<PAGE>
                                                                    Exhibit 10.1

                                            [*] CERTAIN CONFIDENTIAL INFORMATION
                                           CONTAINED IN THIS DOCUMENT, MARKED BY
                                            BRACKETS, HAS BEEN OMITTED AND FILED
                                     SEPARATELY WITH THE SECURITIES AND EXCHANGE
                                                                     COMMISSION.









                                   Ancillary
                          Provider Services Agreement
<PAGE>
                                   ANCILLARY
                          PROVIDER SERVICES AGREEMENT

This Ancillary Provider Services Agreement ("Agreement") is made and entered
into by and between Health Net Inc., ("HNI") Affiliate(s) identified in
Addendum A to this Agreement and Coram, Inc., on behalf of its duly licensed
affiliates and subsidiaries as listed in Addendum G, an ancillary provider
("PROVIDER"), to be effective January 1, 2001:

                                    RECITALS
                                    --------

     A.        PROVIDER is a medical professional, a corporation or other public
               or private entity that provides or arranges for the provision of
               professional health care services, supplies, products or related
               services.

     B.        HNI is one or more corporations which has the legal authority to
               enter into this Agreement, and to perform the obligations of HNI
               hereunder with respect to the Benefit Programs identified on
               Addendum A.

     C.        HNI desires to enter into this Agreement to arrange for PROVIDER
               to render Contracted Services to Members of the various Benefit
               Programs identified on Addendum A.

     D.        PROVIDER desires to enter into this Agreement to render
               Contracted Services to Members of the various Benefit Programs
               identified on Addendum A.


                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the above recitals and the covenants
contained herein, the parties hereby agree as follows:

I.   DEFINITIONS
     -----------

     Many words and terms are capitalized throughout this Agreement to indicate
     that they are defined as set forth in this Article I.

          1.1  AFFILIATE. An entity in which Health Net, Inc., a Delaware
               corporation, owns fifty-one percent (51%) or more of the voting
               stock, or which is managed by HNI or an HNI subsidiary. The
               Affiliates provide, arrange for or administer one or more Benefit
               Programs covered under this Agreement on  behalf of themselves
               and/or Payors. The Affiliates who are parties to this Agreement
               are listed on Addendum A, as amended from time to time by HNI.

          1.2  BENEFIT PROGRAM. HNI's obligation to pay for, provide, arrange
               for or administer Covered Services, provider networks,
               administrative or other related services pursuant to a written
               agreement between an employer or other entity or an individual
               and HNI. The Benefit Programs covered under this Agreement are
               listed on Addendum A.

          1.3  CAPITATION. The compensation paid per Member per month ("PMPM")
               for each HMO Member who has selected or been assigned to
               PROVIDER.



                                  Page 1 of 64
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1.4    COMMERCIAL HMO MEMBER. An HMO Member whose premium is fully paid and
       enrolled in a commercial Benefit Program, including (1) a Benefit Program
       offered to an employer other than a small group employer ("Standard HMO
       Member"), (2) a Benefit Program offered to a small group employer as
       defined in Section 1357(I) of the California Health and Safety Code
       ("Small Group HMO Member"), (3) a Benefit Program offered to individuals
       ("Individual HMO Member"), (4) a Benefit Program offered to an individual
       participating in the Access for Infants and Mothers Program ("AIM
       Member"), (5) a Benefit Program which is fully or partially self-funded
       ("Flexible Funded HMO Member") or (6) a Benefit Program offered to
       Members with primary coverage through Medicare and health care coverage
       under an HMO or POS Plan ("Medicare Supplement Member").

1.5    CONTRACTED SERVICES. Those Medically Necessary Covered Services to be
       rendered by PROVIDER to a Member in accordance with this Agreement.

1.6    COORDINATION OF BENEFITS. The allocation of financial responsibility
       between two (2) or more payors of health care services, each with a legal
       duty to pay for or provide Covered Services to a Member at the same time.

1.7    COPAYMENT. That portion of the cost of Covered Services that a Member is
       obligated to pay under a particular Benefit Program, including
       deductibles and coinsurance.

1.8    COVERAGE CERTIFICATE OR CERTIFICATE. The document which describes the
       benefits available to a Member in connection with a Benefit Program.

1.9    COVERED SERVICES. The health care services, products, supplies or related
       services that are covered under an applicable Benefit Program.

1.10   EMERGENCY. A medical condition manifesting itself by acute symptoms of
       sufficient severity such that a prudent layperson who possesses average
       knowledge of health and medicine, could reasonably expect the absence of
       immediate medical attention to result in: (i) placing the individual in
       serious jeopardy (and in the case of a pregnant woman, her health or that
       of her unborn child); (ii) serious impairment to bodily functions; or
       (iii) serious dysfunction of any bodily organ or part. HNI shall have the
       final authority in decisions regarding emergencies and emergency
       services.

1.11   FACILITY(IES). The hospitals, health care facility(ies) and other service
       locations operated or subcontracted by PROVIDER at which Contracted
       Services are to be provided under this Agreement. PROVIDER's hospitals,
       health care facilities and other service locations are attached as
       Addendum G to this Agreement, as amended from time to time.

1.12   HMO MEMBER. A person who is eligible to receive Covered Services under
       those Benefit Programs offered by an Affiliate which is a health care
       service plan licensed under the Knox-Keene Act, and whose premium has
       been fully paid. An HMO Member shall be a person enrolled in a Medicare
       HMO Benefit Program as set forth in Addendum C ("Medicare HMO Member"), a
       person enrolled in a Medicaid Benefit Program as set forth in Addendum E
       ("Medi-Cal HMO Member") or a person enrolled in a commercial Benefit
       Program as set forth in Addendum B ("Commercial HMO Member").



                                  Page 2 of 64


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1.13   MEDICALLY NECESSARY. Those Covered Services which, under the provision of
       this Agreement, are determined to be:

       (a)  Appropriate and necessary for the symptoms, diagnosis or treatment
            of a condition, illness or injury; and

       (b)  Provided for the diagnosis or the direct care and treatment of a
            medical condition, illness or injury; and

       (c)  Within the standards of good medical practice within the organized
            medical community; and

       (d)  Not primarily for the convenience of the Member, or the Member's
            Participating Provider or other provider; and,

       (e)  The most appropriate supply or level of service, including levels of
            acute care such as intensive care unit services or regular acute
            medical and surgical services as determined by the clinical status
            of the Member, which can safely be provided to the Member. For
            hospitalization, this means that the Member requires acute care as
            an inpatient due to the nature of the services the Member is
            receiving, or the severity of the Member's condition, and that safe
            and adequate care cannot be received as an outpatient or at a less
            intensified medical setting such as a sub-acute unit or skilled
            nursing facility.

       Notwithstanding the above, Medically Necessary services for HMO Members
       shall not differ from that defined in the Evidence of Coverage document
       approved by the Department of Corporation.

1.14   MEMBER. (Beneficiary) A person who is eligible to receive Covered
       Services under a Benefit Program included in this Agreement by virtue of
       completing the required enrollment process and whose premium has been
       fully paid. Member shall include HMO Member.

1.15   MEMBER PHYSICIAN. A physician who practices medicine in the capacity of a
       shareholder, partner, employee, subcontractor, locum tenens or associate
       of PPG.

1.16   OPERATIONS MANUAL. All Operations Manuals, including medical policy
       manuals, issued by HNI, as updated from time to time, which are
       incorporated in this Agreement by this reference. PROVIDER agrees to be
       contractually bound to comply with the Operations Manual, including the
       medical policy manuals, and any updates or revisions to such, to be
       issued to PROVIDER. In the event that any provision in an Operations
       Manual or any updates thereto are clearly inconsistent with the terms of
       this Agreement as amended, the terms of this Agreement shall prevail.

1.17   PARTICIPATING PHYSICIAN GROUP ("PPG"). A Participating Provider who may
       have been delegated by HNI, the utilization management responsibilities
       for HMO Members and from whom authorization of Capitated Services must be
       sought.

1.18   PARTICIPATING PROVIDER. A hospital, skilled nursing facility, physician,
       Participating Physician Group ("PPG"), Member Physician, other health
       care practitioner or other organization which has a direct or indirect
       contractual relationship with HNI or another Participating Provider to
       provide Covered Services to Members. In the event PROVIDER contracts with
       a health care provider to render Covered Services under this Agreement,
       such provider is a Participating Provider.

1.19   PAYOR. A public or private entity contracted with HNI which funds,
       insures or is responsible for paying Participating Providers for Covered
       Services rendered to Members pursuant to the terms of this Agreement and
       as stipulated on the Member's identification card.


                                  Page 3 of 64





<PAGE>
      1.20   PRIMARY CARE PHYSICIAN ("PCP"). A Member Physician who is
             responsible for providing and/or coordinating the delivery of
             Covered Services to an HMO Member pursuant to the applicable
             Benefit Program. Primary Care Physicians include general
             practitioners, family practitioners, internists, pediatricians,
             obstetrician/gynecologists and other specialists, if approved by
             HNI.

      1.21   PRIOR AUTHORIZATION. The written approval by HNI, Payor, PROVIDER,
             or other permitted entity, prior to admitting a Member to a
             hospital or a skilled nursing facility, or to providing certain
             other Covered Services to a Member, which approval is required
             under the Utilization Management Program of the applicable Benefit
             Program as described in the Operations Manual.

      1.22   PROVIDER RISK SERVICES. Contracted Services and such other Covered
             Services as are described in an Addendum to this Agreement for
             which PROVIDER has accepted Capitation as compensation under the
             applicable Benefit Programs to which the Addendum applies.

      1.23   QUALITY IMPROVEMENT PROGRAM. A program to meet HNI standards,
             approved by HNI, and designed to ensure the provision of quality
             medical services, as described more fully in the Operations Manual.

      1.24   SERVICE AREA. The geographic area in the continental United States
             within a thirty (30) air-mile radius of an HMO Member's PCP's
             office location for the purpose of determining in-area versus
             out-of-area services for such Member as set forth in the Operations
             Manual.

      1.25   STATE. The State of California.

      1.26   SURCHARGE. An additional fee that is charged to a Member fee for a
             Covered Service, but which is not approved by the applicable State
             and federal regulatory authority, and is neither disclosed nor
             provided for in a Coverage Certificate.

      1.27   URGENTLY NEEDED SERVICES. Covered Services required in order to
             prevent a serious deterioration of an HMO Member's health that
             results from an unforeseen illness or injury if (i) such Member is
             temporarily absent from the Service Area and (ii) receipt of the
             health care service cannot be delayed until the Member's return to
             the Service Area.

      1.28   UTILIZATION/CARE MANAGEMENT PROGRAM. A program that meets HNI's
             standards and is approved by HNI and designed to review and manage
             the utilization of Covered Services, as described in the
             Operations Manual.

II.   REPRESENTATIONS AND DUTIES OF PROVIDER

      2.1    REPRESENTATIONS OF PROVIDER.

             (a)  PROVIDER warrants that it has the authority to contract on
                  behalf of its Participating Providers and to bind them to all
                  of the terms and provisions of this Agreement. PROVIDER shall
                  notify Participating Providers of their rights and duties
                  under this Agreement and of all amendments and modifications
                  thereto.

             (b)  PROVIDER shall provide HNI, upon request, with its written
                  applicable policies and procedures and its bylaws and articles
                  of incorporation and any modifications thereto.

             (c)  PROVIDER represents that the terms of this Agreement do not
                  conflict with the terms of its agreements with Participating
                  Providers. PROVIDER further represents that the terms of this
                  Agreement shall apply in any situation where there is an
                  inconsistency or conflict with the terms of any agreement
                  between the Participating Provider and PROVIDER or with



                                  Page 4 of 64


<PAGE>
             respect to any matter which is not addressed in any such agreement
             between the Participating Provider and PROVIDER. PROVIDER shall be
             responsible to HNI for any such inconsistency or conflict in terms.
             This provision shall supersede any similar provision in any
             agreement between PROVIDER and a Participating Provider.

2.2    REPRESENTATIONS FOR EACH SITE. PROVIDER represents and warrants for each
       Facility that:

       (a)   PROVIDER is licensed by the State to operate and provide Contracted
             Services.

       (b)   PROVIDER operates and provides Contracted Services in compliance
             with all applicable local, State, and federal laws, rules,
             regulations and institutional and professional standards of care;

       (c)   The PROVIDER is eligible to participate in Medicare Part B under
             Title XVIII of the Social Security Act, and in Medicaid under Title
             XIX of the Social Security Act or other applicable State laws
             pertaining to Title XIX of the Social Security Act, if the PROVIDER
             is contracting for HNI's Medicare line of business;

       (d)   The PROVIDER is accredited by the appropriate accrediting
             organization(s) listed on the Ancillary Facility Credentialing
             Application; and

       (e)   PROVIDER shall maintain such licensure, compliance, certification
             and accreditation throughout the term of this Agreement.

2.3    PROVIDER NETWORK. PROVIDER shall provide HNI with a list of the names,
       practice locations, federal tax identification numbers, professional
       practice name, the business hours and any additional information as
       required in the Operations Manual for all Participating Providers that
       contract with PROVIDER in a format acceptable to HNI. PROVIDER shall
       provide HNI with at least a monthly list of additions, deletions and
       address changes to such list and a complete listing annually.

       PROVIDER shall take all reasonable and prudent steps to ensure that all
       Participating Providers provide adequate personnel and facilities in
       order to perform the duties and responsibilities associated with the
       proper administration of this Agreement, including but not limited to,
       ensuring that all facilities utilized by Participating Providers shall
       satisfy the standards for licensure and certification, if applicable, by
       the appropriate governmental licensing agency as well as applicable State
       and federal law. The Participating Provider assumes the responsibility
       for supervision of all personnel associated with the Participating
       Provider.

2.4    PROVIDER CONTRACTS. Upon entering into any arrangements with a
       Participating Provider as may be necessary to fulfill PROVIDER's
       obligations to provide or arrange for the provision of Contracted
       Services and Covered Services under this Agreement, PROVIDER shall obtain
       written agreements with such providers which include the following
       requirements:

       (a)   Secure adherence by Participating Providers to all the obligations
             of this Agreement which affect Participating Providers, including
             but not limited to:

             (1)   Accepting Members upon referral from Member Physicians and
                   other Participating Providers.

             (2)   Collecting any Copayments due from Member and accepting
                   payment from PROVIDER as payment-in-full for Contracted
                   Services rendered to Members referred to them, except for
                   authorized Copayments, and agree not to bill HNI or


                                  Page 5 or 64


<PAGE>
                    Members for such services regardless of whether or not
                    payment is received from PROVIDER or HNI.

               (3)  Maintaining in force adequate professional liability
                    insurance as set forth in this Agreement and in the
                    Operations Manual.

               (4)  Conforming to all State, federal and other government
                    requirements regarding retention of and access to records,
                    and submission of reports.

               (5)  Accepting all HMO Members when selected, assigned or
                    transferred to PROVIDER.

               (6)  Hospitalizing Members in accordance with the applicable
                    Benefit Program and the Operations Manual.

               (7)  Conforming to HNI's guidelines for rapid medical records
                    review, response and resolution of Member complaints.

     (b)  No agreement between PROVIDER and a Participating Provider shall
          contain any incentive plan that includes a specific payment made, in
          any type or form, as an inducement to deny, reduce, or limit Covered
          Services to a Member. PROVIDER shall comply and shall cause its
          Participating Providers to comply with State and federal law regarding
          physician incentives and stop less insurance requirements, where
          applicable. PROVIDER shall furnish HNI with all of the PROVIDER's
          contracting templates for HNI's review and approval upon request and
          at such time templates are changed. Upon request, PROVIDER shall
          furnish HNI with copies of any amendments to a contract with a
          Participating Provider within ten (10) days of execution. In addition,
          any agreement or amendment between PROVIDER and a Member Physician
          shall not restrict the rights and obligations of Member Physician to
          communicate freely with Members regarding their medical condition and
          treatment alternatives including medication treatment options,
          regardless of benefit coverage limitations. In the event PROVIDER
          enters into a contract with a Participating Provider, PROVIDER shall
          provide HNI with documentation thereof as set forth in the Operations
          Manual.

     (c)  Every PROVIDER subcontract shall provide that it is terminable with
          respect to Members by PROVIDER upon HNI's request. PROVIDER shall
          furnish HNI with copies of any amendments to a subcontract within ten
          (10) days of execution. PROVIDER shall be solely responsible to pay
          any Participating Provider under the subcontract and shall hold and
          ensure that the Participating Provider hold HNI, Members and the State
          harmless from and against any and all claims which may be made by such
          Participating Providers in connection with services rendered to
          Members under the subcontract. As requested or required by HNI,
          PROVIDER shall maintain and make available to HNI, the California
          Department of Health Services ("DHS"), the California Department of
          Corporations ("DOC"), the U.S. Department of Justice ("DOJ"), the U.S.
          Department of Defense ("DOD"), the U.S. Department of Health and
          Human Services ("DHHS") and any other regulatory agency having
          jurisdiction over HNI, copies of PROVIDER's policies and procedures
          and all Participating Provider subcontracts and any amendments
          thereto.

2.5  PARTICIPATING PROVIDER TERMINATION. Whenever possible, PROVIDER shall
     notify HNI in writing at least ninety (90) days prior to any action by
     PROVIDER to terminate a Participating Provider's agreement with PROVIDER.
     When ninety (90) days' prior written notice is not possible, PROVIDER shall
     provide as much advance notice as possible. In the event of a Participating
     Provider's termination, PROVIDER shall ensure that there is sufficient
     capacity in the network.



                                  Page 6 of 64
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     HNI may request and PROVIDER shall terminate any Participating Provider
     from participation under this Agreement, at any time, upon at least thirty
     (30) days' prior written notice from HNI to PROVIDER; provided, however,
     that no such termination shall be because a Participating Provider is
     advocating on behalf of a Member for health care services. Notwithstanding
     the foregoing, if a Participating Provider is found guilty of a criminal
     offense, is barred or sanctioned from participation under the Medicare
     program, or if HNI makes a determination, at its sole discretion, that
     treatment by a Participating Provider may jeopardize the health and safety
     of any Member, PROVIDER, upon HNI's request, shall immediately terminate
     such Participating Provider from participation under this Agreement.

2.6  ELIGIBILITY. Except in an Emergency, PROVIDER shall verify the eligibility
     of Members before providing Contracted Services. HNI shall make a good
     faith effort to confirm the eligibility of any Member. When PROVIDER has
     not made reasonable efforts to verify eligibility, PROVIDER shall not hold
     HNI financially responsible for Covered Services rendered to any person who
     was not eligible for HNI benefits as determined by HNI.

2.7  PROVISION OF SERVICES. PROVIDER agrees to render and to ensure that
     Participating Providers render, Covered Services to Members in accordance
     with:

     (a)  The terms and conditions of this Agreement, and all laws, rules and
          regulations applicable to PROVIDER, HNI and Payors;

     (b)  The Utilization/Care Management Program, the Quality Improvement
          Program, the applicable Benefit Programs, the Member's Coverage
          Certificate and the Operations Manual;

     (c)  The performance standards and indicators that are established by HNI
          including processing of prior authorizations and delivery of services
          once a referral has been made;

     (d)  The termination procedures outlined in the Operations Manual when
          requesting termination of a Member. PROVIDER shall not request,
          demand, or require or otherwise seek, directly or indirectly, the
          removal of any Member based on that Member's need for, or utilization
          of, Covered Services;

     (e)  PROVIDER and Participating Providers shall maintain a professional
          relationship with each Member to whom Contracted Services are
          rendered, and shall be solely responsible to such Member for such
          services; and,

     (f)  The eligibility verification and notification procedures as set forth
          in the Operations Manual.

2.8  HOURS. PROVIDER shall maintain offices, equipment and personnel as may be
     necessary to provide Contracted Services under this Agreement, in
     accordance with State law and as reasonably requested by HNI. PROVIDER
     shall provide Contracted Services under this Agreement during normal
     business hours, and shall be available to Members by telephone twenty-four
     (24) hours a day, seven (7) days a week on an Emergency basis and for
     consultation.

2.9  NON-DISCRIMINATION. PROVIDER and Participating Providers shall not
     discriminate against any Member in the provision of Covered Services
     hereunder, on any basis including age, sex, marital status, sexual
     orientation, race, color, religion, ancestry, national origin, disability,
     handicap, health status, source of payment, utilization of medical or
     mental health services or supplies, or other unlawful basis including
     without limitation, the filing by such Member of any complaint, grievance,
     or legal action against PROVIDER. PROVIDER and Participating Providers
     shall provide Covered

                                  Page 7 of 64
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     Services in the same manner, and with the same availability, as services
     are rendered to its other patients.

     During the term of this Agreement, PROVIDER and its subcontractors shall
     not unlawfully discriminate against any employee or applicant for
     employment because of race, religious creed, color, national origin,
     ancestry, physical disability, mental disability, medical condition,
     marital status, age (over 40) or sex. PROVIDER and its subcontractors also
     shall ensure that the evaluation and treatment of their employees and
     applicants for employment are free of such discrimination. PROVIDER and its
     subcontractors shall comply with the provisions of the Fair Employment &
     Housing Act (California Government Code, Section 12990, et seq.) and the
     applicable regulations promulgated thereunder (California Code of
     Regulations, Title 2, Section 7285.0 et seq.). The applicable regulations
     of the Fair Employment & Housing Commission implementing Government Code,
     Section 12990, set forth in Chapter 5 of Division 4 of Title 2 of the
     California Code of Regulations are incorporated into this Agreement by
     reference and made a part hereof as if set forth in full. PROVIDER and its
     subcontractors shall meet the requirements of all other laws and
     regulations, including Title VI of the Civil Rights Act of 1964, the Age
     Discrimination Act of 1975, the American with Disabilities Acts, and all
     other laws applicable to recipients of Federal funds. PROVIDER and its
     subcontractors shall give written notice of their obligations under this
     clause to labor organizations with which they have a collective bargaining
     or other agreements.

2.10 UTILIZATION/CARE MANAGEMENT PROGRAM. PROVIDER and Participating Providers
     agree to participate in and cooperate fully with the provisions and all
     decisions rendered in connection with HNI's Utilization/Care Management
     Program. PROVIDER and Participating Provider agrees to render Covered
     Services at the most appropriate level of service. PROVIDER and
     Participating Providers also agree to provide medical records and other
     information as may be required or requested under such Utilization/Care
     Management Program as set forth in the Operations Manual. HNI may, at its
     sole discretion, delegate certain Utilization/Care Management Program
     activities. If so determined qualified and delegated by HNI, the
     obligations of PROVIDER for delegation shall be as set forth herein.

2.11 PRIOR AUTHORIZATION AND REFERRALS. PROVIDER and Participating Providers
     agree to comply with prior authorization and referral processes as required
     by the particular Benefit Program or Utilization/Care Management Program as
     set forth in the Operations Manual. Prior authorization or referral may be
     issued by HNI, PROVIDER, or a Participating Provider. For non-emergent
     services, PROVIDER or Participating Provider agrees to obtain prior
     authorization or a referral before providing or ordering Contracted
     Services. In an Emergency, PROVIDER agrees to attempt to obtain prior
     authorization or a referral, by telephone if necessary, before providing or
     ordering Contracted Services. If prior authorization or a referral cannot
     be obtained in an Emergency, PROVIDER agrees to notify HNI and the
     appropriate Participating Provider, as soon as possible, but no later than
     twenty-four (24) hours after services are rendered. In the event PROVIDER
     fails to obtain an authorization or a referral, PROVIDER agrees not to seek
     payment from HNI or a Payor for Contracted Services rendered to a Member
     unless prior authorization or a referral was obtained. HNI shall retain the
     right to authorize Emergency services in accordance with the Operations
     Manual.

2.12 NOTIFICATION OF INSTITUTIONAL SERVICES. PROVIDER shall notify HNI prior to
     or at the time of each admission of a Member to a hospital or skilled
     nursing facility whose admission is the financial responsibility of HNI. In
     the event of an Emergency admission, PROVIDER shall notify HNI regarding
     such Member within twenty-four (24) hours.

2.13 CATASTROPHIC CASES. PROVIDER shall actively participate with HNI in
     managing Members with potentially catastrophic medical conditions
     including, but not limited to, Acquired Immune Deficiency Syndrome ("AIDS")
     cases, organ transplantation, infants requiring intensive care, and burn
     cases. Such participation includes, but is not limited to, prompt
     notification to HNI of all known


                                  Page 8 of 64

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     or suspected catastrophic cases, obtaining prior authorization from HNI for
     organ transplantation evaluations and organ transplantations, and utilizing
     regional centers designated by HNI for the purpose of delivering
     specialized care. PROVIDER shall abide by the policies and procedures for
     catastrophic case management as set forth in the Operations Manual.

2.14 QUALITY IMPROVEMENT PROGRAM. PROVIDER agrees to participate in and
     cooperate fully with the applicable Quality Improvement Program including
     site audits and to comply with decisions rendered by HNI in connection with
     a Quality Improvement Program. The quality of Contracted Services rendered
     to Members shall be monitored under the Quality Improvement Program
     applicable to the particular Benefit Program. PROVIDER also agrees to
     provide medical and other records within five (5) calendar days of receipt
     of written notice, and review data and other information as may be required
     or requested under a Quality Improvement Program, including reporting in
     accordance with, but not limited to, the current Health Plan Employer Data
     and Information Set ("HEDIS"), or its successor. PROVIDER also agrees to
     provide information and reporting requested under the Performance Standards
     as described in Addendum H. In the event that PROVIDER's performance,
     including but not limited to, its structures, processes or outcomes, is
     found to be unacceptable under any Quality Improvement Program, HNI shall
     give written notice to PROVIDER to correct the specified deficiencies
     within the time period specified in the notice. PROVIDER shall correct such
     deficiencies within that time period. If PROVIDER fails to correct such
     deficiencies within the specified time frame, then HNI may choose to
     terminate PROVIDER in accordance to Section 5.3 of this Agreement.

2.15 MEMBER GRIEVANCE PROCEDURES. PROVIDER shall participate in and be bound by
     the applicable Benefits Program, Member's Certificate, and the applicable
     Member grievance procedure, as set forth in the Operations Manual.

2.16 CREDENTIALING OF PROVIDER AND/OR PARTICIPATING PROVIDERS. PROVIDER shall
     submit to HNI the credentialing application. Such application shall be
     completed on behalf of PROVIDER, and/or on behalf of each Participating
     Provider rendering Covered Services under this Agreement. The submitted
     credentialing application is construed to be part of this Agreement.
     PROVIDER represents and warrants that each Participating Provider meets the
     credentialing and recredentialing standards adopted by HNI and that
     PROVIDER shall perform credentialing and recredentialing functions in
     accordance with the Operations Manual.

2.17 NOTICE OF ADVERSE ACTION. PROVIDER shall notify HNI in writing, within five
     (5) days of receiving any notice of any complaint, grievance, or adverse
     action, including, without limitation, (i) any action against any license,
     certification under Title XVIII or Title XIX or other applicable statute of
     the Social Security Act or other State law; (ii) any action which results
     in the filing of a report on a Member Physician under California Business &
     Professions Code Section 805; (iii) any action by an insurance carrier
     indicating that such carrier will cancel or not renew the insurance
     coverage required to be carried by PROVIDER or Participating Physician as
     specified in this Agreement; (iv) any malpractice litigation or settlement
     involving a Member Physician; and (v) any other event, occurrence or
     situation which might materially interfere with, modify or alter
     performance of any of PROVIDER's duties or obligations under this
     Agreement. PROVIDER shall maintain a written record of any Member complaint
     and provide such record to HNI promptly upon request.

2.18 INSURANCE. PROVIDER shall maintain appropriate insurance programs or
     policies as follows and in accordance with the Operations Manual:

     (a) PROVIDER agrees to maintain professional liability, or other risk
         protection program, in the amounts required by law but no less than one
         million dollars ($1,000,000.00) per claim and three million dollars
         ($3,000,000.00) annual aggregate. Notification to HNI by PROVIDER of
         cancellation or material modification of the risk protection program
         shall be made to HNI at least thirty (30) days prior to any
         cancellation. Certificates of Coverage or documents


                                  Page 9 of 64
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                evidencing professional liability insurance or other risk
                protection required under this subsection shall be provided to
                HNI upon request.

        (b)     PROVIDER shall maintain a policy or program of comprehensive
                general liability insurance (or other risk protection) with
                minimum coverage including a Combined Single Limit Body Injury
                and Property Damage Insurance of not less than one million
                dollars ($1,000,000.00) per claim.

        (c)     PROVIDER'S employees shall be covered by Workers' Compensation
                Insurance in an amount and form meeting all requirements of
                applicable provisions of the California Labor Code.

2.19    CONFLICT OF INTEREST. PROVIDER shall not, during the term of this
        Agreement, acquire, or make any commitment to acquire a proprietary
        interest in any organization which is licensed as a health care service
        plan or which has submitted an application for such licensure except as
        to a health care service plan with waivers. This restriction shall
        include any affiliated, subsidiary or parent organizations to which
        PROVIDER may belong in which thirty percent (30%) or more is under
        common ownership. "Proprietary Interest", as used herein, shall not be
        deemed to include:

        (a)     Participation as a provider of services for any other health
                care service plan or system of prepaid health care delivery; or

        (b)     Ownership of shares having a current value of less than two
                hundred fifty thousand dollars ($250,000.00) in a corporation
                whose shares are regularly traded in a public market.

2.20    LISTING OF PROVIDER. PROVIDER agrees that HNI and Payors may list the
        name, address, telephone number and other factual information of
        PROVIDER, each Facility and PROVIDER's subcontractors and their
        facilities in its marketing and informational materials. PROVIDER shall
        supply all printed materials and other information relating to its
        operations within seven (7) days of HNI's request.

