<PAGE>
                                                                 EXHIBIT 10.18.1
<PAGE>
<TABLE>
<CAPTION>
<S>                                   <C>                      <C>                                    <C>

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT                      1. Contract Number
                                                                                                        Page       of Pages
                                                                           POHC-2002-D-0003                      1               2
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2. Amendment/Modification Number       3. Effective Date       4. Requisition/Purchase Request No.    5. Project No. (if applicable)
              M0002                         August 1, 2002     POHC-2002-F-0001
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6. Issued By                                Code                  7. Administered By (If other than line 8)
Office of Contracting and Procurement            ---------------     Department of Health, Office of Managed Care
Public Safety Cluster, Department of                                 Medical Assistance Administration
Health Bureau                                                        625 North Capitol Street, N.E.
441 4th Street, NW., Suite 800 South                                 Attention: Ms. Maude Holt
Washington, DC 20001                                                 Telephone: (202) 442-9074
-------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
8. Name and Address of Contractor (No. Street, city, country, state         (X) 9A. Amendment of Solicitation No.
     and ZIP Code)                                                          ---
   AMERIGROUP MARYLAND INC                                                      ----------------------------------------------------
   514 10TH STREET N.W., SUITE 600                                              9B. Dated (See Item 11)
   WASHINGTON, DC 20004
   ATTN: JANE THOMPSON                                                      --------------------------------------------------------
                                                                                10A. Modification of Contract/Order No.
                                                                                  POHC-2002-D-0003/POHC-2002-F-0001 (D.O)
                                                                            (X) ----------------------------------------------------
                                                                                10B. Dated (See Item 13)
----------------------------------------------------------------------------
         Code                                      Facility                       AUGUST 1, 2002
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                                     11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
------------------------------------------------------------------------------------------------------------------------------------
    The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers [ ] is
    extended,  [ ] is not extended. Offers must acknowledge receipt of this amendment prior to the hour and date specified in the
    solicitation or as amended, by one of the following methods; (a) By completing Items 8 and 15, and returning copies of the
    amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or
    telegram which includes a reference to the solicitation and amendment number. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT
    THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS' PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If
    by virtue of this amendment you desire to change an offer already submitted, such change may be made by letter or telegram,
    provided each letter or telegram makes reference to a solicitation and this amendment, and is received prior to the opening hour
    and date specified.
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12. Accounting and Appropriation Data (if Required)

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        13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
           IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14
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  (X)   A. This change order is issued pursuant to: (Specify Authority)
------  The changes set forth in item 14 are made in the contract/order no. in Item 10A.
------------------------------------------------------------------------------------------------------------------------------------
        B. The above numbered contract/order is modified to reflect the administrative changes (such as changes in paying office,
           appropriation date, etc.) set forth in item 14, pursuant to the authority of 27 dCMR, Chapter 36, Section 3601.2.
------------------------------------------------------------------------------------------------------------------------------------
   X    C. This supplemental agreement is entered into pursuant to authority of:
        DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2(c) Bilateral Contract Modification and agreement between the parties
------------------------------------------------------------------------------------------------------------------------------------
        D. Other (Specify type of modification and authority)
        DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2(c) Bilateral Contract Modification and agreement between the parties
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E. IMPORTANT:     Contractor [ ] is not,    [X] is required to sign this document and return    2   copies to the issuing office.
                                                                                             ------
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14. Description of amendment/modification (Organized by USC Section headings, including solicitation/contract subject matter where
feasible.)

    THE DELIVERY ORDER REFERENCED IN BLOCK 10A ABOVE IS MODIFIED AS FOLLOWS:

    1.  Block 10B above, the Effective Date of award identified in Block 3 is changed from April 11, 2002 to August 1, 2002.

    2.  Section B: A list of Rates increase for trend effective from contract period of August 1, 2002 through July 31, 2003 is
        listed on page 2 of this Modification.

    3.  F.3.1 IMPLEMENTATION
        The implementation date and the effective date of the contract (Block 10A above) is the same, August 1, 2002




------------------------------------------------------------------------------------------------------------------------------------
Except as provided herein, all terms and conditions of the document referenced in item (9A or 10A as heretofore changed, remains
unchanged and in full force and effect.
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15A. Name and Title of Signer (Type or print)                      16A. Name of Contracting Officer
                                                                        ESTHER M. SCARBOROUGH
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15B. Name of Contractor                        15C. Date Signed    16B. District of Columbia                    16C. Data Signed


    (Signature of person authorized to sign)                                 (Signature of Contracting Officer)
------------------------------------------------------------------------------------------------------------------------------------
[LOGO] Government of the District of Columbia             [LOGO] Office of Contracting & Procurement               DC OCP 202 (7-99)
</TABLE>


<TABLE>
<S>                           <C>                                                                    <S>
                                                      2nd BAFO Rates Increase                        Proprietary and Confidential
DISTRICT OF COLUMBIA                                         For Trend                               Source Selection Information
                                     Effective Contract Period August 1, 2002 to July 31, 2003

AMERICAID COMMUNITY CARE

AMERICAID 2ND BAFO OFFERS TRENDED TO THE CONTRACT PERIOD AUGUST 1, 2002 TO JULY 31, 2003

--------------------------------------------------------------
         RATE CELL                         MCO2
--------------------------------------------------------------
< 1 Male & Female                      $  277.78
--------------------------------------------------------------
1 - 12 Male & Female                   $  105.00
--------------------------------------------------------------
13 - 18 Female                         $  177.11
--------------------------------------------------------------
13 - 18 Male                           $  190.30
--------------------------------------------------------------
19 - 36 Female                         $  186.10
--------------------------------------------------------------
19 - 36 Male                           $  126.18
--------------------------------------------------------------
37+ Female                             $  302.24
--------------------------------------------------------------
37+ Male                               $  262.76
--------------------------------------------------------------
Month of Birth                         $5,673.31
--------------------------------------------------------------
Month of Delivery                      $6,286.51
--------------------------------------------------------------
</TABLE>


                                                                          PAGE 2

<PAGE>
<Table>
<S>                                                                   <C>                                 <C>
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                                                                       1. Contract Number                  PAGE     OF    PAGES
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
                                                                       POHC-2002-D-0003                      1             14
------------------------------------------------------------------------------------------------------------------------------------
2. Amendment/Modification Number                                                                      5. Project No. (if applicable)
M0003
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------------------------------------------------------------------------------------------------------------------------------------
8. Name and Address of Contractor (No. Street, city, country, state and ZIP Code)       (X)  9A. Amendment of Solicitation No.

AMERIGROUP MARYLAND INC.                                                                     ---------------------------------------
514 10TH STREET N.W., SUITE 600                                                              9B. Dated (See Item 11)
WASHINGTON, DC 20004
ATTN: JANE THOMPSON                                                                          ---------------------------------------
                                                                                             10A. Modification of Contract/Order No.
                                                                                             POHC-2002-D-0003
                                                                                         X    --------------------------------------
-------------------------------------------------------------------------------------        10B. Dated (See Item 13)
         Code                                       Facility                                 1-Apr-02
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                                     11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
------------------------------------------------------------------------------------------------------------------------------------
[ ] The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers [  ] is
    extended. [  ] is not extended. Offers must acknowledge receipt of this amendment prior to the hour and date specified in the
    solicitation or as amended, by one of the following methods: (a) By completing Items 8 and 15, and returning    copies of the
    amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or
    telegram which includes a reference to the solicitation and amendment number. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT
    THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by
    virtue of this amendment you desire to change an offer already submitted, such change may be made by letter or telegram,
    provided each letter or telegram makes reference to the solicitation and this amendment, and is received prior to the opening
    hour and date specified.
------------------------------------------------------------------------------------------------------------------------------------
12. Accounting and Appropriation Data (If Required)
01 HCO 02 NTHA1 0409
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                                  13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
                                     IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14
------------------------------------------------------------------------------------------------------------------------------------
 (X)  A. This change order is issued pursuant to: (Specify Authority)
-----
      The changes set forth in Item 14 are made in the contract/order no. in Item 10A.
------------------------------------------------------------------------------------------------------------------------------------
      B. The above numbered contract/order is modified to reflect the administrative changes (such as changes in paying office,
      appropriation date, etc.) set forth in item 14, pursuant to the authority of 27 dCMR, Chapter 36, Section 3601.2.
------------------------------------------------------------------------------------------------------------------------------------
  X   C. This supplemental agreement is entered into pursuant to authority of:     27 DCMR Chapter 36, Section 3601.2
      The changes set forth in item 14 are in the contract/order Article 4
------------------------------------------------------------------------------------------------------------------------------------
      D. Other (Specify type of modification and authority)

------------------------------------------------------------------------------------------------------------------------------------
E. IMPORTANT:     Contractor [  ] is not,     [X] is required to sign this document and return   2   copies to the issuing office.
                                                                                                ---
------------------------------------------------------------------------------------------------------------------------------------
14. Description of amendment/modification (Organized by USC Section headings, including solicitation/contract subject matter where
    feasible.)

THE CONTRACT REFERENCED IN BLOCK 10A IS MODIFIED AS STATED ON PAGES 2 THROUGH 12 OF THIS MODIFICATION.









------------------------------------------------------------------------------------------------------------------------------------
Except as provided herin, all terms and conditions of the document referenced in Item (9A or 10A as heretofore changed, remains
unchanged and in full force and effect
------------------------------------------------------------------------------------------------------------------------------------
15A. Name and Title of Signer (Type or print)                         16A. Name of Contracting Officer
                                                                           ESTHER M. SCARBOROUGH
------------------------------------------------------------------------------------------------------------------------------------
15B. Name of Contractor                       15C. Date Signed        16B. District of Columbia                    16C. Date Signed


  (Signature of person authorized to sign)                                  (Signature of Contracting Officer)
------------------------------------------------------------------------------------------------------------------------------------
[LOGO] Government of the District of Columbia              [LOGO] Office of Contracting & Procurement              DC OCP 202 (7-99)
------------------------------------------------------------------------------------------------------------------------------------
</Table>
<PAGE>
                          SECTION I - CONTRACT CLAUSES

I.     Standard Contract Clauses...........................................  189

I.1    Covenant Against Contingent Fees....................................  189
I.2    Patents.............................................................  189
I.3    Quality.............................................................  189
I.4    Inspection of Supplies..............................................  189
I.5    Inspection of Services..............................................  193
I.6    Waiver..............................................................  193
I.7    Default.............................................................  193
I.8    Indemnification.....................................................  195
I.9    Transfer............................................................  195
I.10   Taxes...............................................................  196
I.11   Payments............................................................  196
I.12   Evaluation of Prompt Payment Discount...............................  196
I.13   Responsibility for Supplies Tendered................................  196
I.14   Appointment of Attorney.............................................  197
I.15   Officers Not to Benefit.............................................  197
I.16   Disputes............................................................  198
I.17   Claims by the District Against a Contractor.........................  199
I.18   Changes.............................................................  200
I.19   Termination for Convenience of the District.........................  201
I.20   Recovery of Debts Owed the District.................................  208
I.21   Examination of Books, etc. by the Office of Inspector General
       and the District of Columbia Auditor................................  208
I.22   Non-Discrimination Clause...........................................  208
I.23   Definitions.........................................................  210
I.24   Health and Safety Standards.........................................  210
I.25   Appropriation of Funds..............................................  210
I.26   Hiring of District Residents........................................  211
I.27   Buy American Act....................................................  211
I.28   Service Contract Act of 1965........................................  212
I.29   Cost and Pricing Data...............................................  218
I.30   Cost-Reimbursement Contracts - CLIN 0002 Only.......................  220
I.31   Termination of Contracts for Certain Crimes and Violations..........  220
I.32   Additional Standard Clauses.........................................  220
I.33   Contract Type and Price.............................................  229
I.34   RESERVED............................................................  229
I.35   Assignment of Funds.................................................  229

REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK


--------------------------------------------------------------------------------
CONTRACT NO.: POHC-2002-D-0003         188
--------------------------------------------------------------------------------


<PAGE>
Please add the following changes:

C.10.5.7.7     Addiction Prevention Recovery Administration
C.10.5.7.8     Head Start
C.10.5.7.9     Maternal and Family Health Administration
C.10.5.7.10    Office of Lead Prevention

Change C.11.1.2
C.11.1.2 The contractor shall allow network and non-network providers to submit
an initial claim for covered and, if required, prior authorized services for a
maximum period of one hundred eighty days (180) following the provision of
such services.

C.14.3.1 The contractor shall, whenever an enrollee's request for covered
services is reduced, delayed, denied, terminated, or payment is denied, provide
a written notice within five (5) days to the enrollee with a copy to the Office
of Managed Care. This shall be done in accordance with Federal requirements at
42 C.F.R. Sections 431.211, 431.213 and 431.214, as amended; and all other
statutory or regulatory requirements.

The notice to the enrollee shall include, at a minimum, all of the contents
listed in 42 C.F.R. Section 431.210. In addition, it shall inform the enrollee
about his or her opportunity to file a grievance and an appeal with the
Contractor, include the phone number and name of the contact person at the
Contractor's office and provide information about requesting an appeal to the
Office of Managed Care and the Office of Fair Hearing.

The Contractor shall inquiry from the enrollee if he or she need assistance in
completing the form for the Office of Fair Hearing and the Office of Managed
Care.

If the enrollee appeals through the Office of Fair Hearing, or the Office of
Managed Care the Contractor is responsible for providing an appeal summary
describing the basis for the denial. The appeal summary must be submitted to
the Office of Fair Hearing and the Office of Managed Care at least 15 days
prior to the date of the hearing. The Office of Fair Hearing and the Office of
Managed Care may require that contractor attend the hearing either via
telephone or in person. The contractor is responsible for absorbing any
telephone/travel expense incurred.

The Contractor shall comply with the Office of Fair Hearing and the Office of
Managed Care process, no more nor less and in the same manner as is required
for all other Medicaid evidentiary hearings.

                                                                            2
<PAGE>
The Contractor shall educate the enrollees of their rights to appeal directly
to the Office of Fair Hearing instead or in addition to filing a grievance and
appeal with the Contractor or the Office of Managed Care.

     1    Contractor Policies and Procedures for Complaint, Grievances, and
          Appeals
          a.   The Contractor shall have written policies and procedures, which
               describe the informal and formal grievance and appeal process
               and how it operates, and the process must be in compliance with
               42 C.F.R. Section 434.32 as amended. These written directives
               shall describe how the Contract intends to receive, track,
               review and report all enrollee complaints. The procedures and
               any changes to the procedures must be reviewed and approved in
               writing by the Office of Managed Care prior to implementation.
               The Contractor shall provide grievance or complaint appeal form
               and/or written procedures to enrollees who wish to register
               written grievance or appeals. The procedures must provide for
               prompt resolution of the issue and involve the participation of
               the individuals with the authority to require corrective action.
               Specific requirements regarding enrollee notices, complaints,
               grievances, and appeals are contained in this Article.
           b.  The complaint, grievance, and appeals processes must be
               integrated with Quality Improvements/Quality Assurance/The
               complaint, grievance and appeals process shall include the
               following:
                    i.    Procedures for registering and responding to
                          complaints, grievances and appeals in a timely
                          fashion;
                    ii.   Documentation of the substance of the complaint
                          or grievance or appeal and the actions taken;
                    iii.  Procedures to ensure the resolution of the
                          complaint;
                    iv.   Aggregation and analysis of these data and use of
                          data for quality improvements.

           c.  The Contractor shall, within two (2) days of receipt of any
               written grievance or appeal resulting from denial or termination
               of Medicaid covered service, provide the Office of Managed Care
               with a copy of the request, along with a copy of the notice that
               was sent to the enrollee.

           d.  The Contractor shall issue grievance and appeal decisions within
               fourteen (14) days from the date of the initial receipt of the
               grievance and after all information has been received. The
               decision must be in writing and shall include but not limited to:
                    i.    The decision reached by the Contractor;
                    ii.   The reason or reasons for the decision;
                    iii.  The policies and procedures which provide the basis
                          for the decision, and;
                    iv.   A clear explanation of further appeal rights and the
                          time frame for filing an appeal.

                                                                               3





<PAGE>
          e.   The Contractor shall provide the Office of Managed Care with a
               copy of the final decision of the grievance and appeals process
               within forty-eight (48) hours of the receipt of the complaint in
               cases of medical emergencies in which delay could result in death
               or serious harm to an enrollee of the decision shall promptly
               follow the verbal notice of the expedited decision with a copy to
               the Office of Managed Care.


     (a)  IN GENERAL

               (1) BASIC DUTY -- Contractor shall provide each enrolled
                   individual with notice (meeting the requirements of
                   subsections (b) and (c)) of the individual's right to request
                   a fair hearing in the case of a dispute involving the denial
                   of, or the termination or reduction of, an item or service
                   covered under this Contract, or the delay in the provision of
                   such an item or service.

               (2) NOTICE AT ENROLLMENT -- Contractor shall include the notice
                   described in paragraph (1) in the Enrollee Handbook that is
                   distributed to each enrolled individual within 10 days of
                   being notified by District of a individual's enrollment.

               (3) NOTICE AT TIME OF DENIAL, TERMINATION, OR REDUCTION --
                   Contractor shall ensure that, within 48 hours of the denial
                   of, or the termination or reduction of, an item or service
                   covered under this Contract, the enrolled individual
                   receives, orally and in writing, notice of the individual's
                   right to request a fair hearing as required under this
                   contract.

     (b) CONTENT OF NOTICE -- Contractor shall ensure that the notice described
in subsection (a)(1) contains the following information, consistent with 42
C.F.R. Section 431.206:

               (1) the enrolled individual is entitled to a fair hearing under
               Section 1902(a)(3) of the Social Security Act, 42 U.S.C. Section
               1396a(a)(3), 42 C.F.R. Section 431.220;

               (2) the enrolled individual may immediately request such a
               hearing;

               (3) the method by which the enrolled individual may obtain such a
               hearing;

               (4) the right of the enrolled individual to represent himself or
               herself or to be represented by his or her family or caregiver,
               legal counsel, or other spokesperson;

               (5) in the case of a determination involving the reduction of an
               item or service being furnished to the enrolled individual,
               Contractor shall



                                                                               4
<PAGE>
          continue to furnish the item or service to the enrolled individual
          pending a final decision in a fair hearing;

          (6) the right of the enrolled individual to a fair hearing whether or
          not the individual invokes the grievance procedure maintained by
          Contractor under this contract; and

          (7) the availability of accommodations for individuals with special
          health care needs.

     (c) UNDERSTANDABILITY  Contractor shall ensure that the notice required
under subsection(a)(1) is written:

          (1) in a manner and format which may be easily understood by an
          enrolled individual; and

          (2) in each language which is spoken as a primary language by
          Contractor's enrollees.

Section 1005. GRIEVANCE PROCEDURE

     (a) IN GENERAL

          (1) BASIC DUTY -- Contractor shall establish and maintain a grievance
          procedure in compliance with the requirements of this section.

          (2) SCOPE -- The grievance procedure maintained by Contractor under
          this section shall resolve disputes involving:

               (A) the denial of, or the termination or reduction of, an item or
               service covered under this Contract; or

               (B) the delay in the furnishing of such an item or service.

     (b) FILING OF GRIEVANCES

          (1) PARTIES -- Within 30 days of notice of, any of the following may
          invoke the grievance procedure under this section by filing with
          Contractor a grievance in writing (by facsimile or otherwise):

               (A) the enrolled individual affected by the determination (or in
               the case of an enrolled adolescent, the adolescent);

               (B) the primary care provider (and specialist, if any) of the
               enrolled individual affected by the determination; or

                                                                               5

<PAGE>
          (C) with the permission of the enrolled individual affected by the
          determination, the agency, program or provider that referred the
          enrolled individual for the item or service at issue.

     (2) TIMEFRAME

          (A) In the case of the issuance of a determination involving the
          denial of, or the termination or reduction of, a covered item or
          service any individual described in paragraph (1) may file a grievance
          within 60 days of receipt of the notice.

          (B) In the case a delay in the provision of an item or service covered
          under this Contract, the enrolled individual may file a grievance at
          any point during the delay.

     (3) RELATIONSHIP TO COMPLAINTS -- The Parties enumerated in paragraph (1)
     may file a grievance with Contractor under this section whether or not any
     of the parties has filed a compliant under this contract.

(c) FACILITATION OF GRIEVANCE PROCEDURES

     (1) INFORMATION -- Contractor shall provide on a timely basis to the party
     filing a grievance under subsection (b) reasonable access to, and copies
     of, all documents, records, and other data and information (without regard
     to whether such documents, records, data or information were considered or
     relied upon in making the adverse determination) which, in judgment of the
     party, is needed to enable the party to:

          (A) fully understand the basis for the determination;

          (B) establish the qualifications of the personnel responsible for the
          determination; and

          (C) effectively argue for an alternate determination.

     (2) INTERPRETER SERVICES -- Contractor shall make available professional
     interpreter services at any stage in the grievance procedure under this
     section upon request of the enrolled individual or their family or
     caregiver.

     (3) ACCOMMODATION OF ENROLLED INDIVIDUAL CHILDREN WITH SPECIAL HEALTH CARE
     NEEDS -- Contractor shall, in accordance with the requirements of the
     Americans with Disabilities Act, 42 U.S.C. Section 12101 et seq., make
     reasonable accommodations for enrolled individuals with special health care
     needs with respect to the filing and execution of the grievance procedure
     under this section.



                                                                               6

<PAGE>

(d)  RESOLUTION OF GRIEVANCES

     (1) TIMEFRAME

          (A) Contractor shall resolve grievances filed under this section not
          later than 30 working days after the date of receipt of the grievance,
          except in cases described in subparagraph (B).

          (B) In the case of a grievance involving an urgent medical condition
          (as defined in subparagraph (C)), Contractor shall resolve such
          grievance in accordance with C.14.3.1-C.14.3.I.6

          (C) URGENT DEFINED -- an urgent medical condition is a condition in a
          individual manifesting itself by acute symptoms of sufficient severity
          (including severe pain) that a prudent lay caregiver, who possesses an
          average knowledge of health and medicine, could reasonably expect the
          absence of same day medical attention to result in

               (i) placement of the individual's health in serious jeopardy;

               (ii) serious dysfunction of a individual's bodily functions; or

               (iii) serious dysfunction of a individual's bodily organ or
               part.

     (2)  QUALIFICATIONS OF DECISION-MAKER -- A grievance relating to a
          determination to deny, or to terminate or reduce coverage based
          on a lack of medical necessity shall be resolved only by a physician
          with expertise in the appropriate field of medicine who is other than
          a physician directly or indirectly involved in the initial
          determination.

     (3)  WRITTEN RESOLUTION

          (A) In the case of a grievance filed under this section that is not
          resolved by the furnishing of the item or service in dispute,
          Contractor shall provide to the party within the timeframe specified
          in paragraph (I) a copy of Contractor's resolution in writing.

          (B) The written resolution described in subparagraph (A) shall
          include:

               (i) the facts established in relation to the grievance;


                                                                               7

<PAGE>

               (ii)   the basis under the Contract for Contractor's
               determination;

               (iii)  any other reasons for Contractor's determination;

               (iv)   the right of the enrolled individual immediately to
               request a fair hearing under Section 1902(a)(3) of the Social
               Security Act, 42 U.S.C. Section 1396a(a)(3), 42 C.F.R. Section
               431.220, and the method by which the enrolled individual may
               obtain such a hearing; and

               (v)    the accommodations that Contractor makes under subsection
               (c)(3) for individuals with special health care needs.

     (e)  CONTINUATION OF MEDICAID COVERAGE IN THE CASE OF GRIEVANCE INVOLVING
A TERMINATION OR REDUCTION IN CARE

          (1)  APPLICABILITY - The requirements of this subsection shall apply
          to each grievance filed under this section within 10 days of the date
          on which an enrolled individual is notified under the contract of
          Contractor's determination to terminate or reduce an item or service.

          (2)  DUTY TO CONTINUE COVERAGE - In the case of a grievance described
          in paragraph (1), Contractor shall, in accordance with 42 C.F.R.
          Section 431.230, continue to furnish the item or service at the level
          and in the amount, scope, and duration that item or service was
          provided to the enrolled individual prior to such notification for the
          period described in paragraph (3).

