MEMORANDUM OF AGREEMENT

AMONG THE COUNTY OF SAN MATEO; LUCILE PACKARD CHILDREN’S HOSPITAL; AND THE SAN MATEO HEALTH COMMISSION dba THE HEALTH PLAN OF SAN MATEO

REGARDING THE COMMUNITY HEALTH NETWORK FOR THE UNDERSERVED

THIS MEMORANDUM OF AGREEMENT (this “Agreement”) is entered into by and between the County of San Mateo (the “County”), the Lucile Packard Children’s Hospital, a nonprofit public benefit corporation (“LPCH”), and the San Mateo Health Commission, dba Health Plan of San Mateo (“HPSM”).

WHEREAS, the County operates health care facilities collectively known as the “San Mateo Medical Center” (“SMMC”) which provide care to, among others, those residents of San Mateo County who have little or no access to other sources of medical care and which serve as the public system hub of the health care safety net; and

WHEREAS, LPCH is a not-for-profit hospital with a mission that includes a commitment to advancing family-centered care and advocating on behalf of children and expectant mothers; and

WHEREAS, the HPSM serves as the insurer for many County residents enrolled in the Medi-Cal, Health Families, Healthy Kids, and Medicare CareAdvantage programs, and HPSM also serves as the third party administrator for health care services provided to County residents who are medically indigent; and all these functions involve many healthcare providers who serve San Mateo County’s low-income residents; and in this capacity HPSM undertakes efforts to increase the medical care available for the underserved; and

WHEREAS, the parties, consistent with their respective missions, each seek to increase access to medical care for the most underserved and vulnerable residents of San Mateo County and are therefore participating in the Community Health Network for the Underserved (“CHNU”) as a means of increasing access to such care; and

WHEREAS, in connection with its participation in the CHNU, and as a means of providing further benefit to the community, LPCH is willing to provide certain labor and delivery and pediatric related services and resources to the County and/or HPSM for the benefit of low income residents of the County; and

WHEREAS, the County and HPSM desire to accept these services and resources on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements set forth below, the parties agree as follows:

Section 1. Labor and Delivery and Prenatal Services and Coordination

a. LPCH currently performs approximately 1,800 deliveries for low-income women who reside throughout San Mateo County, approximately 1,250 of which are for patients of the SMMC. The County and HPSM shall use their best efforts to facilitate redirection of deliveries of women who are not high-risk and live north of the Redwood City area (estimated at 600 deliveries per year). During the first one-year period after the effective date of this Agreement, the County and HPSM shall use their best efforts to divert at least 100 deliveries to low-income women to other hospitals for their labor and delivery. (Under current practice, the women whose deliveries would be diverted by this Agreement are currently served at LPCH.) During the second year of this Agreement, the County and the HPSM will use their best efforts to divert at least 300 low-income women to other hospitals for their labor and delivery. During the third year of this Agreement, the County and the HPSM will use their best efforts to divert at least 600 low-income women to other hospitals for their labor and delivery.

b. During the term of this agreement, LPCH agrees to continue performing deliveries for low-income women who reside throughout San Mateo County and assist the County and HPSM in redirecting deliveries as described above. Notwithstanding the foregoing, LPCH agrees that it shall perform all high risk deliveries (those requiring tertiary care) for low income women residing in the County that the County and/or the HPSM deem appropriate.

c. The County currently contracts for the services of obstetric gynecology (OB/GYN) physicians who perform labor and delivery services for low-income women residing in the County who deliver at LPCH. The County will continue to contract for such services during the term of this Agreement and through this contract the County will improve the coordination and management of prenatal care, and track and monitor improvements in prenatal care access and delivery outcomes for the low income population served by the parties. HPSM shall develop and lead the implementation of focused quality monitoring and improvement initiatives. On a quarterly basis, the County will provide LPCH and the HPSM with a report setting forth its plans and progress with respect to improvements in prenatal delivery care access and delivery outcomes. On a quarterly basis, HPSM will provide the County and LPCH with a report on the status of its focused quality monitoring and improvement initiatives.

d. During the term of this Agreement, LPCH shall reimburse the county in the amount of $300,000 per year for the services described in Section 1.c above.

On an annual basis during the term of this Agreement, the County shall provide LPCH with an invoice for the services described in Section 1.c. The County shall timely provide LPCH with a copy of its contract for OB/GYN services, along with any amendments thereto.

e. The County, through SMMC, shall coordinate and provide prenatal care for approximately 1,200 low-income pregnant women who reside within the County, including those who are referred to LPCH for their deliveries. The parties agree, however, that there may be circumstances, at the discretion of LPCH, where SMMC patients are seen on an out-patient basis at LPCH before admission to LPCH or after discharge. Except in cases such as those just described, SMMC shall be responsible for the provision of prenatal obstetric and gynecology care for these patients prior to their admission for delivery at LPCH. SMMC shall also be responsible for the provision of obstetric and gynecology care for these patients after their discharge from LPCH.

f. SMMC, HPSM, and LPCH shall collaborate to develop and finalize protocols for ensuring continuity of care for low income women whose deliveries take place at LPCH as among physicians involved in rendering prenatal, delivery, and postnatal medical care. The parties agree that all SMMC and LPCH physicians providing care to these patients shall comply with these protocols.

g. LPCH agrees to accept reimbursement for all services provided to HPSM-covered patients as set forth in the contract terms established on July 1, 2007 until June 30, 2010.