2.21    NON-SOLICITATION. PROVIDER and Member Physicians shall not, either
        during or after the term of this Agreement, solicit any Member to enroll
        in any other health care service plan or insurance program for the
        primary purpose of securing financial gain. Liquidated damages for such
        solicitation resulting in disenrollment of Members from HNI shall be
        fifteen hundred dollars ($1,500.00) for a commercial Member, twenty-five
        hundred dollars ($2,500.00) for a Medicare HMO Member and one thousand
        dollars ($1,000.00) for a Medi-Cal Member. PROVIDER and HNI agree that
        the amounts stated as liquidated damages are reasonable under the
        circumstances existing at the time that this Agreement is executed.

2.22    REGULATORY AND ACCREDITATION SURVEYS. PROVIDER shall participate in and
        assist HNI with any review conducted by a regulatory agency or any
        accreditation survey or study.

2.23    NEW OR ADDITIONAL BENEFIT PLAN DESIGNS. PROVIDER agrees to accept any
        new or additional benefit plan designs developed by HNI and shall
        provide Covered Services pursuant hereto. HNI shall determine
        appropriate actuarial values, consistent with existing actuarial
        assumptions, in order to compensate PROVIDER.

2.24    PROVIDER LIAISON COORDINATOR STAFFING. Throughout the term of this
        Agreement, PROVIDER agrees to allocate a Provider Liaison to interface
        with HNI and the PPGs to facilitate education, policy and procedure
        development, review claim liability, and oversee medical management
        activity for the Provider Risk Services provided to Members.


                                 Page 10 of 64

<PAGE>
III. DUTIES OF HNI

     3.1  ADMINISTRATION. HNI shall perform, or have performed, all necessary
          administrative, accounting, enrollment, and other functions
          appropriate for marketing and administration of the Benefit Programs
          contained in this Agreement.

     3.2  INSURANCE. HNI shall maintain appropriate insurance programs or
          policies including a policy of bodily injury and personal injury
          coverage which includes persons serving on HNI committees as insured
          by definition. In the event that a policy or program is terminated or
          the coverage of committee persons is materially changed, HNI shall so
          notify PROVIDER. HNI shall maintain coverage at the same level as
          required of PROVIDER hereunder.

     3.3  REPORTING TO REGULATORS. HNI shall accept sole responsibility for
          filing reports, obtaining approvals, and complying with the applicable
          laws and regulations of State, federal, and other regulatory agencies
          having jurisdiction over HNI; provided, however, that PROVIDER agrees
          to cooperate in providing HNI with any information and assistance
          reasonably required in connection therewith.

     3.4  PREMIUMS. HNI shall collect all premiums, dues, Member payments, and
          other items of revenue to which HNI is entitled, except for Copayments
          and payments for non-Covered Services.

     3.5  OUT-OF-AREA SERVICES. HNI shall manage and coordinate out-of-area
          services. PROVIDER shall cooperate fully with HNI and shall provide
          any information necessary to transfer Members back into the Service
          Area, including but not limited to, notification to HNI of known or
          suspected out-of-area services. PROVIDER shall accept the prompt
          transfer of Member to the care of PROVIDER and its Participating
          Providers following the receipt of out-of-area services when medically
          appropriate.

     3.6  OPERATIONS MANUAL. HNI shall provide PROVIDER with various Operations
          Manuals which identify the methods of administration of this
          Agreement, including grievance procedures, Utilization/Care Management
          Programs, Quality Improvement Programs, encounter reporting
          procedures, and billing and accounting of Covered Services rendered
          hereunder. Updates to the Operations Manual will be made by HNI and,
          whenever possible, shall be sent to PROVIDER for review thirty (30)
          days prior to implementation. Such updates shall not materially affect
          the compensation rates or financial responsibility of PROVIDER under
          this Agreement.

     3.7  MARKETING ACTIVITIES. HNI shall make reasonable efforts to market the
          Benefit Programs. Nothing in this Agreement shall require HNI to
          conduct any specific marketing activities on behalf of PROVIDER or to
          identify PROVIDER in any specific HNI marketing or informational
          materials.

IV.  COMPENSATION

     4.1  COMPENSATION RATES. PROVIDER and Participating Providers shall accept
          as payment in full for Contracted Services and all other services
          rendered to Members under this Agreement the amounts payable by HNI or
          a Payor as set forth in the applicable Addenda to this Agreement.

     4.2  BILLING AND PAYMENT.

          (a)  BILLING. PROVIDER shall submit to HNI via HNI's electronic claims
               submission program or by hard copy, clean, complete and accurate
               claims for Contracted Services in accordance with the Operations
               Manual and the applicable Benefit Program. PROVIDER shall submit

                                 Page 11 of 64



<PAGE>
          claims within ninety (90) days of rendering Contracted Services. Where
          HNI is the secondary payor under Coordination of Benefits, such ninety
          (90) day period shall commence immediately after the primary payor has
          paid or denied the claim.

          HNI shall not be under any obligation to pay PROVIDER for any claim
          not timely submitted as set forth above. PROVIDER shall not seek
          payment from any Member in the event HNI does not pay PROVIDER for a
          claim not timely submitted.

     (b)  PAYMENT. Unless a claim is disputed, HNI or a Payor shall pay
          PROVIDER's clean, complete, accurate and timely submitted claims for
          Contracted Services rendered to a Member, in accordance with
          applicable State and federal law.

     (c)  ADJUSTMENTS AND APPEALS. PROVIDER shall submit requests for
          adjustments and/or appeals regarding claim payments to HNI within
          sixty (60) calendar days after the date of the payment of such claim
          to PROVIDER. In the event PROVIDER fails to appeal a claim within such
          time period, PROVIDER shall not have the right to appeal such claim.

     (d)  OFFSETTING. HNI shall have the right to offset any amounts owed by
          PROVIDER to HNI, including but not limited to, amounts owed by
          PROVIDER due to errors, or HNI interim payment of Contracted Services.
          HNI shall offset such amounts against any amounts owed by HNI to
          PROVIDER.

     (e)  RECIPROCITY. PROVIDER agrees that HNI may allow the compensation rates
          set forth in this Agreement to be used by [*].

4.3  COLLECTION FROM MEMBER. PROVIDER shall collect all Copayments due from
     Members, and shall not waive or fail to pursue collection of Copayments
     from Members. PROVIDER shall not charge a Member any fees or Surcharges for
     Covered Services rendered pursuant to this Agreement, except for authorized
     Copayments. In addition, PROVIDER shall not collect a sales, use, or other
     applicable tax from Members for the sale or delivery of Covered Services.
     If HNI receives notice of any additional charge, HNI shall take appropriate
     action. PROVIDER may bill a Member for non-Covered Services rendered by
     PROVIDER to such Member only if the Member is notified in advance that the
     services to be provided are not covered under the Member's Benefit Program,
     and the Member requests in writing that PROVIDER render the non-Covered
     Services, prior to PROVIDER's rendition of such services.

4.4  MEMBER HELD HARMLESS. PROVIDER agrees that in no event, including, but not
     limited to, nonpayment by HNI or Participating Provider, insolvency of HNI
     or Participating Provider, or breach of this Agreement, shall PROVIDER
     bill, charge, collect a deposit from, seek compensation, remuneration, or
     reimbursement from, or have any recourse against Members, the State, or
     persons other than HNI for Covered Services provided pursuant to this
     Agreement. This provision shall not prohibit collection of Copayments or
     any amounts due for services which are determined not to be Covered
     Services in accordance with the terms of the applicable Benefit Program.

     PROVIDER further agrees that: (a) this provision shall survive the
     termination of this Agreement regardless of the cause giving rise to
     termination and shall be construed to be for the benefit of Members; and
     (b) this provision supersedes any oral or written contrary agreement
     existing or hereafter entered into between PROVIDER and Members or persons
     acting on their behalf. Any modification, addition, or deletion of or to
     the provisions of this clause shall be effective on a date no earlier than
     fifteen (15) days after the State regulatory agency has received written
     notice of such proposed change and has approved such change.


                                 Page 12 of 64

<PAGE>

     4.5  COORDINATION OF BENEFITS. PROVIDER agrees to conduct Coordination of
          Benefits in accordance with the policies and procedures in the
          Operations Manual, including but not limited to, the prompt
          notification to HNI of any third party entity who may be responsible
          for payment and collection of Copayments.

          When HNI is secondary under the Coordination of Benefit rules, HNI
          shall pay PROVIDER only those amounts which, when added to the amount
          paid to PROVIDER from other sources, equals the amount due to PROVIDER
          under this Agreement in the absence of other sources of payment. Any
          legal right to collection of overpayments from HNI which may occur
          under this Section shall be deemed to be transferred from PROVIDER to
          HNI if PROVIDER has been paid in full according to the primary
          carrier's contracted rate.

     4.6  THIRD PARTY RECOVERIES, WORKER'S COMPENSATION. In the event PROVIDER
          provides services to HNI Members for injuries resulting from the acts
          of third parties, or resulting from work related injuries, PROVIDER
          shall have the right to recover from any settlement, award, or
          recovery from any responsible third-party the full value of Covered
          Services rendered pursuant to the applicable provisions of the
          Coverage Certificate and as set forth in the Operations Manual.
          PROVIDER shall notify HNI of any third party payor and shall, upon
          request from HNI, provide HNI with an accounting of all such sums
          recovered.

     4.7  AUDIT OF CLAIMS. HNI shall have the right to review and audit any
          claims and to reconcile any amounts accordingly.

V.   TERM AND TERMINATION

     5.1  TERM. The term of this Agreement shall commence on the date set forth
          on the first page of this Agreement and shall continue for a period of
          two (2) years thereafter. This Agreement shall automatically renew for
          successive one (1) year periods, unless one party notifies the other
          in writing of its intent not to renew this Agreement at least one
          hundred twenty (120) days prior to the next scheduled renewal date.
          Any and all negotiations must be completed thirty (30) days prior to
          the anniversary date of the contract. The renewal date of the term of
          this Agreement shall remain the same for all Benefit Programs covered
          hereunder, even if this Agreement becomes effective with respect to a
          particular Benefit Program after the initial or any renewal date of
          this Agreement, due to the licensure, contract award or other reason.

          During the initial term, either party has the right to request
          reconsideration of significant terms and conditions, including the
          compensation payable hereunder, by giving notice of proposed Amendment
          provisions in writing by September 1 of each contract year and the
          parties commit to finalize such good faith negotiations by April 1 of
          the subsequent contract year. Should the parties fail to reach mutual
          agreement through those discussions, one of the parties may, by the
          January 1 deadline, give a ninety (90) day written notice of
          termination.

     5.2  WITHOUT CAUSE TERMINATION. Either party may terminate this Agreement
          without cause upon one hundred and twenty (120) days' prior written
          notice to the other party. In the event HNI provides PROVIDER with
          such notice, HNI may, at its option, begin to transition Members
          immediately under this Agreement to another Participating Provider
          after such notice.

     5.3  IMMEDIATE TERMINATION. HNI may terminate this Agreement immediately
          upon notice to PROVIDER, in the event of: (a) PROVIDER's violation of
          any applicable law, rule or regulation; (b) PROVIDER's failure to
          maintain the professional liability insurance coverage specified
          hereunder; (c) PROVIDER's failure to comply with the terms, conditions
          or determinations of any Utilization/Care Improvement Program or
          Quality Improvement Program, or Benefit Program; or, (d)


                                 Page 13 of 64
<PAGE>
          HNI's determination that the health, safety or welfare of any Member
          may be in jeopardy if this Agreement is not terminated.

          Either party may terminate this agreement immediately upon notice to
          the other party should the other party voluntarily file a petition in
          or for bankruptcy, reorganization or an arrangement with creditor;
          become insolvent or unable to pay claims as they become due; have a
          trust, receiver or other custodian appointed on its behalf; or, should
          any other case on insolvency law, or any dissolution or liquidation
          proceeding be commenced against it.

     5.4  TERMINATION FOR FAILURE TO PAY. In the event HNI fails to make
          payments to PROVIDER under the terms and conditions of this Agreement
          within the times set forth herein, PROVIDER may terminate this
          Agreement, but only if HNI has failed to make such payments following
          ten (10) business days' prior written notice from PROVIDER. PROVIDER
          may not terminate this Agreement after giving such notice unless,
          PROVIDER has first made itself available to meet with HNI to attempt
          in good faith to resolve the matter.

     5.5  TERMINATION DUE TO MATERIAL BREACH OTHER THAN NON-PAYMENT. Except as
          set forth in above, in the event that either PROVIDER or HNI fails to
          cure a material breach of this Agreement within thirty (30) days of
          receipt of written notice of such breach from the other party, the
          non-defaulting party may terminate this Agreement. If the breach is
          cured within such thirty (30) day period, or if the breach is one
          which cannot reasonably be corrected within thirty (30) days, and the
          non-defaulting party determines that the defaulting party is making
          substantial and diligent progress toward correction during such thirty
          (30) day period, this Agreement shall remain in full force and effect.

     5.6  TERMINATION OF AN AFFILIATE. In the event HNI ceases to own fifty-one
          percent (51%) or more of the voting stock, or to manage or have a HNI
          subsidiary manage an entity, such entity shall cease being a HNI
          Affiliate hereunder. Effective on the date HNI ceases to own fifty-one
          percent (51%) or manage, or an HNI subsidiary ceases to manage, the
          entity, such entity shall no longer be a party to this Agreement and
          the terms and conditions hereunder shall not apply to such entity.

          In the event the terminated Affiliate under this Section 5.6 is a
          licensed health care service plan, such Affiliate and Provider
          understand and agree that Section 5.7 of the Agreement shall apply to
          such Affiliate and the Members of such Affiliate.

     5.7  EFFECT OF TERMINATION. In the event that a Member is receiving
          Contracted Services at the time this Agreement terminates, PROVIDER
          shall continue to provide Contracted Services to the Member until the
          later of: (a) treatment is completed; (b) the Member is assigned to
          another Participating Provider; or (c) the anniversary date of the
          Member's Coverage Certificate, if requested by HNI. Compensation for
          such Contracted Services shall be at the rates contained in the Fee
          for Service rates described in each Addendum. Termination of this
          Agreement shall not affect any right or obligations hereunder which
          shall have previously accrued, or shall thereafter arise with respect
          to any occurrence prior to termination, and such rights and
          obligations shall continue to be governed by the terms of this
          Agreement. Notwithstanding the foregoing, in no event shall PROVIDER
          continue to provide Contracted Services to Members hereunder for more
          than ninety (90) days after the effective date of termination of this
          agreement, absent mutual consent of the parties hereto to the
          contrary.

VI.  RECORDS, AUDITS AND REGULATORY REQUIREMENTS

     6.1  MEDICAL AND OTHER RECORDS. PROVIDER shall prepare and maintain all
medical and other books and records required by law in accordance with the
general standards applicable. PROVIDER shall maintain such records for at least
seven (7) years after the rendering of Contracted Services and records of a
minor child shall be kept for at least one (1) year after the minor has reached
the age of



                                 Page 14 of 64
<PAGE>
          eighteen (18), but in no event less that seven (7) years.
          Additionally, PROVIDER shall maintain such financial, administrative
          and other records as may be necessary for compliance by HNI with all
          applicable local, State, and federal laws, rules and regulations, and
          accreditation agencies. PROVIDER agrees to the policies established by
          HNI that describe personal health information, including medical
          records, claims benefits and other administrative data that are
          personally identifiable. The HNI policies include: provisions for
          inclusions in routine consent, care and treatment of Members who are
          unable to give consent, member access to their medical records,
          protection of privacy in all setting, use of measurement data,
          information for employers and the sharing of personal health
          information with employers. The HNI policies are further defined in
          the PROVIDER Operations Manual. PROVIDER agrees to submit upon request
          reports and financial information as is necessary for HNI to comply
          with regulatory requirements to monitor the financial viability of
          PROVIDER. PROVIDER shall comply with all confidentiality and Member
          record accuracy requirements.

     6.2  ACCESS TO RECORDS; AUDITS. The records referred to above shall not be
          removed or transferred from PROVIDER except in accordance with
          applicable local, State, and federal laws, rules and regulations.
          Subject to applicable State and federal confidentiality or privacy
          laws, HNI or its designated representatives, and designated
          representatives of local, State, and federal regulatory agencies
          having jurisdiction over HNI shall have access to PROVIDER's records,
          at PROVIDER's place of business on request during normal business
          hours, to inspect and review and make copies of such records. Such
          governmental agencies shall include, but not be limited to, when
          applicable to the Benefit Programs identified on Addendum A, the DHS,
          the DHHS, the DOC, the DOD and the DOJ. When requested by HNI,
          PROVIDER shall produce copies of any such records at no cost.
          Additionally, PROVIDER agrees to permit HNI, and its designated
          representatives, accreditation organizations, and designated
          representatives of local, State, and federal regulatory agencies
          having jurisdiction over HNI or any Payor, to conduct site evaluations
          and inspections of PROVIDER's offices and service locations.

     6.3  CONTINUING OBLIGATION. The obligations of PROVIDER under this Article
          shall not be terminated upon termination of this Agreement, whether by
          rescission or otherwise. After termination of this Agreement, HNI and
          Payors shall continue to have access to the other party's records as
          necessary to fulfill the requirements of this Agreement and to comply
          with all applicable laws, rules and regulations.


VII.  GENERAL PROVISIONS

     7.1  AMENDMENTS. All amendments to this Agreement or any of its Addenda
          proposed by either HNI or PROVIDER must be mutually agreed upon by
          both parties at least thirty (30) days in advance of the effective
          date thereof. PROVIDER shall have thirty (30) days from the date of
          notice to reject amendment by providing written notice of such
          rejection to HNI. If HNI does not receive such written notice of
          rejection within this time limit, the amendment shall be deemed
          acceptable and shall be binding upon PROVIDER. Amendments required
          because of legislative, regulatory or legal requirements do not
          require the consent of PROVIDER or HNI and shall be effective
          immediately on the effective date thereof. Any amendment to this
          Agreement requiring prior approval of or notice to any federal or
          State regulatory agency shall not become effective until all necessary
          approvals have been granted or all required notice periods have
          expired.

     7.2  SEPARATE OBLIGATIONS. The rights and obligations of HNI under this
          Agreement shall apply to each Affiliate listed on Addendum A to this
          Agreement only with respect to the Benefit Programs of such Affiliate.
          No such Affiliate shall be responsible for the obligations of any
          other Affiliate under this Agreement with respect to the other
          Affiliate's Benefit Programs. The person executing this Agreement has
          been duly authorized by each Affiliate to execute this Agreement on
          such Affiliates behalf. In no event shall HNI or any HNI Affiliate be
          responsible for any payment which is the

                                 Page 15 of 64
<PAGE>
     financial responsibility of a Payor, and PROVIDER shall seek compensation
     for such services only from Payor.

7.3  ASSIGNMENT. Neither party shall assign its rights, duties and obligations
     hereunder without the prior written consent of the other party; which
     consent shall not be unreasonably withheld; provided, however that each
     party shall have the right to automatically assign this Agreement to any
     entity which controls, is controlled by, or is under common control with
     that party. Each party further agrees to provide prior written notice to
     the other of its intent to either sell, transfer or convey control of its
     business to any entity which is not under common control with that party as
     of the effective date of this Agreement.

7.4  CONFIDENTIALITY. HNI and PROVIDER agree to hold all confidential or
     proprietary information or trade secrets of each other in trust and
     confidence and agree that such information shall be used only for the
     purposes contemplated herein, and not for any other purpose. Specifically,
     PROVIDER acknowledges that the names, addresses and other identifying
     information concerning Members and employers and other groups contracting
     with HNI constitute confidential information which derives independent
     economic value from not being generally known or readily accessible to
     others who can obtain economic value from its disclosure or use. HNI
     acknowledges that the names, contracts, addresses, and other information
     concerning a Participating Provider, employees and other providers and
     other groups contracting with PROVIDER constitute proprietary information
     of PROVIDER. HNI shall use such information only as necessary and
     appropriate for the performance of its obligations under this Agreement. In
     the event HNI could obtain such information from a source other than
     PROVIDER, such information shall not be proprietary to PROVIDER. Neither
     PROVIDER, a Participating Provider, nor HNI shall disclose the terms of
     this Agreement except as may be required by law; provided, however, nothing
     herein shall prohibit PROVIDER or a Participating Provider from disclosing
     to a Member any information the PROVIDER or Participating Provider
     determines is relevant to the Member's care including the basic method of
     reimbursement and whether financial bonuses or incentives are used.

7.5  PROVIDER DISPUTE RESOLUTION PROCEDURE. HNI has established a Provider
     Dispute Resolution Procedure under which PROVIDER may submit disputes to
     HNI. The Provider Dispute Resolution Procedure which contains the
     procedures for processing and resolving such disputes including the
     location and telephone number where information regarding disputes may be
     submitted, is set forth in the Operations Manual. Any provider dispute
     which is not resolved informally through the Provider Dispute Resolution
     Procedure may be submitted for arbitration as provided in Section 7.6
     below.

7.6  BINDING ARBITRATION. PROVIDER and HNI agree to meet and confer in good
     faith to resolve any problems or disputes that may arise under this
     Agreement. Such good faith meeting and conference shall be a condition
     precedent to the filing of any arbitration demand by either party. In
     addition, the parties, prior to submitting a dispute to arbitration, are
     encouraged to utilize other impartial dispute settlement techniques such as
     mediation or fact-finding; a joint request for such services may be made to
     the American Arbitration Association ("AAA"), Judicial Arbitration and
     Mediation Services ("JAMS"), or the parties may initiate such other
     procedures as they may mutually agree upon at such time. Notwithstanding
     the foregoing, nothing contained herein is intended to require arbitration
     of disputes for medical malpractice between a Member and the PROVIDER.

     The parties further agree that any controversy or claim arising out of or
     relating to this Agreement, or the breach thereof, whether involving a
     claim in tort, contract, or otherwise, shall be settled by final and
     binding arbitration, upon the motion of either party, to arbitration under
     the appropriate rules of the AAA or JAMS, as agreed by the parties. The
     arbitration shall be conducted in Sacramento, Los Angeles, or San
     Francisco, California by a single, neutral arbitrator who is licensed to
     practice law. The written demand shall contain a detailed statement of the
     matter and facts and include copies of all related documents supporting the
     demand. Arbitration must be initiated within one (1) year after the


                                 Page 16 of 64

<PAGE>
     alleged controversy or claim occurred by submitting a written demand to the
     other party. The failure to initiate arbitration within that period shall
     mean the complaining party shall be barred forever from initiating such
     proceedings.

     All such arbitration proceedings shall be administered by the AAA or JAMS,
     as agreed by the parties; however, the arbitrator shall be bound by
     applicable state and federal law, and shall issue a written opinion setting
     forth findings of fact and conclusions of law. The parties agree that the
     decision of the arbitrator shall be final and binding as to each of them.
     Judgment upon the award rendered by the arbitrator may be entered in any
     court having jurisdiction. The arbitrator shall have no authority to make
     material errors of law or to award punitive damages or to add to, modify,
     or refuse to enforce any agreements between the parties. The arbitrator
     shall make findings of fact and conclusions of law and shall have no
     authority to make any award which could not have been made by a court of
     law. The party against whom the award is rendered shall pay any monetary
     award and/or comply with any other order of the arbitrator within sixty
     (60) days of the entry of judgment on the award, or take an appeal pursuant
     to the provisions of the California Civil Code. The parties waive their
     right to a jury or court trial.

     In all cases submitted to arbitration, the parties agree to share equally
     the administrative fee as well as the arbitrator's fee, if any, unless
     otherwise assessed by the arbitrator. The administrative fees shall be
     advanced by the initiating party subject to final apportionment by the
     arbitrator in this award.

7.7  INDEMNIFICATION OF PARTIES.

     (a)  PROVIDER agrees to indemnify, defend, and hold harmless HNI, its
          agents, officers, and employees from and against any and all liability
          expense including defense costs and legal fees incurred in connection
          with claims for damages of any nature whatsoever, including but not
          limited to, bodily injury, death, personal injury, or property damage
          arising from PROVIDER's performance or failure to perform its
          obligations hereunder.

     (b)  HNI agrees to indemnify, defend, and hold harmless PROVIDER, its
          agents, officers, and employees from and against any and all liability
          expenses, including defense costs and legal fees incurred in
          connection with claims for damages of any nature whatsoever, including
          but not limited to, bodily injury, death, personal injury, or property
          damage arising from HNI's performance or failure to perform its
          obligations hereunder.

7.8  STATUS AS INDEPENDENT ENTITIES. None of the provisions of this Agreement is
     intended to create or shall be deemed or construed to create any
     relationship between PROVIDER and HNI other than that of independent
     entities contracting with each other solely for the purpose of effecting
     the provisions of this Agreement. Neither PROVIDER nor HNI, nor any of
     their respective agents, employees, or representatives shall be construed
     to be the agent, employee, or representative of the other.

7.9  COOPERATION OF PARTIES. The parties shall cooperate in administering and
     determining Member benefits under the applicable Coverage Certificate in
     accordance with the Operations Manual and as agreed to by the parties.
     PROVIDER understands and agrees that PROVIDER is not authorized to make nor
     shall it make any variances, alterations, or exceptions to the provisions,
     terms, and conditions of a Member's Coverage Certificate. HNI shall have
     the final decision-making authority between the parties for payment of
     claims for Covered Services rendered to Members, determination of Covered
     Services, including Medically Necessary Services, determination of
     eligibility and determination of Members' benefits under the applicable
     Benefit Program. Notwithstanding the foregoing, PROVIDER and a
     Participating Provider shall be solely responsible for providing Contracted
     Services to Members. The parties shall refrain from unduly criticizing each
     other, especially in the presence of third parties and shall attempt to
     resolve all issues in a cooperative and professional manner.


                                 Page 17 of 64
<PAGE>
7.10      USE OF NAME. Each party agrees that the other party may not list the
          name, address, telephone number and other factual information of the
          other party in its marketing and informational materials without such
          party's prior written consent, provided HNI shall be entitled to list
          PROVIDER'S information in any HNI provider directory.

7.11      NON-EXCLUSIVE CONTRACT. This Agreement is non-exclusive and shall not
          prohibit PROVIDER or HNI from entering into agreements with other
          health care providers or purchasers of health care services.

7.12      NO THIRD PARTY BENEFICIARY. Nothing in this Agreement is intended to,
          nor shall be deemed or construed to create, any rights or remedies in
          any third party, including a Member. Nothing contained herein shall
          operate (or be construed to operate) in any manner whatsoever to
          increase the rights of any such Member or the duties or
          responsibilities of PROVIDER or HNI with respect to such Members.

7.13      NOTICE. Any notice required or desired to be given under this
          Agreement shall be in writing and shall be sent by certified mail,
          return receipt requested, postage prepaid, or overnight courier, or
          facsimile, addressed as follows:

                    HNI
                    c/o Health Net
                    21600 Oxnard Street
                    Woodland Hills, California 91367
                    Attn: Vice President, Provider Network Management

          PROVIDER:

                    Coram, Inc.
                    Attn: Contracts and Pricing Department
                    1125 Seventeenth Street, Suite 2100
                    Denver, CO 80202

          The addresses to which notices are to be sent may be changed by
          written notice given in accordance with this Section.

7.14      SEVERABILITY. If any provision of this Agreement is rendered invalid
          or unenforceable by any local, State, or federal law, rule or
          regulation, or declared null and void by any court of competent
          jurisdiction, the remainder of this Agreement shall remain in full
          force and effect.

7.15      ADDENDA. Each Addendum to this Agreement is made a part of this
          Agreement as though set forth fully herein. Any provision of an
          Addendum that is in conflict with any provision of this Agreement
          shall take precedence and supersede the conflicting provision of this
          Agreement.

7.16      REGULATORY APPROVAL. If HNI has not been licensed to provide, or
          provide services in connection with, a particular Benefit Program in
          a particular state, or has not received all required regulatory
          approvals for use of this Agreement with respect to the Benefit
          Program in the state prior to the execution of this Agreement, this
          Agreement shall be deemed to be a binding letter of intent with
          respect to such Benefit Program in the state. In such event, this
          Agreement shall become effective with respect to any such Benefit
          Program in the state on the date that the required licensure and
          regulatory approvals are obtained. If HNI is unable to obtain such
          licensure or regulatory approvals after due diligence, HNI shall
          notify PROVIDER and both parties shall be released from any liability
          under this Agreement with respect to the Benefit Program in question
          in the applicable state; provided however, that if such licensure or
          regulatory approval is conditioned upon amendment of this Agreement,
          then this Agreement shall be amended automatically pursuant to this
          Article.


                                 Page 18 of 64
<PAGE>
7.17 HEADINGS. The headings of articles and paragraphs contained in this
     Agreement are for reference purposes only and shall not affect in any way
     the meaning or interpretation of this Agreement.

7.18 ENTIRE AGREEMENT. This Agreement supersedes any and all other agreements,
     either oral or written, between the parties with respect to the subject
     matter hereof, and no other agreement, statement or promise relating to the
     subject matter of this Agreement shall be valid or binding.

7.19 GOVERNING LAW. This Agreement shall be governed by and construed and
     enforced in accordance with the laws of the State, except to the extent
     such laws conflict with or are preempted by any federal law, in which case
     such federal law shall govern. Federal law shall also govern with respect
     to federal Benefit Programs. In addition, HNI is subject to the
     requirements of Chapter 2.2 of Division 2 of the California Health and
     Safety Code and of Subchapter 5.5 of Chapter 3 of Title 10 of the
     California code of Regulations. Any provision required to be in this
     Agreement by either of the above shall bind the parties whether or not
     provided in this Agreement.


                                 Page 19 of 64

<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their
officers duly authorized to be effective on the date and year first written
above.

