1782-motion re info mgmt services and trust ageement and document retention plan

8/6/2019 1782-Motion Re Info Mgmt Services and Trust Ageement and Document Retention Plan

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Hearing Date: July 21, 2011 11:00 a.m. (prevailing Eastern Time)

Objection Deadline: July 14, 2011 by 12:00 p.m. (prevailing Eastern Time)

KRAMER LEVIN NAFTALIS & FRANKEL LLPKenneth H. Eckstein

Adam C. RogoffP. Bradley ONeill1177 Avenue of the AmericasNew York, New York 10036Telephone: (212) 715-9100Facsimile: (212) 715-8000

Counsel for Debtors and Debtors in Possession

UNITED STATES BANKRUPTCY COURTSOUTHERN DISTRICT OF NEW YORK

---------------------------------------------------------- xIn re: : Chapter 11

:SAINT VINCENTS CATHOLIC MEDICALCENTERS OF NEW YORK, et al.,

: :

Case No. 10-11963 (CGM)

:Debtors. : Jointly Administered

---------------------------------------------------------- x

NOTICE OF DEBTORSMOTIONFORANORDER

(I)AUTHORIZINGTHEDEBTORSENTRYINTOANINFORMATION

MANAGEMENTSERVICESANDTRUSTAGREEMENT

WITHMETALQUEST-SVCMCTRUST,LLC D/B/A METALQUEST,(II)APPROVINGTHEDOCUMENTRETENTIONAND

DESTRUCTIONPLANSETFORTHTHEREIN;(III)DIRECTING

THEADDITIONALSTORAGEVENDORSTOCOOPERATEIN

TRANSFEROFRECORDS;AND(IV)GRANTINGRELATED

RELIEFPURSUANTTO11U.S.C.363AND554AND

RULE6007OFTHEFEDERALRULESOFBANKRUPTCYPROCEDURE

PLEASE TAKE NOTICE OF THE FOLLOWING:

1. A hearing to consider the Motion for an order (I) authorizing the Debtorsentry into an information management services and trust agreement; (II) approving the


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Debtors), shall be held before the Honorable Cecelia G. Morris, United States Bankruptcy

Judge, at the United States Bankruptcy Court, Alexander Hamilton Custom House, One

Bowling Green, New York, New York 10004, on July 21, 2011 at 11:00 a.m. (prevailing

Eastern Time), or as soon thereafter as counsel may be heard. Please note that the specific

courtroom will be assigned prior to the hearing and will be posted by a notice on the case

docket.

2. Objections, if any, to the relief sought in the Motion must be made inwriting, with a hard copy to chambers, conformed to the Federal Rules of Bankruptcy

Procedure and the Local Rules for the United States Bankruptcy Court for the Southern District

of New York and be filed with the Bankruptcy Court and served so as to be actually received by

(a) counsel to the Debtors, Kramer Levin Naftalis & Frankel LLP, 1177 Avenue of the

Americas, New York, New York 10036, Attn: Adam C. Rogoff, Esq.; (b) counsel for the

Committee, c/o Akin Gump Strauss Hauer & Feld LLP, One Bryant Park, New York, New

York 10036, Attn: David Botter, Esq. and Sarah Link Schultz, Esq., (c) counsel to the agent of

Debtors postpetition DIP lenders, Winston & Strawn LLP, 200 Park Avenue, New York, NY

10166-4193, Attn: David Neier, Esq., and 101 California Street, San Francisco, CA 94111,

Attn: Randy Rogers, Esq.; (d) the Office of the United States Trustee for the Southern District

of New York, 33 Whitehall Street, 21st Floor, New York, New York 10004, Attn: Serene

Nakano, Esq., (e) the Consumer Privacy Ombudsman, Alan Chapell, Chapell & Associates

LLC, 297 Driggs Avenue, Suite 3A, Brooklyn, New York 11222, (f) counsel to the Patient Care


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Cincinnati, OH 45242, Attn: Gregory J. Berberich, Esq. no later than July 14, 2011 by 12:00

p.m. (prevailing Eastern Time).

Dated: July 7, 2011New York, New York

KRAMER LEVIN NAFTALIS & FRANKEL LLP

/s/ Adam C. RogoffKenneth H. EcksteinAdam C. RogoffP. Bradley ONeill1177 Avenue of the AmericasNew York, New York 10036Telephone: (212) 715-9100



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Hearing Date: July 21, 2011 11:00 a.m. (prevailing Eastern Time)

Objection Deadline: July 14, 2011 by 12:00 p.m. (prevailing Eastern Time)

KRAMER LEVIN NAFTALIS & FRANKEL LLPKenneth H. Eckstein

Adam C. RogoffP. Bradley ONeill1177 Avenue of the AmericasNew York, New York 10036Telephone: (212) 715-9100Facsimile: (212) 715-8000



---------------------------------------------------------- xIn re: : Chapter 11

:SAINT VINCENTS CATHOLIC MEDICAL

CENTERS OF NEW YORK, et al.,

:

:

Case No. 10-11963 (CGM)


---------------------------------------------------------- x

DEBTORSMOTIONFORANORDER(I)AUTHORIZING

THEDEBTORSENTRYINTOANINFORMATION

MANAGEMENTSERVICESANDTRUSTAGREEMENTWITHMETALQUEST-SVCMCTRUST,LLC D/B/A METALQUEST,

(II)APPROVINGTHEDOCUMENTRETENTIONAND

DESTRUCTIONPLANSETFORTHTHEREIN;(III)DIRECTING

THEADDITIONALSTORAGEVENDORSTOCOOPERATEIN


RELIEFPURSUANTTO11U.S.C.363AND554ANDRULE

6007OFTHEFEDERALRULESOFBANKRUPTCYPROCEDURE

TO THE HONORABLE CECELIA G. MORRISUNITED STATES BANKRUPTCY JUDGE:

Saint Vincents Catholic Medical Centers of New York (SVCMC) and


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Cases), hereby move (the Motion) pursuant to section 363 and 554 of title 11 of the

United States Code and Rule 6007 of the Federal Rules of Bankruptcy Procedures

(Bankruptcy Rules) for entry of an order, in substantially the form annexed hereto as

Exhibit A, (I) authorizing the Debtors entry into an information management services and

trust agreement with MetalQuest-SVCMC Trust, LLC d/b/a MetalQuest (MetalQuest); (II)

approving the document retention and destruction plan set forth therein; (III) directing the

additional storage vendors to cooperate in the transfer of records; and (IV) granting related

relief pursuant to 11 U.S.C. 363 and 554 and Rule 6007 of the Federal Rules of

Bankruptcy Procedure. In support of the Motion, the Debtors respectfully represent as

follows:

JURISDICTION AND VENUE

1. The Court has subject matter jurisdiction to consider this matterpursuant to 28 U.S.C. 157 and 1334. This is a core proceeding pursuant to 28 U.S.C.

157(b)(2).

2. Venue is proper before the Court pursuant to 28 U.S.C. 1408 and1409.

3. The statutory predicate for the relief requested herein is 363 and554of title 11 of the United States Code and Bankruptcy Rule 6007.

SUMMARY OF THE RELIEF REQUESTED

4. An important part of the wind down and closure of the Debtors health


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hundreds of thousands of former patients. These records exist in many forms (e.g., paper,

medical films, electronic data files). To address former patients long-term access to their

medical records, the Debtors, in coordination with the applicable regulatory agencies and the

Patient Care Ombudsman appointed in these cases, have developed a records retention and

destruction program (the Records Program). The Records Program takes into account

various non-bankruptcy federal and state law requirements for storage, access and,

ultimately, the appropriate destruction of records that no longer need to be preserved. Under

such non-bankruptcy laws, the Debtors could be obligated to retain records for many years.

To date, many patient records have been transferred to new service providers as part of those

transactions pursuant to medical records custody agreements.2 Nonetheless, the Debtors

remain responsible for many more medical records relating to the Debtors operations as of

the Petition Date at multiple locations as well as former operations that ceased prior to the

Petition Date. The Records Program establishes an orderly process for transferring these

records and providing ongoing access to them as part of the Debtors overall healthcare

mission.

5. The Debtors solicited bids from a number of vendors capable ofproviding storage and related services under the Records Program. Following negotiations,

the Debtors determined that MetalQuest submitted the most favorable bid $3.1 million

which was significantly lower than the competing proposals. In selecting MetalQuest, the

Debtors analyzed not only the costs to the estates but also MetalQuests capability to


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6. Additionally, the Records Program provides that MetalQuest will storenon-medical business records that are required as part of the orderly wind down of the

Debtors' operations and the administration of their Chapter 11 estates. Certain documents

presently being stored by the Debtors are no longer required, and MetalQuest has agreed to

destroy such records at no additional cost to the estates. As part of this process, in

connection with the transfer of documents to MetalQuest, the Debtors will provide the

Creditors Committee with a description of the business records not necessary to retain and

that MetalQuest would be authorized to destroy.

