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A Financial Institution Guide to BusinessManager® for HealthcareThird-party Insurance

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Index:1. Industry overview – Healthcare in the US ..............................................................................................4

2. BusinessManager as a cash flow solution in this sector .......................................................................4

3. Selling BusinessManager in the healthcare industry ............................................................................5

4. Documentation of your BusinessManager healthcare relationships ..................................................5

a. The BusinessManager Agreement for Healthcare Providers ...................................................5

b. UCC Filing – Healthcare insurance receivables ........................................................................5

c. HIPAA compliance .......................................................................................................................5

d. Government insurance programs...............................................................................................5

5. Healthcare implementation and workflow ............................................................................................6

a. Working with Tetris Consulting ...................................................................................................6

b. Lock box usage and ACH payments ..........................................................................................7

c. ProfitStars Processing Services ...................................................................................................7

d. ProfitStars Account Verification Services ...................................................................................7

6. Tracking the performance of your healthcare related business clients ..............................................7

7. Marketing Plans and Resources .............................................................................................................8

8. Attachments

a. BusinessManager Agreement for Healthcare Providers ........................................................10

b. Summary of Tetris Consulting ...................................................................................................18

c. Funding Process Flowchart .......................................................................................................19

d. Payment Application Process Flowchart ..................................................................................22

e. ProfitStars Processing Routines ................................................................................................23

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Notices and DisclaimersThe goal of Jack Henry & Associates, Inc., ProfitStars Division, (“ProfitStars”) is to help our client financial institutions build safe and profitable BusinessManager portfolios. If you have any questions regarding the information contained in this document or would like additional information, please contact the ProfitStars Training Department or the Risk Management Services group at the following location:

Jack Henry & Associates, Inc. (ProfitStars Division) P.O. Box 1603 Brentwood, Tennessee 37024

The information contained or referenced in this document, including information provided by ProfitStars to you through any means including a URL link to a ProfitStars website, is subject to change from time to time without notice. When relying on this information, please check with ProfitStars to ensure that you are working with the most recent publication of the document based on the copyright and document revision dates listed.

This document contains examples and scenarios concerning use of the BusinessManager program within a commercial funding environment. Descriptions are meant to address typical transactions and operations. The facts relating to your particular requirements and operations may vary from what is described in this document.

This document includes some information about laws, regulations and industry rules which relate to commercial funding operations and practices. ProfitStars has applied reasonable efforts to ensure that this information is accurate and useful, you understand and acknowledge by your use of this document that:

■ This information does not constitute legal, accounting or tax advice by ProfitStars in any manner. In order to apply this information to address your particular requirements and operations, you must seek and rely upon your own resources and help from legal, accounting and tax professionals who are knowledgeable and experienced in these matters and can guide you in interpreting and applying this information appropriately for your use and benefit.

■ This information is based on general legal principles and tax and accounting considerations which may not apply to you or your particular location or the type of commercial funding operations you employ. In this document, ProfitStars has not adapted this information to apply to your specific needs—instead, it reflects guidance and principles which broadly apply to financial institutions, commercial funding operations and the various governmental and regulatory jurisdictions across the U.S. as a whole.

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Industry Overview – Healthcare in the USHealthcare in the US is currently a $2.3 Trillion dollar industry. Per data from First Research (a D&B Company), the sector includes about 6,500 general hospitals; 75,000 nursing homes and residential care facilities; 13,000 diagnostic labs; 30,000 outpatient clinics; 220,000 doctor offices; and 150,000 family and social services providers. While many aspects of the US Healthcare sector are in transition, including regulatory and insurance reforms, one thing is certain. Healthcare is expanding in this country, and it is likely to continue that expansion at a rate of 6 – 7% per year from now through 2025. Private healthcare costs, the per-person per year expenditures, are also growing. One dynamic driving this growth is the aging US population. The baby boomer generation has affected every segment of the US economy as it has grown, and healthcare is no different. The first baby boomers officially started reaching retirement age back in 2011, and that long term trend will drive healthcare expenditures for the next twenty years.

What does this mean for your organization? Chances are it means that you will see increasing demand for financial services relating to this sector of our economy. From financing medical providers and related services to helping individual consumers manage their own healthcare spending, your organization will see new opportunities for years to come.

Through the use of the BusinessManager system, you will be able to meet at least one of these market needs, by providing accounts receivable solutions to medical providers and medical service facilities that depend on insurance company payments to drive their cash flow. While AR turn rates in the healthcare sector average around 50 – 60 days, they can be as long as 150 days. Payments coming from both private insurance carriers and from government programs can be delayed, causing the need for short term working capital financing – just as with other industries you have seen with BusinessManager.

The remainder of this booklet will guide you toward success in using BusinessManager to fund medical providers in your market. While this benefits both the provider and your organization, it can also lead to meaningful and measurable cross selling opportunities from equipment financing and leasing, to cash management services for the practitioners and their families.

BusinessManager as a Cash Flow Solution in this SectorYou have come to know BusinessManager as a tool to fund many different industries. After all, our client banks have now funded over $70 Billion dollars in invoices since it all started in late 1990. Now BusinessManager, with some process and documentation modifications, can be used to fund businesses in the healthcare sector, specifically businesses that rely on payments from private insurance carriers or government payers such as Medicare.

In order to accommodate funding in this sector, we have partnered with Tetris Consulting, Inc. (“Tetris Consulting”) to help with development of interfaces into your client’s patient accounting system, to help analyze data as you fund newly generated claims and to provide ad hoc reporting capability at the claim level. We have also modified our internal processes as well as the samples of documentation you would use with your client. Through these changes, the door has now been opened to funding healthcare relationships with BusinessManager. After all, these businesses need cash just as much as those in any other industry. In order to facilitate growth, you can now offer the program to your clients and to prospects in your market. Some examples of healthcare businesses you may encounter include:

■ Home healthcare agencies and medical staffing services

■ Durable medical and home medical equipment suppliers

■ Ambulance and air ambulance services

■ Physical therapy services

■ IV infusion clinics

■ Pharmacy services

■ Surgery centers and hospitals

■ Clinics and physician groups

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In general, the program is not recommended for individual physician practices. This is due to the size of their receivable base and due to the patient accounting systems you are likely to encounter with smaller practices. Additionally, it is not recommended for use with dental practices due to the nature of insurance use in that industry and the fact that so much of the service involves elective procedure.

Selling BusinessManager in the Healthcare IndustryWhen marketing to this industry sector, you can expect the same level of support you receive from your Business Development Manager in other industries. ProfitStars will also be communicating regularly with our sales representatives to let them know what is going on in this market through our own research. Through list management processes, mailing campaigns and direct calling efforts, our goal is to help you market BusinessManager to providers in your area and to facilitate the same discussions and sales presentations we do with more traditional businesses.

The BusinessManager sales process will be similar for the healthcare sector. The key players in the business will vary, however, depending on whether you are calling on a medical clinic, a facility such as a community hospital, or other types of healthcare businesses such as pharmacies, home healthcare agencies or EMT services. Bottom line: It will be a process of identifying any business needs and then finding a way to meet those needs.

Healthcare providers often need enhanced cash flow to accommodate growth. They may need to add staff and also may face increasing variable expenses as growth rates increase. In addition, they may be looking to you to help them outside of BusinessManager with equipment financing, owner occupied real estate, cash management and other bank services. Our hope is that BusinessManager can serve as the catalyst for opening those discussions.

Documentation of Your BusinessManager Healthcare RelationshipsWhile the sales process for healthcare is similar to other industries, the process of documentation is different. ProfitStars offers a sample BusinessManager Agreement, specifically for the healthcare market, and it addresses the issue of HIPAA and government program receivables; both items that are different than the standard BusinessManager Agreement. Please reference Attachment A to see a sample copy of this document. As in the case of the standard BusinessManager Agreement, your local counsel should review this document and make any changes they see fit for your specific circumstances.

In general, your documentation package will be the same as with other BusinessManager relationships. In place of the BusinessManager Agreement, you will be using the BusinessManager Agreement with Healthcare Providers. That agreement also contains a Business Associate Agreement, which is generally required by HIPAA. The other key difference is the language that you will use in your UCC Financing Statement. In addition to your standard lien and proceeds interest in accounts receivable, your filing would typically reference a specific lien against “Healthcare Insurance Receivables.” This is due to the fact that this type of receivable was specifically defined in the most recent revisions to Article 9 of the Uniform Commercial Code. Your local counsel can guide you as to specific language for the filing, based on your State’s variations. As with standard BusinessManager accounts, your counsel may also advise you to include your reserve account in the UCC filing language, since it is serving as cash collateral.