PROVIDER                               HEALTH NET INC. AFFILIATE(S)

/s/ Richard Iriye                      /s/ Christopher Cieno
-------------------------------------  ----------------------------------------
Signature                              Christopher Cieno

                                              Senior Vice President &
    SENIOR VICE PRESIDENT, OPS                 General Manager, South
-------------------------------------  ----------------------------------------
Title                                  Title

          MARCH 19, 2001                             03-29-01
-------------------------------------  ----------------------------------------
Date                                   Date


-------------------------------------
Federal Tax Identification Numbers:
See Addendum G


                                 Page 20 of 64

<PAGE>
                                   ADDENDUM A

                        AFFILIATES AND BENEFIT PROGRAMS

A.   AFFILIATES AND BENEFIT PROGRAMS

Upon execution of this Agreement, the Affiliates primarily using this Agreement
include, but are not limited to, the following: Health Net of California, a
California Health Plan; Health Net Life Insurance Company; Foundation Health
Medical Resource Management; Foundation Integrated Risk Management Solution,
Inc.; and Foundation Health Systems Life and Health Insurance Company. The
Affiliates are defined in Section 1.1 of this Agreement.

Notwithstanding the foregoing, PROVIDER agrees that any other Affiliate of HNI
not listed above may access the rates set forth in this Agreement and Addenda.
This would include Members of non-California based Affiliates who may be
treated by PROVIDER.

The Benefit Programs included in this contract are indicated by the X mark in
the grid below.

<Table>
<Caption>
                                                                                     FEE-FOR-
AFFILIATE AND BENEFIT PROGRAMS                                        ADDENDUM       SERVICE        CAP
------------------------------                                        --------       -------        ---
<S>                                                                  <C>            <C>            <C>
Commercial HMO                                                           B             [*]          [*]
Medicare HMO                                                             C             [*]          [*]
Fee-For-Service (PPO, EPO, POS Programs)                                 D             [*]          [*]
Medi-Cal                                                                 E             [*]          [*]
Occupationally Ill/Injured or Workers' Compensation                      F             [*]          [*]
</Table>



                                 Page 21 of 64
<PAGE>
                                   ADDENDUM B

                         COMMERCIAL HMO BENEFIT PROGRAM

PROVIDER understands and agrees that the obligations of HNI set forth on this
Addendum are only the obligations of Health Net of California, Inc., an HNI
Affiliate (hereafter "HMO") and not the obligations of HNI or any other
Affiliate of HNI. PROVIDER shall be compensated according to this Addendum B
and this Addendum shall be applicable to only those Commercial HMO enrolled in
Health Net of California, Inc.'s HMO program. In the event another HNI
Affiliate is a licensed health care service plan, the provisions of this
Addendum shall also apply to such Affiliates' Commercial HMO Members.

A.   DEFINITIONS:

     For purposes of this Addendum, the definitions included herein shall have
     the meaning required by law to applicable Medicare Risk Programs.

1.   PPG. A Participating Provider Group having a capitation agreement with HNI
     to provide Covered Medical Services to Members.


2.   SERVICE AREA. The State of California.

3.   OUT OF AREA. Any area outside of California, but within the continental
     United States.

4.   PMPM. For purposes of this Addendum, any per Member per month ("PMPM")
     calculation shall be based on HMO Commercial Members only.

B.   DESCRIPTION OF PROVIDER RISK SERVICES:

     1.   HOME INFUSION SERVICES. Home Infusion Services are services which
involve the dispensing and administration of prescribed intravenous substances,
injectibles, solutions, PICC line insertions, and patient education. All
nursing services, equipment and supplies which are necessary to provide such
services are also covered. Infusion patients do not need to be homebound but
must meet the criteria for home health care and meet the requirements of the
Utilization Program to be included as Provider Risk services. [*].

The following conditions shall be included as part of the Provider Risk
Services:

a.   Member's medical condition is such that if the Member leaves home, it
     creates a public health hazard.

b.   Member receives infusion services at school, work, and/or residential
     board and care facilities.

c.   Home infusion therapy services are not restricted to homebound Members.

The following Therapies are Provider Risk Services:

a.   [*]

b.   [*]

c.   [*]

d.   [*]

e.   [*]

f.   [*]

g.   [*]



                                 Page 22 of 64
<PAGE>

     h.  [*]

     i.  [*]

     j.  [*]

     k.  [*]

     l.  [*]

     m.  [*]

     n.  [*]

     o.  [*]


     2.   DURABLE MEDICAL EQUIPMENT. Durable Medical Equipment (DME) and
          supplies (such as pumps and poles) used during the provision of any
          infusion service [*].

     3.   MEDICAL SUPPLIES. All supplies used in conjunction with an infusion
          service and/or for teaching of a Member until Member becomes
          independent, are [*].

C.   NON-CONTRACTED AND EXCLUDED SERVICES:

     The following services are those services which PROVIDER is not responsible
     for rendering under Provider Risk Services or which HMO may not be
     responsible for providing under an applicable Benefit Program:

     1.   [*] are a medical benefit and are the financial responsibility of the
     PPG. PROVIDER shall obtain authorization from PPG and bill the Member's PPG
     directly for any such medications provided.

     2.   OUT OF AREA. PROVIDER is not responsible for providing emergency and
     out of area infusion services. However, for a limited duration of one
     month, planned out-of-area infusion services shall be considered PROVIDER
     Risk Services as long as a two-week notification is given by the Member or
     PPG for such occurrences.

     3.   [*], PROVIDER is not responsible for providing these services under
     Provider Risk Services. PROVIDER shall obtain authorization from PPG and
     bill HNI for [*] provided at the fee-for-service rate schedule on Exhibit 1
     of Addendum D.

     4.   [*] delivered in any place other than a member's residence, such as a
     physician's office, hospital, or ambulatory care center are excluded from
     Provider Risk Services. [*]

     5.   [*] are excluded from Provider Risk Services.

     6.   [*] MEMBERS. For those beneficiaries who have [*], PROVIDER shall be
     financially responsible only for [*] beginning with the [*]. Should a [*]
     be financially responsible for such infusion services for a time period
     exceeding [*], PROVIDER shall be financially

                                 Page 23 of 64
<PAGE>
        responsible only for [*] services commencing on the [*] responsibility
        ends for that Beneficiary. Should a [*] require infusion services prior
        to either of these events occurring, PROVIDER shall be compensated by
        HNI when HNI is the Payor, based on the compensation schedule set forth
        in the fee for service rate schedule on Exhibit 1 of Addendum D until
        such time as the Beneficiary [*] is no longer financially at risk;
        wherein the infusion services would be included within Provider Risk
        Services.

        HNI shall provide a list of all HNI Beneficiaries who are [*] as soon as
        possible. PROVIDER shall review with HNI on a quarterly basis the costs
        associated with the infusion services provided to [*]. PROVIDER and HNI
        shall reevaluate provision of infusion services to [*] after the first
        contract year of the Agreement and the parties agree to use their best
        efforts to make any necessary adjustments or revisions to ensure that
        the provision of such infusion services are feasible.

        7. [*] EXCLUDED FROM CAPITATION. The cost of [*] unless specifically
        listed as part of Provider Risk Services, are excluded from Provider
        Risk Services. The infusion nursing and supplies associated with the
        provision of these services to a Member are also excluded as part of the
        Provider Risk Services arrangement. PROVIDER shall submit claims and HMO
        shall pay PROVIDER at the fee-for-service rate schedule on Exhibit 1 of
        Addendum D, [*].

        8.      NON-COVERED SERVICES. Services which are not covered by Plan
                include, but are not limited to, the following:

                a.      Food, housing, homemaker services, and home-delivered
                        meals.

                b.      Home hemodialysis services, including the purchase or
                        rental of equipment required for renal dialysis
                        procedures.

                c.      Services deemed not to be medically necessary or
                        appropriate by the PPG and HMO.

                d.      Experimental drugs.

D.      HMO REIMBURSEMENT PROGRAMS

        1. COMPENSATION FOR PROVIDER RISK SERVICES. Effective January 1, 2001,
        as compensation for providing Provider Risk Services HMO shall pay
        PROVIDER [*] Per Member Per Month (PMPM) for each Commercial HMO
        Member eligible to receive such services from PROVIDER during any
        particular month. Capitation shall be computed on the basis of the most
        current information available in the eligibility file of Health Net.
        Capitation payment shall be paid by the HMO by wire transfer on or
        before the fifteenth (15th) day of each month or the first business day
        following the fifteenth if the fifteenth is a holiday or on a weekend.
        Each Capitation payment shall be accompanied by a remittance summary by
        written or electronic media. The remittance summary identifies the total
        Capitation payable and those Commercial HMO Members for whom Capitation
        is being paid. In the event of a Capitation error, resulting in an
        overpayment or underpayment to PROVIDER, HMO shall adjust subsequent
        Capitation to offset such error.

        2. [*] STOP LOSS. [*] include but are not limited to, [*]. PROVIDER
        shall be responsible under Capitation for a maximum expenditure of [*]
        PMPM in calculated costs for all [*] for all HMO Commercial Members. The
        threshold shall be calculated using the fee-for-service rate schedule in
        Exhibit 1 of Addendum D. After this threshold has been reached, HMO
        shall assume financial responsibility for such products for any such
        Member. HMO shall reimburse the cost of the [*] after stop loss has been
        met, promptly upon submission of an appropriate claim, based on the
        fee-for-service rate schedule on Exhibit 1 of Addendum D. PROVIDER shall
        notify HMO's Care Management department of each Member receiving [*] and
        shall work cooperatively with HMO on care


                                 Page 24 of 64
<PAGE>
management. Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on a monthly basis
the total accumulated Member costs under this stop loss provision. Failure to
notify or inform HMO accordingly may result in the loss of reimbursement to
PROVIDER.

3. [*] STOP LOSS. PROVIDER shall be responsible under Capitation for a maximum
expenditure of [*] PMPM in calculated costs for [*] for all HMO Commercial
Members. The threshold shall be calculated using the fee-for-service rate
schedule in Exhibit 1 of Addendum D. After this threshold has been reached, HMO
shall assume financial responsibility for such products for any such Member. HMO
shall reimburse the cost [*] after stop loss has been met, promptly upon
submission of an appropriate claim, based on the fee-for-service rate schedule
on Exhibit 1 of Addendum D. PROVIDER shall notify HMO's Care Management
department of each Member receiving [*] and shall work cooperatively with HMO on
care management. Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on a monthly basis
the total accumulated Member costs under this stop loss provision. Failure to
notify or inform HMO accordingly may result in the loss of reimbursement to
PROVIDER.

4. [*] STOP LOSS. PROVIDER shall be responsible under Capitation for a maximum
expenditure of [*] PMPM in calculated costs for all [*] for all HMO Commercial
Members. The threshold shall be calculated using the fee-for-service rate
schedule in Exhibit 1 of Addendum D. After this threshold has been reached, HMO
shall assume financial responsibility for such products for any such Member. HMO
shall reimburse the cost of the [*] after stop loss has been met, promptly upon
submission of an appropriate claim, based on the fee-for-service rate schedule
on Exhibit 1 of Addendum D. PROVIDER shall notify HMO's Care Management
department of each Member receiving [*] and shall work cooperatively with HMO on
care management. Notification shall be according to the requirements in the
Operations Manual. Additionally, PROVIDER shall provide HMO on a monthly basis
the total accumulated Member costs under this stop loss provision. Failure to
notify or inform HMO accordingly may result in the loss of reimbursement to
PROVIDER.

5. [*] STOP LOSS. PROVIDER shall be responsible under Provider Risk Services for
a maximum of [*] for all HMO Commercial Members. The Threshold shall be
calculated using the fee for service rate schedule in Exhibit 1 of Addendum D.
After this threshold has been reached, HMO shall assume financial responsibility
for such products for any such Member. HMO shall reimburse the cost of the [*]
after stop loss has been met, promptly upon submission of an appropriate claim,
based on the fee-for-service rate schedule on Exhibit 1 of Addendum D. PROVIDER
shall notify HMO's Care Management department of each Member receiving [*] and
shall work cooperatively with HMO on care management. Notification shall be
according to the requirements in the Operations Manual. Additionally, PROVIDER
shall provide HMO on a monthly basis the total accumulated Member costs under
this stop loss provision. Failure to notify or inform HMO accordingly may result
in the loss of reimbursement to PROVIDER.

6. AUTHORIZATIONS FOR DRUGS OR ITEMS AFTER STOP LOSS THRESHOLD. It being
understood that HNI does not require PROVIDER to obtain PPG authorization for
capitated services. However, upon proper notification, HNI may require PROVIDER
to obtain authorization from the PPG or HNI for the drugs and/or products with
stop loss amounts.


                                 Page 25 of 64
<PAGE>
                                   ADDENDUM C

                          MEDICARE HMO BENEFIT PROGRAM

This Addendum sets forth additional terms which shall only apply to Members who
are enrolled in Medicare HMO Benefit Programs. PROVIDER understands and agrees
that the obligations as set forth in this Addendum are only the obligations of
Health Net of California, Inc., a California Health Plan, an Affiliate of HNI,
(hereafter separately "HMO" or collectively "HMOs"), and not the obligations of
HNI or any other Affiliate of HNI. In addition, Health Net of California, Inc.
shall be responsible only for those Medicare Members enrolled in Health Net's
Medicare HMO Benefit Program. In the event another HNI Affiliate is a licensed
heath care service plan, the provisions of this Addendum shall also apply to
such Affiliate.

A.   DEFINITIONS. For purposes of this Addendum, the definitions included herein
     shall have the meaning required by law to applicable Medicare HMO Programs.

     1.   DOWNSTREAM PROVIDERS. A Participating Provider who or which is
          contracted with PROVIDER to render services to Members.

     2.   HEALTH CARE FINANCING ADMINISTRATION ("HCFA"). The Health Care
          Financing Administration ("HCFA") which is the agency of the federal
          government within the Department of Health and Human Services ("DHHS")
          responsible for administration of the Medicare program.

     3.   MEDICARE+CHOICE ("M+C") ORGANIZATION OR M+CO. A health plan, PROVIDER,
          or Downstream Provider sponsored organization who has entered into an
          agreement with HCFA to provide Medicare beneficiaries with health care
          options.

     4.   MEDICARE SERVICE AREA. The area approved by HCFA and the State
          regulatory agency as the area in which HMO may market and enroll
          Medicare HMO Members. At any given time during the term of this
          Agreement, the Medicare Enrollment Area consists of the list of zip
          codes currently approved by HCFA and/or the State regulatory agency as
          the Medicare Enrollment Area.

     5.   MEDICARE HMO MEMBER. An individual who has enrolled in or elected
          coverage in Health Net Seniority Plus, an M+C Organization.

     6.   OUT OF AREA. Any area outside of California, but within the
          continental United States.

     7.   PMPM. For purposes of this Addendum, any per Member per month ("PMPM")
          calculation shall be based on Medicare HMO Members only.

B.   MEDICARE STANDARD HMO REIMBURSEMENT

     1.   COMPENSATION FOR PROVIDER RISK SERVICES. Effective January 1, 2001, as
          compensation for providing Provider Risk Services HMO shall pay
          PROVIDER [*] Per Member Per Month (PMPM) for each Medicare HMO Member
          eligible to receive such services from PROVIDER during any particular
          month. Capitation shall be computed on the basis of the most current
          information available in the eligibility file of Health Net.
          Capitation payment shall be paid by the HMO by wire transfer on or
          before the fifteenth (15th) day of each month or the first business
          day following the fifteenth if the fifteenth is a holiday or on a
          weekend. Each Capitation payment shall be accompanied by a remittance
          summary by electronic or paper media. The remittance summary
          identifies the total Capitation payable and those Medicare HMO Members
          for whom Capitation is being paid. In the event of a Capitation error,
          resulting in an overpayment or underpayment to PROVIDER, HMO shall
          adjust subsequent Capitation to offset such error.

     2.   [*] STOP LOSS. PROVIDER shall be responsible under Provider Risk
          Services for a maximum of [*] for all Medicare HMO Members. The
          Threshold shall be


                                 Page 26 of 64
<PAGE>
          calculated using the fee for service rate schedule in Exhibit 1 of
          Addendum D. After this threshold has been reached, HMO shall assume
          financial responsibility for such products for any such Member. HMO
          shall reimburse the cost of the [*] after stop loss has been met,
          promptly upon submission of an appropriate claim, based on the
          fee-for-service rate schedule on Exhibit 1 of Addendum D. PROVIDER
          shall notify HMO's Care Management department of each Member receiving
          [*] and shall work cooperatively with HMO on care management.
          Notification shall be according to the requirements in the Operations
          Manual. Additionally, PROVIDER shall provide HMO on a monthly basis
          the total accumulated Member costs under this stop loss provision.
          Failure to notify or inform HMO accordingly may result in the loss of
          reimbursement to PROVIDER.

     3.   PROVIDER shall include specific payment and incentive arrangements in
          any agreement with a Downstream Provider.

     4.   PROVIDER shall pay claims promptly according to HCFA standards and
          comply with all payment provisions of State and federal law. HCFA
          requires non-contracted provider claims to be paid within thirty (30)
          days of receipt and contracted provider claims to be paid within sixty
          (60) days of receipt.

     5.   PROVIDER agrees that Members health services are being paid for with
          federal funds, and as such payments for such services are subject to
          laws applicable to individuals or entities receiving federal funds.

C.   DESCRIPTION OF PROVIDER RISK SERVICES:

     Provider Risk Services shall be those Medically Necessary Covered Services
     as defined by HCFA for home infusion services for Medicare eligible
     members, as well as HMO's benefit interpretation and administration for
     medically necessary services. Home Infusion Services are services which
     involve the dispensing and administration, including nursing services, of
     prescribed intravenous substances, injectibles, solutions, PICC line
     insertions, and patient education. All equipment and supplies which are
     necessary to provide such are also covered. Infusion patients do not need
     to be homebound but must meet the criteria for home health care and meet
     the requirements of the Utilization Program to be included as Provider Risk
     services.

     The following conditions shall be included as part of the Provider Risk
     Services:

     a.   Member's medical condition is such that if the Member leaves home, it
          creates a public health hazard.

     b.   Member receives infusion services at school, work, and/or residential
          board and care facilities.

     c.   Home infusion therapy services are not restricted to homebound
          Members.

     The following Therapies are Provider Risk Services:

     a.   [*]

     b.   [*]

     c.   [*]

     d.   [*]

     e.   [*]

     f.   [*]

     g.   [*]

                                 Page 27 of 64
<PAGE>
     h.   [*]

     i.   [*]

     j.   [*]

     k.   [*]

     l.   [*]

D.   NON-CONTRACTED AND EXCLUDED SERVICES:
     -------------------------------------

     The following services are those services which PROVIDER is not responsible
     for rendering under Provider Risk Services or which HMO may not be
     responsible for providing under an applicable Benefit Program:

     1.   [*], are a medical benefit and are the financial responsibility of the
     PPG. PROVIDER shall obtain authorization from PPG and bill the Member's PPG
     directly for any such medications provided.

     2.   OUT OF AREA. PROVIDER is not responsible for providing emergency and
     out of area infusion services. However, for a limited duration of one
     month, planned out-of-area services shall be considered PROVIDER Risk
     Services as long as a two-week notification is given by the Member or PPG
     for such occurrences.

     3.   [*] are a medical benefit, however, PROVIDER is not responsible for
     providing these services under Provider Risk Services. PROVIDER shall
     obtain authorization from PPG and bill HNI for such [*] provided at the
     fee-for-service rate schedule in Exhibit 1 of Addendum D.

     4.   [*] IN OTHER LOCATIONS. [*] in any place other than a member's
     residence, school or work place, such as a physician's office, hospital, or
     ambulatory care center are excluded from Provider Risk Services. [*].

     5.   [*] MEMBERS. For those beneficiaries who have [*], PROVIDER shall be
     financially responsible only for [*] beginning with the [*]. Should [*] be
     financially responsible for such infusion services for a time period
     exceeding [*], PROVIDER shall be financially responsible only for [*]
     services commencing on the [*] responsibility ends for that Beneficiary.
     Should a [*] require infusion services prior to either of these events
     occurring, PROVIDER shall be compensated by HNI when HNI is the Payor,
     based on the compensation schedule set forth in the fee for service rate
     schedule on Exhibit 1 of Addendum D until such time as the Beneficiary [*]
     no longer financially at risk; wherein the infusion would be included
     within Provider Risk Services.

     HNI shall provide a list of all HNI Beneficiaries who are [*] as soon as
     possible. PROVIDER shall review with HNI on a quarterly basis the costs
     associated with the infusion services provided to [*]. PROVIDER and HNI
     shall reevaluate provision of infusion services to [*] after the first
     contract year of the Agreement and the parties agree to use their best
     efforts to make any necessary adjustments or revisions to ensure that the
     provision of such infusion services are feasible.

     6.  EXCLUDED SERVICES AND DRUGS. The following drugs and services are
     excluded from Provider Risk Services for Medicare HMO Members. In the
     event that the PROVIDER is asked to provide


                                 Page 28 of 64
<PAGE>
     such services, then PROVIDER shall be reimbursed based on the compensation
     schedule set forth in the fee-for-service rate schedule in Exhibit 1 of
     Addendum D. HMO shall compensate PROVIDER for such claims, less applicable
     Copayments, coinsurance, deductibles and payments from third parties or
     coordination of benefits. These excluded services are the following:

          a.  [*]

          b.  [*]

          c.  [*]

          d.  [*]

          e.  [*]

     7.  [*] EXCLUDED FROM CAPITATION. [*] after the effective date of this
     Agreement unless specifically listed as part of Provider Risk Services, are
     excluded from Provider Risk Services. The infusion nursing and supplies
     associated with the provision of these services to a Member are also
     excluded as part of the Provider Risk Services arrangement. PROVIDER shall
     submit claims and HMO shall pay PROVIDER at the fee-for-service rate
     schedule on Exhibit 1 of Addendum D, [*].

     8.  NON-COVERED SERVICES. SERVICES WHICH ARE NOT COVERED BY PLAN INCLUDES,
     BUT ARE NOT LIMITED TO, THE FOLLOWING:

          a)  Food, housing, homemaker services, and home-delivered meals.

          b)  Home hemodialysis services, including the purchase or rental of
              equipment required for renal dialysis procedures.

          c)  Services deemed not to be medically necessary or appropriate by
              the PPG and HMO.

          d)  Experimental drugs.

E.   MEDICARE POINT OF SERVICE REIMBURSEMENT PROGRAM

     1.   POINT OF SERVICE BENEFIT PROGRAM. Under a POS Benefit Program,
          Medicare POS Members may elect, at the time of obtaining each Covered
          Service, to utilize: (i) HMO coverage through PPG; (ii) coverage by
          self-referring to any PPO Provider; or (iii) coverage to
          self-referring to non-Participating Providers in accordance with
          Benefit program requirements. Medicare HMO Members may be eligible for
          Medicare POS Benefit Programs.

     2.   FEE-FOR-SERVICE COMPENSATION. PROVIDER shall render Contracted
          Services to Medicare POS Members under this Addendum C on a
          fee-for-service basis. As compensation for rendering such Contracted
          Services, PROVIDER shall be paid the lesser of: a) the rates set forth
          in Exhibit 1 of Addendum D; or b) Medicare Allowable rates when
          available. PROVIDER shall submit claims in accordance with Article IV.
          PROVIDER shall be paid for a clean complete and accurate claim for
          Contracted Services rendered to Medicare POS Members in accordance
          with applicable State or federal law.

     3.   PROVIDER shall include specific payment and incentive arrangements in
          any agreement with a Downstream Provider.

     4.   PROVIDER shall pay Downstream Providers' claims promptly according to
          HCFA standards and comply with all payment provisions of State and
          federal law. HCFA requires non-contracted provider claims to be paid
          within thirty (30) days of receipt and contracted provider claims to
          be paid within sixty (60) days of receipt.



                                 Page 29 of 64

<PAGE>
 5.  PROVIDER agrees that Members health services are being paid for with
     federal funds, and as such, payments for such services are subject to laws
     applicable to individuals or entities receiving federal funds.

F.   ACCESS: RECORDS AND FACILITIES

     1.   PROVIDER agrees to give the Department of Health and Human Services
          ("DHHS"), and the General Accounting Office ("GAO") or their designees
          the right to audit, evaluate, inspect books, contracts, medical
          records, patient care documentation, other records of subcontractors,
          or related entities for the later of seven (7) years, or for periods
          exceeding seven (7) years, for reasons specified in the federal
          regulation.

G.   MEMBER PROTECTIONS/ACCESS: BENEFITS & COVERAGE

     1.   PROVIDER agrees to not collect any co-payment or other cost sharing
          for influenza vaccine and pneumococcal vaccines.

     2.   PROVIDER agrees to provide access to benefits in a manner described by
          HCFA.

     3.   PROVIDER agrees to provide all covered benefits to Members in a manner
          consistent with professionally recognized standards of health care.

     4.   PROVIDER agrees to pay for Emergency and urgently needed services
          consistent with federal regulations, if such services are PROVIDER's
          liability.

H.   COMPLIANCE

     1.   PROVIDER agrees that PROVIDER must notify a Participating Provider
          prior to being terminated, in writing, of the reason(s) for denial,
          suspension or termination determination.

     2.   PROVIDER agrees to comply with all applicable Health Net procedures
          and the Operations Manual including, but not limited to, the
          accountability provisions.

     3.   PROVIDER agrees to comply with and require that all Downstream
          Providers comply with applicable State and federal laws and
          regulations, including Medicare laws and regulations and HCFA
          instructions.

     4.   PROVIDER agrees to adhere to Medicare's appeals, expedited appeals and
          expedited review procedures for Health Net Members, including
          gathering and forwarding information on appeals to Health Net, as
          necessary.

I.   ADOPTION OF MEDICARE RISK PROGRAM CONTRACT REQUIREMENTS

     1.   PROVIDER agrees that all agreements with Participating Providers must
          be signed and dated.

                                 Page 30 of 64

<PAGE>
                                   ADDENDUM D

                    PREFERRED PROVIDER ORGANIZATION ("PPO")
                    EXCLUSIVE PROVIDER ORGANIZATION ("EPO")
                            POINT OF SERVICE ("POS")
                                BENEFIT PROGRAMS

PROVIDER understands that Affiliates or Payors contracted with HNI who are
qualified may provide PPO, EPO and POS Benefit Programs. HNI shall provide
PROVIDER with a listing of all such Payors, as updated from time to time by HNI.
Notwithstanding any provision in this Agreement, PROVIDER and Participating
Provider understand and agree that each Payor is solely responsible for paying
PROVIDER and/or Participating Provider for those individuals to whom Payor
provides health care coverage. In no event shall HNI or any HNI Affiliate be
responsible for any payment which is the financial responsibility of a Payor;
and PROVIDER shall seek compensation for such services only from Payor.

PROVIDER understands and agrees that HNI may sell, lease, transfer or convey a
list, including PROVIDER, to Payors. PROVIDER further understands that PROVIDER
may decline to be included in such list.

A Payor shall actively encourage its subscribers to use the list of contracted
providers when obtaining medical care. Payors shall offer its subscribers direct
financial incentives to use the list of contracted providers, including
Provider, when obtaining medical care. A Payor, or HNI on Payor's behalf, shall
provide information to a Payor's subscribers advising such subscribers of the
existence of a list of contracted providers, including Provider, through a
variety of advertising or marketing approaches that supply the names, addresses
and telephone numbers of contracted providers, including Provider, to
subscribers in advance of their selection of a health care provider.

Payor's shall not be permitted to pay Provider's contracted rate under this
Addendum D unless Payor, or HNI on Payor's behalf, has actively encouraged
Payor's subscribers to use the list of contracted providers, Including Provider,
in obtaining medical care.

PROVIDER agrees that those Payors listed on Addendum (D-1) are the Payors
eligible to pay Provider's contracted rate under this Addendum D. This list may
be modified by HNI from time to time. PROVIDER may request in writing, and HNI
shall have thirty (30) days from the date of such request, to provide PROVIDER
with an updated listing of Payors.

PROVIDER understands and agrees that any HNI Affiliate, including, but not
limited to, Health Net Life Insurance Company and Foundation Health Systems Life
and Health Insurance Company, are not Payors under this Addendum D but shall
access the rates hereunder as Affiliates.

Nothing in this Addendum D shall be construed to require a Payor to actively
encourage such Payor's subscribers to use the list of contracted providers,
including Provider, when obtaining medical care in the event of an Emergency.

A.   BENEFIT PROGRAM REQUIREMENTS

     PROVIDER agrees:

     1.   To comply with the terms and conditions of this Addendum, the terms of
          the applicable Benefit Programs, and of the Operations Manual.

     2.   To comply with HNI's efforts to provide Case Management. PROVIDER
          agrees to provide PROVIDER's written treatment plan within five (5)
          working days of receipt of request from HNI. A treatment plan includes
          a statement of diagnosis, current patient condition, current or
          proposed treatment, and anticipated outcomes.


                                 Page 31 of 64

<PAGE>
B.   PRO AND EPO BENEFIT PROGRAMS

     1.   COMPENSATION METHOD. As compensation for rendering Contracted Services
          under this Addendum, PROVIDER shall be paid in accordance with the
          rates set forth in Exhibit 1 of Addendum D. Such compensation shall be
          paid within the time and subject to the billing requirements set forth
          in this Agreement. The above notwithstanding, for self-insured and
          other such Payors, HNI shall not be obligated to pay all or any
          portion of any PROVIDER claim on a Payor's behalf unless and until HNI
          has received sufficient funds from the applicable Payor to cover such
          claim.

