Medical Acquisition Company (MAC) is a factoring company. MAC purchases accounts receivables ("Purchased Receivables") from Qualifying Patients in two ways. First, MAC purchases receivables owed to a hospital for emergency or trauma services to a Qualifying Patient. Second, MAC purchases receivables owed for follow-up medical care, surgeries to Qualifying Patients. Additional to the above mentioned ways, an attorney representing a Qualifying Patient in a personal injury claim against a third party contacts MAC to purchase through MAC's AR Program additional follow-up care.

Participating Patients often do not have health insurance, HMO, PPO, or indemnity. Nor do these Participating Patients qualify for any state, in California Medi-cal, or federal health entitlement programs such as Medicare or TRICARE.

MAC does not enter into any contract or agreement with a Participating Patient at any time. The Participating Patient pays no money, or provides any form of consideration to MAC in connection with their medical care.

MAC's only agreements are with hospitals and outpatient surgical centers to purchase receivables for qualifying emergency and trauma services, and follow-up care for Qualifying Patients.

MAC purchases receivables from contracted hospitals or outpatient surgical center providers at rates that are agreed to after arms-length negotiations have concluded and an agreed contract between MAC and provider is in place. These rates are consistent with fair market value consideration for contracts providers hold with other payors or guarantors. Rates are per diems for inpatient services, case rates for outpatient surgical procedures, flat rates for MRIs CT Scans, etc, and a percentage of billed charges for excluded items such as implantable devices and other hardware. There may also be contracts that have a Stop Loss (i.e. $150,000) where once that is hit, any amount over that will be paid at an agreed upon percentage of billed charges. This pricing formula applies to all ER Purchases and Secondary Purchases. At no time does MAC contract for or receive consideration for a potential referral or a referral of patients to a hospital, outpatient surgical center, to a physician or to an attorney.

When MAC purchases receivables from a provider, MAC is now fully and solely responsible for the collection of the purchased receivables from the Participating Patient. MAC eliminates any and all risks associated with lien(s)/Letter of Protection(s) for the health care provider ie hospital outpatient surgical center. Once the health care provider, assigns over the Participating Patients charges, its role in the lien(s)/Letter of Protection(s) process is completed. By contracting with MAC the health care provider does not have to relegate staff and resources to collecting on lien(s)/Letter of Protection(s). Staff is now able to focus on identifying new potential Third Party Liability lien(s)/Letter of Protection(s) that will generate additional new revenue to the provider. MAC per its contract with the health care provider guarantees payment to the provider within ten (10) days of receipt of provider's bill.

Areas of possible concern, and answers. MAC pre qualifies the Participating Patients case prior to the physician ever being picked by the patient or the patient's attorney to handle their care. MAC makes sure that no Participating Patients it may direct to Participating Health Care Providers are covered by any health insurance plan, HMO, PPO, Indemnity, and do not qualify for any state of federal health entitlement programs such as; Medi-Cal, Medicare, TRICARE. By doing so, MAC makes sure that federal anti-kickback law does not apply to the Accounts Receivable (AR) Program. Therefore the federal physician self-referral law, commonly known as the "Stark Bill," which prohibits a physician who has a financial relationship with an entity from referring his or her Medicare or Medicaid patients to that entity for designated health services unless they receive funds. Since this is not the case with MAC, the Stark Bill does not apply. Should a referral of Participating Patients by MAC occur at the request of a Patient's Attorney, and that Participating Patient is directed to a hospital or other provider which MAC knows is willing to sell the resulting receivables, such referrals are not covered by the Stark Bill or PORA, (California's physician self-referral law, the Physician Ownership and Referral Act of 1993 which prohibits referrals where a physician has a financial interest in an entity ) because these statues apply only to referrals by a physician with a financial interest. MAC does from time to time uses the services of a physician, but these are only consulting services, and no physicians are involved in MAC's day to day operations, nor are any physicians involved in directing Participating Patients to providers. At no time will MAC ever use a physician in the direction of Participating Patients to providers.

California's primary anti-kickback statute, B&P Code Section 650 generally prohibits licensed persons from offering or accepting any payment as compensation or inducement for referrals of any patient, not just federal program patients. Health and Safety Code Section 445 also restricts compensation for referrals of medical services provides in relevant part: "No person, firm, partnership, association or corporation, or agent or employee thereof, shall for profit refer or recommend a person to a physician, hospital, health-related facility, or dispensary for any form of medical care or treatment of any ailment or physician condition. The imposition of a fee or charge for any such referral or recommendation creates a presumption that the referral or recommendation is for profit."

MAC charges no fee and no Participating Patient ever pays for a referral to a health care provider.

When a patient or the Patient's Attorney contacts MAC seeking to arrange for services from providers who participate in MAC's AR Program, MAC first asks the attorney and their client to select a physician, and see if that physician admits at a participating MAC AR Program hospital. Should this be the case, MAC need not have any involvement in directing the patient to a provider.

If the patient or the Patient's Attorney does not have a physician, or has a physician who is not authorized to admit the patient to a hospital which participates in the AR Program, MAC will provide to the patient or the Patient's Attorney a list of hospitals participating in the AR Program and have the patient select a physician on staff at any of the participating hospitals who is known to accept cases on the lien(s)/Letter of Protection(s). In this way, MAC will not be recommending any particular hospital to a patient, and is making no recommendation concerning which physician to use. When MAC does have to provide a patient or the Patient's Attorney with a list of providers who participate in the AR Program, MAC provides a disclaimer stating that MAC is not in any way recommending the providers on such list or in any way vouching for their quality and notes that it is the patient's responsibility to research the qualifications and experience of the providers.