If the bank is taking a blanket lien or any other collateral to secure the provider’s repurchase obligation, an appropriate additional security agreement and appropriate additional language on the financing statement would be necessary. Please seek local counsel to assist you with regard to additional financing documents or security agreements that you may need.

HIPAA ComplianceThe primary purpose of HIPAA (Health Insurance Portability and Accountability Act of 1996) is to protect private healthcare data. This legislation calls for medical providers to take the necessary steps to protect data they maintain. It also calls for providers of medical services to assure the security of data that may be used by other associated businesses. With that goal in mind, the provider would execute a Business Associate Agreement with any companies that may need access to their private healthcare data for legitimate business purposes.

In the case of BusinessManager, there are two specific times where a bank employee may have access to private healthcare data. The first comes during the receipt of EOB’s (Explanation of Benefit Statements) or Remittance Advices

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that accompany payments by insurance companies into the lock box. These EOB’s or Remittance Advices may contain patient names and other identifying information. The second time comes when your organization requests specific claim level reports from Tetris Consulting for monitoring purposes. For these reasons, you will execute a Business Associate Agreement with the medical provider. A sample Business Associate Agreement (“BAA”) has been included as an attachment to the BusinessManager Agreement for Healthcare Providers. Please note, this BAA is being provided as an example only and should be used as a guide but approved by your local counsel.

In addition, Tetris Consulting will execute a Business Associate Agreement with each medical provider. Further information regarding Tetris Consulting and its approach to HIPAA has been added as Attachment B to this document.

Government Insurance Programs In order to accommodate the financing of government Insurance Program receivables such as Medicare and Medicaid, your organization must modify its typical documentation. Some key issues to note are as follows:

1. The financing institution may not purchase the receivables from government programs such as Medicare. For this reason, the BusinessManager Agreement contains specific language defining the scope of the bank’s involvement with government program receivables. The bank may, however, take a security interest in the proceeds from the government program receivables.

2. Each medical provider must have a PO Box and/or a specific ACH address to accommodate payments relating to their book of business. The proceeds from government program receivables and non-government program receivables may not be comingled by the bank. The payment must be directed to the named provider, then the provider may grant the bank a power of attorney to facilitate transfer of funds from that address, but the bank does not have ultimate control of the government program receivables deposit account. This is different than the typical approach of having one PO Box for all of your BusinessManager clients.

3. The Agreement between the bank and the provider should contain language that waives offset rights to the provider’s accounts. Offset occurs when a payer effectively realizes a credit balance against claims that are currently submitted. In this case, Medicare or Medicaid exercises its right to offset payments due the provider against the credit balance. By waiving its “rights to offset”, the bank is acknowledging that it has no recourse against the payer for payment of claims that have been previously financed.

Depending on your own specific circumstances, your local counsel can advise you as to any necessary steps you would take to assure your position in regards to government program receivables.

Working with Tetris ConsultingIn order to facilitate the funding of healthcare claims in the most effective manner; ProfitStars has developed a relationship with Tetris Consulting, a third party contractor. Detailed background information regarding Tetris is included in Attachment B. Tetris will complete three primary tasks in the implementation and ongoing management of the BusinessManager healthcare relationship:

1. Tetris develops a custom interface that allows daily claim level detail to be extracted from the patient accounting system being used by the medical provider. This also includes information regarding the posting of payments to existing claims, as well as adjustments.

2. Tetris analyzes the medical claims and determines the historical reimbursement rates the provider has been experiencing for each individual insurance payer. That information is then used to determine the net value of claims from that payer – so the bank has a strong indication of true account value and how much to fund on each claim.

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3. Tetris pushes daily information to BusinessManager Gold. This includes new claim totals and payment information. While BusinessManager stores this information only in a batch format and the bank funds using a daily batch method, the provider and the bank are able to request claim level detail from Tetris as needed for the purposes of account monitoring. Tetris will also be providing your organization with monthly information as to the average rolling four month reimbursements rates by payer class, so you will have a strong idea as to the performance of each payer.

Two workflow diagrams are included as Attachments C and D to this document. They serve to provide a better view of the actual process of initial implementation and ongoing daily management of workflow for each of you healthcare accounts.

Lockbox Usage and ACH PaymentsAs mentioned previously, your organization will want to create a separate PO Box and ACH account for receipt of payments from each healthcare provider. Payments are typically accompanied by the Explanation of Benefit (EOB) that describes which claims are being paid. Through the process described in the attached workflow diagram, you will sweep the deposit amount into a cash account (formerly termed Suspense account) and forward the EOB to the provider for proper posting of payments and adjustments into their patient accounting system. Once posted, that payment detail is picked up in the Tetris Consulting interface and you will receive instruction as to which batch to make the appropriate adjustments.

In addition to being a legal requirement when funding government program accounts, the use of a separate lock box and ACH account simply makes the most sense. It is much easier to keep information separate if this manner of processing is used. It segments the healthcare account from your other BusinessManager relationships and makes record keeping much easier.

ProfitStars Processing ServicesProfitStars provides batch posting and payment processing services for healthcare accounts. Please see Attachment E for a detailed accounting of the funding process as a well as the daily process for handling of payments. In general, to accommodate both processes, ProfitStars is receiving daily FTP Server files and entering the summary data into BusinessManager Gold. With this in place, your organization knows what general ledger adjustments to make each business day. A month end process for reconciling the cash and reserve accounts is also included in the attachment.

ProfitStars Account Verification ServicesProfitStars also provides AVS services for healthcare accounts. By contacting payers directly, our team is often able to uncover potential delays in the claims resolution process such as errors in billing. This adds an additional layer of protection and monitoring capability to the process, benefiting both you and your client. In most cases, the sampling size for verification is the same as that of other industries, as is the cost.

Tracking the Performance of Your Healthcare-related Business ClientsThe most difficult aspect of financing accounts receivable in the healthcare sector is the valuation of the claims themselves. Each insurance payer reimburses the provider at contracted rates, which change over time. ProfitStars has worked with Tetris Consulting to develop the funding processes described in this guide. By evaluating each payer’s reimbursement history in advance of funding, and tracking changes over time, the goal is to provide your organization with as accurate a reflection of net claim value as possible.

Once the relationship is funding, you will continue to monitor the account in a manner similar to your other BusinessManager clients. Reserve reconciliation, repurchases and report views will still be a part of your process. The key difference will be the level of reporting. Your BusinessManager Gold reports will reflect the performance of individual payers at a daily batch level rather than at the level of individual claims. You will, however, be able to receive claim level detail from Tetris Consulting as needed for exception management of the account.

Thanks for taking the time to review this guide to healthcare for BusinessManager. We wish you success in your marketing and financing efforts, and hope that it leads to strong and profitable long term relationships.

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Marketing Plans and ResourcesAs your organization prepares to approach Healthcare-related businesses, we recommend that you work with your ProfitStars’ Business Development Manager to draft a marketing plan. This plan may include an updated industry sector report as well as development of a prospect list identifying specific businesses based on their SIC or NAICS codes in a specific territory.

Our hope is that calls made with your ProfitStars BDM will lead to multiple cross-sales opportunities. In addition to short term working capital products such as BusinessManager, these businesses are likely to need deposit and cash management services, credit card services, equipment financing and vehicle financing. Several of our LendingNetwork® partners also provide financing in this sector for any specific requests that your organization chooses not to pursue.

The ProfitStars team works to make sure you have access to marketing support and materials for the BusinessManager program.

We recommend several best practices to communicate the BusinessManager message and drive leads to your bank:

■ Print advertising – newspaper, business journals, etc.

■ Radio

■ Direct mail, postcards

■ Website content or landing page

■ In-branch collateral

■ Internet

■ Social media

■ Blogs

■ Networking Resources

– Chamber and SBDC events

– Association Meetings for targeted industries, if applicable

– Bank to host Seminars/Lunch & Learns for targeted industries and CPAs

In addition to general industry related documents that can be used for education and prospecting, we have niche industry pieces available for your use, including advertisements for the Healthcare sector. Two recent examples are shown on the following pages. We encourage you to work with your Business Development Manager to develop a strategy to contact prospects in your market.