C.   POINT OF SERVICE ("POS") BENEFIT PROGRAMS

     1.   BENEFIT PROGRAM DESIGN. Under a Point of Service ("POS") Benefit
          Program, Members may elect, at the time of obtaining each Covered
          Service, to utilize either: (1) HMO coverage through their selected or
          assigned PCP; (2) optional Preferred Provider Organization ("PPO")
          coverage available through PPO Participating Providers; or (3) other
          indemnity coverage through either non-Participating Providers, or
          Participating Providers where other Benefit Program Requirements are
          not met.

     2.   COMPENSATION METHOD. PROVIDER shall render Contracted Services on a
          fee-for-service basis to Members of HNI's Point of Service ("POS")
          Benefit Programs covered under the PPO option of such Benefit
          Programs. As compensation for rendering such Contracted Services,
          PROVIDER shall be paid the fee-for-service compensation rates set
          forth in Exhibit 1 of Addendum D. Such compensation shall be paid
          within the time and subject to the billing requirements set forth in
          this Agreement.

D.   LEASED PPO PAYORS

     1.   PAYOR NOTIFICATION. HNI shall notify Participating Providers of Payors
          utilizing the Leased PPO. Such notification shall include information
          about eligibility verification telephone numbers, claims submission
          procedures, and Utilization/Care Management Programs when HNI is not
          providing these administrative services.

     2.   LEASED PPO BENEFIT PROGRAMS

          a.   BENEFIT PROGRAM DESIGN. Under Exhibit 1 of Addendum D, financial
               incentives shall be implemented to encourage Members to utilize
               Participating Providers. Summaries of the Leased PPO Benefit
               Programs shall be provided in the Operations Manual.

          b.   CHANNELING TO PARTICIPATING PROVIDERS. HNI or a Payor shall
               communicate to Members the availability and benefits of using a
               Participating Provider, and the name and location of
               Participating Provider through directories, marketing materials,
               or other means. Except for an Emergency and subject to any
               limitations of law, Members will be encouraged to use
               Participating Providers for hospitalization. HNI or Payor will
               require that identification cards be issued to Members, as
               appropriate.

          c.   COMPENSATION METHOD. PROVIDER shall render Contracted Services
               pursuant to this Addendum. As compensation for rendering such
               Contracted Services, PROVIDER shall be paid in accordance with
               the rates set forth in Exhibit 1 of Addendum D. Such compensation
               shall be paid within the time and subject to the billing
               requirements set forth in this


                                 Page 32 of 64

<PAGE>

          Agreement. The above notwithstanding, HNI shall not be obligated to
          pay all or any portion of any Provider claim on behalf of a Payor,
          unless and until HNI has received sufficient funds from the applicable
          Payor to cover such claim.

                                 Page 33 of 64

<PAGE>




                                  ADDENDUM D.1

                         *NO OTHER PAYORS AT THIS TIME









                                 Page 34 of 64


<PAGE>
                            EXHIBIT 1 TO ADDENDUM D
                     FEE-FOR-SERVICE COMPENSATION SCHEDULE
                                 HOME INFUSION

A.   COVERED SERVICES/UTILIZATION REVIEW:

     1.   HNI shall reimburse PROVIDER for Home Infusion Services when provided
          in accordance with a Member's Coverage Certificate and when properly
          requested by the Member's Participating Provider Group (PPG) Member
          Physician.

          Home Infusion Services are services which involve the dispensing and
          administration of prescribed intravenous substances and solutions, and
          patient education, and subject to the conditions and limitations of
          this Agreement and the Member's Coverage Certificate.

     2.   PROVIDER agrees to comply with any limitations specified by a Member
          Physician regarding the scope of services to be provided, duration of
          treatment, or other limitations.

     3.   PROVIDER agrees that the plan of treatment for the Member shall
          contain specific orders as to the nature and frequency of services to
          be rendered by PROVIDER as well as to related equipment and supplies.
          The treatment plan as well as subsequent telephone orders shall be
          signed and dated by the Member's Participating Provider Group Member
          Physician.

     4.   PROVIDER agrees to provide services on a 24-hour per day, seven days
          per week basis.

     5.   PROVIDER agrees to provide care within twenty-four (24) hours of
          receiving the request from the PPG Member Physician or HNI.

     6.   PROVIDER agrees to verify coverage, eligibility, and treatment plan of
          Members as appropriate, but in no event less often than monthly.

     7.   PROVIDER agrees to utilize HNI contracted providers in the provision
          of services to HNI Members, including but not limited to durable
          medical equipment, hospitals, and other providers.

     8.   PROVIDER agrees to maintain a State license as a home health agency as
          well as certification as a Medicare (Part B) provider.

B.   BILLING REQUIREMENTS:

     PROVIDER shall submit claims with the following information in a HCFA 1500
     CLAIM FORM:

     1.  Member name
     2.  SUBSCRIBER I.D. number
     3.  Dates of service
     4.  Diagnosis of patient (ICD-9)
     5.  Description of services
     6.  Procedure, HCPC, or Revenue Codes
     7.  Charges for services
     8.  Physician ordering service
     9.  Authorization information
     10. Other insurance coverage (when applicable)
     11. PROVIDER's Federal Tax ID and remit address


                                 Page 35 of 64


<PAGE>
C.   COMPENSATION FOR SERVICES:

PROVIDER shall be compensated for services rendered under this Addendum
according to the following rates and payment guidelines. Such compensation
shall be paid subject to the billing requirements set forth in the Agreement.
HNI shall pay all claims within parameters set forth by state or federal law.

All aspects of PROVIDER's comprehensive services are covered under one of
several therapy specific prices. The therapy services listed within are
inclusive of the following:

1.   Intravenous pharmaceuticals compounded under laminar flow conditions

2.   Standard medical supplies and equipment (unless specifically excluded in
     therapy description)

3.   Pharmacological monitoring and consultations

4.   Hazardous waste disposal

5.   Delivery of standard medical supplies, equipment, and pharmaceuticals to
     patient/care giver

6.   Twenty-four hour availability of clinical expertise and services, including
     weekends and holidays.

7.   Per diems include all nursing visits, including PICC Line and Midline
     placement, in conjunction with therapy administration, unless otherwise
     specified. All other nursing shall be billed separately at the appropriate
     rates contained herein. Per diem shall mean each day that a patient
     receives a dose of pharmaceutical products and/or nursing or other Covered
     Services pursuant to this agreement.

8.   Support services related to delivery and transportation, equipment, rental
     of infusion pumps and IV poles and other related equipment, line
     maintenance, obtaining of laboratory specimens (exception: lab draws
     ordered for purposes unrelated to authorized therapies), pharmacy
     compounding and dispensing, and equipment cleaning.

9.   Support services facilitating patient access and care, including
     precertification and/or preauthorization services, education and training,
     and other customer services.

10.  All medications shall be reimbursed at Average Wholesale Price ("AWP")
     minus a discount where indicated on each therapy. "AWP" shall mean the
     average wholesale price of the designated pharmaceutical product as listed
     in the most recently published and available edition of the Medical
     Economics Redbook guide to pharmaceutical prices.

Compensation Rates:

<TABLE>
<S>                                                         <C>
1.   TOTAL PARENTERAL NUTRITION (TPN)                       PER DIEM

     1 liter of TPN solution                                 [*]
     2 liters of TPN solution                                [*]
     3 liters of TPN solution                                [*]
     4 liters of TPN solution                                [*]

     Lipids (10% & 20%) up to 500 ml                         [*]
     Specialty Amino Acids:
     Glutamine                                               [*]
     All Other (Example: Branchamine, Renamin)               [*]
</TABLE>

     INCLUDED IN THE PER DIEM RATES FOR TOTAL PARENTERAL NUTRITION:
     All additives common to TPN formulations, solutions, pharmacy compounding
     fees, standard medical supplies, pump, IV pole, delivery, hazardous waste
     disposal and pharmacy management services. All other additives (i.e.
     Zantac, heparin) will be billed at [*].


                                 Page 36 of 64

<PAGE>
2. ANTIBIOTIC, ANTIVIRAL, ANTIFUNGAL THERAPY

<TABLE>
<CAPTION>
                                   PER DIEM
                                   --------
<S>                                <C>
Q24............................... [*]
Q12............................... [*]
Q8................................ [*]
Q6................................ [*]
Q4 - Q3........................... [*]
</TABLE>

INCLUDED IN THE PER DIEM FOR ANTIBIOTIC, ANTIVIRAL AND ANTIFUNGAL THERAPY:
Solutions pharmacy compounding fees, standard medical supplies, IV pole, pump
delivery, hazardous waste disposal and pharmacy management services.

MULTIPLE ANTIBIOTIC REGIMENS (BOTH PERIPHERAL AND CENTRAL LINES): For multiple
antibiotic drug regimens, the per diem for the drug regimens will be paid as
follows: The per diem for the most frequent dosing schedule shall be paid [*];
the per diem of the second most frequent dosing schedule shall be paid [*]; and
the per diem of the third most frequent dosing schedule shall be paid at [*].
Any other drug regimens after the third therapy will [*]. The [*] any
antibiotic, antiviral, and antifungal drugs being administered shall also be
paid.

3. ANTICOAGULATION THERAPY

<TABLE>
<CAPTION>
                                   PER DIEM
                                   --------
<S>                                <C>
Heparin (continuous infusion)      [*]
</TABLE>

INCLUDED IN THE PER DIEM RATE FOR ANTICOAGULATION THERAPY:
Solutions, pharmacy compounding fees, standard medical supplies, IV pole,
delivery, hazardous waste disposal and pharmacy management services.

4. HYDRATION THERAPY

<TABLE>
<CAPTION>
                                   PER DIEM
                                   --------
<S>                                <C>
1 liter                            [*]
2 liters                           [*]
3 liters                           [*]
4 liters                           [*]
</TABLE>

INCLUDED IN THE PER DIEM RATES FOR HYDRATION THERAPY:
Solutions, pharmacy compounding fees, standard medical supplies, IV pole, pump,
delivery, hazardous waste disposal and pharmacy management services. All
additives will be billed at [*].

5. PAIN MANAGEMENT

<TABLE>
<CAPTION>
                                   PER DIEM
                                   --------
<S>                                <C>
                                   [*]
</TABLE>


INCLUDED IN THE PER DIEM RATE FOR PAIN MANAGEMENT:
Solutions, pharmacy compounding fees, standard medical supplies, pump, delivery,
hazardous waste disposal and pharmacy management services.

6. CHEMOTHERAPY

<TABLE>
<CAPTION>
                                   PER DIEM
                                   --------
<S>                                <C>
                                   [*]
</TABLE>

INCLUDED IN THE PER DIEM RATE FOR CHEMOTHERAPY:
Solutions, pharmacy compounding fees, standard medical supplies, pump, delivery,
hazardous waste disposal and pharmacy management services.

7. STEROID THERAPY

<TABLE>
<CAPTION>
                                   PER DIEM
                                   --------
<S>                                <C>
                                   [*]
</TABLE>

INCLUDED IN THE PER DIEM RATE FOR STEROID THERAPY:
Solutions, pharmacy compounding fees, standard medical supplies, IV pole,
delivery, hazardous waste disposal and pharmacy management services.


                                 Page 37 of 64

<PAGE>
8.   INHALATION THERAPY                                                 PER DIEM
                                                                             [*]

     INCLUDED IN THE PER DIEM RATE FOR INHALATION THERAPY:
     Solutions pharmacy compounding fees, standard medical supplies, IV pole,
     delivery, hazardous waste disposal and pharmacy management services for
     anti-infective medications only. This rate does not include respiratory
     medications.

9.   IRON BINDING THERAPY                                               PER DIEM
                                                                             [*]

     INCLUDED IN THE PER DIEM RATE FOR IRON BINDING THERAPY:
     Solutions, pharmacy compounding fees, standard medical supplies, pump,
     delivery, hazardous waste disposal and pharmacy management services.

10.  INOTROPIC THERAPY (DOBUTAMINE)*                                    PER DIEM
                                                                             [*]

     INCLUDED IN THE PER DIEM RATE FOR INOTROPIC THERAPY:
     Solutions, pharmacy compounding fees, standard medical supplies, pump,
     delivery, hazardous waste disposal and pharmacy management services.
     * [*]

11.  CATHETER CARE: SUPPLIES                                            PER DIEM
                                                                             [*]

     INCLUDED IN THE RATES FOR CATHETER CARE:
     Solutions, standard medical supplies, delivery, hazardous waste disposal
     and pharmacy management services.

12.  IMMUNOGLOBULINS (IVIG/IGIV)                                        PER DIEM
                                                                             [*]

     INCLUDED IN THE PER DIEM RATE FOR IMMUNOGLOBULINS:
     Solutions, pharmacy compounding fees, standard medical supplies, pump, IV
     pole, delivery, hazardous waste disposal and pharmacy management services.
     [*].

13.  GROWTH HORMONE                                                          [*]

     INCLUDED IN THE DISPENSE FEE FOR GROWTH HORMONE:
     Standard medical supplies, delivery, hazardous waste disposal and pharmacy
     management services. [*].

14.  FACTOR PRODUCTS
                                                                 PER UNIT CHARGE
     a.   FACTOR VIII (RECOMBINANT)
          Recombinate                                                        [*]
          Bioclate                                                           [*]
          Helixate                                                           [*]
          Helixate FS                                                        [*]
          Kogenate                                                           [*]
          Kogenate FS                                                        [*]
          Refacto                                                            [*]

     b.   FACTOR VIII (MONOCLONAL)
          Hemophil M                                                         [*]
          Monoclate P                                                        [*]
          Monarc-M                                                           [*]

     c.   FACTOR VIII (OTHER)


                                 Page 38 of 64

<PAGE>
                Humate                                                [*]
                Koate HP                                              [*]
                Alphanate SD                                          [*]

        d.      FACTOR IX (RECOMBINANT)
                Benefix                                               [*]

        e.      FACTOR IX (MONOCLONAL)
                Monorine                                              [*]

        f.      FACTOR IX (OTHER)
                *Alphanine SD                                         [*]
                Konyne 80                                             [*]
                Profilnine SD                                         [*]
                Bebulin-VH                                            [*]

        g.      ANTI-INHIBITOR COMPLEX
                Hyate C                                               [*]
                *Autoplex-T                                           [*]
                *Feiba VH                                             [*]
                Proplex T                                             [*]

        h.      FACTOR VII                                            [*]
                NOVOSEVEN

        INCLUDED IN THE PER UNIT CHARGE FOR FACTOR PRODUCTS:
        Solutions, pharmacy compounding fees, standard medical supplies, pump,
        IV pole delivery, hazardous waste disposal and pharmacy management
        services. [*].

        * [*]

15.     PUMPS

        Stationary Pump                                               [*]
        Ambulatory Pump                                               [*]
        Disposable Pump                                               [*]

16.     MEDTRONIC PAIN MANAGEMENT                                PER DIEM
        Out of Physician Office (Nursing Included                     [*]
        In Physician Office (No Nursing Included)                     [*]

        INCLUDED IN THE PER DIEM RATE FOR MEDTRONIC PAIN MANAGEMENT:
        Standard medical supplies, Medtronic refill kit, delivery, hazardous
        waste disposal, nursing services related to programming pump (as
        specified above), and pharmacy management services.

17.     ENTERAL NUTRITION                                        PER DIEM
                                                                      [*]

        INCLUDED IN THE PER DIEM RATE FOR ENTERAL NUTRITION:
        Standard medical supplies, pump, IV pole, delivery, hazardous waste
        disposal and pharmacy management services.

18.     REMICADE THERAPY                                              [*]

        INCLUDED IN THE PER UNIT PRICE FOR REMICADE THERAPY:
        Solutions, pharmacy compounding fees, standard medical supplies, IV
        pole, delivery, hazardous waste disposal and pharmacy management
        services. Remicade provided by a sole supplier.

19.     CEREZYME THERAPY                                              [*]



                                 Page 39 of 64


<PAGE>
INCLUDED IN THE PER UNIT PRICE FOR CEREZYME THERAPY:
Standard medical supplies, pump, IV pole, delivery, hazardous waste disposal
and pharmacy management services. Cerezyme provided by a sole supplier.

20.  SYNAGIS THERAPY                                                         [*]

INCLUDED IN THE PER UNIT PRICE FOR SYNAGIS THERAPY:
Standard medical supplies, delivery, hazardous waste disposal and pharmacy
management services. Synagis provided by a sole supplier.

21.  NON-COMPOUNDED INJECTABLES

Levenox (self-injectable)                                                    [*]
Neupogen                                                                     [*]
Epogen                                                                       [*]
Interferon                                                                   [*}
INCLUDED IN THE DISPENSE FEE FOR NON-COMPOUNDED INJECTIBLES:
Standard medical supplies, delivery, hazardous waste disposal and pharmacy
management services. Dispense fees do not include nursing.

22.  RN SERVICES

Nursing visit (up to 2 hours)                                                [*]

Each additional hour                                                         [*]

PICC Line Placement including Supplies                                       [*]
(not including x-ray verification)

Midline Placement including supplies                                         [*]

23.  BLOOD TRANSFUSIONS

Packed red blood cells - first unit                                          [*]
                                                                             [*]

Each additional unit of PRBCs                                                [*]
                                                                             [*]

Platelets (per transfusion)                                                  [*]
                                                                             [*]

INCLUDED IN THE RATE FOR BLOOD TRANSFUSION:
Standard medical supplies, equipment, delivery, hazardous waste disposal and
pharmacy management services and up to four hours high tech-nursing.

24.  RETURNED GOODS

All patient-specific drugs and solutions will be charged at the time of
preparation and no credit will be allowed for return of such goods.

25.  THERAPIES NOT LISTED

For all of the therapies and supplies that are not itemized above, the basic
rate shall be [*]. For those therapies and supplies, Coram shall invoice the
Payor at this [*] and Payor shall allow [*] without further discounts being
applied or taken by Payor.



                                 Page 40 of 64


<PAGE>
                                   ADDENDUM E

                          MEDI-CAL HMO BENEFIT PROGRAM


PROVIDER understands and agrees that the obligations of HNI set forth in this
Addendum shall be the obligations of Health Net of California, Inc., a
California Health Plan, an Affiliate of HNI, and not the obligations of HNI or
any other Affiliate of HNI. Health Net of California, Inc. has entered into one
or more Medi-Cal prepaid health plan agreements with the California Department
of Health Services ("DHS"). For the purposes of this Addendum, Health Net's
Medi-Cal agreements with the DHS and its subcontracts with Medi-Cal prepaid
health plans, are hereinafter collectively referred to as the "Medi-Cal
Agreement". Health Net has agreed, under the Medi-Cal Agreement, to arrange
certain medical services covered under California's Medi-Cal Program, to
Medi-Cal HMO Members enrolled in or otherwise assigned to Health Net, on a
prepaid basis. The provisions of the Addendum are required to appear in all
subcontracts under the Medi-Cal Agreement by the terms of the Medi-Cal Agreement
and by Medi-Cal law and may not be altered.

Notwithstanding any provision in the Agreement to the contrary, PROVIDER
understands and agrees that it shall arrange and provide health care services
to Members in accordance with the benefits and program requirements of the
applicable Medi-Cal Agreement. Benefits under Health Net's Healthy San Diego
Plan and Sacramento GMC Plan are substantially identical to the benefits under
Health Net's Mainstream Plan, except that chiropractic, acupuncture and
spiritual healing services are not covered under the Mainstream Plan. PROVIDER
understands that Evidence of Coverage documents are subject to change and
approval by the DHS and PROVIDER hereby agrees to arrange and provide health
care services in accordance with such changes.

A.   GENERAL PROVISIONS

     1.   PROVISION OF COVERED SERVICES. PROVIDER shall arrange Covered Services
          for assigned Members. For the purposes of this Addendum, "Covered
          Services" means those health care services, supplies and items set
          that are specified as being covered under the Medi-Cal Agreement.
          PROVIDER shall arrange Covered Services for Members, in accordance
          with the following, each of which is hereby incorporated by reference
          as if set out in full herein:

          1.1  The terms and conditions of this Addendum and the Agreement.

          1.2  The terms and conditions of the Medi-Cal Agreement and the
               applicable Evidence of Coverage.

          1.3  Health Net's Medi-Cal policies and procedures and Participating
               Provider bulletins;

          1.4  DHS Medi-Cal Managed Care Division ("MMCD") Policy Letters.

          1.5  All laws applicable to PROVIDER and Health Net.

          1.6  Health Net's Utilization Care Management Program and Quality
               Improvement Program.

          1.7  Standards requiring services to be provided in the same manner,
               and with the same availability, as services are rendered to other
               patients.

          1.8  No less than the minimum clinical quality of care and performance
               standards that are professionally recognized and/or adopted,
               accepted or established by Health Net.



                                 Page 41 of 64
<PAGE>
2.   COMPENSATION TO PROVIDER. As compensation for providing Covered Services
     to Members, Health Net will pay PROVIDER [*] Fee Schedule rates in effect
     at the time of service, or if [*] exist, Health Net shall pay PROVIDER at
     [*]. Such compensation shall be paid within forty-five (45) working days of
     receipt of a clean, complete and accurate claim for Covered Services
     rendered to a Member.

3.   SUBCONTRACTING UNDER THE AGREEMENT. PROVIDER shall not subcontract for the
     performance of services under the Agreement without the prior written
     consent of Health Net. Every such subcontract shall provide that it is
     terminable with respect to Members by PROVIDER upon Health Net's request.
     PROVIDER shall furnish Health Net with copies of such subcontracts, and
     amendments thereto, within ten (10) days of execution. Each such
     subcontracting Participating Provider shall meet Health Net's
     credentialing requirements, prior to the subcontract becoming effective.
     PROVIDER shall be solely responsible to pay any health care Physician
     permitted under the subcontract, and shall hold, and ensure that health
     care Physicians hold, Health Net, Members and the State harmless from and
     against any and all claims which may be made by such subcontracting
     Physicians in connection with services rendered to Members under the
     subcontract. PROVIDER shall maintain and make available to Health Net,
     DHS, DHHS, DOC, DOJ, and any other regulatory agency having jurisdiction
     over Health Net, copies of all PROVIDER's subcontracts under the Agreement
     and to ensure that all such subcontracts are in writing and require that
     the subcontractor: (1) make all applicable books and records available for
     inspection, examination or copying by said entities; (2) retain such books
     and records for a term of at least five (5) years from the close of the
     fiscal year in which the subcontract is in effect; and (3) maintain such
     books and records in a form maintained in accordance with the general
     standards applicable to such book or record keeping. [22 CCR Section
     53250(e)(3)]

4.   PREPARATION AND RETENTION OF RECORDS; ACCESS TO RECORDS; AUDITS. PROVIDER
     shall prepare and maintain medical and other books and records required by
     law in a form maintained in accordance with the general standards
     applicable to such book or record keeping. PROVIDER shall maintain such
     financial, administrative and other records as may be necessary for
     compliance by Health Net with all applicable local, State and federal
     laws. PROVIDER shall retain such books and records and all encounter data
     for a term of at least five (5) years from the close of the California
     State fiscal year in which the Agreement is in effect. PROVIDER shall make
     PROVIDER's books, records and encounter data pertaining to the goods and
     services furnished under the terms of the Agreement, available for
     inspection, examination or copying by Health Net, DHS, the United States
     Department of Health and Human Services ("DHHS"), the California
     Department of Corporations ("DOC"), the United States Department of
     Justice ("DOJ"), and any other regulatory agency having jurisdiction over
     Health Net. The records shall be available at PROVIDER's place of
     business, or at such other mutually agreeable location in California. When
     such entities request PROVIDER's records, PROVIDER shall produce copies of
     the requested records at no charge. PROVIDER shall permit Health Net, and
     its designated representatives, and designated representatives of local,
     State, and federal regulatory agencies having jurisdiction over Health
     Net, to conduct site evaluations and inspections of PROVIDER's offices and
     service locations. [22 CCR Section 53250(e)(1); W & I Section 14452(c);
     Medi-Cal Agreement]

5.   FEDERAL DISCLOSURE FORM. PROVIDER shall submit to Health Net a completed
     Disclosure Form, attached to this Addendum for officers and other persons
     associated with PROVIDER as required by California Welfare and
     Institutions Code Section 14452(a). Please mail the completed form to
     Health Net, Provider Data Management, 21600 Oxnard St., Woodland Hills, CA
     91367.

6.   MEDI-CAL HMO MEMBER EDUCATION. PROVIDER shall make health education
     materials and programs available to Medi-Cal HMO Members on the same basis
     that it makes such materials and programs available to the general public,
     and shall use its best efforts to encourage Medi-Cal HMO Members to
     participate in such health education programs. [Medi-Cal Agreement]

                                 Page 42 of 64
<PAGE>
7.   MEDI-CAL HMO MEMBERS AND STATE HELD HARMLESS. PROVIDER agrees that in no
     event, including, but not limited to, non-payment by Health Net, the
     insolvency of Health Net, or breach of the Agreement, shall PROVIDER or a
     subcontractor of Physician bill, charge, collect a deposit from, seek
     compensation, remuneration, or reimbursement from, or have any recourse
     against Members, the State of California, or persons other than Health Net
     acting on their behalf for services provided pursuant to the Agreement.
     PROVIDER agrees: (1) this provision shall survive the termination of the
     Agreement regardless of the cause giving rise to termination and shall be
     construed to be for the benefit of Medi-Cal HMO Members; and (2) this
     provision supersedes any oral or written contrary agreement now existing
     or hereafter entered into between PROVIDER and Medi-Cal HMO Members or
     persons acting on their behalf. Any modification, addition, or deletion of
     or to the provisions of this clause shall be effective on a date no
     earlier than fifteen (15) days after DHS has received written notice of
     such proposed change and has approved such change. [22 CCR Section
     53250(e)(6)]

8.   GRIEVANCES AND APPEALS. PROVIDER shall resolve all grievances and appeals
     relating to the provision of services to Medi-Cal HMO Members in
     accordance with the Health Net Medi-Cal grievance and appeal procedures.

9.   RELATIONSHIP OF THE PARTIES. PROVIDER shall be solely responsible, without
     interference from Health Net or its agent, for providing PROVIDER
     Fee-for-Service Services to Medi-Cal HMO Members, and shall have the right
     to object to treating any individual who makes onerous the relationship
     between PROVIDER and Medi-Cal HMO Member. In the event of a breakdown in
     such relationship, Health Net shall make reasonable efforts to assign the
     Medi-Cal HMO Member to another Participating Provider. If reassignment is
     unsuccessful, a request may be filed with DHS to permit termination of
     services to such Medi-Cal HMO Member. Approval from DHS must be obtained
     before PROVIDER terminates services to such Medi-Cal HMO Member.

10.  GOVERNING LAW. The Agreement shall be governed by and construed and
     enforced in accordance with all laws and contractual obligations incumbent
     upon Health Net. PROVIDER shall comply with all applicable local, State,
     and federal laws, now or hereafter in effect, to the extent that they
     directly or indirectly affect PROVIDER or Health Net, and bear upon the
     subject matter of the Agreement. PROVIDER shall comply with the provisions
     of the Medi-Cal Agreement, and Chapters 3 and 4 of Subdivision 1 of
     Division 3 of Title 22 of the California Code of Regulations. In addition,
     Health Net is subject to the requirements of Chapter 2.2 of Division 2 of
     the California Health and Safety Code and Subchapter 5.5 of Chapter 3 of
     Title 10 of the California Code of Regulations. Any provision required to
     be in the Agreement by either of the above laws shall bind the parties
     whether or not provided in the Agreement. [22 CCR Section 53250(c)(2)]; W &
     I Section 14452(a); Knox-Keene Act]

11.  NOTICE. PROVIDER shall notify the DHS in the event this Agreement is
     amended or terminated. Notice to DHS is considered given when properly
     addressed and deposited with the United States Postal Service as first
     class registered mail, postage attached. [Knox-Keene Act and Medi-Cal
     Agreement]

12.  REPORTS. PROVIDER shall provide Health Net, within the time requested by
     Health Net, with all such reports and information as Health Net may require
     to allow to meet the reporting requirements under the Medi-Cal Agreement or
     any applicable law, [22 CCR 53250(c)(5)].


                                 Page 43 of 64

<PAGE>
        13.     CONFIDENTIALITY OF INFORMATION. Names of persons receiving
                public social services are confidential and are to be protected
                from unauthorized disclosure in accordance with Title 45, Code
                of Federal Regulations, Section 205.50 and Section 141002 of the
                California Welfare and Institutions Code and the regulations
                adopted thereunder. For the purposes of this Agreement, all
                information, records, data, and data elements collected and
                maintained for or in connection with performance under this
                Agreement and pertaining to Medi-Cal HMO Members shall be
                protected by PROVIDER from unauthorized disclosure. With respect
                to any identifiable information concerning a Medi-Cal HMO Member
                under this Agreement that is obtained by PROVIDER or its
                subcontractors, PROVIDER: (1) shall not use any such information
                for any purpose other than carrying out the express terms of
                this Agreement; (2) shall promptly transmit to Health Net all
                requests for disclosure of such information, (3) shall not
                disclose, except as otherwise specifically permitted by this
                Agreement, any such information to any party other than Health
                Net without Health Net's prior written authorization specifying
                that the information is releasable under applicable law, and (4)
                shall, at the expiration or termination of this Agreement,
                return all such information to Health Net or maintain such
                information according to written procedures provided PROVIDER by
                Health Net for this purpose. PROVIDER shall ensure that its
                subcontractors comply with the provisions of this paragraph.