7. The Records Program and agreement with MetalQuest provide a long-term, global solution for medical and business records which consolidates the storage of all

medical and business records in one facility, providing the most economic and efficient way

to ensure compliance with applicable federal and state law relating to the retention and

destruction of such records. As the Debtors are liquidating and winding down their estates,

the ability to have a third-party assume this responsibility is essential. As part of the

Records Program, the Debtors, in coordination with the Patient Care Ombudsman and

applicable regulatory agencies, will implement a communications plan so that patients are

informed of the whereabouts of their medical records and the means to retrieve them upon

request.

8. Presently, the Debtors have thousands of records located at a variety offacilities, including some being stored by third party vendors. With the closure of the


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the medical and other records currently stored with three different vendors into MetalQuests

facilities. As part of the relief requested in the Motion, the Debtors request that the Court

require the vendors currently storing Records to cooperate with the transfer of the Records in

their possession to MetalQuest.

9. Therefore, the Debtors respectfully request authorization to (i) enterinto the agreement with MetalQuest; (ii) implement the Records Program; and (iii) as

necessary, direct the Additional Storage Vendors to cooperate in the transfer of Records and,

in the absence of an agreement between the Debtors and the applicable vendors(s), establish

the reasonable costs and expenses to be paid by the Debtors estates relating to the transfer

of such Records and the related relief sought herein.

GENERAL BACKGROUND

10. On April 14, 2010 (the Petition Date), each Debtor filed a voluntarypetition for relief under Chapter 11 of the Bankruptcy Code. The cases are being jointly

administered for procedural purposes.

11. The Debtors are operating their business as debtors in possessionpursuant to sections 1107 and 1108 of the Bankruptcy Code.

12. On April 21, 2010, the United States Trustee for the Southern Districtof New York (the U.S. Trustee) appointed an official committee of unsecured creditors

pursuant to section 1102 of the Bankruptcy Code (the Creditors Committee) and (ii)

Daniel T. McMurray as patient care ombudsman pursuant to section 333 of the Bankruptcy


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they give Respect, Integrity, Compassion and Excellence to all who come to us in need,

especially the poor.

14. Prior to the Petition Date, the Debtors operated St. Vincents HospitalManhattan (the Hospital) which was located in the Greenwich Village section of

Manhattan. The Debtors operated numerous other services, including a behavioral health

facility, skilled nursing facilities, continuing care facilities, a hospice, a home health agency,

and a military health plan serving active duty dependents, retirees, and their families.

Additionally, the Debtors operated certain physician-related affiliates, provided specialized

care across 14 clinical departments, and are affiliated with 18 licensed behavioral health and

community medicine programs and six ambulatory care providers in Manhattan, including

the Comprehensive Cancer Center, an HIV center and a wound care center

15. On April 6, 2010, following a sustained period of poor operating resultsand unsuccessful efforts to find additional financing and a strategic partner for the Hospital,

the board of directors of SVCMC voted to approve the closure of the Hospital and the

transfer or closure of the outpatient programs and clinics associated with and operated by the

Hospital. In accordance with New York State law, the Debtors submitted to the New York

State Department of Health (DOH) for approval their proposed plan of closure on April 9,

2010 (the Closure Plan,) as may be amended from time to time in consultation with the

DOH). The Hospital was closed under the Closure Plan and the Debtors continue to work

closely with the DOH to implement the rest of the Closure Plan.


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Rules, 45 C.F.R. Parts 160 and 164, as amended (the HIPAA Privacy and Security

Rules), and a participating provider in the Medicare and Medicaid programs under Tile

SVIII and Title XIX of the Social Security Act (U.S.C. 1395-1995ccc, subchapter SVIII,

chapter 7, Title 42 and 1396-1396v, subchapter XIX, chapter 7, Title 42, respectively) (the

Medicare and Medicaid Law), the Debtors must comply with certain guidelines and

timetables for retention and destruction of medical records, in hard copy and electronic

format, medical samples, and other materials (together, Medical Records)3

pursuant to

HIPAA and the HIPAA Privacy and Security Rules and laws of the State of New York and

the Medicare and Medicaid Law (together with HIPAA and the HIPAA Privacy and Security

Rules, the Applicable Medical Record Retention Laws).

17. Although the Debtors historically operated numerous healthcareoperations at multiple facilities around the tri-state area, they never adopted a single

comprehensive approach for the storage of medical records. As a result, the Debtors

Medical Records are now held in multiple facilities operated by several different providers

as depicted by Exhibit B. In addition to St. Vincents Manhattan Hospital, the Debtors

Medical Records derive from numerous business units including: (i) St. Josephs Hospital,

St. Marys Hospital, St. Johns Queens Hospital and Mary Immaculate Hospital all of which

ceased to be part of the SVCMC system in 2006; (ii) St. Vincents Staten Island Hospital;

(iii) Bayley Seton Hospital; (iv) Pax Christi Hospice; (v) St. Vincents Westchester4; and (vi)

the three nursing homes; (vii) the home health agencies, and (viii) numerous ambulatory care


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and outpatient clinical facilities. The Debtors Medical Records are stored at scattered

locations including the Debtors former Manhattan campus, the Bayley Seton campus, the

Debtors central business office, the Debtors other locations, and with several information

management and storage vendors. The Debtors Medical Records include numerous types of

records (e.g. pathology blocks and slides and x-rays) in numerous formats (e.g. paper,

electronic, and film).

18. In connection with previous transfers of the Debtors healthcareservices to purchasers, records transfer and custodial agreements have been executed with

many of the transferees to transfer certain Medical Records to the new healthcare providers.

However, hundreds of thousands of Medical Records remain in the Debtors custody and

must be prepared for long-term storage and final disposition. In addition, the Debtors

continue to transfer patient records to new healthcare providers selected by former patients

pursuant to medical record custody agreements or copies of such records to any other

requestors including former patients subject to appropriate consents. For example, the

Hospital receives approximately 100 patient record requests each week.

19. As the Debtors wind down their operations, in their sound business judgment, the Debtors are seeking to enter into an Information Management Services and

Trust Agreement with MetalQuest (MetalQuest Agreement) for the implementation of a

Records retention and destruction plan (Records Retention and Destruction Plan or, as

defined above, Records Program) that complies with the Applicable Laws. Furthermore,


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A. The MetalQuest Agreement

20.

MetalQuest is an information lifecycle management company that has

been providing digital and hardcopy information management services to its clients for more

than 12 years. The MetalQuest facilities total more than 200,000 sq. ft. in the center-city

area of Cincinnati, Ohio, and contain hardcopy and digital document and film records from

hospitals and businesses located nationwide.

21. The MetalQuest Agreement contemplates the creation of a trust5 withthe purpose of maintaining the Debtors records in the normal course of their business as a

Covered Health Care Provider and to be deposited with the MetalQuest. MetalQuest will

box the Debtors Records at the various locations where they are stored and transfer them to

MetalQuests facility. MetalQuest will thereafter store, provide access to, and periodically

destroy the Records, all in accordance with Applicable Laws. The total cost for

MetalQuests services is approximately $3.1 million plus a fuel surcharge not to exceed

$125,000.

22. The principal terms of the MetalQuest Agreement (a complete copy ofwhich is annexed hereto as Exhibit C) are as follows6:

Term of

Agreement

Description

Creation of a

Trust

SVCMC, Bishop Francis J. Mugavero Center for Geriatric Care, Inc.,Sisters of Charity Health Care System Nursing Home Inc., St. JeromesHealth Services Corporation, and Pax Christi (collectively, theTrustors) will create an Express Trust under the Ohio Trust Code,


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Term of

Agreement

Description

ORC Chapter 5801, as amended, which is part of the general lawregarding creation of trusts in Ohio, and designate MetalQuest as theTrustee of the Trust (the Trustee), for the benefit of the individuals toand for whom SVCMC provided covered health care services.

The purpose of the Trust is to provide for Records maintained by theTrustors in the normal course of their business as a Covered Health CareProvider to be deposited with the Trustee, for their storage, allowance of

access to, transmission and destruction, all in accordance with ApplicableLaws.

Services MetalQuest will collect, box and transport to MetalQuests storagefacility in Cincinnati, Ohio, all Records described in Exhibit A of theMetalQuest Agreement. MetalQuest will store, maintain, provide accessto, transmit, catalog, index and periodically destroy the Records, all inaccordance with the Applicable Laws.

Length of

Retention

Business Records will be retained in accordance with applicable

regulatory guidelines. In broad terms, all business records will beretained for a period of no less than seven (7) years; provided that theDebtors may give instruction that any records no longer necessary as partof the Debtors wind down may be destroyed sooner. Medical Recordswill be retained by MetalQuest in accordance with certain regulatoryguidelines summarized at Attachments 1, 2, and 3 of Exhibit A to theMetalQuest Agreement, for periods ranging from approximately sixmonths to twenty-five (25) years, depending on the type of record.