The BusinessManager for Healthcare flier is perfect for handing out at industry events, association meetings, hand out in-branch, or as a leave behind after speaking with healthcare-related business owners.

What if you could bridge the gapbetween the services you provide today and the reimbursements that won’t come for weeks (or months)? With BusinessManager for healthcare, now you can get cash for the services you’ve billed for but are still awaiting payment on from patients or their insurers.

Through this unique program, your business can receive cash deposited into your operating account every time you submit an invoice – giving you quick access to the money you’re owed. So whether you receive payment in 30, 60, 90 days, or longer, you’ll still have the cash flow to:

Add staff to keep up with growing demands. Purchase new equipment or technology. Improve the patient experience. Take advantage of new growth opportunities in your industry.

Perhaps best of all, BusinessManager works through your relationship with (Your FI’s name), unlike factoring that requires a relationship with a third-party company.

Yes, it really can be that simple.

Gain Working Capital While Awaiting Patient or Insurance Company Payments

YOUR LOGO HERE

Join the tens of thousands of businesses that have made BusinessManager America’s #1 small-business lending alternative.

Contact us today at (financial institution’s phone #).

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BusinessManager for Healthcare postcard speaks directly to the business’s pain points, and is a perfect tool to generate leads. Use in conjunction with our Prospecting List or 10-day Mailing Campaign below. Additional Marketing Support services that ProfitStars offers includes:

■ Prospecting Lists:

– The most successful BusinessManager industries and size by sales.

– These are typically generated for the target market including city, county, and/or radius to nearest branch locations.

■ Bank Prioritized List:

– Bank provides a list of current Commercial Customers (borrowers and depositors).

– Results analyzed to identify potential BusinessManager prospects who are currently Bank Customers.

■ UCC Data:

– The secured party (bank) loans to borrower for collateral that doesn’t have a deed or a title. Filings are done at the Secretary of State. Each Secretary of State decides what is released to compliers.

■ 10-Day Letter Campaigns:

– Day 10 - Introductory letters are mailed to prospects

• We have pre-scripted letters or you can customize to your specifications.

• Letters are mailed from our Brentwood, TN facility on your letterhead.

– Day 07 - Appointment-setting phone calls are made

• Prospect data is provided to your BDM in the form of a Client Data Worksheet that can be shared with the appropriate bank officer.

– Day 01 – Business Development Day

• Appointments take place

Need website content? Use BusinessManager.com

Business-facing website with video testimonial, benefits, how BusinessManager works and industry information.

Thanks for taking the time to review this information. For more detail, we encourage you to set up a meeting with your Business Development Manager or one of our Risk Managers.

HEALTHCARE | BusinessManager

BusinessManager®

& (FI Name)

Gain Working Capital While Awaiting Patient or Insurance Company PaymentsWhat if you could bridge the gap between the services you provide today and the reimbursements that won’t come for weeks (or months)? With BusinessManager for healthcare, now you can get cash for the services you’ve billed for but are still awaiting payment on from patients or their insurers.

Through this unique program, your business can receive cash deposited into your operating account every time you submit an invoice – giving you quick access to the money you’re owed. So whether you receive payment in 30, 60, 90 days, or longer, you’ll still have the cash flow to add staff to keep up with growing demands, purchase new equipment or technology to improve the patient experience, and take advantage of new growth opportunities in your industry. It really is that simple.

Join the tens of thousands of businesses that have made BusinessManager America’s #1 small-business lending

alternative. Contact us today at (phone #).

YOUR LOGO HERE

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Attachment ASample Documentation

BUSINESSMANAGER® FUNDING AGREEMENT

WITH HEALTH CARE PROVIDERS

TO: ________________________________ FROM: __________________________________

________________________________ __________________________________

________________________________ __________________________________

(the “Bank”) (the “Provider”)

This Agreement is entered into between the Bank and the Provider to govern the sale of Receivables, with the exception of Excluded Receivables, as defined below, by the Provider to the Bank. The parties agree to the following terms:

I. DEFINITIONS

The following terms shall have the following meanings when used in this Agreement:

“BusinessManager Funding Program” is an Internet based accounts receivables financing program which includes access by Provider to the BusinessManager System contracted for by the bank.

“BusinessManager Electronic Data Interchange (“EDI”) Processing Agreement” shall mean the document used to develop the interface and set up the Provider’s account on the BusinessManager System.

“BusinessManager Line” means the amount of Purchased Receivables that at any given time have been sold to the Bank by the Provider.

“BusinessManager Line Limit” means the maximum amount of Purchased Receivables that the Bank, at its discretion, is willing to finance at any given time.

“BusinessManager® System” means the Bank’s contracted Internet-based software application that is designed to assist the Bank in managing the BusinessManager Funding Program.

“Claim” means an account of a Patient of Provider under which Medical Services have been provided.

“Eligible Receivable” means:

(i) a bona fide contractual or other obligation owed to Provider by an Insurer or other Obligor, as defined below, acceptable to Bank; and

(ii) that all information related to the account giving rise to such Receivable, as defined below, has been provided to Bank; and

(iii) is not an Excluded Receivable; and

(iv) such Receivable has been selected by Provider and approved by Bank as a Claim which can be purchased by Bank; and

(v) is a Receivable for which the Provider has secured all authority and rights to bill for; and

(vi) is a current Receivable not declared to be in default or un-collectable by Provider;

(vii) the Receivables are, and will be at the time of their creation, bona fide and existing obligations arising out of Provider’s performance of Medical Services free and clear of all security interests, liens and claims whatsoever (except in favor of Bank) of third parties, and the documentation under which the Receivables are payable authorizes the payee thereof to charge, collect and receive interest at the rate provided in such documentation; or

(viii) Proceeds from a Government Program Receivable that may be legally assigned or sold by Provider.

“Excluded Receivables” mean the following types of Receivables, which are not eligible for sale by Provider to Bank:

(i) Receivables evidenced by promissory notes or other instruments or chattel paper;

(ii) Receivables that represent amounts due from affiliates or employees of Provider unless the applicable Obligor is approved by Bank in Bank’s sole discretion;

(iii) Receivables subject to a lien other than a lien in favor of Bank;

(iv) Receivables that represent amounts due from a payer located outside the United States of America;

(v) Receivables payable in any currency other than United States dollars;

(vi) Receivables that represent amounts due from an Obligor as to whom a Bankruptcy Event has occurred or is deemed likely to occur by Bank;

(vii) Receivables that Provider has declared to be in default; and

(viii) Receivables that Provider has determined will not be collected due to the application of a credit adjustment, corrected entry in its accounting system, or any other reason that the Receivable or portion of the receivable will not be collected.

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“Net Face Amount” of a Receivable means, on any date, the outstanding balance of such Receivable (after taking into account, without duplication, all payments, returns, credits or allowances of any nature at any time issued, owing, granted or outstanding), plus any other charges imposed in connection with such Receivable.

“Government Programs” mean Medicare, Medicaid, Title V Maternal and Child Health Services Block Grant Program, Title XX Social Services Block Grant Program, CHAMPUS/TRICARE and CHAMPVA and any other existing or future state or federal governmental program that restricts the assignment of receivables as related to the provision of health care services.

“Government Programs Receivables” means any receivable generated by existing or future Government Programs, and any other existing or future state or federal governmental program that restricts the assignment of receivables as related to the provision of health care services.

“Insurer” means an insurance company, third party administrator, managed care organization or self-funded health benefit plan contractually obligated to indemnify or make payment on behalf of Patients with respect to Medical Services.

“Medical Services” means medical and health care services or products sold, leased or rented to a Patient and performed by or on behalf of Provider.

“Net Amount” of a Receivable means the Net Face Amount of that Receivable less the Service Charge.

“Obligations” means all Obligations of Provider to Bank, whether pursuant to the Agreement, under any note, contract, guaranty, accommodations or otherwise, however and whenever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing or due.

“Obligors” means all parties responsible for the payment of Claims, whether Patient, Insurer, Government Program or otherwise.

“Patient” means any person receiving Medical Services from Provider and all persons legally liable to pay Provider for such Medical Services other than Insurers or Government Programs.

“Proceeds” means (i) whatever is acquired upon the sale, lease, license, exchange or other disposition of collateral, (ii) whatever is collected on, or distributed on account of, collateral or (iii) rights rising out of collateral.