        14.     THIRD PARTY TORT LIABILITY. PROVIDER shall make no claim for
                recovery for health care services rendered to a Medi-Cal HMO
                Member when such recovery would result from an action involving
                the tort liability of a third party or casualty liability
                insurance, including workers' compensation awards and uninsured
                motorist coverage. Within five (5) days of discovery, PROVIDER
                shall notify Health Net of cases in which an action by the
                Medi-Cal HMO Member involving the tort or workers' compensation
                liability of a third party could result in a recovery by the
                Medi-Cal HMO Member. PROVIDER shall promptly provide: (1) all
                information requested by Health Net in connection with the
                provision of health care services to a Medi-Cal HMO Member who
                may have an action for recovery from any such third party; (2)
                copies of all requests by subpoena from attorneys, insurers or
                Medi-Cal HMO Members for copies of bills, invoices or claims for
                health care services; and (3) copies of all documents released
                as a result of such requests. PROVIDER shall ensure that its
                subcontractors comply with the requirements of this provision.

        15.     AMENDMENTS. When required under Medi-Cal law, Amendments to the
                Agreement shall be submitted by Health Net to the DHS for prior
                approval at least thirty (30) days before the effective date of
                any proposed changes governing compensation, services or term.
                Proposed changes, which are neither approved nor disapproved by
                the Department, shall become effective by operation of law
                thirty (30) days after the DHS has acknowledged receipt, or upon
                the date specified in the amendment, whichever is later.
                Subcontracts between a prepaid health plan and a subcontractor
                shall be public records on file with the DHS. [22 CCR Sections
                53250(a), (c)(3), & (e)(4); W & 1 Sections 14452(a)]

        16.     NOTICE OF CHANGE IN AVAILABILITY OR LOCATION OF COVERED
                SERVICES. Health Net is obligated to ensure Medi-Cal HMO Members
                are notified in writing of any changes in the availability or
                location of Covered Services at least thirty (30) days prior to
                the effective date of such changes, or within fourteen (14) days
                prior to the change in cases of unforeseeable circumstances.
                Such notifications must be approved by DHS prior to the release.
                In order for Health Net to meet this requirement, PROVIDER is
                obligated to notify Health Net in writing of any changes in the
                availability or location of Covered Services at least forty (40)
                days prior to the effective date of such changes.

        17.     TRANSFER OF CARE UPON TERMINATION OF THE AGREEMENT. PROVIDER
                shall, pursuant to the requirements of the Medi-Cal Agreement,
                assist in the orderly transfer of care of all Medi-Cal HMO
                Members under the care of PROVIDER in the event of the
                termination of the Agreement.


                                 Page 44 of 64


<PAGE>
        18.     ASSIGNMENT AND DELEGATION. Assignment or delegation of the
                Agreement shall be void unless prior written approval is
                obtained from the DHS in those instances where prior approval by
                the DHS is required. In addition, any assignment or delegation
                of the Agreement by PROVIDER shall be void unless prior written
                approval is obtained from Health Net.

        19.     LOCAL HEALTH DEPARTMENT COORDINATION. As more fully set out in
                the Medi-Cal Agreement, Health Net or its contracting Medi-Cal
                plan has (or will) entered into agreements for specified public
                health services with certain county health departments (Los
                Angeles, Fresno, Tulare, Riverside, San Bernardino, San Diego
                and Sacramento counties). The public health agreements specify
                the scope and responsibilities of the local health departments
                and Health Net, billing and reimbursements, reporting
                responsibilities, and medical record management to ensure
                coordinated health care services. The public health services
                specified under the agreement are as follows:

                19.1    Family planning services.

                19.2    Treatment of sexually transmitted disease ("STD")
                        services diagnosis and treatment of disease episode of
                        the following STDs: syphilis, gonorrhea, chlamydia,
                        herpes simplex, chancroid, trichomoniasis, human
                        papilloma virus, non-gonococcal urethritis,
                        lymphogranuloma venereum and granuloma inguinale.

                19.3    Confidential HIV testing and counseling.

                19.4    Immunizations.

                19.5    Refugee assessments.

                19.6    California Children Services.

                19.7    Maternal and Child Health.

                19.8    Child Health and Disability Prevention Program.

                19.9    Tuberculosis Direct Observed Therapy.

                19.10   Women, Infants, and Children Supplemental Food Program.

                19.11   Population based Prevention Programs: collaborate in
                        local health department community based prevention
                        programs.

                PROVIDER shall, in accordance with the terms and conditions of
                the public health agreements with the local health departments
                and Health Net's related policies and procedures, be responsible
                for the coordination and arrangement of the public health
                services for its assigned Members. The services specified in
                Sections 19.1 through 19.4 above require reimbursement to the
                applicable local health department. The services specified in
                Sections 19.5 through 19.11 above do not require reimbursement
                to the applicable local health department. [Medi-Cal Agreement]

        20.     CULTURAL AND LINGUISTIC SERVICES. PROVIDER shall, in accordance
                with the requirements of Medi-Cal Agreement and Health Net's
                cultural and linguistic services policies, arrange at its sole
                cost, interpreter services for Members either through telephone
                language services or interpreters.

        21.     SURCHARGES AND NO COPAYMENTS. PROVIDER shall not charge a Member
                any fee, surcharge or Copayment for health care services
                rendered pursuant to the Agreement. In addition, PROVIDER shall
                not collect a sales, use or other applicable tax from Members
                for the sale or delivery of medical services. If Health Net
                receives notice of any additional charge, PROVIDER shall fully
                cooperate with Health Net to investigate such allegations, and
                shall promptly refund any payment deemed improper by Health Net
                to the party who made the payment. [Knox-Keene Act and Medi-Cal
                Agreement]



                                 Page 45 of 64

<PAGE>
                                  ADDENDUM E.1

                                DISCLOSURE FORM
      (Required by California Welfare and Institutions Code Section 14452)

                                  Coram, Inc.

The undersigned hereby certifies that the following information regarding:

_______________________________________________________________________________
(the "Organization") is true and correct as of the date set forth below:

Officers/Directors/General Partners:

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________


Co-Owner(s):

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________


Stockholders owning more than ten percent of the stock of the Organization:

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________


Major creditors holding more than five percent (5%) of Organization's debt:

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________


Form of Organization (e.g., Corporation, Partnership, Sole Proprietorship,
Individual, etc.):

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________


If not already disclosed above, is Organization, either directly or indirectly
related to or affiliated with the Contracting Health Plan? Please explain:

_______________________________________________________________________________

_______________________________________________________________________________

_______________________________________________________________________________




Dated: _____________________________   Signature: _____________________________

                                        Name: _________________________________
                                                   (Please type or print)

                                        Title: ________________________________
                                                   (Please type or print)



                                 Page 46 of 64
<PAGE>
                                   ADDENDUM F

          OCCUPATIONALLY ILL/INJURED OR WORKERS' COMPENSATION BENEFIT
                                    PROGRAMS

HNI or its affiliates shall contract with Payors, to provide Occupationally
Ill/Injured or Workers' Compensation Benefit Programs for Members for work
related injuries and diseases compensatable under State Occupationally
Ill/Injured or Workers' Compensation law. PROVIDER shall render Contracted
Services to Members for occupational illnesses and injuries covered such Benefit
Programs. HNI shall provide PROVIDER with a listing of all such Payors, as
updated from time to time by HNI, including those Payors for whom HNI serves
only in an administrative capacity. The listing shall include the Payors'
utilization management administrator and claims administrator when such is not
HNI.

PROVIDER understands and agrees that HNI may sell, lease, transfer or convey a
list, including PROVIDER, to Payors. PROVIDER further understands that PROVIDER
may decline to be included in such list.

A Payor shall actively encourage its subscribers to use the list of contracted
providers when obtaining medical care. Payors shall offer its subscribers direct
financial incentives to use the list of contracted providers, including
Provider, when obtaining medical care. A Payor, or HNI on Payor's behalf, shall
provide information to a Payor's subscribers advising such subscribers of the
existence of a list of contracted providers, including Provider, through a
variety of advertising or marketing approaches that supply the names, addresses
and telephone numbers of contracted providers, including Provider, to
subscribers in advance of their selection of a health care provider.

Payor's shall not be permitted to pay Provider's contracted rate under this
Addendum F unless Payor, or HNI on Payor's behalf, has actively encouraged
Payor's subscribers to use the list of contracted providers, including Provider,
in obtaining medical care.

PROVIDER agrees that those Payors listed on Addendum (F-1), are the Payors
eligible to pay Provider's contracted rate under this Addendum F. This list may
be modified by HNI from time to time. PROVIDER may request in writing, and HNI
shall have thirty (30) days from the date of such request, to provide PROVIDER
with an updated listing of Payors.

Nothing in this Addendum F shall be construed to require a Payor to actively
encourage such Payor's subscribers to use the list of contracted providers,
including Provider, when obtaining medical care in the event of an Emergency.

A.   COMPENSATION

     1.   BILLING AND PAYMENT. As compensation for the delivery of Contracted
          Services, limited as described above, PROVIDER shall be paid in
          accordance with the rates set forth below. Such compensation shall be
          paid within the time and subject to the billing requirements set forth
          in Section 4.2 of the Agreement. The above notwithstanding, for
          self-insured and other such Payors, HNI shall not be obligated to pay
          all or any portion of any PROVIDER claim, as allowed by applicable
          law, unless and until HNI has received sufficient funds from the
          applicable Payor to cover such claim. PROVIDER claims shall be coded
          and submitted according to the Official California Workers'
          Compensation Medical Fee Schedule ("Fee Schedule"), if applicable.

     2.   RATES. The Parties acknowledge that PROVIDER's billed charges are
          being submitted at HNI's request for informational purposes only. The
          pricing information contained on Provider's claims shall not be used
          for the calculation of Members' lifetime maximum coverage benefits.
          Copayments, co-insurance, and deductibles due to PROVIDER from a
          Member shall be calculated based on the amount to which PROVIDER is
          entitled under this agreement. Reimbursement under the Agreement shall
          be the lessor of: (a) the PROVIDER's usual and customary charges
          ("UCR"); (b) [*] the Fee Schedule adopted by the State of California
          Department of Industrial Relations, Division of Workers' Compensation;
          or (c) the allowable charge based on the Medicare Resource Based
          Relative Value Scale ("RBRVS") unit values and HCFA Geographical
          Practice Cost Indices, or (d) the rates established on Exhibit I of
          Addendum B of this Agreement.




                                 Page 47 of 64
<PAGE>
          "By report" procedures, unlisted procedures and relativities not
          established in RBRVS shall be subject to HNI's review and based upon
          relative complexity shall be assigned a unit value and subsequently
          reimbursed in accordance with the HCFA Cost Indices. If a unit value
          cannot be reasonably determined, reimbursement shall be at [*] not to
          exceed usual, reasonable, and customary charges, less any applicable
          Copayment. Usual, reasonable, and customary means the usual charge
          made by a physician or supplier of services, medicines, or supplies
          and shall not exceed the general level of charges made by others
          rendering or furnishing such services, medicines, or supplies within
          an area in which the charge is incurred for sickness or injuries
          comparable in severity and nature to the sickness or injury being
          treated. The term "area" as it would apply to any particular service,
          medicine or supply means a county or such greater areas as is
          necessary to obtain a representative cross section of level of
          charges.

B.   OTHER DUTIES

     1.   REQUIREMENTS FOR ELIGIBILITY VERIFICATION AND SERVICE AUTHORIZATION.
          The applicable Occupationally Ill/Injured or Workers' Compensation
          Utilization/Care Improvement Programs may require PROVIDER to: (a)
          verify Member eligibility to receive Contracted Services; (b) verify
          that the Member's injury or disease has been determined to "arise out
          of and in the course of employment"; (c) determine the requested
          treatment is Medically Necessary to cure and relieve the work-related
          condition; and (d) obtain a referral or prior authorization to provide
          Contracted Services prior to rendering such services. PROVIDER agrees
          to comply with all requirements. HNI shall advise PROVIDER of all
          applicable Utilization/Care Improvement Program requirements.

     2.   REPORTS. PROVIDER agrees to furnish, upon request, all information
          reasonably required by HNI or a Payor to verify and provide written
          substantiation of the provision of Contracted Services, and the
          charges for such services.

     3.   RETURN TO WORK. In addition to Contracted Services, and without
          further compensation from HNI or a Payor, PROVIDER shall work with HNI
          and each Payor to develop a return-to-work program for each Member.

                   CONFIDENTIAL, PROPRIETARY AND TRADE SECRET

                                 Page 48 of 64
<PAGE>
                                  ADDENDUM F.1

           OCCUPATIONALLY ILL/INJURED OR WORKERS' LISTING OF PAYORS:
                                 as of 5/31/00

<TABLE>
<S>                                      <C>
[*]                                      [*]
</TABLE>

                                 Page 49 of 64
<PAGE>
                            ADDENDUM F.1 [Continued]

[*]                                         [*]


                                 Page 50 of 64

<PAGE>
                            ADDENDUM F.1 [Continued]

<Table>
<S>                                    <C>
[*]                                    [*]
</Table>


                                 Page 51 of 64



<PAGE>
                            ADDENDUM F.1 [Continued]

[*]                                            [*]


                                 Page 52 of 64
<PAGE>
                            ADDENDUM F.1 [Continued]

[*]                                     [*]


                                 Page 53 of 64

<PAGE>
                            ADDENDUM F.1 [Continued]

[*]                                          [*]



                                 Page 54 of 64



<PAGE>
                            ADDENDUM F.1 [Continued]

<TABLE>
<S>                                              <C>
[*]                                              [*]
</TABLE>


                                 Page 55 of 64
<PAGE>
                                   ADDENDUM G

                             PROVIDER SITE LISTING


     PROVIDER shall attach a listing of all sites to be included in this
     contract. The PROVIDER, as appropriate, shall update the list of facilities
     governed by this Agreement, by submitting a written notification to HNI.


<Table>
<Caption>
<S>                                 <C>                         <C>                    <C>            <C>
   Facility Name                      Street Address              Phone/Fax               Tax ID       Remittance Address
                                                                                          Number

Kern Home Health Resources            3101 Sillect Ave.          (800) 333-8346          33-0184040      P.O. Box 74881
d/b/a Coram Healthcare                Suite #109                 (805) 325-8326                          Chicago, IL 60694-4881
                                      Bakersfield, CA 93308      (805) 325-6509 (fax)

Coram Healthcare Corporation          1049 Grand Central Ave.    (800) 523-4042          58-2006708      P.O. Box 74798
of Southern California                Glendale, CA 91201         (818) 956-5007                          Chicago, IL 60694-4798
                                                                 (818) 956-0411 (fax)

Coram Healthcare Corporation          21353 Cabot Blvd.          (800) 876-9101           58-1972773     P.O. Box 74798
of Northern California                Hayward, CA 94545          (510) 732-8800                          Chicago, IL 60694-4798
                                                                 (510) 732-8801 (fax)

Coram Healthcare Corporation          4355 East Lowell Ave.,     (800) 806-7696           58-2006708     P.O. Box 74798
of Southern California                Suite E                    (909) 605-0010                          Chicago, IL 60694-4798
                                      Ontario, CA 91761          (909) 605-0024 (fax)

Coram Healthcare Corporation          1380 Greg Street,          (800) 697-1667           58-1972771     P.O. Box 74805
of Nevada                             Suite 216                  (775) 323-1667                          Chicago, IL 60694-4805
                                      Sparks, NV 89431           (775) 333-8220 (fax)

Coram Healthcare Corporation          1803 Tribute Ave.,         (800) 880-2971           58-1972773     P.O. Box 74798
of Northern California                Suite B                    (916) 565-7233                          Chicago, IL 60694-4798
                                      Sacramento, CA 95815       (916) 567-8255 (fax)

Coram Alternate Site Services, Inc.   8804 Balboa Ave.           (800) 540-7887           76-0215922     P.O. Box 95984
                                      San Diego, CA 92123        (858) 576-6969                          Chicago, IL 60694-5984
                                                                 (858) 974-6606 (fax)

Coram Healthcare Corporation          200 East Carrillo, Suite   (800) 788-9295           58-2006708     P.O. Box 74798
of Southern California                100-A                      (805) 568-0483                          Chicago, IL 60694-4798
                                      Santa Barbara, CA 93101    (805) 692-1170 (fax)

Coram Healthcare Corporation          15031 Parkway Loop,        (877) 296-4423           58-2006708     P.O. Box 74798
of Southern California                Suite B                    (714) 247-1156                          Chicago, IL 60694-4798
                                      Tustin, CA 92680           (714) 247-1167 (fax)

</Table>





                                   ADDENDUM H


                                 Page 56 of 64

<PAGE>
                             PERFORMANCE INDICATORS

                          MEMBER SATISFACTION SURVEYS

STANDARD 1

PROVIDER shall conduct Patient satisfaction surveys on an ongoing basis for
[*] of the patients who receive all home infusion services covered in
Agreement.

Patient satisfaction shall be at least a score of [*] for [*] of the surveys
returned basis on [*] return rate.


MEASUREMENT

PROVIDER shall use their existing survey tool to perform the Satisfaction
Survey. The survey tool shall be approved by HNI, and PROVIDER shall accommodate
reasonable changes requested by HNI to survey tool. The tool will have a scoring
range of 1 (poor) to 5 (excellent) whereby a score of 3 is a rating of "good".

A.        Survey questions shall pertain to the following areas:
-    Professional manner and expertise/staff quality of service
               Customer Service Representative
               Pharmacist
               Nurses
               Driver/Delivery Staff

               Addressed in questions #1, 2, 3, and 4
          -    Ease of access to services
                 Addressed in questions # 5 and 8
          -    Timeliness of visit
                 Addressed in question # 8
          -    Adequacy of teaching regarding therapy process
                 Addressed in questions # 1, 9 and 10

B.        Method
-    New Patients upon discharge
-    Chronic patients once every six months
C.        Reporting
          -    Report Commercial/HMO and Seniority Plus as separate reports


REPORTING FREQUENCY

Quarterly Summary Report of the tabulation of patient surveys sent. During the
first Quarter of each year, Coram will present summary of prior year survey
results. Will be part of ongoing 'Corameters' quarterly report


PENALTIES

[*] for every month that Quarterly Report [*].
[*] for every month that the score is [*].
[*] if corrective action plan, when necessary, is not submitted on time.
Failure to meet objective of this standard will be considered breach of
contract, with the applicable remedy being the termination of the Agreement.


SUPPORTING DOCUMENTATION

Sample Survey and patient satisfaction survey data with calculations.
(Survey document should meet the JCAHO and/or NCQA requirements.)

                             * Attach Coram survey

                                 Page 57 of 64

<PAGE>
                       ACCESS TO CARE: INFUSION SERVICES


STANDARD 2

PROVIDER shall maintain the following level of member access to services on a 7
days a week, 24 hours a day basis on [*] of services provided:


After Hours:        Member calls shall be responded to within [*].
                    If follow-up visit is urgent, the visit shall occur within
                    [*] the call, as clinically indicated.

PROVIDER shall record and report unusual occurrences for members regarding
access device complication, infection, medication errors, supply/product errors,
equipment related errors, lab test errors, adverse drug reactions, rewrite
process, non-compliance issues and other occurrences, including communication
and answering service issues.



MEASUREMENT

PROVIDER'S QI/QM departments shall monitor this standard on an ongoing basis.
Data shall be compiled monthly by PROVIDER and summarized for quarterly
reporting to HNI. Quarterly Reports shall include a corrective action plan
addressing any performance standard, which fall below the performance goal.
Information shall be trended and discussed at a joint QI/QM meeting between
Provider and HNI.

A.   PROVIDER shall use Unusual Occurrence Reports to show the occurrences and
     expectations to this standard.
B.   Provider will review branch on call logs. This will be done monthly by
     branch on rotating schedule and will monitor one weeks activity.



REPORTING FREQUENCY

Quarterly reporting, will be part of ongoing Corameter's quarterly report.
Annual Summary Report.



PENALTIES

[*] for every month that Quarterly report  [*]
[*] if corrective action plan, when necessary, is not submitted on time



SUPPORTING DOCUMENTATION

Trended information regarding expectations.  It is understood that the PROVIDER
cannot submit Unusual Occurrence Forms to HNI directly.


                                 Page 58 of 64
<PAGE>
                         PROVIDER SATISFACTION SURVEYS

STANDARD 3

PROVIDER shall conduct an annual Provider satisfaction survey to include HNI
referring shared risk PPG's and physicians. Annual survey results shall be
submitted to HNI by each first quarter reporting beginning January 1, 2001.

PPG satisfaction shall be at least a score of [*] for [*] of the surveys
returned (based on a [*] return rate).

SURVEY MEASUREMENT

PROVIDER shall use their existing survey tool to perform the Satisfaction
Survey. The survey tool shall be approved by HNI, and PROVIDER shall accommodate
reasonable changes required by HNI to such survey tool. The tool will have a
scoring range of 1 (poor) to 5 (excellent) whereby a score of 3 is a rating of
"good".

A.   Survey questions shall pertain to the following areas:
     -    Professional manner/staff quality of service
     -    Professional expertise/staff quality of care
     -    Ease of access to services
     -    Ability to meet members needs accurately and effectively
     -    Adequacy of teaching regarding the therapy process
     -    Coordination of care

B.   Method
     -    Physician
     -    PPG Medical Management Department

C.   Reporting
     -    Report Commercial/HMO and Seniority Plus as separate reports

REPORTING FREQUENCY
Annual Report of survey results

PENALTIES
[*] for every month that Annual Report [*]
[*] if a corrective action plan, when necessary, is not submitted on time

SUPPORTING DOCUMENTATION
Sample survey and PPG satisfaction survey data with calculations

                             * Attach Coram survey




                                 Page 59 of 64
<PAGE>
                      POTENTIAL QUALITY OF CARE REPORTING

STANDARD 4
--------------------------------------------------------------------------------
PROVIDER shall submit aggregate complaint reporting monthly. PROVIDER shall
maintain a system to track and trend complaints.
--------------------------------------------------------------------------------

MEASUREMENT
--------------------------------------------------------------------------------
PROVIDER shall maintain a member/provider inquiry tracking system as a part of
a communications management process that has the capability of tracking all HNI
inquiries. PROVIDER shall submit logs on format approved by HNI.

Method: Each branch has a complaint log with Intake, turned in to Branch Mng.
and forwarded to Clinical Liaison. Clinical Liaison will tabulate monthly
complaint log and forward to HNI.
--------------------------------------------------------------------------------

REPORT FREQUENCY
--------------------------------------------------------------------------------
Monthly Report.
Quarterly Report of monthly tracking.
Annual Summary Report.
--------------------------------------------------------------------------------

PENALTY
--------------------------------------------------------------------------------
[*] for each month that the Quarterly Report [*].
--------------------------------------------------------------------------------

SUPPORTING DOCUMENTATION
--------------------------------------------------------------------------------
Monthly log.
--------------------------------------------------------------------------------


                                 Page 60 of 64

<PAGE>
                              ENCOUNTER REPORTING

STANDARD 5
--------------------------------------------------------------------------------
PROVIDER shall provide utilization reporting to HNI in accordance with Article
II, Section 2.15 of the Agreement.
--------------------------------------------------------------------------------

MEASUREMENT
--------------------------------------------------------------------------------
Such reports shall include, but not be limited to, general encounter data
elements in accordance with the latest HEDIS and HCFA, and HNI requirements,
according to HNI ________.
--------------------------------------------------------------------------------

REPORT FREQUENCY
--------------------------------------------------------------------------------
PROVIDER shall provide monthly encounter reports, electronically, within 15
calendar days following the month in which service was rendered. The first
monthly report shall be due on January 15, 2001 for the December, 2000 data.
The required data fields for encounter submission are identified via the HMO/IS
format submitted by HNI's I.S. Department to PROVIDER. The rejection report
will be given to Coram by HNI within two weeks of Encounter submission.
--------------------------------------------------------------------------------

PENALTY
--------------------------------------------------------------------------------
[*] for each month encounter data [*].
--------------------------------------------------------------------------------

SUPPORTING DOCUMENTATION
--------------------------------------------------------------------------------
Availability of all records, per request, associated with each encounter.
--------------------------------------------------------------------------------


                                 Page 61 of 64

<PAGE>
                             UTILIZATION REPORT ING

STANDARD 6

PROVIDER shall provide utilization reporting to HNI in accordance with Article
II, Section 2.10 of the Agreement.

MEASUREMENT

PROVIDER shall provide quarterly summary report on an aggregate basis sorted by
the patient's PPG and HMO vs. Seniority Plus. Such reports shall include the
following:

-    Number of patients

-    Diagnoses

-    Therapies and therapy days

-    Referral source


REPORTING FREQUENCY

Quarterly Report

Aggregated Quarterly Report

Annual Summary Report


PENALTY

[*] for each month that the Aggregated Quarterly Report [*].

[*] for each month that hospitalization rate is more than 5% of total
home infusion referrals.

SUPPORTING DOCUMENTATION

Availability, upon request, of all records and calculations associated with
each criteria.





                                 Page 62 of 64
<PAGE>
                                   EXHIBIT 2
                           KEY PERFORMANCE STANDARDS

PERFORMANCE CHARACTERISTICS:

PROVIDER shall achieve acceptable levels of performance on the following
characteristics, which shall be further defined in later sections:

        -       Member Satisfaction Survey

        -       Access to Care

        -       Provider Satisfaction Survey

        -       Potential Quality of Care Reporting

        -       Encounter Reporting

        -       Utilization Reporting

PERFORMANCE REPORTS:

PROVIDER shall report to HNI on a quarterly and/or monthly basis the performance
results under the standards set forth in the attached document. The report shall
be submitted to HNI in a format agreeable to both parties within thirty (30)
calendar days after the end of each quarter. In addition, PROVIDER shall submit
a summary annual report within forty-five (45) days of the close of the year.

FAILURE TO MEET PERFORMANCE STANDARDS:

If PROVIDER fails to meet any of the performance standards, PROVIDER shall
prepare an [*] and shall submit [*] HNI within [*] following the end of the
quarter. Failure to complete [*] for a failed performance standard shall
constitute a [*] and HNI shall be entitled to assess the penalty fee amounts as
defined for each Performance Standard. HNI shall inform PROVIDER in detail, when
such [*] are not sufficient to attain the performance standards. Failure to
submit Performance Standard reports shall also result in penalties as defined
under each standard. PROVIDER shall pay HNI within thirty (30) days after the
penalty fees have been assessed.

INSPECTION AND AUDIT OF PROVIDER PERFORMANCE STANDARD RECORDS BY HNS:

HNI shall be permitted to conduct on-site audits of PROVIDER's performance
standard records and evaluation analyses upon reasonable advance notice to
PROVIDER. HNI shall be entitled to copy reasonable amounts of all such records
at PROVIDER'S cost.

Supporting documents need not be submitted with performance reports, but must be
available for audits.


                                 Page 63 of 64

<PAGE>
                       SERVICE DENIAL OR "NO GO" REFERRAL

STANDARD

PROVIDER shall provide services to members based on appropriate medical need and
benefit coverage.

Denial or services must be approved with the appropriate Regional Medical
Director and HNI utilizing the approved procedures. Any referral that did not
get initiated on to service shall be documented.

MEASUREMENT

The appropriate HNI policy/procedure shall be followed for all services that are
denied by PROVIDER.

PROVIDER shall maintain a member log for all referrals. All referrals that were
not started on service must be identified and the reason documented utilizing
the following categories:

- Physician discontinued the order
- Member expired
- Member changed Health Plan or PPG

REPORTING FREQUENCY

Send monthly report to HNI track and trend as part of Quarterly Reporting, by
the last Wednesday of the month following the end of the quarter.

Annual Summary Report.

PENALTIES

No Penalties shall be incurred for this standard.

SUPPORTING DOCUMENTATION

Tracking systems reports, quarterly calculations with reason codes for
non-initiation of services.


                                 Page 64 of 64





<PAGE>
                                First Amendment

     To The Ancillary Provider Services Agreement Between Health Net Inc.,
                                And Coram, Inc.


<PAGE>
                                FIRST AMENDMENT
              TO THE ANCILLARY PROVIDER SERVICES AGREEMENT BETWEEN
                          HEALTH NET INC., AFFILIATES
                                      AND
                                  CORAM, INC.

This Amendment to the Ancillary Provider Services Agreement ("Agreement"), dated
January 01, 2001, made and entered into by and between HEALTH NET INC.,
AFFILIATE(S) ("HNI") and CORAM, INC., an ancillary provider ("PROVIDER"), shall
be effective JANUARY 1, 2003.

WHEREAS HNI and PROVIDER believe that it would be in their mutual best interest
to amend the Agreement by modifying it as set forth in this Amendment;

NOW, THEREFORE, HNI and PROVIDER hereby agree to amend the Agreement as follows:

1)  The following sections are hereby added to ARTICLE I, DEFINITIONS as
    follows:

    1.28  PHARMACY BENEFIT MANAGER. The Pharmacy Benefit Manager (PBM) that HNI
          uses for on-line reimbursement of pharmaceutical medications.

    1.29  AVERAGE WHOLESALE PRICE. The Average Wholesale Price (AWP) means the
          price for a prescription medication provided to an HNI Member that is
          established, no less than monthly, by Medispan or by such other
          national drug database as HNI may designate.

    1.30  MAXIMUM ALLOWABLE COST. The Maximum Allowable Cost (MAC List) means
          the list established by HNI of prescription medications that will be
          reimbursed at a generic level. The MAC List includes adjacent to each
          prescription medication listed the corresponding maximum allowable
          cost per unit that will be used in calculating reimbursement by HNI.
          This MAC List is subject to periodic review and modification by HNI.

    1.31  WHOLESALE ACQUISITION COST. The Wholesale Acquisition Cost (WAC)
          available for drug pricing.

2)  The following section, EXHIBIT 1 ADDENDUM B, FEE-FOR-SERVICE COMPENSATION
    SCHEDULE, is hereby modified. Accordingly, a revised Exhibit 1 to Addendum
    B, Fee-for-Service Compensation Schedule, is attached hereto.