For a majority of the Medical Records, a six-year retention period isrequired. Upon the expiration of a records retention period, the Trustorauthorizes the Trustee to destroy the record under Applicable Laws.

Term and

Termination

The term of the MetalQuest Agreement commences upon the date theCourt enters the order approving the MetalQuest Agreement, and willcontinue until the expiration of each records required retention period.

A summary of certain retention requirements is set forth in Exhibit A ofthe MetalQuest Agreement. Moreover, the MetalQuest Agreement andthe express Trust created will terminate by operation of law uponcompletion of MetalQuests obligations pursuant to the MetalQuestAgreement and the destruction of all Records held in trust by MetalQuestin accordance with Applicable Laws.


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Term of

Agreement

Description

Seton and the corporate office), excluding any records the Trustordeems necessary to remain on-site until the end of these Chapter 11cases.

(3) $250,000.00 due ten days after the removal of records from two ofthe Trustors record storage vendors, Cityside Archives, Ltd. andThe Robert Lewis Group, LLC.

(4) $500,000.00 due ten days after the removal of all records from theTrustors record storage vendor Iron Mountain.

(5) $200,000.00 due ten days after the successful data migration orsystem relocation of the first four IT systems which include: PhillipsiSite PACS, Optimed, Siemens SyngoEcho, Phillips OB TraceVue,GE Viewpoint, Emergisoft, Hemocare or MISYS.

(6) $200,000.00 due ten days after the successful data migration orsystem relocation of the last of the four IT systems which include:

Phillips iSite PACS, Optimed, Siemens SyngoEcho, Phillips OBTraceVue, GE Viewpoint, Emergisoft, Hemocare or MISYS.

(7) $216,204.00 due ten days after removal of Trustor retained paperrecords and Microsoft Exchange 2007 email system.

Fuel surcharge will be invoiced weekly and is due ten (10) days after theinvoice date, which is the day the invoice was created. The fuel

surcharge, however, is capped at $125,000 for the entire process ofmoving all Records from the Trustors facilities and their storage vendorfacilities to the MetalQuest facility.

Additional payments after the Initial Payment will be made upon thecompletion of the tasks described above. The timing of those tasks willbe mutually agreed upon by the parties.

Timing for

Removal ofRecords

No later than ten (10) days after entry of the order approving the

MetalQuest Agreement and first payment to MetalQuest for services,MetalQuest will commence the organized boxing and removal of records.Accordingly, the Trustors will make Records available at designatedlocations for boxing, removal, and transfer to MetalQuest facilities inaccordance with the MetalQuest Agreement. The orderly removal ofRecords with the exception of those at the Additional Storage Vendors


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Term of

Agreement

Description

and insurance as required by law for its employees.Indemnification

by MetalQuest

MetalQuest agrees to maintain Records in compliance with ApplicableLaws. Accordingly, MetalQuest will indemnify, defend and holdharmless the Trustors, their employees, agents, independent contractorsand medical staff from and against any loss or damage incurred orsuffered by the Trustors relating to any breach by MetalQuest, itsemployees, agents or independent contractors, of its obligations.

Information

Security

Given the personal or private nature of the Debtors Records, MetalQuest

will use several security measures to protect the Debtors Records. Withrespect to paper and physical records, MetalQuest provides physicalaccess controls including an intrusion alarm and monitoring system.With respect to electronic data, MetalQuest secures digital data while inmotion and at rest. When data is being transmitted, internally andexternally, data is encrypted. A password is necessary to accessencrypted data, and all data access and transmission is logged.Furthermore, while data is at rest, MetalQuest creates three live versions

o the data and a backup. MetalQuest performs routine data integritychecks, and if data fails these tests, the data will be restored using thebackup or the original data, as necessary. MetalQuest will enter into aBusiness Associate Agreement as required by HIPAA.

B. Record Retention and Destruction Plan

23. The MetalQuest Agreement is an important part of an overall Recordsprogram that has been developed as part of the Closure Plan. Following the Petition Date,

the Debtors created an internal record retention task force to develop and implement a plan

for the storage, access and destruction of Medical and Business Records. With respect to

Medical Records, this task force worked with regulatory agencies and the Patient Care

Ombudsman. The Debtors goals are to comply with applicable federal and state law in an

efficient and cost-effective manner.7


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(a) Creation of Index of Records24.

An important component of the services to be provided by MetalQuest

will be the creation of an index for those records that come into its custody. MetalQuest will

create a master index of the medical records using identifiers such as medical record, social

security and account numbers which will then be coded with a unique MetalQuest identifier.

All clinical records in electronic form and film records and pathology reports will be indexed

to the record level. MetalQuest will also be indexing the Debtors business records. As

discussed in more detail below, the Debtors will be storing their business records with

MetalQuest as required under applicable non-bankruptcy law.

(b) Medical Record Retention Plan25. To facilitate continuity of care for their former patients, the Debtors

have established a process to make medical records available. Since the Petition Date, the

Debtors have fulfilled approximately 13,000 patient record requests. In addition, the Debtors

continue to transfer patient records to former patients new healthcare providers pursuant to

medical records custody agreements and copies to other requestors, including patients

themselves.

26. To continue providing efficient access to Medical Records upon theconclusion of the Debtors Chapter 11 Cases, MetalQuest will consolidate and store all

Records in one storage facility. To do so, MetalQuest has agreed to assume the cost of all

freight required to transfer the Debtors Records from the Debtors facilities and their other


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27. To provide their former patients with notice of how to access theirrecords, the Debtors will implement a communication plan, developed in coordination with

the Patient Care Ombudsman and applicable regulatory agencies, which includes: (i)

publishing notice of the transfer of all Medical Records to MetalQuest (located in Cincinnati,

Ohio) via press releases and newspaper announcements, (ii) maintaining the Hospitals main

telephone number, for one year from the date of entry of the order approving the Motion,

and directing former patients to MetalQuest to access their medical records, (iii) maintaining

SVCMCs website for the duration of the statute of limitations (i.e. 21 years), which will

direct former patients to MetalQuest to access their medical records, and (iv) providing the

New York State Department of Health with the necessary information to direct former

patients that may contact DOH to obtain access to their medical record.

28. A majority of the Medical Records will be retained for a period of sixyears from the date of patient discharge or three years after the patient has attained the age of

majority, whichever is longer. In addition, the Debtors recognize that certain patient records

may be relevant to certain types of claims or lawsuits. Accordingly, the Debtors believe that

these retention periods are appropriate to preserve the documents that might be required or

used as evidence in any such litigation.

29. Given the complex and dynamic process of retaining and destroyingMedical Records, the record retention task force continues to develop and implement a

medical retention plan that is efficient for both the patients and the estates. Once approved,


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(c) Medical Record Destruction Plan30. Medical Records that the Debtors are no longer required to retain under

Applicable Laws will be destroyed by MetalQuest after the retention period has expired.

MetalQuest will destroy these records, including shredding, to prevent inadvertent release of

information that is of a personal or private nature about the Debtors former patients or

otherwise, including shredding such records. These services are included within the overall

cost of the MetalQuest Agreement.

(d) Business Record Retention and Destruction Plan

31. MetalQuest will also retain and subsequently destroy Business Recordsin accordance with federal and state laws upon the expiration of the retention period.

32. Currently, the Debtors retain volumes of Business Records beyondtheir retention period which is unduly burdensome to these liquidating estates. To facilitate

an efficient and cost-effective transfer of the Business Records, MetalQuest will destroy

Business Records that have been retained beyond their retention period. Continuing to store

these historic records would require an increase in the contract price. Therefore, as part of the

initial consolidation efforts, the Debtors will determine which records no longer need to be

maintained under non-bankruptcy law and which are not required for the administration of

these Chapter 11 Cases. Prior to destruction, the Debtors will consult with the Creditors

Committee and provide the categories of records to be destroyed. MetalQuest will store the

remaining business records for the applicable time periods under state and federal law and


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be destroyed in accordance with applicable law. For claritys sake, this vendor is also storing

pathology specimens which will be transferred to MetalQuest and maintained for the required

length of time.

C. Rejection of Other Information Management and Storage Facility

Contracts

34. At present, numerous Records are stored at certain third party vendors,including Iron Mountain, Cityside Archives, and Robert Lewis Group (together, the

Additional Storage Vendors). Records held by these vendors affect hundreds of

thousands of former patients. The failure to centralize the Records into a single storage

facility will create a risk that, with the passage of time, former patients will be unable to

locate let alone retrieve their Medical Records. This could, in turn, directly affect the

quality of ongoing patient care for these former patients and their family members.