“Processing Services” means the implementation, operation and maintenance, by Processor and Bank of an interface between Provider’s accounting system and the Bank’s BusinessManager System, as well as making timely account postings and compiling reports and records.

“Processor” means the Bank’s vendor responsible for providing Processing Services to Bank.

“Purchased Receivables” means all Eligible Receivables purchased under this Agreement; provided, that Provider shall at all times retain the right to receive payment of any Proceeds from Government Programs.

“Receivables” means all accounts, instruments, contract rights, documents, and general intangibles arising from the Provider’s rendering of Medical Services, the Proceeds thereof, and all security and guaranties, presently or in the future.

“Repurchase Obligation” means the liability of Provider to Bank under this Agreement, in an amount equal on any date to the Net Face Amount of Receivables on that date, plus attorneys’ fees (if incurred). Upon a Default or termination or other event as described in Section 3.1 under this Agreement, the Repurchase Obligation shall also include the amount of all indemnities and other obligations arising under this Agreement.

“Service Charge” means a discount equal to ____________ (______%) of the Net Face Amount of each Eligible Receivable purchased or assigned by/to the Bank. The Service Charge may be periodically reviewed and adjusted, based on activity levels, credit quality and current economic conditions. Provider acknowledges that the Service Charge is a discount based on the value of the Purchased Receivables. The Service Charge is, in the view of the parties, a reasonable and customary fair market value discount. The parties also agree that the Service Charge is not a finance charge.

“Bankruptcy Event” means, with respect to any person, business or corporation, when:

(i) a receiver, custodian, liquidator or trustee of any of its assets is appointed by court order;

(ii) an order for relief under any bankruptcy, reorganization or insolvency law is entered after the filing of a petition by or against it;

(iii) any of its assets are sequestered or attached by court order;

(iv) a petition to reorganize or rehabilitate it under any bankruptcy, reorganization or insolvency laws is filed against it and is not dismissed within thirty (30) days of the filing thereof;

(v) such person requests reorganization, arrangement, composition, readjustment, dissolution, rehabilitation, liquidation or similar relief under any provision of any present or future law or consents to the filing of any petition against it under such law; or

(vi) such person makes a general assignment for the benefit of its creditors, admits in writing its inability to pay its debts as they become due, fails to pay its debts as they become due, consents to the appointment of a receiver, trustee or liquidator of all or any part of its assets, or otherwise commits any similar act.

II. SALE; PURCHASE PRICE; BILLING; RESERVE; INTERFACE; HARDWARE/SOFTWARE REQUIREMENTS

2.1 Assignment and Sale. Provider assigns and sells to Bank as absolute owner, subject to the conditions as explained below, Provider’s entire interest in all of its currently outstanding Eligible Receivables as described on attached Exhibit A, as well as future Eligible Receivables arising during the term of the Agreement following the execution of this Agreement; provided, however, that the total Net Face Amount of outstanding Purchased Receivables shall never exceed the BusinessManager Line Limit of $________ unless agreed to by Bank at the Bank’s discretion. From time to time, the Bank may need to exceed this amount to accommodate the Provider, in so doing the Bank does not waive any such rights

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or any rights granted under this Agreement. The Provider and the Bank agree that the transaction intended by this Agreement is an account purchase transaction, and that the accounts are being purchased by the Bank from the Provider at a discount. The Repurchase Obligation shall be payable by the Provider to the Bank on demand following a default or termination or other event as described in Section 3.1 under this Agreement. The Provider represents and warrants that the purchase and sale of Receivables vests absolute right, title and ownership of such Purchased Receivables, together with all incidents and benefits including servicing rights, by the Bank, and Provider acknowledges that it has no right to reacquire, redeem or otherwise obtain title to such Purchased Receivables or any Proceeds except as provided herein. Notwithstanding the foregoing, Government Program Receivables are not purchased rather the Proceeds of Government Program Receivables are purchased and Provider grants a security interest in those Government Program Receivables pursuant to Section 3.4 below to secure Bank’s purchase of the Proceeds of Government Program Receivables.

2.2 Purchase Price. The price of the Purchased Receivables shall be equal to the Net Amount, which, subject to the reserve requirements of Section 2.5 below, shall be payable by credit to Provider’s primary account with Bank on or before three banking days after delivery to Bank of the data necessary for Bank to verify such Purchased Receivable and the applicable Net Amount. The purchase price for the Purchased Receivables that are Proceeds of Government Program Receivables shall be determined hereunder as if the Government Program Receivables had been purchased. Provider and Bank agree and acknowledge that the purchase price of the Purchased Receivables reasonably reflects fair market value. The BusinessManager System will generate a transaction report(s) for the Bank and Provider that reflects the dollar amount of Claims that the Bank may purchase. Notwithstanding the foregoing, the Provider acknowledges that no funds are available until deposited by the Bank into the Provider’s primary account.

2.3 Documentation. Provider will provide Bank with such documents pertaining to the Eligible Receivables and their transfer, and proof of rendering of Medical Services, as Bank may reasonably require. As to the Purchased Receivables described in Exhibit A, the payment of the Purchase Price by Bank as described in Section 2.2 above shall be conclusive evidence of the assignment and sale, and, if Bank so requires, any Claims sent after that will indicate the related Purchased Receivables have been assigned and sold and are payable to Provider, in trust for the Bank only, with the exception of Government Program Receivables which must be sent to the Provider according to federal and state guidelines. Provider will give to Bank and its Processors any information necessary to verify the eligibility and validity of the receivables sold to the Bank. Provider will grant the Bank or its Processor the right to verify the eligibility and validity of the receivables sold to the Bank by contacting any Obligor. Further, Provider will instruct Obligors to provide any assistance to Bank and its Processor to conduct this process.

2.4 Agency Relationship, Billing and Account Verification. Bank hereby appoints Provider to act as its agent for billing and processing accounts under this Agreement and Provider hereby accepts such appointment. Provider agrees to accurately post all transactions including without limitations, charge, payment, adjustment and correcting entries into its patient accounting

system and keep the patient accounting system updated at all times. Provider agrees to submit Claims to Obligors and to send out monthly statements or invoices to account debtors summarizing their account activity during the preceding billing period, unless otherwise agreed to by the parties. Provider agrees to instruct all Obligors to make payments to the Provider’s designated lockbox(s) that shall be maintained by the Provider at the Bank or such other location as the Bank may direct. Bank may require that the Provider establish more than one lockbox or other accounts with Bank for the purpose of collecting such payments. Provider agrees to receive remittances at the Provider’s designated lockbox(s) and hold said remittances in trust for Bank. With respect to any Claim that represents an obligation under a Government Program, Provider shall instruct Government Programs to make payment to the Provider. Provider shall retain the right to modify instructions pertaining to any such lockbox or other account(s) only as they pertain to Claims under a Government Program Regardless of how remittances are acquired, the Provider will forward any and all remittances received to the Bank by the next banking day. Provider agrees to comply with all applicable state and federal laws, rules and regulations in connection with performing billing services, including without limitation, Fair Debt Collection Practices Acts and Truth in Lending regulations, HIPAA and Regulation Z. Provider will indemnify and hold Bank and its Processor harmless from any and all actions arising as a result of noncompliance with such regulations. After receiving payment and remittance information, Bank will forward the remittance information to Provider. Provider will then enter this information into their accounting system within twenty-four hours. All payments received from or for the account of an Obligor will be applied to the obligations of that Obligor (except in the event of a default, at which time the Bank at its discretion may apply any payments to the outstanding balance of the BusinessManager Line). Provider will then transmit or make available necessary Claim information to Bank and its Processor. Bank shall reconcile the payments received with the corresponding invoices or on a balance forward basis for each patient’s account. Payment will be deemed made when received and reconciled by the Bank. Both parties agree that the Bank is not a debt collector. All variations, modifications or extensions of indebtedness on Purchased Receivables sold to the Bank will be made only by the Bank. Both parties agree that nothing contained in this Section will serve to re-characterize this transaction into a loan, and that the agency relationship between the parties shall not extend beyond the scope of providing billing and account verification services. Provider acknowledges that the BusinessManager Program is not intended to be a tool to manage the accounts receivable. The Provider acknowledges that it will use its own accounting system to manage the billing and collections of the Purchased Receivables.

