Kaiser Permanente MEDICAL SERVICE AGREEMENT

Medical Group will arrange or provide to all Members all Medical Services required by or incident to Membership Contracts. Medical Services will be of good quality in accord with accepted standards of professional medical and surgical practice prevailing in the Service Area when the Services are rendered. Medical Group will maintain an ongoing quality assurance program that complies with the requirements of the Health Maintenance Organization Act of 1973, as amended, and will comply with the requirements of any (A) legislation or regulation imposed on either Health Plan or Medical Group relating to quality of Medical Services, and (B) non-governmental agency or organization from which Health Plan and Medical Group agree in writing to seek or maintain accreditation.

Medical Services pursuant hereto, without intervention in any manner by Health Plan or its agents or employees. However, Medical Group undertakes that Medical Services will be reasonably available.

(a) Personal Services, Medical Group's responsibility hereunder is to provide services of Physicians reasonably required by Medical Group to perform this Agreement and to render Nonmember and Workers' Compensation Medical Services. Except for nurse practitioners, podiatrists, optometrists, physician assistants, providers of mental health care and a business administrator, Health Plan or Hospitals will engage or arrange for engaging nurses, technicians and other paramedical personnel and receptionists, clerical and administrative personnel (including personnel to provide for Medical Group's accounting, financial and other business requirements) reasonably required by Medical Group to perform this Agreement and to render Nonmember and Workers' Compensation Medical Services. All personnel will be under the administrative supervision of their employer, but those engaged in direct provision of care will be functionally responsible to the Physicians in charge of the departments to which they are assigned. Health Plan and Medical Group will establish a process to insure that Medical Group's reasonable needs with respect to non-physician personnel may be met in a timely manner.

(b) Facilities, Equipment and Supplies. Health Plan will provide, repair and maintain health care facilities, equipment and supplies as reasonably required by Medical Group in furnishing outpatient and some inpatient Medical Services and outpatient and some inpatient Nonmember and Workers' Compensation Medical Services. Under the Hospital Service Agreement, Hospitals is required to provide or arrange all Hospital Services, together with facilities, personnel and remaining equipment reasonably required for the full and satisfactory performance of all Hospital Services. Medical Group has no obligation to provide hospital personnel, facilities or equipment.

No standards for facilities and equipment will be established or changed, and no substantial changes in or additions to facilities or equipment for serving Members will be made until after proposed changes or additions have been considered jointly by Health Plan and Medical Group. Health Plan will give strong consideration to the views of Medical Group with respect to proposed changes in or additions to facilities and equipment, and will attempt to agree in writing before implementing (or not implementing) such changes or additions. However, Health Plan reserves the right of final decision as to standards for facilities and equipment, additional facilities and equipment and expansion of existing facilities provided by it. All non-hospital facilities and equipment will be made available to Medical Group on mutually agreeable terms that insure that Medical Group has exclusive medical use of the facilities and equipment and control of all medical practice it conducts therein.

(c) Administrative Services. Health Plan is primarily responsible for providing Administrative Services; however, performance of Administrative Services will be allocated among Health Plan, Hospitals and Medical Group in the most practical manner consistent with efficiency of operations as agreed upon by Health Plan and Medical Group.

As full compensation for Medical Services as provided in Section C-1, and administrative and related services as provided in this Agreement, Medical Group will receive the compensation and other consideration provided for in this Agreement. Medical Group will not make or permit any charge to any Member on account of or otherwise incident to Medical Services except as specifically provided or permitted by the applicable Membership Contract. If Health Plan fails for any reason to pay for Medical Services or any other service set forth in any Membership Contract, Members will not be liable to Medical Group or to any other person for any sum owed by Health Plan, nor will Medical Group assert any claim or maintain any action at law against a Member, or person or organization acting on behalf of a Member (other than Health Plan), to collect any such sum. This Section will not operate in any manner to restrict Medical Group with respect to charges for Nonmember and Workers' Compensation Medical Services.

This Section C-2 and Section C-3 will survive the termination of this Agreement regardless of the cause giving rise to termination, shall be construed to be for the benefit of Members, and supersede any oral or written contrary agreement now existing or hereafter entered into between Medical Group and any Member or any person or organization acting on the Member's behalf.

Medical Group may engage services of Referral Physicians and their support services as appropriate in maintaining accepted professional standards of medical care and to meet Medical Group's obligations under this Agreement, including during the Interim Period described in Section I-2, except that arrangements with Referral Physicians who provide services in hospital-based specialty such as radiology, anesthesiology, or pathology at a hospital or other institution with which Health Plan or Hospitals has an agreement relating to care of Members must be approved by Health Plan.

Each Referral Physician will look solely to Medical Group for compensation for Medical Services and other services incident thereto rendered to Members and will not under any circumstances, including but not limited to non-payment by Medical Group, assert any claim or maintain any action at law against a Member, or person or organization acting on behalf of a Member (other than Medical Group), relating to the provision of Medical Services to a Member.

Except in situations requiring the provision of emergency Medical Services, Medical Group will enter into a written contract with each Referral Physician prior to the Referral Physician providing Medical Services to any Member, which will include (a) language incorporating the provisions of the preceding sentence of this Section C-3 (but Medical Group will not have any liability to Health Plan for breach of such provision by a Referral Physician), (b) language requiring any physician Medical Services to maintain appropriate credentials and to be subject to Medical Group's peer review activities, (c) any provision required by state or federal legislation or regulations, (d) any provision required by any non-governmental agency or organization from which Health Plan and Medical Group agree to seek or maintain accreditation, and (e) any other provisions agreed upon by Medical Group and Health Plan.

Health Plan and Medical Group believe their best interests and the best interests of Members will be served by maintaining a stable and continuing relationship in accord with the principles established by this Agreement, and each party intends to attempt to continue contractual arrangements generally in accord with these principles. Except during the Interim Period described in Section I-2, Health Plan will contract for Medical Services exclusively with Medical Group and will not contract for such services with any other physicians, and Medical Group will contract exclusively with Health Plan and will not render professional services pursuant to any other direct service type of prepayment plan (a plan which assumes responsibility for providing covered medical services to an enrolled population and in which such services are primarily provided directly rather than by means of cash indemnity or other monetary payments for discrete services) within the Service Area.