(Ex. B at ¶ 9.5.)
THE PPO CONTRACT
98.

The PPO Contract also makes clear that BCBS Georgia contracted to

reimburse Chestatee only for services provided by Chestatee.
99.

Indeed, the first substantive provision of the PPO Contract, which

details Chestatee’s responsibilities under the Contract, states that Chestatee
“shall provide to PPO Covered Persons PPO Eligible Services which are
Medically Necessary in accordance with [the PPO Contract], when such services
are ordered by a licensed physician or other licensed health professional.” (Ex. C
at ¶ 2.1.)
100.

Similarly, the first provision of the PPO Contract addressing BCBS

Georgia’s responsibilities states that BCBS Georgia must compensate Chestatee
for eligible services “which [Chestatee] performs for PPO Covered Persons
pursuant to the provisions of [the PPO Contract].” (Ex. C at ¶ 3.1.)
101.

Other relevant provisions of the PPO Contract include:
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a.

Chestatee agreed to “accept [BCBS Georgia’s] payments, as

provided in [the Contract], as payment in full for Eligible Services
provided to PPO Covered Persons.” (Ex. D at ¶ 2.3.)
b.

Chestatee agreed to allow BCBS Georgia to conduct hospital

bill and utilization audits, and to “permit such other activities as are
deemed necessary by [BCBS Georgia] to ensure correct payment to
[Chestatee] for PPO Eligible Services rendered to PPO Covered Persons.”
(Ex. C at ¶ 2.11.)
c.

Chestatee agreed that BCBS Georgia would “pay [Chestatee]

for the provision of medically necessary and appropriate PPO Eligible
Services rendered to PPO Covered Persons in accordance with the
provisions of [the PPO Contract.]” (Ex. C at ¶ 4.1.)
d.

Chestatee agreed to use its best efforts to submit all bills for

“Eligible Services provided to PPO Covered Persons within sixty (60) days
after the services [were] rendered[.]” (Ex. C at ¶ 4.11.)
e.

BCBS Georgia explicitly reserved the right to “review any

PPO claim for Medical Necessity, Appropriateness, and/or to determine
that services provided are Eligible Services under the terms of the PPO

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Covered Person’s Membership Agreement prior to payment.” (Ex. C at
¶ 5.7.)
f.

Chestatee agreed that BCBS Georgia would be “permitted to

recover from [Chestatee] amounts due to [BCBS Georgia] because of,”
among other things, “inaccurate payments including payments based
upon erroneous or incomplete information provided by [Chestatee.]” (Ex.
C at ¶ 4.6.)
g.

BCBS Georgia’s obligation to pay for claims was contingent

upon Chestatee’s bills being “accurate, complete, properly itemized and
clearly for medically necessary and appropriate PPO Eligible Services.”
(Ex. C at ¶ 3.2.)
h.

Chestatee agreed not to assign its “rights, duties or obligations

of the [PPO Contract],” and that it would not subcontract the PPO
Contract, or any portion thereof, without written consent from BCBS
Georgia. (Ex. C at ¶¶ 13.1-13.2.)
i.

Chestatee agreed to “indemnify and hold [BCBS Georgia]

harmless from any and all liability, loss, damage, claim or expense of any
kind, including costs and attorney’s fees, … which results from negligent
or willful acts or omissions by [Chestatee], its agents or employees
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regarding the duties and obligations of [Chestatee] under [the PPO
Contract.]” (Ex. C at ¶ 8.2.)
SUMMARY OF DAMAGES
102.

Since August 2016, Chestatee has billed BCBS Georgia more than

$163 million for the laboratory tests at issue, causing the BCBS Plans to reimburse
Chestatee approximately $103 million.
103.

Under the HMO Contract, Chestatee inappropriately billed BCBS

Georgia approximately $3.65 million, causing the BCBS Plans to reimburse
Chestatee approximately $2.28 million. Through this lawsuit, the BCBS Plans
seek recovery of this entire amount from all Defendants.
104.

Under the PAR Contract, Chestatee inappropriately billed BCBS

Georgia approximately $6.45 million, causing the BCBS Plans to reimburse
Chestatee approximately $4.79 million. Through this lawsuit, the BCBS Plans
seek recovery of this entire amount from all Defendants.
105.

Under the PPO Contract, Chestatee inappropriately billed BCBS

Georgia approximately $153 million, causing the BCBS Plans to reimburse

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Chestatee approximately $96.5 million. Through this lawsuit, the BCBS Plans
seek recovery of this entire amount from Jorge Perez.4
FACTUAL BACKGROUND
URINE DRUG TESTING
106.

Drug tests are laboratory analyses used to aid in the detection of

prescription, recreational, or illicit substances in human specimens.
107.

Although drug tests may be performed on a variety of specimen

types, urine-drug testing is the most commonly used because it is widely
available, minimally invasive, and generally the least expensive for drug
detection and monitoring.
108.

This is consistent with Anthem’s Clinical UM Guideline, entitled

“Drug Testing or Screening in the Context of Substance Use Disorder and
Chronic Pain” (the “Anthem Drug Testing Policy”) which states that “the use of
blood samples as an alternative to urine for drug testing is considered medically
necessary when the use of urine is not feasible[.]”
109.

Urine-drug testing falls into two categories of testing: presumptive

and definitive.

4

The BCBS Plans’ claims against Chestatee, Reliance Labs, Medivance, Aaron Durall, and Neisha Carter
Zaffuto will be arbitrated in accordance with the Court’s Order dated December 14, 2018. (See Dkt. 122.)

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110.

Presumptive testing is used, when medically necessary, to

determine the presence or absence of one or more drugs or drug classes.
Presumptive testing is typically performed via immunoassay, and results are
expressed as negative, positive, or numeric. It is also referred to as “screening”
or “qualitative” testing.
111.

Definitive testing is a follow-up test performed on a separate portion

of the original specimen, when medically necessary, to validate the identity and
quantity of a specific drug or metabolite. Definitive testing is typically
performed using either gas chromatography-mass spectrometry or liquid
chromatography-mass spectrometry, and results are expressed as a concentration
of a particular metabolite or analyte (e.g., nanograms per milliliter (ng/mL)). It is
also referred to as “confirmation” or “quantitative” testing.
112.

Definitive testing is typically reasonable and necessary only in

certain circumstances.
113.

The Anthem Drug Testing Policy states that definitive testing is

medically necessary only when all of the following criteria are met:
a.

presumptive urine-drug testing was done for a medically

necessary reason; and

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b.

presumptive test was negative for prescribed medications,

positive for a prescription drug with abuse potential which was not
prescribed, or positive for an illegal drug (for example, but not limited to,
methamphetamine or cocaine), and
i.

the specific definitive test(s) ordered are supported by

documentation specifying the rationale for each [definitive] test
ordered, and
ii.

clinical documentation reflects how the result of the

test(s) will be used to guide clinical care.
THE TOXICOLOGY LABORATORY INDUSTRY
114.

In recent years, government enforcement, private lawsuits, and

investigative journalism have helped identify widespread fraud within the
toxicology laboratory industry.
115.

For example, in a November 2014 article about the massive increases

in the amount of urine-drug testing being paid for by Medicare, the Wall Street
Journal summarized the then-recent history of the industry:
Spending on the [urine drug] tests took off after
Medicare cracked down on what appeared to be
abusive billing for simple urine tests. Some doctors
moved on to high-tech testing methods, for which
billing wasn’t limited.
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They started testing for a host of different drugs—
including illegal ones that few seniors ever use—and
billing the federal health program for the elderly and
disabled separately for each substance.
Medicare’s spending on 22 high-tech tests for drugs of
abuse hit $445 million in 2012, up 1,423% in five years.5
116.

Because of concerns about the frequency, cost, and manner with

which toxicology laboratories were billing payors, a number of changes were put
into place as to how laboratories test and bill for urine-drug testing.
117.

For example, the Centers for Medicare and Medicaid Services

(“CMS”) changed the way that urine-drug testing is billed, in part because of a
“concern about the potential for overpayment when billing for each individual
drug test rather than a single code that pays the same amount regardless of the
number of drugs that are being tested.”
118.

Because these changes have decreased the rate at which toxicology

laboratories are reimbursed for urine-drug testing, some laboratories have
sought out ways to access more favorable reimbursement rates, including—as

Christopher Weaver and Anna Wilde Mathews, Doctors Cash In on Drug Tests for Seniors, and Medicare
Pays the Bill, THE WALL STREET JOURNAL, Nov. 10, 2014 (available at:
https://www.wsj.com/articles/doctors-cash-in-on-drug-tests-for-seniors-and-medicare-pays-the-bill1415676782).
5

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here—passing their claims through hospitals to take advantage of the hospitals’
participating status and favorable reimbursement rates with payors.
119.

The website of one entity that recruited toxicology laboratories to

pass their claims through a different network of pass-through hospitals makes
clear the motives of the arrangement:

120.

In other words, because of “recurring compliance and quality

issues,” CMS and commercial payors restricted certain laboratories from their
networks. This led some of the remaining laboratories—including those who
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were restricted from payors’ networks for compliance and quality issues—to use
hospitals like Chestatee to hide the true identity of the laboratory performing the
urine-drug testing.
THE DEFENDANTS’ PASS-THROUGH BILLING SCHEME
121.

Durall Capital purchased Chestatee in August 2016.

122.

Around the same time, Aaron Durall (individually or through

Durall Capital) engaged Jorge Perez to manage Chestatee’s finances and help
oversee the scheme.
123.

Jorge Perez owns or manages, indirectly, a number of other small

hospitals, through which he has engaged in similar schemes.
124.

Jorge Perez and Aaron Durall previously conspired to implement at

least one other known pass-through billing scheme, at Campbellton-Graceville
Hospital in Graceville, Florida. There, Perez served as Campbellton-Graceville’s
Chief Executive Officer after it was acquired by The People’s Choice
Hospital, LLC.6 At the direction of Aaron Durall, Reliance Labs performed
laboratory tests at Reliance Labs that were billed to insurers as if performed at

People’s Choice is itself the defendant in separate actions arising from yet more fraudulent billing
schemes. One arose due to its relationship with the Campbellton-Graceville Hospital. See CampbelltonGraceville Hosp. Corp. v. Peoples Choice Hosp., No. 5:16-cv-00222 (N.D. Fla. filed Aug. 3, 2016). Another was
perpetrated in Oklahoma. See Aetna Inc. v. The People’s Choice Hosp., LLC, No. 2:17-cv-04354 (E.D. Pa. filed
Sept. 29, 2017) (recently transferred to the Western District of Texas).
6

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and by Campbellton-Graceville Hospital. Through the scheme, Reliance Labs
received approximately $25 million.
125.

Jorge Perez is also vice president of Hospital Partners, Inc., which

implemented a scheme in Missouri similar to the one alleged herein. That
arrangement was the subject of an audit by the State Auditor of Missouri, who
described it as a “billing scheme” whereby the hospital was “reduc[ed] to what is
essentially a shell organization for labs across the country.”7
126.

Once Durall Capital acquired Chestatee Regional Hospital, it began

billing BCBS Georgia for high volumes of urine-drug testing.
127.

Aaron Durall used his control of Chestatee and Reliance Labs to bill

the claims through Chestatee, camouflaging the claims so that the BCBS Plans
would be more likely to pay them, and would pay them at the higher rates that
Chestatee was entitled to under its contracts with BCBS Georgia if the tests were
ordered from and performed by Chestatee.
128.

Reliance Labs engaged marketing firms to drum up test orders.

129.

Providers ordered tests from Reliance Labs.

The State Auditor’s report, which is incorporated herein, is accessible via the following link:
https://www.auditor.mo.gov/content/auditor-galloway-uncovers-evidence-90-million-billing-schemeputnam-county-memorial-hospital (last visited Feb. 22, 2018). The State Auditor’s press release
announcing its findings is available via the following link: https://auditor.mo.gov/content/auditorgalloway-uncovers-evidence-90-million-billing-scheme-putnam-county-memorial-hospital (last visited
Feb. 22, 2018).
7

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130.

Providers shipped their patients’ specimens to Reliance Labs’ facility

in Florida via Federal Express.
131.

Reliance Labs conducted definitive testing of the patient’s

specimens.
132.

Reliance Labs reported the test results to the ordering providers

through a portal on Reliance Labs’ website.
133.

Reliance Labs then shipped some of the patients’ specimens to

Chestatee and other hospitals controlled by the Defendants.
134.

Chestatee then performed presumptive testing on some portion of

the patient specimens. However, these tests were never ordered from Chestatee
and provided no clinical utility beyond the definitive tests already performed by
Reliance and reported to the ordering providers. Upon information and belief,
the tests conducted at Chestatee were designed to make it appear as though
Chestatee was more involved in the testing than it actually was.
135.

Medivance billed the tests to the BCBS Plans on behalf of Chestatee.

136.

Neisha Carter Zaffuto managed Medivance’s efforts in accordance

with Defendants’ collective agreement.

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137.

Aaron Durall directed the scheme in his capacity as CEO of

Chestatee Regional Hospital, President of Reliance Labs, and Manager of DL
Investment Holdings, LLC.
138.

In exchange for their respective acts in furtherance of the pass-

through scheme, the Defendants split the proceeds.
139.

To increase the revenues that they could generate from the pass-

through scheme, Defendants relied upon a network of referring healthcare
providers who ordered large volumes of laboratory testing (including, most
notably, pain clinics and drug detoxification and rehabilitation facilities).
140.

To ensure that they received the specimens referred by these

providers, Reliance Labs paid some providers kickbacks (e.g., by paying the
providers a portion of the reimbursement that Chestatee received for the tests).
141.

Upon information and belief, Aaron Durall instructed personnel at

Chestatee’s on-site laboratory to destroy the lab results created by the laboratory
equipment there, apparently to avoid creating documentary proof of which tests
were conducted on-site (as opposed to at Reliance Labs).
142.

Upon information and belief, one reason for this instruction was that

the equipment at Chestatee Regional Hospital’s on-site laboratory was only

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capable of testing in panels of eight or fewer drugs or metabolites. However,
Chestatee billed BCBS Georgia for panels of up to 24 drugs or metabolites.
143.

The claims were billed to BCBS Georgia by Medivance, on behalf of

Chestatee, as if the tests were ordered from and performed by Chestatee.
144.

Chestatee, Medivance, Reliance Labs, Aaron Durall, Jorge Perez, and

Neisha Carter Zaffuto agreed to submit the claims in this manner, and each took
the overt acts described herein to facilitate the billing of the claims.
145.

The claims submitted to BCBS Georgia contained numerous material

misrepresentations intended to hide the fact that the tests were ordered from and
performed by Reliance Labs (and not by Chestatee), including:
a.

submission of the claims on a Form UB-04 (indicating that

tests were conducted at a facility like a hospital, rather than at a standalone
laboratory);
b.

provider name (misrepresented as Chestatee);

c.

provider street address (misrepresented as Chestatee);

d.

provider Tax ID and National Provider Identifier (“NPI”)

(misrepresented as Chestatee);
e.

type of bill (misrepresented as 141, which represents a

specimen submitted for analysis to a hospital);
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f.

admission type (misrepresented as “urgent” admission when

no patient was ever admitted at Chestatee Regional Hospital);
g.

source of admission (misrepresented as “information not

available,” when there was no admission);
h.

patient discharge status (misrepresented as a patient

discharged to home or self-care, when there was no admission or
discharge); and
i.

attending physician and attending physician’s NPI

(misrepresented as the provider ordering the tests).
146.

When they submitted claims to BCBS Georgia, Chestatee,

Medivance, Reliance Labs, Aaron Durall, Jorge Perez, and Neisha Carter Zaffuto
falsely certified on each claim that the billing information was “true, accurate,
and complete[.]” On each claim, the Defendants falsely certified that they “did
not knowingly or recklessly disregard or misrepresent or conceal material facts.”
147.

The claim form contains a notice that the submitter of the form

“understands that misrepresentation or falsification of essential information as
requested by this form, may serve as the basis for civil monetary penalties and
assessments and may upon conviction include fines and/or imprisonment under
federal and/or state laws.”
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148.

BCBS Georgia reasonably relied on the material misrepresentations

contained on Chestatee’s claims in deciding to pay the claims.
149.

Chestatee, Medivance, Reliance Labs, Aaron Durall, Jorge Perez, and

Neisha Carter Zaffuto sought to hide from BCBS Georgia the identity of the
laboratory where the tests were ordered from and conducted.
150.

Indeed, had Defendants disclosed the identity of the laboratory

performing the testing (i.e., Reliance Labs), the BCBS Plans would not have paid
the claims at issue or would have paid them at substantially lower rates.
151.

When Reliance Labs billed BCBS Georgia directly, BCBS Georgia

typically paid between $100 and $300 per specimen tested. On the other hand,
when the testing was billed through Chestatee, the Defendants caused BCBS
Georgia to pay more than $1,400 per specimen tested.
152.

Once Chestatee received payment from BCBS Georgia, Chestatee

shared the proceeds with the other Defendants.
153.

Upon information and belief, the Defendants had no written

contracts setting forth the amounts that they were each entitled to, and instead
allocated the proceeds on an ad hoc basis.

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154.

From the payments made by BCBS Georgia, employees or agents of

Reliance Labs paid kickbacks to healthcare providers who referred their patients’
specimens to be used in the scheme.
155.

Upon information and belief, Durall Capital and Aaron Durall

purchased Chestatee Regional specifically to perpetrate this pass-through
scheme.
DEFENDANTS’ EFFORTS TO PREVENT
THE SCHEME FROM BEING UNCOVERED
156.

The Defendants relied on a small group of key staff to execute the

scheme and kept many other employees isolated so that they would not come to
understand the fraudulent scheme.
157.

For example, mail sent to Chestatee was forwarded unopened to

Aaron Durall or Neisha Carter Zaffuto, who facilitated the scheme from Florida.
Once the mail was reviewed in Florida, select communications that would not
reveal the existence of the scheme were returned to Chestatee Regional
Hospital’s facility in Georgia.
158.

When Neisha Carter Zaffuto learned that patients were calling

Chestatee Regional Hospital to ask why they were receiving bills or explanation
of benefits from the hospital when they had never been treated there, she

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arranged to have the calls routed away from staff on-site at the hospital to
another phone line that she had control of.
159.

Reliance Labs’ employees were also kept in the dark about the work

their colleagues did.
160.

In February 2017, after identifying the spike in claims for urine-drug

testing from Chestatee, an Anthem investigator sent a letter to Chestatee
requesting records (including requisition forms, test results, medical records, and
supporting documentation) for 15 members of the BCBS Plans who had urinedrug testing billed through Chestatee.
161.

In March 2017, in response to a complaint from a member who

received an explanation of benefits from Chestatee even though she was never
treated there, a customer service representative from a BCBS Plan spoke with
Kelly Smallwood, a Business Manager at Chestatee. Smallwood said that, since
the sale of Chestatee in August 2016, claims were being billed for “patients” who
had never been to Chestatee.
162.

Later in March 2017, Chestatee responded to the records request but

provided only a fraction of the records requested of it.

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163.

When an Anthem investigator contacted Chestatee’s on-site

laboratory to ask follow-up questions about the production, the on-site
laboratory director said she was unaware of BCBS Georgia’s records request.
164.

The Anthem investigator agreed to fax the records he received to

Chestatee’s on-site laboratory director.
165.

Around the same time, the BCBS Georgia investigator received

multiple calls from Neisha Carter Zaffuto (from a number with a Florida area
code), requesting that he direct his questions to her, rather than to the hospital’s
on-site laboratory director.
166.

After reviewing the records from the BCBS Georgia investigator,

Chestatee Regional Hospital’s on-site laboratory director spoke with Jaquanda
Smith, Chestatee’s “Director of Operations/HIM.”
167.

Among other things, the on-site laboratory director informed

Jaquanda Smith that the test results identified by BCBS Georgia were for panels
of up to 24 drugs or metabolites, which the on-site laboratory director knew
could not have been performed at Chestatee Regional’s on-site laboratory.
168.

Jaquanda Smith told the on-site laboratory director that she would

respond to BCBS Georgia, and that the on-site laboratory director should not
discuss the matter with anyone else.
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169.

Jaquanda Smith then wrote to the BCBS Georgia investigator:

“Chestatee Regional Hospital completed and generated reports for all the tests
you inquired about.”
170.

In response to further questioning from the BCBS Georgia

investigator, Jaquanda Smith added: “I am affirming that the testing results were
completed at chestatee [sic].”
171.

At the time that Jaquanda Smith made these statements, in her

capacity as an employee of Chestatee, she knew that they were false, and made
them with the intent to further the fraudulent scheme described herein.
172.

One employee of Chestatee Regional Hospital also stated that,

because Chestatee was concerned that payors would conduct inspections of
Chestatee Regional Hospital’s on-site laboratory, Chestatee was rushing to install
a machine capable of testing panels of up to 24 drugs or metabolites.
173.

On April 12, 2017, the BCBS Georgia investigator sent a letter to

Aaron Durall summarizing BCBS Georgia’s analysis of the sample claims and the
records provided by Chestatee in support of the sample claims.
174.

The findings summarized included the following:
a.

much of the urine-drug testing billed by Chestatee was not

medically necessary;
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b.

many tests were performed based upon standing orders that

were either signed or stamped blank prescriptions;
c.

definitive tests were frequently billed as presumptive tests;

d.

the majority of the BCBS Plans’ members were tested at

excessive frequencies (often more than 24 times per calendar year);
e.

the frequency of testing was often too frequent (i.e., near

daily) to allow for meaningful use of the tests in medical decision-making,
as additional tests were often ordered before the healthcare providers
received the results of the previous tests;
f.

many BCBS Plan members had urine-drug testing billed by

both Reliance Labs and Chestatee and, when taking the collective volume
into account, the frequency with which the members were tested was even
more excessive;
g.

in some cases, the “client” field on the test results identified

other laboratories for urine-drug testing purportedly performed by
Chestatee;
h.

Chestatee employees reported that they were not permitted to

talk to the Anthem investigator or cooperate with his requests; and

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i.

the medical records provided by Chestatee in response to the

records request were prepared and submitted by persons in Florida, and
did not appear to be from Chestatee Regional Hospital.
175.

Even after being notified of the serious misrepresentations being

made in the claims submitted to BCBS Georgia, Defendants continued to execute
their scheme.
176.

In April 2017, in response to the letter from the Anthem investigator,

an attorney for Chestatee wrote that, “[b]ased upon our internal investigation
subsequent to your February audit of records, we identified an area of noncompliance and, in conjunction with [a statistician], will be submitting a
voluntary refund and disclosure within the next 45-60 days.”
177.