3)  Term and Termination. This Amendment may be terminated by either party with
    90-days written notice to the other party. This Amendment may be terminated
    by either party without terminating or modifying the Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their
officers, duly authorized, to be effective on the date and year first written
above.


CORAM, INC.                                 HEALTH NET INC., AFFILIATES
Tax ID 36-4369972


/s/ Richard Iriye  12/10/02                 /s/ Jenni Vargas  1/15/03
--------------------------------------      ----------------------------
Richard Iriye        Date                   Jenni Vargas       Date
Senior Vice President Operations, West      Network Management and Development
                                            Officer



Page 1 of 4




<PAGE>
================================================================================
                            EXHIBIT 1 TO ADDENDUM B
                     FEE-FOR-SERVICE COMPENSATION SCHEDULE
                           EFFECTIVE JANUARY 1, 2003
--------------------------------------------------------------------------------

I.   MEDICATIONS TO BE REIMBURSED THROUGH PBM:

PROVIDER agrees to provide directly to HNI Members the medications listed on the
HNI Approval Self Injectible List, attached herein as Page 3 to Exhibit 1 of
Addendum B, and to bill HNI through the PBM's system for such medications.
PROVIDER agrees to obtain patient's diagnosis, any pertinent laboratory data and
prior medications used, as well as to calling HNI's Pharmacy Department for
determination of medical necessity, prior to fulfilling any orders for
medications delivered to HNI Members. Upon approval, HNI shall enter an
authorization into the pharmacy claims processing computer system to allow
PROVIDER claims for the prescribed self-injectible medication to be adjudicated
on-line in the PBM's system.

HNI shall reimburse PROVIDER an amount equal to the sum of the "Drug
Acquisition Cost" as described below, or PROVIDER's usual and customary charge,
whichever is less, for each authorized and Covered Service, less applicable
Copayments.

The "Drug Acquisition Cost" for each pharmaceutical product shall equal[*]:

- [*] for Brand Medications
- [*] for Generic Medications on the Health Net MAC List
- [*] for Generic Medications not included in the MAC List
- [*]
- [*] for the prescription medication

  All pricing shall include the following:

  - [*]
  - [*]

In addition to the HNI Approved Self Injectible List, PROVIDER may bill HNI's
PBM system for any other drugs that HNI and PROVIDER may agree in advance to
adjudicate through the PBM. PROVIDER must have prior authorization before
PROVIDER fulfills any orders for medications delivered to HNI Members.

II.  MEDICATIONS THAT WILL CONTINUE TO BE REIMBURSED THROUGH MEDICAL CLAIMS
     PROCESSING:

1. Drugs that have previously been agreed to, and the drugs with new pricing
   that are being delivered to the physician's office.

2. PROVIDER shall be reimbursed for all products and services billed through
   Medical Claims using Redbook AWP Rates (at the Redbook rate in effect at date
   of service). PROVIDER shall submit the claim at the appropriate discounted
   rate and HNI shall pay claim in full according to member's benefit plan.

3. The reimbursement for all therapies/medications shall remain at rates
   previously agreed to, unless amended in this section or until such time that
   HNI and Provider may mutually agree to adjudicate such claims through the HNI
   PBM system. [*];

-  [*]
-  [*]

4. All pricing shall include the following:

-  [*]
-  [*].

5. All [*] that PROVIDER may provide to a HNI member is authorized in
   accordance to the Member's Covered Services, shall be [*].


Page 2 of 4





<PAGE>
III. RETURNED GOOD POLICY.

All patient-specific drugs and solutions will be charged at the time of
dispensing and no credit will be allowed for return of such goods.

Page 3 of 4
<PAGE>
             HEALTH NET OF CALIFORNIA APPROVED SELF-INJECTIBLE LIST

<TABLE>
<CAPTION>
BRAND                                   GENERIC NAME
-----                                   ------------
<S>                                     <C>
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
- [*]                                   [*]
</TABLE>

* Does not require prior authorization
+ Only drugs that are covered for Medicare Patients

* This list is updated per Pharmacy and Therapeutic Committees approval. As
such, this listing is not all inclusive and does change with additions and
deletions of drugs. The updates are available on the Health Net website
www.healthnet.com

Page 4 of 4

<PAGE>


                                SECOND AMENDMENT
              TO THE ANCILLARY PROVIDER SERVICES AGREEMENT BETWEEN
                           HEALTHNET INC., AFFILIATES
                                      AND
                                  CORAM, INC.
<PAGE>
                                SECOND AMENDMENT
              TO THE ANCILLARY PROVIDER SERVICES AGREEMENT BETWEEN
                           HEALTH NET INC., AFFILIATES
                                       AND
                                   CORAM, INC.

This Amendment to the Ancillary Provider Services Agreement ("Agreement"), dated
January 1, 2001, made and entered into by and between HEALTH NET INC.,
AFFILIATE(S) ("HNI") and CORAM, INC., an ancillary provider ("PROVIDER"), shall
be effective OCTOBER 1, 2003.

WHEREAS, HNI and PROVIDER believe that it would be in their mutual best interest
to amend the Agreement by modifying it as set forth in this Amendment;

NOW, THEREFORE, HNI and PROVIDER hereby agree to amend the Agreement as follows:

1.       The First Amendment of the Agreement is hereby deleted in its entirety.

2.       The following Sections are hereby added to Article I, DEFINITIONS, as
         follows:

         1.29     PHARMACY BENEFIT MANAGER. The Pharmacy Benefit Manager (PBM)
                  that HNI uses for on-line reimbursement of pharmaceutical
                  medications.

         1.30     AVERAGE WHOLESALE PRICE. The Average Wholesale Price (AWP)
                  means (a) for fee for service drug claims billed through HNI's
                  medical claims system, the average wholesale price of the
                  designated pharmaceutical product as listed in the most
                  recently published and available edition of the Medical
                  Economics Redbook guide to pharmaceutical prices, and (b) for
                  fee for service drug claims billed through the PBM, the price
                  for a prescription medication provided to an HNI Member that
                  is established, no less than monthly, by Medispan.

         1.31     MAXIMUM ALLOWABLE COST. The Maximum Allowable Cost (MAC List)
                  means the list established by HNI only for those prescription
                  medications that will be reimbursed through the PBM at a
                  generic level. The MAC List includes, adjacent to each
                  prescription medication listed, the corresponding Maximum
                  Allowable Cost per unit that will be used in calculating
                  reimbursement by HNI. This MAC List is subject to periodic
                  review and modification by HNI. HNI shall provide advance
                  notice of any change made to any item contained within the MAC
                  List.

3.       The following Sections of the Agreement are hereby deleted in their
         entirety and replaced with the following Sections:

         2.3      PROVIDER NETWORK. PROVIDER shall provide HNI with a list of
                  the names, practice locations, federal tax identification
                  numbers, professional practice name, the business hours and
                  any additional information as required in the Operations
                  Manual for all Participating Providers that contract with
                  PROVIDER in a format acceptable to HNI. PROVIDER shall provide
                  HNI with at least a monthly list of additions, deletions and
                  address changes to such list and a complete listing annually.

                  PROVIDER shall take all reasonable and prudent steps to ensure
                  that all Participating Providers provide adequate personnel
                  and facilities in order to perform the duties and
                  responsibilities associated with the proper administration of
                  this Agreement, including but not limited to, ensuring that
                  all facilities utilized by Participating Providers shall
                  satisfy the standards for licensure and certification, if
                  applicable, by the appropriate governmental licensing agency
                  as well as applicable State and federal law. The Participating
                  Provider assumes the responsibility for supervision of all
                  personnel associated with the Participating Provider.

                  In the event PROVIDER acquires, whether through buying,
                  building, or merger, a new facility or facilities, PROVIDER
                  shall notify HNI in writing of such new facility or facilities
                  as soon as possible, but in no event later than thirty (30)
                  days after the acquisition. PROVIDER acknowledges and agrees
                  that HNI shall have the right to determine whether the new
                  facility or facilities are acceptable to participate in HNI's
                  network. Notwithstanding the foregoing, PROVIDER understands
                  and agrees that the rates set forth in this Agreement shall
                  apply to any new facility or facilities on the date the

Coram Healthcare Amendment II                          Effective October 1, 2003

                                  Page 1 of 32
<PAGE>

                  PROVIDER acquired such facility or facilities, irrespective of
                  whether HNI was notified or approved participation in the
                  network.

         3.6      OPERATIONS MANUAL. HNI shall provide PROVIDER with various
                  Operations Manuals, which identify the methods of
                  administration of this Agreement, including grievance
                  procedures, Utilization/Care Management Programs, Quality
                  Improvement Programs, encounter reporting procedures, and
                  billing and accounting of Covered Services rendered hereunder.
                  Updates to the Operations Manual will be made by HNI and,
                  whenever possible, shall be sent to PROVIDER for review forty
                  five (45) days prior to implementation. Such updates shall not
                  materially affect the compensation rates or financial
                  responsibility of PROVIDER under this Agreement.

         4.2      BILLING AND PAYMENT.

                  (a)      BILLING. PROVIDER shall submit to HNI or payor via
                           HNI's electronic claims submission program or by hard
                           copy, clean, complete and accurate claims for
                           Contracted Services in accordance with the Operations
                           Manual and the applicable Benefit Program. PROVIDER
                           shall submit claims within ninety (90) days of
                           rendering Contracted Services. Where HNI is the
                           secondary payor under Coordination of Benefits, such
                           ninety (90) day period shall commence immediately
                           after the primary payor has paid or denied the claim.
                           PROVIDER shall have ninety (90) days, from date of
                           first notification, to submit requested information
                           for any claim(s) that has been pended or denied due
                           to insufficient information. If HNI does not receive
                           the requested information from PROVIDER within said
                           ninety (90) days, claim (s) shall be denied without
                           recourse to resubmit and HNI shall have no liability
                           for such claim. HNI shall not be under any obligation
                           to pay PROVIDER for any claim not timely submitted as
                           set forth above. PROVIDER shall not seek payment from
                           any Member in the event HNI does not pay PROVIDER for
                           a claim not timely submitted.

                  (b)      PAYMENT. Unless a claim is disputed, HNI or a Payor
                           shall pay PROVIDER's clean, complete, accurate and
                           timely submitted claims for Contracted Services
                           rendered to a Member, in accordance with applicable
                           State and federal law.

                  (c)      ADJUSTMENTS AND APPEALS. PROVIDER shall submit
                           requests for adjustments and/or appeals regarding
                           claim payments to HNI within ninety (90) calendar
                           days after the date of the payment of such claim to
                           PROVIDER. In the event PROVIDER fails to appeal a
                           claim within such time period, PROVIDER shall not
                           have the right to appeal such claim.

                  (d)      OFFSETTING. HNI shall have the right to offset any
                           amounts owed by PROVIDER to HNI, including but not
                           limited to, amounts owed by PROVIDER due to errors,
                           or HNI interim payment of Contracted Services. HNI
                           shall offset such amounts against any amounts owed by
                           HNI to PROVIDER. HNI shall furnish to PROVIDER
                           advance notice of its intent to exercise its right to
                           offset pursuant to this section.

                  (e)      RECIPROCITY. [*] Agreement to be used by [*].

         4.8      RECONCILIATION OF ELIGIBILITY. In the event Contracted
                  Services are provided to an individual who is not a Member,
                  based on an erroneous or delayed confirmation of enrollment of
                  said individual by HNI, HNI shall be financially responsible
                  for all such services provided by PROVIDER prior to the time
                  PROVIDER received notice of that person's ineligibility,
                  except when the individual is enrolled in another health care
                  service plan, or insurance program from whom PROVIDER has or
                  may receive capitation or other payment from the individual.
                  In the event HNI is financially responsible, HNI shall pay
                  PROVIDER at the fee-for-service rates in Addendum D when
                  PROVIDER supplies HNI with evidence that it has unsuccessfully
                  sought payment through two (2) billing cycles for all or a
                  portion of such charges from the patient, or the person having
                  legal responsibility for the patient or the entity having
                  financial responsibility for such payment. In the event HNI
                  pays PROVIDER pursuant to this Section, PROVIDER shall have no
                  further right and shall not attempt to collect any additional
                  payment from the patient for said services and

Coram Healthcare Amendment II                          Effective October 1, 2003

                                  Page 2 of 32
<PAGE>

                  PROVIDER shall be deemed to have transferred all legal rights
                  of collection and Coordination of Benefits for services to
                  HNI.

                  When PROVIDER is compensated on a Capitation basis, HNI shall
                  provide PROVIDER with a monthly list of Members for whom
                  PROVIDER is responsible for rendering Provider Risk Services
                  during such month. HNI will use its best efforts to discourage
                  retroactive cancellation or addition of Members to a Benefit
                  Program. However, in the event HNI allows such adjustments,
                  HNI shall retroactively adjust PROVIDER's Capitation
                  Compensation as necessary, provided that the retroactive
                  addition or cancellation period shall not exceed ninety (90)
                  days. In the event of allowable retroactive cancellations,
                  PROVIDER agrees to bill the responsible party for all Provider
                  Risk Services received by the Members from the date such
                  Member was no longer covered under the applicable Benefit
                  Program.

         5.1      TERM. The term of the Agreement shall commence on the date set
                  forth on the first page of this Agreement and shall continue
                  for a period of twenty seven (27) months following the
                  effective date of the Second Amendment to the Ancillary
                  Provider Services Agreement between HNI and PROVIDER. This
                  Agreement shall automatically renew for successive one (1)
                  year periods thereafter, unless one party notifies the other
                  in writing of its intent not to renew this Agreement at least
                  one hundred twenty (120) days prior to the next scheduled
                  renewal date. Any and all negotiations must be completed
                  thirty (30) days prior to the anniversary date of the
                  contract. The renewal date of the term of this Agreement shall
                  remain the same for all Benefit Programs covered hereunder,
                  even if this Agreement becomes effective with respect to a
                  particular Benefit Program after the initial or any renewal
                  date of this Agreement, due to the licensure, contract award
                  or other reason.

         6.1      MEDICAL AND OTHER RECORDS. PROVIDER shall prepare and maintain
                  all medical and other books and records required by law in
                  accordance with the general standards applicable. PROVIDER
                  shall maintain such records for at least seven (7) years after
                  the rendering of Contracted Services and records of a minor
                  child shall be kept for at least one (1) year after the minor
                  has reached the age of eighteen (18), but in no event less
                  than seven (7) years. Additionally, PROVIDER shall maintain
                  such financial, administrative and other records as may be
                  necessary for compliance by HNI with all applicable local,
                  State, and federal laws, rules and regulations, and
                  accreditation agencies. PROVIDER agrees to the policies
                  established by HNI that describe personal health information,
                  including medical records, claims benefits and other
                  administrative data that are personally identifiable. The HNI
                  policies include: provisions for inclusions in routine
                  consent, care and treatment of Members who are unable to give
                  consent, Member access to their medical records, protection of
                  privacy in all settings, use of measurement data, information
                  for employers and the sharing of personal health information
                  with employers. The HNI policies are further defined in the
                  Provider Operations Manual. PROVIDER agrees to submit upon
                  request reports and financial information as is necessary for
                  HNI to comply with regulatory requirements to monitor the
                  financial viability of PROVIDER. PROVIDER shall comply with
                  all confidentiality and Member record accuracy requirements as
                  required by HNI and federal and State law.

         6.2      ACCESS TO RECORDS; AUDITS. The records referred to above shall
                  not be removed or transferred from PROVIDER except in
                  accordance with applicable local, State, and federal laws,
                  rules and regulations. Subject to applicable State and federal
                  confidentiality or privacy laws, HNI or its designated
                  representatives, and designated representatives of local,
                  State, and federal regulatory agencies having jurisdiction
                  over HNI shall have access to PROVIDER's records, at
                  PROVIDER's place of business on request during normal business
                  hours, to inspect and review and make copies of such records.
                  Such governmental agencies shall include, but not be limited
                  to, when applicable to the Benefit Programs identified on
                  Addendum A, the DHS, the DHHS, the DMHC, the DOD and the DOJ.
                  When requested by HNI, PROVIDER shall produce copies of any
                  such records at no cost. Additionally, PROVIDER agrees to
                  permit HNI, and its designated representatives, accreditation
                  organizations, and designated representatives of local, State,
                  and federal regulatory agencies having jurisdiction over HNI
                  or any Payor, to conduct site evaluations and inspections of
                  PROVIDER's offices and service locations.

         7.1      AMENDMENTS. All amendments to this Agreement or any of its
                  Addenda, including changes to the compensation payable
                  hereunder, proposed by either HNI or PROVIDER, must be
                  mutually agreed upon by both parties at least (30) days in
                  advance of the effective date thereof. PROVIDER shall have
                  thirty (30) days from the date of the notice to reject
                  amendment by providing written notice of such rejection to
                  HNI. If HNI does not receive such written notice of rejection
                  within this time limit, the amendment shall be deemed
                  acceptable and shall be binding upon PROVIDER. Amendments
                  required because of legislative, regulatory, or legal
                  requirements do not require the consent of PROVIDER or HNI and
                  shall be effective immediately on the effective date thereof.
                  Any amendment to this Agreement requiring

Coram Healthcare Amendment II                          Effective October 1, 2003

                                  Page 3 of 32
<PAGE>

                  prior approval of or notice to any federal or state regulatory
                  agency shall not become effective until all necessary
                  approvals have been granted or all required notice periods
                  have expired.

4.       Addenda B, C, and H are hereby deleted in their entirety and replaced
         with new Addenda B, C and H attached hereto and incorporated herein.

5.       Exhibit 1 to Addendum D, Fee-for-Service Compensation Schedule, Home
         Infusion, is hereby deleted in its entirety and replaced with a new
         Exhibit 1 to Addendum D, Fee-For-Service Compensation Schedule,
         attached hereto and incorporated herein.

6.       Exhibit 2 to Addendum D, Custom Equipment Pricing, is attached hereto
         and incorporated herein.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment, by their
officers duly authorized, to be effective on the date and year first written
above.

CORAM, INC.                           HEALTH NET INC., AFFILIATES

/s/ Allen J. Marabito                 /s/ Jenni Vargas                  10-22-03
---------------------------------     ------------------------------------------
Allen J. Marabito            Date     Jenni Vargas                          Date
Executive Vice President              Network Management and Development Officer
                 October 17, 2003
Coram Healthcare Amendment II                          Effective October 1, 2003

                                  Page 4 of 32
<PAGE>

                                   ADDENDUM B

                         COMMERCIAL HMO BENEFIT PROGRAM

PROVIDER understands and agrees that the obligations of HNI set forth on this
Addendum are only the obligations of Health Net of California, Inc., an HNI
Affiliate (hereafter "HMO") and not the obligations of HNI or any other
Affiliate of HNI. PROVIDER shall be compensated according to this Addendum B and
this Addendum shall be applicable to only those Commercial HMO enrolled in
Health Net of California, Inc.'s HMO program. In the event another HNI Affiliate
is a licensed health care service plan, the provisions of this Addendum shall
also apply to such Affiliates' Commercial HMO Members.

A.       DEFINITIONS:

         For purposes of this Addendum, the definitions included herein shall
         have the meaning required by law to applicable Medicare Risk Programs.

         1.       PPG. A Participating Provider Group having a capitation
                  agreement with HNI to provide Covered Medical Services to
                  Members.

         2.       SERVICE AREA. The State of California.

         3.       OUT OF AREA. Any area outside of California, but within the
                  continental United States.

         4.       PMPM. For purposes of this Addendum, any per Member per month
                  ("PMPM") calculation shall be based on HMO Commercial Members
                  only.

         5.       HOSPICE RELATED CONDITIONS. Palliative or terminal care for
                  Commercial HMO Members who have been admitted to hospice care.

B.       DESCRIPTION OF PROVIDER RISK SERVICES:

         1.       HOME INFUSION SERVICES. Home Infusion Services are services
                  which involve the dispensing and administration of prescribed
                  intravenous substances, injectables, solutions, PICC line
                  insertions, and patient education. All nursing services,
                  equipment and supplies which are necessary to provide such
                  services are also covered. Infusion patients do not need to be
                  homebound but must meet the criteria for home infusion care
                  and meet the requirements of the Utilization Program to be
                  included as Provider Risk Services.

                  The following conditions shall be included as part of the
                  Provider Risk Services:

                  -        Member's medical condition is such that if the Member
                           leaves home, it creates a public health hazard.

                  -        Member receives infusion services at school, work,
                           and/or residential board and care facilities.

                  -        Home infusion services for [*] Commercial HMO Member
                           are included in Provider Risk Services. All nursing
                           services related to home infusion services for [*]
                           Provider Risk Services.

                  -        Home infusion therapy services are not restricted to
                           homebound Members.

                  The following Therapies are Provider Risk Services:

                  a.       [*]

                  b.       [*]

                  c.       [*]

                  d.       [*]

                  e.       [*]

Coram Healthcare Amendment II                          Effective October 1, 2003

                                  Page 5 of 32
<PAGE>

                  The following Therapies are Provider Risk Services (cont):

                  f.       [*]

                  g.       [*]

                  h.       [*]

                  i.       [*]

                  j.       [*]

                  k.       [*]

                  l.       [*]

                  m.       [*]

                  n.       [*]

         2.       DURABLE MEDICAL EQUIPMENT. Durable Medical Equipment (DME) and
                  supplies (such as pumps and poles) used during the provision
                  of any infusion service are [*] for insulin pumps and supplies
                  which are [*] .

         3.       MEDICAL SUPPLIES. All supplies used in conjunction with an
                  infusion service and/or for teaching of a Member until Member
                  becomes independent, are considered as part of Provider Risk
                  Services.

C.       HMO REIMBURSEMENT PROGRAMS

         1.       COMPENSATION FOR PROVIDER RISK SERVICES. Effective October 1,
                  2003, as compensation for providing Provider Risk Services,
                  HMO shall pay PROVIDER [*] Per Member Per Month (PMPM), each
                  month, for each Commercial HMO Member eligible to receive such
                  services from PROVIDER during that month. Capitation shall be
                  computed on the basis of the most current information
                  available in the eligibility file of HMO. Capitation payment
                  shall be paid by the HMO by wire transfer on or before the
                  fifteen (15th) day of each month or the first business day
                  following the fifteenth if the fifteenth is a holiday or on a
                  weekend. Each Capitation payment shall be accompanied by a
                  remittance summary by written or electronic media. The
                  remittance summary identifies the total Capitation payable and
                  those Commercial HMO Members for whom Capitation is being
                  paid. In the event of a Capitation error, resulting in an
                  overpayment or underpayment to PROVIDER, HMO shall adjust
                  subsequent Capitation to offset such error. Adjustments of
                  overpayment to PROVIDER may only be taken by HMO within ninety
                  (90) days of a Capitation payment.

         2.       [*] STOP LOSS. PROVIDER shall be responsible under
                  Capitation for a maximum annual expenditure of [*] in
                  calculated costs using the fee-for-service rates, for all [*]
                  for all Commercial HMO Members. After this threshold has been
                  reached, HMO shall assume financial responsibility for such
                  products for any such Member. HMO shall reimburse the cost of
                  the [*] after stop loss has been met, promptly upon submission
                  of an appropriate claim, based on the fee-for-service rate
                  schedule on Exhibit 1 of Addendum D. PROVIDER shall notify
                  HMO's Care Management department of each Commercial HMO Member
                  receiving [*] and shall work cooperatively with HMO on care
                  management. Notification shall be according to the
                  requirements in the Operations Manual. Additionally, PROVIDER
                  shall provide HMO on a monthly basis the total accumulated
                  Commercial HMO Member costs under this stop loss provision.
                  Failure to notify or inform HMO accordingly may result in the
                  loss of reimbursement to PROVIDER.

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                                  Page 6 of 32
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         3.       [*] STOP LOSS. PROVIDER shall be responsible under
                  Capitation for a maximum annual expenditure of [*] in
                  calculated costs using the fee-for-service rates, for all
                  [*] for all Commercial HMO Members. After this threshold has
                  been reached, HMO shall assume financial responsibility for
                  such products for any such Member. HMO shall reimburse the
                  cost of the [*] after stop loss has been met, promptly upon
                  submission of an appropriate claim, based on the
                  fee-for-service rate schedule on Exhibit 1 of Addendum D.
                  PROVIDER shall notify HMO's Care Management department of each
                  Commercial HMO Member receiving [*] and shall work
                  cooperatively with HMO on care management. Notification shall
                  be according to the requirements in the Operations Manual.
                  Additionally, PROVIDER shall provide HMO on a monthly basis
                  the total accumulated Commercial HMO Member costs under this
                  stop loss provision. Failure to notify or inform HMO
                  accordingly may result in the loss of reimbursement to
                  PROVIDER.

         4.       STOP LOSS FOR [*]. PROVIDER shall be responsible under
                  Capitation for a maximum annual expenditure of [*] in
                  calculated costs using the fee-for-service rates, for all [*]
                  for all Commercial HMO Members. After this threshold has been
                  reached, HMO shall assume financial responsibility for such
                  products for any such Member. HMO shall reimburse the cost of
                  the [*] after stop loss has been met, promptly upon submission
                  of an appropriate claim, based on the fee-for-service rate
                  schedule on Exhibit 1 of Addendum D. PROVIDER shall notify
                  HMO's Care Management department of each Commercial HMO Member
                  receiving [*] and shall work cooperatively with HMO on care
                  management. Notification shall be according to the
                  requirements in the Operations Manual. Additionally, PROVIDER
                  shall provide HMO on a monthly basis the total accumulated
                  Commercial HMO Member costs under this stop loss provision.
                  Failure to notify or inform HMO accordingly may result in the
                  loss of reimbursement to PROVIDER.

         5.       AUTHORIZATIONS FOR DRUGS OR ITEMS AFTER STOP LOSS THRESHOLD.
                  It is understood that HNI does not require PROVIDER to obtain
                  PPG authorization for capitated services; however, upon proper
                  notification, HNI may require PROVIDER to obtain authorization
                  from the PPG or HNI for the drugs and/or products with stop
                  loss amounts.

         6.       COMPENSATION TO OTHER PROVIDERS OF PROVIDER RISK SERVICES.
                  PROVIDER shall compensate all Participating Providers of
                  Provider Risk Services to Members assigned to PROVIDER. In the
                  event that PROVIDER does not process and pay eligible claims
                  submitted by Participating Providers for Provider Risk
                  Services within timeframes required by law, after verification
                  with the PROVIDER that the claim was not paid for some valid
                  reason, HMO may pay such claims at the lesser of HMO's
                  contract rate, the PROVIDER's subcontract terms, or the
                  PROVIDER's billed charges, and shall deduct such amounts paid
                  from PROVIDER's Capitation as set forth in the Operations
                  Manual.

         7.       CAPITATION DEDUCTION DUE TO DELAY IN SERVICES. PROVIDER shall
                  be liable for an unplanned hospital bed day incurred by HMO
                  resulting from a delayed start of care or non-delivery of home
                  infusion services. Any such cases shall be reviewed by an HMO
                  Medical Director and PROVIDER on a case-by-case basis. Upon
                  determination that an unplanned hospital bed day occurred,
                  then HMO may pay such claims at the lesser of HMO's contract
                  rate or the Provider's billed charges, and shall deduct such
                  amounts paid from PROVIDER's Capitation as set forth in the
                  Operations Manual.

         8.       [*] PROGRAM. PROVIDER shall actively participate with medical
                  management staff, PPG and contracted hospitals, to assist in
                  Members being placed at an [*]. PROVIDER will assist as
                  requested in the evaluation of Member [*] PROVIDER shall also
                  actively collaborate with HNI in development or expansion of
                  this program. PROVIDER shall report activities related to this
                  [*] program as HNI requests.

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D.       NON-CONTRACTED AND EXCLUDED SERVICES:

         The following services are those services which PROVIDER is not
         responsible for rendering under Provider Risk Services or which HMO may
         not be responsible for providing under an applicable Benefit Program:

         1.       [*] are a medical benefit and may or may not be the financial
                  responsibility of the PPG. PROVIDER shall obtain authorization
                  from PPG and bill the Member's PPG or HNI if the [*] is shared
                  risk or plan risk. In recognition of the overall benefits and
                  services that PROVIDER brings to HNI and its Members receiving
                  [*], HNI agrees that prior to [*] of HNI Member receiving [*],
                  PROVIDER shall be afforded the opportunity to provide such [*]
                  that Member at [*] contained herein for said products.
                  Additionally, Provider and HNI shall meet monthly to review
                  all HNI Members receiving [*] to evaluate [*]. At the end of
                  [*] following the effective date of this Amendment, should
                  PROVIDER experience [*], it is agreed to by HNI that [*] HNI
                  to PROVIDER for Capitated Services shall be [*], effective on
                  the first day of the month following, [*].

         2.       OUT OF AREA. PROVIDER is not responsible for providing
                  emergency and out of area infusion services. However, for a
                  limited duration of one month, planned out-of-area infusion
                  services shall be considered Provider Risk Services as long as
                  a prior notification is given by the Member or PPG for such
                  occurrences.

         3.       [*] are a medical benefit, however, PROVIDER is not
                  responsible for providing these services under Provider Risk
                  Services. PROVIDER shall obtain authorization from PPG and
                  bill HNI for such [*] provided at the fee-for-service rate
                  schedule on Exhibit 1 of Addendum D. [*] are not included
                  within Provider Risk Services; however, PROVIDER shall be [*]
                  of such services to HMO Members.

         4.       [*] IN OTHER LOCATIONS. [*] in any place other than a Member's
                  residence, such as a physician's office, hospital, or
                  ambulatory care center are excluded from Provider Risk
                  Services. [*] at a long term care or skilled nursing
                  facilities shall likewise be excluded.

         5.       [*] HMO Member are excluded from Provider Risk Services.

