Kaiser Permanente Medical Service Agreement Article E

(a) Existing Contracts. Medical Group is familiar with the forms representing all Group and Individual Membership Contracts now in effect, and hereby acknowledges its approval thereof.

(b) Amendments and Modifications. Health Plan will not amend or modify any Membership Contract now in effect in a manner that changes Medical Group's obligation regarding Medical Services under Section C-1 unless Medical Group approves, except that approval is not required if the modification or amendment is legally required. If Medical Group does not approve any such amendment or modification because it (i) requires or tends to require Medical Services not then covered by Membership Contracts, (ii) appears, in the reasonable judgment of Medical Group, to affect the physician-patient relationship or professional or ethical aspects of Medical Group's practice, or (iii) otherwise tends, in the reasonable judgment of Medical Group, to affect adversely the interests of Medical Group, then Medical Group will so notify Health Plan in writing within 30 days after receipt of the proposed amendment or modification, and the amendment or modification will not be binding on Medical Group. Consistent with the foregoing, Medical Group will accommodate Membership Contract changes, if any, proposed by Health Plan and will provide
Medical Services, as required, to permit normal growth and enrollment of additional Members pursuant to Section E-2. If such modification or amendment is legally required, Health Plan will compensate Medical Group for the net cost of complying with such modification or amendment.

If Medical Group desires to modify or amend any existing Membership Contract, it will submit its proposed modification or amendment to Health Plan for review and discussion. Health Plan will cooperate with Medical Group in an effort to effect any such change, but such change will not take effect until Health Plan has agreed in writing to it and all necessary procedures and formalities required by Membership contracts or deemed desirable by Health Plan to maintain proper relationships with the Members affected thereby have been taken.

Medical Group has received a list of all Group Membership Contracts, including the anniversary dates thereof, now in effect. Health Plan may, without prior review or approval of Medical Group, renew or extend any existing Membership Contract for not more than one year unless Medical Group, at least 60 days before Health Plan is required to give notice of amendment, modification or termination pursuant to the Membership Contract, notifies Health Plan in writing that Medical Group desires that such contract be amended, modified or terminated. If Medical Group so notifies Health Plan, Health Plan will cooperate with Medical Group in an effort to arrive at a satisfactory disposition of Medical Group's request. However, Health Plan may, after notice to Medical Group, renew or extend any Membership contract once for not more than one year without amendment or modification (except for changes in rates) if Health Plan deems such action necessary or desirable. If Health Plan desires to change the anniversary date of any Group Membership Contract, Health Plan will notify Medical Group in writing at least 70 days before such change becomes effective.

At least 90 days before the effective date of any change in rates charged to Members, either through Dues or Supplemental Charges, including the determination of Dues and Supplemental Charges under new Membership Contracts, Health Plan will notify Medical Group of the proposed changes, and will discuss the proposed changes with Medical Group.

Health Plan will give strong consideration to the views of Medical Group with respect to the rates charged to Members, and will attempt to agree in writing before changing (or not changing) Supplemental Charges or any annual Dues rate charged to Members. However, Health Plan reserves the right of final decision regarding rates charged to Members. Any agreement between Health Plan and Medical Group regarding Supplemental Charges or dues will be in writing.

Health Plan and Medical Group desire that total enrollment be controlled to avoid exceeding the reasonable capacity of available personnel and facilities. However, because membership growth is not entirely within the control of Health Plan, the following provisions are established in order that membership growth may be limited insofar as practical, consistent with existing commitments. Except to the extent that the enrollment of additional Members would tend to cause an excessive burden on available facilities or Medical Group personnel, or an excessive financial burden on Medical Group, Medical Group will provide Medical Services, as required, to permit normal growth and enrollment of additional Members pursuant to this Section E-2.

Under many Group Contracts, non-Members in the Groups covered by the Contracts are entitled to membership without review or approval, and Medical Group will provide Medical Services to additional persons who enroll as Members under such Contracts. Health Plan will, insofar as consistent with its commitments, limit additional enrollment under existing contracts if such enrollment would tend to cause an excessive burden on available facilities or on Medical Group personnel.

Members who lose their eligibility for membership under a Group Contract may be entitled to continue their membership under an Individual Contract. Similarly, under many Contracts, Dependents, upon attaining a certain age, are entitled to continue their membership under their own Individual Contracts. In all such cases, Medical Group will provide Medical Services to existing Members who exercise their contractual rights to continue their membership.

Some persons added to a Subscriber's family unit through birth, adoption or marriage are entitled to become Members, and Medical Group will provide Medical Services to such persons who enroll or are enrolled as Members.

Except as otherwise required by law, persons who desire to enroll under Individual Contracts will be subject to medical review by Medical Group, and Health Plan will not enroll any persons as Members who fail to qualify for membership under such medical review, nor will Health Plan effect any additional individual enrollments if, in Medical Group's opinion, such additional enrollments are likely to cause an excessive burden on available facilities or Medical Group personnel.

Health Plan may enroll additional groups under Group Contracts whose form has been approved by Medical Group unless Medical Group advises Health Plan in writing that it objects to enrollment of new Groups. At least once each month, and at least 60 days prior to the expected effective date with respect to the events referred to in (i) below, Health Plan will advise Medical Group in writing of (i) Groups that are expected to enroll or terminate, together with the expected date of enrollment or termination and estimated number of Members involved, and (ii) Groups that have enrolled or terminated since the prior monthly report, and the number of Members involved.

At least once each month Health Plan will provide Medical Group with a list of all Group Contracts and (if known) the actual, and otherwise the estimated number of Members enrolled under each Group Contract.

Policy questions relating to interpretation of Membership contracts will be jointly considered by Health Plan and Medical Group, with final authority on questions of interpretation distributed as follows:

All questions relating to interpretation of Membership Contracts primarily involving questions of a medical nature or relating primarily to physician-patient relationships or to the professional and ethical responsibilities of physicians will be resolved by Medical Group after discussion with Health Plan.

(b) Other Matters.

All other questions relating to interpretation of Membership Contracts will be finally resolved by Health Plan after discussion with Medical Group. This classification includes questions relating to membership relations and to moral responsibility as well as questions of legal responsibility.