For three months, the Anthem investigator worked with Chestatee’s

attorney, who repeatedly assured the Anthem investigator that Chestatee was
conducting a thorough internal investigation.
178.

In May 2017, the BCBS Plans attempted to place Chestatee on pre-

payment review, a process through which Chestatee would be required to
provide records documenting the propriety of each claim before the claims were
paid. However, the fact that the claims were being billed from a hospital caused

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technical issues and prevented pre-payment review from attaching to Chestatee’s
claims for some time.
179.

In approximately September 2017, the pre-payment review became

effective.
180.

In an effort to get around scrutiny of their claims (including the pre-

payment review), the Defendants required ordering providers to sign a standard
“Letter of Medical Necessity.” The forms were required to be sent to Reliance
Labs along with the test order forms and patient specimens.
181.

However, the template for the Letter of Medical Necessity contained

a Reliance Labs logo. As a result, Reliance Labs had a team of employees who
were responsible for redacting the Reliance Labs logo on the Letters of Medical
Necessity before the claims were submitted to payors, including the BCBS Plans.
182.

Between May 2017 and October 2017, BCBS Georgia’s team

responsible for provider contracting tried to engage Chestatee, but Chestatee
refused to modify the operative contracts until BCBS Georgia began taking steps
to terminate Chestatee from the BCBS Plans’ provider networks.
183.

In September 2017, with the termination of its contracts with BCBS

Georgia imminent, Chestatee agreed to amend its contracts with BCBS Georgia.

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184.

Shortly thereafter, the PPO, PAR, and HMO Contracts were

amended to include Lab Fee Schedules that set the amounts that Chestatee
would receive for laboratory tests, including urine-drug testing. True and
correct copies of the Lab Fee Schedules are included in Exhibits A-C.
185.

The Lab Fee Schedules listed laboratory codes and the rates that

BCBS Georgia would pay Chestatee for each service.
186.

For any laboratory codes not listed on the Lab Fee Schedule, the

parties agreed that they would “price at $0.00.”
187.

In response, Defendants made at least three changes to the way that

they billed the BCBS Plans for urine-drug testing, apparently in order to conceal
that the claims were subject to the Lab Fee Schedules.
188.

First, prior to the implementation of the Lab Fee Schedule,

Defendants would submit claims using CPT and HCPCS8 codes that identified
the bills as laboratory-related. After the implementation of the Lab Fee Schedule,
Defendants began submitting claims without these CPT or HCPCS codes, and
using only revenue codes, in an effort to hide that they were laboratory-related.

“CPT” stands for “Current Procedural Terminology,” and is a medical code set that is used to report
medical, surgical, and diagnostic procedures and services to entities such as physicians, health insurance
companies and accreditation organizations. “HCPCS” stands for “Healthcare Common Procedure
Coding System” and is a code set used by Medicare and health insurance providers to standardize
billing.
8

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189.

Second, the Defendants began billing the claims with bill type 131,

rather than bill type 141 as they had been using since taking over Chestatee. Bill
type 131 indicates that a bill is for a hospital outpatient, which does not properly
describe the status of the BCBS Plans’ members whose tests were billed through
Chestatee.
190.

Third, the Defendants changed the diagnosis codes that they billed

to the BCBS Plans to hide the fact that they were laboratory-related. Whereas the
Defendants previously billed claims using diagnosis codes like F11.20 (for opioid
dependence), they changed and began using diagnosis code Z00.00 (for a general
adult medical examination without abnormal findings).
191.

The Defendants took the steps outlined above in order to ensure that

their fraudulent scheme continued for as long as possible.
VEIL-PIERCING NOTICE
192.

In addition to their direct liability, the individual Defendants are

personally liable for the entity Defendants’ wrongdoing because, among other
things: (a) the Defendants have disregarded their respective corporate entities;
(b) the entity Defendants are being used to evade statutory, contractual, and tort
responsibility; (c) the entity Defendants are being used to hinder, delay, and
defraud creditors; (d) a fraud would result of the entity Defendants were allowed
48

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to shield their shareholders and members from liability; (e) the entity Defendants
are a sham and are being used to justify a wrong; (f) the individual Defendants
withdrew funds from insolvent entity Defendants, thereby constituting
fraudulent transfers of assets from the entity Defendants; (g) the Defendants
failed to follow corporate formalities; and (h) the Defendants commingled funds.
SAMPLE CLAIMS
193.

As described above, BCBS Georgia requested that Chestatee

provide medical records, “including all testing results, requisition forms,
provider medical records and all supporting documentation” for a sample of the
claims at issue.
194.

From that documentation, the BCBS Plans have identified the

following claims as illustrative of Defendants’ scheme.
SAMPLE CLAIM SET #1
195.

On October 5, 2016, a doctor of osteopathic medicine affiliated with

a detoxification and rehabilitation facility in Costa Mesa, California completed a
“Standing Order” form for a BCBS Georgia member. That BCBS Plan member is
referred to herein as Member #1.
196.

BCBS Georgia was billed four times by Chestatee for urine-drug

testing collected from Member #1 even before the Standing Order was signed.
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Chestatee failed to provide an order form for any of these four tests.
197.

The Standing Order identifies Member #1’s name, date of birth, and

the date the Standing Order was completed. A section of the form where the
treating provider was to list Member #1’s prescriptions is blank. In the section
entitled “Dx,” where the treating provider was to provide a diagnosis, a notation
states “3x a week.” Upon information and belief, this indicates that Member #1
was to be subjected to urine-drug testing three times per week. Finally, the
Standing Order was stamped with the treating provider’s signature, rather than
being signed.
198.

The first urine-drug testing results provided by Chestatee are for a

specimen collected from Member #1 on October 5, 2016.
199.

Those results have Chestatee’s logo, name, and address across the

top of their first page. The field for Chestatee’s phone number is blank.
200.

On the test results, the laboratory director identified as responsible

for the tests is “Mills Brinson III, CLD.” When contacted by BCBS Georgia,
Brinson denied ever being affiliated with Chestatee or Reliance Labs. Brinson
stated that he was once the lab Director for Regional General Hospital in
Williston, Florida. Regional General Hospital is affiliated with EmpowerHMS,
an entity operated by Jorge Perez.
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201.

The test result form also includes a space for Member #1 to “consent

and agree” to provide his urine specimen “to the facility designated by [his]
doctor as described above.” However, none of the test result forms provided by
Chestatee were signed by Member #1. Further, the form containing this waiver
appears to have been created three days after the urine was collected from
Member #1, and purports to have been created at Chestatee, thousands of miles
away from the rehabilitation facility at which Member #1 was receiving
treatment.
202.

Member #1’s urine specimen was purportedly subjected to

presumptive testing for 24 drug classes, all of which tested not present.
203.

Upon information and belief, these tests were performed at Reliance

204.

Yet, Chestatee billed BCBS Georgia, or caused BCBS Georgia to be

Labs.

billed, for the testing on a claim that misrepresented, among other things:
a.

submission of the claims on a Form UB-04 (indicating that

tests were conducted at a facility like a hospital, rather than at a standalone
laboratory);
b.

provider (misrepresented as Chestatee);

c.

provider’s street address (misrepresented as Chestatee);
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d.

provider’s Tax ID and NPI (misrepresented as Chestatee);

e.

type of bill (misrepresented as “141,” which represents a

specimen submitted for analysis to a hospital);
f.

admission type (misrepresented as “2,” which stands for

“urgent” admission, when there was no admission);
g.

source of admission (misrepresented as “9,” which stands for

“information not available,” when there was no admission);
h.

patient discharge status (misrepresented as “01,” which

represents a patient discharged to home or self-care, when there was no
admission or discharge); and
i.

attending physician and attending physician’s NPI

(misrepresented the referring provider as an attending physician).
205.

The testing was billed to BCBS Georgia using one count of HCPCS

code G0479, for which Chestatee charged $2,700.
206.

BCBS Georgia allowed $1,792.31 based on the reimbursement

guidelines set forth in the PPO Contract. Member #1 owed no copay or
coinsurance, so BCBS Georgia paid Chestatee $1,792.31 for the test.
207.

Member #1 was not a Chestatee patient, was not treated by a

Chestatee-credentialed healthcare provider, and resided thousands of miles from
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Chestatee Regional Hospital.
208.

But for Defendants’ scheme, Chestatee would not have submitted a

claim for this testing to BCBS Georgia and BCBS Georgia would not have paid
anything to Chestatee for the service.
209.

Between September 2016 and August 2017, Chestatee billed BCBS

Georgia for 88 urine drug tests for Member #1 that were substantially similar to
the one described in Paragraphs 205 through 224, above.
210.

In reliance on those 88 fraudulent claims, BCBS Georgia paid

Chestatee more than $155,000.
SAMPLE CLAIM SET #2
211.

On September 22, 2016, a doctor affiliated with a sober living and

intensive outpatient treatment program in Houston, Texas digitally signed a
medical record for a BCBS Plan member.
212.

That BCBS Plan member is referred to herein as Member #2.

213.

Aside from providing basic biographical data, the treating

provider’s notes state only that he “reviewed psychosocial history and
recommend patient comply with the company policy of 3 UA’s/week.”
214.

Upon information and belief, “UA” refers to urinalysis, or urine-

drug testing.
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215.

According to the records provided by Chestatee, the treating

provider made identical notations in Member #2’s medical record on October 21,
2016, November 23, 2016, and December 22, 2016.
216.

In his notation on January 10, 2017, the treating provider

purportedly changed his notation slightly, to read, “have reviewed treatment
plan and recommend client comply with the company policy of 3 UA’s/week.”
217.

The first UDT results provided by Chestatee for Member #2 are for

a specimen collected from him on October 2, 2016.
218.

The test results have Chestatee’s logo, name, and address across the

top of their first page. The field for Chestatee’s phone number is left blank.
219.

As with Sample Claim Set #1, the test results identify Mills Brinson

III, CLD as the lab Director responsible for the tests. Yet, Brinson denies ever
being affiliated with Chestatee or Reliance Labs.
220.

The test result form also includes a space for Member #2 to “consent

and agree” to provide his urine specimen “to the facility designated by [his]
doctor as described above.” However, the forms use an identical digital
signature or are unsigned. In addition, the forms containing the waiver appear
to have been created days after each specimen was collected from Member #2,
and purportedly were created at Chestatee, hundreds of miles from the facility
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where Member #2 received treatment.
221.

The urine specimen taken from Member #2 was purportedly

subjected to presumptive testing.
222.

Upon information and belief, these tests were performed at Reliance

223.

Yet, Defendants billed BCBS Georgia, or caused BCBS Georgia to be

Labs.

billed, for the testing on a claim that misrepresented, among other things:
a.

submission of the claims on a Form UB-04 (indicating that

tests were conducted at a facility like a hospital, rather than at a standalone
laboratory);
b.

provider (misrepresented as Chestatee);

c.

provider street address (misrepresented as Chestatee);

d.

provider Tax ID and NPI(misrepresented as Chestatee);

e.

type of bill (misrepresented as “141,” which represents a

specimen submitted for analysis to a hospital);
f.

admission type (misrepresented as “2,” which stands for

“urgent” admission, when there was no admission);
g.

source of admission (misrepresented as “9,” which stands for

“information not available,” when there was no admission);
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h.

patient discharge status (misrepresented as “01,” which

represents a patient discharged to home or self care, when there was no
discharge); and
i.

attending physician and attending physician’s NPI

(misrepresented the treating provider as an attending physician).
224.

The testing was billed to BCBS Georgia using one count of HCPCS

code G0479, for which Chestatee charged $2,700.
225.

In accordance with the PPO Contract, BCBS Georgia allowed

$1,792.31. Member #2 owed no copay or coinsurance, so BCBS Georgia paid
Chestatee $1,792.31.
226.

Member #2 was not a Chestatee patient, was not treated by a

Chestatee-credentialed healthcare provider, and resided thousands of miles from
Chestatee.
227.

But for Defendants’ scheme, Chestatee would not have submitted a

claim for this testing to BCBS Georgia and BCBS Georgia would not have paid
anything to Chestatee for the service.
228.

Between October 2016 and February 2017, Chestatee billed BCBS

Georgia for 65 urine drug tests for Member #2 that were substantially similar to
the one described in Paragraphs 227 through 246, above.
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229.

In reliance on those 65 fraudulent claims, BCBS Georgia paid

Chestatee more than $104,000.
CAUSES OF ACTION
COUNT I
BREACH OF PAR CONTRACT
(Against Chestatee)
230.

The BCBS Plans incorporate by reference all preceding paragraphs

as if fully set forth herein and further allege as follows:
231.

BCBS Georgia has a contractual relationship with Chestatee, as

defined by the PAR Contract and all materials referenced or incorporated
therein.
232.

BCBS Georgia performed its obligations under the PAR Contract,

and all conditions precedent have been satisfied.
233.

Chestatee materially breached the PAR Contract, including by:
a.

Submitting claims to BCBS Georgia, or causing claims to be

submitted to BCBS Georgia, for services not performed by Chestatee. (See,
e.g., Ex. A at ¶¶ 4.1, 4.2, 4.5, 4.7, 5.1 6.1, 6.2, 6.4, 6.6, 6.10, 7.4, 8.1, 13.1, 13.2.)
b.

Assigning its rights, duties, and/or obligations under the

Contract, in whole or in part, to Reliance Labs, in violation of the Contract.
(See Ex. A at ¶ 13.1.)
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c.

Subcontracting its responsibilities to Reliance Labs, in

violation of the Contract. (See Ex. A at ¶ 13.2.)
d.

Submitting claims to BCBS Georgia, or causing claims to be

submitted to BCBS Georgia, that Chestatee knew were not accurate,
complete, and truthful, including but not limited to claims containing the
following misrepresentations:
i.

provider name;

ii.

provider street address;

iii.

provider Tax ID and NPI;

iv.

type of bill;

v.

admission type;

vi.

source of admission;

vii.

patient discharge status;

viii.

attending physician and NPI; and

ix.

identity of the lab director.

(See, e.g., Ex. A at ¶ 5.4.)
e.

Submitting claims to BCBS Georgia for medically

unnecessary UDT. (Ex. A at ¶ 4.1.)
234.

As a direct and proximate consequence of Chestatee’s material
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breaches of the PAR Contract, the BCBS Plans have suffered damages.
235.

Therefore, the BCBS Plans seek to recover, at a minimum, the

amount paid on the improper claims that Chestatee submitted or caused to be
submitted to BCBS Georgia.
COUNT II
BREACH OF HMO CONTRACT
(Against Chestatee)
236.

The BCBS Plans incorporate by reference all preceding paragraphs

as if fully set forth herein and further allege as follows:
237.

BCBS Georgia has a contractual relationship with Chestatee, as

defined by the HMO Contract and all materials referenced or incorporated
therein.
238.

BCBS Georgia performed its obligations under the HMO Contract,

and all conditions precedent have been satisfied.
239.

Chestatee materially breached the HMO Contract, including by:
a.

Submitting claims to BCBS Georgia, or causing claims to be

submitted to BCBS Georgia, for services not performed at or by Chestatee.
(See, e.g., Ex. B at ¶¶ 3.1, 3.3, 3.5, 3.6, 3.10, 3.11, 3.15, 4.1, 5.1, 5.3, 5.4, 5.5, 5.6,
5.11, 6.1, 7.1.)
b.

Assigning its rights, duties, and obligations under the HMO
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Contract, in whole or in part, to Reliance Labs. (See Ex. B at ¶ 14.2)
c.

Submitting claims to BCBS Georgia, or causing claims to be

submitted to BCBS Georgia, that Chestatee knew were not accurate,
complete, and truthful, including but not limited to claims containing the
following misrepresentations:
i. provider name;
ii. provider street address;
iii. provider Tax ID and NPI;
iv. type of bill;
v. admission type;
vi. source of admission;
vii. patient discharge status;
viii. attending physician and NPI; and
ix. the identity of the laboratory director
(See, e.g., Ex. B at ¶ 5.6.)
d.

Submitting claims to BCBS Georgia for medically

unnecessary UDT. (Ex. B at ¶ 3.1.)
240.

As a direct and proximate consequence of Chestatee’s material

breaches of the HMO Contract, the BCBS Plans have suffered damages.
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241.

Therefore, the BCBS Plans seek to recover, at a minimum, the

amount paid on the improper claims that Chestatee submitted or caused to be
submitted to BCBS Georgia.
COUNT III
BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING
FOR THE PAR CONTRACT
(Against Chestatee)
242.

The BCBS Plans incorporate by reference all preceding paragraphs

as if fully set forth herein and further allege as follows:
243.

Every contract implies a covenant of good faith and fair dealing in

the contract’s performance and enforcement.
244.

BCBS Georgia has a contractual relationship with Chestatee, as

defined by the PAR Contract and all materials referenced or incorporated
therein.
245.

Chestatee violated the implied covenant of good faith and fair

dealing by performing the acts described herein, including but not limited to, by
fraudulently billing BCBS Georgia for laboratory testing performed at and by
Reliance Labs as if it had been performed at and by Chestatee.
246.

In so doing, Chestatee failed to diligently and in good faith seek to

comply with all portions of the terms of the PAR Contract.
247.

As a direct and proximate consequence of Chestatee’s breach of the
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covenant of good faith and fair dealing, the BCBS Plans have suffered damages
in an amount to be determined at trial.
COUNT IV
BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING
FOR THE HMO CONTRACT
(Against Chestatee)
248.

The BCBS Plans incorporate by reference all preceding paragraphs

as if fully set forth herein and further allege as follows:
249.

Every contract implies a covenant of good faith and fair dealing in

the contract’s performance and enforcement.
250.

BCBS Georgia has a contractual relationship with Chestatee, as

defined by the HMO Contract and all materials referenced or incorporated
therein.
251.

Chestatee violated the implied covenant of good faith and fair

dealing by performing the acts described herein, including but not limited to, by
fraudulently billing BCBS Georgia for laboratory testing of non-Chestatee
patients that were performed at and by Reliance Labs as if it had been performed
at and by Chestatee.
252.

In so doing, Chestatee failed to diligently and in good faith seek to

comply with all portions of the terms of the HMO Contract.
253.

As a direct and proximate consequence of Chestatee’s breach of the
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covenant of good faith and fair dealing, the BCBS Plans have suffered damages
in an amount to be determined at trial.
COUNT V
FRAUD AND FRAUDULENT CONCEALMENT
(Claims Paid under HMO & PAR Contracts – All Defendants;
Claims Paid under PPO Contract – Jorge Perez Only)
254.

The BCBS Plans incorporate by reference all preceding paragraphs

as if fully set forth herein and further allege as follows:
255.

As alleged herein, Defendants, individually and in furtherance of

the fraudulent scheme alleged herein, made, or caused to be made, intentional
misrepresentations of material facts relating to the claims they submitted or
caused to be submitted to BCBS Georgia for reimbursement, with the intent to
induce BCBS Georgia to rely on those misrepresentations and pay those claims.
256.

Each Defendant knowingly participated in the fraud by agreeing to

submit the claims to BCBS Georgia as if the underlying laboratory testing were
performed at and by Chestatee.
257.

Each Defendant’s participation in the fraudulent scheme includes,

but is not limited to, the following:
a.

Chestatee: Durall Capital acquired Chestatee Regional

Hospital in order to gain access to the hospital’s participating status and
favorable reimbursement rates with BCBS Georgia, both of which were
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essential to the success of the scheme. Chestatee engaged the other
Defendants, including Medivance, Reliance Labs, Neisha Carter Zaffuto,
and Jorge Perez, to perform functions essential to the success of the
scheme, and to use Chestatee’s facility and billing information to submit
the claims to BCBS Georgia. Chestatee used the on-site laboratory at
Chestatee Regional Hospital as a front for its fraudulent scheme, and took
steps to undermine BCBS Georgia’s efforts to identify and stop the scheme.
Chestatee conspired with the other Defendants to submit the claims at
issue to BCBS Georgia while knowing that the claims contained material
misrepresentations and omissions. In addition, when payment was made
by BCBS Georgia, Chestatee shared such payment with the other
Defendants, in exchange for their participation in the fraudulent scheme.
b.

Reliance Labs: Reliance Labs engaged marketing personnel to

drum up the test orders at issue. The tests were ordered from and
completed by Reliance Labs. Reliance Labs reported the tests back to the
ordering providers. Reliance Labs conspired with the other Defendants to
submit the claims to BCBS Georgia as if the tests were ordered from and
performed by Chestatee. When payment from BCBS Georgia was passed
on by Chestatee to Reliance Labs, Reliance Labs used a portion of that
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payment to fund kickbacks to referring providers.
c.

Aaron Durall: Aaron Durall was responsible for the

management of the scheme, and used his control over Chestatee (as CEO)
and Reliance Labs (as President) to cause them to take the steps described
above. Aaron Durall was primarily responsible for the Defendants’
conspiracy to commit this fraudulent scheme, causing Chestatee and
Reliance’s agreement, hiring Jorge Perez, and engaging Medivance and
Neisha Carter Zaffuto to participate as well. Aaron Durall created Durall
Capital and, upon information and belief, arranged for its purchase of
Chestatee Regional Hospital specifically to carry out this fraudulent
scheme. Aaron Durall also hired a team of employees or agents of
Reliance Labs, through which he supervised and directed the payment of
kickbacks to referring providers in exchange for their patients’ specimens.
Further, upon information and belief, Aaron Durall has personally
received a substantial portion of the amount paid by the BCBS Plans as a
result of this fraudulent scheme.
d.

Medivance: Medivance agreed with Chestatee, Reliance Labs,

Aaron Durall, Jorge Perez, and Neisha Carter Zaffuto to prepare and
submit claims to BCBS Georgia on behalf of Chestatee, in spite of the fact
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that it knew the claims contained numerous material misrepresentations.
Medivance worked closely with Chestatee and Aaron Durall to manage
numerous functions of Chestatee Regional Hospital remotely from Florida
(including billing and contracting with payors), in order to prevent on-site
employees at Chestatee Regional Hospital and payors, including the BCBS
Plans, from identifying this fraudulent scheme. When BCBS Georgia
attempted to renegotiate its contracts with Chestatee to address the
fraudulent scheme, Medivance sought to stop the contractual changes to
perpetuate the fraudulent scheme. When BCBS Georgia implemented
contractual and process changes to stop payment on claims stemming
from this fraudulent scheme, Medivance modified its billing processes to
evade those efforts, in spite of the fact that it knew the claims were
fraudulent.
e.