          (3)  PERIOD OF CONTINUATION - The period described in this paragraph
          begins with the date of receipt of notification and ends on the date
          that:

               (A)  the grievance is resolved; and

               (B)  the enrolled individual has not requested a fair hearing as
               provided under paragraph (4).

          (4)  FAIR HEARING - If Contractor resolves a grievance described in
          paragraph (1) by affirming the termination or reduction in whole or in
          part, and if the enrolled individual (or the individual's family or
          caregiver) makes a request for a fair hearing within 90(1) days of
          receiving the written resolution described in subsection (d)(3),
          Contractor shall continue to


----------------------------
(1) 42 C.F.R. Section 431.221(d) requires the Medicaid agency to allow each
beneficiary "a reasonable time, not to exceed 90 days, from the date that
notice of action is mailed, to request a hearing."



                                                                               8
<PAGE>
             furnish the item or service at the level and in the amount, scope,
             and duration that item or service was provided to the enrolled
             individual prior to the initiative of the grievance until a final
             decision is made by the District of Columbia Medical Assistance
             Administration.

     (f) RELATIONSHIP TO FAIR HEARINGS

             (1) Contractor shall not require an enrolled individual (or the
             enrolled individual's family or caregiver on behalf of the
             individual) to file a grievance under this section prior to seeking
             a fair hearing under Section 1902(a)(3) of the Social Security Act,
             42 U.S.C. Section 1396a(a)(3), 42 C.F.R. Sections 431.200-431.246.

             (2) Contractor shall promptly forward to the District of Columbia
             Medical Assistance Administration any request, orally or in
             writing, from an enrolled individual (or the family or caregiver of
             such individual) for a fair hearing.

             (3) In the event that an enrolled individual (or the family or
             caregiver of such individual) files a request for a fair hearing
             with the District of Columbia Medical Assistance Administration
             while a grievance under this section with respect to the same
             dispute is pending, Contractor shall discontinue the processing of
             such grievance.

             (4) For purposes of 42 C.F.R. Section 431.244(f), the date of the
             filing of a grievance with Contractor under this section shall
             constitute the date of the request for a fair hearing.

     (g) NO CHARGE - Contractor shall not impose any charge on any party to a
grievance under this section in connection with the filing and resolution of
the grievance.

SECTION 1006. COMPLAINT PROCEDURE

     (a) IN GENERAL

             (1) BASIC DUTY - Contractor shall establish and maintain a
             complaint procedure in compliance with the requirements of this
             section.


             (2) SCOPE - Subject to paragraph (3), the complaint procedure
             maintained by Contractor under this section shall resolve disputes
             relating to:

                     (A) the accessibility of providers participating in
                     Contractor's provider network;


                                                                               9
<PAGE>
               (B) access (by the enrolled individual or others) to the
               individual's personal medical information;

               (C) the manner or setting in which a covered item or service will
               be or has been furnished; or

               (D) (Contractor) insert other matters about which an enrolled
               individual is aggrieved

          (3) OUT OF SCOPE -- Contractor shall not resolve disputes involving
          the delay or denial or the termination or reduction of an item or
          service covered under the contract through the complaint procedure
          under this section.

     (b) FILING OF COMPLAINTS

          (1) ORAL OR WRITTEN FILING -- The enrolled individual or the caregiver
          of an enrolled individual (or in the case of an enrolled adolescent,
          the adolescent) involved in a dispute with Contractor enumerated in
          subsection (a)(2) may invoke the complaint procedure under this
          section by filing a complaint orally or in writing:

          (2) RELATIONSHIP TO GRIEVANCES -- The family or caregiver (or
          adolescent) described in paragraph (1) may file a complaint with
          Contractor under this section whether or not the party has filed a
          grievance under Section 1005.

     (c) FACILITATION OF COMPLAINT PROCEDURES

          (1) INFORMATION -- Contractor shall provide on a timely basis to the
          party filing a complaint under subsection (b) reasonable access to,
          and copies of, all documents, records, and other data and information
          which, in judgment of the party, is needed to enable the party to:

               (A) fully understanding the basis for the dispute; and

               (B) effectively argue for an alternate resolution.

          (2) INTERPRETER SERVICES -- Contractor shall make available
          professional interpreter services at any stage in the complaint
          procedure under this section upon request of the enrolled individual,
          or the individual's family or caregiver.

          (3) TELEPHONE ACCESS -- Contractor shall provide a toll-free, 24-hour
          telephone number for the filing of complaints.


                                                                              10
<PAGE>


     (d)  RESOLUTION OF COMPLAINTS -- Contractor shall resolve a complaint
filed under this section in accordance with paragraphs (1), (2), and (3).

          (1)  TIMEFRAME -- Contractor shall resolve a complaint not later than
          [ ] days after the date of receipt of the complaint.

          (2)  QUALIFICATIONS OF DECISION-MAKER -- Contractor shall ensure that
          a complaint is resolved by an individual who was not directly or
          indirectly involved in the action or inaction which gave rise to the
          complaint.

          (3)  WRITTEN RESOLUTION -- Contract shall ensure that each complaint
          is resolved in writing, and shall provide a copy of the written
          resolution to the complainant. The written resolution shall include:

               (A)  the facts established in relation to the complaint; and

               (B)  the actions, if any, which Contractor has taken or will take
               in response to the complaint.

     (e)  RELATIONSHIP TO FAIR HEARINGS

          (1)  Contractor shall not require an enrolled individual (or the
          enrolled individual's family or caregiver on behalf of the individual)
          to file a complaint under this section prior to seeking a fair hearing
          under Section 1902(a)(3) of the Social Security Act, 42 U.S.C. Section
          1396(a)(3), 42 C.F.R. Sections 431.200-431.246.

          (2)  Contractor shall promptly forward to District of Columbia Medical
          Assistance Administration Office of Managed Care any request, orally
          or in writing, from an enrolled individual (or the family or caregiver
          of such individual) for a fair hearing.

          (3) In the case of a complaint relating to a dispute that is out of
          scope under subsection (a)(3), Contractor shall:

               (A)  provide the enrolled individual (or the family or caregiver
               of such individual) the notice described above, unless Contractor
               has already provided such notice in connection with the dispute;
               and

               (B)  if the individual (or the family or caregiver) elects to
               invoke the grievance procedure under Section 1005, resolve the
               grievance.

     (f)  NO CHARGE -- Contractor shall not impose any charge on any party to a
     complaint under this section in connection with the filing and resolution
     of the complaint.




                                                                              11

<PAGE>
ADD I.28.8.3.1

The Contractor hereunder shall not subcontract any of the Contractor's work or
services to any subcontractor without the prior, written consent of the
Contracting Officer. Any work or service so subcontracted shall be performed
pursuant to a subcontract agreement, which the District shall have the right to
review and approve prior to its execution to the Contractor. Any such
subcontract shall specify that the Contractor and the subcontractor shall be
subject to every provision of this contract. Notwithstanding any such
subcontractor approved by the District, the Contractor shall remain liable to
the District for all Contractor's work and services required hereunder.

I.28.8.3.2

Written Agreements with Subcontractors
Contractor shall enter into and maintain a legally enforceable written agreement
with each subcontractor providing services to enrollee through a subcontract to
Contractor.

I.28.8.3.2.1

Purchaser Approval - The subcontractor described in this section shall not be
effective until the District, in writing, determines that the subcontractor is
in full compliance with the requirements of this section.

I.28.8.3.2.2

Modifications - A modification to a subcontract determined to be in full
compliance under Paragraph (1) shall take effect only if the District, in
writing, determines that the subcontract as modified is in full compliance with
the requirements of this section.

Requirements - The subcontract shall:

     (1)  set forth Contractor's agreement to perform the duties of the
          subcontract and to maintain ultimate responsibility for the
          Subcontractor's adherence to, and compliance with, the requirements,
          terms and conditions of the subcontract;

     (2)  set forth Subcontractor's agreement to perform the duties required of
          Subcontractor under the subcontract;

     (3)  set forth Contractor's obligation to perform under the prime
          contract, regardless of any failure of a Subcontractor to perform
          under a subcontract; and

     (3)  set forth Subcontractor's agreement not to delegate any duty required
          of Subcontractor under the subcontract or of Contractor to any other
          entity.

Change C.14.3.4.2 to:

               This provision for continued coverage applies to Enrollees or an
               Enrollee's designee who filed a standard grievance within (60)
               days of the date on which the Enrollee was notified of the
               Contractor's determination to terminate or reduce an item or
               service.

                                                                              12
<PAGE>
Change C.3.12.2 The Contractor shall participate in the Medicaid Advisory
Committee for Managed care on a quarterly basis. The Advisory Committee shall
also include network providers, Enrollees, and sufficient other stakeholders,
representative of relevant advocacy groups, trade associations, and the District
agencies that serve Medicaid managed care Enrollees to provide comprehensive
feedback on the Contractor's operations and planned changes. At a minimum, the
Advisory Committee shall include a representative of the Department of Mental
Health, the DC Public Schools, the District's Court System, Child and Family
Services Agency, Department of Health Addiction Prevention and Recovery
Administration, Maternal and Family Health Administration, Parent
Representative, the Department of Human Services Youth Services Administration
and Early Intervention Program.

Change C.17.2 Additional Provision for Disenrollment of Enrollees

              The Contractor may request that MAA disenroll an individual from
              DCHFP who has been admitted to a District approved long term care
              facility and or Residential Treatment Facility, who is expected to
              remain in the facility for thirty (30) consecutive days. If the
              month has less than or more than 30 days the contractor is
              responsible for payment.

              If approved by MAA, disenrollment is effective the first full
              month following the date of MAA approval.

              C.17.2.1 If the Contractor fails to place an enrollee in a
              District approved long term care facility and or Residential
              Treatment Facility the contractor will be financial responsible.





                                                                              13
<PAGE>
<Table>
<S>                                                                   <C>                                 <C>
------------------------------------------------------------------------------------------------------------------------------------
                                                                       1. Contract Number                  PAGE     OF    PAGES
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
                                                                       POHC-2002-D-0003                      1              1
------------------------------------------------------------------------------------------------------------------------------------
2. Amendment/Modification Number    3. Effective Date           4. Requisition/Purchase Request No.   5. Project No. (if applicable)
M0004                                   See block 16C below     HCOP2-210457
------------------------------------------------------------------------------------------------------------------------------------
6. Issued By                                                Code [             ]           7. Administered By (if other than line 6)
     Office of Contracting and Procurement                                                 Department of Health
     Public Safety Cluster, Department of Health Bureau                                    Medical Assistance Administration
     441 4th Street, NW., Suite 800 South                                                  825 North Capitol Street, N.E.
     Washington, DC 20001                                                                  Washington, DC 20002
------------------------------------------------------------------------------------------------------------------------------------
8. Name and Address of Contractor (No. Street, city, country, state and ZIP Code)       (X)  9A. Amendment of Solicitation No.

AMERIGROUP MARYLAND INC.                                                                     ---------------------------------------
514 10TH STREET N.W., SUITE 600                                                              9B. Dated (See Item 11)
WASHINGTON, DC 20004
ATTN: JANE THOMPSON                                                                          ---------------------------------------
                                                                                             10A. Modification of Contract/Order No.
                                                                                             POHC-2002-D-0003
                                                                                         X    --------------------------------------
-------------------------------------------------------------------------------------        10B. Dated (See Item 13)
         Code                                       Facility                                 1-Apr-02
------------------------------------------------------------------------------------------------------------------------------------
                                     11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
------------------------------------------------------------------------------------------------------------------------------------
[ ] The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers [  ] is
    extended. [  ] is not extended. Offers must acknowledge receipt of this amendment prior to the hour and date specified in the
    solicitation or as amended, by one of the following methods: (a) By completing Items 8 and 15, and returning    copies of the
    amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or
    telegram which includes a reference to the solicitation and amendment number. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT
    THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by
    virtue of this amendment you desire to change an offer already submitted, such change may be made by letter or telegram,
    provided each letter or telegram makes reference to the solicitation and this amendment, and is received prior to the opening
    hour and date specified.
------------------------------------------------------------------------------------------------------------------------------------
12. Accounting and Appropriation Data (If Required)
01 HCO 02 NTHA1 0409
------------------------------------------------------------------------------------------------------------------------------------
                                  13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
                                     IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14
------------------------------------------------------------------------------------------------------------------------------------
 (X)  A. This change order is issued pursuant to: (Specify Authority)
-----
      The changes set forth in Item 14 are made in the contract/order no. in Item 10A.
------------------------------------------------------------------------------------------------------------------------------------
      B. The above numbered contract/order is modified to reflect the administrative changes (such as changes in paying office,
      appropriation date, etc.) set forth in item 14, pursuant to the authority of 27 dCMR, Chapter 36, Section 3601.2.
------------------------------------------------------------------------------------------------------------------------------------
  X   C. This supplemental agreement is entered into pursuant to authority of:     27 DCMR Chapter 36, Section 3601.2
      The changes set forth in item 14 are in the contract/order Article 4
------------------------------------------------------------------------------------------------------------------------------------
      D. Other (Specify type of modification and authority)

------------------------------------------------------------------------------------------------------------------------------------
E. IMPORTANT:     Contractor [  ] is not,     [X] is required to sign this document and return   2   copies to the issuing office.
                                                                                                ---
------------------------------------------------------------------------------------------------------------------------------------
14. Description of amendment/modification (Organized by USC Section headings, including solicitation/contract subject matter where
    feasible.)

THE CONTRACT REFERENCED IN BLOCK 10A IS MODIFIED AS FOLLOWS:

THE CONTRACT EFFECTIVITY DATE IS AUGUST 1, 2002 IN LIEU OF APRIL 1, 2002







------------------------------------------------------------------------------------------------------------------------------------
Except as provided herin, all terms and conditions of the document referenced in Item (9A or 10A as heretofore changed, remains
unchanged and in full force and effect
------------------------------------------------------------------------------------------------------------------------------------
15A. Name and Title of Signer (Type or print)                         16A. Name of Contracting Officer
JANE E. THOMPSON, PRESIDENT                                           ESTHER M. SCARBOROUGH
------------------------------------------------------------------------------------------------------------------------------------
15B. Name of Contractor                       15C. Date Signed        16B. District of Columbia                    16C. Date Signed
AMERIGROUP DISTRICT OF COLUMBIA               7/17/02
/s/ Jane E. Thompson
  (Signature of person authorized to sign)                                  (Signature of Contracting Officer)
------------------------------------------------------------------------------------------------------------------------------------
[LOGO] Government of the District of Columbia              [LOGO] Office of Contracting & Procurement              DC OCP 202 (7-99)
------------------------------------------------------------------------------------------------------------------------------------
</Table>

<PAGE>
<Table>
<S>                                                                   <C>                                 <C>
------------------------------------------------------------------------------------------------------------------------------------
                                                                       1. Contract Number                  PAGE     OF    PAGES
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
                                                                       POHC-2002-D-0003                      1              2
------------------------------------------------------------------------------------------------------------------------------------
2. Amendment/Modification Number    3. Effective Date           4. Requisition/Purchase Request No.   5. Project No. (if applicable)
M0005                                  August 1, 2002           HCOP2-210457
------------------------------------------------------------------------------------------------------------------------------------
6. Issued By                                                Code [             ]        7. Administered By (if other than line 6)
     Office of Contracting and Procurement                                              Department of Health, Office of Managed Care
     Public Safety Cluster, Department of Health Bureau                                 Medical Assistance Administration
     441 4th Street, NW., Suite 800 South                                               825 North Capitol Street, N.E.
     Washington, DC 20001                                                               Attention: Ms. Maude Holl
                                                                                        Telephone: (202) 442-8074
------------------------------------------------------------------------------------------------------------------------------------
8. Name and Address of Contractor (No. Street, city, country, state and ZIP Code)       (X)  9A. Amendment of Solicitation No.

AMERIGROUP MARYLAND INC.                                                                     ---------------------------------------
514 10TH STREET N.W., SUITE 600                                                              9B. Dated (See Item 11)
WASHINGTON, DC 20004
ATTN: JANE THOMPSON                                                                          ---------------------------------------
                                                                                             10A. Modification of Contract/Order No.
                                                                                             POHC-2002-D-0003
                                                                                         X    --------------------------------------
-------------------------------------------------------------------------------------        10B. Dated (See Item 13)
         Code                                       Facility                                 AUGUST 1, 2002
------------------------------------------------------------------------------------------------------------------------------------
                                     11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
------------------------------------------------------------------------------------------------------------------------------------
[ ] The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers [  ] is
    extended. [  ] is not extended. Offers must acknowledge receipt of this amendment prior to the hour and date specified in the
    solicitation or as amended, by one of the following methods: (a) By completing Items 8 and 15, and returning    copies of the
    amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted; or (c) By separate letter or
    telegram which includes a reference to the solicitation and amendment number. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT
    THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by
    virtue of this amendment you desire to change an offer already submitted, such change may be made by letter or telegram,
    provided each letter or telegram makes reference to the solicitation and this amendment, and is received prior to the opening
    hour and date specified.
------------------------------------------------------------------------------------------------------------------------------------
12. Accounting and Appropriation Data (If Required)

------------------------------------------------------------------------------------------------------------------------------------
                                  13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
                                     IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14
------------------------------------------------------------------------------------------------------------------------------------
 (X)  A. This change order is issued pursuant to: (Specify Authority)
-----
      The changes set forth in Item 14 are made in the contract/order no. in Item 10A.
------------------------------------------------------------------------------------------------------------------------------------
      B. The above numbered contract/order is modified to reflect the administrative changes (such as changes in paying office,
      appropriation date, etc.) set forth in item 14, pursuant to the authority of 27 dCMR, Chapter 36, Section 3601.2.
------------------------------------------------------------------------------------------------------------------------------------
  X   C. This supplemental agreement is entered into pursuant to authority of:
      DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2(c) Bilateral Contract modification and agreement between the parties
------------------------------------------------------------------------------------------------------------------------------------
      D. Other (Specify type of modification and authority)
      DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2(c) Bilateral Contract modification and agreement between the parties
------------------------------------------------------------------------------------------------------------------------------------
E. IMPORTANT:     Contractor [  ] is not,     [X] is required to sign this document and return   2   copies to the issuing office.
                                                                                                ---
------------------------------------------------------------------------------------------------------------------------------------
14. Description of amendment/modification (Organized by USC Section headings, including solicitation/contract subject matter where
    feasible.)

   THE DELIVERY ORDER REFERENCED IN BLOCK 10A ABOVE IS MODIFIED AS FOLLOWS:

   1. Block 10B above, the Effective Date of award identified in Block 3 is changed from April 11, 2002 to August 1, 2002.

   2. Section B: A list of Rates increase for trend effective from contract period of August 1, 2002 through July 31, 2003 is listed
      on page 2 of this Modification.

   3. F.3.1 IMPLEMENTATION
      The Implementation date and the effective date of the contract (Block 10A above) is the same, August 1, 2002.

   4. Reference 1006, Complaint Procedure (d) Resolution of Complaints
      (1) Timeframes-Contractor shall resolve a complaint not later than (10) days after the date receipt of the complaint.

------------------------------------------------------------------------------------------------------------------------------------
Except as provided herin, all terms and conditions of the document referenced in Item (9A or 10A as heretofore changed, remains
unchanged and in full force and effect
------------------------------------------------------------------------------------------------------------------------------------
15A. Name and Title of Signer (Type or print)                         16A. Name of Contracting Officer
                                                                      ESTHER M. SCARBOROUGH
------------------------------------------------------------------------------------------------------------------------------------
15B. Name of Contractor                       15C. Date Signed        16B. District of Columbia                    16C. Date Signed

  (Signature of person authorized to sign)                                  (Signature of Contracting Officer)
------------------------------------------------------------------------------------------------------------------------------------
[LOGO] Government of the District of Columbia              [LOGO] Office of Contracting & Procurement              DC OCP 202 (7-99)
------------------------------------------------------------------------------------------------------------------------------------
</Table>
<PAGE>

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

                                                                Page of Pages
                                                              1               2

1.   Contract Number
     POHC-2002-D-0003

2.   Amendment/Modification Number
               'M0006

3.   Effective Date
     AUGUST 1, 2003

4.   Requisition/Purchase Request No.

5.   Project No. (If applicable)

6.   Issued By                                                 Code ____________
     Office of Contracting and Procurement
     Department of Health Bureau
     441 4th Street, NW., Suite 700 South
     Washington, DC 20001

7.   Administered By (If other than line 6).
     Department of Health, Office of Managed Care
     Medical Assistance Administration
     825 North Capitol Street; N.E.
     Attention: Ms. Maude Holt
     Telephone: (202) 442-9074

8.   Name and Address of Contractor (No. Street, city, country, state and ZIP
     Code)
     AMERIGROUP DISTRICT OF COLUMBIA
     750 1ST STREET, N.E. SUITE 1120
     WASHINGTON, DC 20004
     ATTN: MS. JANE THOMPSON

     Code ____________                 Facility ____________

(X)  9A. Amendment of Solicitation No.

     9B. Dated (See Item 11).

     10A. Modification of Contract/Order No.
     POHC-2002-D-2003
 X
     10B. Dated (See Item 13)
     AUGUST 1,2002

11.  THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

[ ]  The above numbered solicitation is amended as set forth in Item 14. The
     hour and date specified for receipt of Offers [ ] is extended. [ ] is not
     extended. Offers must acknowledge receipt, this amendment prior to the hour
     and date specified in the solicitation or as amended, by one of the
     following methods: (a) By completing Items 8 and 15, and returning
     ______copies of the amendment, (b) By acknowledging receipt of this
     amendment on each copy of the offer submitted; or (c) By separate letter or
     telegram which includes a reference to the solicitation and amendment
     number. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE
     DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED
     MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you
     desire to change an offer already submitted, such change may be made by
     letter or telegram, provided each letter or telegram makes reference to the
     solicitation and this amendment, and is received prior to the opening hour
     and date specified.

12.  Accounting and Appropriation Data (If Required)

13.  THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS.
     IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

(X)  A. This change order is issued pursuant in: (Specify Authority)

     IN ACCORDANCE TO DCMR CHAPTER 36, SECTION 3601.2 (C) OPTION

     The changes set forth in item 14 are made in the contract/order no. in
     item 10A.

     B. The above numbered contract/order is modified to reflect the
     administrative changes (such as changes in paying office,
     appropriation date, etc.) set forth in item 14, pursuant to the authority
     of 27 dCMR, Chapter 36, Section 3601.2.

     C. This supplemental agreement is entered into pursuant to authority of:
     DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2 (c) Bilateral Contract
     Modification and agreement between the parties

     D. Other (Specify type of modification and authority)

     E. IMPORTANT:     Contractor [ ] is not,  [X] is required to sign this
     document and return 2 copies to the issuing office.

14.  Description of amendment/modification (Organized by USC Section headings,
     including solicitation/contract subject matter where feasible.)

     THE CONTRACT REFERENCED IN BLOCK 10A IS MODIFIED AS FOLLOWS:

1.   TO EXERCISE A PARTIAL OPTION TO EXTEND THE CONTRACT FOR THE PERIOD OF
     AUGUST 1,2003 THROUGH AUGUST 4,2003, IN ACCORDANCE WITH SECTION F1.2.1,
     TERM OF CONTRACT. THE PRICE FOR THIS OPTION PERIOD IS $ 908,841.71.

2.   A LIST OF RATES INCREASE FOR TREND EFFECTIVE FROM CONTRACT PERIOD AUGUST
     1,2003 THROUGH AUGUST 4,2003 IS LISTED ON PAGE 2 OF THIS MODIFICATION.

          ALL OTHER CONTRACT TERMS AND CONDITIONS REMAIN UNCHANGED

Except as provided herein, all terms and conditions of the document referred in
Item (9A or 10A as herebefore changed, remains unchanged and in full force and
effect.


