NORTH MISSISSIPPI HEALTH LINK, INC.

MANAGED CARE PROGRAMS

PROVIDERSTATEMENT OF POLICIES AND PROCEDURES

ON APPOINTMENT AND REAPPOINTMENT

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TABLE OF CONTENTSPAGE

ARTICLE 1. DEFINITIONS ............................................................................................ 1

ARTICLE 2. QUALIFICATIONS FOR PARTICIPATION ........................................... 4Section 2.1. General. ................................................................................................. 4Section 2.2. Specific Provider Qualifications. .......................................................... 4Section 2.3. Non-hospital Providers. ........................................................................ 5Section 2.4. No Entitlement to Appointment. ........................................................... 6Section 2.5. Information. .......................................................................................... 6Section 2.6. Submission of Application. ................................................................... 7Section 2.7. Undertakings. ........................................................................................ 8Section 2.8. Burden of Providing Information. ......................................................... 9Section 2.9. Authorization to Obtain Information. ................................................. 10Section 2.10. Credentials Committee Procedure for Appointment. .......................... 11Section 2.11. Credentials Committee Report. ........................................................... 12Section 2.12. Delay of Credentials Committee’s Report. ......................................... 12Section 2.13. Subsequent Action on the Application. .............................................. 12Section 2.14. Recredentialing Participating Providers. ............................................ 13Section 2.15. Factors to Be Considered. ................................................................... 14Section 2.16. The Credentials Committee Procedure for Reappointment. ............... 15

ARTICLE 3. PROCEDURE FOR INVESTIGATION OF MANAGED CAREPROGRAM APPOINTEES ............................................................................................ 16

Section 3.1. Grounds for Action. ............................................................................. 16Section 3.2. Investigative Procedure. ...................................................................... 16Section 3.3. Procedure after Investigation or after Receiving Request for Investigation. ....................................................................................... 17Section 3.4. Suspension of Privileges. .................................................................... 18

ARTICLE 4. SUMMARY SUSPENSION OF APPOINTMENT PRIVILEGES .......... 19Section 4.1. Grounds for Summary Suspension. .................................................... 19Section 4.2. Credentials Committee Procedure. ..................................................... 19

ARTICLE 5. PROVIDER HEARING WITH RESPECT TO CREDENTIALSCOMMITTEE’S RECOMMENDATION ...................................................................... 19

Section 5.1. Initiation of Hearing. ........................................................................... 19Section 5.2. Notice of Recommendation. ............................................................... 20Section 5.3. Grounds for Hearing. .......................................................................... 21Section 5.4. Unappealable Actions. ........................................................................ 21Section 5.5. Notice of Hearing and Statement of Reasons. .................................... 21Section 5.6. List of Witnesses. ................................................................................ 21Section 5.7. Hearing Officer(s). .............................................................................. 22

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Section 5.8. Failure to Appear. ............................................................................... 22Section 5.9. Postponements and Extensions. .......................................................... 22Section 5.10. Representation. ................................................................................... 22Section 5.11. Admissibility of Evidence. ................................................................. 23Section 5.12. Official Notice. ................................................................................... 23Section 5.13. Basis of Decision. ............................................................................... 23Section 5.14. Burden of Proof. .................................................................................. 24Section 5.15. Adjournment and Conclusion. ............................................................ 24Section 5.16. Deliberations and Recommendations of the Hearing Officer(s). ....... 24Section 5.17. Disposition of Report of Hearing Officer(s). ...................................... 24Section 5.18. Action by the Managed Care Board. .................................................. 24Section 5.19. Action by the Corporate Board. .......................................................... 25

ARTICLE 6. PROVIDER HEARING WITH RESPECT TO PROPOSED MANAGEDCARE BOARD OR CORPORATE BOARD ACTION ................................................. 25

Section 6.1. Initiation of Hearing. ........................................................................... 25Section 6.2. Notice of Proposed Action. ................................................................. 26Section 6.3. Grounds for Hearing. .......................................................................... 27Section 6.4. Unappealable Actions. ........................................................................ 27Section 6.5. Notice of Hearing and Statement of Reasons. .................................... 27Section 6.6. List of Witnesses. ............................................................................... 28Section 6.7. Hearing Officer(s). .............................................................................. 28Section 6.8. Failure to Appear. ............................................................................... 28Section 6.9. Postponements and Extensions. ......................................................... 28Section 6.10. Representation. ................................................................................... 29Section 6.11. Admissibility of Evidence. ................................................................. 29Section 6.12. Official Notice. ................................................................................... 29Section 6.13. Basis of Decision. ............................................................................... 29Section 6.14. Burden of Proof. .................................................................................. 30Section 6.15. Adjournment and Conclusion. ............................................................ 30Section 6.16. Deliberations and Recommendations. ................................................ 30Section 6.17. Disposition of Report of Hearing Officer(s). ...................................... 30Section 6.18. Action by the Corporate Board. .......................................................... 31

ARTICLE 7. EFFECT OF ADVERSE ACTION ........................................................... 31

ARTICLE 8. NOTICES .................................................................................................. 31Section 8.1. Form and Delivery. ............................................................................. 31Section 8.2. Waiver. ................................................................................................ 31

ARTICLE 9. AMENDMENTS .................................................................................... 32

ARTICLE 10. ADOPTION ............................................................................................ 32

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ARTICLE 1.DEFINITIONS

The definitions apply to Health Link® documents, collectively known as theHealth Link® Amended and Restated By-laws, which include: North Mississippi HealthLink, Inc. Managed Care Programs Amended and Restated By-laws, PractitionerAmended and Restated Statement of Policies and Procedures on Appointment,Reappointment and Clinical Privileges, Provider Statement of Policies and Procedures onAppointment and Reappointment, and the Amended and Restated Delineation of ClinicalPrivileges Policy.

(1) “ABMS” shall mean the American Board of Medical Specialties;

(2) “ACGME” shall mean the Accrediting Council for Graduate MedicalEducation;

(3) “ADA” shall mean the American Dental Association;

(4) “Administrator” shall mean the President of North Mississippi HealthLink, Inc. or his/her delegate, i.e., Vice President or Director;

(5) “AOA” shall mean the American Osteopathic Association;

(6) “AOB” shall mean the American Osteopathic Board of (Specialty);

(7) “authorized representative” shall mean the Provider’s representative ordesignee who is legally authorized to represent the Provider in thecompletion of the Provider’s Application, provide other requiredinformation and execute other legal documents on behalf of the Provider;

(8) “applicant” shall mean a Practitioner or a Provider or a Provider’sauthorized representative applying to become a participant in HealthLink® Preferred Provider Organization or any other managed careprogram operated by North Mississippi Health Link, Inc;

(9) “approved fellowship” shall mean a fellowship training program approvedor recognized by the ABMS or the AOB of (Specialty);

(10) “approved residency training program” shall mean a residency trainingprogram approved or recognized by the ABMS or AOB of (Specialty);

(11) “board candidate” shall mean a physician who has committed his or hercredentials to the ABMS or the AOB of (Specialty), has been accepted tothe ABMS member board or the AOB of (Specialty) and has receivednotice of the date and time of the board examination;

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(12) “board certified” shall mean that a physician has successfully completedcertain published education and training requirements in a Specialty boardprogram officially recognized by the ABMS and the American MedicalAssociation or the American Osteopathic Association and the AOB of(Specialty) and has passed the required board certification;

(13) “Corporate Board” shall mean the Board of Directors of North MississippiHealth Link, Inc;

(14) “Corporation” shall mean North Mississippi Health Link, Inc;