2.5 Reserve. Bank may retain a portion of the sums payable to Provider under the Agreement (herein, the “Reserve”), the amount of which Bank may adjust from time to time in its reasonable discretion (including temporary adjustments to account for shortfalls or excesses in the Reserve Account), to provide for satisfaction of the Provider’s Repurchase Obligation and to cover fees due from Provider to the extent such fees are not otherwise paid. These sums will be placed in a deposit account (the “Reserve Account”) in Provider’s name established and controlled solely by Bank. The initial amount of the Reserve will be equal to ______ (____%) of the Face Amount of the Purchased Receivables listed on Exhibit A.

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After that, subject to the Bank’s right to adjust the Reserve as set out above, the amount of the Reserve will be adjusted for each Claim based on the primary payer’s historical performance. Upon a Default or termination or any event as described in Section 3.1, under this Agreement, the Reserve and any other accounts established under this Agreement may also be applied against any indemnities or other obligations of Provider under this Agreement. Notwithstanding any provision this Agreement, Bank waives any rights it may have to set off as against Government Program Receivables.

2.6 Software Interface. Provider will provide sufficient ¬specifications to Bank to enable Bank to build an electronic data interface compatible with Provider’s patient accounting system so that Bank and its Processor can receive data from Provider. The parties acknowledge and accept that the development of the interface system is based on information given by the Provider during the application and development processes of the BusinessManager Funding Program as outlined in the BusinessManager EDI Processing Agreement which is attached as Exhibit B. The Provider acknowledges that inaccuracies and or omissions in the information provided for the interface specifications will affect the performance of the BusinessManager Funding Program. Neither Bank nor its Processor will be liable for any lack of performance in the System due to inaccuracies and or omission of information, regarding the Interface specifications. The Provider will be given the opportunity to review the specifications that will be used to develop the interface. The Bank and its Processor will make a reasonable effort to ensure that the information being sent by the Provider is interpreted accurately and timely. In the event that a processing error occurs or that a correction is required of the interface, it is understood by all parties that:

(a) the Bank and its Processor are only responsible for correcting the errors that it made to the extent that the remedy is reasonable and that no further liability exists;

(b) any required correction to the interface or its operation that is the responsibility of the Bank or its Processor will be corrected, to the extent that the remedy is reasonable, at the Bank’s expense;

(c) any correction to the interface or its operation that is due to incorrect and or omissions provided for the interface specifications given to the Bank or its Processor by the Provider will be corrected, to the extent that the remedy is reasonable, at the Provider’s expense;

(d) any corrections to the interface or its operation are billable by the Bank or its Processor at $200.00 per hour and;

(e) the Bank and its Processor will make the determination of who is at fault regarding any required corrections to the interface.

2.7 Hardware and Software Requirements. Provider must install and maintain at its own expense a computer and telecommunications system, which meets the minimum technical specifications, and requirements for such system as set forth in writing by in Exhibit C. The minimum requirements may be revised by the Bank at any time, but shall reflect industry standards for access to Internet browsing. The Provider shall be given at least ninety (90) days for making any updates.

2.8 Security. The BusinessManager System is password protected through passwords issued to the Provider. Provider shall use all efforts to maintain the security of the System including its passwords. Provider shall indemnify and hold harmless the Bank and its Processor for any misuse of the System due to a compromise of the security of the System, including but not limited to loss of passwords.

III. REPURCHASE OF RECEIVABLES; BILLING DISPUTES/ERRORS; SECURITY INTEREST

3.1 Required Repurchase. With respect to any Purchased Receivables initially purchased by Bank and shown on Exhibit A, Bank may reassign and charge back to Provider all or any portion of such receivables from any particular Obligor or Patient if

(a) payment due on one or more of such Purchased Receivables remains unpaid following ______ days after purchase;

(b) at any time that the Provider makes an adjustment to its accounting system or has knowledge that such receivables will not be collected due to write-offs, adjustments, correcting entries, courtesy adjustments or any other similar event;

(c) at any time that the Bank, within its reasonable discretion, believes that such receivable will not be collected.

With respect to any Purchased Receivables purchased after Bank’s initial purchase, Bank may reassign and charge back to Provider all or any portion of such Receivables from any particular Obligor or Patient if:

(a) payment due on one or more of such Purchased Receivables remains unpaid following ______ days after purchase;

(b) at any time that the Provider makes an adjustment to its accounting system or has knowledge that such receivables will not be collected due to write-offs, adjustments, correcting entries, courtesy adjustments or any other similar event;

(c) at any time that the Bank, within its reasonable discretion, believes that such receivable will not be collected.

For purposes of this Agreement, the aging status of Purchased Receivables as shown on the aging of Receivables produced or generated by Bank will be deemed conclusive (absent manifest error) in determining which Receivables may be reassigned by Bank to Provider. Regardless of when purchased, Bank may reassign and charge back to Provider all or any portion of Purchased Receivables from any particular Obligor or Patient if such Obligor or Patient is bankrupt or insolvent or if any dispute arises with an Obligor or Patient regarding such Receivables (including, without limitation, any alleged deduction, defense, offset or counterclaim). Bank may reassign and charge back to Provider all outstanding Purchased Receivables:

(a) upon a Default, or

(b) upon the termination of this Agreement.

Any decision by Bank to reassign less than the maximum amount permitted shall not be deemed a waiver of the Bank’s rights of reassignment to the maximum extent permitted.

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3.2 Effect of Repurchase. Upon a reassignment of one or more Purchased Receivables, the Provider shall be liable to Bank for payment of the Repurchase Obligation with respect to the reassigned Receivables. Without notice or demand on Provider, Bank may debit that amount (and any amount necessary to bring the Reserve to the level required by Bank in its sole and reasonable discretion) against the Provider’s Reserve Account or any other deposit account of Provider with Bank. In the event such accounts contain insufficient funds for the Bank’s debit or Bank elects not to make such debit, Provider agrees to pay such deficiency on demand. Upon a reassignment of Receivables, Bank shall not have any further responsibility with respect to the collection of the Receivable so reassigned, except as Bank expressly agrees to in writing.

3.3 Disputed Amounts/Billing Errors. Provider shall bear the risk of any disputes by a Patient, Insurer or Government Program as to the amount of a billing, except with respect to disputes resulting from a clerical error on the part of Bank, as to which Bank shall have the responsibility to assure proper correction of the Patient’s account. Provider shall promptly resolve all disputes other than those involving a Bank error. Provider agrees to indemnify and hold Bank and its affiliates harmless against any and all claims, judgments and damages arising from the actions or inactions of Provider in the conduct of its affairs.

3.4 Security Interest. The Provider hereby grants the Bank a security interest in all of its present and future accounts including health care insurance receivables including, without limitation, Government Programs Receivables, instruments, contract rights, chattel paper, documents and general intangibles (in each case as defined in the Uniform Commercial Code in effect for the State whose law governs this Agreement) and any Proceeds from those, and all returned, repossessed, and reclaimed goods, and related books and records, computer “back up” media and records, patient account information stored electronically or on paper, including, without limitation, demographic, health care insurance/payer, payment history, claims adjudication, and collections information to secure all of the Provider’s Obligations, (the “collateral”) and agrees to execute appropriate UCC-1 financing and other related statements. In addition, the Provider grants the Bank a security interest in the Reserve and in the Reserve Account to secure all of the Provider’s Obligations. The Provider agrees to execute such additional documents and take such further action as Bank believes necessary in order to perfect the security interests granted here and otherwise to effectuate the purposes of the Agreement. In the event that the Bank requires additional security for the Provider’s obligations under this Agreement and the Provider or other party executes additional security agreements, pledge agreements, guaranties and documents of similar import (collectively, the “Additional Security Documents”), terms used such as, but not limited to, “loans,” “indebtedness,” “secured obligations,” and “obligations,” shall be deemed to include the Repurchase Obligation as defined in this Agreement, and despite the provisions of the Additional Security Documents, the Repurchase Obligation secured by those shall not constitute a loan.