Jorge Perez: Aaron Durall retained Perez to help manage

Chestatee’s finances and billing services, and to assist with overall
management of the scheme. Jorge Perez leveraged his healthcare
experience to assist Aaron Durall in perpetrating the pass-through billing
arrangement, including through Perez’s company, Empower H.I.S., LLC.
Upon information and belief, Perez provided financial assistance (directly
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or indirectly) to Durall Capital and Aaron Durall’s purchase of Chestatee
Regional Hospital, with the expectation that the hospital would be used to
perpetrate this pass-through billing scheme. Perez conspired with the
other Defendants to submit the claims to BCBS Georgia in spite of the fact
that he knew the claims contained numerous material misrepresentations.
Further, upon information and belief, Jorge Perez has received a portion of
the amount paid by the BCBS Plans as a result of this fraudulent scheme.
f.

Neisha Carter Zaffuto: As President of Medivance, Neisha

Carter Zaffuto was responsible for Medivance’s agreement to submit the
claims at issue to BCBS Georgia on behalf of Chestatee, in spite of the fact
that she knew the claims were not payable by BCBS Georgia, were
fraudulent, and were in violation of multiple contracts between BCBS
Georgia and Chestatee Regional Hospital. After agreeing to participate in
the scheme, Neisha Carter Zaffuto oversaw and directed Medivance’s
submission of fraudulent claims to BCBS Georgia on behalf of Chestatee,
and caused Medivance to take the actions described above.
258.

Collectively, Aaron Durall, Jorge Perez, and Neisha Carter Zaffuto

directed the conduct of the remaining Defendants, thereby causing their
agreement to submit the fraudulent claims to BCBS Georgia.
67

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259.

The claims submitted by Defendants, or that Defendants caused to

be submitted, included the following material misrepresentations:
a.

submission of the claims on a Form UB-04 (indicating that

tests were conducted at a facility like a hospital, rather than at a standalone
laboratory);
b.

provider name (misrepresented as Chestatee);

c.

provider street address (misrepresented as Chestatee);

d.

provider Tax ID and NPI (misrepresented as Chestatee);

e.

type of bill (misrepresented as “141,” which represents a

specimen submitted for analysis to a hospital, and later “131,” which
represents a hospital outpatient);
f.

admission type (misrepresented as “2,” which stands for

“urgent” admission, when there was no admission);
g.

source of admission (misrepresented as “9,” which stands for

“information not available,” when there was no admission);
h.

patient discharge status (misrepresented as “01,” which

represents a patient discharged to home or self-care, when there was no
discharge);
i.

attending physician and attending physician’s NPI
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(misrepresented referring provider as an attending physician); and
j.

diagnosis code (misrepresented as “encounter for general

adult medical examination without abnormal findings” in effort to avoid
having claims identified as laboratory-related).
260.

Defendants falsely certified, or caused Chestatee to falsely certify,

that the billing information on each claim submitted to BCBS Georgia was “true,
accurate, and complete” and that they “did not knowingly or recklessly
disregard or misrepresent or conceal material facts.”
261.

Defendants also failed to disclose, or caused Chestatee to fail to

disclose, material facts relating to the claims that Defendants submitted, or
caused to be submitted, including that:
a.

Chestatee, Medivance, Reliance Labs, Aaron Durall, Jorge

Perez, and Neisha Carter Zaffuto had conspired to participate in a passthrough scheme in breach of Chestatee’s HMO, PAR, and PPO Contracts
with BCBS Georgia;
b.

Aaron Durall and Reliance Labs paid kickbacks, or caused

kickbacks to be paid, to referring providers or laboratories in exchange for
their patient’s specimens, resulting in those claims being billed to BCBS
Georgia;
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262.

Defendants intentionally designed and operated their scheme to

conceal from BCBS Georgia the identity of the laboratory performing the testing,
as well as the identities of the participants in their conspiracy.
263.

Defendants had a duty to disclose to BCBS Georgia information

material to the claims that Defendants submitted, or caused to be submitted, to
BCBS Georgia, so as not to mislead BCBS Georgia.
264.

Defendants took on this obligation every time they filed a claim, or

caused a claim to be filed, as they certified that the claim was not “knowingly or
recklessly disregard[ing] or misrepresent[ing] or conceal[ing] material facts.”
265.

At the time that Defendants submitted the claims, or caused the

claims to be submitted, they knew that the representations described above were
false, and that the claims contained the above-described omissions.
266.

These misrepresentations and omissions were material to BCBS

Georgia’s determination of whether the claims were payable.
267.

Defendants intended for BCBS Georgia to rely on their material

misrepresentations and omissions, such that BCBS Georgia would pay Chestatee
for the claims arising from this pass-through scheme.
268.

In failing to disclose the aforementioned material omissions to BCBS

Georgia, Defendants acted in bad faith.
70

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269.

BCBS Georgia reasonably relied on the claims submitted to it by

Defendants, including the misrepresentations and omissions, when determining
whether to pay each claim.
270.

Had BCBS Georgia been aware that the claims contained material

misrepresentations, or omitted material information, it would not have made the
payments it did.
271.

Defendants had superior and special knowledge of their pass-

through scheme, as set forth herein, and took steps to prevent BCBS Georgia
from identifying the scheme.
272.

As a result, when BCBS Georgia received the claims, it was unaware

of the pass-through scheme, which was not reasonably discoverable by BCBS
Georgia.
273.

As a direct and proximate result of Defendants’ material

misrepresentations and omissions, the BCBS Plans have been damaged in an
amount to be determined at trial.
COUNT VI
NEGLIGENT MISREPRESENTATION
(IN THE ALTERNATIVE TO COUNT V)
(Claims Paid under HMO & PAR Contracts – All Defendants;
Claims Paid under PPO Contract – Jorge Perez Only)
274.

The BCBS Plans incorporate by reference all preceding paragraphs
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as if fully set forth herein and further allege as follows:
275.

The claims submitted by Defendants, or caused to be submitted by

Defendants, contained material misrepresentations, including but not limited to
those described in paragraph 278, above.
276.

These representations were either false, made without reasonable

grounds for believing them to be true, made without knowledge of their truth or
falsity, made without reasonable care, or made under circumstances in which
Defendants ought to have known their falsity.
277.

Defendants’ misrepresentations were made to BCBS Georgia in the

course of Defendants’ business and because of a pecuniary interest.
278.

Defendants had a duty to disclose to BCBS Georgia information

material to the claims that Defendants submitted, or caused to be submitted, to
BCBS Georgia, to avoid misleading BCBS Georgia.
279.

Defendants took on this obligation every time they filed a claim, or

caused a claim to be filed, as they certified that they were not “knowingly or
recklessly disregard[ing] or mispresentin[g] or conceal[ing] material facts.”
280.

Defendants failed to exercise reasonable care when making these

representations.
281.

It was foreseeable that BCBS Georgia would rely on Defendants’
72

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 73 of 86

representations, given the nature of the claims payment process, and the fact that
they were submitted to BCBS Georgia by Chestatee and Medivance.
282.

BCBS Georgia reasonably relied on Defendants’ representations, and

paid the claims.
283.

If BCBS Georgia had been aware of the material misrepresentations,

BCBS Georgia would not have paid the claims.
284.

As a direct and proximate result of Defendants’ misrepresentations,

the BCBS Plans have been damaged in an amount to be determined at trial.
COUNT VII
TORTIOUS INTERFERENCE WITH BCBS GEORGIA’S
CONTRACTS WITH CHESTATEE
(Claims Paid under HMO & PAR Contracts – All Defendants Except
Chestatee; Claims Paid under PPO Contract – Jorge Perez Only)
285.

BCBS Georgia incorporates by reference all preceding paragraphs as

if fully set forth herein and further alleges as follows:
286.

BCBS Georgia has three valid and enforceable contracts with

Chestatee (i.e., the PAR Contract, the HMO Contract, and the PPO Contract).
287.

Through each of these Contracts, BCBS Georgia agreed to reimburse

Chestatee only for services provided by Chestatee.
288.

Similarly, each of the Contracts prohibited their assignment to third

parties without BCBS Georgia’s prior written approval.
73

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 74 of 86

289.

By orchestrating and participating in the fraudulent scheme

described herein, Reliance Labs, Medivance, Aaron Durall, Jorge Perez, and
Neisha Carter Zaffuto caused Chestatee to breach its contracts with BCBS
Georgia by, among other things:
a.

Submitting claims to BCBS Georgia, or causing claims to be

submitted to BCBS Georgia, for services not performed by, or performed
under the direction and personal supervision of, Chestatee.
b.

Submitting claims to BCBS Georgia, or causing claims to be

submitted to BCBS Georgia, that Reliance Labs, Medivance, Durall, Perez,
and Zaffuto knew were not accurate, complete, and truthful, including but
not limited to claims containing the following misrepresentations:
i.

Provider name;

ii.

Provider street address;

iii.

Provider Tax ID and NPI;

iv.

Type of bill;

v.

Admission type;

vi.

Source of admission;

vii.

Patient discharge status; and

viii.

Attending physician and attending physician’s NPI.
74

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 75 of 86

c.

Assigning, delegating, subcontracting, or transferring the

HMO and PAR Contracts or Chestatee’s rights and responsibilities under
the Contracts without the prior written consent of BCBS Georgia.
d.

Submitting claims to BCBS Georgia, or causing claims to be

submitted to BCBS Georgia, that Reliance Labs, Medivance, Durall, Perez,
and Zaffuto knew were not reasonable and medically necessary, as defined
by the Contract.
e.

Paying, receiving, offering an incentive, or participating in an

incentive program or arrangement that provides another physician or
provider with a direct or indirect inducement to provide less than
medically necessary health care services, supplies, accommodations,
treatments or care to BCBS members.
290.

Each of Aaron Durall, Jorge Perez, Neisha Carter Zaffuto,

Medivance, and Reliance Labs was aware of these Contracts, including that the
Contracts covered only services provided by Chestatee and were unassignable.
291.

Upon information and belief, the reason that Aaron Durall and

Durall Capital purchased Chestatee Regional Hospital was because of the
hospital’s agreements with payors, including with BCBS Georgia.
292.

Similarly, the reason that Aaron Durall, Jorge Perez, Neisha Carter
75

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 76 of 86

Zaffuto, Medivance, and Reliance Labs agreed to this fraudulent scheme was
because they knew that Chestatee’s contracts with BCBS Georgia could be used
to extract substantial reimbursement from BCBS Georgia, in exchange for which
each of the Defendants would receive a portion of the reimbursement paid by
BCBS Georgia.
293.

In other words, Defendants agreed to participate in a fraudulent

scheme that would cause Chestatee to repeatedly breach each of its three
contracts with BCBS Georgia.
294.

Defendants’ collective efforts to disrupt BCBS Georgia’s

investigation of this fraudulent scheme demonstrates the Defendants’ knowledge
that their conduct was in violation of Chestatee’s contracts with BCBS Georgia.
295.

Reliance Labs, Medivance, Aaron Durall, Jorge Perez, and Neisha

Carter Zaffuto improperly, wrongfully, willfully, and intentionally engaged in
the fraudulent scheme described herein, thereby interfering with the HMO and
PAR Contracts, and causing Chestatee to materially breach each of those
Contracts.
296.

Jorge Perez improperly, wrongfully, willfully, and intentionally

engaged in the fraudulent scheme described herein, thereby interfering with the
PPO Contract and causing Chestatee to materially breach that Contract.
76

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 77 of 86

297.

The Defendants’ interference with BCBS Georgia’s contracts with

Chestatee was not justified or privileged.
298.

The Defendants’ tortious interference with the contracts caused

BCBS Georgia to pay for claims that were not payable by BCBS Georgia, were
fraudulent, were in breach of the Contracts, and were otherwise unlawful.
299.

But for the Defendants’ tortious interference with the PAR, HMO,

and PPO Contracts, BCBS Georgia would not have paid these claims.
300.

The BCBS Plans are entitled to an award of compensatory damages,

including consequential damages, together with interest and costs, and an
injunction prohibiting Chestatee from continuing to engage in the tortious
conduct described above.
COUNT VIII
RESTITUTION UNDER ERISA § 502(a)(3)
(Claims Paid under HMO & PAR Contracts – All Defendants;
Claims Paid under PPO Contract – Jorge Perez Only)
301.

The BCBS Plans incorporate by reference all preceding paragraphs

as if fully set forth herein and further allege as follows:
302.

Many of the impacted group health plans are employer-sponsored

group health plans covered by ERISA (the “ERISA Plans”).
303.

The BCBS Plans have been delegated by the plan administrator of

each of the ERISA Plans the discretionary authority to review and decide on
77

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 78 of 86

claims for benefits under the ERISA Plans.
304.

The ERISA Plans also delegated to the BCBS Plans the authority to

recover overpayments made by the BCBS Plans on the ERISA Plans’ behalf.
305.

Because of the fraudulent scheme identified herein, the BCBS Plans

have paid millions of dollars in benefits to Chestatee, and through Chestatee, to
Reliance Labs, Medivance, Aaron Durall, Jorge Perez, and Neisha Carter Zaffuto.
306.

The BCBS Plans have standing to sue under ERISA § 502(a)(3) to

obtain appropriate equitable relief to redress violations of the ERISA Plans and to
enforce the terms of the ERISA Plans.
307.

As alleged herein, Defendants have submitted, or caused to be

submitted, misleading and fraudulent claims to BCBS Georgia for payment of
benefits for charges related to laboratory services that Defendants represented, or
caused to be represented, were performed by Chestatee.
308.

BCBS Georgia relied on the claim information supplied by

Defendants, or that Defendants caused to be supplied, in determining whether to
pay the claims.
309.

Had BCBS Georgia been aware that the claims misrepresented the

services in order to make them appear payable, when in fact they were not, it
would not have made those payments.
78

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 79 of 86

310.

Based upon the fraudulent claims Defendants submitted, or caused

to be submitted, to BCBS Georgia, Defendants received payments in excess of the
amounts that they were actually entitled to receive for those services.
311.

Further, even if Defendants did not knowingly and intentionally

submit misleading and fraudulent claims to BCBS Georgia, the BCBS Plans are
entitled to equitable relief to enforce the terms of the ERISA Plans, and recover
overpayments made to Defendants.
312.

This is particularly true where Defendants submitted claims, or

caused claims to be submitted, for members of ERISA Plans pursuant to valid
contractual assignments (or authorized representation agreements) received
from ERISA Plan members. In these instances, Defendants accepted the terms of
the ERISA Plans and submitted claims, or caused claims to be submitted, that
were subject to those terms.
313.

Further, by knowingly accepting payments from the ERISA Plans,

Defendants became bound by the ERISA Plans’ terms and conditions, including
conditions related to overpayments.
314.

The ERISA Plans, by their terms, require the return of overpayments

and amounts that were erroneously paid.
315.

Thus, even to the extent that Defendants did not intentionally
79

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 80 of 86

overcharge BCBS Georgia, the BCBS Plans are entitled to equitable relief to
enforce the terms of the ERISA Plans and recover these overpayments.
316.

Because of Defendants’ wrongful behavior, BCBS Georgia has paid

millions of dollars in benefits to Chestatee, and, through Chestatee, to the other
Defendants, which were not owed under the terms of the ERISA Plans.
317.

Each Defendant has funds that they obtained in violation of the

ERISA Plans’ terms and conditions.
318.

The BCBS Plans seek equitable restitution to cover the assets that

Defendants unlawfully obtained because of the conduct described herein.
319.

Specifically, the BCBS Plans seek an Order imposing a constructive

trust or an equitable lien on the assets that Defendants received in the form of
overpayments, as well as on any profits or income made by Defendants on those
amounts.
320.

The BCBS Plans also seek an Order restoring to the BCBS Plans—

individually and on behalf of the ERISA Plans—the sums held in constructive
trust by Defendants.

80

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 81 of 86

COUNT IX
DECLARATORY AND INJUNCTIVE RELIEF
UNDER ERISA § 502(a)(3) AND 28 U.S.C. §§ 2201 AND 2202
(Claims Paid under HMO & PAR Contracts – All Defendants;
Claims Paid under PPO Contract – Jorge Perez Only)
321.

The BCBS Plans incorporate by reference all preceding paragraphs

as if fully set forth herein and further allege as follows:
322.

The BCBS Plans act as a claims fiduciary for the ERISA Plans.

323.

Therefore, the BCBS Plans have standing to sue under ERISA

§ 502(a)(3) to enjoin any acts or practices that violate any provisions of the ERISA
Plans, and to obtain other appropriate relief to redress such violations or enforce
plan provisions.
324.

Defendants have engaged in a scheme to defraud BCBS Georgia into

paying amounts to Defendants in excess of amounts owed under the relevant
ERISA Plans, and for services that are not covered under the relevant ERISA
Plans’ terms, as described herein.
325.

There is an actual case and controversy between the BCBS Plans and

Defendants as to the claims Defendants submitted, and continue to submit, to
BCBS Georgia, all of which arise from the fraudulent scheme described herein.
326.

Defendants’ fraudulent scheme is deceptive, unfair, and unlawful.

81

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 82 of 86

327.

No payment is due to Defendants on any claims that are pending, or

may be submitted in the future, where such claims arise from Defendants’
fraudulent scheme.
328.

Defendants appear to disagree, and continue to submit fraudulent

claims to BCBS Georgia.
329.

There is a bona fide, present, and practical need for a declaration as to

the lawfulness of Defendants’ actions, including whether BCBS Georgia has the
right to deny the claims implicated by Defendants’ actions and scheme.
330.

The BCBS Plans are entitled to a judgment declaring that

Defendants’ actions and business practices are unlawful, and that any claims for
payment of benefits submitted by Defendants to BCBS Georgia because of this
scheme are non-payable and void.
331.

The BCBS Plans also seek recovery of their reasonable and necessary

attorney’s fees and costs, pursuant to ERISA § 502(g)(1).
332.

Under the Declaratory Judgment Act, 28 U.S.C. §§ 2201 and 2202, the

BCBS Plans are entitled to a judgment declaring that Defendants’ actions and
business practices are unlawful, even as to the non-ERISA plans impacted by this
fraudulent scheme, and that any claims for payment of benefits submitted by
Defendants as a result of their fraudulent scheme are non-payable and void.
82

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 83 of 86

COUNT X
UNJUST ENRICHMENT
(Claims Paid under HMO & PAR Contracts – All Defendants Except Chestatee;
Claims Paid under PPO Contract – Jorge Perez Only)
333.

The BCBS Plans incorporate by reference all preceding paragraphs

as if fully set forth herein and further allege as follows:
334.

Defendants fraudulently used the names and billing information of

Chestatee to submit, or cause the submission of, claims to BCBS Georgia for
services that were not performed at or by Chestatee, or on behalf of Chestatee
patients.
335.

BCBS Georgia, relying on Defendants’ representations that the

services billed for using Chestatee’s name and billing information were
performed at and by Chestatee on behalf of Chestatee patients, issued
reimbursements to Chestatee, which were shared with the other Defendants.
336.

Each Defendant received a benefit from the BCBS Plans in the form

of a share of reimbursements for services that should not have been reimbursed.
337.

Each Defendant has unjustly retained those benefits.

338.

Each Defendant should be required to make restitution for the

benefits they received, retained, and appropriated because justice and equity
require such restitution.
339.

Restitution is required by public policy to promote the stability of
83

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 84 of 86

insurance markets and to avoid the continuing unjust enrichment of
unscrupulous providers at the expense of insurance companies and patients.
340.

The BCBS Plans are entitled to restitution in an amount to be

determined at trial, including but not limited to all amounts Defendants received
from BCBS Georgia because of Defendants’ scheme.
RELIEF REQUESTED
WHEREFORE, the BCBS Plans respectfully request an award in their favor
and granting the following relief:
a)

Actual and consequential damages in an amount to be determined at
trial, plus interest;

b)

An order obligating Defendants to disgorge all revenues and profits
derived from their scheme;

c)

An order holding Defendants jointly and severally liable;

d)

An award of reasonable attorney’s fees, in accordance with the
relevant contracts or as allowed by common law;

e)

Punitive damages;

f)

Equitable relief, as described herein;

g)

An injunction prohibiting Defendants from continuing the scheme;

84

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 85 of 86

h)

Appropriate interim measures against Chestatee, Reliance Labs,
Medivance, Aaron Durall, and Neisha Carter Zaffuto under American
Arbitration Association Rule 37; and

i)

Any other relief that the Court deems just, proper, and/or equitable.

Dated: December 28, 2018

By:

T. Joshua Archer

BALCH & BINGHAM LLP
T. Joshua R. Archer (Georgia #021208)
30 Ivan Allen, Jr. Blvd. N.W., Suite 700
Atlanta, GA 30308
T: (404) 962-3556
F: (404) 261-3656
jarcher@balch.com
- and ROBINS KAPLAN LLP
Jeffrey S. Gleason (admitted PHV)
Randall Tietjen (admitted PHV)
Nathaniel J. Moore (admitted PHV)
Amira A. ElShareif (admitted PHV)
800 LaSalle Avenue
Minneapolis, MN 55402-2015
T: (612) 349-8500
F: (612) 339-4181
jgleason@robinskaplan.com
rtietjen@robinskaplan.com
nmoore@robinskaplan.com
aelshareif@robinskaplan.com
Attorneys for Plaintiffs
85

 Case 1:18-cv-01304-MLB Document 134 Filed 12/28/18 Page 86 of 86

LOCAL RULE 7.1D CERTIFICATION
Through the signature below, counsel hereby certifies that the
foregoing document was prepared in Book Antiqua, 13-point font, with lines
double-spaced, in compliance with Local Rule 5.1C.
December 28, 2018
/s/ T. Joshua R. Archer
T. Joshua R. Archer (Ga. Bar No. 021208)

CERTIFICATE OF SERVICE
I hereby certify that I caused the foregoing to be electronically filed with
the Clerk of Court using the CM/ECF system, which will automatically send
notification to all counsel of record.
December 28, 2018
/s/ T. Joshua R. Archer
T. Joshua R. Archer (Ga. Bar No. 021208)

86

 Case Document 134-1 Filed 12/28/18 Page 1 of 33

Exhibit A

 3 Case Document 134-1 Filed 12/28/18 Page 2 of 33

Blue Cross
Blue Shield

of Georgia

 

l?
lb




 

PARTICIPATING HOSPITAL
AGREEMENT 

 

 

THIS AGREEMENT is effective on January 1- 1937 between BLUE cnoss AND
51:. Joseph Hospital of

BLUE SHIELD OF GEORGIA, we (the and Dahlonega . Inc.


l. HECITALB

?x 1.1- The PLAN Is a Georgia non-pro?t health care corporation, duly licensed by the Insurance Commissioner
- oi the State of Georgia. providing health care plans covering the provision of health care services.