(15) “dentist” shall mean a person who has received a degree from a schoolaccredited by the ADA Commission on Dental Accreditation and islicensed to practice dentistry by a state board of dental examiners;

(16) “enrollee” shall mean an employee, or dependent of an employee, who iseligible to receive health care services in accordance with an employergroup contract that specifies the scope of health care services to bedelivered under the managed care program;

(17) “licensure” shall mean a process by which a constituted authority oragency grants authorization to engage in a profession or a business aftermeeting the prerequisite requirements as defined by state or federalregulations;

(18) “Managed Care Board” shall mean the Board of Directors of the managedcare programs;

(19) “managed care program(s)” shall include Health Link® PPO and anyother managed care programs operated by the Corporation;

(20) “Medical Director” shall mean the Medical Director of the managed careprograms operated by the Corporation who shall serve in such capacitypursuant to a written contract;

(21) “must or shall” means an imperative need and/or duty; an essential orindispensable item; mandatory;

(22) “Non-physician Practitioner” shall mean an individual other than aphysician, dentist, or oral surgeon who is specialty trained and licensed bythe state to provide health care services and patient care either with thedirect supervision or under the direction of a physician or, if allowed bylicensure, an independent practitioner;

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(23) “participating Practitioner” shall mean a licensed health care professionalwho has agreed to and has been accepted by North Mississippi HealthLink, Inc. to provide health care services to enrollees;

(24) “participating Provider” shall mean a licensed hospital, surgery center,other facility or an equipment supply company which provides health careservices and has been accepted by North Mississippi Health Link, Inc. toprovide health care services to enrollees and whose authorizedrepresentative of the facility or company has agreed to the terms forparticipation set forth by North Mississippi Health Link, Inc.;

(25) “physicians” shall mean doctors licensed to practice allopathic orosteopathic medicine;

(26) “PPO” shall mean the Preferred Provider Organization operated by theCorporation;

(27) “Practitioner” shall mean a physician, dentist, or an independent licensedhealth care professional;

(28) “Provider” shall mean a licensed hospital, surgery center, other facility oran equipment supply company which is licensed by the state as a facilityor company for the provision of health care services;

(29) “Residency” shall mean training in a medical specialty in a programapproved or recognized by the ABMS or the AOB of (Specialty) at thetime the physician completes the training; any physician requestingclinical privileges must have satisfactorily completed the residencytraining program;

(30) “Service Agreement” shall mean a written and signed binding agreementbetween North Mississippi Health Link, Inc. and a Practitioner or aProvider;

(31) “Subscriber” shall mean an employer or other organization acceptable tothe managed care program which enters into an agreement with themanaged care program for the provision of health care services to itsemployees and their dependents.

Words used in this policy shall be read as the masculine or feminine gender, and assingular or plural, as the content requires. The captions or headings are for convenienceonly and are not intended to limit or define the scope or effect of any provision of thispolicy.

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ARTICLE 2.QUALIFICATIONS FOR PARTICIPATION

Section 2.1. General.

Participation in the managed care programs is a privilege which is extended only toProviders who continuously meet the qualifications, standards and requirements set forthfrom time to time by the Managed Care Board and approved by the Corporate Board. Participation in the managed care programs is not a matter of right and shall notnecessarily be extended to all applicants. Participation in the managed care programsmay be denied to a qualified applicant by the Corporate Board based upon the needs ofthe managed care programs and other factors as determined from time to time by theCorporate Board in its sole discretion.

Section 2.2. Specific Provider Qualifications.

Only Providers which can satisfy the following requirements shall be eligible toparticipate in the managed care programs:

(a) Are licensed to operate a business and provide medical services inthe state(s) in which such Providers will render medical services toenrollees;

(b) Have provided proof of professional liability insurance coverageissued by an insurance carrier acceptable to the Corporate Board ina coverage amount not less than One Million Dollars (1,000,000)per occurrence/Three Million Dollars ($3,000,000) aggregateunless the Provider is governed by state or federal law and therequirement is determined by the legislative governing agency orthe Provider has proof of self-insurance acceptable to the managedcare program;

(c) Have provided the managed care program with a list of anyadverse professional liability (malpractice) decisions in which theapplicant was involved in the past five (5) years;

(d) Have provided the managed care program with a copy ofaccreditation or certification and/or status, if any;

(e) For any provider not accredited by the Joint Commission onAccreditation for Healthcare Organizations (“JCAHO”), amanaged care program representative shall have completed anassessment with a recommendation;

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(f) Have provided either a notarized statement that the Provider is notcurrently operating or protected under federal or state bankruptcylaws or a copy of bankruptcy reorganization plan and currentfinancial status, if applicable;

(g) Upon request, the Provider’s authorized representative candocument:

(1) Adherence to business and organizational ethics;

(2) Demonstrated intent of providing high quality, cost-effective health care and services;

(3) Patients’ satisfaction with the services provided by theProvider; and

(4) Ability to work harmoniously with Health Link and otherparticipating Providers in a manner satisfactory to theManaged Care Board or the Corporate Board such that allpatients receiving services from the Provider under themanaged care program will receive quality care, and thatthe managed care program and the Provider andPractitioners will be able to work together in an orderlymanner.

Failure of the Provider’s authorized representative to provide the requested informationwill deem the application incomplete.

Section 2.3. Non-hospital Providers.

For non-hospital Providers, with the exception of durable medical equipment companies,the non-hospital Provider must provide proof of at least fifty percent (50%) ownership bya managed care program Participating Hospital in addition to the criteria listed in Section2.2. or if not fifty percent (50%) ownership by a managed care program ParticipatingHospital, then the Credentials Committee will consider the following factors:

(a) Whether Provider offers a health care service(s) not alreadyprovided or meets a need not already met by other participatingProviders;

(b) Whether Provider is accredited by JCAHO or other applicableaccreditation organization;

(c) Whether Provider provides the managed care program andenrollees 24 hours per day, 7 days per week access, acceptable to

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the managed care program, to the non-hospital Provider’sPractitioners and records;

(d) Whether all Practitioners providing services at Provider are boardcertified;

(e) Whether Provider accepts all patients (including without limitationMedicare, Medicaid and charity patients);

(f) Whether Provider provides services to indigent patients pursuant toa charity care policy;

(g) Whether Provider’s Practitioners provide 24 hours per day, 7 daysper week call coverage for Provider’s patients;

(h) Whether Provider maintains a staff of Practitioners and otherhealth care workers adequate to meet the needs of enrollees;

(i) Whether Provider maintains office hours adequate to meet theneeds of enrollees;

(j) Whether Provider demonstrates financial soundness based uponnumber of years in operation and appropriate credit rating over anextended period of time; and

(k) Such other criteria as deemed appropriate by the CredentialsCommittee.

The Credentials Committee will give strong preference to not-for-profit Providersand Providers controlled by not-for-profit entities.

Section 2.4. No Entitlement to Appointment.

No Provider shall be entitled to participation in the managed care program merely byvirtue of the fact that the applicant meets the credentialing criteria set forth in this policy. As stated in Section 2.1, participation in the managed care program may be denied to aqualified applicant by the Corporate Board based upon the needs of the managed careprogram and other factors as determined by the Managed Care Board or the CorporateBoard.

Section 2.5. Information.