IV. REPRESENTATIONS AND WARRANTIES OF PROVIDER

Each of the representations and warranties made in the Agreement are true and correct as of the date of this Agreement. In addition, Provider represents, warrants and covenants as follows, all of which

will be true and correct as of the date of this Agreement and as of each date that a Receivable is purchased:

(a) each Purchased Receivable is an Eligible Receivable as defined in Section 1(d);

(b) Provider’s sale of any Receivables to Bank will not violate any federal, state or local law, rule or regulation, court or other governmental order or decree or terms of any contract;

(c) Provider’s place of business, or Provider’s chief executive office if Provider has more than one place of business, is located at the address of Provider set forth in the Agreement, and Provider keeps its books and records regarding its Receivables at that address;

(d) Provider has all appropriate licenses, approvals or otherwise satisfies any and all conditions imposed for the provision of all of the services giving rise to each Claim processed;

(e) Provider is not, nor will the execution, delivery, or performance of this Agreement cause Provider to be, in default or in violation (nor has any event or condition occurred which, with notice or lapse of time or both, would constitute a default or violation) under:

(i) its formation documents or bylaws, or

(ii) any credit or loan agreement, indenture, lease, franchise, license, mortgage or deed of trust, or other material agreement, undertaking or arrangement (written or oral) to which it is a party or by which it may be bound;

(f) the Receivables are, and will be at the time of their creation, bona fide and existing obligations arising out of Provider’s performance of Medical Services free and clear of all security interests, liens and claims whatsoever (except in favor of Bank) of third parties, and the documentation under which the Receivables are payable authorizes the payee thereof to charge, collect and receive interest at the rate provided in such documentation;

(g) no consent, approval or authorization of, registration with or declaration to any tribunal, person or entity, is required in connection with the execution and delivery of this Agreement or in connection with the performance by Provider of any covenant or agreement contained here;

(h) the collateral of Provider in which a security interest is granted in Section 3.4 hereof or any Additional Security Documents is not subject to any other security interest, lien or encumbrance whatsoever (except in favor of Bank) and Provider will not permit such collateral to become so encumbered without the Bank’s prior written consent;

(i) no Bankruptcy Event has occurred with respect to Provider and Provider is solvent;

(j) all Receivables and all documents and practices related thereto comply with all applicable federal and state laws;

(k) Provider has paid or provided for the payment of any taxes arising from the creation of the Receivables, and no Purchased Receivables are subject to any deduction, offset, defense or counterclaim; and

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(l) the transactions described in Section 2.1 hereof are account purchase transactions, and the Provider will reflect such transactions in its accounting books and records as absolute sales of Receivables to the Bank and will reimburse and indemnify the Bank for all loss, damage and expenses, including reasonable attorneys’ fees, incurred in defending the characterization, or as a result of the re-characterization, of such transactions.

(m) the information respecting Provider at the end of this Agreement is true and accurate

(n) all financial information forwarded to Bank and Processor is true, materially accurate, and not misleading by omission or otherwise

V. CONDITIONS; FINANCIAL STATEMENTS; RECORDS; CONFIDENTIALITY; RESPONSIBILITY

5.1 Conditions. Provider will deliver or cause to be delivered to Bank before Bank’s purchase of any Eligible Receivables:

(a) UCC-1 searches of Provider (including any d/b/a’s and trade names of Provider) in such jurisdictions as Bank shall require, which searches shall indicate that the assets of Provider are subject to no liens except those acceptable to Bank;

(b) appropriate corporate or partnership resolutions in form acceptable to Bank approving the transactions contemplated hereby; and

(c) such other documents, instruments or certificates as Bank shall request.

5.2 Financial Statements. Provider (and any guarantor(s) of Provider’s Obligations) shall promptly provide Bank with copies of such financial and operating statements relating to Provider or such guarantor(s) as Bank may request from time to time during the term of the Agreement.

5.3 Records. Provider shall at all times during the term of the Agreement maintain full and accurate books and records regarding its business in accordance with generally accepted accounting principles. Subject to any prohibitions under applicable law, such books and records, together with other financial and business information concerning Provider shall be available for inspection, audit, confirmation and copying by Bank or its agents during reasonable business hours throughout the term of the Agreement. Provider will make available to Bank upon demand, the Provider’s fee schedule and any contracts or agreements that the Provider has entered into with any Obligor.

5.4 Confidentiality. Bank agrees to enter into a “Business Associate Agreement” which is attached as Exhibit D. Not withstanding the aforementioned, strict confidentiality shall be maintained between Bank and Provider. Information about Provider’s Patients will not be released other than for the purpose of accepting or receiving information regarding Claims or performing the respective duties of each party. Bank shall hold in confidence and not release information about Medical Services extended to Provider’s Patients except as permitted under this Agreement or as required by law. Bank will also use reasonable good faith efforts to ensure that its assignees, agents and subcontractors maintain the same level of confidentiality.

5.5 Responsibility. The Provider will be solely responsible for the adequacy, completeness and accuracy of the data relating to the Receivables, its preparation in the form required and its transmission to the Bank, and will indemnify and hold the Bank and its Processor, contractors, and their respective agents and employees harmless from (and pay all reasonable attorneys’ fees with respect to) any claim or liability sustained from acting in reliance upon data furnished by the Provider. The Provider will verify the accuracy of the information transmitted and the proper application thereof, on a daily basis and notify the Bank immediately upon discovering any variance in the amounts or application of the information. The Bank and the Provider agree that the Bank is the owner of all Receivables purchased by the Bank, and that all activities of the Bank in connection with the collection of Receivables, generation of information, and processing of data, is for the account of the Bank’s own affairs; and that the information generated in connection therewith is the property of the Bank. The Provider will indemnify and hold the Bank, its Processor, its contractors, and their respective agents and employees harmless from (and pay all reasonable attorneys’ fees with respect to) any loss or claim involving breach of warranty or representation by the Provider and from any loss or claim by any Patient relating to goods and/or services giving rise to Receivables.

VI. POWER OF ATTORNEY

With respect to all Eligible Receivables, Provider appoints Bank as its attorney-in-fact to receive, open, and dispose of all mail addressed to the Provider regarding Receivables; to endorse the Provider’s name upon any lines, acceptances, checks, drafts, money orders, and other evidences of payment of Receivables that may come into the Bank’s possession, and to deposit or otherwise collect the same; and to do all other acts and things necessary to carry out the terms of this Agreement. This power, being coupled with an interest, is revocable by the Provider.

VII. DEFAULT

7.1 Events of Default. The following events constitute a default (a “Default”) under the terms of this Agreement:

(a) the Provider fails to pay the Repurchase Obligation or any other payment obligation of the Provider under this Agreement on demand or the Provider fails to pay any indebtedness of the Provider owed to the Bank pursuant to its terms;

(b) the Provider fails to give remittances on Receivables to the Bank in accordance with Section 2.4 hereof;

(c) except for the obligations described in Sections 7.1(a), and 7.1(b), the Provider fails to perform any obligation, covenant or liability in connection with this Agreement within ten (10) days after the date that written notice is given to the Provider of such failure to perform;

(d) any warranty, representation or statement whenever made by the Provider in connection with this Agreement proves to be false in any material respect when made, or the Provider fails to disclose to the Bank that any such warranty, representation or statement has become untrue in any material respect;

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(e) dissolution or termination of the Provider if the Provider is a corporation, partnership, or other entity, or if the Provider is an individual, the death of such individual;

(f) a bankruptcy event of the Provider;

(g) any proceeding for the dissolution or liquidation, settlement of claims against or winding up of the Provider’s affairs;

(h) the termination or withdrawal of any guaranty for the Provider’s Obligations;

(i) the Provider fails to pay when due any tax imposed on it or any tax lien is filed against the Provider or any of its assets;

(j) any judgment against the Provider that remains unpaid, or that has not been stayed on appeal, discharged, bonded or dismissed for a period of thirty (30) days;

(k) the Provider discontinues its business as a going concern;

(l) the Bank in good faith believes the prospect of the Provider’s payment or performance of its Obligations have been impaired;

(m) the Provider redirects government remittances to a location other than the Provider’s lockbox, maintained by the Bank, without giving the Bank prior written notice; or

(n) the Provider makes any changes in the fee schedule or remittances without proper notice to the Bank as outlined in Section 12 of this Agreement;

(o) the Provider fails post any and all payments and adjustments within twenty-four hours of receipt;

(p) the Provider fails to advance any and all remittances received to Bank within 1 business day of receipt;

(q) the Provider fails to correct any shortfall in the holding account established by the Bank on behalf of this Agreement within 5 (five) business days;

(r) the Provider fails to post all payments and adjustments into its accounting system prior to the Bank’s initial purchase of accounts receivable;

(s) the Receivables and amounts indicated in the Provider’s accounting system are not valid at the time of the initial purchase.