         6.       [*] MEMBERS. For those beneficiaries who have [*], PROVIDER
                  shall be financially responsible only for infusion services as
                  Provider Risk Services beginning with [*]. Should a [*] be
                  financially responsible for such infusion services for a time
                  period [*], PROVIDER shall be financially responsible only for
                  [*] commencing on the day after [*] responsibility ends for
                  that Beneficiary. Should [*] Beneficiary require infusion
                  services prior to either of these events occurring, PROVIDER
                  shall be compensated by HNI when HNI is the Payor, based on
                  the compensation schedule set forth in the fee for service
                  rate schedule on Exhibit 1 of Addendum D until such time as
                  the Beneficiary [*] is no longer financially at risk; wherein
                  the infusion services would be included within Provider Risk
                  Services.

                  HNI shall provide a list of all HNI Beneficiaries who [*] as
                  soon as possible. PROVIDER shall review with HNI on a
                  quarterly basis the costs associated with the infusion
                  services provided to [*]. PROVIDER and HNI shall reevaluate
                  provision of infusion services to [*] after the first contract
                  year of the Agreement and the parties agree to use their best
                  efforts to make any necessary adjustments or revisions to
                  ensure that the provision of such infusion services are
                  feasible.

         7.       [*] FROM CAPITATION. [*] after the effective date of this
                  Amendment, unless

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                                  Page 8 of 32
<PAGE>

                  specifically listed as part of Provider Risk Services, are
                  excluded from Provider Risk Services. The infusion nursing and
                  supplies associated with the provision of these services to a
                  Member are also excluded as part of the Provider Risk Services
                  arrangement. PROVIDER shall submit claims and HMO shall pay
                  PROVIDER at the fee-for-service rate schedule on Exhibit 1 of
                  Addendum D.

         8.       NON-COVERED SERVICES. Services which are not covered by HMO
                  include, but are not limited to, the following:

                  a.       Food, housing, homemaker services, and home-delivered
                           meals.

                  b.       Home hemodialysis services, including the purchase or
                           rental of equipment required for renal dialysis
                           procedures.

                  c.       Services deemed not to be Medically Necessary or
                           appropriate by the PPG and HMO.

                  d.       Experimental drugs.

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                                  Page 9 of 32
<PAGE>

                                   ADDENDUM C

                          MEDICARE HMO BENEFIT PROGRAM

This Addendum sets forth additional terms which shall only apply to Members who
are enrolled in Medicare HMO Benefit Programs. PROVIDER understands and agrees
that the obligations as set forth in this Addendum are only the obligations of
Health Net of California, Inc., a California Health Plan, an Affiliate of HNI,
(hereafter separately "HMO" or collectively "HMOs"), and not the obligations of
HNI or any other Affiliate of HNI. In addition, Health Net of California, Inc.
shall be responsible only for those Medicare Members enrolled in Health Net's
Medicare HMO Benefit Program. In the event another HNI Affiliate is a licensed
health care service plan, the provisions of this Addendum shall also apply to
such Affiliate.

A.       DEFINITIONS. For purposes of this Addendum, the definitions included
         herein shall have the meaning required by law to applicable Medicare
         HMO Programs.

         1.       DOWNSTREAM PROVIDERS. A Participating Provider who or which is
                  contracted with PROVIDER to render services to Members.

         2.       CENTERS FOR MEDICARE & MEDICAID SERVICES. The Centers for
                  Medicare & Medicaid Services ("CMS") which is the agency of
                  the federal government within the Department of Health and
                  Human Services ("DHHS") responsible for administration of the
                  Medicare program.

         3.       MEDICARE+CHOICE ("M+C") ORGANIZATION OR M+CO. A health plan,
                  PROVIDER, or Downstream Provider sponsored organization who
                  has entered into an agreement with CMS to provide Medicare
                  beneficiaries with health care options.

         4.       MEDICARE SERVICE AREA. The area approved by CMS and the State
                  regulatory agency as the area in which HMO may market and
                  enroll Medicare HMO Members. At any given time during the term
                  of this Agreement, the Medicare Enrollment Area consists of
                  the list of zip codes currently approved by CMS and/or the
                  State regulatory agency as the Medicare Enrollment Area.

         5.       MEDICARE HMO MEMBER. An individual who has enrolled in or
                  elected coverage in Health Net Seniority Plus, an M+C
                  Organization.

         6.       OUT OF AREA. Any area outside of California, but within the
                  continental United States.

         7.       PMPM. For purposes of this Addendum, any per Member per month
                  ("PMPM") calculation shall be based on Medicare HMO Members
                  only.

         8.       HOSPICE RELATED CONDITIONS. Palliative or terminal care for
                  Medicare HMO Members who have been admitted to hospice care.

B.       DESCRIPTION OF PROVIDER RISK SERVICES:

         1.       Provider Risk Services shall be those Medically Necessary
                  Covered Services as defined by CMS for home infusion services
                  for Medicare eligible Members, as well as HMO's benefit
                  interpretation and administration for Medically Necessary
                  services. Home Infusion Services are services which involve
                  the dispensing and administration of prescribed intravenous
                  substances, injectables, solutions, PICC line insertions, and
                  patient education. All nursing services, equipment and
                  supplies which are necessary to provide such services are also
                  covered. Infusion patients do not need to be homebound but
                  must meet the criteria for home infusion care and meet the
                  requirements of the Utilization Program to be included as
                  Provider Risk Services.

                  The following conditions shall be included as part of the
                  Provider Risk Services:

                  -        Member's medical condition is such that if the Member
                           leaves home, it creates a public health hazard.

                  -        Member receives infusion services at school, work,
                           and/or residential board and care facilities.

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                                 Page 10 of 32
<PAGE>

                  -        Home infusion services for [*] Member are included in
                           Provider Risk Services. All nursing services related
                           to home infusion services for [*] Provider Risk
                           Services.

                  -        Home infusion therapy services are not restricted to
                           homebound Members.

                  The following Therapies are Provider Risk Services:

                  a.       [*]

                  b.       [*]

                  c.       [*]

                  d.       [*]

                  e.       [*]

                  f.       [*]

                  g.       [*]

                  h.       [*]

                  i.       [*]

                  j.       [*]

                  k.       [*]

                  l.       [*]

                  m.       [*]

                  n.       [*]

         2.       DURABLE MEDICAL EQUIPMENT. Durable Medical Equipment (DME) and
                  supplies (such as pumps and poles) used during the provision
                  of any infusion service are [*], except for insulin pumps and
                  supplies which are [*]

         3.       MEDICAL SUPPLIES. All supplies used in conjunction with an
                  infusion service and/or for teaching of a Member until Member
                  becomes independent, are considered as part of Provider Risk
                  Services.

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                                 Page 11 of 32
<PAGE>

C.       MEDICARE STANDARD HMO REIMBURSEMENT:

         1.       COMPENSATION FOR PROVIDER RISK SERVICES. Effective October 1,
                  2003, as compensation for providing Provider Risk Services,
                  HMO shall pay PROVIDER [*] Per Member Per Month (PMPM), each
                  month, for each Medicare HMO Member eligible to receive such
                  services from PROVIDER during that month. Capitation shall be
                  computed on the basis of the most current information
                  available in the eligibility file of HMO. Capitation payment
                  shall be paid by HMO by wire transfer on or before the
                  fifteenth (15th) day of each month or the first business day
                  following the fifteenth if the fifteenth is a holiday or on a
                  weekend. Each Capitation payment shall be accompanied by a
                  remittance summary by electronic or paper media. The
                  remittance summary identifies the total Capitation payable and
                  those Medicare HMO Members for whom Capitation is being paid.
                  In the event of a Capitation error, resulting in an
                  overpayment or underpayment to PROVIDER, HMO shall adjust
                  subsequent Capitation to offset such error. Adjustments of
                  overpayment to PROVIDER may only be taken by HMO within ninety
                  (90) days of a Capitation payment.

         2.       [*] STOP LOSS. PROVIDER shall be responsible under Provider
                  Risk Services for a maximum of annual expenditure of [*] in
                  calculated costs using the fee-for-service rates, for all [*]
                  for all Medicare HMO Members. The threshold shall be
                  calculated using the fee for service rate schedule in Exhibit
                  1 of Addendum D. After this threshold has been reached, HMO
                  shall assume financial responsibility for such products for
                  any such Member. HMO shall reimburse the cost of the [*] after
                  stop loss has been met, promptly upon submission of an
                  appropriate claim, based on the fee-for-service rate schedule
                  on Exhibit 1 of Addendum D. PROVIDER shall notify HMO's Care
                  Management department of each Medicare HMO Member receiving
                  [*] and shall work cooperatively with HMO on care management.
                  Notification shall be according to the requirements in the
                  Operations Manual. Additionally, PROVIDER shall provide HMO on
                  a monthly basis the total accumulated Medicare HMO Member
                  costs under this stop loss provision. Failure to notify or
                  inform HMO accordingly may result in the loss of reimbursement
                  to PROVIDER.

         3.       [*] STOP LOSS. PROVIDER shall be responsible under Provider
                  Risk Services for a maximum of annual expenditure of [*] in
                  calculated costs using the fee-for-service rates, for all [*]
                  for all Medicare HMO Members. The threshold shall be
                  calculated using the fee for service rate schedule in Exhibit
                  1 of Addendum D. After this threshold has been reached, HMO
                  shall assume financial responsibility for such products for
                  any such Member. HMO shall reimburse the cost of the [*] after
                  stop loss has been met, promptly upon submission of an
                  appropriate claim, based on the fee-for-service rate schedule
                  on Exhibit 1 of Addendum D. PROVIDER shall notify HMO's Care
                  Management department of each Medicare HMO Member receiving
                  [*] and shall work cooperatively with HMO on care management.
                  Notification shall be according to the requirements in the
                  Operations Manual. Additionally, PROVIDER shall provide HMO on
                  a monthly basis the total accumulated Medicare HMO Member
                  costs under this stop loss provision. Failure to notify or
                  inform HMO accordingly may result in the loss of reimbursement
                  to PROVIDER.

         4.       STOP LOSS [*]. PROVIDER shall be responsible under Capitation
                  for a maximum annual expenditure of [*] in calculated costs
                  using the fee-for-service rates, for all [*] for all Medicare
                  HMO Members. After this threshold has been reached, HMO shall
                  assume financial responsibility for such products for any such
                  Member. HMO shall reimburse the cost of the [*] after stop
                  loss has been met, promptly upon submission of an appropriate
                  claim, based on the fee-for-service rate schedule on Exhibit 1
                  of Addendum D. PROVIDER shall notify HMO's Care Management
                  department of each Medicare HMO Member receiving [*] for
                  [*] and shall work cooperatively with HMO on care management.
                  Notification shall be according to the requirements in the
                  Operations Manual. Additionally, PROVIDER shall provide HMO on
                  a monthly basis the total accumulated Medicare HMO Member
                  costs under this stop loss provision. Failure to notify or
                  inform HMO accordingly may result in the loss of reimbursement
                  to PROVIDER.

         5.       PROVIDER shall include specific payment and incentive
                  arrangements in any agreement with a Downstream Provider.

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                                 Page 12 of 32
<PAGE>

         6.       PROVIDER shall pay claims promptly according to CMS standards
                  and comply with all payment provisions of State and federal
                  law. CMS requires non-contracted provider claims to be paid
                  within thirty (30) days of receipt and contracted provider
                  claims to be paid within sixty (60) days of receipt.

         7.       PROVIDER agrees that Members' health services are being paid
                  for with federal funds, and as such payments for such services
                  are subject to laws applicable to individuals or entities
                  receiving federal funds.

         8.       PROVIDER shall actively participate with medical management
                  staff, PPG and contracted hospitals, to assist in Members
                  being placed at an [*]. PROVIDER will assist as requested in
                  the evaluation of [*]. PROVIDER shall also actively
                  collaborate with HNI in development or expansion of this
                  program. PROVIDER shall report activities related to this [*]
                  program as HNI requests.

D.       NON-CONTRACTED AND EXCLUDED SERVICES:

         The following services are those services which PROVIDER is not
         responsible for rendering under Provider Risk Services or which HMO may
         not be responsible for providing under an applicable Benefit Program:

         1.       [*] are a medical benefit and may or may not be the financial
                  responsibility of the PPG. PROVIDER shall obtain authorization
                  from PPG and bill the Member's PPG or HNI if the [*] is shared
                  risk or plan risk. In recognition of the overall benefits and
                  services that PROVIDER brings to HNI and its Members receiving
                  [*], HNI agrees that prior to [*] of HNI Member receiving [*],
                  PROVIDER shall be afforded the opportunity to provide such [*]
                  to that Member at [*] contained herein for said products.
                  Additionally, Provider and HNI shall meet monthly to review
                  all HNI Members receiving [*] to evaluate [*]. At the end of
                  [*] following the effective date of this Amendment, should
                  PROVIDER experience [*], it is agreed to by HNI that the [*]
                  by HNI to PROVIDER for Capitated Services shall be [*],
                  effective on the first day of the month following, [*].

         2.       OUT OF AREA. PROVIDER is not responsible for providing
                  emergency and out of area infusion services. However, for a
                  limited duration of one month, planned out-of-area infusion
                  services shall be considered Provider Risk Services as long as
                  a two-week notification is given by the Member or PPG for such
                  occurrences.

          3.      [*]. [*] are a medical benefit, however, PROVIDER is not
                  responsible for providing these services under Provider Risk
                  Services. PROVIDER shall obtain authorization from PPG and
                  bill HNI for such [*] provided at the fee-for-service rate
                  schedule in Exhibit 1 of Addendum D. [*] are not included
                  within Provider Risk Services, however, PROVIDER shall be [*}
                  of such services to Medicare HMO Members.

         4.       [*] IN OTHER LOCATIONS. [*] in any place other than a Member's
                  residence, school or work place, such as a physician's office,
                  hospital, or ambulatory care center are excluded from Provider
                  Risk Services. [*] at a long term care or skilled nursing
                  facilities shall likewise be excluded.

         5.       [*] MEMBERS. For those beneficiaries who have [*], PROVIDER
                  shall be financially responsible only for infusion services as
                  Provider Risk Services beginning with [*]. Should a [*] be
                  financially responsible for such infusion services for a time
                  period [*], PROVIDER shall be financially responsible only for
                  [*] commencing on the day after the [*] responsibility ends
                  for that Beneficiary. Should a [*] Beneficiary require
                  infusion services prior to either of these events occurring,
                  PROVIDER shall be compensated by HNI when HNI is the Payor,
                  based on the compensation schedule set forth in the fee for
                  service rate schedule on Exhibit 1 of Addendum D until

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                                 Page 13 of 32
<PAGE>


                  such time as the Beneficiary [*] is no longer financially at
                  risk; wherein the infusion would be included within Provider
                  Risk Services.

                  HNI shall provide a list of all HNI Beneficiaries who are [*]
                  as soon as possible. PROVIDER shall review with HNI on a
                  quarterly basis the costs associated with the infusion
                  services provided to [*]. PROVIDER and HNI shall reevaluate
                  provision of infusion services to [*] after the first contract
                  year of the Agreement and the parties agree to use their best
                  efforts to make any necessary adjustments or revisions to
                  ensure that the provision of such infusion services are
                  feasible.

         6.       EXCLUDED SERVICES AND DRUGS. The following drugs and services
                  are excluded from Provider Risk Services for Medicare HMO
                  Members. In the event that the PROVIDER is asked to provide
                  such services, then PROVIDER shall be reimbursed based on the
                  compensation schedule set forth in the fee-for-service rate
                  schedule in Exhibit 1 of Addendum D. HMO shall compensate
                  PROVIDER for such claims, less applicable Co-payments,
                  coinsurance, deductibles and payments from third parties or
                  coordination of benefits. These excluded services are the
                  following:

                  a.       [*]

                  b.       [*]

                  c.       [*]

                  d.       [*]

         7.       [*] FROM CAPITATION. [*] after the effective date of this
                  Agreement unless specifically listed as part of Provider Risk
                  Services, are excluded from Provider Risk Services. The
                  infusion nursing and supplies associated with the provision of
                  these services to a Member are also excluded as part of the
                  Provider Risk Services arrangement. PROVIDER shall submit
                  claims and HMO shall pay PROVIDER at the fee-for-service rate
                  schedule on Exhibit 1 of Addendum D.

         8.       NON-COVERED SERVICES. Services which are not covered by
                  Medicare HMO include, but are not limited to, the following:

                  a.       Food, housing, homemaker services, and home-delivered
                           meals.

                  b.       Home hemodialysis services, including the purchase or
                           rental of equipment required for renal dialysis
                           procedures.

                  c.       Services deemed not to be medically necessary or
                           appropriate by the PPG and HMO.

                  d.       Experimental drugs.

E.       MEDICARE POINT OF SERVICE REIMBURSEMENT PROGRAM

         1.       POINT OF SERVICE BENEFIT PROGRAM. Under a POS Benefit Program,
                  Medicare POS Members may elect, at the time of obtaining each
                  Covered Service, to utilize: (i) HMO coverage through PPG;
                  (ii) coverage by self-referring to any PPO Provider; or (iii)
                  coverage to self-referring to non-Participating Providers in
                  accordance with Benefit program requirements. Medicare HMO
                  Members may be eligible for Medicare POS Benefit Programs.

         2.       FEE-FOR-SERVICE COMPENSATION. PROVIDER shall render Contracted
                  Services to Medicare POS Members under this Addendum C on a
                  fee-for-service basis. As compensation for rendering such
                  Contracted Services, PROVIDER shall be paid the lesser of: a)
                  the rates set forth in Exhibit 1 of Addendum D; or b) Medicare
                  Allowable rates when available. PROVIDER shall submit claims
                  in accordance with Article IV. PROVIDER shall be paid for a
                  clean complete and accurate claim for Contracted Services
                  rendered to Medicare POS Members in accordance with applicable
                  State or federal law.

         3.       PROVIDER shall include specific payment and incentive
                  arrangements in any agreement with a Downstream Provider.

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                                 Page 14 of 32
<PAGE>

         4.       PROVIDER shall pay Downstream Providers' claims promptly
                  according to CMS standards and comply with all payment
                  provisions of State and federal law. CMS requires
                  non-contracted provider claims to be paid within thirty (30)
                  days of receipt and contracted provider claims to be paid
                  within sixty (60) days of receipt.

         5.       PROVIDER agrees that Members health services are being paid
                  for with federal funds, and as such, payments for such
                  services are subject to laws applicable to individuals or
                  entities receiving federal funds.

F.       ACCESS: RECORDS AND FACILITIES

         1.       PROVIDER agrees to give the Department of Health and Human
                  Services ("DHHS"), and the General Accounting Office ("GAO")
                  or their designees the right to audit, evaluate, inspect
                  books, contracts, medical records, patient care documentation,
                  other records of subcontractors, or related entities for the
                  later of seven (7) years, or for periods exceeding seven (7)
                  years, for reasons specified in the federal regulation.

G.       MEMBER PROTECTIONS/ACCESS: BENEFITS & COVERAGE

         1.       PROVIDER agrees to not collect any co-payment or other cost
                  sharing for influenza vaccine and pneumococcal vaccines.

         2.       PROVIDER agrees to provide access to benefits in a manner
                  described by CMS.

         3.       PROVIDER agrees to provide all covered benefits to Members in
                  a manner consistent with professionally recognized standards
                  of health care.

         4.       PROVIDER agrees to pay for Emergency and urgently needed
                  services consistent with federal regulations, if such services
                  are PROVIDER's liability.

H.       COMPLIANCE

         1.       PROVIDER agrees that PROVIDER must notify a Participating
                  Provider prior to being terminated, in writing, of the
                  reason(s) for denial, suspension or termination determination.

         2.       PROVIDER agrees to comply with all applicable HNI procedures
                  and the Operations Manual including, but not limited to, the
                  accountability provisions.

         3.       PROVIDER agrees to comply with and require that all Downstream
                  Providers comply with applicable State and federal laws and
                  regulations, including Medicare laws and regulations and CMS
                  instructions.

         4.       PROVIDER agrees to adhere to Medicare's appeals, expedited
                  appeals and expedited review procedures for HNI Members,
                  including gathering and forwarding information on appeals to
                  HNI, as necessary.

I.       ADOPTION OF MEDICARE RISK PROGRAM CONTRACT REQUIREMENTS

         1.       PROVIDER agrees that all agreements with Participating
                  Providers must be signed and dated.

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                                 Page 15 of 32
<PAGE>

                             EXHIBIT 1 TO ADDENDUM D
                      FEE-FOR-SERVICE COMPENSATION SCHEDULE

A.       COVERED SERVICES/UTILIZATION REVIEW:

         1.       HNI shall reimburse PROVIDER for Home Infusion Services when
                  provided in accordance with a Member's Coverage Certificate
                  and when properly requested by the Member's Participating
                  Provider Group (PPG) Member Physician.

                  Home Infusion Services are services which involve the
                  dispensing and administration of prescribed intravenous
                  substances and solutions, and patient education, and subject
                  to the conditions and limitations of this Agreement and the
                  Member's Coverage Certificate.

                  Durable Medical Equipment Services means those services which
                  PROVIDER customarily provides to Members including, but not
                  limited to: Durable Medical Equipment and supplies; subject to
                  the conditions and limitation of this Agreement and the
                  Member's Coverage Certificate.

         2.       PROVIDER agrees to comply with any limitations specified by a
                  Member Physician regarding the scope of services to be
                  provided, duration of treatment, or other limitations.

         3.       PROVIDER agrees that the plan of treatment for the Member
                  shall contain specific orders as to the nature and frequency
                  of services to be rendered by PROVIDER as well as to related
                  equipment and supplies. The treatment plan as well as
                  subsequent telephone orders shall be signed and dated by the
                  Member's Participating Provider Group Member Physician.

         4.       PROVIDER agrees to provide services on a 24-hour per day,
                  seven days per week basis.

         5.       PROVIDER agrees to provide care within twenty-four (24) hours
                  of receiving the request from the PPG Member Physician or HNI.

         6.       PROVIDER agrees to verify coverage, eligibility, and treatment
                  plan of Members as appropriate, but in no event less often
                  than monthly.

         7.       PROVIDER agrees to utilize HNI contracted providers in the
                  provision of services to HNI Members, including but not
                  limited to durable medical equipment, hospitals, and other
                  providers.

         8.       PROVIDER agrees to maintain a State license as a home health
                  agency as well as certification as a Medicare (Part B)
                  provider.

B.       BILLING REQUIREMENTS:

         PROVIDER shall submit claims with the following information in a
         standard CMS 1500 (HCFA 1500) paper claim form, or electronically in a
         standard electronic claim format that is both acceptable to HNI and
         compliant with all applicable state and federal laws and regulations:

         1.       Member name

         2.       SUBSCRIBER I. D. number

         3.       Dates of service

         4.       Diagnosis of patient (ICD-9)

         5.       Description of services

         6.       Procedure codes, HCPC, Revenue Codes, NDC

         7.       Charges for services

         8.       Physician ordering service

         9.       Authorization information

         10.      Other insurance coverage (when applicable)

         11.      PROVIDER's Federal Tax ID and remit address

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 16 of 32
<PAGE>

C.       HOME INFUSION COMPENSATION INCLUDES:

         PROVIDER shall be compensated for services rendered under this Addendum
         according to the following rates and payment guidelines. Such
         compensation shall be paid subject to the billing requirements set
         forth in the Agreement.

         HNI shall pay all claims within parameters set forth by state or
         federal law.

         All aspects of PROVIDER's comprehensive services are covered under one
         of several therapy specific prices. The therapy services listed within
         are inclusive of the following:

         1.       Intravenous pharmaceuticals compounded under laminar flow
                  conditions

         2.       Standard medical supplies and equipment (unless specifically
                  excluded in therapy description)

         3.       Pharmacological monitoring and consultations

         4.       Hazardous waste disposal

         5.       Delivery of standard medical supplies, equipment, and
                  pharmaceuticals to patient/care giver

         6.       Twenty-four hour availability of clinical expertise and
                  services, including weekends and holidays.

         7.       Per diems include [*], in conjunction with therapy
                  administration, unless otherwise specified. [*] shall be
                  billed separately at the appropriate rates contained herein.
                  When included in the per diem, [*] should be coded separately
                  on claims.

         8.       Per diem shall mean each day that a patient receives a dose of
                  pharmaceutical products and/or nursing or other Covered
                  Services pursuant to this agreement.

         9.       Support services related to delivery and transportation,
                  equipment, rental of infusion pumps and IV poles and other
                  related equipment, line maintenance, obtaining of laboratory
                  specimens (exception: lab draws ordered for purposes unrelated
                  to authorized therapies), pharmacy compounding and dispensing,
                  and equipment cleaning.

         10.      Support services facilitating patient access and care,
                  including pre-certification and/or preauthorization services,
                  education and training, and other customer services

         11.      For drug claims billed through HNI's medical claims system,
                  all medications shall be reimbursed at Average Wholesale Price
                  ("AWP") minus a discount where indicated on each therapy.
                  "AWP" shall mean the average wholesale price of the designated
                  pharmaceutical product as listed in the most recently
                  published and available edition of the Medical Economics
                  Redbook guide to pharmaceutical prices.

D.       COMPENSATION FOR FEE-FOR-SERVICES (FFS) - HOME INFUSION:

         1.       ANTIBIOTIC, ANTIVIRAL, AND ANTIFUNGAL THERAPY:

                  Rate is applicable for central or peripheral lines and shall
                  include a per diem plus the drug.

                  Dosing Schedule

                  Every 24 hours, q24               [*]
                  Every 12 hours, q12               [*]
                  Every 8 hours, q8                 [*]
                  Every 6 hours, q6                 [*]
                  Every 4 hours, q4                 [*]
                  Every 3 hours, q3                 [*]

         2.       TOTAL PARENTERAL NUTRITION (TPN) THERAPY

                  TPN therapy consists of amino acid/dextrose; including, but
                  not limited to, electrolytes, vitamins (excluding Vitamin K),
                  trace elements, insulin and heparin. The TPN therapy service
                  is composed of the daily per-diem rate, determined by the
                  daily volume of TPN solution. The per diem rate for TPN
                  therapy INCLUDES the TPN solutions. There is NOT a separate
                  rate for the AWP of the solutions. Only lipids will be paid at
                  a separate rate, as detailed below. The pump is included in
                  the per diem rates. All other specialty drug additives shall
                  be billed at [*].

                  Standard TPN Solution per 24 hour cycle

                  Solution 1.0. or less liters per day         [*]
                  Solution 1.1. to 2.0 liters per day          [*]
                  Solution 2.1 to 3.0 liters per day           [*]
                  Solution 3.1 liters or greater per day       [*]

                  Lipids will be paid in addition to the standard per diem for
                  Solution:

                  10% up to 500 ml                             [*]
                  20% up to 500 ml                             [*]

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 17 of 32
<PAGE>

         3.       ANTICOAGULATION THERAPY                       [*]
                                                                [*]

                  Heparin (continuous infusion or subcutaneous)

         4.       HYDRATION THERAPY                             [*]

                  Hydration therapy consists of fluids with electrolytes. The
                  hydration therapy service is composed of the daily per diem
                  rate. The per diem rate for Hydration therapy includes the
                  charge for the fluids and electrolytes.
                  All additional additives shall be billed at:  [*]

         5.       PAIN MANAGEMENT                               [*]
                                                                [*]

                  Continuous or intermittent pain management, one drug or
                  multiple drugs

         6.       CHEMOTHERAPY                                  [*]
                                                                [*]

                  Chemotherapy, one or more drugs. [*]

         7.       STEROID THERAPY                               [*]
                                                                [*]

                  Including, but not limited to Solumedrol

         8.       AEROSOLIZED THERAPIES

                  Pentamidine                                   [*]
                                                                [*]

         9.       IRON BINDING THERAPY (CHELATION)              [*]
                                                                [*]

         10.      INOTROPIC CARDIAC DRUGS                       [*]
                                                                [*]

         11.      INFUSION CATHETER SUPPLIES AND MAINTENANCE    [*]

                  The central line maintenance rate is a per diem rate and
                  includes supplies needed to maintain a catheter.

         12.      INTRAVENOUS IMMUNE GLOBULIN (IVIG/IGIV)       [*]

                  [*]

         13.      GROWTH HORMONE THERAPY

                  [*] When Growth Hormone products are [*], then the AWP source
                  shall be [*]. When Growth Hormone products are [*], then the
                  AWP source shall be [*].

                                                REDBOOK          MEDISPAN

                  Genotropin                   [*]               [*]
                  Humatrope                    [*]               [*]
                  Nutropin                     [*]               [*]
                  Nutropin AQ                  [*]               [*]
                  Nutropin Depo                [*]               [*]
                  Norditropin                  [*]               [*]
                  Protropin                    [*]               [*]
                  Saizen                       [*]               [*]
                  Geref                        [*]               [*]

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 18 of 32
<PAGE>

         14.      BLOOD FACTOR PRODUCTS

                  [*] When Blood Factor Products are [*], then the AWP source
                  shall be [*]. When Blood Factor Products are [*], then the AWP
                  source shall be [*].