Applications for appointment to the managed care program shall be in writing and shallbe submitted on forms required by law and/or approved by the Managed Care Board andthe Corporate Board. Such forms may be obtained from the Administrator. Theapplication shall require detailed information concerning the applicant’s qualifications,

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including:

(a) The name and location of the Provider, and the name of theProvider’s authorized representative, ownership, governing bodyor agency tax status and other operations information;

(b) Information on liability claims history, experience and litigation,and a certificate from the present insurance carrier stating the nameof the company, the amount and classification of coverage, that thepolicy is in full force and effect and that the carrier agrees to notifythe managed care program of any changes in coverage unless theProvider provides evidence of self insurance acceptable to themanaged care program or the Provider is governed by state orfederal law and the requirement is determined by the legislativegoverning agency;

(c) Information, including documentation, regarding investigations,limitations or sanctions of any kind imposed by any health careinstitution, professional health care society, licensing authority,Centers for Medicare and Medicaid Services or other managedcare entity;

(d) The applicant’s compliance with requirements as may be imposedby law or applicable accreditation agencies;

(e) An unrestricted consent to the release of information from theapplicant’s present and past liability insurance carriers concerningany claims history requested by the managed care program, eitherpresent or past;

(f) Information as to whether the applicant or any of its officers ordirectors has ever been named as a defendant in criminalproceedings and details about any such instance;

(g) The Provider’s authorized representative’s notarized signature; and

(h) Any such other information, in addition to that required in theapplication, if additional information is desired by the CredentialsCommittee, the Managed Care Board or the Corporate Board.

Section 2.6. Submission of Application.

The application for participation in the managed care program shall be submitted by theapplicant’s authorized representative to the Administrator. It must be accompanied bypayment of such processing fees as may be established by the Corporate Board. After

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receiving information or materials deemed pertinent, the Administrator shall determinethe application to be complete and transmit the application and all supporting materials tothe Credentials Committee for evaluation. An application shall be deemed incomplete ifthe need arises for new, additional or clarifying information any time during theevaluation. It is the responsibility of the applicant’s authorized representative to providea complete application. An incomplete application will not be processed. If theapplication is not complete within one hundred eighty (180) days from the date of thesignature on the application, the application shall be returned to the applicant withnotification that the application is no longer being considered by the managed careprogram. A record shall be kept of all returned applications with the reason for return.

Section 2.7. Undertakings.

The following undertakings shall apply to every applicant or participating Providerseeking appointment or reappointment to the managed care program as a condition ofconsideration of such application and as a condition of continued appointment if granted:

(a) Execution of a participation agreement by Provider’s authorizedrepresentative that upon appointment to the managed careprogram, the Provider shall agree to:

(1) participate as a Provider of health care services in themanaged care program;

(2) provide services applicable to its business to enrollees forwhom the applicant has responsibility;

(3) abide by all applicable policies of the managed careprogram, including all bylaws, policies and rules andregulations as shall be in force from time to time during thetime the Provider is appointed to the managed careprogram;

(4) provide the managed care program with new or updatedinformation submitted on the application form; and

(5) notify Health Link if the authorized representative changeswithin thirty (30) days of the change.

(b) A statement that the applicant’s authorized representative hasreceived and had an opportunity to read a copy of the bylaws,policies and rules and regulations as are in force at the time theapplication is processed and all amendments or revisions theretoadopted from time to time and that the applicant has agreed to bebound by the terms thereof in all matters relating to the

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consideration of the application without regard to whether or notProvider is granted appointment to the managed care program;

(c) A statement of the applicant’s authorized representative’swillingness to appear for personal interviews in regard to theapplication;

(d) A statement that any material misrepresentation or misstatement inor omission from the application, if not corrected uponnotification, whether intentional or not, shall constitute cause forautomatic and immediate rejection of the application resulting indenial of appointment without a right to a hearing under Article 5or 6, and a statement that an appointment granted prior to thediscovery of such misrepresentation, misstatement or omission, ifnot corrected upon notification, may result in summary dismissalfrom the managed care program without a right to a hearing underArticle 5 or 6 in the sole discretion of the Corporate Board;

(e) An agreement that the applicant will abide by generally recognizedprinciples of medical and business ethics, and the professionalstandards of care in the industry and that the applicant will renderhealth services to enrollees in the same manner, in accordance withthe same standards and within the same time availability as thoseservices are offered to other private patients, consistent withexisting medical, ethical and legal requirements for providingcontinuity of care to any patient.

Each applicant’s authorized representative for appointment and reappointmentshall sign a statement specifically agreeing to these undertakings as part of theapplication.

Section 2.8. Burden of Providing Information.

The applicant’s authorized representative shall have the burden of producing adequateinformation for a proper evaluation of its qualifications and of resolving any doubts aboutsuch qualifications. The applicant’s authorized representative shall have the burden ofproviding evidence that all the statements made and information given on the applicationare true and correct. Until the applicant’s authorized representative has provided allinformation requested by the managed care program, the application for appointment orreappointment will be deemed incomplete and will not be processed. Should an incidentoccur during the course of an appointment year, the appointee has the burden to provideinformation about such an incident sufficient for the Credentials Committee’s review andassessment.

Section 2.9. Authorization to Obtain Information.

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The following statements are express conditions applicable to any managed care programapplicant and any appointee to the managed care program. By applying for appointmentor reappointment, the applicant’s authorized representative expressly accepts theseconditions during the processing and consideration of the application, whether or not theapplicant is granted appointment or reappointment.

(a) Release of Liability and Grant of Immunity. The Provider’sauthorized representative submitting an application recognizes thatin accordance with the Mississippi Code Annotated 41-63-1, etseq., as amended, persons, entities and organizations participatingin professional review activities are immune from liabilitydamages, disclosure made and actions taken as is provided in suchlaws.

The Provider’s authorized representative expressly releases themanaged care program, the members of any committee of themanaged care program, the Corporate Board, the Managed CareBoard, the Corporation, any of their employees, agents orauthorized representatives and any third parties from any and allliability for loss, damage or injury of any nature arising from anyacts, communication, documents, recommendations or disclosuresinvolving the Provider concerning the following and grantsabsolute immunity to the managed care program, the members ofany committee of the managed care program, the Corporate Board,the Managed Care Board, the Corporation, and any of theiremployees, agents or authorized representatives, and any thirdparties as to all matters concerning the following:

(1) Applications for appointment and reappointment;

(2) Evaluations, actions or inactions concerning appointmentand reappointment;

(3) Exclusion from participation in the managed care programon the basis of need (or other criteria established by theManaged Care Board and the Corporate Board), poorpatient satisfaction, cost efficiency or poor clinicaloutcomes;

(4) Proceedings for suspension or for revocation ofappointment, or any other disciplinary sanction;

(5) Summary Suspension;

(6) Hearings and appellate reviews;

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(7) Utilization reviews;

(8) Other activities relating to the quality of patient care;

(9) Matters of inquiries concerning the applicant’s ethics orbehavior; or

(10) Any other matter that might directly or indirectly have aneffect on patient care or on the orderly or efficientoperation of the managed care program.

(b) Authorization to Obtain Information. The Provider’s authorizedrepresentative specifically authorizes the managed care programand its representatives to consult with any third party who mayhave information bearing on the applicant’s federal or statelicensure, clinical competence, ethics, behavior or any other matterreasonably having a bearing on the applicant’s satisfaction of thecriteria for initial and continued appointment to the managed careprogram. This authorization also covers the right to inspect orobtain any and all communications, reports, records, statements,documents, recommendations or disclosures to said third partiesthat may be relevant to such questions. The Provider alsospecifically authorizes such third parties to release suchinformation to the managed care program and its authorizedrepresentatives upon request.

(c) Authorization to Release Information. Similarly, the Provider’sauthorized representative specifically authorizes the managed careprogram and its representatives to release such information toother health care entities which solicit such information for thepurpose of evaluating the applicant’s professional qualificationspursuant to the applicant’s request for appointment orreappointment.

