AMENDMENT TO THE AGREEMENT

BETWEEN THE COUNTY OF SAN MATEO AND PHARMERICA

THIS AGREEMENT, entered into this ___ day of __________________, 2004, by and between the COUNTY OF SAN MATEO (hereinafter called "County") and (hereinafter called "Contractor"),

W I T N E S S E T H:

WHEREAS, on June 20, 2003 the parties hereto entered into an agreement (hereinafter referred to as the "Original Agreement") for the furnishing of certain services by Contractor to County as set forth in that Original Agreement; and

WHEREAS, it is now the mutual desire and intent of the parties hereto to amend and clarify that Original Agreement;

NOW, THEREFORE, IT IS HEREBY AGREED between the parties that the Original Agreement is amended as follows:

1.

Paragraph 3, Payments, of the Original Agreement is hereby amended to read as follows:

"3.

Payments. In consideration of the services rendered in

accordance with all terms, conditions and specifications set

forth herein and in Exhibit A, County shall make payments to

Contractor in the manner specified herein and in Exhibit A. In

the event that County makes any advance payments,

Contractor agrees to refund any amounts in excess of the

amount owed by County at the time of contract termination.

County reserves the right to withhold payment if County

determines that the quantity or quality of the work performed is

unacceptable. In no event shall total payment for services under

this Agreement exceed TWO HUNDRED THIRTY THOUSAND

DOLLARS ($230,000).

2.

Exhibit A of the Original Agreement is hereby amended to read as follows:

Exhibit A

I.

Agreement between the County of San Mateo and PharMerica

A.

Effective July 1, 2003 to June 30, 2004, Contractor shall provide the

following pharmacy services including medications and IV therapy services to San Mateo Medical Center (SMMC):

1.

Contractor agrees to promptly deliver to County any prescription and nonprescription drugs and supplies within reasonable times and without unreasonable delay, except for circumstances and conditions beyond its control which shall expressly include, but not be limited to, out of stock situations. If for any reasons Contractor is unable to deliver requested item(s) within a reasonable time, Contractor shall promptly notify County of its inability to deliver, and shall, subsequently, secure an alternative source of supply.

If an order is missed by Contractor and not sent on the appropriate day with the routine deliveries, then the medication will automatically be considered STAT or sent accordingly the next day.

2.

Contractor agrees to provide continuous products and services

Monday through Friday during normal business hours and shall, in

addition, provide emergency service twenty-four (24) hours per

day, seven (7) days a week throughout the calendar year. An

emergency shall be defined as the lack of availability for

administration of any drug ordered by a physician, regardless of

reason.

Drugs ordered STAT by the physician that are not available in the facility emergency drug supply shall be available and administered within one (1) hours during normal pharmacy hours. For those hours during which the pharmacy is closed, drugs ordered STAT within two (2) hours. Drug orders shall be available on the same day ordered unless the drug would not normally be started until the next day.

Antibiotics will be delivered within four (4) hours if not available in Emergency Drug Supply.

3.

Contractor agrees to bill each patient individually or in the case of a

Medi-Cal Assistance Recipient to the appropriate state agency in

conformity with the usual and customary method of billing.

4.

Contractor will provide to County all forms it deems necessary for

the proper execution of the drug delivery system. Said forms

include, but shall not be limited to, drug order and reorder forms,

delivery receipt forms, and communication orders.

5.

All deliveries, by whatever means, shall be at the expense of

Contractor. Routine deliveries will be completed within thirty (30)

minutes of agreed upon delivery times which are 3:00 p.m. and

8:00 p.m. for San Mateo County Long Term Care Services, except

for circumstances beyond Contractor's control.

6.

All telephone calls to Contractor from County, or from County to

Contractor shall be made by the most expedient and least

expensive method. All long distance toll charges resulting from

said telephone calls shall be the responsibility of Contractor.

7.