35. In connection with the implementation of the Records Program and theconsolidation of all medical and business records with MetalQuest, the Debtors will seek to

reject the contracts8 with the Additional Storage Vendors at a later date, likely under the

Debtors established procedures for the orderly rejection of contracts approved by the Court on

May 27, 2010 [Docket No. 386] (Rejection Procedures). However, the Debtors reserve

the right to seek rejection in the Order as part of this Motion as is necessary or otherwise

desirable. In the event that the Debtors and the Additional Storage Vendors cannot agree

upon the appropriate postpetition costs to be paid to such vendors for the transfer of Records

h D b d/ M lQ h D b k li f f hi C d i h


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reasonable costs of such services to ensure that neither the Debtors' estates and creditors, nor -

- more importantly -- patients are impacted by any delay in transferring records.

9

RELIEF REQUESTED

36. By this motion, the Debtors seek entry of an order, substantially in theform annexed hereto as Exhibit A, (I) authorizing the Debtors entry into the MetalQuest

Agreement; (II) approving the document retention and destruction plan set forth therein; and

(III) as necessary, directing the Additional Storage Vendors to cooperate in the transfer of

Records and, in the absence of an agreement between the Debtors and the applicable

vendor(s), establishing the reasonable costs and expenses to be paid by the Debtors estates

relating to the transfer of such Records.

37. The Debtors respectfully submit that this relief is in the best interest ofthe estate as it will result in significant cost savings and enable the Debtors to adhere to record

retention requirements set forth by the Applicable Laws.

BASIS FOR RELIEF REQUESTED

A. The MetalQuest Agreement Should Be Approved

38. In the exercise of their reasonable business judgment, the Debtorssubmit that the MetalQuest Agreement is in the best interests of these estates and their

creditors. As discussed above, the retention and final disposition of Records is complex and

requires consideration of numerous issues including the type and format of the Record, the

required retention period for each type of Record, the current location of the Records, access


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under Applicable Laws while also capturing significant cost savings by consolidating all of

the Debtors Records in one facility for efficient access to the documents and implementation

of the Record Retention and Destruction Plan. As noted in the Patient Care Ombudsmans

report dated June 13, 2011 [Docket No. 1697], the Debtors record retention and destruction

plan will produce a result that is consistent with patient needs.

39. Section 363(b) of the Bankruptcy Code governs transactions outside theordinary course of business involving property of a debtors estate. Specifically, that section

provides, in relevant part, that, [t]he trustee, after notice and a hearing, may use, sell, or

lease, other than in the ordinary course of business, property of the estate . . . .

11 U.S.C. 363(b)(1). The Debtors use of property of the estates outside the ordinary course

of business should be approved by the Court if the Debtors can demonstrate a sound business

justification for the proposed transaction. See Official Comm. of Unsecured Creditors of LTV

Aerospace & Defense Co. v. LTV Corp. (In re Chateaugay Corp.), 973 F.2d 141, 143 (2d Cir.

1992) (a section 363(b) application must include evidence of a sound business reason to grant

such application) (citing Comm. of Equity Sec. Holders v. The Lionel Corp. (In re Lionel

Corp.), 722 F.2d 1063, 1071 (2d Cir. 1983) (same)); see also In re Ionosphere Clubs, Inc., 100

B.R. 670, 675 (Bankr. S.D.N.Y. 1989) (noting the standard for determining a section 363(b)

motion is a good business reason).

40. The business judgment rule is satisfied where the directors of acorporation acted on an informed basis, in good faith and in the honest belief that the action


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872 (Del. 1985)). In fact, [w]here the debtor articulates a reasonable basis for its business

decisions (as distinct from a decision made arbitrarily or capriciously), courts generally will

not entertain objections to the debtors conduct. Comm. of Asbestos-Related Litigants and/or

Creditors v. Johns-Manville Corp. (In re Johns-Manville Corp.), 60 B.R. 612, 616 (Bankr.

S.D.N.Y. 1986). Courts in this jurisdiction have consistently been reluctant to interfere with

corporate decisions absent a showing of bad faith, self-interest or gross negligence, and have

upheld such decisions as long as they are attributable to any rational business purpose.

Integrated Res., 147 B.R. at 656 (stating that courts are loath to interfere with corporate

decisions absent a showing of bad faith, self interest or gross negligence) (citations omitted).

Whether or not there are sufficient business reasons to justify a transaction depends upon the

facts and circumstances of each case. Lionel, 722 F.2d at 1071.

41. Further, section 105(a) of the Bankruptcy Code grants the Court theauthority to issue any order, process, or judgment that is necessary or appropriate to carry out

the provisions of [the Bankruptcy Code]. This provision is the basis for a broad exercise of

power [by the Court] in the administration of a bankruptcy case. 2 Collier on Bankruptcy

105.01 (Lawrence P. King, et al. eds., 15th ed. rev. rel. 2000).

42. A sound business justification exists for the MetalQuest Agreementhere because it will allow the Debtors to: (i) uphold their obligations to Applicable Laws, (ii)

reduce the estates burden of retaining Medical Records, and (iii) provide efficient access to

Medical Records and implement a Retention and Destruction Plan by consolidating all


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disposal, and system management services. MetalQuest has provided similar services to

Caritas Healthcare, Inc.

10

in its bankruptcy case.

44. The Debtors undertook extensive negotiations with MetalQuest as wellas solicited offers from other potential service providers. The final price agreed to by

MetalQuest $3.1 million was substantially less than the offers submitted by other

providers. Certain of these other proposals were in excess of $10 million exclusive of any

cost associated with transferring records from existing storage vendors. Given (i) the

thorough negotiations of the MetalQuest Agreement and (ii) the significant cost savings being

offered by MetalQuest, the Debtors submit that the MetalQuest Agreement is fair, reasonable,

and in the best interests of the Debtors estates.

45. The MetalQuest Agreement is also the most favorable and economicproposal as MetalQuest agrees to retain and destroy the Debtors Business records in

accordance with applicable federal and state law with no incremental cost to the estates.

46. As such, the Debtors submit that the entry into the MetalQuestAgreement is an exercise of the Debtors sound business judgment and warrants approval by

the Court.

B. The Records Program Should Be Approved

47. Implementing the Records Program falls within the Debtorsreasonable business judgment. The Records Program provides for the long-term storage

of Records and, ultimately, the destruction of Records that are no longer required


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abandon any property of the estate that is burdensome to the estate or that is inconsequential

value and benefit to the estate. See 11 U.S.C. 554(a); Adelphi Hospital Corp. v. New York

State Department of Health (In re Adelphi Hospital Corp.), 579 F.2d 726 (2d Cir. 1978)

(affirmed an order authorizing the trustee of a bankrupt hospital to abandon its hospital

records as the records were certain not to benefit the estate and thus, worthless.).

48. Although abandonment of Records may be warranted, becauseMetalQuest has agreed to destroy Records at no additional cost, the Debtors believe that

destruction is prudent as the Records may contain information of a personal or private nature

about the Debtors patients, employee, or otherwise. As such, MetalQuest will provide

Record destruction services in compliance with the Applicable Laws. The balance of the

Records Program is to be implemented through the transfer and storage of Records to

MetalQuest as noted above, as well as a communication program to inform former patients of

the location of, and how to access, their Medical Records. A similar program was

implemented in In re Caritas Healthcare, Inc. with MetalQuest providing retention and

destruction services. As such, the Records Program is an exercise of the Debtors sound

business judgment and warrants approval by the Court.

49. For these reasons, the relief requested is appropriate and in the bestinterests of the Debtors and their respective estates and creditors.

NOTICE

50. No trustee or examiner has been appointed in the Chapter 11 Cases. In


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identified on the General Service List and the Special Service List (as such terms are

identified in the Case Management Order) and all counterparties to contracts and agreements

to be rejected upon entry of an order approval the MetalQuest Agreement.

NO PREVIOUS REQUEST

51. No previous request for the relief sought herein has been made to thisor any other court.

WHEREFORE, the Debtors respectfully request that the Court enter an order

granting the relief requested and such other or further relief as is just.