Section 2.10. Credentials Committee Procedure for Appointment.

(a) The Credentials Committee shall examine the evidence of thequalifications, prior behavior, cost efficiency, patient satisfaction,clinical outcomes and ethical standing of the applicant and shalldetermine, through information from other sources available to theCredentials Committee, whether the applicant has established andsatisfied all of the necessary qualifications for participation in themanaged care program.

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(b) The Credentials Committee may consider compliance withapplicable state and federal rules and regulations and on-siteassessments performed by the managed care program’s staff.

(c) The Credentials Committee may consider the managed careprogram’s need for the applicant’s services.

(d) The Credentials Committee shall have the right to require theapplicant’s authorized representative to meet with the CredentialsCommittee to discuss any aspect of the applicant’s application orqualifications.

Section 2.11. Credentials Committee Report.

Not later than one-hundred eighty (180) days from the date of signature on the completedapplication, the Credentials Committee shall make a written report and recommendationwith respect to the applicant to the Managed Care Board. The Chairman of theCredentials Committee or his/her designee shall be available to the Managed Care Boardor its appropriate committee to answer any questions that may be raised with respect tothe recommendation.

Section 2.12. Delay of Credentials Committee’s Report.

If the recommendation of the Credentials Committee to the Managed Care Board is notmade within one hundred eighty (180) days of the date the application is taken to theCredentials Committee, the Chairman of the Credentials Committee shall send (or causeto be sent) a letter to the applicant’s authorized representative explaining the delay.

Section 2.13. Subsequent Action on the Application.

The recommendation of the Credentials Committee shall be transmitted by the Chairmanof the Credentials Committee, together with all necessary supporting documentation,including the complete application, to the Managed Care Board. The CredentialsCommittee shall make its recommendation that the applicant be approved forparticipation in the managed care program (and the scope of the applicant’sparticipation), that the applicant’s application be deferred for further consideration or thatthe applicant be rejected for participation in the managed care program. The Chairman ofthe Credentials Committee or his/her designee shall be available to the Managed CareBoard or its appropriate committee to answer any questions that may be raised withrespect to the recommendation. If the Credentials Committee proposes to make arecommendation adverse to the applicant as described in Section 5.3 of this policy whichentitles the applicant to a hearing, the Credentials Committee shall proceed as set forth inArticle 5. If the Credentials Committee’s proposed recommendation does not entitle theapplicant to a hearing under Section 5.3 of this policy, the Managed Care Board shall actupon the recommendation of the Credentials Committee within one hundred and twenty

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(120) days of receipt of such recommendation and shall promptly forward its proposedaction to the Corporate Board. If the Managed Care Board proposes to take actionadverse to the applicant as described in Section 5.3 of this policy, the Managed CareBoard shall proceed as set forth in Article 6. If the Managed Care Board’s proposedaction does not entitle the applicant to a hearing under Section 5.3 of this policy, theCorporate Board shall act upon the proposed action of the Managed Care Board withinsixty (60) days of receipt of such proposed action and shall promptly notify theapplicant’s authorized representative of its action. If the Corporate Board affirms thefavorable proposed action of the Managed Care Board, the Administrator shall notify theapplicant’s authorized representative that it has been appointed to the managed careprogram for an initial appointment term of thirty-six (36) months, subject to theProvider’s compliance with the managed care program’s requirements. If the CorporateBoard proposes to take adverse action as described in Section 5.3 of this policy, theCorporate Board shall proceed as set forth in Article 6.

Section 2.14. Recredentialing Participating Providers.

Participating Providers shall be recredentialed every thirty-six (36) months of theprevious credentialing date. Participating Providers shall be responsible for completingthe reappointment application form approved by the Managed Care Board. Thereappointment application shall contain the same statements required in an initialapplication as provided in Section 2.5 and Section 2.7 of this policy. The reappointmentapplication shall be submitted to the Administrator at least three (3) months prior to theexpiration of the participating Provider’s then current appointment. Reappointment, ifgranted, shall be for a period of thirty-six (36) months, (unless the Corporate Boardestablishes a shorter period of appointment). If an application is filed and suchapplication has not been finally acted upon prior to the expiration of the currentappointment, the current appointment shall continue in effect until such time as theapplication is finally acted upon. The time of continuation is limited to thirty (30) dayspast the thirty-six (36) month credentialing deadline from the date of the CredentialsCommittee’s last decision on the affected applicant. At the end of such time, theProvider's agreement with the managed care program is terminated and the Provider’sauthorized representative must re-submit an application for further consideration.

Participation in the managed care program is not a matter of right and shall notnecessarily be extended to all Providers seeking reappointment to the managed careprogram. Participation in the managed care program may be denied to a qualifiedProvider seeking reappointment by the Corporate Board based upon the needs of themanaged care program at such time and other factors established by the Corporate Boardand based upon the policies of the Managed Care Board and the Corporate Board withrespect to the operation of the managed care program from time to time.

Section 2.15. Factors to Be Considered.

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Each recommendation concerning reappointment of a Provider currently participating inthe managed care program shall consider:

(a) The ethical behavior, clinical competence, cost efficiency, andpatient satisfaction of the participating Provider and itsPractitioners and staff;

(b) The participant’s compliance with the managed care program’sbylaws, policies and rules and regulations as are in force;

(c) For non-accredited or non-certified Providers, the managed careprogram’s staff will conduct an on-site assessment and verifycompliance with federal and state rules and regulations;

(d) The participant’s behavior in the managed care program, includingcooperation with other participating Practitioners and Providers;

(e) The participant’s capacity to satisfactorily provide services asindicated by the results of the managed care program’s qualityassurance activities or other reasonable indicators of continuingqualification;

(f) The participant’s satisfactory compliance with the law, themanaged care program’s policies and procedures or therequirements of applicable accreditation agencies;

(g) A review of complaints by subscribers and enrollees, results ofquality review and sanctions, utilization management and enrolleesatisfaction surveys;

(h) The managed care program’s need for participating Providers;

(i) Other relevant findings from the managed care program’s qualityassurance activities; and

(j) Any such other information, in addition to that required in theapplication for reappointment, if additional information is desiredby the Credentials Committee, the Managed Care Board or theCorporate Board. The Credentials Committee Procedure forReappointment.

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Section 2.16. The Credentials Committee Procedure for Reappointment.

(a) The Credentials Committee may review all pertinent informationavailable, including all information provided from othercommittees of the managed care program and from the managedcare program’s management, as well as quality assurance orutilization review information, patient outcome information orother information, for the purpose of determining itsrecommendations for reappointment to the managed care program.

(b) The Credentials Committee shall thereafter submit its report andrecommendation to the Managed Care Board. If the CredentialsCommittee’s recommendation is adverse to the participatingProvider as described in Section 5.3 of this policy, the CredentialsCommittee shall proceed as set forth in Article 5. The Chairmanof the Credentials Committee or his/her designee shall be availableto the Managed Care Board or its appropriate committee to answerany questions that may be raised with respect to therecommendation. If the Managed Care Board proposes to takeaction on the participating Provider’s application forreappointment which may entitle the Provider to a hearing underSection 5.3, it shall proceed as provided in Article 6 and shallnotify the affected Provider’s authorized representative of itsproposed action. If the Corporate Board proposes to take action onthe participating Provider’s application for appointment which mayentitle the Provider to a hearing under Section 5.3, it shall proceedas provided in Article 6 and shall notify the affected Provider’sauthorized representative of its proposed action. If the applicationfor reappointment has not been finally acted upon prior to the endof the appointment term, the current appointment shall continueuntil thirty (30) days past the thirty-six (36) month credentialingdeadline. At the end of such time, the Provider's agreement withthe managed care program is terminated and the Provider must re-submit an application for further consideration. If the ManagedCare Board proposes favorable action for reappointment which isaffirmed by the Corporate Board, the participating Provider shallbe reappointed to the managed care program for a newappointment term of thirty-six (36) months, subject to theProvider’s compliance with the managed care program’srequirements.