Contractor will, as necessary, make available to County certain

materials and equipment which may include, but shall not be

limited to, reference books, films, slides, manuals, audio-visual

equipment and training aids. Contractor shall also insure that drug

distribution carts are available for use on a continual basis. It is

understood and agreed to by County that such materials shall at all

times remain the property of Contractor and upon demand shall be

returned to Contractor in their original condition subject to normal

wear and tear. However, in the event of termination of this

Agreement, County shall be responsible for purchasing the drug

distribution carts at their then remaining value.

8.

Contractor shall provide County with an appropriate number of

Emergency Medication Kits and use the policy which shall conform

to all State Board of Pharmacy and Board of Health rules and

regulations. It is understood by both parties that said kit and its

contents shall remain at the property of Contractor in the event of

termination of this contract. It is further understood and agreed

upon by both parties that use of an item from this kit shall be

pursuant only to a drug order by a licensed physician. County

agrees to promptly report the usage of any item from this kit and to

facilitate the billing for said items to the appropriate patient. In the

event that County fails to report such usage, the cost of

replenishing the kit to the approved list of contents shall be borne

by County.

9.

Applicable Standards

The services performed by Contractor shall conform to the standards of the Joint Commission on Accreditation of Hospitals and Health Organizations (Long Term Care Section); the Department of Health and Human Services; and all other State and Federal Agencies including, but not limited to, the State board of Health; State Board of Pharmacy; and the Department of Health Services. Contractor shall obtain and maintain all necessary local, State, and Federal licenses and permits required for the operation of Contractor consistent with the above standards. Contractor agrees that its pharmacists shall be registered and qualified to practice as Long Term Care facility pharmacists. Quality Assurance monitoring will be provided separately through an independent contract.

B.

Effective January 1, 2004 to June 30, 2004, Contractor will provide the following consulting services:

1.

Review the drug regimen of each patient at the skilled level of care

in SMMC Long Term Care 1AB at least once each month and

report in writing any irregularity to San Mateo Medical Center's

Administrator, Medical Director, Director of Nursing Services, and

where appropriate, the individual patient's physician.

2.

Serve on SMMC Long Term Care 1AB Quality

Improvement Committee.

3.

Submit, at least quarterly, a written report to SMMC Long Term

Care 1AB Quality Improvement Committee on the status of SMMC

Long Term Care 1AB pharmaceutical service and staff

performance. Such report shall include, but not be limited to:

a.

A review and assessment of compliance with any plan of

action previously adopted by SMMC Long Term Care 1AB

quality Improvement Committee.

b.

A review and ongoing assessment of compliance with all

federal, state, or local laws, regulations or rules and all of San

Mateo Long Term Care 1ABs pharmaceutically-related policies

and procedures including, for example, that drugs are

dispensed and labeled in compliance with federal and state

laws, and provided on a prompt and timely basis.

c.

Recommendations, if any, for improving the delivery of

pharmaceutical services with the goal of correcting or

preventing instances of noncompliance and enhancing the

level of patient care in SMMC Long Term Care 1AB facility.

4.

Prepare and maintain SMMC Long Term Care 1AB's Pharmacy

Policy and Procedure Manual.

5.

Assist SMMC Long Term Care 1AB staff in the accounting,

destruction, and reconciliation of unused controlled substances as

prescribed by law, rule, or regulation.

6.

Assist SMMC Long Term Care 1AB administrative staff in

establishing and implementing policies and procedures for the safe

and effective distribution, control, and use of drugs.

7.

Consult with the Medical Director and any attending physicians

regarding the use of formulary drugs as requested by the Facility

Administrator.

8.

Participate as needed in SMMC Long Term Care 1AB's facility

inservice training program for the licensed nursing staff.

9.

Meet all other responsibilities required of a consultant pharmacist

as set forth in federal, state, or local laws, regulations, or rules as

enacted or as may be enacted or amended.

10.

Contractor agrees that the following additional services will be

provided to SMMC Long Term Care 1AB. These services include:

a.

A FAX system for convenient ordering.

b.

Pharmacist consulting services.

c.

Nurse consulting services in medication distribution and other

incidental consulting.

d.

Continuing education services.

e.