7.2 Effect of Default. Upon the occurrence of any Default, in addition to any rights the Bank has under this Agreement or applicable law, the Bank may immediately terminate this Agreement. Upon termination, all Obligations the Provider owes to the Bank will immediately become due and payable without notice or demand, and the Bank’s obligations to the Provider will cease. After the occurrence of Default, the Bank will have the right to withhold any further payments to the Provider, and none of the Bank’s rights or collateral will be adversely affected.

VIII. NON-LIABILITY OF BANK; RELEASE

Except for a breach by the Bank of this Agreement, the Provider hereby releases, discharges, and acquits the Bank, its officers, directors, employees, participants, Processor, successors and

assigns from any and all claims, demands, losses, and liability of any nature which the Provider ever had, now or hereafter can, shall or may have in connection with or arising out of the transactions intended by this Agreement or the documentation hereof. In addition to the provisions of this Section, Section 5.5 and Section 3.3, the Bank shall not be liable for any indirect, special or consequential damages, such as loss of anticipated revenues or other economic loss in connection with or arising out of any default in performance or other matter arising from this Agreement. Nor shall the Bank be liable for any errors of judgment or mistake of fact when acting as the Provider’s attorney-in-fact pursuant to Section 6, or liable for delay in the performance of the Bank’s duties caused by strike, lawsuit, riot, civil disturbance, fire, shortage of supplies or materials, or any other cause reasonably beyond the Bank’s control. IF ANY FORM OF LITIGATION IS INSTITUTED BY THE BUSINESS AGAINST THE BANK FOR VIOLATION OF THIS AGREEMENT, OR ANY WRONGFUL CONDUCT ASSOCIATED WITH THIS AGREEMENT, BUSINESS HEREBY EXPRESSLY WAIVES ITS RIGHT TO A JURY TRIAL. BUSINESS FURTHER AGREES THAT ITS DAMAGES WILL BE LIMITED, IN ANY CASE, TO THE AMOUNT OF THE SERVICE CHARGE PAID BY THE BUSINESS TO THE BANK DURING THE PRECEDING TWELVE (12) MONTH PERIOD.

IX. EFFECTIVE DATE; TERMINATION; BINDING EFFECT

This Agreement will be effective when accepted by the Bank, and will continue in full force and effect until the earlier of:

(a) one year after the effective date of this Agreement; or

(b) sixty (60) days after written notice of termination has been given by one party to the other (in each case subject to immediate termination upon a Default).

The term of this Agreement will automatically be extended for periods of one year each following its otherwise scheduled termination, subject to Section 7.2 above and to the parties’ rights to terminate this Agreement under clause (b) of this Section 9. Upon termination of this Agreement, the Provider will pay all of its Obligations to the Bank. The Provider will remain liable to the Bank for any deficiency remaining after liquidation of any collateral. The Bank may withhold any payment to the Provider unless supplied with an indemnity satisfactory to the Bank. This Agreement shall bind the Provider and the Provider’s heirs, executors, successors and assigns and shall continue for the benefit of the Bank and the Bank’s successors and assigns. The Provider agrees that the Bank may delegate its duties, but that the Provider may not do so without the Bank’s prior written consent.

X. FAIR MEANING; ATTORNEY’S FEES; PAST-DUE OBLIGATIONS; WAIVER; SEVERABILITY; HEADINGS; ENTIRE AND CONTROLLING AGREEMENT; NOTICES; COUNTERPARTS; APPLICABLE LAW

The language in all parts of this Agreement shall be construed, in all cases according to its fair meaning. The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement. The Provider will pay all reasonable expenses incurred by the Bank in connection with the execution of this Agreement, including

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expenses incurred in connection with the filing of financing statements, continuation statements and record searches. All past-due obligations of the Provider arising under this Agreement shall bear interest at the maximum non-usurious rate permitted under applicable state or federal law. The Provider hereby waives grace, demand (other than demand pursuant to Section 3.2 hereof), presentment for payment, notice of dishonor or default, notice of intent to accelerate, notice of acceleration, protest and notice of protest and diligence in collecting and bringing of suit against the Provider. Upon liquidation of any collateral, settlement or prosecution of a dispute with any Patient, or enforcement of any obligation of the Provider, the Provider will pay to the Bank, and the Bank may charge to the Provider’s account, all costs and expenses incurred, including reasonable attorneys’ fees, and such costs, expenses and fees shall constitute part of the Provider’s Obligations. No delay or failure on the Bank’s part in exercising any right, privilege, or option shall operate as a waiver of such or of any other right, privilege, or option. No waiver, amendment or modification of any provision of this Agreement shall be valid unless in writing signed by the Bank, and then only to the extent stated. Should any provision of this Agreement be prohibited by or invalid under applicable law, the validity of the remaining provisions shall not be affected. The headings are for convenience only, and shall not define or limit the scope, extent, meaning or intent of this Agreement. This Agreement embodies the Provider’s entire agreement as to its affiliation with the BusinessManager Funding Program; although the Provider anticipates that the Bank will subsequently outline certain depository and other bank procedures. In the event of any inconsistency between this Agreement and any other agreement signed by the Provider and the Bank in connection with this Agreement, including but not limited to, any Additional Security Documents, the terms and provisions of this Agreement shall control and the terms and provisions of any such other document shall be ineffective to the extent of any such inconsistency. Any notice, request or demand to be given will be deemed to be given when deposited with a delivery service addressed to, or sent by registered or certified mail to, the address of the recipient listed at the beginning of this Agreement. This Agreement may be executed in multiple counterparts, which when taken together shall constitute one and the same Agreement. This Agreement is governed by, construed and enforced according to the laws of the State of _______________________.

XI. NOTICE OF CHANGE IN FEES

Provider must notify the Bank in writing three (3) days in advance of any changes in the fee schedule or any anticipated changes in the Provider’s usual remittance to the Bank.

XII. SPECIAL STIPULATIONS

___________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

XIII. ACKNOWLEDGEMENT

THE PROVIDER ACKNOWLEDGES THAT THIS AGREEMENT CONTAINS A RELEASE OF CLAIMS AND WAIVERS OF CERTAIN RIGHTS, AND THAT THIS AGREEMENT HAS BEEN FULLY UNDERSTOOD PRIOR TO EXECUTION. PROVIDER FURTHER REPRESENTS AND WARRANTS THAT IT HAS HAD THE OPPORTUNITY TO CONSULT WITH ITS OWN LEGAL COUNSEL REGARDING THIS AGREEMENT AND ITS FULL LEGAL EFFECT, AND THAT IT IS NOT RELYING UPON ANY ORAL REPRESENTATIONS ON THE PART OF THE BANK, ITS EMPLOYEES OR AGENTS IN ENTERING INTO THIS AGREEMENT.

Provider:

Name of Institution

Address

City, State, Zip

_________________________________________________________

Name

_________________________________________________________

Title

ACCEPTANCE:

This Agreement is accepted this ________ day of ________________, 20____.

Bank:

Name of Institution

Address

City, State, Zip

_________________________________________________________

Name

_________________________________________________________

Title

_________________________________________________________

Date

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Attachment BSummary of Tetris Consulting and HIPAA

Summary of Tetris Consulting HIPAA and HITECH Act Compliance PolicySince 2003, Tetris Consulting has developed and supported hundreds of electronic data interchanges (EDI) for various organizations across the healthcare industry including hospitals, physician practices, home health providers, pharmacies, ambulatory transport providers, healthcare financing organizations and many other healthcare care providers. Tetris EDI’s have been developed with practice management systems, electronic medical records, human resources databases, accounting and hospital based billing systems. Typically this includes electronic exchange of sensitive electronic protected health information (EPHI) as defined by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and updated by the Health Information Technology for Economic and Clinical Health Act (HITECH) in 2009. As such, Tetris’ HIPAA/HITECH compliance policy is designed to assure that individuals’ health information is properly protected while allowing the flow of information needed to provide the services offered by Tetris.