15A. Name and Title of Signer (Type or Print)
     JANE E. THOMPSON
     CEO-DC OPERATIONS

15B. Name of Contractor

     AMERIGROUP DISTRICT OF COLUMBIA

     /s/ Jane E. Thompson
     ------------------------------------------
     (Signature of person authorised to sign)

15C. Date Signed
     7/30/03

16A. Name of Contracting Officer
     ESTHER M. SCARBOROUGH

16B. District of Columbia

     /s/ E.M. Scarborough
     ------------------------------------------
     (Signature of Contracting Officer)

16C. Date Signed
     7/31/03

***  Government of The District of Columbia

     [OFFICE OF CONTRACTING & PROCUREMENT LOGO]

     DC OCP 202 (7-99)

<PAGE>

DISTRICT OF COLUMBIA            DCHFP RATE SUMMARY
                             AMERIGROUP 2003-2004 RATES

CAPITATION RATES

EFFECTIVE AUGUST 01, 2003 TO AUGUST 4, 2003

<TABLE>
<CAPTION>
----------------------------------------------
   AGE/SEX CELL                    AMERIGROUP
----------------------------------------------
<S>                               <C>
< 1 Male & Female                 $     263.08
----------------------------------------------
1 - 12 Male & Female              $     112.50
----------------------------------------------
13 - 18 Female                    $     185.44
----------------------------------------------
13 - 18 Male                      $     188.44
----------------------------------------------
19 - 36 Female                    $     187.07
----------------------------------------------
19 - 36 Male                      $     119.73
----------------------------------------------
37+ Female                        $     312.43
----------------------------------------------
37+ Male                          $     267.42
----------------------------------------------
Infant's Month of Birth           $   5,109.97
----------------------------------------------
Mother's Month of Delivery        $   5,439.59
----------------------------------------------

----------------------------------------------
OVERALL RATE INCREASE                      0.5%
----------------------------------------------
</TABLE>

Page 2
<PAGE>

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

                                                               Page of Pages
                                                             1               1

1.  Contract Number
    POHC-2002-D-0003

2.  Amendment/Modification Number
              'M0007

3.  EFFECTIVE DATE
    See Block 16 C

4.  Requisition/Purchase Request No.
    HCOP2-210457

5.  Project No. (If Applicable)

6.  Issued By                                                Code ______________
    Office of Contracting and Procurement
    Department of Health Bureau
    441 4th Street, NW., Suite 700 South
    Washington, DC 20001

7.  Administered By (If other than line 6)
    Department of Health, Office of Managed Care
    Medical Assistance Administration
    825 North Capitol Street; N.E.
    Attention: Ms. Maude Holt
    Telephone: (202) 442-9074

8.  Name and Address of Contractor (No. Street, city, country, state and ZIP
    Code)

    AMERIGROUP DISTRICT OF COLUMBIA
    75O 1ST STREET, N.E., SUITE 1120
    WASHINGTON, DC 20004
    ATTN: MS. JANE THOMPSON

    Code ______________                                  Facility ______________

(X) 9A. Amendment or Solicitation No.

    9B. Dated (See Item 11)

    10A. Modification of Contract/Order No.
         POHC-2002-D-0003
X
    10B. Dated (See Item 13)
        AUGUST 1, 2002

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

[ ] The above numbered solicitation to amended as set forth in Item 14. The
    hour and date specified for receipt of Offers [ ] is extended. [ ] is not
    extended. Offers must acknowledge receipt this amendment prior to the hour
    and date specified in the solicitation or as amended, by one of the
    following methods: (a) By completing Items 8 and 15, and returning
    ______copies of the amendment, (b) By acknowledging receipt of this
    amendment on each copy of the offer submitted; or (c) By separate letter or
    telegram which includes a reference to the solicitation and amendment
    number. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE
    DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED
    MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you
    desire to change an offer already submitted, such change may be made by
    letter or telegram, provided each letter or telegram makes reference to the
    solicitation and this amendment, and is received prior to the opening hour
    and date specified.

12. Accounting and Appropriation Data (If Required)

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS, IT MODIFIES THE
    CONTRACT/ORDER NO, AS DESCRIBED IN ITEM 14

(X) A. This change order is issued pursuant to: (Specify Authority)

    The changes set forth in item 14 are image in the contract/order no. in
    item 10A.

    B. The above numbered contract/order is modified to reflect the
    administrative change (such as changes in paying office, appropriation
    date, etc.) set forth in item 14, pursuant to the authority of 27 dCMR,
    Chapter 36, Section 3601.2.

 X  C. This supplemental agreement is entered into pursuant to authority of:
    DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2 (c) Bilateral Contract
    Modification and agreement between the parties

    D. Other (Specify type of modification and authority)

    E. IMPORTANT: Contractor [ ]is not,  [X] is required to sign this document
    and return 2 copies to the issuing office.

14. Description of amendment/modification (Organized by USC Section headings,
    including solicitation/contract subject matter where feasible.)

    THE CONTRACT REFERENCED IN BLOCK 10A IS MODIFIED AS TO CHANGE THE NAME
    "AMERICAID COMMUNITY CARE TO" AMERIGROUP DISTRICT OF COLUMBIA"

            ALL OTHER CONTRACT TERMS AND CONDITIONS REMAIN UNCHANGED

Except as provided herein, all terms and condition of the document referenced in
item (9A or 10A as heretofore changed, remains unchanged and in full force and
effect


15A. Name and Title of Signer:(Type or Print)
     JANE E. THOMPSON
     CEO-DC OPERATIONS

15B. Name of Contractor
     AMERIGROUP DISTRICT OF COLUMBIA

     /s/ Jane E. Thompson
     ------------------------------------------
     (Signature of person authorised to sign)

15C. Date Signed
     7/16/03

16A. Name of Contracting Officer
     ESTHER M. SCARBOROUGH

16B. District of Columbia

     /s/ E.M. Scarborough
     ------------------------------------------
     (Signature of Contracting Officer)

16C. Date Signed
     7/17/03

***  GOVERNMENT OF THE DISTRICT OF COLUMBIA

     [OFFICE OF CONTRACTING & PROCUREMENT LOGO]

     DC OCP 202 (7-99)
<PAGE>
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

                                                                 Page of Pages
                                                               1               1

1.   Contract Number
     POHC-2002-D-0003

2.   Amendment/Modification Number
               'M0008

3.   Effective Date
              AUGUST 5, 2003

4.   Requisition/Purchase Request No.

5.   Project No. (if applicable)

6.   Issued By                                                    Code _________
     Office of Contracting and Procurement
     Department of Health Bureau
     441 4th Street, NW., Suite 700 South
     Washington, DC 20001

7.   Administered By (If other than line 6)
     Department of Health, Office of Managed Care
     Medical Assistance Administration
     825 North Capitol Street, N.E.
     Attention: Ms. Maude Holt
     Telephone: (202) 442-9074

8.   Name and Address of Contractor (No. Street, city, country, state and ZIP
     Code)

     AMERIGROUP DISTRICT OF COLUMBIA
     750 1 ST STREET, N.E. SUITE 1120
     WASHINGTON, DC 20004
     ATTN: MS. JANE THOMPSON

     Code _____________________               Facility _________________________

(X)  9A. Amendment of Solicitation No.

     9B. Dated (See Item 11)

     10A. Modification of Contract/Order No.
     POHC-2002-D-0003
 X
     10B. Dated (See Item 13)
     AUGUST 1, 2002

11.  THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

[ ]  The above numbered solicitation is amended as set forth in Item 14. The
     hour and date specified for receipt of Offers [ ] is extended. [ ] is not
     extended Offers must acknowledge receipt of this amendment prior to the
     hour and date specified in the solicitation or as amended, by one of the
     following methods; (a) By completing items 8 and 15, and returning ______
     copies of the amendment; (b) By acknowledging receipt of this amendment on
     each copy of the offer submitted; or (c) By separate letter or telegram
     which includes a reference to the solicitation and amendment number.
     FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR
     THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN
     REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to
     change an offer already submitted, such change may be made by letter or
     telegram, provided each letter or telegram makes reference to the
     solicitation and this amendment, and is received prior to the opening hour
     and date specified.

12.  Accounting and Appropriation Data (If Required)

13.  THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
     IT MODIFIES THE CONTRACT/ORDER NO, AS DESCRIBED IN ITEM 14

(X)  A. This change order is issued pursuant to: (Specify Authority)

     IN ACCORDANCE TO DCMR CHAPTER 36, SECTION 3601.2(C) OPTION

     The changes set forth in item 14 are made in the contract/order no. in item
     10A.

     B. The above numbered contract/order is modified to reflect the
     administrative changes (such as changes in paying office, appropriation
     date, etc.) set forth in item 14, pursuant to the authority of 27 DCMR,
     Chapter 36, Section 3601.2.

     C. This supplemental agreement is entered into pursuant to authority of:
     DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2(c) Bilateral Contract
     Modification and agreement between the parties

     D. Other (Specify type of modification and authority)

     E. IMPORTANT:        Contractor. [ ] is not, [X] is required to sign this
     document and return 2 Copies to the issuing office.

14.  Description of amendment/modification (Organized by USC Section headings,
     including solicitation/contract subject matter where feasible.)

     THE CONTRACT REFERENCED IN BLOCK 10A ABOVE IS MODIFIED AS FOLLOWS:

     1.   THE DISTRICT HEREBY EXERCISES ITS OPTION TO RENEW THIS CONTRACT IN
          ACCORDANCE TO SECTION 1.2, TERM OF CONTRACT FOR THE PERIOD OF AUGUST
          8, 2003, THROUGH AUGUST 8, 2003 , THE CONTINUATION OF THIS CONTRACT
          IS SUBJECT TO CITY COUNCIL'S APPROVAL AND AVAILABILITY OF FUNDS.

            ALL OTHER CONTRACT TERMS AND CONDITIONS REMAIN UNCHANGED

Except as provided herein, all terms and conditions of the document referenced
in Item (9A or 10A as heretofore changed, remains unchanged and In full force
and effect

15A. Name and Title of Signer (Type or print)
     JANE E. THOMPSON
     CEO - DC OPERATIONS

15B. Name of Contractor
     AMERIGROUP DISTRICT OF COLUMBIA

     /s/ Jane E. Thompson
     -------------------------------------------
     (Signature of person authorized to sign)

15C. Date Signed
     8/4/03

16A. Name of Contracting Officer
     ESTHER M. SCARBOROUGH

16B. District of Columbia

     /s/ E.M. Scarborough
     -------------------------------------------
     (Signature of Contracting Officer)

16C. Date Signed
     8/4/03

***  Government of the District of Columbia

     [OFFICE OF CONTRACTING & PROCUREMENT LOGO]

     DC OCP 202 (7-99)

<PAGE>

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

                                                                Page of Pages
                                                               1             109

1.   Contract Number
     POHC-2002-D-0003

2.   Amendment/Modification Number
              'M0009

3.   Effective Date
              See Block 16 C

4.   Requisition/Purchase Request No.
              HCOP2-210457

5.   Project No. (if applicable)

6.   Issued By                                                     Code________
     Office of Contracting and Procurement
     Department of Health Bureau
     441 4th Street, NW, Suite 700 South
     Washington, DC 20001

7.   Administered By (if other than line 6)
     Department of Health, Office of Managed Care
     Medical Assistance Administration
     825 North Capitol Street, N.E.
     Attention: Ms. Maude Holt
     Telephone: (202) 442-9074

8.   Name and Address of Contractor (No. Street, city, country, state and ZIP
     Code)

     AMERIGROUP DC, INC
     750 1 ST STREET, N.E, SUITE 1120
     WASHINGTON, DC 20004
     ATTN: MS. JANE THOMPSON

     Code_____________________               Facility__________________________

(X)  9A. Amendment of Solicitation No.

     9B. Dated (See Item 11)

     10A. Modification of Contract/Order No.
     POHC-2002-D-0003
 X
     10.B Dated (See Item 13)
     AUGUST 1, 2002

11.  THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

The above numbered solicitation is amended as set forth in Item 14. The hour and
date specified for receipt of Offers [ ] is extended, [ ] is not extended.
Offers must acknowledge receipt of this amendment prior to the hour and date
specified in the solicitation or as amended, by one of the following methods:
(a) By completing items 8 and 15, and returning ______ copies of the amendment;
(b) By acknowledging receipt of this amendment on each copy of the offer
submitted; or (c) By separate letter or telegram which includes a reference to
the solicitation and amendment number. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE
RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND
DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted, such change may be
made by letter or telegram, provided each letter or telegram makes reference to
the solicitation and this amendment, and is received prior to the opening hour
and date specified.

12.  Accounting and Appropriation Data (if Required)

13.  THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
     IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14

(X)  A. This change order is issued pursuant to: (Specify Authority)
     The changes set forth in item 14 are made in the contract/order no. in item
     10A.

     B. The above numbered contract/order is modified to reflect the
     administrative changes (such as changes in paying office, appropriation
     date, etc.) set forth in item 14, pursuant to the authority of 27 dCMR,
     Chapter 36, Section 3601.2.

X    C. This supplemental agreement is entered into pursuant to authority of:
     DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2(c) Bilateral Contract
     Modification and agreement between the parties

     D. other (Specify type of modification and authority)

     E. IMPORTANT:     Contractor [ ] is not, [X] is required to sign this
     document and return 2 copies to the issuing office.

14.  Description of amendment/modification (Organized by USC Section headings,
     including solicitation/contract subject matter where feasible.)

     THE CONTRACT REFERENCED IN BLOCK 10A IS MODIFIED AS LISTED ON THE
     FOLLOWING PAGES TO THIS MODIFICATION.

            ALL OTHER CONTRACT TERMS AND CONDITIONS REMAIN UNCHANGED

Except as provided herin, all terms and conditions of the document referenced
in item (9A or 10A as heretofore changed, remains unchanged and in full force
and effect

15A. Name and Title of Signer (Type or print)
     JANE E. THOMPSON
     CEO - DC OPERATIONS

15B. Name of Contractor
     AMERIGROUP DISTRICT OF COLUMBIA

     /s/ Jane E. Thompson
     -------------------------------------------
     (Signature of person authorized to sign)

15C. Date Signed
     8/12/03

16A. Name of Contracting Officer
     ESTHER M. SCARBOROUGH

16B. District of Columbia

     /s/ E. M. Scarborough
     -------------------------------------------
     (Signature of Contracting Officer)

16C. Date Signed
     8/12/03

***  Government of the District of Columbia

     [OFFICE OF CONTRACTING & PROCUREMENT LOGO]

     DC OCP 202 (7-99)
<PAGE>
                         AMERIGROUP DISTRICT OF COLUMBIA

MODIFY EXISTING LANGUAGE OR ADD THE FOLLOWING:

SECTION B CONTRACT MODIFICATIONS

SECTION B.3

Insert the following language to SECTION B.3

         ADD

         B.3               Actuarially sound capitation rates means capitation
                           rates that:

                           A. Have been developed in accordance with generally
                              accepted actuarial principles and practices;

                           B. Are appropriate for the populations to be covered,
                              and the services to be furnished under the
                              contract; and

                           C. Have been certified, as meeting the requirements
                              of this paragraph (c), by actuaries who meet the
                              qualification standards established by the
                              American Academy of Actuaries and follow the
                              practice standards established by the Actuarial
                              Standards Board.

                           Adjustments to smooth data means adjustments made by
                           cost-neutral methods, across rate cells, to
                           compensate for distortions in costs, utilization, or
                           the number of eligibles.

                           Cost neutral means that the mechanism used to smooth
                           data, share risk, or adjust for risk will recognize
                           both higher and lower expected costs and is not
                           intended to create a net aggregate gain or loss
                           across all payments.

                           Incentive arrangements means any payment mechanism
                           under which a Contractor shall receive additional
                           funds over and above the capitation rates it was paid
                           for meeting targets specified in the contract.

                           Risk corridor means a risk sharing mechanism in which
                           States and Contractors share in both profits and
                           losses under the contract outside of predetermined
                           threshold amount, so that

CONTRACT # POHC-2002-D-0003                                                1
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

                           after an initial corridor in which the Contractor is
                           responsible for all losses or retains all profits,
                           the State contributes a portion toward any additional
                           losses, and receives a portion of any additional
                           profits.

         Change from:

         B.3.3.   The maximum for each DCHFP contract is 75,000 enrollees per
                  year.

         Change to:

         B.3.3    The maximum for each DCHFP contract is 100,000 enrollees per
                  year.

SECTION C DESCRIPITION/SPECIFICATIONS/WORK STATEMENT

SECTION C.1.2

         ADD

         Bullet under Applicable Documents:

                  -   45 CFR 74 Appendix A

                  -   42 CFR 438.604

                  -   42 CFR 438.606

                  -   42 CFR 455.1

                  -   42 CFR 455.17

                  -   42 CFR 438.610

                  -   Section 1902 (a)(37)(A) of the Social Security Act

                  -   42 CFR 438.6

                  -   42 CFR 438.210

                  -   Section 1128 of the Social Security Act

                  -   Section 1128A of the Social Security Act

                  -   42 CFR 438.214

         ADD the following Terms and Definitions to SECTION C.1.3

         ACTION (defined as used in Section C.14):

                           -   The denial or limited authorization of a
                               requested service, including the type or level of
                               service;

                           -   The denial in whole or in part of payment for a
                               service;

                           -   The failure to provide services in a timely
                               manner as defined by the District; or

CONTRACT # POHC-2002-D-0003                                                    2
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

                           -   The failure of the Contractor to act within the
                               timeframes for resolution and notification of
                               appeals and grievances in this section.

         ACTUARIALLY SOUND CAPITATION RATES: Rates that have been developed in
                   accordance with generally accepted actuarial principles and
                   practices; are appropriate for the populations to be covered
                   and the services to be furnished under the contract; and have
                   been certified, as meeting the requirements of the
                   regulation, by actuaries who meet the qualification standards
                   established by the American Academy of Actuaries and follow
                   the practice standards established by the Actuarial Standards
                   Board.

         ADJUSTMENTS TO SMOOTH DATA: Adjustments made by cost-neutral methods,
                   across rate cells, to compensate for distortions in costs,
                   utilization, or the number of eligibles.

         ADULTS WITH SPECIAL HEALTH CARE NEEDS: Adults who have an illness,
                   condition or disability that results in limitation of
                   function, activities or social roles in comparison with
                   accepted adult age-related milestones in general areas of
                   physical, cognitive, emotional, and/or social growth and/or
                   development, or people who have seen a specialist more than
                   three (3) times in the last year. This definition includes
                   but is not limited to individuals who self-identify as having
                   a disability or who meet the standard of limited English
                   proficiency.

         ADVANCE DIRECTIVE: A written instruction, such as a living will or
                   durable power of attorney for health care, recognized under
                   State law (whether statutory or as recognized by the courts
                   of the State), relating to the provision of health care when
                   the individual is incapacitated.

         APPEAL:   A request for review of an action, as "action" is defined as
                   used in SECTION C.14 of this contract.

         Change from:

         CAPITATION RATE: The monthly rate per Enrollee, fixed annually in
                   advance, paid by the MAA to a contracted managed care plan
                   for managing the services described in the contracted
                   Evidence of Coverage, whether or not the Enrollee receives
                   services during the period covered by the rate.

         Change to:

CONTRACT # POHC-2002-D-0003                                                    3
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

         CAPITATION PAYMENT: A payment the MAA makes periodically to a
                   Contractor on behalf of each recipient enrolled under a
                   contract for the provision of medical services under the
                   District's plan. The MAA makes the payment regardless of
                   whether the particular recipient receives services during the
                   period covered by the payment.

         Change from:

         CHILDREN WITH SPECIAL HEALTH CARE NEEDS: Those children who have, or
                   are at increased risk for, chronic physical, developmental,
                   behavioral, or emotional conditions and who also require
                   health and related services of a type or amount beyond those
                   required by children generally. This definition includes
                   children on SSI or who are SSI-related eligible.

         Change to:

         CHILDREN WITH SPECIAL HEALTH CARE NEEDS: Those children who have, or
                   are at increased risk for, chronic physical, developmental,
                   behavioral, or emotional conditions or who also require
                   health and related services of a type or amount beyond those
                   required by children generally. This definition includes
                   children on SSI, children who are SSI-related eligible,
                   children who are or have been in foster care, and children
                   who meet the standard of limited English proficiency.

         ADD the following Terms and Definitions to SECTION C.1.3

         COMPETENT PROFESSIONAL INTERPRETER: Someone who is proficient in both
                   English and the other language; has had orientation or
                   training in the ethics of interpreting; has the ability to
                   interpret accurately and impartially; and has the ability to
                   interpret for medical encounters using medical terminology in
                   English and the other language.

         COMPREHENSIVE RISK CONTRACT: A risk contract that covers comprehensive
                   services, that is, inpatient hospital services and any of the
                   following services or any three or more of the following
                   services:

                   -   Outpatient hospital services;

                   -   FQHC services;

                   -   Other laboratory and x-ray services;

                   -   Nursing facility (NF) services;

                   -   Early and periodic screening, diagnostic, and treatment
                       (EPSDT) services;

                   -   Family planning services;

                   -   Physician services;

                   -   Home health services; and

CONTRACT # POHC-2002-D-0003                                                    4
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

                   -   Mental health services.

         COST NEUTRAL: The mechanisms used to smooth data, share risk, or adjust
                   for risk will recognize both higher and lower expected costs
                   and is not intended to create a net aggregate gain or loss
                   across all payments.

         ENROLLEE: A Medicaid recipient who is currently enrolled in a MCO or
                   CASSIP participating in District's Medicaid managed care
                   program.

         GRIEVANCE: An expression of dissatisfaction about any matter other than
                   an action. The term is also used to refer to the overall
                   system that includes grievances and appeals handled by the
                   Contractor and access to the District's Fair Hearing process.

         Change from:

         HEALTH CARE PROFESSIONAL: Physician or other health care
                   provider/practitioner if coverage for the professional's
                   services, provided for under the professional scope of
                   practice, and included under the contract for the services of
                   the professional. This term includes, but is not limited to:
                   podiatrist, optometrist, chiropractor, psychologist, dentist,
                   physician assistant, physical or occupational therapist and
                   therapy assistant, speech-language pathologist, audiologist,
                   registered or licensed practical nurse (including nurse
                   practitioner, clinical nurse specialist, certified registered
                   nurse anesthetist and certified nurse-midwife), licensed
                   certified social worker, registered respiratory therapist and
                   certified respiratory therapy technician.

         Change to:

         HEALTH CARE PROFESSIONAL: A physician or any of the following: a
                   podiatrist, optometrist, chiropractor, psychologist, dentist,
                   physician assistant, physical or occupational therapist,
                   therapist assistant, speech-language pathologist,
                   audiologist, registered or practical nurse (including nurse
                   practitioner, clinical nurse specialist, certified registered
                   nurse anesthetist, and certified nurse midwife), license
                   certified social worker, registered respiratory therapist,
                   and certified respiratory therapy technician.

         ADD the following Terms and Definitions to SECTION C.1.3

CONTRACT # POHC-2002-D-0003                                                    5
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

         INCENTIVE ARRANGEMENT: Any payment mechanism under which a Contractor
                   shall receive additional funds over and above the capitation
                   rates it was paid for meeting targets specified in the
                   contract.

         LIMITED OR NO ENGLISH PROFICIENCY INDIVIDUAL: An individual who is
                   unable to speak, read, write, or understand the English
                   language at a level that permits him or her to interact
                   effectively with Contractors, agencies, or providers.

         Change from:

         MANAGED CARE ORGANIZATION (MCO): An entity that manages the purchase
                   and provision of physical or behavioral health services.

         Change to:

         MANAGED CARE ORGANIZATION (MCO): A Contractor that has, or is seeking
                   to qualify for, a comprehensive risk contract, and that is:

                   -   A Federally qualified MCO that maintains written policies
                       and procedures that meet the advance directives
                       requirements of subpart I of part 489 of the CFR; or

                   -   Any public or private Contractor that meets the advance
                       directives requirements and is determined to also meet
                       the following conditions:

                       -   Makes the services it provides to its Medicaid
                           Enrollees as accessible (in terms of timeliness,
                           amount, duration, and scope) as those services are to
                           other Medicaid recipients within the area served by
                           the Contractor.

                       -   Meets the solvency standards of CFR 438.116.

         ADD the following Terms and Definitions to SECTION C.1.3

         POTENTIAL ENROLLEE: District of Columbia residents who have been
                   determined eligible for Medicaid in an eligibility category
                   that requires them to participate in Medicaid Managed Care
                   Program by enrolling in a health plan, either through
                   mandatory enrollment or voluntarily elect to enroll, but is
                   not yet an enrollee of a specific MCO, CASSIP, or PCCM.