Access to a toll-free hotline for dietary, medical records,

clinical, Medicare, regulatory and reimbursement questions.

SMMC Long Term Care 1AB Administrator shall designate the employee(s) responsible for implementing the services contemplated in this Agreement and who shall act as coordinator(s) with Contractor.

II.

Amount and Method of Payment

A.

Effective July 1, 2003 to June 30, 2004, For providing pharmacy services including medications and IV therapy services, Contractor shall be paid based on the following:

1.

County shall pay Contractor for pharmaceuticals provided to

patients covered by Medicare at rates established for Medi-Cal

patients.

2.

County agrees to notify Contractor as to the status of each patient

regarding source of reimbursement for prescription drugs and

supplies and in case of a Medi-Cal patient, shall provide to

Contractor, an appropriate Medi-Cal ID card or P.O.E. sticker on a

prompt and timely basis so as to avoid delays in pharmacy billings.

County also agrees that it shall notify Contractor as to changes in

status or source of reimbursement on a prompt and timely basis.

County shall give Contractor reasonable access to all patient

records, facilities, and supplies necessary for the performance of its

duties, herein, and Contractor agrees that it will furnish to County

upon request all reciprocal information relating to the drugs and

supplies furnished to County or patients therein.

3.

In all instances where County processes billing and remittance on

behalf of Contractor, County agrees to promptly process said

claims received from Contractor and to remit the same to

Contractor within thirty (60) days' of receipt of Contractor's

statement without regard to collectability. Any unpaid monies

greater than 60 days shall bear interest of 10% per annum.

4.

In the event of any dispute arising from any claim or bill submitted

by Contractor, Contractor shall have access to all reasonable and

necessary documents and records that would in the discretion of

Contractor tent to sustain its claim. Further, where County is an

intermediary in the processing of said claim, County shall promptly

furnish to Contractor any information regarding the status of the

claim and shall grant to any fiscal agency involved the right to

discuss status of the claim with Contractor.

5.

County shall pay for any drugs, supplies, or ancillary equipment

purchased on its own account and shall remit payment on same

promptly according to the terms extended by Contractor upon

receipt of bill from Contractor. The purpose of said drugs, supplies,

and equipment is not required by this contract. This amount shall

not exceed the limits as set forth in paragraph 2, of this Agreement.

6.

County may at its option purchase from Contractor and Contractor

agrees to sell to County all stock supplies whose use may not be

attributed to a single patient.

7.

In the event of the referral of a Medi-Cal pending patient, the

County shall have four (4) months to provide proof of eligibility.

After this time, Contractor shall bill the patient or Conservator.

8.

Maximum amount for pharmacy services shall not exceed $227,000.

B.

Effective January 1, 2004 to June 30, 2004, For providing consulting services, Contractor shall be paid based on the following:

1.

Contractor will be compensated by County for consultant pharmacy

services rendered from the first day of a calendar month to the last

day of that calendar month ("Billing Period") according to invoices

submitted by Contractor to County. Contractor shall be

compensated at a rate of THREE DOLLARS ($3) per bed per

month, based upon invoices submitted for the applicable Billing

Period.

2.

The maximum amount for Consulting services will not exceed

$3,000. County shall have the right to withhold payment if County

determines that the quantity or quality of work performed is

unacceptable.

NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES that:

1.

These amendments are hereby incorporated and made a part of the Original Agreement and subject to all provisions therein.

2.

All provisions of the Original Agreement, including all references to audit and fiscal management requirements unless otherwise amended hereinabove, shall be binding on all the parties hereto.

3.

All provisions of the Original Agreement, including all monitoring and evaluation requirements, shall be applicable to all amendments herein.

NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES that the Agreement of June 20, 2003, be amended accordingly.

IN WITNESS WHEREOF, the parties hereto, by their duly authorized representatives, have affixed their hand on the day and year first above written.

COUNTY OF SAN MATEO

PHARMERICA

By:

By:

Mark Church, President,

Board of Supervisors
San Mateo County

Date:

Date:

ATTEST:

By:

Clerk of Said Board

Date: