AMENDMENT TO AGREEMENT

BETWEEN THE COUNTY OF SAN MATEO AND
PENINSULA SURGICAL SPECIALISTS MEDICAL GROUP, INC.

THIS AMENDMENT TO THE AGREEMENT, entered into this _____ day of _______________, 20_____, by and between the COUNTY OF SAN MATEO, hereinafter called "County," and Peninsula Surgical Specialists Medical Group, Inc., hereinafter called "Contractor";

W I T N E S S E T H:

WHEREAS, pursuant to Government Code, Section 31000, County may contract with independent contractors for the furnishing of such services to or for County or any Department thereof;

WHEREAS, the parties entered into an Agreement for general and vascular surgical services on October 5, 2009; and

WHEREAS, the parties wish to amend the Agreement to reflect a reduction in services and corresponding reduction in compensation, to be effective as of April 1, 2011.

NOW, THEREFORE, IT IS HEREBY AGREED BY THE PARTIES HERETO AS FOLLOWS:

1.

Section 1.5 Payments, 1.5.1 Maximum Amount of the Agreement is amended in its entirety to read as follows:

In full consideration of Contractor’s performance of the services described in Exhibit A, the amount that County shall pay for serviced rendered under this Agreement shall be as specified in Exhibit B and not to exceed a total of $2,553,361 during the term of this Agreement.

2.

From and after April 1, 2011, original Exhibits A and B are replaced with Revised Exhibits A and B, (rev. [March 1, 2011]) which are attached hereto and incorporated herein by reference.

3.

All other terms and conditions of the Agreement dated October 5, 2009, between the County and Contractor shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto, by their duly authorized representatives, have affixed their hands.

COUNTY OF SAN MATEO

By:

President, Board of Supervisors
San Mateo County

Date:

ATTEST:

By:

Clerk of Said Board

PENINSULA SURGICAL SPECIALISTS MEDICAL GROUP, INC.

Contractor’s Signature

Date:

EXHIBIT A

SERVICES

In consideration of the payments specified in EXHIBIT B, Contractor shall perform such services described below under the general direction of the Chief Medical Officer and the SMMC Chief of Surgery.

I.

As set forth below, provide professional general, thoracic, and vascular surgery services in SMMC, Department of Surgery, including inpatient, outpatient, and emergency care.

II.

Participate in such scheduled coverage of service as is mutually arranged and agreed upon by members of the Department of Surgery under the supervision of the Chief of Surgery.

Contractor shall develop schedule for "on-call" and/or "emergency-call" status during other than scheduled times and for twenty-four (24) hours each Saturday, Sunday, or holiday. "On-call" and "emergency-call" are defined as being available by telephone or pager to the hospital medical staff, nursing supervisor, and administrator on call as needed. In addition, Contractor must adhere to the guidelines of the San Mateo County Trauma System by being immediately available by telephone and must make every reasonable effort to be present at the hospital at the time of the patient's arrival.

It is expressly understood that Contractor and subcontractors for medical specialty services are subject to these conditions, that all will accept equal scheduling for "on-call" status, and that each will be responsible for his/her portion of "on-call" time. All physicians who take calls for medical specialty services must have San Mateo Medical Center (SMMC) privileges.

III.

Contractor shall participate in such teaching and/or training programs as are, or may be, established by the medical staff at SMMC. Each individual’s participation in continuing education is documented and considered at the time of reappointment to the medical staff and/or renewal or revision of individual clinical privileges.

IV.

Contractor shall fulfill those requirements for active staff membership set forth in Articles 3 and 4.2 of the SMMC Medical Staff Bylaws, Rules and Regulations and maintain such active staff status as a condition of the Agreement. Contractor shall complete the SMMC’s General Compliance Training within 30 days of execution of this Agreement.

V.

Contractor shall attend regularly and serve without additional compensation on committees responsible for peer review activities, quality assurance, and utilization review as outlined in the SMMC Medical Staff Bylaws, Rules and Regulations.

VI.

Contractor shall provide medical staff administrative support to hospital and nursing in meeting surgical and anesthesia standards as defined by the Joint Commission, Title XXII, and other applicable standards.

VII.

General Surgery Responsibilities and Expectations

A.

Provision of professional general surgery services including inpatient, outpatient, and emergency care. The area of coverage within the field of general surgery shall include diseases of the gastrointestinal tract, liver, pancreas, intra-abdominal organs, breast, endocrine glands, and skin and soft tissues, including thoracic surgery.

B.

Provision of three (3) general surgery outpatient clinics per week, each of at least 3.5 hours in length conducted at the SMMC outpatient clinics.

C.

Provision of a minimum of four (4) hours of general surgery four days per week, on days of the week and at times each day mutually determined in consultation with the Chief of Surgery; provided that during the term of this Agreement, County will contract with Dr. David Jegge to provide such general surgery services every fourth week. The parties agree that Contractor currently is providing approximately 25 hours per week of general surgical services.

D.

Provision of Emergency Department and inpatient consultation 24 hours per day/7 days per week/365 days per year, (except for any coverage times contractually committed to by Dr. David Jegge for the same services as described below), including performance of surgical procedures as determined necessary by the Division of General Surgery.

E.

Provision of inpatient postoperative care as dictated by standard surgical practice and in compliance with SMMC medical staff requirements for the general practice of medicine.

F.

The parties to this Agreement acknowledge that, during the term that corresponds to this Agreement (i.e. through June 30, 2011), the County intents to contract directly with Dr. Jegge for the following services:

1.

One (1) clinic per week of four hours of general surgery outpatient clinic sessions conducted at the SMMC outpatient clinics.

2.

Every fourth week, provision of a minimum of four (4) hours of general surgery, four days per week, on days of the week mutually determined in consultation with the Chief of Surgery.

3.

Provision of Emergency Department and inpatient consultation 24 hours per day/7 days per week every fourth night and every fourth weekend, including performance of surgical procedures as determined necessary by the Division of General Surgery.

4.

Provision of inpatient postoperative care as dictated by standard surgical practice and in compliance with SMMC medical staff requirements for the general practice of medicine.

Contractor agrees that, in the event that the Agreement between Dr. Jegge and the County for the provision of the above-referenced general surgery services shall expire or be terminated for any reason during the term of this Agreement, Contractor shall provide the services that Dr. Jegge had been contracted to provide, as described above. If Contractor assumes responsibility for these services, the County will increase the monthly compensation payable to Contractor hereunder by $19,973 per month.

VIII.

Vascular Surgery Responsibilities and Expectations

A.

Provision of one session of vascular surgery outpatient clinic, which is at least 3.5 hours in duration, per week at SMMC outpatient clinics.

B.

Provision of at least five hours of vascular surgical procedures on a day of the week mutually determined in consultation with the Chief of Surgery.

C.

All procedures that can safely and reasonably be performed at SMMC shall be.

D.

Off-site care: all vascular care for SMMC patients provided at off-site locations (other hospitals) is included.

E.

Provision of inpatient postoperative care as dictated by standard surgical practice and in compliance with SMMC medical staff requirements for the general practice of medicine.

F.

Participate in such scheduled coverage of service as is mutually arranged and agreed upon by members of the Department of Surgery under the supervision of the Chief of Surgery.

EXHIBIT B

PAYMENTS

In consideration of the services specified in EXHIBIT A, County will pay Contractor based on the following:

I.

Contractor shall be paid at fixed rate of ONE MILLION, SIXTY-SIX THOUSAND, NINE HUNDRED SIXTY-THREE DOLLARS ($1,066,963) per year for the first year of the Agreement, to be paid in monthly installments of EIGHTY EIGHT THOUSAND, NINE HUNDRED THIRTEEN DOLLARS AND FIFTY EIGHT CENTS ($88,913.58) (one-twelfth of the annual rate) for each month worked.

II

In year two of the Agreement, for the months of April through June 2011, the monthly payment amount will be reduced by NINETEEN THOUSAND NINE HUNDRED SEVENTY THREE DOLLARS ($19,973) per month. This reduction reflects payments made directly to Dr. Jegge for general surgery services and it will reduce the amount payable under this Agreement by a total of FIFTY NINE THOUSAND NINE HUNDRED NINETEEN DOLLARS ($59,919).

III.

Failure of Contractor to perform the listed services in any given month constitutes a material breach of this Agreement, and in such circumstances the County, at its option, may withhold payment for any portion of services not rendered, terminate the Agreement pursuant to the termination provisions above, work with the Contractor to reach a schedule for returning the Contractor to performance under this Agreement, revise this Agreement pursuant to the terms of this Agreement, pursue any remedy available at law, or any combination of these options. The Contractor is not entitled to payment for non-performance of services listed by this Agreement.

IV.

The term of this Agreement is July 1, 2009 through June 30, 2011, as stated in Section 3.1 of the Agreement.

V.

For patients treated at Mills-Peninsula Hospitals, Contractor shall bill all payers, including Medicare, Medi-Cal, ACE, ACE County, commercial insurance, or “self-pay” patients. Contractor shall claim against third party payer for payment, and County shall bear no financial responsibility for such patients.

VI.

Contractor compensation for general surgery, thoracic, and vascular services by the County will be based on the service hours of clinic and surgical time set forth in Sections VII and VIII of Amended Exhibit A. If the contract terms of service are amended such that the current numbers of clinic sessions in and surgical time in AMENDED EXHIBIT A are changed, the corresponding compensation shall be adjusted in proportion to the change in service hours.

VII.

Contractor’s amended annual compensation has been based on the following:

A.

Scheduled clinics and surgical time described in Exhibit A, Sections VII and VIII: $835,263.

B.

Call coverage:

1.

General surgery: $300/night x 274 = $82,200

2.

Vascular surgery: $300/night x 365 = $109,500

C.

Medical Director and scheduling call coverage: $3,500/month = $40,000

VIII.

Total payment for services performed under this Agreement will not exceed TWO MILLION FIVE HUNDRED FIFTY-THREE THOUSAND, THREE HUNDRED SIXTY ONE DOLLARS ($2,553,361).