Dated: New York, New York

July 7, 2011

KRAMER LEVIN NAFTALIS & FRANKEL LLP

/s/ Adam C. RogoffKenneth H. EcksteinAdam C. Rogoff

P. Bradley ONeill1177 Avenue of the AmericasNew York, New York 10036Telephone: (212) 715-9100



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EXHIBITA

Proposed Order


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---------------------------------------------------------- xIn re: : Chapter 11

:SAINT VINCENTS CATHOLIC MEDICALCENTERS OF NEW YORK, et al.,

: :

Case No. 10-11963 (CGM)


---------------------------------------------------------- x

ORDER(I)AUTHORIZINGTHEDEBTORSENTRYINTO

ANINFOMRATIONMANAGEMENTSERVICESANDTRUSTAGREEMENT

WITHMETALQUEST-SVCMCTRUST,LLC D/B/A METALQUEST,

(II)APPROVINGTHEDOCUMENTRETENTIONAND

DESTRUCTIONPLANSETFORTHTHEREIN;(III)DIRECTINGTHEADDITIONALSTORAGEVENDORSTOCOOPERATEIN


PURSUANTTO11U.S.C.363AND554ANDRULES6007

OFTHEFEDERALRULESOFBANKRUPTCYPROCEDURE

[RELATED DOCKET NO.____]

Upon the motion (the Motion)1 of Saint Vincents Catholic Medical Centers of New

York (SVCMC) and certain of its affiliates, as chapter 11 debtors and debtors in possession

(each a Debtor and collectively, the Medical Centers or the Debtors)2 in the above-

referenced chapter 11 cases (the Chapter 11 Cases), for entry of an order, in substantially the

form annexed hereto as Exhibit A, (I) authorizing the Debtors entry into an information

management services and trust agreement with MetalQuest-SVCMC Trust, LLC d/b/a


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MetalQuest (MetalQuest) and (II) approving the document retention and destruction plan set

forth therein; (III) directing the additional storage vendors to cooperate in transfer of records; and

(IV) granting related relief pursuant to section 363and554 of title 11 of the United States Code

and Rule 6007 of the Federal Rules of Bankruptcy Procedures (Bankruptcy Rules); and the

Court having subject matter jurisdiction to consider the Motion and the relief requested therein

pursuant to 28 U.S.C. 1334 and the Standing Order of Referral of Cases to Bankruptcy Court

Judges of the District Court for the Southern District of New York, dated July 19, 1984 (Ward,

Acting C.J.); and the Motion being a core proceeding pursuant under 28 U.S.C. 157(b); and

venue being proper before the Court pursuant to 28 U.S.C. 1408 and 1409; and due and

proper notice of the Motion having been provided, and no other or further notice need be

provided; and the relief requested in the Motion being in the best interests of the Debtors and

their estates and creditors; and the Court having reviewed the Motion and having heard the

statements in support of the relief requested at the hearing before the Court (the Hearing); and

the Court having determined that the legal and factual bases set forth in the Motion, and at the

Hearing establish just cause for the relief granted herein; and upon all of the proceedings had

before the Court; and after due deliberation and sufficient cause appearing therefore,

IT IS HEREBY ORDERED THAT:

1. The Motion is granted to the extent provided herein.2. The Debtors have articulated good, sufficient and sound business reasons

to consummate the MetalQuest Agreement. Accordingly, the MetalQuest Agreement and all of


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3. The Record Retention Plan as described in the Motion and the MetalQuestAgreement is approved in its entirety. The Debtors are authorized to implement the Record

Retention Plan. Accordingly, the scope of MetalQuests retention services will include the

following:

(a) Retrieve and review Records from the Debtors and their storagevendor facilities.

(b) Box and move all Records requiring long-term storage, pursuant toApplicable Laws, to the MetalQuest facility.

(c) Catalog and index the Records retained at the MetalQuest facilityand provide the Debtors with the catalog and index.

(d) Store and maintain Records in accordance to Applicable Laws, andprovide access to and transmit the Records as requested by the Debtors,the Debtors former patients, and other qualified persons.

4. The Debtors have also articulated good and sound business reasons todestroy rather than abandon their Records upon the expiration of their retention period pursuant

to section 554 of the Bankruptcy Code. Accordingly, the Debtors and MetalQuest are authorized

to destroy Records in compliance with Applicable Laws. Accordingly, the scope of

MetalQuests destruction services will be the following:

(a) After reviewing Records retrieved from the Debtors and theirstorage vendor facilities, MetalQuest may destroy Records that have beenheld beyond their expiration and/or do not require long-term storage in

accordance with its agreement with the Debtors.

(b) Prior to the initial determination of what Records will be destroyedby MetalQuest as provided for in paragraph (a) immediately above, theDebtors will consult with the Creditors Committee concerning thecategories of Records that need not be stored by MetalQuest.


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5. The Debtors may revise the Record Retention and Destruction Plan incompliance with Applicable Laws.

6. The Debtors are authorized to take such actions and to incur and pay suchexpenses as are reasonable and necessary to implement the Record Retention and Destruction

Plan in consultation with the Creditors Committee and in accordance with the Debtors

postpetition financing agreement.

7. The Additional Storage Vendors and any other information managementservice and/or storage facility provider are directed to cooperate with the Debtors and

MetalQuest the orderly access, removal, and transfer of the Records to the MetalQuest storage

facility. The Debtors are authorized to pay, in consultation with the Creditors Committee and

General Electric Capital Corporation, as prepetition and postpetition lenders, reasonable amounts

for the removal and transfer of records. In the event of any dispute, the Court retains jurisdiction

to determine such reasonable amount.

8. Notice of the Motion as provided for therein shall be deemed good andsufficient notice and the requirements of Bankruptcy Rule 4001(d) are waived.

9. The terms and conditions of this Order shall be immediately effective andenforceable upon its entry pursuant to Bankruptcy Rule 6004(h). The requirements set forth in

Bankruptcy Rule 6004(a) are hereby waived.


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10. This Court retains jurisdiction with respect to all matters arising from orrelated to the implementation of this Order.

Dated: ___________________New York, New York

____________________________________THE HONORABLE CECELIA G. MORRISUNITED STATES BANKRUPTCY JUDGE


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EXHIBIT B

Debtors Current Record Storage

Debtors Record Storage


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Debtors Record Storage

Saint Vincents CatholicMedical Center

Current Record Platform/3

rdParty Storage Vendor

St. JosephsHospital

St. JohnsQueens Hospital

Paper MedicalRecords

Long Term RecordRetention Partner

X-Ray Films

St. MarysHospital

Mary ImmaculateHospital

St. VincentsManhattanHospital

St. VincentsStaten Island

Hospital

Pax ChristiHospice

St. VincentsWestchester

St. VincentsBehavioral

Health

St. VincentsAIDS Center

St. VincentsAmbulatoryPrograms

PACS RadiologySystem

Electric MedicalRecords(Multiple)

Iron Mountain

Multiple Other 3rd

Party StorageVendors

Bayley SetonHospital

Pathology Slidesand Blocks

Long Term Plan


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EXHIBIT C

MetalQuest Agreement


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INFORMATION MANAGEMENT SERVICES AND TRUST

AGREEMENT

THIS INFORMATION MANAGEMENT SERVICES AND TRUST AGREEMENT

(this Agreement) is entered into on this ______ day of ____________, 2011 between

MetalQuest-SVCMC Trust, LLC, dba MetalQuest (MetalQuest or the Trustee), an Ohiolimited liability company, and Saint Vincent Catholic Medical Center, Inc., a New York not-for-

profit corporation, Bishop Francis J. Mugavero Center for Geriatric Care, Inc, Sisters of CharityHealth Care System Nursing Home, Inc, St. Jeromes Health Services Corporation and PaxChristi (Trustors). MetalQuest and Trustors may hereinafter be collectively referred to as the

Parties.

1. Background. MetalQuest is a Business Associate as the term is defined under

Health Insurance Portability and Accountability Act of 1996(HIPAA) and HIPAA Privacy

and Security Rules 45 CFR Parts 160 and 164, as amended (HIPAA Privacy and SecurityRules). Trustor, through its prior operation of Saint Vincent Catholic Medical Center andassociated clinics and nursing homes, is a Covered Health Care Provider under HIPAA and the

HIPAA Privacy and Security Rules. Trustors are a debtor-in-possession under title 11 of the

United States Code, 11 U.S.C. 101, et seq. (the Bankruptcy Code), and filed a voluntary

petition for relief under Chapter 11 of the Bankruptcy Code on April 14, 2010, in the UnitedStates Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) (Case

No. 10-11963 (CGM)) (the Bankruptcy Case). The effectiveness of this Agreement is subject

to the entering of an order of the Bankruptcy Court, in form and substance reasonablysatisfactory to the Parties, approving this Agreement and the transactions contemplated hereby

(the Approval Order).

2. Term. The term of this Agreement (the Term) shall begin on the date on which

the Approval Order is entered by the Bankruptcy Court and shall continue until expiring at the

end of each records retention schedule as mandated by State of New York requirements at the

time of contract execution (New York State Record Retention Requirements), unless sooner

terminated as provided herein. A summary of certain of the New York State Record RetentionRequirements as of the date hereof is set forth in Attachment 1 and Attachment 2 to Exhibit A

annexed hereto.