I 1.2- HOSPITAL is a corporation. duly licensed by the Slate Department oi Human Resources at the State of
Georgia to provide quality acute inpatient and outpatient Hospital Services.

1.3- HDSPITAL provides Hospital Services that meet or exceed all legal standards ol care and that comply: 
with all applicable Federal. State and local laws, and to) standards of the PLAN.

1.4- The PLAN and HOSPITAL are both committed to the delivery of quality health care services in an 
and effective manner, recognizing the need to control and contain cost. and recognizing an obligation to main-
tain and Improve health care. .

THEREFOFIE, In consideration of the promises and the Agreement herein contained. it is oovenanted as
to ovrs:

II. DEFINITIONS

2.1- "Benefit Agreementisl" means a written agreement entered into by the PLAN and employers, groups or in-
dividuals under which the PLAN or other Blue Cross and Blue Shield Plans provide. indemnity tor. or administer
health care benefits.

 

I 2.2- ?lv?ledlcal Emergency" means lrealment'lor a sudden onset of a medical condition manifesting Iteeli by
acute of sufficient severity that the absence of immediate medical attention could reasonably result
in: is) Permanently placing the subscriber's health in leopardy: Serious impairment to bodin functions; to)

I Serious and pennanent disiunotlon of any bodily organ or part; or Other serious medical consequences.



2.3? ?Hospital Serviceisi" means those acute inpatient services and outpatient services which are covered by
the applicable Benefit Agreement. Hospital Services do not include skilled nursing or extended care services:
however. such services are normally covered underthe other professional and medical services section of the

a Subscriber Benellt Agreement.

First at 15 Pages

 ?f 1? Case Document 134-1 Filed 12/28/18 Page30f 33

 

 

.7 2.4- ?Medically Necessary" means Hospital Services or Medical Services as defined in Section 7.3 which the
PLAN determines are covered under a Benefit Agreement. 

2.5- "Medical Services" means those services provided by a physician (as defined by law) and covered under
a Benefit Agreement.

2.6- ?Identification Card" means the card Issued by the PLAN Identifying the Subscriber as entitled to receive
services from HOSPITAL or any other eligibie provider.

2.7- "Subscribedsi" means any person entitled to receive the PLAN benefits for the services of HOSPITAL or
other health care professionals, facilities or institutions as defined in and pursuant to a Benefit Agreement.

2.8- "Utilization Management Programis)" means a function performed by the PLAN to review and determine
whether the Hospital Services provided are covered and properly delivered under the Subscriber's Benefit
Agreement.

2.9- "Covered Services" means those health care sewices and supplies for which Subscribers are entitled to
receive benefits from the PLAN under a Benefit Agreement.

2.10 ?Non-covered Services" means all health care services rendered to Subscribers other than Covered Services.

2.11- ?Participating Hospital" means any licensed hospital which is a party to a Participating Hospital Agree-
ment with the PLAN.

2.12- "Non-Participating Hospital" means any licensed hospital which is not a party to a Participating Hospital
Agreement with the PLAN.

2.13- "Payment System" means a program deveIOped by the PLAN to reimburse hospitals for Covered Services
to Subscribers, which is attached hereto and made a part of this Agreement, hereinafter referred to as Exhibit
A together with amendments thereto as from time to time adopted by the PLAN.

2.14- ?Provider Audlt" means the program developed by the PLAN to audit the charges of HOSPITAL to
Subscribers for Hospital Services, which is attached hereto and made a part of this Agreement, hereinafter referred
to as Exhibit together with amendments thereto as from time to time adopted by the PLAN.

Ill. GENERAL PROVISIONS

3.1- The PLAN and HOSPITAL are independent entitles. Nothing in this Agreement shall be construed or be
deemed to create a relationship of employer and employee, or principal and agent. or any relationship other
than that of independent parties contracting with each other solely for the purpose of carrying out the provi-
sions of this Agreement.

3.2- HOSPITAL shall attain and maintain status as a Participating Hospital and meet all prerequisites associated
therewith. Further, shall display. in a prominent location in its admission lobby. the symbol of its
participation in the form iurnished by the PLAN.

3.3- HOSPITAL agrees that it will render Hospital Services to any Subscriber, insofar as its facilities and admis-
sion policies permit. When a patient of HOSPITAL has presented an Identification Card entitling the patient
to bene?ts as a Subscriber under a Benefit Agreement issued by the PLAN, HOSPITAL will not require an ad-
vance deposit or solicit payment from such patient for Covered Services. except for any deductibles or co~
insurance that are the Subscriber's responsibility under the Benefit Agreement.

3.4- This Agreement is entered into by HOSPITAL and the PLAN with the express understanding and agree-
ment that this Agreement shall not be construed nor considered to be an Agreement between HOSPITAL and
other hospitals who are party to similar Agreements. This Agreement shall not constitute an Agreement that
HOSPITAL may act as agent for any other hospital that becomes a party to a simiiar Agreement. This Agree
ment shall not impose any liability upon any other hospital by reason of any act or acts of omission or commis-
sion on its part, nor shall HOSPITAL incur any liability by reason of any act or acts of omission or commission
of any other hospital.

Second of 15 Pages

 Case Document 134-1 Filed 12/28/18 Page4of 33

 



 

- ?ei-

 

3.5- HOSPITAL agrees to indemnity and hold the PLAN harmless from any and all liability. loss. damage. claim
or expense of any kind. including costs and attorneys' fees. which result from any action or proceeding involv-
alleged medical liability by HOSPITAL its agents or employees.

3.6- It is understood the PLAN retains the right to change. revise. modify or alter the term and content of any
Benefit Agreement without prior approval or notice to the HOSPITAL.

IV. HOSPITAL SERVICES AND RESPONSIBILITIES

4.1- HOSPITAL shall provide Medically Necessary Hospital Services to Subscribers as provided In the applicable
Benefit Agreement when ordered by a licensed physician or other licensed medical professionals and are within
the bylaws of the HOSPITAL

4.2- HOSPITAL shall provide Hospital Services to Subscribers In the same manner as those services are provid-
ed to all other patients at HOSPITAL The quality of Hospital Services shall be no less than the quality of ser-
vices provided to other patients at HOSPITAL.

4.3- HOSPITAL has. and shall maintain in good standing. all licenses required bylaw. Evidence of such licenses

shall be submitted to the PLAN upon request.

4.4? in order to encourage HOSPITAL to satiety mlmimum standards in providing patient care.
HOSPITAL agrees to be either accredited by the Joint Commission on Accreditation or Hospitals (JOAN) or the
American Osteopathic Association most. or certified for the Medicare Program through the Health Care Finan-
cing Administration. Division of Health Standards and Duality, as applicable. Afters decision by JCAH or AOA
to deny accreditation or by the Health Care Financing Administration. Division of Health Standards and Quality.
to deny a clarification to HOSPITAL. the PLAN shall have the right. notwithstanding any other provision con-
tained herein. to laminate this Agreement upon giving HOSPITAL thirty [30) days prior written notice of such
Intent to terminate. Such notice to terminate will he stayed It HOSPITAL Initiates an appeal of such a decision
or applies for an alternative certi?cation or accreditation within the thirty day period stated in the 
notice Alter a final decision to deny certiticstlon or accreditation. the PLAN shall have the right. notwithstand-
ing any other provision contained herein. to terminate this Agreement upon giving HOSPITAL thirty (30) days
prior written notice of such Intent to laminate.

al.5- HOSPITAL shall ensure that all physicians and other medical professionals who practice at HOSPITAL.
whether or not on Its medical staff. and all employees continue to meet all malleable State laws and regula-
tions. and all rules of HOSPITAL and medical staff.

4.6- HOSPITAL shall notify the PLAN of: [at Any action against any of Its licenses; Any changes
In Its ownership or business address; to) Any legal or government action, other problem or situation that In the
opinion of the Chief Executive Officer might imoalr the ability of HOSPITAL to carry out its duties and obliga-
tions under this Agreement.

4.7- HOSPITAL agrees to permit the PLAN to conduct Provider Audits and Utilization Management Program audits.
In addition HOSPITAL agrees to permit such other activities as are deemed mutually necessary to ensure cor-
rect payment to HOSPITAL for Covered Services rendered to a Subscriber.

it. THE PLAN SERVICES AND RESPONSIBILITIES

5.1- The PLAN agrees to pay HOSPITAL directly for Covered Services rendered to Subscribers pursuant to the
provisions of Article VI. Exhibit A and other applicable provisions of this Agreement.

5.2- The PLAN agrees to grant HOSPITAL the status of ?Participating Hospital." and to identity HOSPITAL as
a Participating Hospital on Informational materials to Subscribers.

5.3- The PLAN agrees to continue listing HOSPITAL as a Participating Hospital until this Agreement tenninales.
5.4. The PLAN shall matte payments to HOSPITAL Agreement as provided by Georgia law within tif-

teen (15} wanting days of receipt of bills (either paper claims or the PLAN paperless claims entry system] from
HOSPITAL. provided that such bills are accurate. complete. and properly Itemized.

Third of 15 Pages

(page 6 of Case Document 134-1 Filed 12/28/18 Page 5 of 33

 

 

 

5.5- The benefits to which a Subscriber shall be entitled shall be limited to those set out in that Subscriber's

Benefit Agreement in effect at the time Covered Services are performed, and the PLAN shall not be responsible
for any misrepresentation of the Benefit Agreement made to HOSPITAL by Subscriber; provided, however. that
HOSPITAL shall be entitled to rely on that Subscriber's Identification Card, when presented to HOSPITAL.
as to the accuracy of all information contained therein and the PLAN. upon request by HOSPITAL (either
by telephone or In writing), shall verify and confirm the Subscriber?s membership. The PLAN shall be responsi-
ble for any discrepancies between the information so verified and confirmed and such Subscriber?s Benefit
Agreement.

5.6- The PLAN shall provide timely management reports to the Chief Executive Officer of the HOSPITAL con-
taining data determined by the PLAN to be relevant to operation of the Payment System described in Exhibit A.

5.7- The PLAN agrees to provide HOSPITAL with a list of all participating physicians. participating hospitals.
and other participating providers which are located within a reasonable geographic area to the HOSPITAL.

VI. COMPENSATION AND BILLING

6.1- HOSPITAL agrees that the only charges for which Subscribers may be liable and be billed by HOSPITAL
shall be for Hospital Services not covered under an applicable Benefit Agreement and for deductibles and co-
lnsurance as provided In that Benefit Agreement. The Subscriber may not be billed for the difference between
billed charges and the Payment Adjustment described in Exhibit A.

6.2- HOSPITAL shall bill the PLAN in a manner and on forms acceptable to the PLAN (currently UB-82 paper
claim form orthe PLAN paperless claims entry system) and on a periodic basis as prescribed by the PLAN from
time to time. shall furnish. on request, all information reasonably required by the PLAN to verify and
substantiate the provision of Hospital Services and the charges for such services. Such bills should be submit-
ted within sixty (60) days after the services are rendered. but in no instance can the bill be submitted later than
twelve (12) months from the date the services are rendered. The PLAN reserves the right to review all statements
submitted by HOSPITAL. Claims which are not submitted within the timely filing period described above will
not be honored and HOSPITAL agrees not to bill Subscribers or the PLAN for services associated with such

claims. The PLAN will not apply this provision to any claim in which the PLAN was the cause of the delay.
6.3- The PLAN agrees to reimburse HOSPITAL for Hospital Services provided to Subscribers regarding inpa-

tient admissions and outpatient claims as set forth in Exhibit A attached to and made a part of this Agreement.

6.4- The PLAN shall be permitted to recover from HOSPITAL amounts due the PLAN because of payments
made in error. the Utilization Management Program. to) the Payment System described in Exhibit A, the
Provider Audit program described in Exhibit or inaccurate payments including payments based upon er-
roneous or incomplete Information provided by HOSPITAL. HOSPITAL shall first be given an opportunity to re-
fund the amoum. If this recovery is not received within forty-five (45) days of the notice from the PLAN, then
the PLAN shall have a right to offset, deducting from future payments. amounts due the PLAN. The PLAN shall
provide adequate notice to HOSPITAL of the amounts offset.

Examples of "payments made in error" include but are not limited to:

Duplicate Payments: when two or more payments have been made to the HOSPITAL for the same service
rendered the same Subscriber on the same day;

(bi Services not Rendered: when payments have been made to the HOSPITAL for services not rendered by the


Non?covered Services: when the PLAN has made a? payment for services later determined by the PLAN to
be non-covered;

Coordination of Benefits: when the PLAN is the secondary carrier under the coordination of benefits provi-
sion of a Benefit Agreement and has made a payment for services for which payment has been or should have
been made by a primary carrier; or

Workers' Compensation: when payment has been made by the PLAN for services for which benefits are
available to the Subscriber under the Workers' Compensation laws of any state or federal Jurisdiction.

Fourth of 15 Pages

(Page 'i of 13]

I
i

Case Document 134-1 Filed 12/28/18 Page 6 of 33



6.5- The PLAN shall make refunds to HOSPITAL for amounts due HOSPITAL because of omissions and under-
payments of bills made In error. lb} the Payment System described In Exhibit A. and to] the Provider Audit pro
gram described in Exhibit B. These retunds shall be made within forty-five [45! days oi written notice given by
HOSPITAL

8.8- The provisions oi this Agreement shall apply only to the number oi beds licensed by the State
of Georgia recorded with the PLAN.

63- The day of Hospital Service Is defined to mean the period or any parts thereof between the census-taking
hours oi two successive days. The Census-taking Hour is defined to be the hour fixed by the HOSPITAL for
counting its patients In computing the number oi days of Hospital Services furnished. the day of admission
shall be counted. but the day of discharge shall not be counted unless the Subscriber is discharged on the
day ct admission.

6.3- Changes In HOSPITAL charges shall be reported to the PLAN in the faucet attached hereto and made a
part of this Agreement. hereinatter referred to as Exhibit 0. Changes in charges will be made on the effective
date requested by HOSPITAL provided changes are not retroactive. The PLAN reserves the right to negotiate
charges with any Hospital attempting to compromise the Payment System. Disputes regarding this issue will
be reconciled underthe Dispute Resolution clause In Article x. The HOSPITAL agrees to supply to the PLAN
a schedule of all charges upon request.

6.9. The PLAN agrees to provide HOSPITAL with a copy oi Its certified annual iinanclei statements within thirty
(30) days of completion. In exchange HOSPITAL shall provide the PLAN with a copy oi its certified annual ?nan-
cial statements upon request.

5.10- The HOSPITAL agrees that the PLAN shall never be charged a fee or rate higher than that charged for
services to the general public, and that the PLAN will be billed on the same billing system as the HOSPITAL
utilizes for the general public.

6.11- The PLAN and HOSPITAL both recognize the need to coordinate the replacement or expansion oi HOSPITAL
Iacllities with the overall plans for hospital facilities developed by the highest recognized statewide govem-
mental planning agency. The purpose of this coordination Is to eliminate unnecessary and duplicate tacilltles.
Beginning with the date on page 1 of this Agreement. it the highest recognized statewtde governmental plann-
Ing agency dlsapproves a project relative to HOSPITAL that is subject to Its review and it that decision is not
subsequently reversed by higher authority or it such approval is obtained Initially or therealter Is reversed by
higher authority all as provided by law. and HOSPITAL nevertheless carries out the project for which noendorse-
ment Is in tame. the PLAN payment to HOSPITAL with respect to that project will be computed without allowance
tor capital expenditures applicable to such project.

VII. UTILIZATION MANAGEMENT

7.1- The PLAN shall establish a Utilization Management Program. HOSPITAL agrees to cooperate with and be
bound as between HOSPITAL and the PLAN. by the determinations of any Utilization Management Program.

7.2- Utilization Management Programs conducted by the PLAN shall detennlne Covered Services under the
Subscriber?s Bene?t Agreement. Reviews and determinations include but are not limited to the appropriateness
of acute hospitalization. length of stay. outpatient care. or diagnostic services. This function would also include
review for Non-covered Services such as pro-existing conditions. cosmetic procedures and custodial care.

13- The PLAN and the HOSPITAL agree to attempt to avoid retrospective denial of Hospital Services as much
as possible in all Utilization Review Procedures. and to seek to minimize this occurrence. The PLAN reserves
the right to determine whether In Its judgement a service or supply ls Medically Necessary. The tact that a physi-
cian has ordered a service or supply does not. In ltselt. make It Medically Necessary. Medically Necessary Hospital
Services are: consistent with the or diagnosis and treatment of the condition. disease. ailment,
or Injury: and not primarily for the convenience of the Subscriber. his or her Physician. or other provider.
and not primarily custodial care.

7.4- The PLAN shall not be obligated to pay Ior Hospital Services provided to a Subscriber after the attending
physician determines that further hospitalization is not Medically Necessary. or If the Hospital's utilization review

Filth pt 15 Pages

(Page

8 of 18)

Case Document 134-1 Filed 12/28/18 Page 7 of 33

 



committee determines that further hospital care is not Medically Necessary. Hospital shall not charge Subscribers
for Hospital Services denied by the PLAN as not being Medically Necessary, unless HOSPITAL notifies Subscriber
in writing such Hospital Services are not reimbursable by the PLAN and Subscriber agrees in writing to reim-
burse HOSPITAL directly for such Hospital Services.

7.5- HOSPITAL agrees to cooperate with the PLAN in administering special "Utilization Management Programs"
which specific PLAN accounts may require andlor purchase from the PLAN. These programs may include, but
are not limited to:

?Pre-admission Certification" to determine the appropriateness of the inpatient admission.

"Admission Review? to determine whether an unscheduled inpatient admission or an admission not sub-
Ject to pro-admission review was medically necessary.

(0) "Concurrent Review" to determine whether a continued inpatient hospital stay is Medically Necessary.
7.6- Utilization Management shall include medical review of claims in order to determine Non-covered Services
such as cosmetic procedures, custodial care and pre-exlsting conditions. (Pre-exlsting conditions are defined
in the Subscriber's Benefit Agreement.) The PLAN reserves the right to deny payment for any Hospital Servicets)
the PLAN to be Non-covered Services. The decision oi the PLAN is final for the medical review of
individual claims. HOSPITAL has the right to bill Subscriber directly for any charges determined by the PLAN
as Non-covered Services.



7.7- HOSPITAL may appeal any Utilization Management denial in which the HOSPITAL Is not permitted to bill
the Subscriber by requesting reconsideration by the Health Cost Management Division of the PLAN within thir-
ty (30} days following communication of such denial to the HOSPITAL. Such reconsideration shall be conducted
and the reconsideration decision shall be communicated to the HOSPITAL. li HOSPITAL is not satisfied with
the result of the Health Cost Management Division, HOSPITAL may request arbitration by an independent pro-
fessional review agency with whom the PLAN has contracted. HOSPITAL and the PLAN agree that the decision

oi the independent professional review agency is binding on both parties.



I 7.8- The PLAN shall rely on the Utilization Review Committee for concurrent utilization review.

HOSPITAL agrees to submit to the PLAN its utilization review plan upon request. HOSPITAL further agrees to
submit any changes or modifications of its utilization review plan to the PLAN upon request.

RECORDS. MAINTENANCE, AVAILABILITY, INSPECTION AND AUDIT

3.1- HOSPITAL shall prepare and maintain all appropriate records on Subscribers receiving Hospital Services
at HOSPITAL. The records shall be maintained in accordance with generally accepted record-keeping procedures
and as required by law.

8.2- and access to records of Subscribers shall be controlled by applicable Federal,
State and local laws and this Agreement.

8.3- HOSPITAL agrees to permit reasonable inspection and reasonable audit, and provide reasonable duplica-
tion of date and other records reierred to in Section 8.1, including but not limited to billing, payment, assign-
ment, Utilization Management. and medical records maintained on Subscribers pursuant to this Agreement.
Such inspection, audit and duplication shall be provided upon reasonable notice during regular business hours.
and shall be provided without cost to the PLAN or Subscriber. PLAN agrees to request the minimum number
of records necessary to reasonably fulfill Its obligations under this contract with the HOSPITAL and Subscriber.

8.4- HOSPITAL and PLAN agree to keep confidential, and to take all reasonable precautions to prevent the
unauthorized disclosure of any and all records required to be prepared or maintained by this Agreement.

IX. MARKETING, ADVERTISING AND PUBLICITY

The PLAN shall have the right to usethe name of HOSPITAL for purposes of marketing, informing Subscribers

oi the identity of Participating Hospitals, and otherwise to carry out the terms of this Agreement.

Sixth pl 15 Pages

 

 1" Case Document 134-1 Filed 12/28/18 Page8of 33

 

3.
9.2- Except as provided in Section 9.1. the PLAN and HOSPITAL each rves the light and control of the use
at its name. symbols, trademarks and service marks presently existing or later established. In addition. except
as provided in Section 9.1. neither the PLAN nor HOSPITAL shall use the other party's name. symbols. tmdenwke
or service marks in advertising or promotional material or otherwise without the prior written consent of that
. party and shall cease any such usage Immediately upon written notice of that party or upon termination of this
Agreement. whichever Is sooner.

I. DISPUTE RESOLUTION

10.1- The PLAN and agree to meet and center In good faith to resolve any problems or disputes that
may arise under this Agreement.

 

I 10.2- In the event that any problem or dispute, other than a Utilization Management decision provided tor in
Article VII. Is not satisfactorily resolved. the PLAN and HOSPITAL agree to submit the problem or dispute to

I. the Hospital Service Committee at the Board of Directors at the PLAN for resolution. Either party may Initiate

. ins action. The Hospital Service Committee shall hold a bee?ng and decide the matter within sixty [60) days
i area tar.

10.3- Elther party may appeal the Hospital Service Committee decision to the Board of Directors at the PLAN
by giving written notice to the other party and the PLAN within ten days following the date of the Hospital Ser-
vice Committee decision. The decision of the Board of Directors shall be iinsl and binding on both parties.

KI. TERM AND TERMINATION

11.1- When executed by both parties. this Agreement shall become effective as of the date noted on page 1
and shall continue In eifect until laminated.