         PREPAID INPATIENT HEALTH PLAN (PIHP): A Contractor that provides
                   medical services to Enrollees under contract with the
                   District MAA, and on the basis of prepaid capitation
                   payments, or other payment arrangements that do

CONTRACT # POHC-2002-D-0003                                                    6
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

                   not use District plan payment rates; provides, arranges for,
                   or otherwise has the responsibility for the provision of any
                   inpatient hospital or institutional services for its
                   Enrollees.

         PRIMARY CARE: All health care services and laboratory services
                   customarily furnished by or through a general practitioner,
                   family physician, internal medicine physician,
                   obstetrician/gynecologist, or pediatrician, to the extent the
                   furnishing of those services are legally authorized in the
                   State or District in which the practitioner furnishes them.

         PREVALENT LANGUAGES: Spanish, Chinese, Vietnamese, Amharic, Braille, as
                   well as other languages that the District may designate if
                   there are speakers of that language who are eligible to be
                   served or likely to be directly affected by the Contractor's
                   program.

         RISK CONTRACT: A contract under which the Contractor assumes risk for
                   the cost of the services covered under the contract and
                   incurs loss if the cost of furnishing the services exceeds
                   the payments under the contract.

         RISK CORRIDOR: A risk sharing mechanism in which the District and
                   Contractors share in both profits and losses under the
                   contract outside of predetermined threshold amount, so that
                   after an initial corridor in which the Contractor is
                   responsible for all losses or retains all profits, the State
                   contributes a portion toward any additional losses, and
                   receives a portion of any additional profits.

         SERVICE AUTHORIZATION REQUEST: A managed care Enrollee's request for
                   the provision of a service.

         TIMELY:   Filing on or before the later of the following: within sixty
                   (60) days of the Contractor's mailing the notice of action
                   and the intended effective date of the Contractor's proposed
                   action.

         TIMELINESS OF ORAL INTERPRETER SERVICES:

         EMERGENCY SERVICES-The Contractor shall ensure that all providers of
                   emergency services furnish or arrange for the furnishing of
                   oral interpreter services on a 24 hour, 7 day a week basis
                   immediately after a request for such services by an Enrollee
                   or on behalf of an Enrollee with limited English proficiency;
                   or a determination by the treating provider that the Enrollee
                   requires such services.

         NON-EMERGENCY SERVICES--The Contractor shall furnish, or arrange for
                   the furnishing of oral interpreter services to the Enrollee
                   with limited

CONTRACT # POHC-2002-D-0003                                                    7
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

                   English proficiency; at the time a scheduled appointment
                   begins or within 1 hour of the time an unscheduled
                   appointment is requested by or on behalf of the Enrollee with
                   limited English proficiency.

         VITAL DOCUMENTS: Notices, complaint/appeal forms, enrollment and
                   outreach materials that inform individuals about their rights
                   and/or eligibility requirements for benefits and
                   participation under the District's services, programs, and
                   activities.

         ADD the following to the ACRONYMS list in SECTION C.1.3

         LEP LIMITED OR NO ENGLISH PROFICIENCY
         OMB FEDERAL OFFICE OF MANAGEMENT AND BUDGET

SECTION C.2                Background

         ADD

         C.2.4.2           As required by 42 CFR 438.6(a), the MAA will submit
                           all MCO and PIHP contracts to the CMS Regional Office
                           for review and approval.

SECTION C.3                Requirements

         ADD

         C.3.1.4           Ensure the geographic location of providers and
                           Medicaid Enrollees, considering distance, travel
                           time, the means of transportation ordinarily used by
                           Medicaid Enrollees, and whether the location provides
                           physical access for Medicaid Enrollees with
                           disabilities.

         C.3.1.5           In accordance with 42 CFR 438.208, the Contractor
                           shall implement procedures to deliver primary care to
                           and coordinate health care for all Enrollees. These
                           procedures shall meet the District's requirements and
                           are not limited to:

                           A. Ensure that each Enrollee has an ongoing source of
                              primary care appropriate to his or her needs and a
                              person or entity formally designated as primarily
                              responsible for

CONTRACT # POHC-2002-D-0003                                                    8
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

                              coordinating the health care services furnished to
                              the Enrollee;

                           B. Coordinate the services the MCO or PIHP furnishes
                              to the Enrollee with the services the Enrollee
                              receives from any other MCO or PIHP;

                           C. Share with other MCOs and PIHP serving the
                              Enrollee with special health care needs the
                              results of its identification and assessment of
                              that Enrollee's needs to prevent duplication of
                              those activities; and

                           D. Ensure that in the process of coordinating care,
                              each Enrollee's privacy is protected in accordance
                              with the privacy requirements in 45 CFR parts 160
                              and 164 subparts A and E, to the extent that they
                              are applicable.

         C.3.1.6           The Contractor's network shall provide female
                           Enrollees with direct access to a women's health
                           specialist within the networks for covered care
                           necessary to provide women's routine and preventive
                           health care services. This is in addition to the
                           Enrollee's designated source of primary care if that
                           source is not a women's health specialist, as
                           specified in 42 CFR 438.206 (b)(2). A female enrollee
                           may choose a women's health specialist as a primary
                           care provider.

         Change from:

         C.3.3             Health plans must ensure that all individually
                           identifiable information relating to Medicaid
                           Enrollees is kept confidential pursuant to District
                           of Columbia, 42 U.S.C. Section 1396a(a)(7) (Section
                           1902(a)(7) of the Federal Social Security Act), 42
                           CFR Part 2 and other regulations promulgated
                           thereunder. Such information shall be used by the
                           plan or its providers only for a purpose directly
                           connected with performance of the plan's obligations
                           under this program. The provisions of this Section
                           will survive the termination of a health plan's
                           participation in the Medicaid managed care program
                           and will remain in effect as long as the plan
                           maintains any individually identifiable information
                           relating to Medicaid beneficiaries.

                           The Contractor must ensure compliance with the Health
                           Insurance Portability and Accountability Act of 1996
                           (Public Law 104-191, August 21, 1996) and all
                           applicable regulations

CONTRACT # POHC-2002-D-0003                                                    9
MODIFICATION # M0009

<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

                           promulgated thereunder. Such regulations include but
                           are not limited to, the Medical Privacy Rule 65
                           Federal Regulations 82462 (December 28, 2000)
                           (codified at 45 C.F.R. Parts 160-164) and the
                           electronic transactions and code set standards rule,
                           65 Federal Regulations 50312 (August 17, 2000)
                           (codified at 45 C.F.R. Parts 160 and 162).

                           The Contractor shall maintain written procedures for
                           compliance with all applicable privacy,
                           confidentiality, and information security
                           requirements. The Contractor shall train employees
                           and subcontractors on compliance with all applicable
                           privacy, confidentiality, and information security
                           requirements.

         Change to:

         C.3.3             Health plans shall ensure that all individually
                           identifiable information relating to Medicaid
                           Enrollees is kept confidential pursuant to District
                           of Columbia, 42 U.S.C. Section 1396a(a)(7), Section
                           1902(a)(7) of the Federal Social Security Act), 42
                           CFR Part 2 and other regulations promulgated there
                           under. Medical records and any other health and
                           enrollment information that identifies a particular
                           Enrollee, the Contractor shall use and disclose such
                           individually identifiable health information in
                           accordance with the privacy requirements in 45 CFR
                           parts 160 and 164, subparts A and E, to the extent
                           that these requirements are applicable. Such
                           information shall be used by the plan or its
                           providers only for a purpose directly connected with
                           performance of the plan's obligations under this
                           program. The provisions of this Section shall survive
                           the termination of a health plan's participation in
                           the Medicaid managed care program and shall remain in
                           effect as long as the plan maintains any individually
                           identifiable information relating to Medicaid
                           beneficiaries.

                           The Contractor shall ensure compliance with the
                           Health Insurance Portability and Accountability Act
                           of 1996 (Public Law 104-191, August 21, 1996) and all
                           applicable regulations promulgated there under. Such
                           regulations include but are not limited to, the
                           Medical Privacy Rule 65 Federal Regulations 82462
                           (December 28, 2000) (codified at 45 C.F.R. Parts
                           160-164) and the Electronic Transactions and Code Set
                           Standards Rule, 65 Federal Regulations 50312 (August
                           17, 2000) (codified at 45 C.F.R. Parts 160 and 162).

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           The Contractor shall maintain written procedures for
                           compliance with all applicable privacy,
                           confidentiality, and information security
                           requirements. The Contractor shall train employees
                           and subcontractors on compliance with all applicable
                           privacy, confidentiality, and information security
                           requirements.

         Change from:

         C.3.4 (FIFTH BULLET)

                           -  Maintaining Quality Improvement Programs and Plans
                              that focus on meeting and/or exceeding the
                              Performance Standards with Guidelines required by
                              the District of Columbia Medical Assistance
                              Administration or their designee.

         Change to:

         C.3.4

                           A. Maintaining Quality Improvement Programs and Plans
                              that focus on meeting and/or exceeding the
                              Performance Standards with Guidelines and timely
                              access to care, services and satisfaction
                              standards, taking into account urgency of the need
                              for services, required by the District of Columbia
                              Medical Assistance Administration or their
                              designee;

         ADD

         Bullet under C.3.4

                           A. Having procedures that -- assess the quality and
                              appropriateness of care and services furnished to
                              all Medicaid Enrollees and to individuals with
                              special health care needs; identify the race,
                              ethnicity, and primary language spoken of each
                              Medicaid Enrollee; regularly monitor and evaluate
                              the Contractor's compliance with the standards;
                              for MCOs, PIHPs, any national performance measures
                              and levels that maybe identified and developed by
                              CMS in consultation with States and other relevant
                              stakeholders.

CONTRACT # POHC-2002-D-0003                                                   11
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                         AMERIGROUP DISTRICT OF COLUMBIA

                           Arrangements for annual, external independent reviews
                           of the quality outcomes and timeliness of, and access
                           to, the services covered under each MCO and PIHP
                           contract.

         ADD

         C.3.4.1           In accordance with 42 CFR 438.202, the District shall
                           have a written strategy for assessing and improving
                           the quality of the Contractor's managed care
                           services. The District shall obtain the input of
                           Contractor's recipients and other stakeholders in the
                           development of the strategy and make the strategy
                           available for public comment before adopting it in
                           final. The Contractor shall comply with standards
                           established by the District and conduct periodic
                           reviews to evaluate the effectiveness of the strategy
                           and update the strategy periodically.

         C.3.4.2           The Contractor shall establish mechanisms to ensure
                           that network providers comply with the timely access
                           requirements and monitor them regularly to determine
                           compliance and take corrective action if there is a
                           failure to comply.

SECTION C.5                Marketing

         ADD

         After first sentence in C.5

                           In accordance with 42 CFR 438.104(a), the following
                           terms have the indicated meanings:

                           A. Cold-call marketing means any unsolicited personal
                              contact by the MCO, PIHP, with a potential
                              Enrollee for the purposes of marketing as defined
                              in this paragraph.

                           B. Marketing means any communication from a MCO,
                              PIHP, to a Medicaid recipient who is not enrolled
                              in that entity, that can reasonably be interpreted
                              as intended to influence the recipient to enroll
                              in that particular MCO's, PIHP's, Medicaid
                              product, or either to not enroll in, or disenroll
                              from, another MCO's, PIHP's, Medicaid product;

CONTRACT # POHC-2002-D-0003                                                   12
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                         AMERIGROUP DISTRICT OF COLUMBIA

                           C. Marketing materials means materials that are
                              produced in any medium, by or on behalf of a MCO,
                              PIHP, and can reasonably be interpreted as
                              intended to market to potential Enrollees; and

                           D. MCO, PIHP include any of the Contractor's
                              employees, affiliated providers, agents, or
                              Contractors.

         Change from:

         C.5.2.1           The Contractor shall submit a detailed description of
                           its marketing plan and all materials that it intends
                           to use to MAA sixty (60) days prior to implementation
                           of the marketing plan.

         Change to:

         C.5.2.1           The Contractor shall submit a detailed description of
                           its marketing plan and all materials that it intends
                           to use to MAA sixty (60) days prior to implementation
                           of the marketing plan. In accordance with 42 CFR
                           438.104(b), the District shall approve all marketing
                           materials before these materials are distributed to
                           any potential Enrollees.

         Change from:

         C.5.3.1           Written brochures and materials which are intended to
                           encourage eligibles to select the Contractor and are
                           distributed through the permissible marketing
                           activities described SECTION C.5.1 shall be written
                           at the fifth (5th) grade reading level and shall at a
                           minimum contain the following information:

         Change to:

         C.5.3.1           In accordance with the Balanced Budget Act of 1997,
                           the District of Columbia, the enrollment broker,
                           participating MCO, PIHP, PAHP, shall provide all
                           vital documents, and all written materials relating
                           to Enrollees and potential Enrollees in a manner and
                           format that shall be easily understood.

                           The Contractor shall have in place a mechanism to
                           help Enrollees and potential Enrollees understand the
                           requirements and benefits of the plan.

CONTRACT # POHC-2002-D-0003                                                   13
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                         AMERIGROUP DISTRICT OF COLUMBIA

                           A. Language. The Contractor shall:

                              a. Make available all written vital documents in
                                 each prevalent non-English language; and

                              b. Make competent professional oral interpretation
                                 services available free of charge to each
                                 potential Enrollee and current Enrollee. The
                                 Contractor must provide competent professional
                                 oral interpretation at all points of contact,
                                 including but not limited to, the offices of
                                 billing, scheduling, transportation, and
                                 appeals and grievances, whether or not the
                                 person speaks a prevalent language, in a timely
                                 manner during all hours of operation, unless
                                 the Enrollee refuses such services. If the
                                 Enrollee refuses such services, the Contractor
                                 should document the offer and declination in
                                 the LEP person's file. Even if a LEP person
                                 elects to use a family member or friend, the
                                 Contractor should suggest that a professional
                                 interpreter sit in on the encounter to ensure
                                 accurate interpretation. This applies to all
                                 non-English languages, not just those the
                                 District identifies as prevalent. The Enrollee
                                 shall not be charged for interpretation
                                 services.

                           B. Notification:

                                 The Contractor shall notify Enrollees and
                                 Potential Enrollees that oral interpretation is
                                 available and free of charge for any language
                                 and written information is available in
                                 prevalent languages for vital information and
                                 how to access those services.

                           C. When Oral Notice Must Be Provided:

                                 The Contractor shall ensure that the oral
                                 notice of the language requirements of this
                                 section is provided to an eligible LEP Enrollee
                                 at each contact relating to the furnishing of
                                 covered services between the Enrollee and an
                                 employee of Contractor; or provider
                                 participating in Contractor's provider network
                                 or an employee of such provider.

                                 The Contractor shall ensure that for each
                                 prevalent language spoken by an Enrollee, a
                                 notice shall be

CONTRACT # POHC-2002-D-0003                                                   14
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                         AMERIGROUP DISTRICT OF COLUMBIA

                                 posted in the patient waiting area of each
                                 provider participating in the Contractor's
                                 network. Each notice posted by a provider
                                 participating in the Contractor's network shall
                                 be written and printed in a manner and format
                                 that meets the understandability requirements
                                 set forth in the information relating to the
                                 availability of oral interpreter services and
                                 written translations in prevalent languages
                                 upon request and without charge. Each notice
                                 must set forth information relating to appeals
                                 and grievances. Each notice must provide
                                 information about how to access oral
                                 interpreter services and written translations.

                           D. Format. The Contractor shall provide all written
                              materials:

                              a. Use easily understood language and format; and

                              b. Be available in large font and in an
                                 appropriate manner that takes into
                                 consideration the special needs of those who,
                                 for example, are visually limited or have
                                 limited reading proficiency.

                              c. All Enrollees and Potential Enrollees shall be
                                 informed that written information is available
                                 for vital documents; are available in prevalent
                                 languages, and how to access those formats.
                                 When oral notice must be provided, the
                                 Contractor shall ensure that the oral notice
                                 required is provided to an Enrollee at each
                                 contact relating to the furnishing of covered
                                 services between the Enrollee and: (a) an
                                 employee of Contractor; or (b) a provider
                                 participating in Contractor's provider network
                                 or an employee of such provider.

                              E. Written brochures and materials which are
                                 intended to encourage eligibles to select the
                                 Contractor and shall be distributed through the
                                 permissible marketing activities described in
                                 SECTION C.5.1 shall be written at the fifth
                                 (5th) grade reading level and shall at a
                                 minimum contain the following information:

                                 This description of services must address
                                 written translation materials that are
                                 available, oral translation that is available,
                                 how to access these services, and list

CONTRACT # POHC-2002-D-0003                                                   15
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                         AMERIGROUP DISTRICT OF COLUMBIA

                                 languages spoken by all network providers
                                 including at a minimum primary care physicians,
                                 specialists, and hospitals, of each provider,
                                 whose language spoken is listed, as described
                                 in C.7.4.1.

                           E. Language Card -- Contractor shall provide without
                              charge a language card that sets forth, in each
                              language spoken in Contractor's service area
                              (whether or not such language is a prevalent
                              language), to each Enrollee:

                              a. Is identified by, or known to, Contractor as an
                                 Enrollee with limited English proficiency; or

                              b. Identifies himself or herself as having limited
                                 English proficiency.

                           F. Oral Notice -- Contractor shall provide, or ensure
                              the provision of, oral notice of the right to oral
                              interpreter services without charge to an Enrollee
                              who:

                              a. Is identified by, or known to, Contractor as an
                                 Enrollee with limited English proficiency; or

                              b. Identifies himself or herself as having limited
                                 English proficiency.

                           H. Content of Language Card and Oral Notice -- At a
                              minimum, the language card must explain in clear
                              understandable terms the benefits available to
                              Enrollees including the availability of oral
                              interpretation and written translation services,
                              and how to access these services free of charge.

                              The language card and oral notices shall include a
                              statement that:

                              a. Each Enrollee with limited English proficiency
                                 has a right to receive oral interpreter
                                 services without charge;

                              b. The Contractor has a duty to furnish oral
                                 interpreter services to an Enrollee with
                                 limited English proficiency at each contact
                                 relating to the furnishing of covered services
                                 between the Enrollee and an employee of
                                 Contractor, a provider participating in
                                 Contractor's provider network, or an employee
                                 of such provider;

CONTRACT # POHC-2002-D-0003                                                   16
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                         AMERIGROUP DISTRICT OF COLUMBIA

                              c. An Enrollee with limited English proficiency
                                 may not be required to use family or friends to
                                 furnish oral interpreter services;

                              d. An Enrollee with limited English proficiency
                                 has the right to file appeals or grievances if
                                 required oral interpreter services are not
                                 provided in a timely manner;

                              e. An Enrollee who speaks a prevalent language has
                                 the right to receive written translated
                                 materials in that language; and

                              f. How to access the written translations and oral
                                 interpretation services.

                           When the Language Card Shall be Provided to
                           Enrollees:

                              a. The language card shall be provided to new
                                 Enrollees, annually thereafter, and upon
                                 request; and

                              b. The language card shall accompany all written
                                 notices of denial, termination, reduction of
                                 services, denial of payment, or any other
                                 action upon which an Enrollee may file a
                                 grievance (as defined at Section 1005 (a)); or
                                 any other vital document.

         ADD

         C.5.3.1.8         In accordance with 42 CFR 438.104(b)(1)(iii),
                           marketing materials shall comply with the
                           requirements in 42 CFR 438.10 to ensure that, before
                           enrolling, the recipient receives from the Contractor
                           the accurate oral and written information he or she
                           needs to make an informed decision on whether to
                           enroll within fifteen days of when the potential
                           Enrollee must make her decision in choosing among
                           available MCOs; and

         C.5.3.1.9         In accordance with 42 CFR 438.52 (d), Limitations on
                           changes between primary care providers. For an
                           enrollee of a single MCO,PIHP under paragraph (b)(2)
                           or (b)(3) of this section, any limitation the State
                           imposes on his or her freedom to change

CONTRACT # POHC-2002-D-0003                                                   17
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                         AMERIGROUP DISTRICT OF COLUMBIA

                           between primary care providers may be no more
                           restrictive than the limitations on disenrollment
                           under Section 438.56(c).

         ADD

         C.5.3.2.5         In accordance with 42 CFR 438.104(b)(1)(ii), the
                           Contractor may distribute the materials to its entire
                           service area as specified in the contract.

         Change from:

         C.5.5.1           Materials which mislead or falsely describe covered
                           or available services;

         Change to:

         C.5.5.1           In accordance with 42 CFR 438.104(b)(2), the
                           Contractor shall specify the methods it shall use to
                           assure that marketing including plans and materials,
                           is accurate and does not mislead, confuse, or defraud
                           the recipients or the District. Statements that shall
                           be considered inaccurate, false, or misleading,
                           include, but are not limited to, any assertion or
                           statement (whether written or oral) that:

                           A. The recipient shall enroll in the MCO or CASSIP in
                              order to obtain benefits or in order not to lose
                              benefits; or

                           B. The Contractor is endorsed by CMS, the Federal or
                              District government, or similar entity.

         Change from:

         C.5.5.5.          Direct soliciting of members, either by mail,
                           door-to-door or telephonic, of prospective Enrollee;

         CHANGE TO:

         C.5.5.5.          Does not, directly or indirectly, engage in
                           door-to-door, telephone, or other cold-call marketing
                           activities.

         ADD

         C.5.5.7           In accordance with 42 CFR 438.104(b)(1)(iv), the
                           Contractor shall not seek to influence enrollment in
                           conjunction with sale or offering of any private
                           insurance.

CONTRACT # POHC-2002-D-0003                                                   18
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                         AMERIGROUP DISTRICT OF COLUMBIA

     SECTION C.6           Enrollment, Education and Outreach

         Change from:

         C.6.2             Acceptance of all Enrollees

                           The Contractor shall accept each individual who is
                           enrolled in or assigned to the Contractor by the
                           District or its agent.

         Change to:

         C.6.2             Acceptance of all Enrollees

                           The Contractor shall accept each individual who is
                           enrolled in or assigned to the Contractor by the
                           District or its agent. According to 42 CFR 438.6 (d)
                           (1) (2) (3) (4) the Contractor will not on the basis
                           of health status or need for health care services,
                           discriminate against individuals eligible to enroll.
                           The Contractor shall not discriminate against
                           individuals eligible to enroll on the basis of race,
                           color, or national origin, and shall not use any
                           policy or practice that has the effect of
                           discriminating on the basis of race, color or
                           national origin.

         Change from:

         C.6.3             Evidence of Coverage

                           Within ten (10) business days of the date on which
                           the District or its agent notifies the Contractor
                           that an individual has been enrolled with the
                           Contractor, the Contractor shall provide each
                           Enrollee with written evidence of coverage and a
                           Member Handbook written equivalent to a fifth grade
                           reading level that shall include the following
                           orientation and education materials:

         Change to:

         C.6.3             Evidence of Coverage

CONTRACT # POHC-2002-D-0003                                                   19
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                         AMERIGROUP DISTRICT OF COLUMBIA

                           Within ten (10) business days of the date on which
                           the District or its agent notifies the Contractor
                           that an individual has been enrolled with the
                           Contractor, the Contractor shall provide each
                           Enrollee with written evidence of coverage, ( the
                           language card will be included in the enrollees
                           enrollment package), and a Member Handbook written
                           equivalent to a 5th grade reading level that shall
                           include the following orientation and education
                           materials:

    ADD

         C.6.3.2.1         This description of services must address written
                           translation materials that are available, oral
                           translation that is available, how to access these
                           free services, and list languages spoken by all
                           network providers including at a minimum primary care
                           physicians, specialists, and hospitals.

         Change from:

         C.6.3.3           Explanation of the procedure for obtaining benefits,
                           including the address and telephone number of the
                           Contractor's office or facility and the days that the
                           office or facility is open and services are
                           available;

         Change to:

         C.6.3.3           Explanation of the procedure for obtaining benefits,
                           including authorization requirements, prescription
                           drug formularies, the address and telephone number of
                           the Contractor's office or facility and the days that
                           the office or facility is open and services that are
                           available;

         Change from:

         C.6.3.8           A list of all current network primary care providers
                           with open practices, with their board certification
                           status, addresses, telephone numbers, availability of
                           evening or weekend hours, and all languages spoken;

         Change to:

         C.6.3.8           A list of all current network primary care providers,
                           specialists, and hospitals. The list shall include
                           board certification status,

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           addresses, telephone numbers, availability of evening
                           or weekend hours, all languages spoken, hospital
                           privileges, and identification of providers that are
                           not accepting new patients.