3. Scope of Services. Trustors are a Covered Entity under HIPAA. Trustors

i i h i i d i h l h i f i l i d h l h i f i


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administrative, physical and technical safeguards in order to assure confidentiality, integrity andavailability of the Records.

a. Trust. The Trustors hereby create an Express Trust under the Ohio TrustCode, ORC Chapter 5801, as amended, and designate MetalQuest as the Trustee of the

Trust and the Records, for the benefit of the individuals to and for whom Trustors

provided covered health care services.

b. Trust Purpose. Trustors hereby create this Trust under the Ohio Trust

Code, ORC Chapter 5801, in order to comply with its obligations as a Covered Health

Care Provider. The purpose of the Trust is to provide for Records maintained by theTrustors in the normal course of its business as a Covered Health Care Provider to be

deposited with MetalQuest as Trustee, for their storage, allowance of access to,

transmission and destruction, all in accordance with Applicable Law. The Trustee herebyagrees to maintain, store, catalog, access, transmit and destroy such Records in

accordance with Applicable Law and the terms and provisions hereinafter set forth. The

Parties acknowledge that the Trustee acts as a repository only, and is not responsible inany way for the furnishing of Records, except as required by Applicable Law or as

otherwise directed by the Bankruptcy Court or other court of competent jurisdiction.This Agreement shall supersede any previous trust agreements between the Parties, and

shall be binding upon the Parties and their respective heirs, executors, administrators,successors and assigns.

c. Disposal of Records. Trustee shall maintain, store, catalog, index, permitaccess to and transmit the Records as required under Applicable Law. Trustee shall

satisfy its continuing compliance obligations under Applicable Law. Trustors transfer all

ownership rights and privileges to the Records and authorizes Trustee to destroy theRecords upon expiration of the Trustors obligations with respect to such Records under

Applicable Law.

4. Independent Contractor Status. It is understood that MetalQuest, its employees

and agents are independent contractors and not employees, agents, or representatives of Trustor,and no employee or agent of MetalQuest shall hold herself/himself out to the public as an

employee, agent or representative of Trustor. As an independent contractor, MetalQuest is

responsible to pay all workers compensation insurance, disability benefits insurance, and otherbenefits and insurance as required by law for its employees.

5. Trustee Fees. Trustors agree to pay MetalQuest the Trustee Fees set forth in the

schedule attached hereto and incorporated herein as Exhibit A.


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7. MetalQuests Covenants, Representations and Warranties. MetalQuest

represents, warrants, and covenants to Trustors as to the following matters:

a. No Consents Necessary. MetalQuest has the legal right, power, capacity

and authority to enter into and perform its obligations under this Agreement, and no

approval or consent of any other person or entity is necessary to authorize the executionof this Agreement by MetalQuest. MetalQuest represents that it is licensed to do

business in the State of Ohio and is authorized to do business in the State of New York,

and MetalQuest agrees to maintain the currency of such license and authorization.

MetalQuest represents that it is familiar with its legal obligations under Applicable Lawand covenants to maintain, store, access and destroy the Records in compliance with the

same. The execution and delivery of the Agreement by MetalQuest have been duly

authorized and validly executed and delivered by MetalQuest.

b. No Violations. MetalQuest has not received any written notice of any

violations of law, rule, regulation, order or ordinance that would impair its ability to dobusiness in the States of Ohio or New York or impair its ability to perform the terms of

this Agreement.

c. Compliance with Applicable Law. MetalQuest represents that it isfamiliar with its legal obligations as Trustee of the Records under Applicable Law.

MetalQuest hereby agrees to maintain comprehensive indexes of the Records it maintains

on behalf of Trustors and will provide such indexes for inspection at its offices inCincinnati, Hamilton County, Ohio. MetalQuest covenants and warrants to Trustors that

it will maintain currency and compliance with its obligations under Applicable Law.

8. Indemnification by MetalQuest. MetalQuest agrees to maintain the Records in

compliance with Applicable Law. MetalQuest shall indemnify, defend and hold harmlessTrustor, its employees, agents, independent contractors and medical staff from and against any

loss or damage incurred or suffered by Trustors relating to any breach by MetalQuest, its

employees, agents or independent contractors, of its obligations hereunder.

9. Duties of Trustor. On or before _______ __, 2011, Trustors shall make the

Records available to MetalQuest at designated locations at Trustors facilities for boxing andtransportation by MetalQuest to MetalQuests storage facility in Cincinnati, Ohio. Recordscurrently stored by the Trustors with Iron Mountain and/or other storage organizations will be

made available at Iron Mountains and/or other organizations storage facility. Trustors shall pay

to MetalQuest all Trustee Fees, in full, in the manner set forth in Exhibit A. The Parties hereby


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a. No Consents Necessary. Subject to the entering of the Approval Order,Trustors have the legal right, power, capacity and authority to enter into and perform its

obligations under this Agreement. The execution and delivery of the Agreement have

been duly authorized and validly executed and delivered by Trustor.

b. No Third-Party Rights. Subject to the entering of the Approval Order,

Trustors represent that this Agreement will not conflict with or violate any otheragreement between Trustors and any third-party or any obligation owed by Trustors to

any third-party. Except for the rights of patients and other third parties to retrieve copies

of Records with respect to which they are entitled under Applicable Law, the Parties

agree that this Agreement is not intended to, and will not, create rights of any type inthird parties.

11. Default.

a. By MetalQuest. If MetalQuest breaches any material obligation hereunder

and fails to cure such breach within thirty (30) days of receipt of written notice of such default,MetalQuest agrees that the Trustors shall have all remedies available at law or in equity.

b. By Trustor. If Trustors breach any material obligation hereunder and fails

to cure such breach within thirty (30) days of receipt of written notice of such default, Trustorsagree that MetalQuest shall have all remedies available at law or in equity.

12. Termination of this Agreement. This Agreement and the express Trust createdhereunder shall terminate by operation of law upon completion of all of Trustee obligations

hereunder and the destruction of all Records held in trust by Trustee in accordance with

Applicable Law.

13. Notices. Any notice required under this Agreement shall be deemed given if inwriting and sent by certified mail, return receipt requested, or via reputable overnight courier to

the MetalQuests principal office or the office of the Trustors or the Trustors heirs, assigns or

successors, as the case may be, with a copy of all such notices to Trustors also being so deliveredto: St. Vincent Catholic Medical Center, Inc.

Attn: Mark Toney, Chief Restructuring Officer

Steven Korf, Chief Financial Officer12th Floor 450 West 33rd StreetNew York, NY 10001

copies to: Barbara D. Knothe, Esq.


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Adam C. Rogoff, Esq.

Kramer Levin Naftalis & Frankel, LLP

1177 Avenue of the AmericasNew York, NY 10036

(212) 715-9285

Fax (212) [email protected]

___________________________________________________________________________,

and a copy also being so delivered to Gregory J. Berberich, Esq., Suite G, 7815 Cooper Road,

Cincinnati, OH 45242, (513) 381-4800, Fax (513) 791-2653, [email protected]..

14. Miscellaneous. This Agreement shall be binding upon the respective parties, their

heirs, agents, assigns, executors, administrators and successors-in-interest.

15. Entire Agreement. This Agreement contains the entire understanding of theParties. It may not be changed orally but only by an agreement in writing signed by the party

against who enforcement of any waiver, change, modification, extension or discharge is sought.

16 Submission to Jurisdiction; Consent to Service of Process. Without limiting any

Partys right to appeal any order of the Bankruptcy Court, as to any disputes or claims betweenthem, the Parties agree (i) the Bankruptcy Court shall retain exclusive jurisdiction to enforce the

terms of this Agreement and to decide any claims or disputes which may arise or result from, or

be connected with, this Agreement, or any breach or default hereunder, and (ii) any and allproceedings related to the foregoing shall be filed and maintained only in the Bankruptcy Court,

and the parties hereby consent to and submit to the jurisdiction and venue of the BankruptcyCourt and shall receive notices at such locations as indicated in Section 13 hereof; provided,however, that if the Bankruptcy Case has closed, the parties agree to unconditionally and

irrevocably submit to the exclusive jurisdiction of the United States District Court for theSouthern District of New York sitting in New York County or the Supreme Court of the State of

New York sitting in New York County and any appellate court from any thereof, for the

resolution of any such claim or dispute. The parties hereby irrevocably waive, to the fullestextent permitted by applicable law, any objection which they may now or hereafter have to thelaying of venue of any such dispute brought in such court or any defense of inconvenient forum

for the maintenance of such dispute. Each of the Parties agrees that a judgment in any such

dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner


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18. Headings and Capitalized Terms. Headings in this Agreement are for

convenience only and shall not be used to interpret or construe any of the provisions or terms

hereof. Capitalized terms that are not otherwise defined in this Agreement shall have the samedefinitions as under HIPAA or 45 CFR Part 160, et seq.

19. Waiver. The waiver by either party of a breach of any provision of thisAgreement shall not operate as, or be construed as, a waiver of any subsequent breach.