11.2- Either party may terminate this Agreement, with or without cause, by giving prior written notice of at least
ninety (90) days. Nothing contained in this Agreement shall be construed to limit either party?s lawful remedies
In the event oi a material breach of this Agreement.

11.3- II this Agreement be terminated pursuant to this Article HOSPITAL shall continue to provide Hospital
Services under the tonne at this Agreement to Subscribers who are hospital Inpatients on the date oi tennlna-
tion until those Subscribers are discharged.

11.4- Notwithstanding termination. the PLAN shall continue to have access to records tor three years. In ac-
cordance with Article to the extent pennilted by law and as necessary to ful?ll the terms at this Agreement.

11.5- Atter the eifective date of termination. this Agreement shall remain in effect for the resolution of all mat-
ters unresolved on the date of termination.

11.6- Agreement will automatically terminate upon the suspension or revocation ol the license
to operate. or a change of ownership of the HOSPITAL

IIL UNFORESEEN CIRCUMSTANCES

12.1- In the event that the operations of lacilities are substantially Interrupted by acts of war. tire.
insurrection. labor disputes. riots, earthquakes, or otheracta at nature, HOSPITAL shall be relieved of its obliga-
lions only as to those attested operations and only as to those affected portions of this Agreement for the dura-

tion of such Interruption. 

12.2- In the event that the Hospital Services provided by HOSPITAL are substantially Interrupted pursuant to
I an event descrle in Section 12.1. the PLAN shall have the right to terminate this Agreement upon thirty (on)
days prior written notice to HOSPITAL. Such notice at termination shall be withdrawn it the PLAN In its judge-
meint that Hospital Services can be performed in spite ot the event or because the Interruption has
an ad.

HISCELLANEOUS PROVISIONS

13.1- No assignment of the rights. duties, or obligations of this Agreement shall be made by HOSPITAL Any
I attempted assignment in violation of this provision shall be void as to the PLAN.

 

Seventh of 15 Page:

(rage 1a a: 1st

Case Document 134-1 Filed 12/28/18 Page 9 of 33

 

 

13.2- HOSPITAL shall not subcontract this Agreement or any portion of It without prior written consent of the
-- PLAN.

13.3- Waiver of a breach of any provision of this Agreement shall not be deemed a waiver of any other breach
of the same or different provision.

13.4- Any notices required to be given pursuant to the tones and provisions of this Agreement shall be In writing
and shall be sant by certified mail, return receipt requested. postage prepaid, to the PLAN at:

BLUE GROSS AND BIJJE SHIELD OF GEORGIA, 338 PEACHTFIEE ROAD. ATLANTA. GA 30326;
ATTENTION: SENIOR VICE PRESIDENT. HEALTH CARE 

and to HOSPITAL at the address shown on the application form submitted by the HOSPITAL The notice shalt
be effective on the date indicated on the return receipt.

13.5- In the event any provision of this Agreement is rendered invalid or unenforceable by any federal statute
or state law, or by any regulation duty promulgated by officers of the United States or oi the State of Georgia
acting in accordance with law. or declared nail and void by any court of competent jurisdiction. the remaining
provisions of this Agreement shall, subject to Section 13.6, remain in foil force and effect.

13.6- In the event that a provision of this Agreement is rendered invalid or unenforceable or electoral: null and
void as provided In Section 13.5 and Its removal has the effect of materially altering the obligations of either
party in such manner as In the Judgement of the party affected (at wtil cause serious financial hardship to such
party. crib] will cause such party to act in violation of its corporate Articles or Bylaws, the party so affected
shall have the right to terminate this Agreement upon thirty (30) days prior written notice to the other party.
The applicable provisions of Article XI shall apply to such termination.

13.7- The PLAN may amend this Agreement from time to time; such amendment shall automatically become
part of this Agreement ninety [Wt days after written notice of the amendment has been sent to the 

13.3- The headings of Articles and Sections contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

13.9? Agreement shall be construed and enforced in accordance with the laws of the State of Georgia.

13.10- in the event that either the PLAN or HOSPITAL institutes any action, suit, or arbitration proceeding to
enforce the provisions of this Agreement, the prevailing party shall recover its costs and reasonable attorneys?
fees.

13.11- This Agreement replaces and supersedes all prior Participating Hospital Agreements between the
HOSPITAL and the PLAN, but does not effect any other agreements between the parties.

 

 

 

 

 

 

 

   

     

HOSPITAL BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC
For: MW- By: 

[Name of Hospital) {Signaturel 
By: Thomas Kinser

(Signature) (Name Printed}

President and 0430
{Name Pr ted] {Title}
My, 4 October 15. use
(tine) (Date)
Attested By: 

 

(Date) {Corporate Scretary or Assistant
Eighth of 15 Pages

(Page 11 at 18]

Case Document 134-1 Filed 12/28/18 Page 10 of 33

0 

 

EXHIBIT A TO THE PARTICIPATING HOSPITAL AGREEMENT
'r

. PLAN PAYMENT SYSTEM
i l. DEFINITIONS
"Peer Group" - A grouping of hospitals by the PLAN using criteria established by the PLAN.

2. "Diagnosis Related Grouping - A method ot classifying hospital patients by similar diagnoses, pro-
cedures, age1 sex. and discharge status.

3- "Principal Diagnosis" - The condition established alter study to be chie?y responsible tor occasionlng the
admission at the patient to the HOSPITAL for care.

4- "Other Diagnosis" - All conditions (secondary) that exist at the time of admission or develop subsequently
which affect the treatment received andior the length of stay. Diagnoses that relate to an earlier episode which
have no bearing on this hospital stay are to be excluded (Includes complications and 

5- Procedure" - The procedure which was pericnned for definitive treatment ratherthan one performed
for diagnostic or exploratory purposes, Or was necessary to take care of a complication. The principal procedure
Is that procedure most related to the principal diagnosis.

6- "lnlier" - Patient stays which meet the criteria for being assigned to a DFIG and which do not present any
of the tactors which would cause the patient stay to be considered an Outlier.

7- "Collier" - Patient stays which have unique characteristics and are considered to be outside established
parameters for each ORG. Outliers consist of cases with any at the following characteristics:

lei Length of stay above trim points specified by the PLAN. ibiChargee above trim points specified by the PLAN.
and to) Patients whose diagnosis does not group Into valid DHG's {currently DHG codes 466-470}.

a "Hospital Based Physician Charges" - Physicians who are independent practitioners. whose services are billed
by HOSPITAL to the PLAN as a part of the Subscriber's total hill.

9- "Average Charge Per Admission" - average inpatient charge per admission for claims paid dur-
the previous twelve-month Data Collection Period as calculated by the PLAN for all letters. For the first year
at this Agreement. the Data Collection Period may be less than twelve months.

lo- "Adlusted Charge Per Admission" - Each Participating Hospital?s average inpatient charge per admission
as calculated by the PLAN alter adlustmente tor Case Mitt Complexity and Hospital Based Physician Charges.

11- "Peyrnenl Threshold" - The limit tor the Adjusted Charge Per Admission set each yesrby the PLAN for each
Peer Group.

12? ?Inflation Index" - The lndexlesl which the PLAN will use each year to lnflate the Payment Threshold.

13- "Case Mix Complexity Index" - An index calculated by the PLAN tor the HOSPITAL based on 
PLAN admissions (Inlters) grouped by DHG.

14- "Payment Adjustment" - The percentage calculated each year by the PLAN for any Participating Hospital
whose Adlusted Charge Per Admission is greater than its Peer Group's Payment Threshold. This percentage
will be derived by dividing the Peer Group Payment Threshold by Adjusted Charge Per Admission.
The Payment Adjustment will be applied to all HOSPITAL inpatient claims submitted during the Payment Period.

15- "Data Collection Period" - The twelve-month claims payment period (currently October 1 to September 30]
used to compare Participating Hospital charges ior PLAN admissions.

16- "Payment Period" - The twelve-month period (currently January to December 31] during which the PLAN
. will pay HOSPITAL using the Payment Adlustment forany inpatient claim submitted by HOSPITAL

Ninth at 15 Pages

 

 12 Case Document 134-1 Filed 12/28/18 Page 11 of 33

 

?Trim Points" - The respective limits set by the PLAN on length of stay and charges per admission. It the
inpatient's length of stay or charges are above the respective Trim Point, the admission is considered an Outlier.

Ii. PAYMENT

1. The PLAN agrees to reimburse HOSPITAL for Hospital Services provided to Subscribers regarding outpa-
tient claims at reasonable billed eligible charges.

2- li HOSPITAL has under $100,000 in total inpatient charges for PLAN Subscribers for each of the previous
two twelvemonth Data Collection Periods, PLAN will pay HOSPITAL its reasonable billed eligible charges.

3- if HOSPITAL has over $100,000 in total inpatient charges for PLAN Subscribers for any one of the previous
two twelve-month Data Collection Periods, PLAN will pay HOSPITAL tor Subscriber Heepital Services accor-
- ding to the provisions of Sections 4 thru 12 of this Article II.

4- Each year the PLAN will calculate each Participating Hospital's Payment Adjustment with data from the prior
twelve-month Data Collection Period using the procedures described in this Exhibit A.

5- The PLAN will first calculate for HOSPITAL an Average inpatient Charge Per Admission.

6- The PLAN will subtract Hospital Based Physician Charges from the HOSPITAL Average Charge Per Admis-
sion for comparison purposes.

7- The Average Charge Per Admission will be further adjusted by the Case Mix Complexity index.
The result will be the Adjusted Charge Per Admission.

 

8- All Participating Hospitals will be grouped into homogeneous Peer Groups by the PLAN.

9- In the first and second years of the Agreement the PLAN will calculate a Payment Threshold for each Peer
Group. The Payment Threshold for the first and second years for each Peer Group will be greater than the average
of the Adjusted Charge Per Admission for each respective Peer Group.

10- After the second year of the Agreement the Payment Threshold for each succeeding year will be set by in-
flating the previous Payment Threshold by the inflation index.

11- The Payment Threshold will be the maximum Adjusted Charge Per Admission which the PLAN will pay as
determined for each Peer Group.

Participating Hospitals whose Adjusted Charge Per Admission is less than their respective Peer Group?s
:gyment Threshold will be paid reasonable billed eligible charges for the succeeding twelve-month Payment
riod.

Participating Hospitals whose Adjusted Charge Per Admission is greater than their respective Peer Group's
Payment Threshold will have a Payment Adjustment calculated by the PLAN. The Payment Adiustment will be
the percentage calculated by dividing the Peer Group Payment Threshold by the Adjusted Charge
Per Admission. This Payment Adjustment will be the basis of payment to HOSPITAL for inpatient ad-
missions ior the succeeding twelve-month Payment Period. A patient cannot be considered an inpatient and
outpatient on the same calendar day.

12? The PLAN agrees to supply HOSPITAL with its Payment Adjustment 60 days prior to the beginning of the
new Payment Period.

Iii. INFORMATION

1- In order for the PLAN to assign a BBC number to each admission, HOSPITAL shall provide the following
information for each Subscriber admission:

Tenth of 15 Pages

(Peg-13 as 1st

 

 



Cgse _Doc3u_ment 134-1 Filed 12/28/18 Page 12 of 33

(at Principal diagnosis and any other diagnoses (using the IOU-943M coding system]. principal procedures
and any other procedures {using the ICD-S-CM coding system}. to) age on admission, d] sex. and discharge
status.

2- In the event HOSPITAL submits an Interim while the Subscriber Is still an inpatient, the PLAN will use
the information submitted at discharge to assign the DRG.

3- Each year HOSPITAL agrees to provide to the PLAN any data needed for calculating the average Hospital
Based Physicist-I Charges per Subscriber admission. The PLAN shall provide HOSPITAL with a description of
the Information needed and the date by 1iirhIInh dale ls needed {currently October 

4- agrees to notify the PLAN of any changes In its billing practices tor Hospttal Based Physicians.

5- The PLAN shall have the right to conduct on-site audits to verify DHG assignment criteria and Hospital
Based Physician Charges.

Any HOSPITAL dispute for any portion of Payment System Shall ?rst be sent In tho Health care Affairs

Division of the PLAN for reconsideration. It HOSPITAL is not satis?ed 1with the result at such consideration,
HOSPITAL may follow the Dispute Resolution procedure described in Article of the Agreement.

Eleventh at 15 Pages

 

 

(Page 14 at 18)

Case Document 134-1 Filed 12/28/18 Page 13 of 33

 

EXHIBIT OF THE PARTICIPATING HOSPITAL AGREEMENT

PROVIDER AUDITS

The PLAN shall be given the right by the HOSPITAL to conduct on-site audits during the regular
business hours. These audits shall consist of, but are not limited to, the examination of appropriate records
to verify that the charges on the hospital bill are for services ordered by a physician and rendered to the patient,
and that the charges are accurate.

2? The HOSPITAL agrees. upon request and at a time mutually agreed upon by the HOSPITAL and the PLAN,
to make available for audit to authorized representatives of the PLAN any medical records, statement-of-charge
records, and any supporting documents covering Hospital Services to a Subscriber. PLAN agrees that each
Subscriber, as a condition of enrollment in the PLAN, will have authorized such disclosure of information.

3- The PLAN agrees that all representatives conducting Provider Audits on site at the HOSPITAL shall carry
identification designating them as PLAN personnel.

4- The HOSPITAL shall pennlt authorized representatives of the PLAN to examine and audit all records.
documents, and data pertinent to the PLAN claims at the HOSPITAL.

5- The PLAN reserves the right to compile pertinent dataldocuments regarding Provider Audits as determined
to be appropriate and sufficient for reporting audit findings, while respecting patient confidentiality.


6- No audit charge or fee shall be billed to the PLAN or Subscriber by the HOSPITAL regarding copies of records
or documents or the use of HOSPITAL personnel in supplying needed audit documentation.

The PLAN will make reasonable Provider Audit requests and conduct the audits in an expeditious and pro-
fessional manner in order to minimize disruptions and burdens to the HOSPITAL


The PLAN agrees there will be no unneccesary delays in claim payments to HOSPITAL because of Provider
Audits.

9- Terms covering payments of refunds due HOSPITAL by PLAN, or PLAN by HOSPITAL. as a result of Provider
Audit findings are described in Section 6.4 of the Agreement. The PLAN agrees to reimburse HOSPITAL, upon
receipt of an adjusted bill, for properly documented Hospital Services provided to the Subscriber and not billed
by HOSPITAL discovered In the course of 3 Provider Audit.

10- HOSPITAL agrees not to bill Subscriber for any refund HOSPITAL makes to the PLAN as a result of any
Provider Auditis).

11- No routine adjustments will be projected from a routine claims audit sample except under special cir-
cumstances. For example, where a specific problem can be identified as a result of Provider Audits, projection
of an adjustment may well be considered statistically valid. If the HOSPITAL objects to such a projection, it
may request that an extended claims audit be performed, and the amount of the adjustment will be projected
from this extended audit. if the PLAN determines that immediate repayment will cause undue financial hard-
ship for the HOSPITAL, the HOSPITAL and the PLAN may agree to a repayment schedule which satisfies the
specific adjustment.

12- The PLAN representatives will not receive any part of any amounts recovered.

13- Ii HOSPITAL has concerns regarding the auditor's experience or conduct, or excessive document requests
resulting in an unreasonable economic burden, HOSPITAL may state its grievance and request relief by peti~
tionlng the Health Care Affairs Division of the PLAN. The PLAN decision shall be communicated to the HOSPITAL.
If HOSPITAL is not satisfied with the Health Care Affairs Division decision, HOSPITAL may follow the dispute
resolution procedures described in Article of the Agreement.

Twelfth of 15 Pages

(Page 15 o! :81

Case _Document 134:1 Filed 12/28/18 Page 14 of 33

14? In addition, Provider Audits hereunder shall be conducted pursuant to the loitering:

 

 

The PLAN will furnish all written notice of en err-cite Provider Audit to HOSPITAL prior to the visit defining
. the nature oi the audit.

The on-alte review will he conducted try qualified PLAN personnel 1who are with medical terminology
and general hospital charging and medical record documentation procedures.

I personnel will schedule an entrence conference with appropriate atai'f to coordinate
arrangement: for the Provider Audit and an exit conference to dlecuee the neurotic of the Provider Audit.

 

I, areas In Hark with the PLAN in inetltuting corrective action to reconcile billing and documenta-
tion problems. a PLAN agrees to inform HOSPITAL of PLAN policies and billing guidelines in order to prevent
future incorrect payments.

 

Thirteenth of 15 Peace

(Page IE



Case Bocument 12/28/18 Page 15 of 33

 

'0

EXHIBIT 0 O. HE PARTICIPATING HOSPITAL AGREEMENT

SCHEDULE OF ROOM HATE CHANGES
HOSPITAL ?new DATE COMPLETED: M9 6
ADDRESS: WM 19!.
mm? STATE: ZIP CODE: TELEPHONE REL: IM 46%6a?-
PERSON REPLYING II. TITLE: W- ?lms?; I no

BLUE GROSS PROVIDER gi? EFFECTIVE DATE: I: My

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a. SURGICAL PJLIH 
Number
ONE-BED 91 Beds L8
ROOMS 1
Rye 3
Number
TWO-BED at em 
ROOMS I
RaIa i 
Number
THREE-RED was 0 0
ROOMS
Rate 3 I 5
Number
FOUR-BED In Bed: 0 0
ROOMS
RE 5 
ROOMS WITH Number
MOFIE THAN oI Beds 0 0
FDUFI BEDS
Reta I: 5
SPECIAL CARE ?gm Igu ccu IIcu BURN
Number
lnIermediEte of Beds 4
ICU, Burn. etc.
Flat_e _s I 5 5
OTHER BEDS _Ty_'pe
Number
(Isolation. of Bags {0
emmenciee.
halls. eth Flare i 
Number of Beds 5-2
MRSERY RAT-Es 
Home! or
Haguler '3 Return form to:
Preemie or G. Nordmuk, 
SE arc in BIB 0  Georgie. Inc.
Neomul. . Peal D?loe Box 
Premature. er Atlanta, Geomla 30302
Icu Egg 5?

 

 

 

 

 

DO NOT WRITE BELOW THIS LINE

 

AVERAGE SEMI-PRIVATE RATE: AVSP RATE:
MOST angih?gh?gsEMl-PHWATE: HIGHEST SEMI-PRIVATE RATE:
. 4 I .
Mos'r i? HIGHEST Icwccu RATE: 5 i?

Feurteenlh of 15 Page:

(Page of 131

Case Document 134-1 Filed 12/28/18 Pa_ge 16 of 33

 


In

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROJECTED ANCILLARY CHANGES IN REVENUE
. HOSPITAL Prciccicd Rmnuu
i Produced by tho Ghana.
Pomontauo In lho Period 
Dopanmonla lnoroaao '3 I [Wand If?
1. Anoathosloloay. 4' 3 
2. Blood Bank 0 1?5 3
a. Caldlology 1amEmergency Room 5?0 i
is. Hurt caihcrizuiicn .. #71 v. 
7. Laban. DeliveryLaboratory VI 
. a. Macicni and surgicai Supplloo {g 8 
- i 10. Neurology 5
11. Nucim Modiolna 0 5
12. Occupational Tharapy VI 3
13. Operating Room 0 V- 3
14. Outpmlont Surgery 5
15. Prion-ruler 9'0 i
18. 0 '35 5
17. Pulritiionm uc 2% v- 
13. Radiation Therapy ?5 5
19. Radiology 3
20. Recovery Room (Excluding 22. Rosoirotory Therapy . 0 3
23. Speech Thoropy VI 3
24. nihcr . V- 3
Flaturn Form to: G. Nordmark, Ill; BIC I 815 Gaur?a. Inc; Past O?ica Box 4445:

Atlanta, Glorgla 30302.

Fi??n?'b or 15 noon

Case Document 134-1 Filed 12/28/18 Page 17 of 33

Case Document 134-1 Filed 12/28/18 Page 18 of 33

AMENDMENT
TO PARTICIPATING AGREEMENT
BETWEEN
BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC.
and
ST. JOSEPH HOSPITAL OF DAHLONEGA. INC. a/lgLa
SOUTHERN HEALTH CORPORATION OF DAHLONEGA d/ a
CHESTATEE REGIONAL HOSPITAL
EFFECTIVE August 19, 2016

WHEREAS, BLUE CROSS BLUE SHIELD OF GEORGIA, INC. and S1
IOSEPH HOSPITAL OF DAHLONEGA. INC. a/ k/ a SOUTHERN HEALTH
OP DAHLONEGA d/b/a CHESTATEE REGIONAL HOSPITAL

have previously entered into an Agreement (hereinafter referred to
as the ?Agreement?) made and entered into on the 1 day of january, 1987; and

WHEREAS, Section 13.1 of the Agreement states:

No assignment of the rights, duties or obligations of this Agreement shall be made by
HOSPITAL. Any attempted assignment in Violation of this provision shall be void as to the
PLAN.

WHEREAS, St. Lloseph Hospital of Dahlonega, Inc. a/ k/ a/ Southern Health Corporation
of Dahlonega. Inc. d/ b/ a Chestatee Regional Hospital has requested consent to
assign the Agreement to Durall Capital Holdings d/ a Chestatee Regional Hosgital
11 winch is a newly formed entity that will utilize the hospital assets and conduct the
hospital operations previously performed by SHCD and PLAN wishes to consent to the
Assignment;

NOW THEREFORE, for and in consideration of the mutual promises and covenants
contained in the Amendment, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legally bound, agree to modify the Agreement as follows:

PLAN hereby consents to the Assignment of the Agreement by SHCD d/b/a Chestatee
Regional Hospital to DCH d/b/ a Chestatee Regional Hospital, to DCH d/ b/ a Chestatee
Regional Hospital, and by its execution of this Assignment, DCH d/ a Chestatee Regional
Hospital agrees to be bound by all terms and conditions of the Agreement as 
therein.

Except for the above, all other terms and conditions of the Agreement remain in full force
and effect. Section 13.1 shall apply to any future assignments of the rights, duties or
obligations of the Agreement.

 

 

Case Document 134-1 Filed 12/28/18 Page 19 of 33

IN WITNESS WHEREOF, the parties hereto have executed the Amendment as of {he

date ?rst written above.