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ARTICLE 3.PROCEDURE FOR INVESTIGATION OF

MANAGED CARE PROGRAM APPOINTEES

Section 3.1. Grounds for Action.

Whenever, on the basis of information and belief, the Chairman of the CredentialsCommittee, the Administrator, the Chairman of the Managed Care Board or the Presidentof the Corporation has cause to question:

(a) The services provided by any managed care program appointee;

(b) The known or suspected violation by any managed care programappointee of applicable ethical or business standards or the bylaws,policies, rules or regulations of the managed care program,including, but not limited to, the managed care program’s qualityassurance, risk management and utilization review programs;

(c) The behavior or conduct on the part of any managed care programappointee that is considered lower than the standards of themanaged care program or disruptive of the orderly operation of themanaged care program, including the inability of the appointee towork harmoniously with others; or

(d) The failure to timely report or respond to a request for information,a written request for an investigation of the matter shall beaddressed to the Credentials Committee making specific referenceto the activity or conduct which gave rise to the request.

Section 3.2. Investigative Procedure.

The Credentials Committee shall meet as soon as practicable after receiving the requestand if, in the opinion of the Credentials Committee:

(a) The request for an investigation contains information sufficient towarrant a recommendation, the Credentials Committee, in itsdiscretion, shall make a recommendation to the Managed CareBoard, with or without a personal interview with the appointee; or

(b) The request for an investigation does not at that point containinformation sufficient to warrant a recommendation to theManaged Care Board, the Credentials Committee shallimmediately investigate the matter or appoint a subcommittee todo so (the “Investigating Committee”):

(1) The Investigating Committee shall consist of up to three (3)

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persons, any of whom may or may not hold appointmentsto the managed care program. The InvestigatingCommittee shall not include any individual who has aperceived or actual conflict of interest.

(2) The Credentials Committee or the InvestigatingCommittee, if used, shall have available to it the fullresources of the managed care program to aid in its work,as well as the authority to use outside consultants asrequired.

(3) The Provider’s authorized representative may be offered anopportunity to meet with the Investigating Committeebefore the Investigating Committee makes its report. Atthis meeting (but not, as a matter of right, in advance of it,)the Provider’s authorized representative shall be informedof the general nature of the evidence supporting theinvestigation requested and shall be invited to discuss,explain or refute it. The interview shall not constitute ahearing, and none of the procedural rules provided in thispolicy with respect to hearings shall apply. A summary ofsuch interview shall be made by the InvestigatingCommittee and included with its report to the CredentialsCommittee.

(4) If an Investigating Committee conducts an investigation,the Credentials Committee may accept, modify or reject therecommendation it receives from the InvestigatingCommittee.

Section 3.3. Procedure after Investigation or after Receiving Request forInvestigation.

(a) In acting after the investigation or after receiving the request forthe investigation, the Credentials Committee may:

(1) Recommend that no action is justified;

(2) Issue a written warning;

(3) Issue a letter of reprimand;

(4) Impose terms of probation;

(5) Recommend suspension of appointment;

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(6) Recommend revocation of managed care programappointment; or

(7) Make such other recommendations as it deems necessary orappropriate.

(b) The Credentials Committee’s recommendation shall be forwardedto the Managed Care Board. The Credentials Committee shallproceed as provided in Article 5 if the Credentials Committee’srecommendation entitles the affected provider to a hearingpursuant to Section 5.3.

(c) If the Credentials Committee’s recommendation does not entitlethe Provider to a hearing in accordance with this policy, a report ofthe action taken and reasons therefor shall be made and deliveredto the Managed Care Board. The Managed Care Board shallproceed as provided in Article 6 if the Managed Care Board’sproposed action entitles the affected Provider to a hearing on theManaged Care Board’s proposed action as provided in Section 6.3. If the Managed Care Board’s proposed action does not entitle theProvider to a hearing in accordance with this policy, a report of theproposed action and the reasons shall be made and delivered to theCorporate Board. In the event the Corporate Board proposes tomodify the Managed Care Board’s proposed action and such actionwould entitle the Provider to a hearing in accordance with Section6.3 of this policy, the Administrator shall so notify the affectedProvider’s authorized representative of the Provider’s right to ahearing in accordance with Article 6.

Section 3.4. Suspension of Privileges.

At any time during the investigation, either the Credentials Committee, with the approvalof the Managed Care Board, or the Corporate Board may suspend the appointment of aparticipating Provider pending an investigation concerning the conduct of the Provider orwhere the failure to take such action may result in an imminent danger to the health ofany individual. This suspension shall be deemed administrative in nature, for theprotection of the managed care program and/or its patients. Such suspension shall notindicate the validity of the charges and shall not remain in effect for more than fourteen(14) days (without the written consent of the Provider’s authorized representative) unlessso authorized by the Corporate Board. If the suspension exceeds the fourteen (14) dayperiod, the Provider’s authorized representative will be notified of the right to a hearingas provided in Article 5 or 6 as appropriate.

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ARTICLE 4.SUMMARY SUSPENSION OF APPOINTMENT PRIVILEGES

Section 4.1. Grounds for Summary Suspension.

(a) The Chairman of the Credentials Committee or, in his/her absence,his/her designee, the Chairman of the Managed Care Board or thePresident of the Corporation shall have the authority to summarilysuspend a participating provider pending an investigationconcerning the conduct of the Provider or whenever failure to takesuch action may result in an imminent danger to the health of anyindividual. Such suspension shall not imply final finding ofresponsibility for the situation that caused the suspension.

(b) Such summary suspension shall become effective immediatelyupon imposition, shall immediately be reported in writing to theCredentials Committee, the Administrator, the Chairman of theManaged Care Board and the President of the Corporation, andshall remain in effect unless or until modified by the CorporateBoard.

Section 4.2. Credentials Committee Procedure.

Any person who exercises authority under Section 4.1 to summarily suspend appointmentprivileges shall immediately report this action to the Administrator, the CredentialsCommittee, the Chairman of the Managed Care Board and the President of theCorporation to take further action in the matter. At that point, the Credentials Committeeshall take such further action as is required by Article 3. The Credentials Committeeshall report to the Managed Care Board and the Corporate Board within fourteen (14)days of the date of such suspension. The summary suspension shall remain in force untilmodified by the Corporate Board. If the summary suspension exceeds fourteen (14)days, the affected Provider’s authorized representative will be notified of the right to ahearing as provided in Article 5 or 6 as appropriate.

ARTICLE 5.PROVIDER HEARING WITH RESPECT TO

CREDENTIALS COMMITTEE’S RECOMMENDATION

Section 5.1. Initiation of Hearing.

An applicant or a participating Provider in the managed care program shall be entitled toa hearing based on an adverse recommendation made by the Credentials Committeeregarding those matters enumerated in Section 5.3. The purpose of the hearing shall befor the hearing officer(s) to consider the evidence and to recommend a course of action tothe Managed Care Board. The hearing shall be conducted in as informal a manner as

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possible, subject to the rules and procedures set forth in this policy.

Section 5.2. Notice of Recommendation.