                                                   REDBOOK        MEDISPAN

                  FACTOR VIII (RECOMBINANT)

                  Advate                          [*]             [*]
                  Recombinate                     [*]             [*]
                  Helixate FS                     [*]             [*]
                  Kogenate FS                     [*]             [*]
                  Refacto                         [*]             [*]

                  FACTOR VIII (MONOCLONAL)

                  Hemophil M                      [*]             [*]
                  Monoclate P                     [*]             [*]
                  Monarc-M                        [*]             [*]

                  FACTOR VIII (OTHER)

                  Humate-P (per ROCF unit)        [*]             [*]
                  Koate DVI  (not Koate HP)       [*]             [*]
                  Alphanate SD                    [*]             [*]

                  FACTOR IX (RECOMBINANT)

                  Benefix                         [*]             [*]

                  FACTOR IX (MONOCLONAL)

                  Mononine                        [*]             [*]

                  FACTOR IX (OTHER)

                  Alphanine SD                    [*]             [*]
                  Konyne 80                       [*]             [*]
                  Profilnine SD                   [*]             [*]
                  Bebulin-VH                      [*]             [*]

                  ANTI-INHIBITOR COMPLEX

                  Hyate C                         [*]             [*]
                  Autoplex-T                      [*]             [*]
                  Feiba VH                        [*]             [*]
                  Proplex T                       [*]             [*]

                  FACTOR VII

                  Novoseven                       [*]             [*]

         15.      REMICADE THERAPY

                  [*]                                                  [*]
                                                                       [*]
                  [*]                                                  [*]
                  [*]

         16.      PICC LINE INSERTION                           [*]

                  The PICC Line Insertion Service consists of a charge for each
                  PICC Line Insertion. Verification of PICC placement via X-Ray
                  is not included, and PROVIDER is not responsible for the cost
                  of the X-Ray.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 19 of 32
<PAGE>

         17.      INJECTABLE MEDICATIONS

                  [*]

                                                      REDBOOK       MEDISPAN

                  Lovenox                            [*]            [*]
                  Neupogen                           [*]            [*]
                  Epogen                             [*]            [*]
                  Procrit                            [*]            [*]
                  Neulasta                           [*]            [*]
                  Aranesp                            [*]            [*]
                  Synagis                            [*]            [*]
                  Other Subcutaneous Injectables     [*]            [*]

         18.      [*]

                  Cerezyme Therapy (unit price)     [*]
                  Aralast(R)                        [*]
                  All Others                        [*]

         19.      ENTERAL NUTRITION THERAPY

                  The per diem rates of all levels of enteral nutrition therapy
                  shall be inclusive of all standard medical supplies, pump, IV
                  poles, delivery, hazardous waste disposal, dietitian services
                  and pharmacy management services. [*]

                  Level 1    Bolus                          [*]
                  Level 2    Gravity                        [*]
                  Level 3    Continuous                     [*]
                  Level 4*   Oral formula                   [*]

                  *  Level 4, Oral formula therapy is not a covered benefit.
                     However, the rate is defined in the event HNI Medical
                     Management grants the benefit on a case by case basis.

         20.      BLOOD TRANSFUSIONS

                  Packed red blood cells - first unit
                    Blood costs, leukocyte depletion filter:      [*]

                  Each additional unit of Packed red blood cells
                    Blood costs, leukocyte depletion filter:      [*]

                  Platelets (per transfusion)
                    Cost of platelets, leukocyte depletion        [*]
                     filter:

                  The rates for blood transfusions [*]

         21.      OTHER INFUSION THERAPIES

                  Miscellaneous infusion therapy, not           [*]
                  otherwise classified

         22.      NURSING SERVICES:

                  Nursing Services (per visit up to 2 hours)*   [*]
                  Nursing Services (each additional hour)*      [*]

                  [*]

         23.      RETURNED GOODS

                  All patient-specific drugs and solutions will be charged at
                  the time of preparation and no credit will be allowed for
                  return of such goods.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 20 of 32
<PAGE>

E.       COMPENSATION FOR REIMBURSEMENT THROUGH THE PHARMACY BENEFIT MANAGER
         (PBM):

         PROVIDER agrees to provide directly to HNI Members the medications
         listed on the HNI Approved Self Injectable List, and to bill HNI
         through the PBM's system for such medications. Upon mutual agreement,
         HNI shall enter an authorization into the pharmacy claims processing
         computer system to allow PROVIDER claims for the prescribed
         self-injectable medication to be adjudicated on-line through the PBM's
         adjudication system.

         PROVIDER agrees to obtain patient's diagnosis, any pertinent laboratory
         data and prior medications used, as well as to calling HNI's Pharmacy
         Department for determination of medical necessity, prior to fulfilling
         any orders for medications delivered to HNI Members

         HNI shall reimburse PROVIDER an amount equal to the sum of the Drug
         Acquisition Cost as described below, or PROVIDER's usual and customary
         charge, whichever is less, for each authorized and Covered Service,
         less applicable Co-payments.

         For drug claims billed through the PBM, AWP shall mean the price for a
         prescription medication provided to an HNI Member that is established,
         no less than monthly, by Medispan.

         The Drug Acquisition Cost for each pharmaceutical product shall equal
         the lesser of following amount:

         1.       [*] Medications

         2.       [*]

         3.       [*]

         4.       [*] for Generic Medications on the HNI MAC List

         5.       [*] for Generic Medications not included in the MAC List

         6.       [*] for the prescription medication

         All pricing shall include the following:

                  -        [*]

                  -        [*]

         In addition to the HNI Approved Self Injectable List, PROVIDER may bill
         HNI's PBM system for any other drugs that HNI and PROVIDER may agree in
         advance to adjudicate through the PBM. PROVIDER must have prior
         authorization before PROVIDER fulfills any orders for medications
         delivered to HNI Members.

F.       COMPENSATION FEE-FOR-SERVICE (FFS) -  DURABLE MEDICAL EQUIPMENT (DME):

         DME services are offered by PROVIDER only in San Diego County. PROVIDER
         shall notify HNI upon its ability to provide DME services in other
         areas.

         HNI SHALL REIMBURSE PROVIDER BASED ON THE CURRENT DMERC REGION D
         MEDICARE FEE SCHEDULE WITH DISCOUNTS AS FOLLOWS:

         DME                [*]
         Respiratory        [*]
         Medical Supplies*  [*]
         Unlisted Items     [*]

         [*]

         The description of DME categories and terms are as follows:

                  1.       CAPPED RENTAL ITEMS (CR). This category includes DME
                           which is generally rented monthly rather than
                           purchased). Rental payment will be made for a maximum
                           of 13 months. PROVIDER must continue to supply the
                           rented DME at no additional charge after the maximum
                           rental period is met. PROVIDER shall be paid a
                           maintenance-servicing fee every six months for a
                           capped rental item. The maintenance and service fee
                           shall be equal to one month rental rate for the item.

                  2.       FREQUENTLY SERVICED ITEMS (FS). This category
                           includes items which require frequent and substantial
                           servicing in order to avoid risk to the patients
                           health. These items are rented monthly with no rental
                           cap as long as it is medically appropriate for the
                           Member's condition. HNI shall not pay a maintenance
                           or servicing fee on these items.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 21 of 32
<PAGE>

                  3.       INEXPENSIVE AND ROUTINELY PURCHASED ITEMS (IR). This
                           includes DME whose purchase price generally does not
                           exceed $150.00 (Medicare rate) or DME which is
                           generally purchased at least 75% of the time. Payment
                           for IR items shall be made on a rental basis or in a
                           lump-sum purchase amount. If rental rather than
                           lump-sum purchase is chosen, the total amount of
                           rental payments may not exceed the allowed lump-sum
                           purchase amount.

                  4.       TRACHEOSTOMY(OS). These are also inexpensive
                           routinely purchased supplies that are required for
                           surgically created opening, tracheostomy care.
                           Supplies will be limited to Usual Maximum Quantity of
                           Supplies as suggested in DMERC Region D Supplier
                           Manual.

                  5.       OXYGEN AND OXYGEN EQUIPMENT (OX). Included in this
                           category are oxygen (both gaseous and liquid) and all
                           equipment and supplies used to deliver oxygen to the
                           patient. These items will be rented monthly with no
                           rental cap for three months at a time as long as it
                           is medically appropriate. After three months rental,
                           an authorization extension request by the provider
                           must be accompanied with a follow up test of the
                           initial indications, performed within the final 30
                           days of that 90-day period. Payments for stationary
                           oxygen system rentals and for oxygen provided to
                           Members are included. The provider must bill on a
                           monthly basis for all covered oxygen equipment and/or
                           oxygen contents furnished during a month, regardless
                           of the number of times delivery of oxygen or
                           equipment was made in that month. Because the monthly
                           payment is all inclusive, the single monthly bill
                           must show each reported HCPCS oxygen/equipment code
                           only once. Further:

                           a.       All stationary liquid oxygen systems shall
                                    include [*]

                           b.       All oxygen concentrator and compressed
                                    oxygen stationary system rentals [*]

                  6.       REHABILITATION SERVICES. A Customized Wheelchair
                           (including but not limited to Specialized Wheelchairs
                           and Adaptive Strollers) is defined as any wheelchair
                           that has been modified with non-standard features
                           and/or adapted with specific consideration made for a
                           Member's body size, disability, period of need or
                           extended use and has been assembled by a supplier or
                           ordered from a manufacturer who makes available
                           customized features, modifications or components for
                           wheelchairs. The wheelchair or adaptive stroller is
                           intended for individual use in accordance with
                           instructions from the Member's physician.

CONDITIONS:

                  1.       All purchased or rental equipment shall include all
                           medically necessary supplies and training, to ensure
                           delivery of the treatment prescribed

                  2.       HNI shall not reimburse:

                           a.       For delivery and pick up of the
                                    rented/purchased item.

                           b.       For training of the patient and/or the
                                    family on the use of the item.

                           c.       For after hours, weekend, holiday
                                    availability for delivery of
                                    rental/purchased DME.

                  3.       HNI shall reimburse PROVIDER at [*] for any HCPCS
                           codes not listed in the DMERC Region D fee schedule.

                  4.       PROVIDER agrees that in no event shall total rental
                           reimbursement exceed the purchase price of an item.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 22 of 32
<PAGE>

                             EXHIBIT 2 TO ADDENDUM D
                            CUSTOM EQUIPMENT PRICING

<TABLE>
<CAPTION>
 HCPC                                                                   ALLOWABLE
 CODE                        DESCRIPTION                                  AMOUNT      DISCOUNT      RATE
 ----                        -----------                                  ------      --------      ----
<S>      <C>                                                            <C>           <C>        <C>
E0192    Low pressure and positioning equalization pad for wheelchair   [*]             [*]      [*]

E1230    Power operated vehicle includes: 3 wheel, non-highway( belt    [*]             [*]      [*]
         or direct drive), all other three wheeled scooters, and all
         4 wheel scooters

K0005    Ultra lightweight Wheelchair                                   [*]             [*]      [*]

K0008    Custom manual wheelchair/base                                  [*]             [*]      [*]

K0009    Other manual wheelchair/base                                   [*]             [*]      [*]

K0011    Standard weight frame motorized / power wheelchair with        [*]             [*]      [*]
         programmable control parameters for speed adjustment, tremor
         dampening, acceleration control and braking.

K0014    Other motorized wheelchair base - Specialty power base         [*]             [*]      [*]

K0108    Other accessories                                              [*]             [*]      [*]

K0109    Customization of wheelchair base frame options or accessories  [*]             [*]      [*]

K0115    Seating system, back module, posterior-lateral control, with   [*]             [*]      [*]
         or without lateral supports, custom fabricated for
         attachment to wheelchair base

K0116    Seating system, combined back and seat module, custom          [*]             [*]      [*]
         fabricated for attachment to wheelchair base.

E1340    Repair or non-routine service for durable medical equipment    [*]             [*]      [*]
         requiring the skill of a technician, labor component - Rate
         is per 1/4 hour intervals

K0012    Lightweight portable motorized / power wheelchair              [*]             [*]      [*]

K0015    Detachable, non adjustable height armrest                      [*]             [*]      [*]

K0016    Detachable, adjustable height armrest, complete                [*]             [*]      [*]

K0017    Detachable, adjustable height armrest, base                    [*]             [*]      [*]

K0018    Detachable, adjustable height armrest, upper                   [*]             [*]      [*]

K0019    Arm pad, (ea.)                                                 [*]             [*]      [*]

K0020    Fixed, adjustable height armrest, pair                         [*]             [*]      [*]

K0021    Anti-tipping device (ea.)                                      [*]             [*]      [*]

K0022    Reinforced back upholstery                                     [*]             [*]      [*]

K0023    Solid back insert, planner back, single density foam           [*]             [*]      [*]
         attached w/straps

K0024    Solid back inset, planner back, single density foam            [*]             [*]      [*]
         w/adjustable hook on hardware

K0025    Hook on headrest extension                                     [*]             [*]      [*]

K0026    Back upholstery for ultra lightweight or high strength         [*]             [*]      [*]
         lightweight wheelchair

K0027    Back upholstery for wheelchair -type other than ultra          [*]             [*]      [*]
         lightweight or high strength

K0028    Fully reclining back                                           [*]             [*]      [*]

K0029    Reinforced seat upholstery                                     [*]             [*]      [*]

K0030    Solid seat insert, planar seat, single density foam,           [*]             [*]      [*]
         non-custom specified

K0031    Safety belt/pelvic strap                                       [*]             [*]      [*]

K0032    Seat upholstery for ultra lightweight or high strength         [*]             [*]      [*]
         lightweight wheelchair

K0033    Seat upholstery for wheelchair types other than ultra          [*]             [*]      [*]
         lightweight or high strength

K0034    Heel loop (ea.)                                                [*]             [*]      [*]

K0035    Heel loop w/ankle strap (ea.)                                  [*]             [*]      [*]

K0036    Toe loop (ea.)                                                 [*]             [*]      [*]

K0037    High mount flip up                                             [*]             [*]      [*]
</TABLE>

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 23 of 32
<PAGE>

<TABLE>
<S>      <C>                                                            <C>             <C>      <C>
K0038    Leg strap (ea.)                                                [*]             [*]      [*]

K0039    Leg strap, H style (ea.)                                       [*]             [*]      [*]

K0040    Adjustable angle foot plate (ea.)                              [*]             [*]      [*]

K0041    Large size foot plate (ea.)                                    [*]             [*]      [*]

K0042    Standard size foot plate (ea.)                                 [*]             [*]      [*]

K0043    Footrest, lower extension tube (ea.)                           [*]             [*]      [*]

K0044    Footrest upper hanger bracket (ea.)                            [*]             [*]      [*]

K0045    Footrest complete assembly                                     [*]             [*]      [*]

K0046    Elevating leg rest, lower extension tube (ea.)                 [*]             [*]      [*]

K0047    Elevating leg rest, upper hanger bracket (ea.)                 [*]             [*]      [*]

K0048    Elevating leg rest, complete assembly                          [*]             [*]      [*]

K0049    Calf pad (ea.)                                                 [*]             [*]      [*]

K0050    Ratchet assembly                                               [*]             [*]      [*]

K0051    Cam release assembly, footrest or leg rest (ea.)               [*]             [*]      [*]

K0052    Swing away detachable footrest (ea.)                           [*]             [*]      [*]

K0053    Elevating footrests, articulating (ea.)                        [*]             [*]      [*]

K0054    Seat width of 10"-17" and 20" for a high strength              [*]             [*]      [*]
         lightweight or ultra lightweight

K0055    Seat depth of 15"-18" for a high strength lightweight or       [*]             [*]      [*]
         ultra lightweight

K0056    Seat height less than 17" or equal to or greater than 21"      [*]             [*]      [*]
         for a high strength, lightweight ultra

K0057    Seat width of 19" or 20" for heavy/extra duty chair            [*]             [*]      [*]

K0058    Seat depth of 17" or 18" inches for a motorized/power          [*]             [*]      [*]
         wheelchair

K0059    Plastic coated hand rims (ea.)                                 [*]             [*]      [*]

K0060    Steel hand rims (ea.)                                          [*]             [*]      [*]

K0061    Aluminum hand rims (ea.)                                       [*]             [*]      [*]

K0062    Hand rim with 8 - 10 vertical or oblique projections (ea.)     [*]             [*]      [*]

K0063    Hand rim with 12 - 16 vertical or oblique projections (ea.)    [*]             [*]      [*]

K0064    Zero pressure tube (flat free inserts) any size (ea.)          [*]             [*]      [*]

K0065    Spoke protectors (ea.)                                         [*]             [*]      [*]

K0066    Solid tire, any size (ea.)                                     [*]             [*]      [*]

K0067    Pneumatic tire, any size (ea.)                                 [*]             [*]      [*]

K0068    Pneumatic tire tube, any size (ea.)                            [*]             [*]      [*]

K0069    Rear wheel tire assembly complete with solid tire, spoke, or   [*]             [*]      [*]
         molded (ea.)

K0070    Rear wheel assembly complete with pneumatic tire spokes or     [*]             [*]      [*]
         molded (ea.)

K0071    Front caster assembly complete with pneumatic tire (ea.)       [*]             [*]      [*]

K0072    Front caster assembly complete with semi-pneumatic tire (ea.)  [*]             [*]      [*]

K0073    Caster pin lock (ea.)                                          [*]             [*]      [*]

K0074    Pneumatic caster tire, any size (ea.)                          [*]             [*]      [*]

K0075    Semi-pneumatic caster tire, any size (ea.)                     [*]             [*]      [*]

K0076    Solid caster tire, any size (ea.)                              [*]             [*]      [*]

K0077    Front caster assembly complete with solid tire (ea.)           [*]             [*]      [*]

K0078    Pneumatic caster tire tube (ea.)                               [*]             [*]      [*]

K0079    Wheel lock extension (pr.)                                     [*]             [*]      [*]

K0080    Anti-rollback device (pr.)                                     [*]             [*]      [*]

K0081    Wheel lock assembly complete (pr.)                             [*]             [*]      [*]
</TABLE>

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 24 of 32
<PAGE>

<TABLE>
<S>      <C>                                                            <C>             <C>      <C>
K0082    22NF deep cycle lead acid battery (ea.)                        [*]             [*]      [*]

K0083    22NF gel battery (ea.)                                         [*]             [*]      [*]

K0084    Group 24 deep cycle lead acid battery (ea.)                    [*]             [*]      [*]

K0085    Group 24 gel cell battery (ea.)                                [*]             [*]      [*]

K0086    U-1 lead acid battery (ea.)                                    [*]             [*]      [*]

K0087    U-1 gel cell battery (ea.)                                     [*]             [*]      [*]

K0088    Battery charger, lead acid, or gel cell *5, 8, or 10 amp       [*]             [*]      [*]
         charger

K0089    Battery charger, dual mode                                     [*]             [*]      [*]

K0090    Rear wheel tire for power chair, any size (ea.)                [*]             [*]      [*]

K0091    Rear wheel tire tube other than zero pressure for power        [*]             [*]      [*]
         wheelchair, any size (ea.)

K0092    Rear wheel assembly for power wheelchair                       [*]             [*]      [*]

K0093    Rear wheel zero pressure tire tube(flat free insert) for       [*]             [*]      [*]
         power wheelchair

K0094    Wheel tire for power base, any size                            [*]             [*]      [*]

K0095    Wheel tire tube other than zero pressure for each base, any    [*]             [*]      [*]
         size (ea.)

K0096    Wheel assembly for power base, complete (ea.)                  [*]             [*]      [*]

K0097    Wheel zero-pressure tire tube(flat free insert) for power      [*]             [*]      [*]
         base, any size (ea.)

K0098    Drive belt for power wheelchair                                [*]             [*]      [*]

K0099    Front caster for power wheelchair                              [*]             [*]      [*]

K0100    Amputee adapter (pr.)                                          [*]             [*]      [*]

K0114    Back support system for use with a wheelchair, with inner      [*]             [*]      [*]
         frame, prefabricated.

K0452    Wheelchair bearings                                            [*]             [*]      [*]
</TABLE>

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 25 of 32
<PAGE>

                                   ADDENDUM H
                              PERFORMANCE STANDARDS

PERFORMANCE CHARACTERISTICS:

PROVIDER shall achieve acceptable levels of performance on the following
characteristics, which shall be further defined in later sections:

         -        Member Satisfaction Survey

         -        Access to Care

         -        Provider Satisfaction Survey

         -        Encounter Reporting

         -        Utilization Reporting

         -        Coordination of Care - Chart Auditing

PERFORMANCE REPORTS:

PROVIDER shall report to HNI on a quarterly and/or monthly basis the performance
results under the standards set forth in the attached document. The report shall
be submitted to HNI in a format agreeable to both parties within [*] after the
end of each quarter. In addition, PROVIDER shall submit a summary annual report
within [*] of the close of the calendar year.

FAILURE TO MEET PERFORMANCE STANDARDS:

If PROVIDER fails to meet any of the performance standards, PROVIDER shall
prepare [*] and shall submit such [*] to HNI within forty-five (45) calendar
days following the end of the quarter. Failure to complete [*] for a failed
performance standard shall constitute a [*] and HNI shall be entitled to assess
the penalty fee amounts as defined for each performance standard. HNI shall
inform PROVIDER in detail, when such [*] are not sufficient to attain the
performance standards. Failure to submit performance standard reports shall also
result in penalties as defined under each standard. PROVIDER shall pay HNI
within thirty (30) days after the penalty fees have been assessed.

INSPECTION AND AUDIT OF PROVIDER PERFORMANCE STANDARD RECORDS BY HNI:

HNI shall be permitted to conduct on-site audits of PROVIDER's performance
standard records and evaluation analyses upon reasonable advance notice to
PROVIDER. HNI shall be entitled to copy reasonable amounts of all such records
at PROVIDER's cost.

Supporting documents need not be submitted with performance reports, but must be
available for audits.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 26 of 32
<PAGE>

                                   ADDENDUM H
                              PERFORMANCE STANDARDS

                           MEMBER SATISFACTION SURVEYS

PROVIDER shall conduct Member satisfaction surveys on an ongoing basis [*]
of the patients who receive all home infusion services covered in Agreement.

Patient satisfaction shall be at least a score of [*] of the surveys returned
basis on a [*] quarterly return rate.

MEASUREMENT

PROVIDER shall use their existing survey tool to perform the satisfaction
survey. The survey tool shall be approved by HNI, and PROVIDER shall accommodate
reasonable changes requested by HNI to survey tool. The tool will have a scoring
range of 1 (poor) to 5 (excellent) whereby a score of 3 is a rating of "good".

Survey questions shall pertain to the following areas. Coram shall provide HNI
with a sample of its standard survey template and shall inform HNI in the event
of any significant change to the template.

         -        Professional manner and expertise/staff quality of service
                           Customer Service Representative
                           Pharmacist
                           Nurses
                           Driver/Delivery Staff

         -        Ease of access to services
                           Timeliness of visit

         -        Adequacy of teaching regarding therapy process

METHOD

         -        New Members upon discharge

         -        Chronic Members once every six months

REPORTING

         -        Report Commercial/HMO and Seniority Plus as separate reports

REPORTING FREQUENCY

Quarterly summary report of the tabulation of patient satisfaction surveys sent.
During the first quarter of each calendar year, Coram will present summary of
prior year survey results. Will be part of ongoing `Corameters' quarterly report

PENALTIES

[*] for every month that quarterly report [*].
[*] for every quarter that the patient satisfaction score is [*].
[*] if corrective action plan, when necessary, is not submitted on time.
Failure to meet objective of this standard will be considered breach of
contract, with the applicable remedy being the termination of the Agreement.

SUPPORTING DOCUMENTATION

Sample survey and patient satisfaction survey data with calculations.
Survey document should meet all applicable accreditation requirements.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 27 of 32
<PAGE>

                                   ADDENDUM H
                              PERFORMANCE STANDARDS

                        ACCESS TO CARE: INFUSION SERVICES

PROVIDER shall maintain the following level of Member access to services on a
seven (7) day a week, twenty-four (24) hours a day basis on [*] of services
provided:

After Hours:               Member calls shall be responded to within 60 minutes.

                           If follow-up visit is urgent, the visit shall occur
                           within two (2) hours of the call, as clinically
                           indicated.

PROVIDER shall record and report unusual occurrences for Members regarding
access device complication, infection, medication errors, supply/product errors,
equipment related errors, lab test errors, adverse drug reactions, rewrite
process, non-compliance issues and other occurrences, including communication
and answering service issues.

MEASUREMENT

PROVIDER's performance improvement department shall monitor this standard on an
ongoing basis. Data shall be compiled monthly by PROVIDER and summarized for
quarterly reporting to HNI. Quarterly reports shall include a corrective action
plan addressing any performance standard, which falls below the performance
goal. Information shall be trended and discussed at a joint performance
improvement meeting between PROVIDER and HNI.

A.       PROVIDER shall use unusual occurrence reports to show the occurrences
         and expectations to this standard.

B.       PROVIDER will review branch on call logs. This will be done monthly by
         branch on a rotating basis to monitor a week's activity.

REPORTING FREQUENCY

Quarterly reporting, will be part of ongoing Corameters quarterly report.

Annual summary report.

PENALTIES

[*] for every month that quarterly report [*]

[*] if corrective action plan, when necessary, is not submitted on time

SUPPORTING DOCUMENTATION

Trended information regarding expectations. It is understood that the PROVIDER
cannot submit unusual occurrence reports to HNI directly.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 28 of 32
<PAGE>

                                   ADDENDUM H
                              PERFORMANCE STANDARDS

                          PROVIDER SATISFACTION SURVEYS

PROVIDER shall conduct an annual Provider satisfaction survey to include HNI
referring shared risk PPG's and physicians. Annual survey results shall be
submitted to HNI by each calendar year first quarter reporting.

PPG satisfaction shall be at least a score of [*] of the surveys returned, with
a [*] return rate.

SURVEY MEASUREMENT

PROVIDER shall use their existing survey tool to perform the Provider
satisfaction survey. The survey tool shall be approved by HNI, and PROVIDER
shall accommodate reasonable changes required by HNI to such survey tool. The
tool will have a scoring range of 1 (poor) to 5 (excellent) whereby a score of 3
is a rating of "good".

Survey questions shall pertain to the following areas. Coram shall provide HNI
with a sample of its standard survey template and shall inform HNI in the event
of any significant change to the template.

         -        Professional manner/staff quality of service

         -        Professional expertise/staff quality of care

         -        Ease of access to services

         -        Ability to meet Member's needs accurately and effectively

         -        Adequacy of teaching regarding the therapy process

         -        Coordination of care

METHOD

         -        Physician

         -        PPG medical management department

REPORTING

         -        Report Commercial/HMO and Seniority Plus as separate reports

REPORTING FREQUENCY

Annual report of survey results

PENALTIES

[*] for every month that annual report [*]

[*] if a corrective action plan, when necessary, is not submitted on time

SUPPORTING DOCUMENTATION

Sample survey and PPG satisfaction survey data with calculations

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 29 of 32
<PAGE>

                                   ADDENDUM H
                              PERFORMANCE STANDARDS

                               ENCOUNTER REPORTING

PROVIDER shall provide utilization reporting to HNI in accordance with Article
II, Section 2.15 of the Agreement.

MEASUREMENT

Electronic encounter reports shall include, but not be limited to, general
encounter data elements in accordance with the latest HEDIS and CMS, and HNI
requirements, according to HNI. With [*], PROVIDER will summarize the encounter
submissions.

METHOD

PROVIDER shall submit monthly electronic encounter reports, within fifteen (15)
calendar days following the month in which service was rendered. The required
data fields for encounter submission are identified via the HMO/IS format
submitted by HNI's I.S. Department to PROVIDER. The rejection report will be
given to PROVIDER by HNI within two weeks of encounter submission.

REPORT FREQUENCY

Quarterly reporting included with other performance standards.

PENALTY

[*] for each month encounter data is delayed.

SUPPORTING DOCUMENTATION

Availability of all records, per request, associated with each encounter.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 30 of 32
<PAGE>

                                   ADDENDUM H
                              PERFORMANCE STANDARDS

                              UTILIZATION REPORTING

PROVIDER shall provide utilization reporting to HNI in accordance with Article
II, Section 2.10 of the Agreement.

MEASUREMENT

PROVIDER shall provide quarterly summary report on an aggregate basis sorted by
the patient's PPG and HMO or Seniority Plus. Such reports shall include but not
limited to the following:

         -        Number of patients

         -        Diagnoses

         -        Therapies and therapy days

         -        Number of referrals not serviced with reason(s) for service
                  not being provided, (e.g. not appropriate candidate for home
                  infusion therapy)

         -        Referral source

REPORT FREQUENCY

Quarterly Report

Aggregated quarterly report

Annual summary report

PENALTY

[*] for each month that the aggregated quarterly report [*].

SUPPORTING DOCUMENTATION

Availability, upon request, of all records and calculations associated with each
criteria.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 31 of 32
<PAGE>

                                   ADDENDUM H
                              PERFORMANCE STANDARDS

                       COORDINATION OF CARE - CHART AUDIT

PROVIDER shall conduct patient chart audits and provide quarterly summary of
chart audit results. At least annually, there will be a focus on a specific
therapy category, e.g. IVIG, human growth hormone (HGH), factor, chemotherapy.

MEASUREMENT

PROVIDER's performance improvement departments shall monitor this standard on an
ongoing basis. Data shall be compiled monthly by PROVIDER and summarized for
quarterly reporting to HNI. Quarterly reports shall include a corrective action
plan addressing any performance standard, which falls below the performance
goal. Information shall be trended and discussed at a joint performance
improvement meeting between PROVIDER and HNI.

1.       PROVIDER will use a chart audit form agreed to by HNI and PROVIDER that
         will include clinical findings, clinical problem solving and outcomes.

2.       PROVIDER will complete a chart audit (minimum of 10 annually) for each
         servicing branch under this Agreement.

3.       PROVIDER will have charts audited by PROVIDER's Area Clinical
         Directors.

4.       PROVIDER shall incorporate the findings into their performance
         improvement program.

REPORTING FREQUENCY

Provide quarterly report to HNI with monthly detail. Tracking and trending will
be reported as part of quarterly performance standard meeting.

PENALTIES

No penalties shall be incurred for this standard.

SUPPORTING DOCUMENTATION

Chart audits will be maintained including the actual chart reviewed. HNI will
have access to the chart and the audit tool finding upon request.

Coram Healthcare Amendment II                          Effective October 1, 2003

                                 Page 32 of 32