  

Blue Cross and Blue Shield Southern Health Corporation of
of Georgia, Inc. Dahlonega, Inc. d/b/a Chestatee
Regional Hospital

 

 

By:SIgna1;ure 

 

 

 

 

 

 

Jeff Fusile \cm em em?
Printed Name Printed Name
President 
Title 5 Title
We 
Daee Date

Durall Capital Holdings d/b/a
Chestaiee Regional Hospital

ENE 
?Reggae? Essex} {Ea f- gig Ev S?Egy 
iBy: Signature
ME
Printed Name

?35;

T?tle 
?ew/E? Esme

.

mm

Da?e

 



Case Document 134-1 Filed 12/28/18 Page 20 of 33

Case Document 134-1 Filed 12/28/18 Page 21 of 33

Amendment to
Hospital Agreement for Participating Provider Program
between
Blue Cross and Blue Shield of Georgia

Chestatee Regional Hospital

Effective a embex I .520! PLAN and HOSPITAL agree that the Hospital Agreement for
Participating Provider Program (the "Agreement"), is amended as follows:

The lab Fee Schedule is added to the agreement as Appendix B.

Except for the above, all other terms and conditions of the Hospital Agreement for Participating

Provider Program remain in full force and effect.

To the extent con?ict antes between the provisions of the Amendment and those of the Agreement,

the provisions of the Amendment shall control.

BLUE CROSS AND BLUE SHIELD
OF GEORGIA, INC.

 

 


1' . 
(Peinced Name)

Regional Vice President, Georgia Provider
menu?:
(Title)
a c; 7. i "r
(Date)

 

 

PAR Hospital Appmdix Ammdmentdoc

CHESTATEE REGIONAL HOSPITAL

 

(Signature)

Aim? paMu?
(Printed Name)

 

Critic)

7'

(Date)'

 

Case Document 134-1 Filed 12/28/18 Page 22 of 33

Chestatee Regional Hospital
Appendix 
PAR Lab Fee Schedule

Lab codes not listed on Lab Fee Schedule will price at $0.00.
FAC FEE PT CPT FAC FEE
80368
80369
80371
80372
803?3
803?4
80375
80376
803??
80400
80402
80406
80408
80410
30412
80414
80415
80415
8041?
80418
80420
80422
80424
80425
80428
80430
80432
80434
80435
80435
80438
80439
80500
80502
81000
81001
81002
81003
81005
81007

 


Page 1 of 12

Case Document 134-1 Filed 12/28/18 Page 23 of 33

PAC FEE CPT
81445
81450
81519
81528
81535
81536
81539
82009
82010
82013
82016
82017
82024
82030
82040
82042
82043
82044
82045
82025
82085
82088
82103
82104
82105
82106
82102
82108
82120
82127
82128
82131
82135
82136
82139
82140
82143
82150
82154
82157
82160
82163
82164
82172
82125




Page 2 of 12

Case Document 134-1 Filed 12/28/18 Page 32130 5 REDACTED 5 2715 5
32190 2725 5
32232 725 
32239 2723 
32240 5 5 2731 5
32247 5 5 735 5
32243 32745 
32252 5 32747 5
32251 32757 5
32270 32759 
32271 5 32750 5
32272 5 5 32775 5
32274 32775 
32235 32777 5
32300 32734 
32305 5 32735 
32303 5 5 32737 5
32310 32300 
32330 32303 
32331 5 5 32305 5
32340 32310 
32355 32320 
32350 32930 
32355 32933 5
32370 5 32941 
32373 32943 
32374 32945 
32375 32945 5
32375 5 5 32947 5
32373 32943 
32379 5 5 32950 5
32330 32951 
32332 32952 
32333 5 32955 5
32334 5 5 32950 5
32337 5 5 32952 5
32390 5 5 32953 5
32397 5 5 32955 
32415 5 5 32977 5
32435 32973 
32435 5 32979 5
32433 32935 
32441 5 33001 5
32455 5 33002 5
32430 33003 

 

Page 3 01?12

Case Document 134-1 Filed 12/28/18 Page 25 of 33

 

PT

930
33935
3393?
33945
33930
33951
33970
33935
33937
33992
33993
34030
34035
34050
34051
34055
34075
34073
34030
34031
34035
34037
34100
34105
34105
34110
34112
34119
34120
34125
34132
34133
34134
34135
34133
34140
34143
34144
34145
34145
34150
34152
34153
34154
34155








5


3




5













5






5










 

Page 4 of 12

Case Document 134-1 Filed 12/28/18 Page 26 of 33

   

 

  
   
   
  

704
830
5002
5004
5007
5008
5009
5013
5014
018
025
027
032
1
5044
5
5046
85048
85049
85055
85060
85097
85130
85170
85175
85210
85220
85230
85240
85244
85245
85246
85247
85250
85250
85270
85280
85290
85291
85292
85293
85300
85301
85302
85303

  

     
 
     
    
  

  
  

  
   
 
     
   
  
  

  
  
  

   
    
  

  
    
    
  
  
  
  
     
  
  
  
  

  

  
  
  
  
  
  

  
  
  
  
    
  













5






5













  

  
      
     
   
  

  
  

  
   




 

Page 5 of 12

Case Document 134-1 Filed 12/28/18 Page 27 of 33

PT
5255
5277
5230
5294
5300
5301
5304
5305
5303

35309

35310

35315

35317

35313

35320

35325

35327

35329

35331

35332

35334

35335

35335

35337

35340

35341

35343

35344

35352

35353

35355

35355

35357

35353

35350

35351

35357

35375

35373

35332

35334

35335

35403

35405

35430


















































 

Page 5 0f 12

Case Document 134-1 Filed 12/28/18 Page 28 of 33



87

88
289
790
6793
6800
6803
6304
6805
6306
680?
6803
6812
813
816
817
821
86822
86825
86826
86828
86829
86830
86831
86832
86833
86834
86835
86850
86860
86820
86880
86885
86886
86890
86891
86900
86901
86902
86904
86905
86906
86910




Page 7? of 12

Case Document 134-1 Filed 12/28/18 Page 29 of 33

274
275
7276
7277
7278
7279
7280
7281
7283
7285
7290
7299
7300
7301
7305
20
324
7327
7328
7329
7332
7335
7336
7337
7338
7339
7340
7341
7350
7330
7385
7389
7390
87391
37400
87420
37425
87427
37430
87449
87450
87451
37470
87471
37472






5















 

Page 8 of 12

Case Document 134-1 Filed 12/28/18 Page 88037
88040
880?5
88104
88106
88108
88112
88120
88121
88125
88125
88130
88140
88141
88142
88143
88147



 

Page 9 of 12

Case Document 134-1 Filed 12/28/18 Page 31 of 33

  
  
 

FAC FEE CPT
88372
88373
88374
88375
88377
88380
88381
88387
88388
88388
88720
88738
88740
88741
89049
89050
89051
89055
89060
89125
89160
89190
89220
89230
89250
89251
89300
89310
89320
89321
89322
89325
89329
89330
89331
0001U
0002U
0003U
0004M
0007M
0008M
0009M
60027
60103
60123

     
   
     
  

 

  
    
  
   
   
   
    
   
    
  
  
    
   
    
   
  
  

  
  

  
  
  
  

  

  
  
  

  

  

  
  
   
  

  
    
 
  

  

   
  



  
     
  
  

  
  
   
     
     
   

Page 10 of 12

Case Document 134-1 Filed 12/28/18 Page 32 of 33

 

FAC FEE






































5










 

Page 11 of 12

Case Document 134-1 Filed 12/28/18 Page 33 of 33

Page 12 of 12

Case Document 134-2 Filed 12/28/18 Page 1 of 36

Exhibit 



191%, by and between HMO Georgia. Inc.. a Georgia corporation is wholly aria-rt
subsidiary at Blue Cross and Blue Shield oi Georgia and a Member of the Blue Cross
and Blue Shield Association an Association of Independent Blue Cross and Blue Shield

Case Document 134-2 Filed 12/28/18 Page 2 of 36



HMO Georgia. Inc.
Hospital Agreement

THIS AGREEMENT is made and entered into this 15 day of

 

 

ii

7010?

Plans] lhereinlafterw referred to as lineage-Wm.
located 31M Georgia lhereinalter referred to as 

l. RECITALS

1.1

1.2

1.3

1.4

2.1

HMO 

HMOGA is a Georgia corporation. duly licensed by the Insurance Commissioner

of the State of Georgia and the Department of Human Resources as an HMO,

providing HMO and Pointmf?Service Membership Agreements covering the

provision of Medical Services in certain marketsof Georgie.

HOSPITAL is a corporation or a hospital authority. duly licensed as a hospital
by the State of Georgia Department of Human Resources to provide quality
inpatient and ourpatient Hospital Services and accredited by the Joint

Commission on Accreditation of Healthcare Organizations 

HOSPITAL and HMOGA desire to enter into a written service agreement to
provide andror arrange for the provision of basic and supplemental Medical
Services to certain HMOGA Members in an appropriate manner and to preserve
and enhance Member dignity in the most efficient and cost
effective manner. As designated from time to time by HMGGA. this
Agreement may apply to certain enrollees in HMOGA and enrollees of other
HMO arrangements with whom HMOGA may be affiliated or for whom
HMOGA may administer claims or arrange bene?ts on behali oi self-insured

employers.

NOW. THEREFORE, in consideration of the promises and the mutual covenants
herein stated. it is agreed by and between HMDGA and HOSPITAL as follows:

DEFINITIONS 

Aifiliatelsl of HMOGA . These organizations designated from time to time by
HMOGA that are associated with HMOGA or for whom HMDGA may

administer claims or arrange benefits on behalf of sell-insured employers.

Herr. 

Case Document 134-2 Filed 12/28/18 Page Agreement - This contract. including attachments or eddenda hereto, that may
be issued or amended by HMOGA from tirne to time.

Coinsurance - The percent of a bill for Covered Services which a Member must
pay as set forth in a Membership Agreement.

Coordination of Bene?ts {also referred to as "603") - The combining of
benefits under a Membership Agreement with duplicate coverage under
another health insurance policy such that total benefits paid for Covered
Services rendered to a Member do not exceed the amount HMOGA would have
paid under the terms of this Agreement had HMOGA been the primary pevor.

Copavment - The predetermined amount a Member must pay for Covered
Services at the time services are rendered as set forth in a Membership

Agreement.

Covered Groupie! - Select grouolsl for which HMDGA provides. indemnifies or
administers health care benefits under the terms of a Membership Agreement.
which may specifically include (without limiting the generality of the foregoing]
a group covered or administered by another HMO which is an Affiliate of
HMOGA for whom HMOGA provides. indemnifies or administers benefits.

Covered Services - These services which are reimbursable under the terms of
a Membership Agreement and which are Medically Necessarv as determined
by HMOGA.

Emergency The treatment for a sudden onset of a medical condition
manifesting itself by acute of sufficient severity that the absence
of immediate medical attention could reasonably result in:

{al Permanently placing a Member's health in jeopardy;

ibl Serious impairment to bodily functions:

(cl Serious and permanent disfunction of any bodily organ or part: or

(all Other serious medical consequences.

Encounter - Any event or occasion in Which any Medical Service is provided
to a Member by a Network Provider.

-2- Rev. ?157

Case Document 134-2 Filed 12/28/18 Page 4 of 36



 

2.10

2.11

2.12

2.13

2.14
2.15

2.16

2.1?

Fee Schedule - A comprehensive listing of lee maximums used to reimburse
a Network Provider on a fee-for-service basis for the provision of Covered
Services.

Guest Men-Iberia] - Memberisl of an Affiliate of HMOGA temporarily residing
in a Service Area. Guest Memberisl will be treated as an HMOGA Memberisl
while present in a Service Area.

Hospital - A facility licensed by the State of Georgia Department of Human
Resources as a hospital that has been selected by HMOGA for participation in
its Provider Network. and that has signed an HMO Georgia. Inc. Hospital
Agreement.

Hospital Based Physician - Any physician, with the exception of residents.
interns and fellows. who has a contractual relationship with HOSPITAL to
provide professional services. These services may be of two types: ill
administrative, managerial. teaching. or quality control activities compensated
from or through HOSPITAL which are furnished to HOSPITAL or its general
population; or physician services personally rendered to a Member while in
HOSPITAL which directly contribute to the diagnosis or treatment of a Member
and which ordinarily require perfonnence by a physician. including. an
emergency room physician. radiologist, pathologist. and anesthesiologist. and
any other physicians contracting with hospitals specified by HMOGA. at any
time. or from time to time; provided. however, that this term shall not include
Primary Care Physicians or Specialty Care Physicians employed by HOSPITAL
who have a separate contractual agreement with HMOGA.

Hospital Network - The green of hospitals designated by and under contract
with HMOGA to provide Covered Services to Members.

Hospital Services - Those acute inpatient and outpatient services which a
Hospital is licensed by the State of Georgia to provide.

ineligible Services - These services which are not Covered Services either
because they are not reimbursable under the terms of a Membership
Agreement or because they are not Medically Necessary as determined by
HMOGA.

Medical Director - A physician appointed by HMOGA to assume overall
responsibility for: supervision and implementation of dayato-day
administrative policies and procedures related to Network Provider activities;
i2] coordination of peer review and Quality Assurance activities; and [Bi other
Utilization Management activities.

J. ?lly. 4! I i9?

Case Document 134-2 Filed 12/28/18 Page 5 of 36

2.13

2.19

2.20

2.21

2.22

2.153

2.24

Medical Servicetsl - Health care serviceie) provided by a Network Provider.

Medically Necessary - Those Covered Services or supplies provided by a
Network Provider to identify or treat an illness or injury which. as determined
by HMOGA under its Utilization Management Program. are:

a} Consistent with the or diagnosis and treatment of a Member?s
condition. disease. ailment or iniurv; and

bi Appropriate with regard to standards of good medical practice: and

cl Generally accepted by the medical community as safe and effective. The
treatment must be the appropriate alternative for the situation and it
must be required for the condition; and

ill The most appropriate supply or level of service which can be safely
provided to a Member. When applied to an inpatient. it further means
that a Member's medical or conditions require that the
services or supplies cannot be safely provided to a Member as an
outpatient.

Memberiel - Certain perennial entitled to receive HMOGA benefits as de?ned
in a Membership Agreement.

Membership Agreement - A contract between HMOGA or Affiliates of HMOGA
and an employer. group. or individual to provide, indemnify or administer the
delivery of health care benefits through a health maintenance organization or
point-of-service program.

Membership Card - A valid identification card issued by HMDGA
entitling a Member to receive Covered Services through a Membership
Agreement.

Network Providerlsl - Any physician or group of physicians. or any facility,
including. but not limited to. a hospital. clinical laboratory. freestanding
ambulatory surgery facility. skilled nursing facility. hospice. home health
agency. or any other health care practitioner or provider of Medical Services
who has entered into a contractual agreement with HMOGA to provide
Covered Services Members. I

Parties - HMOGA and the HOSPITAL whose name appears on page one of
this Agreement.

4- HIV. 

Case Document 134-2 Filed 12/28/18 Page 6 of 36

2.25

2.26

2.27

2.23

2.29

2.30

Physicianisl . Any physicianlsl licensed in the State of Georgia who meets
criteria to become a Network Provider and who has signed one of
HMO Georgia. lnc.'s Physician Agreements.

Primary Care Physician - A Physician who agrees under a contract with
HMOGA to assume primary responsibility for providing or coordinating the
overall health care {including referrals to Specialty Care Physicians} of
Members who have selected such Physician to do so.

Quality Assurance Program [also referred to as Program"I - The program
developed or used by HMOGA for the collection and analysis of quantitative
and qualitative data which identi?es patterns of health care delivery, in order
to provide the most beneficial outcome for a Member, given a Member?s
medical condition before. during and after medical intervention.

Service Areaisl - Those counties speci?ed on Attachment E. as it may be
modified or amended by HMOGA by written notice to HOSPITAL at any time
or from time to time.

Specialty Care Physician - A Physician. other than a Primary Care Physician.
who practices in a recognized medical specialty and who agrees by contract
with HMOGA to provide Covered Services to Members.

Utilization Management Programs - The functions described in Article. VI
below. performed by HMOGA or by any entity or provider seiected by HMOGA
to review and determine whether Covered Services ordered andior provided by
a Network Provider are Medically Necessary.

HOSPITAL SERVICES AND RESPONSIBILITIES

3.1

3.2

HOSPITAL shall provide to Members and Guest Members in the relevant
Service Area Covered Services in accordance with this Agreement. when such
services are ordered by a Physician or other licensed health professional.

HOSPITAL shall provide Covered Services to Members in the same manner and
quality as those services are provided to all non-Member patients of
HOSPITAL. HOSPITAL shall not discriminate against any Member based upon
the source of'payment ior services. race. color. sex. ago. religion, national
origin. handicap, or health status. HOSPITAL shall assure that Covered
Services will be provided in a manner intended to preserve human dignity and
patient privacy. HOSPITAL shall treat Members with dignity and will not make
disparaging remarks to Members.

-5- an. #1197

Case Document 134-2 Filed 12/28/18 Page 7 of 36

3.3

3.4

3.5

(Z)

3.6

3.7

3.3





HOSPITAL shall assure that services provided are made available and
accessible to Members and In a manner that assume continuity of
care (including coordinating overall health care and exchanging health records)
and agrees to forward all clinical information in a timely manner to other
Network Providers engaged in the treatment of Members.

HOSPITAL agrees to accept HMOGA's payments. under the tonne of this
Agreement, as payment in lull for Covered Servicee provided t0 
HOSPITAL further agrees to look solely to HMOGA for payment of Covered
Services: provided, however. that HOSPITAL may bill Members for: 
Ineligible Services; applicable deductibles; and i3} PT
copavment amounts as provided in a Member's Membership Agreement.
Except as provided in this paragraph. HOSPITAL agrees not to bill Member 5 fl"
the difference between charges and HMOGA reimbursement 33
set forth in Attachment A.

In the event that HOSPITAL renders services to a Member which are lneligibl?
Services. HOSPITAL shall, prior to the provision of such Ineligible Services,
inform a Member that: {ii the services to be provided are not reimbursable
under a Membership Agreement or the services are not Medically Necessary:
l2! HMOGA will not pay for or be liable for such services: and a Member
will be financially liable for such services.

HOSPITAL warrants that it now has, and shall maintain, in good standing; (1)
all licenses required by law. I2i certi?cation for participation in the
Medicare program: and adequate malpractice and liability insurance or
suf?cient restricted reserves in lieu of insurance.

HOSPITAL warrants that it has entered into. and will maintain during the term
of this Agreement. both a Participating Hospital Agreement and a PPO Hospital
Agreement with Blue Cross and Blue Shield of Georgia.

HOSPITAL agrees that HMOGA mav utilize HOSPITAL's name. services
performed. address and phone number in its advertising, publlcitv and
promotional material with current and potential Members and Network
Providers. HMOGA agrees that any use of HOSPITAL's name, services. etc.
will be in a conservative and ethical manner so as to preserve the dignity of
HOSPITAL. Further, HOSPITAL shall display in a prominent location In its
admission lobby the symbol of its HMOGA participation in the form provided
by HMOGA.

TD 45- HIV. ?1 f5?





Case Document 134-2 Filed 12/28/18 Page 8 of 36

3.9

3.10

3.11

HOSPITAL shall notify HMOGA immediately. in writing. of:

la} ??int:r change or notification of possible change in its state
lioensure, accreditation status by JCAHO or Medicare
certification:

ibl Any change in its ownership or business address:

in} Any legal or governmental action or anyr other problem or situation which
might impair the ability of HOSPITAL to carry out its duties and
obligations under this Agreement, including, but not limited to. employee
strikes or walkouts. ?nancial insolvency, or damage to the physical plant
resulting in any interruption in Medical Services;

Any written complaint. claim, suit or threat of legal action by a Member
against HOSPITAL or a member of HOSPITAL's medical staff;

lei Any action taken by HOSPITAL or its medical staff against a Physician:
and

if) Any change or noti?cation of possible change in professional licensure of
staff member or a Physician.

HOSPITAL agrees to provide to HMOGA ninety {90! days print written notice
of HOSPITAL's intention to add. limit or delete any facility or service identified
in Attachment of this Agreement. If HOSPITAL proposes to limit or delete
a facility or service. HMOGA. in its sole discretion. Will determine 
of such limitation or deletion upon HOSPITAL's continued ability to provide the
required scope of Covered Services to Members residing within a Service Area.
Where HMOGA determines that such limitation or deletion would adverser
impact a Member's access to Covered Services within Service
Area. HMOGA reserves the right to cancel or modify this Agreement subject
to the termination requirements contained herein. HMOGA will notify
HOSPITAL. in writing, of such cancellation or modi?cation within forty-five
l45l days of 'receipt of noti?cation from HOSPITAL. Such change will become
effective on the date of notice to HOSPITAL.

HOSPITAL agrees to take reasonable steps to ensure that members of its
medical staff, health professionals working within HOSPITAL and HOSPITAL
employees are at all times appropriately licensed, credentialed andfor certified
by the State of Georgia andfor all appropriate professional or other
organizations. All employees must also continue to meet all applicable state
laws and regulations. all rules of HOSPITAL and its medical staff and all

-1- HIV. 

Case Document 134-2 Filed 12/28/18 Page 9 of 36



 



3.12

3.14

3.15

applicable legal standards of care. HOSPITAL further agrees to cooperate with
HMOGA in monitoring the care provided by members of its medical staff.
health professionals working within HOSPITA L. and HOSPITAL employees, and
to report. Immediately, any disciplinary action [suspension revocation. other
form of reduction of privileges. resignation in lieu of disciplinary action
sanctions or corrective actions) taken by HOSPITAL's medical staff. board of
directors. hospital authority or administration or any agencies of the state or
federal government against any member of its medical staff, health
professionals working within HOSPITAL or HOSPITAL employees. NOTE:
Temporary suspension of a Physician's admitting privileges due to untimely
completion of medical records is not required to be reported.

HOSPITAL agrees to permit HMOGA to conduct audits of HOSPITAL. its
facilities, charges, policies and procedures. including, but not limited to,
Utilization Management Program audits at any time during regular
business hours upon 24 hours prior notice. HOSPITAL agrees to pencil:
HMOGA to conduct such other monitoring activities as are deemed necessary
by HMOGA to ensure correct payment to HOSPITAL for Covered Services
rendered to Members.

Upon request from HMOGA. HOSPITAL agrees to provide to
HMOGA: l1} photostatic copies of its state license: certificates of liability
and malpractice insurance (for self-insured hospitals. veri?cation from an
independent, third-party as to the adequacy of funded? reserves}; 
documentation supporting that HOSPITAL is accredited by (4i
documentation that HOSPITAL is certi?ed for participation in the Medicare
program: [El copies of HOSPITAL's most recent audit ?nancial statements: and
such other information as HMOGA may require.