         Change from:

         C.6.3.19          As needed, the Contractor shall make the above listed
                           materials available to Enrollees in English, Spanish,
                           Vietnamese, Chinese, for Braille the contractor may
                           use an audio format; and

         Change to:

         C.6.3.19          The Contractor shall make all vital documents
                           available to Enrollees who speak a prevalent
                           language, to include English, Spanish, Vietnamese,
                           Amharic and Chinese, unless the Enrollee refuses such
                           services; and

         Change from:

         C.6.3.20          The Contractor shall issue updates to the Member
                           Handbook when there are material changes that will
                           affect access to services and information about the
                           Medicaid Managed Care Program and shall provide at
                           least an annual mailing of the complete updated
                           Member Handbook.

         Change to:

         C.6.3.20          The Contractor shall give each Enrollee written
                           notice of any significant change that will affect
                           access to services and information about the Medicaid
                           Managed Care Program at least thirty (30) days before
                           the intended effective date of the change. This shall
                           include the issuance of updates to the Member
                           Handbook. In addition, the Contractor shall provide
                           at least an annual mailing of the completed updated
                           Member Handbook. The contractor shall make available
                           updated Member Handbook upon request.

                           Significant changes shall include:

                           A. Changes to the list of providers (including
                              primary care physicians, specialists and
                              hospitals) in the Enrollee's service area and the
                              information about each provider including
                              locations, telephone numbers, hospital privileges,
                              non-English languages spoken by current contracted
                              providers and whether they accept new patients;

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           B. Changes to restrictions on the Enrollee's freedom
                              of choice among network providers;

                           C. Changes to Enrollee rights and protections;

                           D. Changes to grievance and Fair Hearing procedures;

                           E. Changes to the amount, duration, and scope of
                              benefits available;

                           F. Changes to procedures for obtaining benefits,
                              including authorization requirements;

                           G. Changes to the extent to which, and how, Enrollees
                              may obtain other benefits, including family
                              planning services, from out-of-network providers;

                           H. Changes to the extent to which, and how,
                              after-hours and emergency coverage are provided
                              including what constitutes emergency medical
                              condition, emergency services and
                              post-stabilization services;

                           I. Changes to emergency services including
                              authorization requirements, processes and
                              procedures, locations of emergency settings, and
                              other locations at which providers and hospitals
                              furnish emergency services, and post-stabilization
                              services;

                           J. Changes to policies on referrals for specialty
                              care and other benefits not furnished by the
                              Enrollee's primary care provider;

                           K. Changes to cost sharing; and

                           L. Changes to how and where to access any benefits
                              that are available under the State plan but not
                              covered under the contract, including any cost
                              sharing and how transportation is provided.

CONTRACT # POHC-2002-D-0003                                                   22
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                         AMERIGROUP DISTRICT OF COLUMBIA

         ADD

         C.6.3.21          In accordance with 42 CFR 438.206 (b) (1), the
                           Contractor shall submit documentation to the District
                           that it complies with the following requirements:

                           A. Maintains and monitors a network of appropriate
                           providers that is supported by written agreements and
                           is sufficient to provide adequate access to all
                           services covered under the contract considering the
                           following:

                              a. The anticipated Medicaid enrollment.

                              b. The expected utilization of services taking
                                 into consideration the characteristics and
                                 health care needs of specific Medicaid
                                 populations represented in the managed care
                                 organization.

                              c. The numbers and types (in terms or training,
                                 experience, and specialization) of providers
                                 required to furnish the contracted Medicaid
                                 services.

                              d. The number of network providers who are not
                                 accepting new Medicaid patients.

                              e. The geographic location of providers and
                                 Medicaid enrollees, considering distance,
                                 travel time, the means of transportation
                                 ordinarily used by Medicaid enrollees, and
                                 whether the location provides physical access
                                 for Medicaid enrollees with disabilities.

                           B. Provides female enrollees with direct access to a
                           women's health specialist within the network for
                           covered care necessary to provide women's routine and
                           preventive health care services. This is an addition
                           to the enrollee's designated source of primary care
                           if that source is not a women's health specialist.

                           C. Provides for a second opinion from a qualified
                           health care professional within the network, or
                           arrange for the enrollee to obtain one outside of the
                           network, at no cost to the enrollee.

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           D. If the network is unable to provide necessary
                           services, covered under the contract, to a particular
                           enrollee, the MCO must adequately and timely cover
                           these services out of network for the enrollee, for
                           as long as the MCO is unable to provide them.

                           E. Requires out-of-network providers to coordinate
                           with the MCO with respect to payment and ensures that
                           cost to the enrollee is no greater than it would be
                           if the services were furnished within the network.

                           F. Demonstrate that its providers are credentialed as
                           required by 42 CFR 438.214

         Add:

         C.6.3.22          In accordance with 42 CFR 438.207, the Contractor
                           shall give assurance to the District and provide
                           supporting documentation that demonstrate that it has
                           the capacity to serve the expected enrollment in its
                           service area in accordance with the District's
                           standard for access to care under this subpart.:

         Change from:

         C.6.4.1           The Contractor shall allow each Enrollee the freedom
                           to choose from among its participating PCPs, and
                           change PCPs as requested. The Contractor shall notify
                           Enrollees of procedures for changing PCPs. The
                           materials used to notify Enrollees shall be approved
                           by MAA.

         Change to:

         C.6.4.1           The Contractor shall allow each Enrollee the freedom
                           to choose from among its participating PCPs, and
                           change PCPs as requested.

                           A. The Contractor shall permit female enrollees to
                           designate as their PCP a participating physician or
                           advanced practice registered nurse who specializes in
                           obstetrics and gynecology.

                           B. The Contractor shall permit a member with chronic
                           disabling or life threatening condition to choose an
                           appropriate participating specialist as his or her
                           PCP.

CONTRACT # POHC-2002-D-0003                                                   24
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<PAGE>

                         AMERIGROUP DISTRICT OF COLUMBIA

                           C. The Contractor shall notify Enrollees of
                           procedures for changing PCPs.

                           D. The materials used to notify Enrollees must be
                           approved by MAA.

                           E. The contractor shall notify Enrollees of
                           procedures to use in selecting a specialist as their
                           PCP.

         ADD

         C.6.4.6           The Contractor shall send written notice of
                           termination of a contracted provider to each enrollee
                           who received his or her primary care or was seen on a
                           regular basis by the terminated provider, at least 30
                           days before the effective date of the termination.

         Change from:

         C.6.6.2           The Contractor must request that MAA disenroll an
                           Enrollee who demonstrates a pattern of disruptive or
                           abusive behavior or obtaining services in a
                           fraudulent or deceptive manner.

         Change to:

         C.6.6.2           In accordance with 42 CFR 438.56 (b)(2), the MCO or
                           PIHP may not request disenrollment because of an
                           adverse change in the Enrollee's health status or
                           because of the Enrollee's utilization of medical
                           services, diminished mental capacity, or
                           uncooperative or disruptive behavior resulting from
                           his or her special needs (except when his or her
                           continued enrollment in the MCO or PIHP seriously
                           impairs the Contractor's ability to furnish services
                           to either this particular Enrollee or other
                           Enrollees.

                           The contractor may request MAA to disenrollee and
                           enrollee who is obtaining services in a fraudulent or
                           deceptive manner with the appropriate documentation
                           submitted to MAA. The request must be in writing
                           including supporting documentation.

         ADD

         C.6.6.2.3.1       Disenrollment For Cause Requested by Enrollee

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           In accordance with 42 CFR 438.56 (c)(1), an Enrollee
                           may request disenrollment for cause at any time.

         ADD

         C.6.6.2.4         Disenrollment Without Cause

                           In accordance with 42 CFR 438.56 (c)(2)(i), a
                           recipient may request disenrollment without cause at
                           the following times:

                           a. During the ninety (90) days following the date of
                           the recipient's initial enrollment with the MCO,
                           PIHP,PAHP or the date the District send the recipient
                           notice of the enrollment, whichever is later.

                           b. At least once every 12 months thereafter

                           c. Upon automatic reenrollment under paragraph (g) of
                           this section, if the temporary loss of Medicaid
                           eligibility has caused the recipient to miss the
                           annual disenrollment opportunity

                           d. When the District imposes the intermediate
                           sanctions specified in Section 438-702(a)(3)

         C.6.6.2.7         Request for Disenrollment by Enrollee.

                           In accordance with 42 CFR 438.56 (d)(1) (i & ii), the
                           Enrollee (or his or her representative) must submit
                           an oral or written request to the District or the
                           Enrollment Broker.

         C.6.6.2.8         Cause for Disenrollment

                           As specified in 42 CFR 438.56 (d)(2), the following
                           are cause for disenrollment:

                           A. The Enrollee moves out of the MCO's or PIHP
                              service area.

                           B. The plan does not, because of moral or religious
                              objections, cover the service the Enrollee seeks.

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           C. The Enrollee requires related services (for
                              example a cesarean section and a tubal ligation)
                              to be performed at the same time; and not all
                              related services are available within the network.
                              And the Enrollee's primary care provider or
                              another provider determines that receiving the
                              services separately would subject the Enrollee to
                              unnecessary risk.

                           D. Other reasons, including but not limited to, poor
                              quality of care, lack of access to services
                              covered under the contract, or lack of access to
                              providers experienced in dealing with the
                              Enrollee's health care needs.

                           E. If the District or Enrollment Broker fails to make
                              disenrollment determination so that the recipient
                              can be disenrolled within the timeframes specified
                              in paragraph (e)(1) of this section, the
                              disenrollment is considered approved.

                           F. For a request received directly from the
                              recipient, or one referred by the MCO, PIHP, the
                              District or Enrollment Broker must take action to
                              approve or disapprove the request based on the
                              following:

                              1. Reasons cited in the request.

                              2. Information provided by the MCO, PIHP at the
                                 agency request.

                              3. Any of the reasons specified in paragraph
                                 (d)(2) of this section.

                           G. Regardless of the procedures followed, the
                              effective date of An approved disenrollment must
                              be no later than the first day of the second month
                              following the month in which the enrollee or the
                              MCO, PIHP files the request

                           H. If the District OR ENROLLMENT BROKER FAILS TO MAKE
                              THE DETERMINATION WITHIN THE TIMEFRAMES SPECIFIED
                              IN PARAGRAPH(e)(1) OF THIS SECTION, THE
                              DISENROLLMENT IS CONSIDERED APPROVED.

         C.6.6.2.11        Use of Contractor's Grievance Procedures

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           The grievance process shall be completed in time to
                           permit the disenrollment (if approved) to be
                           effective in accordance with the timeframe specified
                           in 438.56 (e)(1).

         C.6.6.2.15        AUTOMATIC REENROLLMENT the Contractor's contract
                           shall provide for automatic reenrollment of a
                           recipient who is disenrolled solely because he or she
                           loses Medicaid eligibility for a period of two (2)
                           months or less, as specified in 42 CFR 438.56 (g).

         ADD

         C.6.7             In accordance with the Balanced Budget Act of 1997,
                           the District of Columbia, the enrollment broker,
                           participating MCOs, and PHIP, shall provide all
                           enrollment notices, informational materials, and
                           instructional materials relating to Enrollees and
                           Potential Enrollees in a manner and format that shall
                           be easily understood.

                           Each MCO and PHIP shall have in place a mechanism to
                           help Enrollees and Potential Enrollees understand the
                           requirements and benefits of the plan.

                           A. Language. The Contractor shall:

                              a. Make available all written vital documents in
                                 each prevalent non-English language; and

                              b. Make competent professional oral interpretation
                                 services available free of charge to each
                                 Potential Enrollee and current Enrollee. The
                                 Contractor must provide competent professional
                                 oral interpretation at all points of contact,
                                 including but not limited to, the offices of
                                 billing, scheduling, transportation, and
                                 appeals and grievances, whether or not the
                                 person speaks a prevalent language, in a timely
                                 manner during all hours of operation, unless
                                 the Enrollee refuses such services. If the
                                 Enrollee refuses such services, the Contractor
                                 should document the offer and declination in
                                 the LEP person's file. Even if a LEP person
                                 elects to use a family member or friend, the
                                 Contractor should suggest that a professional
                                 interpreter sit in on the encounter to ensure
                                 accurate interpretation. This applies to all
                                 non-English languages, not just those the
                                 District

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                         AMERIGROUP DISTRICT OF COLUMBIA

                                 identifies as prevalent. The Enrollee shall not
                                 be charged for interpretation services.

                              c. Notify its Enrollees that oral interpretation
                                 is available for any language and written vital
                                 information is available in prevalent languages
                                 and how to access those services

                              d. Display "I Speak" posters, postcards, and
                                 language cards in common areas in the facility.

                           B. Notification. The Contractor shall notify
                              Enrollees and Potential Enrollees that oral
                              interpretation is available for any language and
                              written information is available in prevalent
                              languages and how to access those services.

                           C. When Oral Notice Must Be Provided --The Contractor
                              shall ensure that the oral notice of the language
                              requirements of this section is provided to an
                              eligible LEP Enrollee at each contact relating to
                              the furnishing of covered services between the
                              Enrollee and an employee of Contractor; or
                              provider participating in Contractor's provider
                              network or an employee of such provider.

                              The Contractor shall ensure that for each
                              prevalent language spoken by an Enrollee, a notice
                              shall be posted in the patient waiting area of
                              each provider participating in the Contractor's
                              network. Each notice posted by a provider
                              participating in the Contractor's network shall be
                              written and printed in a manner and format that
                              meets the understandability requirements set forth
                              in the information relating to the availability of
                              oral interpreter services and written translations
                              in prevalent languages upon request and without
                              charge. Each notice must set forth information
                              relating to appeals and grievances. Each notice
                              must provide information about how to access oral
                              interpreter services and written translations.

                              a. Each Enrollee with limited English proficiency
                                 has a right to receive oral interpreter
                                 services without charge;

                              b. The Contractor has a duty to furnish oral
                                 interpreter services to an Enrollee with
                                 limited English proficiency at each contact
                                 relating to the furnishing of covered services
                                 between the Enrollee and an employee of

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                         AMERIGROUP DISTRICT OF COLUMBIA

                                 Contractor, a provider participating in
                                 Contractor's provider network, or an employee
                                 of such provider;

                              c. An Enrollee with limited English proficiency
                                 may not be required to use family or friends to
                                 furnish oral interpreter services;

                              d. An Enrollee with limited English proficiency
                                 has the right to file appeals or grievances if
                                 required oral interpreter services are not
                                 provided in a timely manner;

                              e. An Enrollee who speaks a prevalent language has
                                 the right to receive written translated
                                 materials in that language; and

                              f. How to access the written translations and oral
                                 interpretation services.

SECTION C.7                Member Services

         Change from:

         C.7.4.1           All materials furnished to prospective and current
                           Enrollees shall be available in English, Spanish,
                           Vietnamese, Chinese, and Braille, as well as other
                           languages that the District may designate if speakers
                           of that language comprise a significant amount of the
                           Contractors Medicaid enrollment. Additionally, the
                           information shall meet threshold comprehension
                           equivalent to a grade five (5) reading level.

         Change to:

         C.7.4.1           All materials furnished to prospective and current
                           Enrollees shall meet threshold comprehension
                           equivalent to a grade five (5) reading level.

                           A. The Contractor shall translate into Spanish all
                              written material furnished to eligible Enrollees,
                              for each LEP individual whose primary language is
                              Spanish, and provide the translation to the
                              individual or, if the individual is a child, to
                              the parent, guardian, or caretaker.

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           B. Regarding eligible LEP individuals whose primary
                              language is not Spanish, but who speak Chinese,
                              Vietnamese, Amharic, or read Braille, or speak any
                              other language of the population of persons
                              eligible to be served or likely to be directly
                              affected by the Contractor's program: the
                              Contractor ensures that, at a minimum, vital
                              documents are translated in writing into the
                              appropriate non-English languages of such LEP
                              individuals. The District may designate other
                              documents that must be translated. The Contractor
                              shall ensure that each eligible LEP individual can
                              obtain an oral translation of written materials
                              that are not vital documents into the appropriate
                              non-English language.

         Change from:

         C.7.4.2           The Contractor shall have a protocol for
                           communicating member information accurately and
                           completely to Enrollees who speak languages other
                           than those made available or those who cannot read.

         Change to:

         C.7.4.2           The Contractor shall have a protocol for
                           communicating member information accurately and
                           completely to Enrollees who speak languages other
                           than those made available or those who cannot read.
                           The Contractor must provide timely competent
                           professional oral interpretation to an eligible LEP
                           individual (whether or not the individual speaks a
                           prevalent language), free of charge at all points of
                           contact, including but not limited to, the offices of
                           billing, scheduling, transportation, and appeals and
                           grievances, during all hours of operation, unless the
                           Enrollee refuses such services.

                           If the Enrollee refuses such services, the Contractor
                           should inform the Enrollee that the interpreter's
                           services are available free of charge; if the
                           Enrollee still refuses, the Contractor shall document
                           the offer and declination in the LEP person's file.
                           Even if an LEP individual elects to use a family
                           member or friend, the Contractor should suggest that
                           a competent

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           professional interpreter sit in on the encounter to
                           ensure accurate interpretation.

         ADD

         C.7.4.3.1.1       For the processing of requests for initial and
                           continuing authorizations of services, the Contractor
                           and its subcontractors shall have in place and follow
                           written policies and procedures and have in effect
                           mechanisms to ensure consistent application of review
                           criteria for authorization decisions, while
                           consulting with the requesting provider when
                           appropriate.

         C.7.4.3.1.2       In accordance with 42 CFR 438.210 (b)(3), any
                           decision to deny a service authorization request or
                           to authorize a service in an amount, duration, or
                           scope that is less than requested, be made by a
                           health care professional who has appropriate clinical
                           experience in treating the Enrollee's condition or
                           disease.

         Change from:

         C.7.4.3.2         The Contractor's financial condition;

         Change to:

         C.7.4.3.2         The Contractor's structure, operation, and financial
                           condition;

         ADD

         C.7.5             Provider-Enrollee Communications

         C.7.5.1           In accordance with 42 CFR 438.102(a), the Contractor
                           shall not prohibit or otherwise restrict a health
                           care professional acting within the lawful scope of
                           practice, from advising or advocating on behalf on an
                           Enrollee who is his or her patient, for the
                           following:

         C.7.5.1.1         The Enrollee's health status, medical care, or
                           treatment options, including any alternative
                           treatment that may be self-administered;

         C.7.5.1.2         Any information the Enrollee needs in order to decide
                           among all relevant treatment options;

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                         AMERIGROUP DISTRICT OF COLUMBIA

         C.7.5.1.3         The risks, benefits, and consequences of treatment or
                           non-treatment; and

         C.7.5.1.4         The Enrollee's right to participate in decisions
                           regarding his or health care, including the right to
                           refuse treatment, and to express preferences about
                           future treatment decisions.

                           Subject to the information requirements of paragraph
                           (b) of CFR 42 438.102 (b) of this section, an MCO or
                           PIHP that would otherwise be required to provide,
                           reimburse for, or provide coverage of a counseling or
                           referral service because of the requirements in
                           paragraph (a) (1) of this section is not required to
                           do so if the MCO,PIHP objects to the service on moral
                           or religious grounds.

         C.7.5.2           In accordance with 42 CFR 438.102(b), a MCO or PIHP
                           that elects the option provided in the paragraph
                           (a)(2) of this section must furnish information about
                           the services it does not cover as follows:

         C.7.5.2.1         To the District,

                           (A) With its application for a Medicaid contract; and

                           (B) Whenever it adopts the policy during the terms of
                           its contract.

                               (ii) Consistent with the provisions of Section
                                    438.10-

         C.7.5.2.2         To potential Enrollees, before and during enrollment;
                           and

         C.7.5.2.3         To Enrollees, within ninety (90) days after adopting
                           the policy with respect to any particular service.
                           (Although this time-frame would be sufficient to
                           entitle the MCO or PIHP to the option provided in
                           paragraph (a) (2) of this section, the overriding
                           rule in Section 438.10 (f) (4) requires the State,
                           its contracted representative, or the MCO or PIHP to
                           furnish the information at least 30 days before the
                           effective date of the policy.)

                           As specified in Section 438.10 (e) and (f), the
                           information that MCOs, or PIHP must furnish to
                           enrollees and potential enrollees does not include
                           how and where to obtain the services excluded under
                           paragraph (a) (2) of this section.

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                         AMERIGROUP DISTRICT OF COLUMBIA

         C.7.5.3           In accordance with 42 CFR 438.102(c), for each
                           service excluded by a MCO or PIHP on moral or
                           religious grounds, the District shall provide
                           information on how and where to obtain the service,
                           as specified in Section 438.10(e)(2)(ii) and (f)(6)
                           (xii).

         C.7.5.4           In accordance with 42 CFR 438.102(d), an MCO that
                           violates the prohibition of paragraph (a)(1) of this
                           section is subject to immediate sanctions under
                           subpart I of this part.

SECTION C.8                Coverage of Services and Benefits

         Change from:

         C.8               COVERAGE OF SERVICES AND BENEFITS

                           The Contractor shall develop, contract, arrange, and
                           provide for all medically necessary covered services
                           to Enrollees in each of the plans as specified in
                           Attachment J 8, and as specified in the Medicare
                           post-stabilization requirements, which are available
                           in the Reference Library.

         Change to:

         C.8               COVERAGE OF SERVICES AND BENEFITS

                           The Contractor shall develop, contract, arrange and
                           provide for all medically necessary covered services
                           to Enrollees in each of the plans as specified in
                           ATTACHMENT J 8 and as specified in the Medicare
                           post-stabilization requirements, which are available
                           in the Reference Library. The Contractor shall
                           identify, define, and specify the amount, duration,
                           and scope of each service. In accordance with 42 CFR
                           438.210, the Contractor shall be required to furnish
                           the identified services in an amount, duration, and
                           scope that is no less than the amount, duration, and
                           scope for the same services furnished to benefits
                           under fee-for-service Medicaid. The Contractor shall
                           ensure that the services are sufficient in amount,
                           duration, or scope to reasonably be expected to
                           achieve the purpose for which the services are
                           furnished. The Contractor shall not arbitrarily deny
                           or reduce the amount, duration, or scope of a
                           required service solely because of diagnosis, type of
                           illness, or condition of the beneficiary. The
                           Contractor shall place appropriate limits on a
                           service on the basis of criteria applied under the
                           District plan,

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           such as medically necessity, or for the purposes of
                           utilization control, provided the services furnished
                           can reasonably be expected to achieve their purpose.

         Change from:

         C.8.1.1.1         Reasonably expected to prevent the onset of an
                           illness, condition or disability; reduce or
                           ameliorate the physical, behavioral, or developmental
                           effects of an illness, condition, injury or
                           disability, and assist the individual to achieve or
                           maintain maximum functional capacity in performing
                           daily activities, taking into account both the
                           functional capacity of the individual and those
                           functional capacities appropriate for individuals of
                           the same age;

         Change to:

         C.8.1.1.1         Prevent the onset of an illness, condition, or
                           disability or sustain the Enrollee's physical,
                           mental, behavioral, or developmental health; and
                           assist the individual to achieve, maintain, or regain
                           maximum functional capacity in performing daily
                           activities, taking into account both the functional
                           capacity of the individual and those functional
                           capacities appropriate for individuals of the same
                           age;

         Change from:

         C.8.1.1.3         Sufficient in amount, duration, and scope to
                           reasonably achieve their purpose as defined in
                           federal law; and

         Change to:

         C.8.1.1.3         Sufficient in amount, duration and scope to
                           reasonably achieve their purpose as defined in
                           Federal law. The coverage shall be no more
                           restrictive than that used in the District's Medicaid
                           program as indicated in District statutes and
                           regulations, the District Plan, and other District
                           policy and procedures; and

         ADD

         C.8.1.1.5         The Contractor shall be responsible for covering
                           services related to the following:

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           A. The prevention, diagnosis, and treatment of health
                              impairments.

                           B. The ability to achieve age-appropriate growth and
                              development.

                           C. The ability to attain, maintain, or regain
                              functional capacity, in accordance with 42 CFR
                              438.210.