When a recommendation adversely affecting the Provider is proposed by the CredentialsCommittee, which, according to this policy, entitles a Provider to a hearing on thatproposed adverse recommendation, notice shall be given (or caused to be given) by theAdministrator in writing to the affected Provider’s authorized representative. This noticeshall contain:

(a) A statement of the proposed recommendation by the CredentialsCommittee and a statement of the general reason for the proposedrecommendation;

(b) A statement that the Provider has the right to request a hearing onthe recommendation;

(c) The request for a hearing shall be the earlier of 45 days from dateof mailing or 30 days of the Provider’s receipt of a notice of aproposed adverse action. Failure to timely request a hearing shallbe deemed a waiver of the hearing rights.

(d) The following summary of the Provider’s right in the hearing:

If a hearing is requested on a timely basis, the hearing shall bebefore a hearing officer or officers appointed by the Administrator. At such hearing, the Provider has the following rights:

(1) the right to be represented by an attorney or other person ofchoice;

(2) the right to have a record made of the proceedings, a copyof which may be obtained upon payment of the reasonablecharges associated with the preparation thereof;

(3) the right to call, examine and cross-examine witnesses;

(4) the right to present evidence determined to be relevant bythe hearing officer(s), regardless of whether such evidencewould be admissible in a court of law; and

(5) the right to submit a written statement at the close of thehearing.

As the Provider’s authorized representative, you shall also have theright to receive the written recommendation of the hearing

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officer(s), including a statement of the basis for therecommendation and to receive a written final decision of themanaged care program, including a statement of the basis for thedecision. The right to a hearing may be forfeited if you fail withoutgood cause to appear.

Section 5.3. Grounds for Hearing.

No proposed action or inaction, or recommendation for action or inaction, other thanthose hereinafter enumerated shall constitute grounds for a hearing:

(a) Denial of initial participation in the managed care program;

(b) Denial of reappointment to the managed care program;

(c) Revocation of appointment to the managed care program; and

(d) Suspension or summary suspension of appointment which exceedsfourteen (14) days.

Section 5.4. Unappealable Actions.

Voluntary relinquishment of appointment to the managed care program shall notconstitute grounds for a hearing but shall take effect without a hearing.

Section 5.5. Notice of Hearing and Statement of Reasons.

If a hearing is requested by the affected Provider’s authorized representative, theAdministrator shall schedule the hearing and shall give (or cause to be given) writtennotice to the affected Provider’s authorized representative of its time, place and date. The notice shall include a proposed list of witnesses (if any) who will give testimony atthe hearing in support of the proposed action. The hearing shall be no sooner than thirty(30) days after the date of notice of the hearing unless an earlier hearing date has beenagreed to in writing by the parties. The notice and the information contained in thenotice may be amended or added to at any time, even during the hearing, so long as theadditional material is relevant, and the authorized representative and the Provider’scounsel have sufficient time, but in no case more than thirty (30) days, to study thisadditional information and rebut it.

Section 5.6. List of Witnesses.

A list of the individuals so far as are then reasonably known, who will give testimony orevidence in support of the proposed action at the hearing, shall be enclosed with thenotice of the hearing as provided in Section 5.5 of this policy. The Provider’s authorizedrepresentative requesting the hearing shall also provide a list of the names of thewitnesses who will give testimony or evidence on the Provider’s behalf and a summary

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of other information to be offered at the hearing. This information shall be given to theAdministrator within ten (10) days after receiving notice of the hearing. The witness listof either party may be supplemented or amended during the course of the hearing,provided that reasonable notice of the change is given to the other party.

Section 5.7. Hearing Officer(s).

When a hearing is requested, the Administrator shall appoint a hearing officer (or severalhearing officers). Such appointment shall include designation of a Chairman if more thanone hearing officer is appointed. Knowledge of the matter involved shall not precludeany individual from serving as a hearing officer. The hearing officer(s) shall not includeany individuals who have a perceived or actual conflict of interest.

The hearing officer (or Chairman if there is more than one hearing officer) shallact to ensure that all participants in the hearing have a reasonable opportunity to be heardand to present all oral and documentary evidence, that decorum is maintained throughoutthe hearing and that no intimidation is permitted. The hearing officer(s) shall determinethe order of procedure throughout the hearing and shall have the authority and discretion,in accordance with this policy, to make rulings on all questions which pertain to matter ofprocedure and to the admissibility of evidence. In all instances, the hearing officer(s)shall act in such a way that all information relevant to the appointment or reappointmentof the person requesting the hearing is considered by the hearing officer(s) in formulatingthe recommendations. It is understood that the hearing officer(s) is acting at all times tosee that all relevant information is made available for the deliberations andrecommendations.

Section 5.8. Failure to Appear.

Failure, without good cause, of the Provider requesting the hearing to have an authorizedrepresentative to appear and proceed at such a hearing shall be deemed to constitutevoluntary acceptance of the proposed recommended action.

Section 5.9. Postponements and Extensions.

Postponements and extensions of time beyond any time limit set forth in this policy maybe requested by any party but shall be permitted by the hearing officer(s) only upon ashowing of good cause.

Section 5.10. Representation.

The Provider requesting the hearing shall be entitled representation at the hearing by anattorney or other person of the Provider’s choice to examine witnesses and present thecase. The Chairman of the Credentials Committee shall appoint a person to support therecommendations that gave rise to the hearing and to examine and cross-examinewitnesses at the hearing.

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Section 5.11. Admissibility of Evidence.

The hearing shall not be conducted according to rules of law relating to the examinationof witnesses or presentation of evidence. Any relevant evidence shall be admitted by thehearing officer(s) if it is the sort of evidence on which responsible persons areaccustomed to rely in the conduct of serious affairs, regardless of the admissibility ofsuch evidence in a court of law. Each party shall have the right to submit a memorandumof points and authorities, and the hearing officer(s) may request such a memorandum tobe filed following the close of the hearing. The hearing officer(s) may interrogate thewitnesses, call additional witnesses or request documentary evidence if he or she deems itappropriate.

Section 5.12. Official Notice.

The hearing officer(s) shall have the discretion to take official notice of any matters,either technical or scientific, relating to the issue under consideration which could havebeen judicially noticed by the courts of this state. Participants in the hearing shall beinformed of the matters to be officially noticed, and such matters shall be noted in therecord of the hearing. Either party shall have the opportunity to request that a matter beofficially noticed or to refute the noticed matter by evidence or by written or oralpresentation of authority. Reasonable additional time shall be granted, if requested, topresent written rebuttal of any evidence admitted on official notice.

Section 5.13. Basis of Decision.

The decision of the hearing officer(s) shall be based on the evidence produced at thehearing. This evidence may consist of the following:

(a) Oral testimony of witnesses;

(b) Memoranda of points and authorities presented in connection withthe hearing;

(c) Any information regarding the Provider who requested the hearingso long as that information has been admitted into evidence at thehearing and the Provider who requested the hearing had theopportunity to comment on and, by other evidence, refute it;

(d) Any and all applications, references and accompanyingdocuments;

(e) All officially noticed matters; and

(f) Any other evidence that has been admitted.

Section 5.14. Burden of Proof.

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At any hearing conducted under this article, the following rules governing the burden ofproof shall apply:

(a) The Credentials Committee shall first come forward with evidencein support of its recommendation. Thereafter, the burden shallshift to the Provider who requested the hearing to come forwardwith evidence in its support.

(b) After all of the evidence has been submitted by both sides, thehearing officer(s) shall recommend in favor of the recommendationproposed by the Credentials Committee unless he finds that theProvider who requested the hearing has proved that the proposedrecommendation that prompted the hearing was unreasonable, notsustained by the evidence or otherwise unfounded.

