HOSPITAL AGREEMENT

Amendment 2010-01 (Amendment No. 3)

This Amendment is made this day of , by and between the San Mateo Health Commission, a public corporation, hereinafter referred to as “PLAN”, and the County of San Mateo, dba San Mateo Medical Center, a hospital, hereinafter referred to as “HOSPITAL”.

RECITALS

WHEREAS, PLAN and HOSPITAL have previously entered into an Agreement effective January 1, 2007;

WHEREAS, Article XIV.C. of Agreement provides for amending such Agreement;

WHEREAS, PLAN received an increase in total compensation under its Medi-Cal Services Contract with the State of California, effective for the State fiscal year 2010-11 rate period that is in addition to the PLAN’s share of those rate increases for Medi-Cal Managed Care Plans, including County Organized Health Systems health plans, reflected in the final State Budget for the State fiscal year 2010-11;

WHEREAS, HOSPITAL is the only disproportionate share hospital (DSH), as defined in Welfare and Institutions Code Section 14105.98, in the County of San Mateo, and historically has been the largest DSH provider of adult (non-obstetric) inpatient hospital service days to PLAN’s members; and

WHEREAS, HOSPITAL operates a distinct part skilled nursing facility and is the largest provider of Medi-Cal long term care bed days; and

WHEREAS, in light of the foregoing facts, both parties wish to amend the Agreement.

NOW, THEREFORE, PLAN and HOSPITAL hereby agree as follows:

Paragraph One – Exhibit 2. Reimbursement Addendum

I. Section C, which was previously added to Exhibit 2 of the agreement by Amendment 2009-01 and modified by Amendment 2009-02, is further amended to read:

C. Supplemental Payments

(1) The requirements of Paragraph C.(1) of Exhibit 2 (added by Amendment 2009-02), which addressed supplemental payments between September 2009 and June 2010, have been satisfied. That language regarding past payments is incorporated herein by reference in relation to performance that was required under the Agreement for the periods covered by Amendment 2009-02.

(2) In addition to any other payments made to HOSPITAL pursuant to this Agreement, and in consideration of services provided to PLAN’s Members and HOSPITAL’s agreements, PLAN shall make supplemental quarterly payments to HOSPITAL in the amount of $ 7,000,000 on each of September 30, 2010, December 31, 2010, March 31, 2011, and June 30, 2011.

(3) As a condition for receipt of the supplemental payments provided for in this Section, HOSPITAL shall:

(i) remain a participating hospital in the PLAN and not issue a notice of termination of this Agreement pursuant to Article X.C.;

(ii) maintain current emergency room licensure status and not close the emergency room pursuant to Article II.C.(4);

(iii) explore with PLAN collaborative initiatives in the area of Medical Management of PLAN and HOSPITAL members;

(iv) work with PLAN medical staff to reduce hospital readmissions from the skilled nursing facility; and

(v) submit a written report on the above quarterly prior to receiving each supplemental payment.

Paragraph Two – Conditional Amendment

The supplemental payments provided for in Paragraph One of this Amendment are conditioned upon PLAN receiving an increase to its regular compensation under PLAN’s Medi-Cal Services Contract with the State of California, effective for the State fiscal year 2010-11 rate period, that is in addition to the PLAN’s share of those rate increases for Medi-Cal Managed Care Plans, including County Organized Health Systems health plans, reflected in the final State Budget for State fiscal years 2010-11. In the event the aforementioned increase in compensation for the IGT portion is insufficient to fund the total amount of the supplemental payments to HOSPITAL specified under Paragraph One, such payments will be reduced in the same proportion.

Paragraph Three – Waive 45 Day Provision

By signing this Amendment, both parties mutually agree to waive the 45 business day notice requirement for this contract amendment, as provided for in Section 1375.7 of the California Health and Safety Code.

Paragraph Four – Effective Date

This amendment shall be effective July 1, 2010.

Paragraph Five – Incorporation of Agreement Rights, Duties and Obligations

All other terms and provisions of said Agreement shall remain in full force and effect so that all rights, duties and obligations, and liabilities of the parties hereto otherwise remain unchanged.

SAN MATEO HEALTH COMMISSION

Date: ______________________ By: ___________________________________

Title: Executive Director

SAN MATEO COUNTY by and through the

SAN MATEO MEDICAL CENTER

Date: ______________________ By: ________________________________

Title: Chief Executive Officer

By: ________________________________

Title: President, Board of Supervisors, San Mateo County

ATTEST:

By:

Clerk of Said Board