HOSPITAL agrees that HMOGA retains the right to change. revise, modify or
alter the form and content of any Membership Agreement without prior notice
to or approval by HOSPITAL.

HOSPITAL shall, and shall cause each of its Hospital Based Physicians t0.
agree to cooperate and participate with and to be bound by HMDGA's
Utilization Management and Quality Assurance Programs and all other policies
and procedures established by HMDGA.

To the extent applicable, Section 202 at Executive Order 1246. as amended
by Executive Order 11375. relating to equal employment opportunities. the
implementing rules and regulations of the Secretary of Laborr and all contract
ciauses and requirements which are applicable and set forth therein are
incorporated herein by specific reference. In particular, HOSPITAL hereby

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Case Document 134-2 Filed 12/28/18 Page 10 of 36

4.1

4.2

certifies that it does not maintain segregated facilities. In making this
certification HOSPITAL incorporates each and all of the provisions of the
approved form of certification contained in 41 C.F.R. 60-1.3lbl the same as
if such provisions were fully set forth herein and signed by HOSPITAL

To the extent applicable, Sections 503 and 504 of the Rehabilitation Act of
1973 and Title IV of the Vietnam Era Veterans Readiustrnent Assistance Act
of 1974 relating to employment and advancement in the employment of
qualified handicapped individuals, disabled veterans and veterans of the
Vietnam era. the implementing rules and regulations of the Secretary of Labor.
and all contract clauses and requirements which are applicable and set forth
therein are incorporated herein by speci?c reference. To the extent applicable.
Sections 1 and 3 of Executive Order 11625 relating to the promotion of
minority business enterprises, the implementing rules and regulations of the
General Services Administration, and all contract clauses and requirements
which are applicable and set forth therein are incorporated herein by speci?c
reference.

HOSPITAL hereby eXpressly acknowledges its that this
Agreement constitutes a contract between HOSPITAL and HMOGA. that
HMOGA is an independent corporation operating under a license from the Blue
Cross and Blue Shield Association. an association of Independent Blue Cross
and Blue Shield Plans (the 'Association'l permitting HMOGA to use the Blue
Cross and Blue Shield Service Markls} in the State of Georgia. and that
HMOGA is not contracting as an agent of the Association. HOSPITAL further
acknowledges and agrees that it has not entered Into this Agreement based
upon representations by any person other than HMOGA and that no person,
entity, or organization other than HMOGA shall be held accountable or liable
to HOSPITAL for any of HMOGA's obligations to HOSPITAL created under this
Agreement. This paragraph shall not create any additional obligations
whatsoever on the part of HMOGA other than those obligations created under
other provisions of this Agreement.

HMOGA SERVICES AND RESPONSIBILITIES

HMOGA agrees to compensate HOSPITAL directly for Covered Services
rendered by HOSPITAL to Members, pursuant to the provisions of this
Agreement and Attachment A. 

HMOGA shall distribute information to Members detailing Members'
responsibilities and procedures. benefit levels, and deductible. copavment and

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Case Document 134-2 Filed 12/28/18 Page 11 of 36

coinsurance requirements. HMOGA shall provide each Member with a
Membership Card.

4.3 HMOGA agrees to perform. or cause to be performed. administrative.
accounting. marketing. enrollment. database management. reporting and other
functions as it deems necessary for the administration of HMOGA and the
performance of this Agreement.

4.4 HMOGA agrees to provide to HOSPITAL periodically information regarding
marketing policies. HMOGA's policies and procedures, required
billing formats or procedures, deductibles. copayments or coinsurance. if any.
to be paid by Members. and such other information as may be reasonably
necessary in order to facilitate the provision of Covered Services to Members
and payment therefore under this Agreement.

4.5 HMOGA makes no representations or guarantees concerning the number of
Members it can or will refer to HOSPITAL for services to be provided under the
terms of this Agreement. Upon request of HOSPITAL HMOGA shall con?rm
the enrollment status of any individual during regular business hours
throughout the term of this Agreement.

,3 4.6 HMOGA agrees to furnish to HOSPITAL HMOGA's best available information

regarding Network Providers. Member eligibility for Covered Services and basic
coverage. Such information will normally be available only for? locally enrolled
Members and will be obtained from'existing HMOGA records which are
available in the ordinary course of business through HMOGA computer
terminals. The information may be transmitted to HOSPITAL by electronic
means or communicated by telephone. it is understood and agreed by
HOSPITAL and HMOGA that circumstances inherent in the record keeping
system or circumstances beyond the control of HMOGA may occasionally
cause retroactive changes in reported Member eligibility status and coverage.
It is understood and agreed by HOSPITAL and HMOGA that ?nal benefit
adjudication is subject to and conditioned on the terms and conditions of a

Member's Membership Agreement. including, without limitation, eligibility.
waiting periods, exclusions. medical waivers or riders, deductibles, coinsurance
or other contract limitations, the application of all of which cannot always be
determined conclusively prior to claims submission. HOSPITAL understands
and agrees that verification of eligibility status and coverage shall not
constitute an assurance or guarantee of coverage or payment.

4.7 HMOGA agrees that, in the event its employees or agents erroneously verify

an individual's eligibility status or coverage when information available to
HMOGA's employees or agents at the time of verification clearly indicates that

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Case Document 134-2 Filed 12/28/18 Page 12 of 36

4.8

5.1

5.3

such person was not eligible for services or coverage did not exist. HMOGA
agrees to make payment to HOSPITAL for Covered Services provided to such
person until such time as HMOGA informs HOSPITAL of its error. HMOGA
shall have no financial liability to HOSPITAL for any services provided
subsequent to noti?cation of HOSPITAL bv HMOGA that eligibility or coverage
does not exlst.

HMOGA agrees to provide HOSPITAL periodically with a list of all Network
Providers.

COMPENSATION AND BILLING

HMOGA shall pay HOSPITAL for the provision of Covered Services rendered
to Members in accordance with the provisions of this Agreement and
Attachment A. The payment from HMOGA shall be limited to the amounts
referred to in this Agreement and Attachment A, less deductible, copayment
and coinsurance amounts and amounts received from sources other than
HMOGA pursuant to the COB provisions of a Member's Membership
Agreement.

HOSPITAL shall accept such compensation as specified in this Agreement as
payment in full for Covered Services. HOSPITAL further agrees that the only
charges for which a Member may be liable and may be billed by' HOSPITAL are
those specified in Section 3.4 above. Under no other circumstances.
including. but not limited to. the insolvency of HMOGA. shell HOSPITAL bill,
charge, collect a deposit from. seek compensation, remuneration or
reimbursement from or have any recourse against a Member or a person acting
on a Member's behalf for Covered Services provided pursuant to this
Agreement. HOSPITAL further agrees that: i 1} this provision shall survive the
termination of this Agreement regardless of the events giving rise to the
termination: (21 this provision shall be construed for the bene?t of Members:
and if? this provision supersedes anv oral or written contrary agreement now
existing or hereinafter entered into between HOSPITAL and Members or
persons acting on their behalf.

HOSPITAL agrees that charges for Covered Services rendered to Members
shall not exceed regular billed charges to persons other than
Members for the same services. If multiple charge schedules are maintained
by HOSPITAL, the schedule which generates the lowest aggregate charge per
case for a service shall be used for Membersi3?

Case Document 134-2 Filed 12/28/18 Page 13 of 36

5.4 HOSPITAL further agrees that charges submitted for Covered Services
provided to a Member in an outpatient setting will not exceed the charges that
would have been submitted had the same servicetsl been provided by
HOSPITAL in an inpatient setting.

5.5 For all Covered Services provided by HOSPITAL to Members. HOSPITAL
agrees to furnish to HMOGA. without charge, on either standard LIB-92 claim
forms or electronically, all information reasonably required to process
EncounterS. including. but not limited to. complete and accurate descriptions
of health care senrices performed and charges made. with diagnoses and
procedure codes approved by HMOGA [only and 
are acceptable diagnoses and procedure codesl. HOSPITAL shall also inform
HMOGA of any other insurance coverage of each Member. which is known to
HOSPITAL. including. but not limited to, worker's compensation coverage for
job-related injuries or illnesses. and any other information specified by HMOGA
as it deems necessary to the perfonnance of this Agreement. HOSPITAL
further agrees that In those circumstances where its reasonably appears that
a Member is entitled to coverage under another bene?t agreement. HOSPITAL
will notify HMOGA of such coverage and exert reasonable efforts to obtain
information for the Coordination of Benefits.

:1 5.6 Payments made to HOSPITAL by HMOGA are contingent upon the accuracy
of diagnostic and other information provided by HOSPITAL to HMOGA.
HMOGA shall be permitted to recover from HOSPITAL, and HOSPITAL shall
refund to HMOGA. amounts paid by HMOGA because of: it} payments made
in error; Utilization Management Program determinations: services not
rendered; (4) provider audits: inaccurate payments, including, but not
limited to. payments based upon erroneous or Incomplete information provided
b? payment for services later determined by HMOGA to be
Ineligible Services [except as provided in Section 4.7 above]: and payments
made under a COB provision of a Membership Agreement upon which payment
has been or should have been made by a primary carrier, tea, but not limited
to. auto medical. no fault or any liability Insurance} or for which benefits are
available to a Member under the Worker's Compensation laws of any state or
federal iurisdiction. HMOGA shall also have the right to offset any such
amounts due HMOGA from future payments due HOSPITAL under any Blue
Cross and Blue Shield of Georgia or any HMOGA provider agreement.

HMOGA shall 'make adjustments to HOSPITAL for amounts due HOSPITAL
because of payment errors made by HMOGA.

5.8 HMOGA shall determine the appropriate amount of deductibles and
coinsurance. where applicable, to be paid by a Member on the basis of charges

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Case Document 134-2 Filed 12/28/18 Page 14 of 36

calculated in accordance with Section 5.3 above. HMOGA shall pay only;r
these amounts, if any, which when added to the deductibles and coinsurance
due HOSPITAL from a Member. and amounts received by HOSPITAL from
other sources pursuant to the applicable COB rules. total 100% of the lesser
of [ii the amount which HOSPITAL would have been paid pursuant to this
Agreement had HMOGA had primaryr responsibility: or Iii} the amount the
HOSPITAL has agreed to accept as payment in full from the primary carrier,
less the reimbursement set forth in Attachment A of this Agreement.

 

5.9 HOSPITAL shall bill HMOGA on a basis in a manner and on forms
prescribed by HMOGA (currently Health Care Financing
Administration's Common Procedure Coding System Coding is
required on all HOSPITAL outpatient claims. HOSPITAL shall lurnish. on
request. all information reasonably required by HMOGA. including, but not
limited to. the detailed bill. medical record. and current charge master. to verily
and substantiate the provision of and the charges for Covered Services.
HMOGA reserves the right to review any and all statements, bills. claims or
invoices submitted by HOSPITAL to HMOGA for reimbursement.

5.1 0 Unless otherwise agreed, HOSPITAL shall use its best efforts to submit all bills
for Covered Services provided to Members within thirty I30) days after the
services are rendered, but in no instance mav the bill be submitted later than
ninetv {9m days from the date services are rendered.

5.11 HOSPITAL shall submit only one claim per admission for Covered Services
provided to Members and only after all charges and credits have been recorded
on the claim. Such claims must include charges from any other hospital or
facility for specific care or treatment when transported thereto from HOSPITAL
because such services were not available in HOSPITAL. The entire claim must
be billed and processed at one time: therefore. HOSPITAL agrees not to bill
portions of a claim whether on an interim cvcle billing basis or split over the
end of a calendar or ?scal year. EXCEPTION: HOSPITAL may submit an
interim bill for inpatient services provided to a Member for eventI thirty I30)
days of continuous inpatient hospitalization during the same admissionl.

5.12 HOSPITAL agrees that charges for services provided by Hospital Based
Physicians will be separated from the HOSPITAL claim and filed on the HEPA-
1500 and that reimbursement for such services will be paid to HOSPITAL
based on an HMOGA Fee Schedule. Any charges ?led that exceed the charges
included in the Fee Schedule may not be billed to a Member.

~13- Flair. 



Case Document 134-2 Filed 12/28/18 Page 15 of 36

VI.

6.1

6.2

6.3

UTILIZATION MANAGEMENT

HOSPITAL agrees to cooperate in the administration and implementation and
to be bound by, the procedures and determinations of the Utilization
Management Programs established by HMOGA. as described in this Article VI.

Utilization Management Programs conducted by HMOGA shall determine
whether Covered Services are Medically Necessary. Reviews and
determinations shall include. but are not limited to, of stay and the
appropriateness of referrals to and payment for inpatient hospitalization,
outpatient care or diagnostic services. Utilization Management shall also
include review as to whether services are Ineligible Services for reasons such
as preexisting conditions, cosmetic procedures, or custodial care. according to
the terms of a Member's Membership Agreement.

The determination of whether a Covered Service is Medically Necessary shall
be made according to the protocols and procedures used in the Utilization
Management Program and is not to be determined by the mere fact that a
Physician has ordered a service or supply. Payment shall not be rendered for
a particular claim unless the procedures described below are followed (as
outlined in HMOGA's Utilization Management Manual} in addition to any other
procedures. or modi?cation of existing procedures. that may be specified by
HMOGA at any time or from time to time following noti?cation by HMOGA to
HOSPITAL: .

la) Preedmission Certification - To determine the medical necessity of an
inpatient admission or authorization to perform outpatient surgery.
outpatient diagnostic procedures or treatment, or any related inpatient or
outpatient service.

{bl Admission Review - To determine whether an unscheduled inpatient
admission or an admission not subject to Pro?admission Certification is
Medically Necessary. Maternity admissions or Emergency admissions are
excluded from Pro-admission Certification; provided. however. that
HMOGA shall be notified of such admission by HOSPITAL on the next
working day following the day of admission.

Concurrent Review - To determine whether a continued inpatient heapital
stay is Medically Necessary.

Outpatient Review - To determine the appropriateness of selected
outpatient diagnostic and treaunent procedures as identified by HMDGA.

lei Discharge Planning - To determine the continuation of appropriate health
care services for a Member's treatment andlor convalescence subsequent
to discharge from a hospital.

44- Eur- 

Case Document 134-2 Filed 12/28/18 Page 16 of 36

if} Case Management - HOSPITAL shall provide case management services
to selected Members as determined by HMOGA and shall work
cooperatively with HMOGA. a Member andfor a Member's family to
identify appropriate alternative treatment settings during Concurrent
Review.

lg) Referral Management - HOSPITAL shall cooperate with and follow
HMOGA's referral management policies and procedures.

HOSPITAL exoressly understands and agrees that failure to follow any
procedures specified in the Utilization Management Programs or any
modifications tn the Utilization Management Programs speci?ed by HMOGA
can result in limitation of payments. and HOSPITAL expressly agrees not to bill
any Member for any unpaid charges that result from failure by HOSPITAL to
comply with the procedures of the Utilization Management Programs or from
an adverse determination that a service is not Medically Necessary.
Notwithstanding the provisions of this Section. HMOGA agrees to exercise

reasonable efforts to avoid retrospective denial of claims for services to the
extent possible within the confines of the Utilization Management Program
procedures.

6.4 HMOGA shall notify HOSPITAL either by written notice. telephone
or other electronic communication. when HMOGA determines through the
Utilization Management Programs: ill that a service is not Medically
Necessary: i2} that it will not accept ?nancial responsibility for initial or
continued inpatient hospitalization. outpatient diagnostic or treatment
procedures: or when HMOGA determines that a less restrictive or more
appropriate setting is available for treatment of the Member in question.

6-5 Except as provided in this Section. HMOGA's decision as to whether a service
is Medically Necessary is ?nal for an individual claim. HOSPITAL agrees that
HMOGA may conduct a medical review of all cases prior to payment. Should
HOSPITAL disagree with HMDGA's initial determination not to accept financial
liability for initiator continued inpatient hospitalization. outpatient diagnostic
or treatment procedures. or that a more appropriate setting is available.
may appeal HMOGA's determination to the Medical Director or
hisiher designed. Such an appeal must be made no later than the first working
day following noti?cation by HMOGA of its determination in regard to a claim.
The decision of the Medical Director. or his/her designee. shall be binding on
HOSPITAL, HMOGA and a Member.

6.6 HOSPITAL expressly agrees that it will not bill or attempt to collect fees or
charges either from HMOGA or a Member for the cost to HOSPITAL arising out
of its participation in HMOGA's Utilization Management Programs or such
other Utilization Management Programs as required by an Affiliate of HMOGA.

-l 5- RIM ??37

0

Case Document 134-2 Filed 12/28/18 Page 17 of 36

6.7

VII.

7.1

7.2

7.3

7.4



8.1

8.2

8.3



HOSPITAL agrees to submit to HMOGA its own utilization management
program. if any, andfor any changes or modifications made to such program,
upon request by HMOGA.

QUALITY ASSURANCE PROGRAM

HOSPITAL also agrees to cooperate and participate with HMOGA and other
Network Providers in the development, implementation and ongoing operation
of a Quality Assurance hereinafter referred to as Program and to satisfy
any related requirements. Related requirements include, but are not limited to,
the suPpIy and collection of data necessary to conduct profiling of Network
Providers in a manner and format prescribed by HMOGA-

HOSPITAL and HMOGA mutually agree that the purpose of the 0A Program
shall be the collection and analysis of quantitative and qualitative data which
identify patterns of health care delivery providing the most beneficial and cost-
effective outcome for a Member, given a Member's medical condition before.
during and after medical intervention.

HOSPITAL agrees to provide to HMOGA summary OA Program data in a
manner and format prescribed by HMOGA.

HMOGA agrees to provide to HOSPITAL comparative OA Program reports in
a manner and format prescribed by HMOGA.

RECORDS MAINTENANCE. AVAILABILITY. INSPECTION AND AUDIT

HOSPITAL shall prepare and maintain all appropriate medical, financial and
administrative records on Members receiving Covered Services at HOSPITAL
The records shall be prepared and maintained in accordance with prudent
record-keeping procedures and as required by law.

HOSPITAL and HMOGA further agree to treat any and all records required to
be prepared or maintained by this Agreement in the same manner as they do
their own con?dential information and agree to take all reasonable precautions
to prevent the unauthorized disclosure of such records to third parties.

Ownership and access to HOSPITAL's records of Members shall be controlled
by applicable federal. state and local laws and this Agreement. HOSPITAL
shall maintain the confidentiality of information contained in a Member's
medical records and will only release such information that is permitted by
applicable laws and that is: It} necessary to other providers treating a
Member: l2l necessary for HOSPITAL medical review committees: or 
consented to by a Member. This Section will not be construed to prevent

mousms?ro die. Rev. mist

Case Document 134-2 Filed 12/28/18 Page 18 of 36

3.4

8.5

M.

9.1_

9.2

HOSPITAL from releasing information which it has taken from such records to
organizations or individuals taking part in research. experimental. educational
or similar programs. ii no identification of a Member is made in the released
information.

Notwithstanding any other provision of this Agreement. including termination
of this Agreement for any reason under Article XII, HOSPITAL shall retain. and
HMOGA shall have access to, a Member's records for a period oi at least six
years after the last Encounter for adults, and for at least six years after
a minor reaches the age of majority. This information may be retained as
originals. 0" Mi?Ofilms. or in other usable forms and shall afford a basis for a
complete audit of professional information about services rendered to
Members.

Notwithstanding any other provision of this Agreement. HOSPITAL agrees to
allow HMOGA to inspect. audit and duplicate any and all information.
including, but not limited to. billing, payment. Utilization Management. and
medical records maintained by HOSPITAL on Members pursuant to this
Agreement, with the understanding that each Member has waived any
provision of law forbidding such disclosure as a condition of enrollment as a
Member. With such waiver. medical records of Members shall also be made
available to other Network Providers participating in a Member's medical care
as well as to HMOGA to make determinations regarding quality of care.
Utilization Management Programs, peer review. grievance review or for other
purposes. Such inspection. audit and duplication shall be allowed upon
reasonable notice to HOSPITAL by HMOGA during normal
business hours. and duplication of such data and records shall be provided,
without cost. to HMOGA or Members.

LIABILITY. INDEMNITY AND INSURANCE

Neither HMOGA nor HOSPITAL, nor any of their respective agents or
employees. shall be liable to third parties for any act or omission of either
HOSPITAL or HMOGA.

HOSPITAL agrees to indemnify and hold HMOGA harmless from any and all
liability, loss. damages, fines. demands. suits. actions, claims or expenses of
any kind. inclu?ding costs and attorney's fees. which result from any action
involving alleged medical liability by HOSPITAL, its agents or employees. or
members of its medical staff. or which results from negligent or willful acts or
omissions by HOSPITAL. its agents or employees or members of its medical
stall, regarding the performance of the duties and obligations of HOSPITAL
under the terms of this Agreement, including, but not limited to, the duty to
maintain the legal standard of care applicable to HOSPITAL. HMOGA agrees
to indemnify and hold HOSPITAL harmless for any and all liability. loss.



Case Document 134-2 Filed 12/28/18 Page 19 of 36

 

C)



9.3

9.4?

9.5

9.6

damages. lines. demands. suits. action. claims or expenses. including ?0513
and attorney's fees, which result from negligent acts or willful acts or
emissions by HMOGA. its agents or em?oyeos. ragarding the performance of
the duties and obligations of HMOGA under the terms of this 

shall notiiv HMOBA of the initiation of legal action against
HOSPITAL or any of its agents. employees or members of its medical staff. by
a Member. HMOGA shall notify HOSPITAL of the initiation of legal
action against HMOGA by a Member, concerning or relating to the services
rendered by HOSPITAL.

Should an employer, group or individual for whom HMOGA or an Af?liate of
HMOGA provides. indemnifies or administers health care bene?tsr 
bankruptcy proceedings and be unable to reimburse HMOGA-established
premiums, claims expenses. administrative or other fees, HMOGA's obligations
under any Membership Agreement relating to such person shall cease
Immediately, and HMOGA shall have no obligation to HOSPITAL under this
Agreement. HOSPITAL agrees to indemnify and hold HMOGA and Members
harmless from any and all liability. loss, damage. claim or expense of kind.
including costs and attorney's fees, which result from any such bankruptcy
proceedings.

HOSPITAL shall procure and maintain, at its sole cost and expense,
G?mllrehensive general. professional liability insurance and such other
insurance as shall be necessary to. insure HOSPITAL and its employees against
any and all claims for damages arising item the duties and obligations of
HOSPITAL under the terms of this Agreement. HOSPITAL shall maintain other
insurance coverage as requested by HMOGA.