Section 5.15. Adjournment and Conclusion.

The hearing officer(s) may adjourn the hearing and reconvene the same at theconvenience of the participants without special notice. Upon conclusion of thepresentation of oral and written evidence, the hearing shall be closed.

Section 5.16. Deliberations and Recommendations of the Hearing Officer(s).

Within twenty (20) days of the receipt of the hearing transcript, the hearing officer(s)shall conduct his/her deliberation outside the presence of any other person and shallrender a recommendation, accompanied by a report, which shall contain a concisestatement of the reasons justifying the recommendation made, and shall deliver suchreport to the Chairman of the Credentials Committee.

Section 5.17. Disposition of Report of Hearing Officer(s).

Upon its receipt, the Chairman of the Credentials Committee shall forward the hearingofficer’s report and recommendation, along with all supporting documentation, to theManaged Care Board for further action. The Administrator shall send a copy of thereport and recommendations to the individual who requested the hearing and to themembers of the Credentials Committee.

Section 5.18. Action by the Managed Care Board.

The Managed Care Board shall act upon the proposed recommendation of the CredentialsCommittee and the report of the hearing officer(s). The Managed Care Board mayaffirm, modify or reverse the recommendation of the Credentials Committee or thehearing officer(s) or, in its discretion, refer the matter for further review andrecommendation. The Managed Care Board shall take action within one hundred andtwenty (120) days after receipt of the hearing officer’s recommendation. Copies of the

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Managed Care Board’s proposed action shall be delivered to the affected Provider’sauthorized representative and the Chairman of the Credentials Committee. If the matteris referred for further review and recommendation, this further review process and reportback to the Managed Care Board shall in no event exceed one hundred and twenty (120)days in duration, except as the parties may otherwise agree. The Managed Care Boardshall then have one hundred and twenty (120) days to act upon the report resulting fromthe further review process. The Managed Care Board shall forward its proposed action tothe Corporate Board for final action.

Section 5.19. Action by the Corporate Board.

Within sixty days, the Corporate Board shall act upon the Managed Care Board’sproposed action. The Corporate Board takes final action by affirming, modifying orreversing the proposed action or, in its discretion, referring the matter for further reviewand recommendation. Copies of the action taken by the Corporate Board shall bedelivered to the affected Provider’s authorized representative, the Chairman of theCredentials Committee and the Chairman of the Managed Care Board.

ARTICLE 6.PROVIDER HEARING WITH RESPECT TO

PROPOSED MANAGED CARE BOARD OR CORPORATE BOARD ACTION

Section 6.1. Initiation of Hearing.

An applicant or a Provider holding appointment to the managed care program shall beentitled to a hearing before a hearing officer(s) appointed by the managed care programwhenever the Managed Care Board or the Corporate Board intends to take action whichwould adversely affect the Provider, if such proposed action entitles the Provider to ahearing as provided in Section 6.3 of this policy. The hearing provided for in this articleshall be available only under such circumstances where a hearing was not available underthe provisions of Article 5 because the recommendation of the Credentials Committee didnot adversely affect the applicant. Further, a hearing based on the Corporate Board’sproposed adverse action shall be available only under such circumstances where ahearing on the Managed Care Board’s proposed action was not available because theproposed action of the Managed Care Board did not adversely affect the applicant orProvider holding appointment to the managed care program. An applicant or a Providerholding an appointment to the managed care program is entitled to no more than one (1)hearing under this policy. The purpose of the hearing shall be for the hearing officer(s)to consider the evidence and to recommend a course of action to the Managed CareBoard or the Corporate Board, as appropriate. The hearing shall be conducted in asinformal a manner as possible, subject to the rules and procedures set forth in this policy.

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Section 6.2. Notice of Proposed Action.

(a) When the Managed Care Board or the Corporate Board proposesto take adverse action, the affected Provider’s authorizedrepresentative shall be given notice by the Administrator inwriting. This notice shall contain:

(1) A statement of the proposed adverse action to be taken bythe Managed Care Board or the Corporate Board and astatement of the general reasons for the proposed adverseaction;

(2) A statement that the Provider has the right to request ahearing on the proposed adverse action;

(3) The request for a hearing shall be the earlier of 45 daysfrom date of mailing or 30 days of the Provider authorizedrepresentative’s receipt of a notice of a proposed adverseaction or an adverse action. Failure to timely request ahearing shall be deemed a waiver of the hearing rights.

(4) The following summary of rights in the hearing:

If a hearing is requested on a timely basis, the hearing shallbe before a hearing officer or officers appointed by theAdministrator. At such hearing, the Provider has thefollowing rights:

(a) the right to be represented by an attorney or otherperson of choice;

(b) the right to have a record made of the proceedings,a copy of which may be obtained upon payment ofthe reasonable charges associated with thepreparation thereof;

(c) the right to call, examine and cross-examinewitnesses;

(d) the right to present evidence determined to berelevant by the hearing officer(s), regardless ofwhether such evidence would be admissible in acourt of law; and

(e) the right to submit a written statement at the closeof the hearing.

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As the Provider’s authorized representative, youshall also have the right to receive the writtenrecommendation of the hearing officer(s), includinga statement of the basis for the recommendation andto receive a written final decision of the managedcare program, including a statement of the basis forthe decision. The right to a hearing may be forfeitedif you fail without good cause to appear.

(b) A request for a hearing shall be made in writing to theAdministrator. In the event the affected Provider’s authorizedrepresentative does not request a hearing in the time and themanner herein set forth, the Provider shall be deemed to havewaived the right to such hearing and to have accepted the proposedadverse action of the Managed Care Board or the Corporate Board,as appropriate.

Section 6.3. Grounds for Hearing.

No proposed action or inaction, or recommendation for action or inaction, other thanthose hereinafter enumerated shall constitute grounds for a hearing:

(a) Denial of initial participation in the managed care program;

(b) Denial of reappointment to the managed care program;

(c) Revocation of appointment to the managed care program; and

(d) Suspension or summary suspension of appointment which exceedsfourteen (14) days.

Section 6.4. Unappealable Actions.

Voluntary relinquishment of appointment to the managed care program shall notconstitute grounds for a hearing but shall take effect without a hearing.

Section 6.5. Notice of Hearing and Statement of Reasons.

If a hearing is requested by the affected Provider’s authorized representative, theAdministrator shall schedule a hearing and shall give written notice to the affectedProvider’s authorized representative of the hearing’s time, place and date. The noticeshall include a list of witnesses (if any) who will give testimony in support of the adverseaction proposed to be taken by the Managed Care Board or the Corporate Board. Thehearing shall be no sooner than thirty (30) days after the date of the notice of the hearingunless an earlier hearing date has been specifically agreed to in writing by the parties.

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Section 6.6. List of Witnesses.

A list of the names of the individuals so far as are reasonably known who will givetestimony at the hearing shall be enclosed with the notice of the hearing as provided inSection 6.3 of this policy. The authorized representative requesting the hearing shall alsoprovide a list of the names of the individual witnesses who will give testimony orevidence on the Provider’s behalf and a summary of other information to be offered at thehearing. This information shall be given to the Administrator within ten (10) days afterthe individual receives notice of the hearing. The witness list of either party may, in thediscretion of the hearing officer(s), be supplemented or amended during the hearing.

Section 6.7. Hearing Officer(s).

When a hearing is requested, the Administrator shall appoint a hearing officer (or severalhearing officers). Such appointment shall include designation of a Chairman if more thanone hearing officer is appointed. Knowledge of the matter involved shall not precludeany individual from serving as a hearing officer. The hearing officer(s) shall not includeany individuals who have a perceived or actual conflict of interest.