         Change from:

         C.8.3.2.1         The Contractor shall adhere to the following
                           definition of emergency medical condition, including
                           a mental health/alcohol and drug abuse condition when
                           determining coverage for Enrollees: a medical
                           condition manifesting itself by acute symptoms of
                           sufficient severity (including severe pain) that-a
                           prudent layperson, who possesses an average knowledge
                           of health and medicine, could reasonably expect the
                           absence of immediate medical attention to result in
                           placing the health of the individual (or with respect
                           to a pregnant woman, the health of the woman or her
                           unborn child) in serious jeopardy, serious impairment
                           to body functions, and/or serious dysfunction of any
                           bodily organ or part.

         Change to:

         C.8.3.2.1         In accordance with 42 CFR 438.114(a), please note the
                           definitions of the following terms:

                           A. Emergency medical condition means a medical
                              condition manifesting itself by acute symptoms of
                              sufficient severity (including severe pain) that a
                              prudent layperson, who possesses an average
                              knowledge of health and medicine, could reasonably
                              expect the absence of immediate medical attention
                              to result in the following:

                              a. Placing the health of the individual (or, with
                                 respect to a pregnant woman, the health of the
                                 woman or her unborn child) in serious jeopardy;

                              b. Serious impairment to bodily functions; or

                              c. Serious dysfunction of any bodily organ or
                                 part.

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           B. Emergency services mean covered inpatient and
                              outpatient services that are:

                              a. Furnished by a provider that is qualified to
                                 furnish these services under the title; or

                              b. Needed to evaluate or stabilize an emergency
                                 medical condition.

                           C. In accordance with 42 CFR 438.114 Emergency and
                              Post-stabilization services. Post stabilization
                              means covered services, related to an emergency
                              medical condition that are provided after an
                              Enrollee is stabilized in order to maintain the
                              stabilized condition, or, under the circumstances
                              described in paragraph (e) of this section, to
                              improve or resolve the enrollee's condition. The
                              Contractor shall be responsible for coverage and
                              payment of emergency and post stabilization care
                              services.

                           D. The MCO and PIHP shall cover and pay for emergency
                              services regardless of whether the provider that
                              furnishes the services has a contract with the MCO
                              or PIHP.

                           E. The contractor may not deny payment for treatment
                              obtained under either of the following
                              circumstance:

                              An enrollee had an emergency medical condition,
                              including cases in which the absence of immediate
                              medical attention would not have had the outcomes
                              specified in paragraphs (1), (2), and (3) of the
                              definition of emergency medical condition in
                              paragraph (a) of this section. representative of
                              the MCO, PIHP instructs the enrollee to seek
                              emergency services.

                           F. The MCO, PIHP may not:

                              Limit what constitutes an emergency medical
                              condition with reference to paragraph (a) of this
                              section, on the basis of lists of diagnoses or
                              symptoms;

                                           and

                              Refuse to cover emergency services based on the
                              emergency room provider, hospital, or fiscal agent
                              not notifying the enrollee's screening and
                              treatment within 10 calendar days of presentation
                              for emergency services.

                              An enrollee who has an emergency medical condition
                              may not be held liable for payment of subsequent
                              screening and

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                        AMERIGROUP DISTRICT OF COLUMBIA

                              treatment needed to diagnose the specific
                              condition or stabilize the patient.

                                 The attending emergency physician, or the
                                 provider actually treating the enrollee, is
                                 responsible for determining when the enrollee
                                 is sufficiently stabilized for transfer or
                                 discharge, and that determination is binding on
                                 the MCO, PIHP identified in paragraph (b) of
                                 this section as responsible for coverage and
                                 payment. Coverage and payment: Post
                                 stabilization care services. Post stabilization
                                 care services covered and paid for in
                                 accordance with provisions set forth at
                                 Section 422.113(C) of this chapter. In applying
                                 those provisions, reference to "M+C
                                 organization" must be read as reference to the
                                 entities responsible for Medicaid payment, as
                                 specified in paragraph (b) of this section.

                                 To the extent that services required to treat
                                 an emergency medical condition fall within the
                                 scope of the services for which the PIHP is
                                 responsible, the rules under this section
                                 apply.

         Change from:

         C.8.3.2.3         The Contractor shall be responsible for covering
                           emergency services, as defined above, provided to
                           Enrollees at either in-network or out-of-network
                           providers, without regard to prior authorization.

         Change to:

         C.8.3.2.3         In accordance with 42 CFR 438.114(b) through (f):

                           A. The Contractor shall cover and pay for emergency
                              services regardless of whether the provider that
                              furnishes the services has a contract with the
                              Contractor;

                           B. The Contractor shall not deny payment for
                              treatment obtained under either of the following
                              circumstances:

                              a. An Enrollee has an emergency medical condition,
                                 including cases in which the absence of
                                 immediate medical attention would not have had
                                 the outcomes

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                        AMERIGROUP DISTRICT OF COLUMBIA

                                 specified for the definition of emergency
                                 medical condition in SECTION C.8.3.2.1 above;
                                 or

                              b. A representative of the Contractor instructs
                                 the Enrollee to seek medical services.

                           C. The Contractor shall not:

                              a. Limit what constitutes an emergency medical
                                 condition with reference to SECTION C.8.3.2.1,
                                 on the basis of lists of diagnoses and
                                 symptoms; and

                              b. Refuse to cover emergency services based on the
                                 emergency room provider, hospital, or fiscal
                                 agent not notifying the Enrollee's primary care
                                 provider, MCO, or applicable District
                                 Contractor of the Enrollee's screening and
                                 treatment within ten (10) calendar days of
                                 presentation for emergency services.

                           D. An Enrollee who has an emergency medical condition
                              shall not be held liable for payment of subsequent
                              screening and treatment needed to diagnose the
                              specific condition or stabilize the patient.

                           E. The attending emergency physician or the provider
                              actually treating the Enrollee, responsible for
                              determining when the Enrollee is sufficiently
                              stabilized for transfer or discharge and that
                              determination is binding on the Contractor
                              responsible for payment.

                           F. Ambulance services, emergency and urgently needed
                              services, and maintenance and post-stabilization
                              care services are covered and paid for in
                              accordance with Section 422.113 (see SECTION
                              C.8.3.2.1 above). In applying those provisions,
                              reference to "M+C organization" shall be read as
                              reference to the Contractor.

                           G. To the extent that services required to treat an
                              emergency medical condition fall within the scope
                              of the services for which the PIHP is responsible,
                              the rules under this section apply (SECTION
                              8.3.2).

         Change from:

         C.8.3.7           Services for Persons with HIV or AIDS

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                        AMERIGROUP DISTRICT OF COLUMBIA

         Change to:

         C.8.3.7           Services for Persons with Special Health Care Needs

         ADD

         C.8.3.7.3         The Contractor shall allow the family or caregiver of
                           an enrolled person (either adult or child) with
                           special health care needs to receive care
                           coordination services from a care coordinator which
                           can include a specialist or a person other than a
                           primary care provider if the care coordinator is
                           selected by the Enrollee's primary care provider in
                           consultation with the Enrollee's family or caregiver.

         ADD

         C.8.4.5.1.1       In accordance with 42 CFR 438.206 (b)(5), Requires
                           out-of-network providers to coordinate with the MCO
                           or PIHP with respect to payment and ensures that cost
                           to the enrollee is no greater than it would be if the
                           services were furnished within the network.
                           Section 438.206 (b)(6) Demonstrates that its
                           providers are credentialed as required by Section
                           438.214.

         ADD

         C.8.4.5.4         If the network is unable to provide necessary
                           services covered under the contract to a particular
                           Enrollee, the Contractor shall adequately and timely
                           cover these services out of network for the Enrollee,
                           for as long as the Contractor is unable to provide
                           them, as specified in 42 CFR 438.206 (b)(4).

         C.8.4.6           Continued Services to Recipients

                           In accordance with 42 CFR 438.62, the State must
                           arrange for Medicaid services to be provided without
                           delay to any Medicaid Enrollee of an MCO, PIHP whose
                           contract is terminated and for any Medicaid Enrollee
                           who is disenrolled from a MCO, PIHP, for any reason
                           other than ineligibility for Medicaid.

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                        AMERIGROUP DISTRICT OF COLUMBIA

         C.8.5             In accordance with 42 CFR 438.6 (f) (1) all contracts
                           shall comply with:

                           A. Title VI of the Civil Rights Act of 1964;

                           B. Title IX of the Education Amendments of 1972
                              (regarding education programs and activities);

                           C. The Age Discrimination Act of 1975;

                           D. The Rehabilitation Act of 1973; and

                           E. The Americans with Disabilities Act.

                           In accordance with 438.100 (a)(2), the Contractor
                           shall ensure that its staff and affiliated providers
                           take those rights into account when furnishing
                           services to Enrollees.

         C.8.5.1           All contracts shall comply with all Federal and
                           District laws and regulations pertaining to Enrollee
                           rights including DC Code Section 2-1401.01 (2001);

SECTION C.9                Network

         ADD

                           The following paragraph after first paragraph in
                           C.9.1.16:

         C.9.1.16          The Contract's network shall provide female Enrollees
                           with direct access to a female health specialist
                           within the networks for covered care necessary to
                           provide women's routine and preventive health care
                           services. This is in addition to the Enrollee's
                           designated source of primary care, if that source is
                           not a women's health specialist, as specified in 42
                           CFR 438.206 (b)(2). A female enrollee may choose a
                           women's health specialist as a primary care provider.

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                        AMERIGROUP DISTRICT OF COLUMBIA

         C.9.1.16.1        In accordance with 42 CFR 438.12, the Contractor
                           shall not discriminate for the participation,
                           reimbursement, or indemnification of any provider who
                           is acting within the scope of his or her license or
                           certification under applicable District law, solely
                           on the basis of that license or certification. If the
                           Contractor declines to include individual providers
                           or groups of providers in its network, it shall give
                           the affected providers written notice of the reason
                           for its decision.

                           The paragraph above should not be construed to:

                           A. Require the MCO, PIHP, to contract with providers
                              beyond the number necessary to meet the needs of
                              its enrollees;

                           B. Preclude the MCO, PIHP, from using different
                              reimbursement amounts for different specialties or
                              for different practitioners in the same specialty;
                              or Preclude the MCO, PIHP, from establishing
                              measures that are designed to maintain quality of
                              services, control costs, and are consistent with
                              its responsibilities to Enrollees.

         ADD

         C.9.2             Access Standards

                           Insert the following paragraphs under C.9.2 Access
                           Standards;

                           The Contractor shall meet and require its providers
                           to meet District standards for timely access to care
                           and services, taking into account the urgency of the
                           need for services. Contractors must also regularly
                           monitor providers to assure compliance with timely
                           access standards and when necessary take corrective
                           action for failures to comply.

                           In accordance with 42 CFR 438.206 (c) (ii) and
                           438.207, the Contractor shall ensure that the network
                           providers offer hours of operation that are no less
                           than the hours of operation offered to commercial
                           Enrollees or comparable to Medicaid fee-for-service,
                           if the provider serves only Medicaid Enrollees.

         Change from:

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                        AMERIGROUP DISTRICT OF COLUMBIA

         C.9.2.1.2         Emergency care, as defined in Section C.8.3.2.1,
                           shall be provided immediately and without prior
                           authorization. In general, emergency care shall be
                           provided in accordance to the time frame dictated by
                           the nature of the emergency, at the nearest available
                           facility, twenty-four (24) hours a day, seven (7)
                           days a week.

         Change to:

         C.9.2.1.2         Emergency care, as defined in SECTION C.8.3.2.1,
                           shall be provided immediately and without prior
                           authorization. In general, emergency care shall be
                           provided in accordance to the time frame dictated by
                           the nature of the emergency, at the nearest available
                           facility, twenty-four (24) hours a day, seven (7)
                           days a week. Additionally, services included in this
                           contract, in accordance with 42 CFR 438.206
                           (c)(1)(iv)(v))vi), shall be available 24 hours a day,
                           7 days a week, when medically necessary.

         ADD

         C.9.3.1.5         In accordance with 42 CFR 438.214 the Contractor
                           shall:

                           A. Follow the District's policy of uniform provider
                              credentialing and recredentialing, including a
                              documented process for those providers with signed
                              contracts or participation agreements with the
                              Contractor;

                           B. Assure that provider selection policies and
                              procedures are consistent with 42 CFR 438.12 that
                              the Contractor shall not discriminate against
                              providers serving high-risk populations or that
                              specialize in conditions requiring costly
                              treatments;

                           C. The Contractor shall ensure that the entity may
                              not employ or contract with providers excluded
                              from participation in Federal health care programs
                              under either Sections 1128 of 1128A of the Social
                              Security Act; and

                           D. Contractor must comply with additional provider
                              participation rules established by the State
                              (District of Columbia)

         ADD               Credentialing

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                        AMERIGROUP DISTRICT OF COLUMBIA

         C9.3.1.6          The MCO, PIHP must evaluate the professional
                           capabilities and conduct of the applicant from all
                           applicable sources. Such information shall include,
                           but not limited to:

                           a.       Education, training and experience;

                           b.       Licensure and certifications, including
                                    limitations or restrictions, any previously
                                    successful or currently pending challenges
                                    to licensure or registration, or the
                                    voluntary relinquishment of such licensure,
                                    registration, or certification;

                           c.       Professional references concerning the
                                    individual's professional performance,
                                    judgment, and clinical or technical skills;

                           d.       Current competence;

                           e.       Voluntary or involuntary termination of
                                    professional employment, or voluntary or
                                    involuntary limitation, reduction, or loss
                                    of clinical privileges at another hospital,
                                    institution, or professional organization;

                           f.       Professional sanctions;

                           g.       Professional liability claims history (at a
                                    minimum, final judgments or settlements
                                    involving the applicant); and

                           h.       Other information reflecting on
                                    professionalism.

                                    Recredentialing:
                                    The Contractor shall obtain updated
                                    information from internal and external
                                    sources regarding the individual's
                                    professional activities, performance,
                                    conduct, and compliance with applicable
                                    Federal and District regulations is
                                    conducted and placed in the credentialing
                                    file. Such information shall include, but
                                    not limited to:

                           a.       Education, training, and experience;

                           b.       Licensure and certifications, including
                                    limitations or restrictions, any previously
                                    successful or currently pending challenges
                                    to licensure, registration, or

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                        AMERIGROUP DISTRICT OF COLUMBIA

                                    certification, or the voluntary
                                    relinquishment of such licensure,
                                    registration, or certification;

                           c.       Professional peer references concerning the
                                    individual's professional performance,
                                    judgment, and clinical or technical skills;

                           d.       Current competence;

                           e.       Voluntary or involuntary termination of
                                    professional, or voluntary or involuntary
                                    limitation, reduction, or loss or clinical
                                    privileges at another hospital, institution,
                                    or professional organization;

                           f.       Professional sanctions;

                           g.       Professional liability claims history (at a
                                    minimum, final judgments or settlements
                                    involving the applicant); and

                           h.       Other information reflecting on
                                    professionalism.

         Change from:

         C.9.3             Network Development

                           The Contractor shall recruit, credential, evaluate,
                           and monitor selected providers with an appropriate
                           combination of skills, experience, and specialties to
                           constitute a network to provide covered benefits to
                           MMCP Enrollees within the acceptable geographic
                           access standards.

         Change to:

         C.9.3             Network Development

                           The Contractor shall recruit, credential, evaluate,
                           and monitor selected providers with an appropriate
                           combination of skills, experience, and specialties to
                           constitute a network to provide covered benefits to
                           MMCP Enrollees within the acceptable geographic
                           access standards. The Contractor's provider selection
                           policies and procedures shall not discriminate
                           against particular providers that serve high-risk
                           populations or

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           specialize in conditions that require costly
                           treatment. The Contractor shall not employ or
                           contract with providers excluded from participation
                           in Federal health care programs under either Section
                           1128 or Section 1128A of the Social Security Act. The
                           Contractor shall comply with any additional
                           requirements established by the District.

         ADD

         C.9.3.1.1.        On a quarterly basis, the Contractor shall review
                           wait-times for normal, non-urgent specialty care
                           appointments to determine whether networks are
                           adequate and report findings to the MAA. Meanwhile,
                           if the wait-time exceeds the contractual standards
                           for a specialty appointment of 30 days for a
                           non-urgent referral appointment with a specialist,
                           the Enrollee shall be permitted to go outside of the
                           network.

         ADD

         Under C.9.3.1     The Contractor shall follow the District's
                           credentialing and recredentialing policies. All
                           Contractors who have signed contracts or
                           participation agreements with the Contractor shall
                           follow a documented process for credentialing and
                           recredentialing. Additionally, the time frame for
                           verification shall be in accordance with NCQA for
                           verification of credentials from the primary source.

         ADD

         C.9.4.4.1

                  e)       In accordance with 42 CFR 438.206 (c)(2), cultural
                           competence training shall be required for
                           non-clinical MCO staff who interact on a regular
                           basis with Enrollees, to include but not be limited
                           to member services, scheduling, billing,
                           transportation, appeal and grievance staff. Cultural
                           competence training shall at a minimum:

                  f)       Be carried out by individuals who are qualified to
                           conduct such training;

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                        AMERIGROUP DISTRICT OF COLUMBIA

                  g)       Address the language access policy of providing oral
                           interpreters service and written translated material
                           to Enrollees and potential Enrollees; how to access
                           and use these services; how to access the grievance
                           and appeals process; effects of differences of
                           cultures, language and ethnicity among providers,
                           clinical staff, and enrollees; and its effect on
                           providers, enrollees, clinical staff, management,
                           clinical encounters, and patient safety; and comply
                           with the applicable requirements of the Title VI of
                           the Civil Rights Act of 1964; Section 504 of the
                           Rehabilitation Act of 1973, the American's with
                           Disabilities Act; and DC Code Section 2-1401.01
                           (2001).

         C.9.4.4.2         In accordance with 42 CFR 438.214, the Contractor
                           shall implement written policies and procedures for
                           selection and retention of providers.

SECTION C.10               Utilization Management and Care Coordination
                           Capabilities

         Change from:

         C.10              The Contractor shall maintain a care management
                           system, including utilization management and care
                           coordination that ensures that all Enrollees are
                           regularly examined to identify potential or actual
                           health problems requiring prevention, treatment,
                           rehabilitation, and/or education in self-care. This
                           system shall be operated in accordance with
                           applicable standards for high quality provision of
                           services, including: EPSDT, IDEA, standards for
                           prenatal care, guidelines of the Office of Maternal
                           and Child Health, and relevant professional standards
                           for the provision of health care to adults. In
                           addition, the Contractor shall identify children and
                           adults with special health care needs and determine
                           which cases warrant additional management and
                           coordination. The Contractor shall establish
                           procedures to ensure that their medical and adjunct
                           care is comprehensively planned with the involvement
                           of the Enrollee, family, and/or caretaker and
                           appropriately qualified practitioners, the Enrollee
                           is assisted to coordinate services when needed, and
                           health care resources are used efficiently.

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                        AMERIGROUP DISTRICT OF COLUMBIA

         Change to:

         C.10              In accordance with 42 CFR 438.208 (c) (2-4), the
                           Contractor shall maintain a care management system,
                           including utilization management and care
                           coordination that ensures that all Enrollees are
                           regularly examined to identify potential or actual
                           health problems requiring prevention, treatment,
                           rehabilitation, and/or education in self-care. This
                           system shall be operated in accordance with
                           applicable standards for high quality provision of
                           services, including EPSDT, IDEA, standards for
                           prenatal care, and relevant professional standards
                           for the provision of health care to adults. In
                           addition, the Contractor shall implement mechanisms
                           to assess each Medicaid Enrollee identified by the
                           District or by the Contractor itself as having
                           special health care needs in order to identify any
                           ongoing special conditions of the Enrollee that
                           require a course of treatment or regular care
                           monitoring. The assessment mechanisms shall use
                           appropriate health care professionals. The Contractor
                           shall establish procedures to ensure that their
                           medical and adjunct care is comprehensively planned
                           with the involvement of the Enrollee, family, or
                           caretaker and appropriately qualified practitioners.
                           The Enrollee shall be assisted to coordinate services
                           when needed, and health care resources shall be used
                           efficiently. The treatment plan shall be developed by
                           the Enrollee's primary care provider with Enrollee
                           participation, and in consultation with any
                           specialists caring for the Enrollee. The Contractor
                           shall review the plan of treatment in a timely
                           manner. If the Contractor fails to review the plan of
                           treatment within 30 days, the plan of treatment may
                           be implemented in accordance with any applicable
                           District quality assurance and utilization review
                           standards.

                           In accordance with 42 CFR 438.208, for Enrollees with
                           special health care needs determined through an
                           assessment by appropriate health care professions
                           (consistent with 42 CFR 438.208(c)(2)) to need a
                           course of treatment or regular care monitoring, the
                           Contractor shall have a mechanism in place to allow
                           Enrollees to directly access a specialist as
                           appropriate for the Enrollee's condition and
                           identified needs.

                           The Contractor shall ensure that the plan of
                           treatment for an Enrollee with special health care
                           needs will be reviewed and updated, no less
                           frequently than every 12 months or as

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           determined by the Enrollee's primary care provider on
                           the basis of: (i) the provider's assessment of the
                           Enrollee's health and developmental status and needs;
                           (ii) the recommendation of the care coordinator and
                           (iii) the views of the Enrollee's family or
                           caregiver. The revised treatment plan will be
                           incorporated into the Enrollee's medical record
                           following each update.

         ADD

         C.10.1.1.1        The Contractor shall establish a system to
                           effectively manage authorization of treatment for
                           Enrollees with high risk conditions and for other
                           Enrollees with special health care needs.

         C.10.1.1.2        The Contractor shall establish criteria for cases
                           that warrant case management and procedures for
                           identifying Enrollees that meet these criteria.

         Change from:

         C.10.1.2          The Contractor's Medical Director shall review all
                           denials of care for EPSDT services pertaining to
                           physical health care and the Contractor's Psychiatric
                           Medical Director shall review all denials of care for
                           mental health treatment services.

         Change to:

         C.10.1.2          The Contractor's Medical Director shall review all
                           denials of care for EPSDT services pertaining to
                           physical health care and care for Enrollees with
                           special health care needs. The Contractor's
                           Psychiatric Medical Director shall review all denials
                           of care for mental health treatment services.

         ADD

         C.10.1.3.1        The Contractor must review health risk questionnaires
                           used to identify special needs populations within 30
                           days of enrollment. If the Contractor does not
                           receive the health risk

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           questionnaire, the Contractor must develop and
                           complete the form within 60 days of enrollment.

         ADD

         C.10.1.14.2       The Contract shall provide for a second opinion from
                           a qualified health care professional within the
                           network, or arranges for the Enrollee to obtain one
                           outside the network, at no cost to the Enrollee, as
                           specified in 42 CFR 438.206 (b)(3).

         Change from:

         C.10.2.1.6        Enrollees and their families shall be fully informed
                           of all appropriate treatment options, their expected
                           effects, and any risks or side effects of each option
                           in order to make treatment decisions and give
                           informed consent.

         Change to:

         C.10.2.1.6        Enrollees and their families shall be fully informed
                           of all available treatment options, their expected
                           effects, and any risks or side effects of each option
                           in order to make treatment decisions and give
                           informed consent. Available treatment options shall
                           include the option to refuse treatment and shall
                           include all treatments that are medically available,
                           regardless of whether the Contractor or provider
                           provides coverage for those treatments.

         CHANGE NUMBERING FROM C.102.1.9 TO C.10.2.1.9
         CHANGE NUMBERING FROM C.102.1.10 TO C.10.2.1.10

         ADD

         C.10.2.1.16.1     As required by 42 CFR, 438.6(i)(1)-(2) the Contractor
                           shall provide for compliance with the requirements of
                           42 CFR 422.128 for maintaining written policies and
                           procedures for advance directives.

                           A. The Contractor shall maintain written policies and
                              procedures that meet requirements for advance
                              directives in Subpart I of part 489.

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           B. Advance directives are defined in 42 CFR 489.100.

                           C. The Contractor shall maintain written policies and
                              procedures concerning advance directives with
                              respect to all adult individuals receiving medical
                              care by or through the MCO and PHIP.

                           D. The information must reflect changes in District
                              laws as soon as possible, but no later than 90
                              days after the effective change.