Section 2. Pediatric Care

a. The County, through SMMC, shall expand its ambulatory pediatric capacity in the South County geographical area at both the SMMC’s Fair Oaks Children’s Clinic and Willow Clinic to improve access to pediatric primary medical care for low income children residing in the southern part of the County.

b. During the term of this Agreement, LPCH shall fund the full cost of salary and benefits for two (2.0) County-employed FTE primary care pediatricians to be employed at SMMC clinics serving residents of the southern part of San Mateo County. The cost of salaries and benefits for these staff pediatricians as of August 1, 2010 is $406,500. The estimated cost for these positions as of August 1, 2011 is up to $447,000. On an annual basis during the term of this Agreement, the County shall provide LPCH with an invoice for the two FTE positions described in this section 2, along with the basis for its calculation of the amount due from LPCH. The parties further agree that one purpose of placing the LPCH-funded primary care pediatricians in the County’s SMMC clinics in the southern portion of the County is to allow some patients presently receiving primary care pediatric services at LPCH to be served in SMMC clinics closer to their homes.

c. LPCH shall allow the County reasonable access to LPCH’s physician recruitment staff, free of charge, to assist the County in recruiting two pediatric subspecialists; specifically, an endocrinologist and a gastroenterologist, to serve as County contractors providing clinics for two half-days each month at SMMC’s main campus, in San Mateo.

d. LPCH will use best efforts to identify and secure two million dollars in funding for a new County facility in the southern portion of the County which will be used to expand pediatric care access.

Section 3. Term and Termination

This Agreement shall commence on June 1, 2010 and, unless terminated sooner, shall continue until May 31, 2012, after which it shall be of no further force and effect. The term of the Agreement may be extended by mutual written, signed agreement by the parties. This Agreement shall be immediately terminated as follows: a) upon County’s loss of certification as a Medicare and/or Medi-Cal provider; b) upon the closure of the San Mateo Medical Center.

Either party may terminate this Agreement at any time in the event the other party engages in an act or omission constituting a material breach of any term or condition of this Agreement. The party electing to terminate this Agreement shall provide the breaching party with not less than thirty (30) days advance written notice specifying the nature of the breach. The breaching party shall then have (30) days from the date of the notice in which to remedy the breach and conform its conduct to this Agreement. If such corrective action is not taken within the time specified, this Agreement shall terminate at the end of the sixty (60) day period without further notice or demand.

Section 4. Conflict of Interest

The parties shall take reasonable measures to inform physicians who provide services under this Agreement of their obligation to inform them of any arrangements which may present a professional, financial, Stark Law, or any other state or federal conflict of interest or materially interfere in their performance of its duties under this Agreement.

Section 5. No Power to Contract in the Name of the Other Party

Neither LPCH nor any physician affiliated with LPCH performing services under this Agreement shall have the right or authority to enter into any contract in the name of County, or otherwise bind County in any way without the express written consent of County. Likewise, neither the County nor anyone acting on behalf of the County under this Agreement shall have the right or authority to enter into any contract in the name of LPCH, or to otherwise bind LPCH in any way without the express written consent of LPCH.

Section 6. Insurance and Indemnification

During the term of this Agreement, each party shall take out and maintain such bodily injury liability and property damage liability insurance as shall protect them, in their sole judgment, while performing such work covered by this Agreement, from any and all claims for property damage which may arise from operations or actions under this Agreement, whether such operations/ actions are done by it, by providing physicians, any subcontractor, or anyone directly or indirectly employed by them.

All parties shall also have in effect during the entire life of this Agreement, workers’ compensation and employer liability insurance providing full statutory coverage. In signing this Agreement, each party makes the following certification, required by Section 1861 of the California Labor Code:

I am aware of the provision of Section 3700 of the California Labor Code which requires every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of the Code, and I will comply with such provisions before commencing the performance of the work of this Agreement.

Each party agrees to indemnify, defend, and hold harmless the other party and its officers, directors, trustees, employees and agents from any claim, liability or loss (including reasonable attorneys' fees) arising out of or resulting from the acts or omissions of the indemnifying party or any of its employees or agents in connection with this Agreement; provided, however, that each party shall not be required to indemnify the other party for such liabilities that are covered by insurance pursuant this Section 6. Each party shall notify the other immediately in writing of any claim of injury or damage related to activities performed pursuant to this Agreement. The parties shall cooperate with each other in the investigation and disposition of any claim arising out of the activities of this Agreement, provided that nothing shall require either party to disclose any documents, records or communications that are protected under the peer review privilege, the attorney-client privilege or the attorney work-product privilege. The provisions of this Section 6 shall survive the termination of this Agreement.