20. Modification. No change, modification or waiver of any term of this Agreement

shall be valid unless it is in writing and signed by both Parties.

21. Entire Agreement. This Agreement constitutes the entire agreement between the

Parties and supersedes all prior agreements or understandings between MetalQuest and Trustor.

22. Execution of this Agreement. This Agreement may be executed in two or more

counterparts, each of which shall be deemed an original but all of which together shall constituteone and the same instrument. The exchange of copies of this Agreement and of signature pages

by facsimile or other electronic transmission shall constitute effective execution and delivery ofthis Agreement as to the parties and may be used in lieu of the original Agreement for all

purposes.


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In witness whereof, the Parties have executed this Agreement this __ day of___________ 2011.

TRUSTORS TRUSTEE

SAINT VINCENT CATHOLIC METALQUEST-SVCMC TRUST, LLC

MEDICAL CENTER, INC.

By: __________________________ By: _____________________________

William L. Jansen__________________________

Printed Name

Its: __________________________ Its: President


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EXHIBIT A

Explanation of Services and Schedule of Fees

A. Patient Access to Medical Record InformationMetalQuest adheres to State of New York regulations governing the release of medicalinformation and associated charges. MetalQuest will not deny a patient access to their medicalinformation for treatment purposes due to an inability to pay. See Attachment One forregulation.

Delivery Methods and Address for Submitting a Request for Medical Records

Delivery of Requested Medical Records

With the exception of original analog mammography films and pathology blocks and glassslides, MetalQuest provides requested information in digital format via removal media such as

CD/DVD or secure on-line electronic transfer. MetalQuest does not provide information inhardcopy form, unless specifically requested by the requestor. MetalQuest will not release theoriginal hardcopy records.

Original Analog Mammography Film and Pathology Blocks and Glass Slides

When requested, MetalQuest will release the original analog mammography film in accordancewith the Food and Drug Administrations MQSA regulation. Released mammography films will

be considered permanently transferred to the requestor.

Email Request to:

[email protected] (not case sensitive)

Fax Request to:

SVCMC Release of Information

Telephone Number: 513-242-5059


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Mail Request to:

MetalQuest

Attn: SVCMC Release of InformationP.O. Box 46364Cincinnati, Ohio 45246-0364

Courier Request to:

MetalQuest

Attn: SVCMC Release of Information4900 Spring Grove AvenueCincinnati, Ohio 45232-1900

Customer Service:

Monday Friday, 9:00 A.M. to 5:00 P.M. Eastern Time

Telephone Number: 513-898-1022

B. Record FormatsMetalQuest has the ability to store and access a myriad of hardcopy and electronic recordformats including microforms. Presently, in addition to traditional hardcopy storage, MetalQuestoperates an electronic archive consisting of subsystems including PACS designed to handle awide variety of file formats including but not limited to

Electronic Formats

DICOM PDF JPEG VIDEO TIFF PST PNG BMP HTML XML

RAW GIF DOC XLS XPS EPS DWG DXF MP3 MPEG

Hardcopy Formats

ANALOGFLAT X-RAY

PAPERDOCUMENTS

MICROFICHE MICROFILMJACKET

ROLLFILM

35MM CINEFILM

FETALMONITOR


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Special Formats and Containers

PATHOLOGY:

GLASS SLIDES

PATHOLOGY:

PARAFFIN TISSUEBLOCKS

CD DVD

VHS VIDEO TAPE MAGNETO-OPTICAL DISK

MAGNETIC TAPE RIGID ANDFLEXIBLE DISK

COMPUTER HARDDRIVE

OTHER OPTICALDISK

C. Information SecurityInformation security is a top priority at MetalQuest. To protect our customers data and theprivacy of individuals, MetalQuest begins with its people. All employees are subjected to athorough background check before hire and periodic checks throughout their employment. Eachemployee is required to attend mandatory information security classes that focus heavily onhealth information protection and privacy. Each employee has a business associate agreement on

file.

Facility Security

MetalQuest provides physical access control at its facility along with fire suppression and fireand intrusion alarm and monitoring service. At this time MetalQuest is upgrading all facilitysecurity measures and equipment which includes: access control, fire suppression, fire andintrusion alarm and monitoring, motion detection and video surveillance.

Electronic Data Security

Digital data residing with MetalQuest is secured while in motion and at rest. This means databeing transmitted both internally and externally is encrypted using AES 256 encryption includingdata transmitted by media such as a CD. (The data on the CD is encrypted in the event off loss ortheft. The user is provided the password to access the encrypted data. The password is sentseparately from the CD.) All data access and transmission is logged.

To further protect the data, MetalQuest creates three live mirrors of all data plus a backup.Furthermore, upon receipt of electronic data, each file has a hash generated and is securelystored, so routine data integrity checks can be performed. Data failing a hash test is replaced byrestoring from backup or original data, as necessary.


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MetalQuest has successfully extracted data from a myriad of systems both supported andunsupported, new to obsolete, functional and dead. Ideally, the system is supported with fulladministrative privileges, so MetalQuest technical personnel may draw on available expertise.

However, if the system is unsupported and documentation is not available, then MetalQuesttechnical personnel will leverage tools and techniques to assess the system to determine thelocation of the needed data. Once the data is located a copy is made for analysis and more workperformed, as necessary, to make it useful. Data extraction and the work needed to make datauseful may be the most time-consuming portion of this project.

E. Accepted Records, Retention Schedules and Destruction

MetalQuest will accept all clinical, business and administrative records generated by the Trustorgenerated through the final dissolution of the estate.

Health Record Retention

MetalQuest will follow the State of New York retention schedule for health records at the timethe trust agreement is executed. The NYS health record retention schedule is Title 10 NYCRR405.10(a)(4), which requires a six year retention after the last visit. An exception exists forminors and obstetrical records. The requirement mandates retention until age 21.

Laboratory Reports and Specimens Retention

See the Report and Specimen Retention Schedule attachment for detailed information on thestorage of glass slides and tissue blocks.

Record and Specimen Destruction

The one-time fee payable hereunder covers the HIPAA compliant destruction of stored records(records are shredded, baled and recycled) and specimens at the end of their mandated retentionperiod including records and specimens received from the following storage vendors:

1. Iron Mountain2. Cityside Archives3. Robert Lewis

F. Start Date


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G. Project Duration at Trustor Facilities

With the exception on the Phillips iSite PACS and Optimed systems, the orderly removal ofrecords will be accomplished within approximately 30 days.

H. Access to Trustor Facilities

At minimum, facility access is required between the hours of 8:00 AM to 5:00 PM, Sundaythrough Saturday. All docks and elevators must be accessible and functioning for the duration of

the project.

I. Indexing of Medical, Business, Specimen, and Other Information

1. The Trustor will provide a copy of the master patient index (MPI) in an electronic formagreeable to MetalQuest. The MPI will contain at a minimum the medical record number,patient name, DOB, dates of service, social security number, patient account number andfacility. This data will be provided within 15 days of the Approval Order. MetalQuestwill use the MPI to populate its database during data entry, as appropriate.

2. MetalQuest will create a master index by matching unique identifiers such as medicalrecord, social security and account numbers or a combination of the three from eachrecord indexed against the MPI. At a minimum, the master index will indicate themedical record number, patient name, DOB, record type, format and its location addresswhether physical for a hardcopy record or virtual for an electronic record. When available

from either the MPI or the record, additional fields will be added including but notlimited to social security number, patient account number, service date(s), study anddiagnosis data.

3. MetalQuest will assign an accession number to each record indexed. All boxes stored areassigned an accession number. Each accession number is unique.

4. When indexing records, the double-blind entry method is used to reduce keying errors.5. MetalQuest will create a record level index of all unitized paper in-patient and out-patient

medical records and analog flat x-ray jackets.

6. All electronic records will be indexed to the record level.7. All microfilm jackets and microfiche will be indexed to the record level.8. The indexing (MARS) data for the rollfilm will be imported into the MetalQuest database

allowing the creation of an index to the record level.9. All pathology reports will be indexed. The pathology report contains the name and


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1. MetalQuest is responsible for all freight required to move the Trustors records storedwith a current record storage vendor to its Cincinnati storage facility.

2. The Trustor is responsible for the payment of any fee required to permanently removerecords and pathology specimens and any other preparation necessary including allshipping and packing materials and supplies to the other storage vendors, before transferto MetalQuest.

3. The Trustor is responsible to deliver a softcopy index from each storage vendor, with theexception of the Robert Lewis Group, in either Microsoft Excel or CSV file format withthe minimum required data fields:

3.1. Patient name3.2. Facility name3.3. Medical record number3.4. DOB3.5. Storage vendor record accession3.6. Storage vendor box3.7. Storage vendor box accession number

4. Trustor will provide a contact for each storage vendor.5. MetalQuest will manage the record transfer process.

O. Transfer of Electronically Stored Data

MetalQuest will, at its option, either transfer data from the Trustors electronic medical record(EMR) and picture archive communication system (PACS) systems or physically move thenecessary hardware and software to maintain and access data.