         ADD

         C.10.2.1.18       In accordance with 42 CFR 438.6 (i)(1)-(2), the
                           Contractor shall provide written information to those
                           individuals with respect to:

                           A. Their rights under the law of the District of
                              Columbia including the right to accept or refuse
                              medical or surgical treatment and the right to
                              formulate advance directives; and

                           B. The organization's policies respecting the
                              implementation of those rights, including a
                              statement of any limitation regarding the
                              implementation of advance directives as a matter
                              of conscience.

         C.10.2.1.19       The Contractor shall inform individuals that appeals
                           concerning noncompliance with the advance directive
                           requirements shall be filed with the District survey
                           and certification agency.

SECTION C.11               Financial Functions

         Change from:

         C.11.1.5          The Contractor shall pay or deny at least 90 percent
                           (90%) of "clean claims" (claims for which no further
                           written information or substantiation is required)
                           within thirty (30) calendar days of receipt and at
                           least ninety-nine percent (99%) of clean claims

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           within (90) calendar days of receipt consistent with
                           the claims procedures described in Section
                           1902(a)(37)(A) of the Social Security Act. The
                           Contractor shall adhere to these claims payment
                           procedures unless the health care provider and the
                           Contractor agree to an alternative payment schedule.

         Change to:

         C.11.1.5          In accordance with 42 CFR 447.45(d)(2)
                           (d)(3)(d)(5)(d)(6) and 447.46, the Contractor shall
                           pay ninety nine percent(99%) of "clean claims" (a
                           claim means a bill for services, a line item of
                           service, or all services for one recipient within a
                           bill. A clean claim means one that can be processed
                           without obtaining additional information from the
                           provider of the service or from a third party. It
                           includes a claim with errors originating in the
                           District's claims system). It does not include a
                           claim from a provider who is under investigation for
                           fraud or abuse, or claim under review for medical
                           necessity. The date receipt is the date the
                           Contractor receives the claim, as indicated by its
                           date stamp on the claim, and the date of payment is
                           the date of the check or other form of payment. The
                           Contractor shall adhere to these claims payment
                           procedures unless the health care provider and the
                           Contractor agree to an alternative payment schedule.

SECTION C.12               Management Information System(MIS)

         Change from:

         C.12.1            Minimum MIS Requirements

                           The Contractor shall operate an MIS capable of
                           maintaining, providing and documenting information
                           sufficient to document Contractor's compliance with
                           the contract requirements that will include but not
                           be limited to the following functions:

                           -    Enrollee eligibility data--current and
                                historical;

                           -    Encounter and claim payment records - current
                                and historical;

                           -    Authorization and care coordination data;

                           -    Utilization management;

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           -    Provider network information, i.e., provider
                                affiliations, credentialing information;

                           -    EPSDT tracking;

                           -    Outcome reports;

                           -    Financial accounting data;

                           -    Grievance and appeals statistics;

                           -    Internal operations data, e.g., telephone
                                response time;

                           -    Clinical information;

                           -    Serious incidents;

                           -    Client satisfaction;

                           -    Provider profiling; and

                           -    Outcome measurements.

         Change to:

         C.12.1            In accordance with 42 CFR 438.242, the Contractor
                           shall operate a MMIS capable of maintaining,
                           providing, and documenting information. The MMIS
                           shall be capable of collecting, analyzing,
                           integrating, and reporting data sufficient to
                           document Contractor's compliance with the contract
                           requirements that shall include but not be limited to
                           the following functions:

                           A. Enrollee eligibility data--current and
                              historical;

                           B. Encounter and claim payment records--current and
                              historical;

                           C. Authorization and care coordination data;

                           D. Utilization management;

                           E. Provider network information, i.e., provider
                              affiliations, credentialing information;

                           F. EPSDT tracking;

                           G. Outcome reports;

                           H. Financial accounting data

                           I. Grievance and appeals statistics;

                           J. Internal operations data, e.g., telephone response
                              time;

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           K. Clinical information;

                           L. Serious incidents;

                           M. Enrollee satisfaction;

                           N. Provider profiling;

                           O. Outcome measurements; and

                           P. Disenrollment for other than loss of Medicaid
                              eligibility.

         Change from:

         C.12.1.1          The Contractor shall have an MIS capable of
                           documenting administrative and clinical procedures
                           while maintaining confidentiality of individual
                           medical information, including special
                           confidentiality provisions related to people with
                           HIV/AIDS, mental illness, and alcohol and drug abuse
                           disorders. The encounter data reporting system should
                           be designed to assure aggregated, unduplicated
                           service counts provided across service categories,
                           provider types; and treatment facilities.

         Change to:

         C.12.1.1          The Contractor shall have a MMIS capable of
                           documenting administrative and clinical procedures
                           while maintaining confidentiality of individual
                           medical information, including special
                           confidentiality provisions related to people with
                           HIV/AIDS, mental illness, and alcohol and drug abuse
                           disorders. The MMIS shall be capable of collecting
                           data on Enrollee and provider characteristics as
                           specified by the District and on services furnished
                           to Enrollees through an encounter data system or
                           other methods as specified by the District. The
                           encounter data reporting system should be designed to
                           assure aggregated, unduplicated service counts
                           provided across service categories, provider types,
                           and treatment facilities.

         Change from:

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                         AMERIGROUP DISTRICT OF COLUMBIA

         C.12.1.2          The Contractor shall have internal procedures to
                           ensure that data reported to the District are valid
                           and to test validity and consistency on a regular
                           basis. The Contractor shall also agree to cooperate
                           in data validation activities that may be conducted
                           by the District, at its discretion, by making
                           available medical records, claims records, and a
                           sample of other data In accordance with
                           specifications developed by the District.

         Change to:

         C.12.1.2          The Contractor shall have internal procedures to
                           ensure that data reported to the District are valid
                           and to test validity and consistency on a regular
                           basis. The Contractor shall ensure data are accurate
                           and complete, shall verify the accuracy and
                           timeliness of reported data; screen the data for
                           completeness, logic, and consistency; and collect
                           service information in standardized formats to the
                           extent feasible and appropriate. The Contractor shall
                           also agree to cooperate in data validation activities
                           that may be conducted by the District, at its
                           discretion, by making available medical records,
                           claims records, and a sample of other data in
                           accordance with specifications developed by the
                           District.

         Change from:

         C.12.1.4          The Contractor shall provide the District with
                           aggregate performance and outcome data, as well as
                           its policies for transmission of data from network
                           providers. The Contractor shall submit its work plan
                           or readiness survey assessing its ability to comply
                           with Health Insurance Portability and Accountability
                           Act (HIPAA) mandates in preparation for the standards
                           and regulations.

         Change to:

         C.12.1.4          The Contractor shall provide the District with
                           aggregate performance and outcome data, as well as
                           its policies for transmission of data from network
                           providers. The Contractor shall make all collected
                           data available to the District and to CMS. The
                           Contractor shall submit its work plan or readiness
                           survey assessing its ability to comply with Health
                           Insurance Portability and Accountability Act (HIPAA)
                           mandates in

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           preparation for the standards and regulations within
                           60 days of the contract.

         ADD

         C.12.1.5          Each Contractor shall obtain from the District and
                           reassess at the first presentation of the Enrollee to
                           the MCO or network provider the following pieces of
                           information:

         C.12.1.5.1        Primary language spoken by each Enrollee and the
                           parent, guardian or caretaker (if the Enrollee is a
                           minor child) of each Enrollee;

         C.12.1.5.2        Whether that Enrollee would prefer written materials
                           be sent in their primary language;

         C.12.1.5.3        The racial and ethnic minority group of each Enrollee
                           by following the OMB Standards for race and ethnicity
                           data collection;

         C.12.1.5.4        The Contractor shall also collect data on:

         C.12.1.5.4.1      The number of providers who speak one of the
                           prevalent language by provider category;

         C.12.1.5.4.2      The manner in which oral interpretation services are
                           furnished including the name of each organization or
                           individual furnishing the services (the manner in
                           which oral services are provided); how the services
                           are provided (in person or telephonically, or both);
                           and whether there is any agreement between any
                           organization or individual to provide interpreter
                           services.

         C.12.1.5.4.3      The frequency and the number of individuals who
                           provide oral interpreter services (whether in or out
                           of network) provided by the Contractor in any form or
                           the provision of written translated material to any
                           Enrollee;

         C.12.1.5.4.4      The number of providers within the Contractor's
                           network and non-clinical Contractor staff who have
                           attended the minimum cultural competence training as
                           required by SECTION C.9.4.4.1; and

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         C.12.1.5.4.5      An ongoing list of written translated publications in
                           all prevalent languages.

         ADD

         C.12.8            Outcome Reporting

                           The following after the first paragraph:
                           The Contractor's Management Information Systems shall
                           ensure that its clinical, administrative, and other
                           non-financial information systems under SECTION
                           C.12.1 have the capacity to receive, store, report,
                           and verify data relating to:

         C.12.8.1          The language in which each Enrollee speaks;

         C.12.8.2          Oral interpreter services as described in SECTION
                           C.6.
                           [Reserved]

         C.12.8.3          The provision of written translations provided to
                           each individual in a non-English language;

         C.12.8.4          The racial and ethnic minority group of each Enrollee
                           by following the OMB standards of data collection for
                           race and ethnicity; and

         C.12.8.5          Appeals and grievances described in SECTION C.14; and

         C.12.8.6          And any other data described above in SECTION C.12.

SECTION C.13               Quality Improvement

         ADD

         Under C.13        In accordance with 42 CFR 438.236, the Contractor
                           shall adopt practice guidelines that meet the
                           following requirements:

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                           A. Based on valid and reliable clinical evidence or a
                              consensus of health care professionals in the
                              particular field;

                           B. Considered the needs of the Contractor's
                              Enrollees;

                           C. Adopted in consultation with contracting health
                              care professionals; and

                           D. Reviewed and updated periodically as appropriate.

                           The Contractor shall disseminate the guidelines to
                           all affected providers and, upon request, to
                           Enrollees and potential Enrollees. Decisions for
                           utilization management, Enrollee education, coverage
                           of services, and other areas to which the guidelines
                           apply are consistent with the guidelines.

         Change from:

         C.13.3.1          The Contractor shall operate a Quality Improvement
                           Program. The Contractor shall develop a written QI
                           Plan annually that details plans, tasks, initiatives,
                           and staff responsible for improving quality and
                           meeting the requirements incorporated in this
                           Contract.

         Change to:

         C.13.3.1          The Contractor shall operate and provide a
                           description of its Quality Improvement Program to the
                           District for approval. The Contractor shall develop a
                           written QI Plan annually that details plans, tasks,
                           initiatives, and staff responsible for improving
                           quality and meeting the requirements and Enrollee
                           services incorporated in this Contract. CMS, in
                           consultation with States and the District and other
                           stakeholders, shall specify at least one performance
                           measure and topics for performance improvement
                           projects to be required by the District in this
                           contract.

         Change from:

         C.13.3.1.7

                           The contractor shall submit an annual Quality
                           Improvement Report 30 days prior to the expiration of
                           each year of the

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           contract year. The QI Report shall summarize the
                           findings from initiatives described in the annual QI
                           Plan.

         Change to:

         C.13.3.1.7

                           The contractor shall submit an interim Quality
                           Improvement Report (QIR) 60 days prior to the
                           expiration of each year of the contract. The Annual
                           Quality Improvement Report is to be submitted to the
                           Office of Managed Care 90 days after the ending of
                           the calendar year. The MCO, PIHP must analysis and
                           summarize the findings from initiatives described.
                           The QIR must include a corrective action plan for
                           each area that does not meet its benchmark

                           The MCO, PIHP Quality Assurance/Quality Improvement
                           Director shall participate in monthly /quarterly QI
                           meetings with MAA and the EQRO.

         ADD

         C.13.3.4          In accordance with 42 CFR 438.240, the Contractor
                           shall comply with the following requirements:

                           A. Conduct performance improvement projects. These
                              projects shall be designed to achieve, through
                              ongoing measurements and intervention, significant
                              improvement, sustained over time, in clinical care
                              areas that are expected to have a favorable effect
                              on health outcomes and Enrollee satisfaction;

                           B. Submit quarterly performance measurement data;

                           C. Have in effect mechanisms to detect both
                              underutilization and over-utilization of services;
                              and

                           D. Have in effect mechanisms to assess the quality
                              and appropriateness of care furnished to Enrollees
                              with special health care needs.

                           E. The MCO, PIHP shall comply with the entire section
                              of 42CFR 438.240 and all sections of the CFR that
                              are referenced in this section.

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SECTION C.14               Complaints, Grievances and Fair Hearings

         ADD

         The following paragraphs after first paragraph in C.14.

                           Statutory basis for requiring the Contractor to have
                           grievance procedures may be found in the Social
                           Security Act (following Sections):

                           A. 1902(a)(3) - The District plan shall provide an
                              opportunity to any person whose claim for
                              assistance is denied or not acted upon promptly;

                           B. 1902(a)(4) - The District plan shall provide
                              methods of administration that the Secretary of
                              HHS finds necessary for the proper and efficient
                              operation of the (grievance) plan; and

                           C. 1932(b)(4) - Medicaid managed care organizations
                              are required to establish internal grievance
                              procedures under which Medicaid Enrollees, or
                              providers acting on their behalf, may challenge
                              the denial of coverage, or payment for such
                              assistance.

         ADD               The following after the first paragraph:

         C.14.1.1.1        An Enrollee or Enrollee's authorized representative
                           may file a grievance or appeal with the District's
                           Office of Fair Hearing regarding any matter that can
                           be a subject of a grievance or appeal under this
                           chapter.

                           In accordance with 42 CFR 438.406(a)(1), the
                           Contractor shall give Enrollees reasonable assistance
                           in completing forms and taking other procedural
                           steps. This includes, but is not limited to,
                           competent professional interpreter services and
                           toll-free numbers that have adequate TTY/TTD and
                           interpreter capability. The Contractor shall also
                           offer to assist in the filing of an appeal to the
                           Office of Fair Hearing.

         Change from:

         C.14.1.1.5        The Contractor shall in no way penalize any Enrollee
                           who files a complaint or grievance, or requests a
                           Fair Hearing.

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         Change to:

         C.14.1.1.5        The Contractor shall in no way penalize any Enrollee
                           who files or any provider who supports or assists
                           him/her in filing an appeal or grievance, or requests
                           a Fair Hearing.

         ADD

         C.14.1.6          In accordance with this contract, the Contractor
                           shall have a system in place that includes a
                           grievance process, an appeal process, and access to
                           the District's Office of Fair Hearing system.

         C.14.1.7          A provider, acting on behalf of the Enrollee or
                           authorized representative and with the Enrollee's
                           written consent, may file an appeal. A provider also
                           may file a grievance or request a District Fair
                           Hearing on behalf of an Enrollee.

         C.14.1.8          The Enrollee shall file a grievance either orally or
                           in writing. Unless the Enrollee (or provider)
                           requests expedited resolution, oral appeals shall be
                           followed by a signed, written appeal. The grievance
                           from the enrollee may either be filed with the
                           District Office of Fair Hearing or with the MCO,
                           PIHP.

         ADD

         After the first paragraph of C.14.3:

                           The parties to the Office of Fair Hearing include the
                           Contractor as well as the Enrollee and his or her
                           representative or the representative of a deceased
                           Enrollee's estate (42 CFR 438.408(f)(2)).

                           In accordance with 42 CFR 438.414, the Contractor
                           shall provide the information specified in this
                           section (C.14.3) of the contract and in 42 CFR
                           438.400-424 to all providers and subcontractors at
                           the time they enter into a contract.

         Change from:

         C.14.3.1          First paragraph.

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                           The Contractor shall, whenever an Enrollee's request
                           for covered services is reduced, delayed, denied,
                           terminated, or payment is denied, provide a written
                           notice within five (5) days to the Enrollee with a
                           copy to the Office of Managed Care. This shall be
                           done in accordance with Federal requirements at 42
                           CFR 431.213 and 431.214, as amended; and all other
                           statutory or regulatory requirements.

         Change to:

         C.14.3.1          First paragraph

                           The Contractor shall provide a written notice to the
                           Enrollee ten days prior to action whenever an
                           Enrollee's request for covered services is reduced,
                           denied, or terminated. The Contractor shall notify
                           the Enrollee five (5) business days prior to action
                           whenever an Enrollee's request for covered services
                           is delayed, reduced, denied, or terminated. In cases
                           of service reduction, delay, denial or termination,
                           the Contractor shall send a monthly report to the
                           Office of Managed Care. For payment denials, the
                           Contractor shall notify the provider and provide a
                           summary monthly report to the Office of Managed Care.

                           In accordance with 42CFR 438.210(b)(3) Any decision
                           to deny a service authorization request or to
                           authorize a service in an amount, duration, or scope
                           that is less than requested, must be made by a health
                           professional who has appropriate clinical expertise
                           in treating the enrollee's condition or disease.

                           The notification shall meet the requirements of 42
                           CFR 438.404 and include the following information:

                           A. The action the Contractor or its subcontractor has
                              taken;

                           B. The reason for the action;

                           C. The Enrollee's or the provider's right to file an
                              MCO or CASSIP appeal;

                           D. The right to request a District Fair Hearing
                              immediately;

                           E. The procedures for exercising these rights;

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           F. The circumstances under which expedited resolution
                              is available and how to request it; and

                           G. The Enrollee's right to have benefits continue
                              pending resolution of the appeal, how to request
                              that benefits be continued.

         ADD

         C.14.3.1.7        Compensation for utilization management
                           activities - consistent with 42 CFR 438.210 (e)
                           compensation to individuals or entities that conduct
                           utilization management activities cannot be
                           structured to provide incentives for that individual
                           or entity to deny, limit, or discontinue medically
                           necessary services.

         ADD

         C.14.3.1 Section 1005. (a) In General (2) Scope (as specified in
                           subsection E):

                           (C) limited authorization of a required service,
                               including the type or level of service, the
                               suspension, reduction, or termination of an
                               authorized service, the denial in whole or in
                               part of payment for a service, the failure to
                               provide services in a timely manner as defined by
                               the District;

                           (D) the failure of the Contractor to act within the
                               timeframes provided in this section taken from
                               438.408(b).

         Change from:

         C.14.3.1 Section 1005 Grievance Procedure under (b) Filing of
                           grievances (1) Parties (as specified in subsection E)

                           (1) Within 30 days of notice of, any of the following
                           may invoke the grievance procedure under this section
                           by filing with the Contractor in writing (by
                           facsimile or otherwise):

                           (A) the enrolled individual affected by the
                               determination (or in the case of an enrolled
                               adolescent);

                           (B) the primary care provider (and specialist, if
                               any) of the enrolled individual affected by the
                               determination; or

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           (C) with the permission of the enrolled individual
                               affected by the determination, the agency,
                               program or provider that referred the enrolled
                               individual for the item or service at issue.

         Change to:

         C.14.3.1 Section 1005 Grievance Procedure under (b) Filing of
                           grievances (1) Parties (as specified in subsection E)

                           (1) A grievance may be filed in writing or orally
                           with the Contractor. An oral grievance must be
                           followed with a request in writing within ten (10)
                           days of the oral request, unless resolved. Any of the
                           following may invoke the grievance procedure under
                           this section by filing with the Contractor within 90
                           days of notice:

                           (A) The enrolled individual affected by the
                               determination (or in the case of an enrolled
                               adolescent);

                           (B) The primary care provider (and specialist, if
                               any) of the enrolled individual affected by the
                               determination; or

                           (C) If the Enrollee is a minor child, a parent,
                               guardian, or authorized representative;

                           (D) Any Enrollee may have an authorized
                               representative request a grievance on his /her
                               behalf;

                           (E) An authorized representative may include, but is
                               not limited to an attorney or non-legal advocate;
                               and

                           (F) With the permission of the enrolled individual
                               affected by the determination, the agency,
                               program or provider that referred the enrolled
                               individual for the item or service at issue.

         Change from:

         C.14.3.1 Section 1005 Grievance Procedure (b) Filing of Grievances (2)
                           Timeframe (A) (as specified in subsection E)

                           In the case of the issuance of a determination
                           involving the denial of, or the termination or
                           reduction of, a covered item or

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           service any individual describe in paragraph (1) may
                           file a grievance within 90 days of receipt of the
                           notice.

         Change to:

         C.14.3.1 Section 1005 Grievance Procedure (b) Filing of Grievances (2)
                           Timeframe (A) (as specified in subsection E)

                           In the case of the issuance of a determination
                           involving the denial of, or the termination or
                           reduction of, a covered item or service any
                           individual describe in paragraph (1) may file a
                           grievance within 90 days of receipt of the notice.

         ADD

         C.14.3.1 Section 1005 Grievance Procedure (d) Resolution of Grievances
                           (1) Timeframe (C) Urgent Defined (as specified in
                           subsection E)

                           (iv) if the provider indicates that taking the time
                           for a standard resolution could seriously jeopardize
                           the Enrollee's ability to attain, maintain, or regain
                           maximum function.

         Change from:

         C.14.3.1 Section 1005 Grievance Procedure (d) Resolution of Grievances
                           (1) Timeframe (A) (as specified in subsection E)

                           (A) Contractor shall resolve grievances filed under
                           this section not later than 30 working days after the
                           date of receipt of the grievance, except in cases
                           described in subparagraph (B).

         Change to:

         C.14.3.1 Section 1005 Grievance Procedure (d) Resolution of Grievances
                           (1) Timeframe (A) (as specified in subsection E)

                           Contractor shall resolve grievances filed under this
                           section not later than 14 working days after the date
                           of receipt of the grievance, with the possibility of
                           an extension of 14 days if it is in the best interest
                           of the Enrollee, except in cases described in
                           subparagraph (B).

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                           If the MCO or PIHP extends the timeframe, the MCO or
                           PIHP shall give the Enrollee written notice of the
                           reason for the decision to extend the timeframe and
                           inform the Enrollee of the right to file a grievance
                           if he or she disagrees with that decision; and issue
                           and carry out its determination as expeditiously as
                           the Enrollee's health condition requires and no later
                           than the date the extension expires.

         ADD

         C.14.3.1 Section 1006 Compliant Procedure (a) In General (2) Scope (as
                           specified in subsection F)

                           (E) Any matter other than a grievance (as defined at
                               1005 (a)(2)), that should include, but not be
                               limited to the quality of care or services
                               provided, and aspects of interpersonal
                               relationships such as rudeness of a provider or
                               employee or failure to respect the Enrollee's
                               rights.

         Change from:

         C.14.3.1 Section 1006 (d) Resolution of Complaints (1) Timeframe (as
                           specified in subsection F)

                           (1) Timeframe--Contractor shall resolve a complaint
                               not later than [ ] days after the date of receipt
                               of the complaint.

         Change to:

         C.14.3.1 Section 1006 (d) Resolution of Complaints (1) Timeframe (as
                           specified in subsection F)

                           Timeframe--Contractor shall resolve an appeal not
                           later than 14 days after the date of receipt of the
                           appeal, with the possibility of an extension up to 14
                           days if it is in the best interest of the Enrollee.

                           If the MCO or CASSIP extends the timeframe, the
                           Contractor shall give the Enrollee written notice of
                           the reason for the decision to extend the timeframe
                           and inform the Enrollee of the right to file a
                           grievance if he or she disagrees with that decision;
                           and issue and carry out its determination as
                           expeditiously as the Enrollee's health condition
                           requires and no later than the date the extension
                           expires.

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         ADD

         The following after first paragraph of C.14.3.1.3:

                           In accordance with 42 CFR 438.410(b), the Contractor
                           shall ensure that punitive action is neither taken
                           against a provider who requests an expedited
                           resolution or supports an Enrollee's appeal.

                           In accordance with 42 CFR 438.410(c), if the
                           Contractor denies a request for expedited resolution
                           of an appeal, it shall:

                           A. Transfer the appeal to the timeframe for standard
                              resolution (C.14.3.1 1005(d)(1)(A)) of an appeal;
                              and

                           B. Make reasonable efforts to give the Enrollee
                              prompt oral notice of the denial, and follow up
                              within two (2) calendar days with a written
                              notice.

         Change from:      (d) Resolution of Grievances

                           (1) Timeframe

         C.14.3.1.         (A) A Contractor shall resolve grievances filed under
                               this section not later than 30 days after the
                               date of receipt of the grievance, except in cases
                               described in subparagraph (b).