The hearing officer (or Chairman if there is more than one hearing officer) shallact to ensure that all participants in the hearing have a reasonable opportunity to be heardand to present all oral and documentary evidence, that decorum is maintained throughoutthe hearing and that no intimidation is permitted. The hearing officer(s) shall determinethe order of procedure throughout the hearing and shall have the authority and discretion,in accordance with this policy, to make rulings on all questions which pertain to mattersof procedure and to the admissibility of evidence. In all instances, the hearing officer(s)shall act in such a way that all information relevant to the appointment or reappointmentof the Provider requesting the hearing is considered by the hearing officer(s) informulating the recommendation. It is understood that the hearing officer(s) is acting atall times to see that all relevant information is made available for his/her deliberationsand recommendations.

Section 6.8. Failure to Appear.

Failure of the Provider’s authorized representative requesting a hearing to appear withoutgood cause shall be deemed to constitute acceptance of the proposed adverse action ofthe Managed Care Board or the Corporate Board.

Section 6.9. Postponements and Extensions.

Postponements and extensions of time beyond any time limit set forth in this policy maybe requested by the Provider’s authorized representative but shall be permitted by thehearing officer(s) only upon a showing of good cause.

Section 6.10. Representation.

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The Provider requesting a hearing shall be entitled to be represented at the hearing by anattorney or other person of the individual’s choice and to examine witnesses and presentthe Provider’s case.

Section 6.11. Admissibility of Evidence.

The hearing shall not be conducted according to the rules of law relating to theexamination of witnesses or presentation of evidence. Any relevant evidence shall beadmitted if it is the sort of evidence which responsible people are accustomed to rely onin the conduct of serious affairs regardless of the admissibility of such evidence in a courtof law. The Provider’s authorized representative shall have the right to submit amemorandum of points and authority.

Section 6.12. Official Notice.

The hearing officer(s) shall have the discretion to take official notice of any matters,either technical or scientific, relating to the issue under consideration which could havebeen judicially noticed by the courts of this state. Participants in the hearing shall beinformed of the matters to be officially noticed, and such matters shall be noted in therecord of the hearing. Either party shall have the opportunity to request that a matter beofficially noticed or to refute the noticed matter by evidence or by written or oralpresentation of authority. Reasonable additional time shall be granted, if requested, topresent written rebuttal of any evidence admitted on official notice.

Section 6.13. Basis of Decision.

The recommendation of the hearing officer(s) shall be based on the evidence produced atthe hearing. This evidence may consist of the following:

(a) Oral testimony of witnesses;

(b) Memoranda of points and authorities presented in connection withthe hearing;

(c) Any information regarding the person who requested the hearingso long as that information has been admitted into evidence at thehearing and the person who requested the hearing had theopportunity to comment on and, by other evidence, refute it;

(d) Any and all applications, references and accompanyingdocuments;

(e) All officially noticed matters; and

(f) Any other evidence that has been admitted.

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Section 6.14. Burden of Proof.

At any hearing conducted under this article, the following rules governing the burden ofproof shall apply:

(a) The Managed Care Board or the Corporate Board, as appropriate(or a representative thereof), shall first come forward withevidence in support of its proposed adverse action. Thereafter, theburden shall shift to the Provider who requested the hearing tocome forward with evidence in its support.

(b) After all the evidence has been submitted by both sides, thehearing officer(s) shall recommend in favor of the action proposedby the Managed Care Board or the Corporate Board unless he/shefinds that the Provider which requested the hearing has proved thatthe proposed action that prompted the hearing was unreasonable,not sustained by the evidence or otherwise unfounded.

Section 6.15. Adjournment and Conclusion.

The hearing officer(s) may adjourn the hearing and reconvene the same at theconvenience of the participants without special notice. Upon conclusion of thepresentation of oral and written evidence, the hearing shall be closed.

Section 6.16. Deliberations and Recommendations.

Within twenty (20) days of the receipt of the receipt of the hearing transcript, the hearingofficer(s) will conduct his/her deliberation outside the presence of the Provider and shallrender a decision accompanied by a written report which shall contain a concisestatement of his/her recommendation and the reasons therefor. A copy of the report shallbe forwarded to the Administrator.

Section 6.17. Disposition of Report of Hearing Officer(s).

Upon its receipt, the Administrator shall forward the hearing officer’s report andrecommendation, along with all supporting documentation, to the Corporate Board forfurther action. The Administrator shall send a copy of the report and recommendations tothe authorized representative who requested the hearing and to the members of theManaged Care Board.

Section 6.18. Action by the Corporate Board.

Within sixty (60) days, the Corporate Board shall act upon the Managed care Board’sproposed action. The Corporate Board takes final action by affirming, modifying or

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reversing the proposed action or, in its discretion, referring the matter for further reviewand recommendation. Copies of the action taken by the Corporate Board shall bedelivered to the affected individual, the Chairman of the Credentials Committee and theChairman of the Managed Care Board.

ARTICLE 7.EFFECT OF ADVERSE ACTION

A Provider seeking appointment or reappointment which has received a finaladverse decision, or a Provider which has had its appointment terminated by virtue ofcorrective action, shall not be eligible to reapply for appointment for a period of five (5)years, unless the decision itself, or other provisions of this policy, provide otherwise, orthe Corporate Board waives the five (5) year waiting period. Any such re-applicationshall be processed as an initial application, and the applicant shall submit such additionalinformation as the Credentials Committee, the Managed Care Board or the CorporateBoard may require to demonstrate that the basis for the earlier adverse action no longerexists.

ARTICLE 8.NOTICES

Section 8.1. Form and Delivery.

Whenever notice is required to be given to any person, it may be given in writing mailedto the person’s address as it is listed with the Administrator. Notices to the Provider’sauthorized representative given by mail shall be deemed to be given when they aredeposited in the United States mail, postage prepaid. Notice to any person may also begiven, and is deemed effective upon personal delivery of written notice to the person,upon telephone notice to the person, upon facsimile transmission, upon placement of acopy of the notice in the person’s hospital mail box or upon system courier hand-delivery.

Section 8.2. Waiver.

Whenever any notice is required to be given, a written waiver thereof signed by theperson entitled to such notice, whether before or after the time stated therein, shall bedeemed to be equivalent to such notice. Any person who attends any meeting withoutprotesting at the commencement of the meeting the lack of notice thereof shall beconclusively deemed to have waived notice of such meeting.

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ARTICLE 9.AMENDMENTS

The Managed Care Board may recommend amendments to this policy to theCorporate Board. The Corporate Board shall have final authority to amend this ProviderStatement of Policies and Procedures on Appointment and Reappointment and to adoptnew policies by an affirmative vote of a majority of the Corporate Board. New oramended policies shall be effective when adopted. All applications in process at the timeof the adoption of new or amended policies shall be processed under the policies in placeat the time the application for appointment or reappointment was received. Allapplications for appointment or reappointment received after the adoption of the new oramended policies shall be processed according to the terms of the new or amendedpolicies.

ARTICLE 10.ADOPTION

This Provider Statement of Policies and Procedures on Appointment andReappointment of the Managed Care Programs operated by North Mississippi HealthLink, Inc. is adopted by majority vote of the whole Corporate Board on the 7th day ofDecember, 2004, and shall be effective on this December 7, 2004.

NORTH MISSISSIPPI HEALTH LINK, INC.

By: Gerald Wages, NMHS Vice President, External Affairs

By:T. Homer Horton, M.D.Medical Director