HOSPITAL agrees to provide to HMDGA. upon request. copies of all
certificates of insurance required by this Agreement and shall provide evidence
of HOSPITAL's ability to meet an? other requirement of this Article. In the
event that HOSPITAL reserves funds to meet the insurance requirements of
this Agreement. either in whole or in part. HOSPITAL agrees to provide
HMOGA with a statement from its independent auditor. consultant or other
independent. quali?ed expert attesting to the adequacy of such reserves.

-l 8- HIV. #1 



Case Document 134-2 Filed 12/28/18 Page 20 of 36

10.1

10.2

XII.

12.1

MARKETING. ADVERTISING AND PUBLICITY

HMOGA shall market. in its the availabilitv of HMOGA products to
eligible groups and individuals. and shall encourage Members to use the
services of all Network Providers and HOSPITAL specifically. when
appropriate.

Except as provided in other provisions of this Agreement. HMOGA and
HOSPITAL each reserves the right and control of the use of its name. symbols.
trademarks and service merits, owned by or licensed to it. presently existing
or later established. In addition. except as provided in other provisions of this
Agreement. neither HMOGA nor HOSPITAL shall use the other's name.
symbols. trademarks or service marks in advertising or promotional material or
otherwise without the prior written consent of the other and shall cease any
such use immediately upon written notice directing that such use be stopped
or upon termination of this Agreement. Whichever is sooner.

DISPUTE RESOLUTION

HMOGA and HOSPITAL agree to meet and confer in good faith to resolve any
problems or disputes that may arise under this Agreement.

in the event that any problem or dispute concerning the terms of this
Agreement or arising out of this Agreement. other than a Utilization
Management Program decision provided for in Article VI, is not satisfactorily
resolved. HMOGA and HOSPITAL agree to submit the dispute to the Board of
Directors of HMOGA for consideration and possible resolution.

HOSPITAL and HMOGA shall cooperate in ail grievance proceedings of
Members as established by HMOGA and approved by the Georgia Insurance
Department.

HOSPITAL shall maintain a mechanism for processing and logging Member
concerns and provide HMOGA the results.

TERM AND TERMINATION

When executed by both Parties. this Agreement shall become effective as of
the date noted on page one and shall continue in effect for two (2) years
unless terminated by either HOSPITAL or HMOGA as provided in this Article
XII. Following completion of the initial term. this Agreement shall be renewed

.19. an. 

Case Document 134-2 Filed 12/28/18 Page 21 of 36

automatically for additional one 11) year terms. unless terminated by either
HOSPITAL or HMOGA as provided in this Article XII: provided. however. that
the compensation arrangements set forth in Attachment A shall be effective
only for the period speci?ed therein. and for such additional period of time until
the Parties mutually agree. in writing. to different compensation arrangements.
HMOGA and HOSPITAL shall review annually the compensation arrangements
set forth in Attachment A.

12.2 Notwithstanding any other provision of this Agreement, either HOSPITAL or
HM OGA may terminate this Agreement at any time. with or without cause, by
giving at least ninetv 190} days prior written notice. The effective date of sueh
termination shall be the first day of the month occurring at least ninety [90}
days after the date of notice of termination.

12.3 HMOGA may suspend or terminate this Agreement immediately with cause.
Suspension or termination with cause may result from. but is not limited to.
the following actions or emissions by HOSPITAL: failure to continue to meet
credentialing criteria. misrepresentation of information on the
application. submission of charges for services not rendered. falsely billing for
services or repeatedly mis-identifving actual services performed. inapprupriati
conduct toward patients. quality of care issues. and interference with other
programs of HMOGA or its af?liates.

12.4 Either HOSPITAL or HMOGA may terminate this Agreement in the event of a
material breach or this Agreement by either HOSPITAL or HMOGA upon thirty
days prior written notice. Such notice shall include a description of the
masonic} for termination. This Agreement shall terminate
automaticallv at the end of such thirty 130] day period if the breaching
HOSPITAL or HMOGA has not cured the breech within such period and
demonstrated evidence of such cure to the satisfaction of the non-breaching
HOSPITAL or HMOGA. Nothing contained in this Agreement shall be
construed to limit either or HMOGA's lawful remedies in the
event of a material breach of this Agreement.

12.5 This Agreerrient shall terminate automatically. without notice. upon the
or revocation of HOSPITAL's license to operate. loss of
accreditation by JCAHO. loss of certification for participation in the Medicare
program or change in the ownership of HOSPITAL.

12.6 Termination of this Agreement for any reason shall not. except for termination
under Section 12.5. affect the status of any other arrangement the HOSPITAL
has with HMOGA's parent corporation. Blue Cross and Blue Shield of Georgia.
However. HOSPITAL agrees not to terminate any other agreement It has with
Blue Cross and Blue Shield of Georgia prior to the termination of this
Agreement.

Flint. 



12.7

12.3

12.9

12.10

13.1

13?

13.3

Case Document 134-2 Filed 12/28/18 Page 22 of 36

to another Network Provider.

Agreement.

or Network Providers.

Agreement.

UNFORESEEN CIRCUMSTANCES

interruption.

performed in spite of the event or because the interruption has ended.

cease for the period of the interruption.

311 - Rev. ?"57

If this Agreement is terminated pursuant to any provision. other than Section
12.5. HOSPITAL shall continue to provide Covered Services under the terms
of this Agreement to Members who are hospital inpatients on the date of
termination until those Members are discharged or are transferred by HMOGA

Termination of this Agreement shall have no effect upon the rights and
obligations of the Parties arising out of any transactions occurring prior to the
effective date of termination. in the event of termination, HOSPITAL will
cooperate with HMOGA in the orderly transfer of a Member's care. including
a Member's medical records. to other Network Providers. HOSPITAL and
HMOGA will cooperate to resolve any outstanding financial.
administrative or patient care issues upon termination or expiration of this

During the term of this Agreement. and following the termination or expiration
of this Agreement. HOSPITAL agrees to refrain from any action that interferes
with the relationship between HMOGA and its existing or prospective Members

It is the responsibility of HMOGA to notify Members of the termination of this

In the event that the operations of HOSPITAL's facilities are substantially
interrupted by acts of war. fire, insurrection. labor disputes. riots. earthquakes.
tornados. other acts of nature. or power or other utility failures. HOSPITAL
shall be relieved of its obligations only as to those affected operations and only
as to those affected portions of this Agreement for the duration of such

Notwithstanding the provisions of Section 13.1. in the event that the provision
of Covered Services by HOSPITAL is substantiallyr interrupted pursuant to an
event described in Section 13.1. HOSPITAL shall have the right to terminate
this Agreement upon thirty {30} davs prior written notice to HMOGA. Such
notice of termination may be withdrawn if HOSPITAL. in its sole judgment.
determines during the said thirty {30} day period that Covered Services can be

In the event that the provision of Covered Services by HOSPITAL to Members
is interrupted for anv reason set forth in Section 13.1. HMOGA's obligation
under this Agreement to compensate HOSPITAL for Covered Services shall

14.1

14-2

14.3

14.41

14.5

14.6

14.7

14.8

Case Document 134-2 Filed 12/28/18 Page 23 of 36

XIV. GENERAL PROVISIONS

self-insured employees.

made by HOSPITAL.

waiver of any other breach of the same or a different provision.

remain in full force and effect.

thirty {30) days prior written notice to the other entity.

carrying out the provisions of the Agreement.

reasonably be required or appropriate for this purpose.

amendment has been mailed to HOSPITAL.

Hmonserusrp .22. ?ev. H1157

understands and agrees that. as designated from time to time by
HMOGA. this Agreement may apply to certain mollees in HMDGA and
enrollees of other HMO arrangements with whom HMOGA may be af?liated
or for whom HMOGA may administer claims or arrange benefits on behalf of

No assignment of the rights. duties or obligations of this Agreement shall be

Waiver of a breach of any provision at this Agreement shall not be deemed a

in the event any provision of this Agreement is rendered invalid or
unenforceable by any federal. state or local law. or by any regulation duly
by of?cers of the United States or of the State of Georgia acting
in accordance with the law. or declared null and void by any court of
competent jurisdiction. the remainder of the provisions of this Agreement Shall

In the event that a provision oi this Agreement is rendered invalid or
unenforceable or is declared null and void as provided in Section 14.4 and its
removal has the effect of materially altering the obligations of either HOSPITAL
or HMOGA in such manner as in the judgment of the entity affected: will
preclude the provision of Covered Services pursuant to the terms of this
AQreernent: l2l will cause serious financial hardship to the entity affected: or
will cause such entity to act in violation of its corporate articles or bylaws.
the entity so affected shall have the right to terminate this Agreement upon

HMOGA and HOSPITAL are independent entities. Nothing in this Agreement
shall be construed or be deemed to create a relationship of employer and
employee or principal and agent. or any relationship other than that of
independent ?parties contracting with each other soleiy for the purpose of

HOSPITAL agrees to cooperate with HMDGA in programs relating to the
Coordination of Bene?ts and other third party claims for Covered Services
Provided to Members and to execute any further documents that may

HMOGA may amend this Agreement at any time or from time to time. Except
as otherwise provided in this Agreement. an amendment shall automatically
become part of this Agreement sixty (60} days after written notice of the

Case Document 134-2 Filed 12/28/18 Page 24 of 36

1 4.9

14.10

14.11

14.12

14.13



HOSPITAL agrees that when examinations are conducted pursuant to the
Official Code of Georgia Annotated Section 33-21?17. HOSPITAL and HMOGA
will produce and make freely accessible to the Georgia Insurance
Commissioner and the Georgia Commissioner of Human Resources all
accounts, records. documents and files in their possession or control relating
to the subject of the examination. HOSPITAL and HMOGA officers, employees
and representatives will also produce and make freely accessible such material
and will facilitate the examination and aid the examiners as far as is within
their powers.

The headings of the Articles contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

Attachments and Appendices hereto are fully incorporated into and made a
part of this Agreement by reference herein.

Due to the competitive nature of the health care market and the selection of
Hospitals to participate as Network Providers. HMOGA and HOSPITAL agree
that the terms of this Agreement and all records. documents. data. ?gures and
other information required to be prepared or maintained by this Agreement
shall be kept strictly con?dential. unless otherwise provided in this Agreement
or by federal. state or local laws. Such information includes. but is not limited
to. the terms of this Agreement, reimbursement methodologies. particular
reimbursement amounts. HMOGA enrollment data. and Utilization Management
Programs and figures. Disclosure of such information by HOSPITAL. or its
agents. employees, or representatives may result in automatic termination of
this Agreement. HMOGA may disclose the terms of this Agreement to
Affiliates of HMOGA which are owned. in whole or in part. by Ellue Cross and
Blue Shield of Georgia directly. or indirectly through one of its intermediaries
or subsidiaries. HMOGA may also disclose the terms of this Agreement to
non-parties for the purpose of: soliciting new business to be served by
Network Providers: administering claims incurred by accounts which are
served by Network Providers. including administration on the NASCO system:
or l3) facilitating a claims audit. HMOGA and HOSPITAL, their agents and
employees, may disclose to non-parties that HOSPITAL is a Network Provider.
HMOGA and HOSPITAL may also disclose the speci?ed terms of this
Agreement to non-parties with the prior written approval of either HOSPITAL
er HMOGA. 

This Agreement is entered into by HOSPITAL and HMOGA with the excress
understanding and agreement that this Agreement shall not be construed nor
considered to be a contract between HOSPITAL and other Hospitals who are
parties to similar contracts. nor shall it constitute an agreement that HOSPITAL
may act as agent for any other hospital that becomes a party to a similar
contract or impose any liability upon any other Hospital by reason of any act

-23- Hut. #1119?

0

Case Document 134-2 Filed 12/28/18 Page 25 of 36

14.1?

14.15

14.17

14.13



or acts of omission or commission on its part, nor shall HOSPITAL incur any
liability by reason of any act or acts of omission or commission of any other
Hospital.

This Agreement shail not be construed to be an exclusive agreement between
HMOGA and HOSPITAL. Nothing in this Agreement shall be construed to
restrict HMOGA or HOSPITAL from entering into other contracts or
agreements to provide health care services to other health care delivery plans.
patients or employer groups.

This Agreement shall be construed and enforced in accordance with the laws
of the State of Georgia.

This Agreement shall not be deemed to be an agreement requiring Physicians
or any other Network Providers to refer any Members to HOSPITAL.

This Agreement replaces and supersedes all prior agreements between the
Parties for this product line.

Any notices required to be given pursuant to the terms and provisions of this
Agreement shall be in writing and shall be either hand-delivered or sent by
certified mail. return receipt requested, postage prepaid, to HMOGA at:

Blue Cross and Blue Shield of Georgia
Attention: Corporate Provider Services
3350 Peaohtroe Road. NE.

Atlanta, GA. 30326

and to HOSPITAL at the address shown on the application form submitted by
HOSPITAL

{24- Rev. 4" i5?

C)

Case Document 134-2 Filed 12/28/18 Page 26 of 36



FDR FDR HOSPITAL:

73/10


morn 1
WW 43km Bewm
(mm: Pri?wd) {Na-n: aimed)
Mg Witt-
1 I: Id:
51% 

{but} (data) 

 

 

 

-25~ ROW 

Case Document 134-2 Filed 12/28/18 Page 27 of 36

 

 



BLUECHOICE HEALTHCARE PROPOSAL
CHESTATEE REGIONAL HOSPITAL
REIMBURSEMENT RATES

1. Name of Facility: Chestatee Regional Hospital

2. Reimbursement Period: Reimbursement rates below are effective for HMOIPOS claims
incurred from June I, 1998 through May 1999.

3. Inpatient Per Diem Payment Rates: Reimbursement for approved eligible inpatient
services will be at the following rates:

REDACTED

Medical
Surgical

OB Normal

OB -Soction
Boarder Baby


4, OutpaticnUOther Payment Rate includin_ but not limited to Emergency Room.
Implantables, Pharmaceuticals RE ACT 

5. Outpatient Surgery

 

   

ASC REDACTED

ASC Stan Loss:
RE DACTED

RE DACTED

FOR HMO GEORGIA. WC. FOR HOSPTIAL

Case Document 134-2 Filed 12/28/18 Page 28 of 36

 



 

 

 

Be sigma?e ?r I 

NwP?nted I Name Printed .5-
Title

 

 

 

 

Title
[)2ng Dani/2.426

Case Document 134-2 Filed 12/28/18 Page 29 of 36

Case Document 134-2 Filed 12/28/18 Page 30 of 36

AMENDMENT TO
HOSPITAL AG REEMENT FOR PREFERRED PROVIDER ORGANIZATION
Between
BLUE CROSS AND BLUE. SHIELD OF GEORGIA
And

Chestatee Re innal
Effective, March 1, 2006

Blue Cross and Blue Shield of Georgia and ?egignal Hospital
(HOSPITAL), parties in a Hospital Agreement (Agreement} dated More 13. 1993 agree
as follows

WHEREAS, 3013363 and HOSPITAL are parties to a PPO Hospital Agreement which includes
provisions reiatittg to the rendering of'outpatient radiology services by HOSPITAL, and

WHEREAS, certain claims (the ?Diaputcd Claims" as de?ned below) have been disputed
benveen and and

WHEREAS. the parties desire to settle the ?Disputed Claims" and enter into releases in
connection therewith pursuant to this Amendment.

NOW THEREFORE. the existing Attachment A, Hospital Reimbursement Rates of Agreement
shall be amcndet as it ?ows:

For the period of March 1, 2006 through April 30, 2006 reimbursement for approved inpatient
services will he at the following rates:

Inpatient Services Per Diem
REDACTED

Medical
Surgical
ICUICCU
Boarder Bab)r

 

Effective May 1, 2006 reimbursement for approved inpatient services will be at the following
rates or as Updated in accordance with Appendix A, Section 2.:



I a?ent Services

Medical
Surgical

Boarder Baby

   

Chestnut: Per Diem PM Amendment I l-IS-DSdoc

Case Document 134-2 Filed 12/28/18 Page 31 of 36

The Parties agree that these increased reimbursement rates for the period of March I, 2006
through April 30. 1005 shall be in full settlement for all outpatient radiology services. for the
period of February I, MOS through February 33, 2006.

Performance of the obligations stated above shall release from further obligations with
respem to the outpatient radiology claims incurred from February 1. 2005 through Febmary 28.
2006.

To the extent con?ict arises between the provisions of the Amendment and those of the
Agreement, the provismns of the Amendment shall control.

Except for the above, all other tones and conditions of the Agreement remain in full force and
effect.

IN WITNESS WHEREOF. the parties hereto have executed the Amendment as of the date
shown on the ?rst page hereof.

FOR BLUE CROSS BLUE SHIELD FOR HOSPITAL
OF GEORGIA, INC.

 

 

 

 

 

 

 

(Signature) gnature)
MerrLS. Rivers to Fit) CL
(Printed Name) (Printed Name)
Vice Presi 1 Network Mane ement EC)
(Title) (Title)

ale, ?ed,
(Date) (Date)

Chestlm: Per Diem Amendnunl 

Case Document 134-2 Filed 12/28/18 Page 32 of 36

AMENDMENT
TO HOSPITAL AGREEMENT
BETWEEN
HMO GEORGIA, INC (a wholly owned subsidiary of BLUE CROSS BLUE
SHIELD HEALTHCARE PLAN OF GEORGIA, INC.)
and
CHESTATEE REGIONAL HOSPITAL

EFFECTIVE August 19, 2016

WHEREAS, HMO GEORGIA, INC a wholly owned subsidiary of BLUE CROSS BLUE
SHIELD PLAN OF GEORGLX, INC. and SOUTHERN
HEALTH CORPORATION OF DAHLONEGA d/ b/ a CHESTATEE REGIONAL
HOSPITAL (?Hospital?) have previously entered into an Agreement (hereinafter referred to
as the ?Agreement?) made and entered into on the 18th day of May" 1998; and

WHEREAS, Section 14.2. of the Agreement states:

No assignment of the rights, duties or obligations of this Agreement shall be made by
HOSPITAL.

WHEREAS, Southern Health Corporation of Dahlonega. Inc. d/ b/ a Chestatee Regional
Hospital has requested consent to assign the Agreement to Durall Capital
Holdings d/ a Chestatee Regional Hospital which is a newly formed entity" that
will utilize the hospital assets and conduct the hospital operations previously performed by
and HMOGA wishes to consent to the r?issignment;

NOW THEREFORE, for and in consideration of the mutual promises and covenants
contained in the Amendment, the receipt and suf?ciency of which is hereby acknowledged,
the parties hereto, intending to be legally bound, agree to modify the Agreement as follows:

hereby consents to the Assignment of the Agreement by SHCD d/ a Chestatee
Regional Hospital to OCH b/ a Chestatee Regional Hospital, and by its execution of this
Assignment, DCH d/ b/ a Chestatee Regional Hospital agrees to be bound by all terms and
conditions of the Agreement as ?Hospital? therein.

Except for the above, all other terms and conditions of the Agreement remain in full force
and effect. Section 14.1 shall apply to any future assignments of the rights, duties or
obligations of the Agreement.

 

 

Case Document 134-2 Filed 12/28/18 Page 33 of 36

IN WITNESS WHEREOF, the parties hereto have executed the Amendment as of the

date ?rst written above.

Blue Cross Blue Shield Southern Health Corporation of
Healthcare Plan of Georgia, Inc. Dahlonega, Inc. d/ a Chestatee
Regional Hospital

 

 

    

 

 

 

 

ByS/Signa?xr?

jeff Fusile gem-m \fmexe ear
Printed Name Printed Name

President (Sta

Title Tide

59?? gm t-?s 

Date fr Date

Duxali Capital Holdings a
Chestatee Regionel Hospital
WE

team gar %m,g 

fie?
fB?y Signame . ?5wa

f: 5&3 Egg

Printed Name

{Lie

Title

4: e: 5e

 

 

Date

 

 

Case Document 134-2 Filed 12/28/18 Page 34 of 36

Case Document 134-2 Filed 12/28/18 Page 35 of 36

AMENDMENT TO HOSPITAL AGREEMENT
Between
BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA. INC.
And
REGIONAL HOSPITAL

Effective mm 11%

Blue Cross Blue Shield Hulthcare Plan of Georgia, Inc. and Chestntee Regional
Hospital (HOSPITAL), parties to and BCBSI-IP Hospital Agreement (Agreement), is amended as
follows:

The Lab Fee Schedule is added to the agreement as Attachment E. Stat Lab restrictions tau-ill
apply.

Except for the above, ell other terms and conditions of the Agreement remain in full force and
effect.

To the extent con?ict arises between the provisions of the Amendment and those of the Agreement,
the provisions of the Amendment shall control.

IN WITNESS WHEREOF, the parties hereto have executed the Amendment as of the date shown
on the ?rst page hereof.

BLUE CROSS BLUE SHIELD REGIONAL HOSPITAL
I-IEALTHCARE PLAN OF GEORGIA1 INC.

Qi?shJ 

 

 

 

 

 

 

 

(5W (Signature)
Shalini ?retruck My ?ame?
(Printed Name) (Printed Name)
Regional Vice President, Georgia Provider
Solutions a; a
(Title) (Title)

(Date) (Date)



Case Document 134-2 Filed 12/28/18 Page 36 of 36

Chestatee Regional Hospital
Attachment 
HMO Lab Fee Schedule

Stat Lab restrictions apply. Lab codes not listed on Lab Fee Schedule will price at $0.00.

FAC FEE

CPT

84157
84484
84520
84703
85002
85004
85007
85008
85009
85013
85014
85018
85025
8502?
85041
85044
85045
85048
85097
85379
85460
85461
85576
85610
85651
85652
85230
8607?
86140
86308
86403
86406
86580
86756
86759
86850
86880
86885
86900
86901
86920
86921



 

CPT
86922
86923
8?045
87110
87164
87205
87210
87220
87280
87400
87803
87804
87807
87809
87880
87905
88172
88173
88177
88319
88738
89050
89051
89060
89230
89250
89300
89310
89320
89321
89322
89325
89329
89330
89331
89253
89254
89255
89258
89259
89250
89272
age 1 of1

 



CPT

89280
89281
89290
89291
89335
89342
89343
89346
89352
89356

FAC FEE

5



5



5


 

Case Document 134-3 Filed 12/28/18 Page 1 of 52

Exhibit 

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