Tetris’ HIPAA/HITECH Security policy is comprised of 4 parts:

1. Proper documentation and authorization from covered entity and adherence to all privacy policies of covered entity.

2. Secure and compliant transfer of all EPHI data to and from clients.

3. Establish and maintain administrative, physical and technical safeguards for all data submitted to Tetris.

4. Continued assessment of security policies, risk analyses and education regarding the dynamic legal requirements.

Documentation and AuthorizationBy law, the HIPAA Privacy Rule applies only to covered entities – health plans, healthcare clearinghouses, and certain healthcare providers. However, the Privacy Rule allows covered providers and health plans to disclose protected health information to these “business associates” if the providers or plans obtain satisfactory assurances that the business associate will use the information only for the purposes for which it was engaged by the covered entity, will safeguard the information from misuse, and will help the covered entity comply with some of the covered entity’s duties under the Privacy Rule.

What Is a “Business Associate?” A “business associate” is a person or entity that performs certain functions or activities that involve the use or disclosure of protected health information on behalf of, or provides services to, a covered entity. Business associate functions and activities include: claims processing or administration; data analysis; processing or administration; utilization review; quality assurance; billing; benefit management; practice management; and re-pricing. Business associate services are: legal; actuarial; accounting; consulting; data aggregation; management; administrative; accreditation; and financial. See the definition of “business associate” at 45 CFR 160.103.

Tetris’ policy is to always review and use the Business Associates Agreement (BAA) provided by the covered entity to ensure Tetris understands and can comply with all Privacy Policy elements of each covered entity. However, if Tetris feels the covered entity’s BAA is insufficient, out of date or they do not already have one available, Tetris can provide a template that is up to date with the provisions of the HITECH act.

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In the event that a Tetris’ client requests the transfer of EPHI to a third party organization from the Tetris data warehouse, Tetris requires either written documentation that a BAA has been signed between the client and third party or a second BAA with Tetris as the covered entity and the third party as the business associate must be executed.

Transfer of EPHI

One of the most important aspects of the HIPAA/HITECH regulations for Tetris clients is the transfer of raw data files to Tetris and access to and from the clients systems. While several HIPAA compliant transfer mechanisms can and are used, the vast majority of all data exchanges are done via Secure File Transport Protocol (SFTP). Tetris maintains a secure FTP server and provides assistance installing and using the very user friendly SFTP client applications to transfers data and reports. If you can transfer a file in windows explorer, you can securely transfer a file to/from the Tetris server in almost the same way. SFTP meets all 5 sections of the technical safeguards of the HIPAA regulations (Sec. 164.312(a)(1) - Sec. 164.312(e)).

Access control is accomplished by requiring users to login with valid credentials or a valid encryption key. The SFTP server maintains audit controls by keeping active security logs. User connections and administrative actions are logged constantly. Data integrity is ensured by use of journaling file systems, file integrity checking, and server mirroring technology. User file and directory permissions are set in place to govern what access users will have once they are logged in. Identity can be verified and proven by either, usernames and passwords or by use of RSA keys. Transmission security is provided by transparent 512bit 3DES network level encryption. 512bit 3DES encryption is stronger than most of the encryption in common VPN tunnels.

Security SafeguardsTetris security safeguards are designed to comply with all aspects of the Centers for Medicare & Medicaid Services (CMS) rule titled “Security Standards for the Protection of Electronic Protected Health Information,” found at 45CFR Part 160 and Part 164, Subparts A and C, commonly known as the Security Rule. The Security Rule is comprised of 18 required and addressable implementation specifications, broken down into 3 subcategories: administrative, physical and technical. Tetris security standards ensure that all required and all reasonable addressable implementation specifications are met.

Administrative safeguards include risk analysis and management, information security review, assigned security responsibility, sanction policy, incident reporting and contingency plan. As president of Tetris Consulting, Graham Voss also acts as the HIPAA security officer and oversees all administrative safeguards and monitors ongoing activity to ensure the adherence to Tetris policy.

Physical safeguards include facility access control by locked server rooms and offices, building surveillance cameras and restricted building access after normal business hours. All workstations and remote access devices are password protected and routinely updated. All access logins are time sensitive and automatically logoff users out after a short period of inactivity.

Technical safeguards include the strict adherence to Tetris policy regarding the complete absence of all EPHI on any portable device including laptops, CDs, DVDs, thumb drives, portable hard drives, etc, unless fully encrypted. Even if fully encrypted, Tetris policy is to never store EPHI on any device not fully safeguarded by the administrative and physical safeguards mentioned above. Because Tetris works with many different healthcare providers, each client is given a unique “Client ID” that is used on all data elements. Furthermore, each patient record is uniquely identified within the Client ID to ensure no crossover of EPHI or any data element is possible.

Continued Assessment and Education:Tetris recognizes that security is not a one-time project, but rather an on-going, dynamic process that will create new challenges as covered entities’ organizations and technologies change. In order to comply with all state and federal regulations regarding the use of EPHI, Tetris must continually review and respond to the changing requirements and needs of its clients. Luckily, in today’s hi-tech world access to the changing requirements are easily accessible. Tetris routinely monitors all relevant federal government agency websites including the U.S. Department of Health and Human Services (http://www.hhs.gov/ocr/privacy/index.html) and the Centers for Medicare and Medicaid Services

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(https://www.cms.gov/home/regsguidance.asp). Tetris also subscribes to several private Healthcare/HIPAA blogs and newsletters including The HIPAA Survival Guide (http://www.hipaasurvivalguide.com), The Healthcare Law Blog (http://healthcarebloglaw.blogspot.com/) and Clearwater Compliance (http://abouthipaa.com/).

ConclusionTetris understands that in order for their clients to be protected and comfortable with sharing the healthcare information of their patients, Tetris needs to provide every reasonable safeguard available to ensure the continuation of the covered entities privacy and security policy. While the regulations can seem complicated, the core requirements are more than satisfactorily met by executing a clear security policy internally using readily available safeguards. Tetris appreciates your concerns and continually strives to exceed all current requirements as well as your expectations. Please contact Tetris’ Security Officer; Graham Voss at gvoss@tetrisconsulting.com for additional information.

i From the U.S. Department of Health and Human Services website (http://www.hhs.gov/ocr/privacy/hipaa/understanding/coveredentities/businessassociates.html)

ii From the U.S. Department of Health and Human Services website (http://www.hhs.gov/ocr/privacy/hipaa/understanding/coveredentities/businessassociates.html)

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Attachment CFunding Process

Healthcare Provider

Provider provides patient service and uploads claim data.

Bank

Bank approves and funds amount.

Tetris Consulting

Tetris processes detailed claim Analyzes and determines Net

Realizable Value.

Invoices

Invoices are loaded into Gold At Net.

Realizable Value

InsuranceProvider files claim

with insurance carriers as usual.

Reserve10% deposited to Reserve account.

$

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Attachment DPayment Process

Payments

Payments received in lockbox.

Bank

Bank processes accounting entries to reduce line amount.

Healthcare Provider

Providers post and send data to Tetris.

Cash

Cash applied in BusinessManager Gold by ProfitStars Processing

ReserveExcess to Reserve.

$

Line Amount

Line balance paid down.

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Attachment EBusinessManager Healthcare Work Flow

1. Update Cash AccountOn a daily basis, the FI updates the Cash account using Cash Reconciliation in the Journal. The amounts credited to the Cash account are available to process payment applications submitted by the provider.

Cash Reconciliation to debit or credit the Cash account is available from these links:

■ Access 1: Main > Journal > Overview > Cash Reconciliation quick link

■ Access 2: Main > Journal > Accounting Entries > Cash Reconciliation quick link

■ Access 3: Main > Journal > Completed Entries > Cash Reconciliation quick link

■ Access 4: Main > Journal > Accounting Research > Cash Reconciliation quick link

■ Access 5: Main > A/R Activity > Overview > Process Staged Payments quick link

2. Process PaymentsProfitStars Processing completes payment processing for the FI. When a payment batch is posted, the appropriate accounting entries are available in the Journal.

Access: Main > Journal > Accounting Entries

3. Apply Unapplied CreditsThe FI should apply unapplied credits prior to conducting the reserve analysis. “Sweeping” is a shortcut to select one or more unapplied credits and automatically apply them using the standard auto apply rules.

Note: When sweeping the credits, there is an option to Write Off remaining balances of the credit. This option is used when there are no more open debits for the payor. The Write Off option creates a debit memo and applies the remaining balance of the payment to the debit memo.

Access: Main > A/R Activity > Select a Third Party Healthcare business (Business A/R Activity) > Apply Credits > Sweep Credits quick link