DICOM Data Transfer

1. The Trustor will provide MetalQuest with root privileges to all electronic systemsrequiring the transfer of data.

2. Optimed System2.1. The Optimed cardiac catheterization medical image storage system will be

transferred to MetalQuest.2.2. Solution64 will migrate data stored on magnetic media at the Trustors facility.


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3.2. MetalQuest is financially responsible for the equipment relocation.4. MetalQuest will transfer data from the GE Viewpoint system.5. MetalQuest will transfer data from the Siemens Syngo Echo system.6. MetalQuest will store the CT and MRI magneto-optical disks and access them as required

for medical a record request. MetalQuest will provide the magneto-optical disk drive.7. MetalQuest will store the nuclear medicine magneto-optical disks and CD/DVDs and

access them as required for a medical record request. MetalQuest will provide the PhilipsADAC Ultra 10 workstation required for data access.

PDF Data Transfer

1. The Trustor will provide MetalQuest with root privileges to all electronic systemsrequiring the transfer of data.

2. MetalQuest, at its option, will transfer the data in a file format other than PDF.3. MetalQuest will transfer data from the Phillips OB TraceVue system.4. MetalQuest will transfer data from the Emergisoft system.5. MetalQuest will transfer data from the MISYS system.6. MetalQuest will transfer data from the Hemocare/Lifeline system.7. Trustor will transfer data from the Epic system.8. Trustor will transfer data from the Avatar system.9. Trustor will transfer data from the Softpath system (index only no reports).

Data Transfer from PC Systems

1.

The Trustor will provide MetalQuest with root privileges to all PC systems requiring thetransfer of data.2. MetalQuest will transfer data stored on a PC. Data will be transferred at MetalQuest,

which will necessitate the transfer of the PC or hard drive to MetalQuest.

P. Destruction of Records

MetalQuest will provide record destruction services to the Trustor for the duration of the on-siteportion of the project. MetalQuest will provide gaylord boxes (4x4x4) for storing andtransporting the record collected at its facilities and slated for destruction. The Trustor isresponsible for providing secure storage for the filled gaylord boxes. The gaylord boxes are opentopped and cant be secured individually. Additionally, MetalQuest will provide record


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Q. Additional Services

Additional services requested and not covered under this agreement must be added by addendumor separately contracted.

R. One-time Information Lifecycle Management Fee

One-Time Fees

Description Fee Total

Paper Records $391,581.00 $391,581.00

Other Storage Vendors $2,000,000.00 $2,000,000.00

Other (pathology, film-based) $130,527.00 $130,527.00

Electronic PHI Applications $534,096.00 $534,096.00

Email $60,000.00 $60,000.00

Total $3,116,204.00 $3,116,204.00

S. Payment Terms

The one time-fees are payable after receipt of the Approval Order, as shown. Additional phasesof project will commence upon mutually agreed dates.

1. $500,000.00 due with ten days of the Approval Order.2. $1,250,000.00 due ten days after the removal of paper records from the Trustors

facilities (hospital, OToole, Bayley Seton and the corporate office), excluding anyrecords the Trustor deems necessary to remain on-site until the end of Bankruptcy, and,with the exception of Iron Mountain, Cityside Archives and the Robert Lewis Group.

3. $250,000.00 due ten days after the removal of records from the Trustors record storagevendors Cityside Archives and Robert Lewis Group.

4. $500,000.00 due ten days after the removal of all records from the Trustors recordstorage vendor Iron Mountain.

5 $200 000 00 due ten days after the successful data migration or system relocation of any

f h l f IT Philli iSi PACS O i d Si S E h Philli


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of the last four IT systems: Phillips iSite PACS, Optimed, Siemens SyngoEcho, PhillipsOB TraceVue, GE Viewpoint, Emergisoft, Hemocare or MISYS.

7. $216,204.00 due ten days after removal of Trustor retained paper records and MicrosoftExchange 2007 email system.8. Fuel surcharge will be invoiced weekly and is due ten (10) days after the invoice date,

which is the day the invoice was created. The invoice date will be clearly printed on theinvoice in the upper left-hand corner.

Remittance by Wire Transfer:

MetalQuest-SVCMC Trust, LLC.Account:Bank: Fifth Third Bank, Cincinnati, OHRoute: 042000314Account: To Be Provided at Time of Transfer

Remittance by Check:

MetalQuest-SVCMC Trust, LLC.Attn: Accounts PayableP.O. Box 46364Cincinnati, Ohio 45246-0364

T. Contacts

Contract Administration William L. Jansen

Technical William E. Parker

Finance Patricia R. Lohmiller

Compliance and Privacy Agnes M. Larcenaire

U. Attachments

1. NYS Retention Schedule Compilation2. NYS Laboratory Report and Specimen Retention Schedule

PPrraaccttiicceeBBrr iieeffRReetteennttiioonnooffHHeeaalltthh IInnffoorrmmaattiioonn((uuppddaa tteedd))T bl 4 St t L R l ti P t i i t R t ti f H lth I f ti


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State Summary of Law/Regulation Citation

Montana (cont.) Diagnostic imaging film and electrodiagnostic tracings must be ARM 16.32.328 (1990)

retained for at least five years; their interpretations must be re-tained for the length of time required for other medical records.

Other healthcare facilities must retain patient or resident ARM 16.32.308 (1990)medical records for no less than five years following the

patients or residents discharge or death.

Nebraska Hospitals must keep medical records in original, microfilm, Nebraska Admin. Rules &or other approved copy form for at least 10 years following Regs. 775-9-003.04A6discharge. In the case of minors, hospitals must keep the re- (1979)cord until three years after the age of majority.

Intermediate care facilities must keep medical records for at Nebraska Admin. Rules &least as long as the resident remains at the facility and five Regs. 175-8-003.04A3years thereafter, or in the case of a minor, five years after (1987)the resident reaches the age of majority.

Health clinics must maintain client records for not less Nebraska Admin. Rules &than five years. Regs. 175-7-004.04 (1975)

Substance abuse treatment centers (which includes alcohol Pendingand druginpatient and outpatient) rules and regulations are

pending at this time due to a statute change.Home health agencies must retain records in retrievable form Nebraska Admin. Rules &for at least five years after last discharge. The home health Regs. 175-14-006.01I (1988)agency must keep records of minors at least five years afterthe patient reaches the age of majority.

Nevada Healthcare providers must retain health records for five years Nevada Rev. Stat. Annotatedafter their receipt or production. Section 629.051

(Michie 1991)

New Hampshire Both hospitals and health facilities must retain medical records New Hampshire Code

of adults for a period of seven years from discharge. Childrens Admin. R. Dept. of Healthrecords must be retained to the age of majority plus seven years. and Human Services Reg.

802.11, 803.06 (1986)

X-ray film must be stored at least seven years. New Hampshire CodeAdmin. R. Dept. of Healthand Human Services Reg.802.08(b)(5)(1986)

New Jersey Hospitals must preserve medical records for a period of not N.J.A.C. Title 26 26:8-5less than 10 years following the most recent discharge of

the patient or until the discharged patient reaches age 23,whichever is the longer period.

In addition, a discharge summary sheet shall be retained fora period of 20 years following the most recent dischargeof the patient.

X ray films shall be retained for a period of five years

TT

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PPrraaccttiicceeBBrr iieeffRReetteennttiioonnooffHHeeaalltthh IInnffoorrmmaattiioonn((uuppddaa tteedd))Table 4: State Laws or Regulations Pertaining to Retention of Health Information


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State Summary of Law/Regulation Citation

New York (cont.) years; tissue block20 years; histopathology block20 years;

histopathology slide20 years; bone marrow biopsy20years; cytogenetic slidesix years; photographic slide ofcytogenetic karyotype25 years; and recipient blood spec-imensone week stoppered at 6~C.

North Carolina Hospitals must maintain medical records, whether original, T10:03C:3903(1996)computer media, or microfilm for a minimum of 11 yearsfollowing the discharge of an adult patient. Hospitals mustmaintain the medical records of minors until the patients30th birthday.

Hospice medical records must be retained for a period of not T10:03T:0900 (1996)less than three years from the date of discharge of the patient,unless the patient is a minor, in which case the record must beretained until five years after the patients 18th birthday. If aminor patient dies, as opposed to being discharged for otherreasons, the minors records must be retained at least five yearsafter the minors death.

Nursing homes must maintain medical records, whether orig- T10:03H:2402 (1996)inal, computer media, or microfilm for a minimum of fiveyears following the discharge of an adult patient. Nursinghomes must maintain the medical record

1782-motion re info mgmt services and trust ageement and document retention plan

Documents