Section 7. Notice Provisions

Any notice required or desired to be given in respect to this Agreement shall be deemed to be given upon the earlier of (i) actual delivery to the intended recipient or its agent; or (ii) upon the third business day following deposit in the United States mail, postage prepaid, certified, or registered mail, return receipt requested.

If to HPSM: Maya Altman, Executive Director

Health Plan of San Mateo

701 Gateway Boulevard, Suite 400

South San Francisco, CA 94080

If to LPCH: Lucile Salter Packard Children’s Hospital at Stanford

725 Welch Road

Palo Alto, California 94304

Attn: James McCaughey, Chief Strategy Officer

With a copy to: Office of the General Counsel

Building 170, 3rd Floor, Main Quad

Stanford, CA 94304

Attn: Chief Hospital Counsel

Section 8. Entire Agreement and Confidentiality

This Agreement contains the entire agreement of the parties hereto and supersedes all prior agreements, contracts and understanding, whether written or otherwise, between the parties relating to the subject matter hereof. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Except for disclosure to each party’s authorized employees and/or agents, neither party shall disclose any terms of this Agreement to any person who is not a party to this Agreement unless disclosure thereof is required by law (including, but not limited to, the California Public Records Act and the Brown Act) or consented to in writing by the other party.

Section 9. Partial Invalidity

In the event any provision of this Agreement is found to be legally invalid or unenforceable for any reason, the remaining provisions of the Agreement shall remain in full force and effect provided the fundamental rights and obligations remain reasonably unaffected.

Section 10. Assignment

Neither party may assign any of its rights or obligations hereunder without the prior written consent of the other party. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

Section 11. Independent Contractors

The parties acknowledge and agree that each party and its respective representatives are performing services and providing resources under this Agreement as independent contractors and not as employees, agents, partners of, or joint ventures with any other party.

Section 12. Regulatory Requirements

The parties expressly agree that nothing contained in this Agreement shall require any party or a party’s representative to refer or admit any patients to, or order any goods or services from another party. Notwithstanding any unanticipated effect of any provision of this Agreement, neither party will knowingly or intentionally conduct himself or herself in such a manner as to violate the prohibition against fraud and abuse in connection with the Medicare and Medi-Cal programs. All payments specified in this Agreement are consistent with what the parties reasonably believe to be a fair market value for the services provided.

Section 13. Dispute Resolution

In the event that any dispute arises between the parties arising out of or related to the validity, interpretation, enforcement or performance of this Agreement, or otherwise arising out of the relationship between the parties or the termination of that relationship, either party may by written notice call a meeting regarding such dispute to be attended by an executive officer of each party who has the authority to negotiate and bind that party to a resolution. At the meeting, the parties will attempt in good faith to resolve the dispute. No party will proceed to seek judicial relief with respect to any dispute prior to the resolution session described in this Section 13.

Section 14. No Third Party Beneficiaries

This Agreement is entered into for the sole benefit of County, HPSM, and LPCH. Nothing contained herein or in the parties’ course of dealings shall be construed as conferring any third party beneficiary status on any person or entity not a party to this Agreement.

Section 15. Governing Law

This Agreement shall be governed by the laws of the State of California.

Section 16. Amendments

All amendments must be in writing and shall be approved by the County Board of Supervisors and LPCH Executive management.

Section 17. Use of Names, Logos, Corporate Identity

No party may use the name, logo, or corporate identity of the other party for any purpose without the prior written consent of the other party whose name, logo, or corporate identity is proposed to used (“granting party”).

Section 18. Excluded Provider Representation and Warranty.

Each party represents and warrants that it has not been excluded, debarred, or otherwise made ineligible to participate in any Federal Healthcare program as defined in 42 USC 1320a-7b(f). Each party represents and warrants that it (i) is not currently excluded, debarred, or otherwise ineligible to participate in the Federal health care programs as defined in 42 USC 1320a-7b(f) (the “Federal healthcare programs”); (ii) is not convicted of a criminal offense related to the provision of healthcare items or services, but has not yet been excluded, debarred, or otherwise declared ineligible to participate in the Federal healthcare programs, and (iii) is not under investigation or otherwise aware of any circumstances which may result in being excluded from participation in the Federal healthcare programs. This shall be an ongoing representation and warranty during the terms of this Agreement and each party shall immediately notify the other party of any change in the status of the representation and warranty set forth in this section.

IN WITNESS, the duly authorized representatives of the parties have executed this Agreement in duplicate as of the date last signed below.

LUCILE SALTER PACKARD CHILDREN’S HOSPITAL AT STANFORD

By___________________________

Name: Christopher G. Dawes

Chief Executive Officer

Date: ___________________________________

COUNTY OF SAN MATEO

By___________________________ ATTEST:

Name: President, Board of Supervisors,

San Mateo County By:_________________________

Date: _________________________ Clerk of Said Board

THE SAN MATEO HEALTH COMMISSION dba THE HEALTH PLAN OF SAN MATEO

By___________________________

Name: ________________________

Date: _________________________