         Change to:

         C.14.3.1.         In accordance with 42 CFR 438.408(c), the Contractor
                           shall resolve grievances filed not later than 14
                           working days after receipt of grievance. However, the
                           Contractor may make written requests for an
                           additional 14 days if the Contractor shows (to the
                           satisfaction of the MAA, upon its request) that there
                           is need for additional information and how the delay
                           is in the Enrollee's interest. If the MCO or PIHP
                           extends the timeframes it shall - for any extension
                           not requested by the Enrollee, give the Enrollee
                           written notice of the reason for the delay.

         ADD

         The following new section to the contract (C.14.3.1.6(c)):

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                           In accordance with 42 CFR 438.406(b), the process for
                           appeals shall:

                           i.       Provide that oral inquiries seeking to
                                    appeal an action are treated as appeals (to
                                    establish the earliest possible filing date
                                    for the appeal) and shall be confirmed in
                                    writing, unless the Enrollee or provider
                                    requests expedited resolution;

                           ii.      Provide the Enrollee a reasonable
                                    opportunity to present evidence, and
                                    allegations of fact or law, in person as
                                    well as in writing. The Contractor shall
                                    inform the Enrollee of the limited time
                                    available for this in the case of expedited
                                    resolution;

                           iii.     Provide the Enrollee and his or her
                                    representative the opportunity, before the
                                    appeals process, to examine the Enrollee's
                                    case file, including medical records, and
                                    any other documents and records; and

                           iv.      Include as parties to the appeal the
                                    Enrollee and his or her legal representative
                                    or the legal representative of a deceased
                                    Enrollee's estate.

         ADD

         C.14.3.1.6(d)

                           (1)      The written notice of the resolution shall
                                    include the following:

                                    a)    The results of the resolution process
                                          and the date it was completed; and

                                    (b)   For appeals not resolved wholly in
                                          favor of Enrollees:

                                          (A) The right to request a District
                                              Fair Hearing and how to do so; and

                                          (B) The right to request and receive
                                              benefits while the hearing is
                                              pending and how to make the
                                              request.

         Change from:

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         C.14.3.2.6        The Enrollee's right to obtain free copies of the
                           documents, including the Enrollee's medical records,
                           used to make the decision and the medical necessity
                           criteria referenced in the decision; and

         C.14.3.2.7        The circumstances under which benefits will continue
                           pending resolution of the grievance or issuance of a
                           District Fair Hearing decision.

         Change to:

         C.14.3.2.6        The Enrollee's right to obtain free copies of the
                           documents, including the Enrollee's medical records
                           used to make the decision and the medical necessity
                           criteria referenced in the decision;

         C.14.3.2.7        In accordance with 42 CFR 438.404 and 438.210, the
                           MCO, or PIHP gives notice as expeditiously as the
                           Enrollee's health condition requires and within
                           District-established timeframes that may not exceed
                           fourteen (14) calendar days following receipt of the
                           request for services, with the possible extension of
                           up to fourteen (14) additional calendar days, if the
                           Enrollee or the provider requests the extension or
                           the MCO or PHIP justifies a need for additional
                           information and how the extension is in the
                           Enrollee's interest. If the MCO or PHIP extends the
                           timeframe, the Contractor must give the Enrollee
                           written notice of the reason for the decision to
                           extend the timeframe and inform the Enrollee of the
                           right to file a grievance if he or she disagrees with
                           that decision; and issue and carry out its
                           determination as expeditiously as the Enrollee's
                           health condition requires and no later than the date
                           the extension expires.

         ADD

         C.14.3.2.8        In accordance with 42 CFR 438.404(c), the Contractor
                           shall mail the notice within the following
                           timeframes:

                           A.       For termination, suspension, or reduction of
                                    Medicaid services, the timeframes specified
                                    in 42 CFR 431.211, 431.213, and 431.214;

                           B.       For denial of payment, at the time of any
                                    action affecting the claim;

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           C.       For standard service authorization decisions
                                    that deny or limit services, within 5 days.
                                    [Reserved]

                           If the Contractor extends the timeframe in accordance
                           with 42 CFR 438.210(d)(1), the Contractor shall:

                           A.       Give the Enrollee written notice of the
                                    reason for the decision to extend the
                                    timeframe and inform the Enrollee of the
                                    right to file a grievance if he or she
                                    disagrees with that decision; and

                           B.       Issue and carry out its determination as
                                    expeditiously as the Enrollee's health
                                    condition requires and no later than the
                                    date the extension expires.

                           For service authorization decisions not reached
                           within the timeframe specified in 42 CFR 438.210(d)
                           (which constitutes a denial and is thus an adverse
                           action), on the date that the timeframes expire; and

                           In accordance with 42 CFR 438.404(b)(6), the
                           circumstances under which expedited resolution is
                           available and how to request it. For cases in which
                           the provider indicates or the MCO or PHIP determines,
                           that following the standard timeframe could seriously
                           jeopardize the enrollee's life or health or ability
                           to attain, maintain or regain maximum function, the
                           MCO or PHIP gives notice must make an expedited
                           authorization decision and provide notice as
                           expeditiously as the Enrollee's health condition
                           requires and no later than the seventy-two (72) hours
                           after receipt of the request for service, as
                           specified in 42 CFR 438.210(d). The MCO or PHIP may
                           extend the seventy-two (72) hours time period by up
                           to fourteen (14) calendar days if the Enrollee
                           requests an extension, or if the MCO or PHIP
                           justifies a need for additional information and how
                           the extension is in the Enrollee's interest.

         C.14.3.2.9        The circumstances under which benefits shall continue
                           pending resolution of the grievance or issuance of a
                           District Fair Hearing decision, as defined in
                           C.14.3.4.4.

         ADD

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         C.14.3.4.5        While the Enrollee's appeal is pending, the
                           Enrollee's benefits shall continue until one of the
                           following occurs:

                           A.       The Enrollee withdraws the appeal;

                           B.       Ten days pass after the MCO or PIHP mails
                                    the notice, providing the resolution of the
                                    appeal against the enrollee, unless the
                                    enrollee, within the 10-day timeframe, has
                                    requested a District Fair Hearing with
                                    continuation of benefits until the District
                                    Fair Hearing decision is reached.

                           C.       The District Office of Fair Hearing issues a
                                    hearing decision adverse to the Enrollee; or

                           D.       The time period or service limits of a
                                    service has been met.

         C.14.3.4.6        The Contractor is prohibited from recovering payment
                           for continuation of benefits furnished during a
                           pending appeal, if the final resolution of the appeal
                           is adverse to the Enrollee.

         C.14.3.4.7        In accordance with 42 CFR 438.424, if the Contractor
                           or District Office of Fair Hearing reverses a
                           decision to deny, limit, or delay services that were
                           not furnished while the appeal was pending, the
                           Contractor must authorize or provide the disputed
                           services within two (2) working days, and as
                           expeditiously as the Enrollee's health condition
                           requires. In addition, if the MCO, PIHP or District
                           Office of Fair Hearing reverses a decision to deny
                           authorization of services, and the Enrollee received
                           the disputed services while the appeal was pending,
                           the MCO or PIHP must pay for those services, in
                           accordance with District policy and regulations.

         ADD

         Add the following after the first paragraph in SECTION C.14.4.1

                           In accordance with 42 CFR 431.220, the District shall
                           grant an opportunity for a hearing to the following:

                           A.       Any applicant who requests it because
                                    his/her claim for services in denied or is
                                    not acted upon with reasonable promptness;
                                    and

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                           B.       Any Enrollee who is the subject of an action
                                    as that term is defined in C.14 of this
                                    contract or grievance as defined in C.14.

         ADD

         C.14.5.1          In accordance with 42 CFR 431.244, hearing
                           recommendations must be based exclusively on evidence
                           introduced at the hearing.

         Change from:

         C.14.6            Tracking Log

                           The Contractor shall maintain a record keeping and
                           tracking system for complaints, grievances, and
                           appeals that includes copy of the original written
                           complaint, grievance, or appeal, the decision, and
                           the nature of the decision and any corrective action
                           that was taken.

         Change to:

         C.14.6            Tracking Log

                           In accordance with 42 CFR 438.416, the Contractor
                           shall maintain a record keeping and tracking system
                           for complaints, grievances and appeals that includes
                           a copy of the original written complaint, grievance,
                           or appeal, the decision, and the nature of the
                           decision and any corrective action that was taken.
                           The Contractor must keep a record of any oral
                           (telephonic or in-person) complaints and the outcomes
                           that result.

SECTION C.16

         Change from:

         C.16              PERFORMANCE AND OUTCOME MEASURES

                           The Contractor shall generate and track the
                           performance measures as described in Section C.17,
                           and Section C.18 for evaluation of the Contractor's
                           performance. MAA reserves the right to specify
                           additional or change performance measures or

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                           criteria within sixty (60) days of prior notification
                           to the Contractor. Nothing in this Section precludes
                           the requirement of the Contractor to fulfill
                           reporting requirements specified in Section F or
                           reports that are mandated by the Health Care Finance
                           Administration (HCFA) or other federal or District
                           governmental entities.

         Change to:

         C.16              PERFORMANCE AND OUTCOME MEASURES

                           The Contractor shall generate and track the
                           performance measures as described in SECTION C.17 and
                           SECTION C.18 for evaluation of the Contractor's
                           performance. Nothing in this Section precludes the
                           requirement of the Contractor to fulfill reporting
                           requirements specified in SECTION F or reports that
                           are mandated by the Centers for Medicare and Medicaid
                           Services (CMS) or other Federal or District
                           governmental Contractors. In accordance with 42 CFR
                           438.240, the Contractor shall annually measure and
                           report to the District its performance, using
                           standard measurements required by the District. In
                           addition, the Contractor shall submit to the District
                           data specified by the District that enables the
                           District to measure the Contractor's performance and
                           perform a combination of the above activities.

SECTION C.17               Specific Requirements And Responsibilities for DCHFP
                           Contractors Only

         ADD

         C.17.7.1.2        In accordance with 42 CFR 438.240, the Contractor
                           shall have an ongoing program of performance
                           improvement projects that focus on clinical and
                           non-clinical areas and that involve the following:

                           A.       Measurement of performance using objective
                                    quality indicators;

                           B.       Implementation of system interventions to
                                    achieve improvement in quality;

                           C.       Evaluation of the effectiveness of
                                    interventions; and

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                           D.       Planning and initiation of activities for
                                    increasing or sustaining improvement.

         C.17.7.1.3        The Contractor shall report the status and results of
                           each project to the District as requested. Each
                           performance improvement project shall be completed in
                           a reasonable time period as to generally allow
                           information on the success of performance improvement
                           projects in the aggregate to produce new information
                           on quality of care every year. Additionally, the
                           Contractor shall have in effect a process for its own
                           evaluation of the impact and effectiveness of its
                           quality assessment and performance improvement
                           program.

SECTION C.18

         DELETE            Reserved

         ADD

         C.18              Enrollee Rights

         C.18.1            General Rule

                           In accordance with 42 CFR 438.100(a), the District of
                           Columbia requires that each MCO or PIHP have written
                           policies regarding Enrollee rights specified in this
                           (C.18); and each MCO or PIHP complies with Federal
                           and District laws that pertain to Enrollee rights,
                           and ensures that its staff and affiliated providers
                           take those rights into account when furnishing
                           services to Enrollees.

         C.18.2            Specific Rights

                           In accordance with 42 CFR 438.100(b), the District
                           requires that each MCO or PIHP Enrollee is guaranteed
                           the following rights;

                           A.       To receive information in accordance with 42
                                    CFR 438.10;

                           B.       To be treated with respect and with due
                                    consideration for his or her dignity and
                                    privacy;

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                           C.       To receive information on available
                                    treatment options and alternatives,
                                    presented in a manner appropriate to the
                                    Enrollee's condition and ability to
                                    understand. (The information requirements
                                    for services that are not covered under this
                                    contract are set forth in Section 438.10(f)
                                    (6)(xiii));

                           D.       To participate in decisions regarding his or
                                    her health care, including the right to
                                    refuse treatment;

                           E.       To be free from any form of restraint or
                                    seclusion used as a means of coercion,
                                    discipline, convenience, or retaliation, as
                                    specified in other Federal regulations on
                                    the use of restraints and seclusion;

                           F.       If the privacy rule, as set for in 45 CFR
                                    Parts 160 and 164 subparts A and E applies,
                                    request and receive a copy of his or her
                                    medical records, and request that they be
                                    amended or corrected, as specified in 45 CFR
                                    Section 164.524 and 164.526; and

                           G.       The right to be furnished health care
                                    services in accordance with Sections 438.206
                                    through 438.210 (as specified in SECTION C
                                    of this contract related to availability of
                                    services, assurances of adequate capacity
                                    and services, coordination and continuity of
                                    care, and coverage and authorization of
                                    services).

         C.18.3            Free Exercise of Rights

                           In accordance with 42 CFR 438.100(c), the District
                           requires that each MCO or CASSIP ensure that each of
                           its Enrollees is free to exercise his or her rights,
                           and that the exercise of those rights does not
                           adversely affect the way the MCO, PIHP, and its
                           providers or State agency treat the Enrollee.

         C.18.4            Compliance with Other Federal and District Laws

                           In accordance with 42 CFR 438.100(d), each MCO, PIHP,
                           shall comply with any other applicable Federal or
                           District laws (such as Title VI of the Civil Rights
                           Act of 1964 as implemented by regulations at 45 CFR
                           part 80; the Age Discrimination Act of 1975 as
                           implemented by regulations at 45 CFR part 91; the
                           Rehabilitation Act of 1973; and Titles II

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                         AMERIGROUP DISTRICT OF COLUMBIA

                           and III of the Americans with Disabilities Act;
                           HIPAA; DC Code Section 2-1401.01 (2001) and other
                           laws regarding privacy and confidentiality).

SECTION F                  Term Of Contract

SECTION F.1

         ADD

         F.1.2.2           In accordance with 42 CFR 438.610(c), if the
                           Contractor is not in compliance with the terms of 42
                           CFR 438.610 (prohibited affiliations and debarment by
                           Federal agencies - see SECTION H.8.2 of this
                           contract), the District shall not renew or otherwise
                           extend this contract unless the Secretary of HHS
                           provides a written statement to the District and to
                           Congress describing compelling reasons for renewing
                           or extending this contract.

         F.1.2.3           Renegotiations

                           The District reserves the right to enter into
                           renegotiations of this contract with the Contractor
                           under the following circumstances:

                           A.       For cause; and

                           B.       For modification(s) during the contract
                                    period, if circumstances warrant, at the
                                    discretion of the District.

SECTION G                  Contract Administration Data

         ADD

         G. 1.1.1.2        CONTRACT ADMINISTRATION DATA

                           In accordance with 42 CFR 438.602, as a condition of
                           receiving payment under the Medicaid Managed Care
                           Program, an MCO, or PIHP must comply the
                           applicability certification

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                           program integrity and prohibited affiliation of this
                           subpart requirements.

         ADD

         After the first paragraph under SECTION G CONTRACT ADMINISTRATION DATA

                           In accordance with 42 CFR 438.60, MAA shall ensure
                           that no payment is made to a provider other than the
                           MCO or PIHP for services available under this
                           contract between the District and the MCO or PIHP,
                           except when these payments are provided for in Title
                           XIX of the Social Security Act, in 42 CFR, or when
                           the MAA has adjusted the capitation rates paid under
                           the contract, in accordance with 42 CFR
                           438.6(c)(5)(v), to make payments for graduate medical
                           education. Please note that 42 CFR 438.6(c)(5)(v)
                           states the following:

                           A.       If the District makes payments to providers
                                    for graduate medical education (GME) costs
                                    under an approved State plan, the State must
                                    adjust the actuarially sound capitation
                                    rates to account for the GME payments to be
                                    made on behalf of Enrollees covered under
                                    the contract, not to exceed the aggregate
                                    amount that would have been paid under the
                                    approved State plan for FFS
                                    (fee-for-service). The State must first
                                    establish actuarially sound capitation rates
                                    prior to making adjustments for GME.

SECTION H                  Special Contract Requirements

SECTION H.1

         Change from:

         H.1.1.3.3         Except as provided in Section C.17.2, no Enrollee
                           shall be disenrolled solely because of an adverse
                           change in health status.

         Change to:

         H.1.1.3.3         Except as provided in SECTION C.6.6 and SECTION
                           C.17.2, no Enrollee shall be disenrolled because of a
                           change in the

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                           Enrollee's health status, or because of the
                           Enrollee's utilization of medical services,
                           diminished mental capacity, or uncooperative or
                           disruptive behavior resulting from his or her special
                           needs (except when his or her continued enrollment in
                           the MCO or PIHP seriously impairs the Contractor's
                           ability to furnish services to either this particular
                           Enrollee or other Enrollees or services are obtained
                           in a fraudulent or wasteful manner.)

SECTION H.4

         ADD

         Under H.4.1       In addition to its rights under the Default clause of
                           the Standard Contract provisions, if the District
                           determines that the Contractor has failed to comply
                           with terms of this contract or has violated
                           applicable: (1) Federal law as specified in Sections
                           1903(m)(5)(A) and 1932(e)(1) of the Social Security
                           Act and 42 CFR 422.208-210, Section 438.700-702, and
                           45 CFR 92.36(i)(1) including:

                           A.       Substantially failing to provide medically
                                    necessary services that the Contractor is
                                    required to provide under law or under its
                                    contract with the District to an Enrollee
                                    covered under the contract;

                           B.       Imposing on Enrollees premiums or charges
                                    that are in excess of the premiums or
                                    charges permitted under the Medicaid
                                    program;

                           C.       Acting to discriminate among Enrollees on
                                    the basis of their health status or need for
                                    health care services;

                           D.       Misrepresenting or falsifying information
                                    the Contractor furnishes to CMS or the
                                    District;

                           E.       Misrepresenting or falsifying information
                                    that the Contractor furnishes to an
                                    Enrollee, potential Enrollee, or health care
                                    provider;

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                           F.       Failing to comply with requirements for
                                    physician incentive plans as set forth (for
                                    Medicare) in 42 CFR 422.208 and 422.210 (see
                                    SECTION H.9 of this contract);

                           G.       Distributing directly, or indirectly though
                                    any agent or independent Contractor,
                                    marketing materials that have not been
                                    approved by the District or that contain
                                    false or materially misleading information
                                    (see SECTIONS C.5.2 and C.5.3 of this
                                    contract); and

                           H.       Violating any of the other applicable
                                    requirements of sections 1903(m) or 1932 of
                                    the Social Security Act and any implementing
                                    regulations;

                           I.       District of Columbia law; or regulations or
                                    court orders including but not limited to
                                    Salazar v.The District of Columbia et.al---

         ADD

         H.4.1.3.1         Suspend all new enrollment, including default
                           enrollment, after the effective date of the sanction
                           (42 CFR 438.702(a)(4));

         ADD

         H.4.1.6.1         Suspend payment for recipients enrolled after the
                           effective date of the sanction and until CMS or the
                           District is satisfied that the reason for imposition
                           of the sanction no longer exists and is not likely to
                           recur (42 CFR 438.702(a)(5));

         H.4.1.7.1         In accordance with 42 CFR 438.704, the District may
                           impose the following CMS approved financial
                           sanctions:

                           A.       A maximum of $25,000 for each determination
                                    or failure to provide services;
                                    misrepresentation or false statements to
                                    Enrollees, potential Enrollees, or health
                                    care providers; failure to comply with
                                    physician incentive plan requirements
                                    (SECTION 8.9 of this contract and 42 CFR
                                    422.208 and 422.210); or marketing
                                    violations.

                           B.       A maximum of $100,000 for each determination
                                    of discrimination; or misrepresentation or
                                    false statements to CMS or the District.

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                           C.       A maximum of $15,000 for each recipient the
                                    District determines was not enrolled because
                                    of a discriminatory practice (subject to the
                                    $100,000 overall limit above).

                           D.       A maximum of $25,000, or double the amount
                                    of the excess charges (whichever is greater)
                                    for charging premiums or charges in excess
                                    of the amounts permitted under the Medicaid
                                    program. The District will deduct from the
                                    penalty the amount of the overcharge and
                                    will return it to the affected Enrollees.

         ADD

         H.4.1.9           In accordance with 42 CFR 438.706(b), the District
                           will impose temporary management (regardless of any
                           other sanction that shall be imposed) if it finds
                           that the Contractor has repeatedly failed to meet the
                           substantive requirements in sections 1903(m) and 1932
                           of the Social Security Act. The District will grant
                           Enrollees the right to terminate enrollment without
                           cause, as described in 42 CFR 438.702(a)(3), and will
                           notify the affected Enrollees of their right to
                           terminate enrollment. As required by 42 CFR
                           438.706(c), the District will not delay imposition of
                           temporary management to provide a hearing before
                           imposing this sanction. Finally, in accordance with
                           42 CFR 438.706(d), the District will not terminate
                           temporary management until the District determines
                           that the Contractor can ensure that the sanctioned
                           behavior will not recur; and/or

         Change from:

         H.4.2             Denial of Payment by the Health Care Financing
                           Administration

         H.4.2.1           Payments provided for under this contract, shall be
                           denied for new Enrollees when and for so long as,
                           payment for those Enrollees is denied by the Health
                           Care Financing Administration under 42 C.F.R.
                           434.67(e).

         Change to:

         H.4.2             Denial of Payment by the Centers for Medicare and
                           Medicaid Services (formally Health Care Financing
                           Administration)

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         H.4.2.1           In accordance with 42 CFR 438.726(b), payments
                           provided under this contract to the Contractor shall
                           be denied for new Enrollees when, and for so long as,
                           payment for those Enrollees is denied under 42 CFR
                           438.730(e).

         Change from:

         H.4.3.1           Before taking any action described in Section 0, the
                           District will provide written notice which shall
                           include at least the following:

                           -        A citation to the law or regulation or
                                    contract provision that has been violated;

                           -        The sanction to be applied and the date the
                                    sanction will be imposed;

                           -        The basis for the District's determination
                                    that the sanction should be imposed; and

                           -        The time frame and procedure for the
                                    Contractor to appeal the District's
                                    determination.

         Change to:

         H.4.3.1           In accordance with 42 CFR 738.710, before taking any
                           action described in SECTION H.4, the District shall
                           provide timely written notice, which shall include at
                           least the following:

                           A.       A citation to the law or regulation or
                                    contract provision that has been violated;

                           B.       The sanction to be applied and the date the
                                    sanction shall be imposed;

                           C.       The basis for the District's determination
                                    that the sanction should be imposed; and

                           D.       The time frame and procedure for the
                                    Contractor to appeal the District's
                                    determination.

         ADD

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         H.4.3.2           In accordance with 42 CFR 438.724, the District must
                           give the CMS Regional Office written notice whenever
                           the District imposes or lifts a sanction under this
                           contract for violations specified in 42 CFR 438.700
                           (SECTION H.4.1). The notice to the CMS Regional
                           Office must be given no later than 30 days after the
                           District imposes or lifts a sanction, and must
                           specify the affected Contractor, the kind of
                           sanction, and the District's reason for deciding to
                           impose or lift a sanction.

         ADD

         H.4.5             Monitoring Violations

         H.4.5.1           In accordance with 42 CFR 438.726(a), the District
                           must develop and implement a plan to monitor for
                           violations that involve the actions and failures to
                           act specified in this part and to implement the
                           provisions of this part.

         H.4.5.2.          A contract with an MCO, PIHP must provide that
                           payments provided under this contract will be denied
                           for new enrollees when, and for so long as, payment
                           for those enrollees is denied by CMS under section
                           438.730(e).

SECTION H.7                General Subcontract Requirement

         ADD

         H.7.1.1.2         In accordance with 42 CFR 438.230, the State must
                           ensure, through its contracts, that each MCO, PIHP,
                           and PAHP- (1)Oversees and is accountable for any
                           functions and responsibilities that it delegates to
                           any subcontractor; and (2)Meets the conditions of
                           paragraph (b) of this section. (b) Specific
                           conditions. (1) Before any delegation, each MCO, PIHP
                           and PAHP evaluates the prospective subcontractor's
                           ability to perform the activities to be delegated:

                           A.       There is a written agreement that specifies
                                    the activities and report responsibilities
                                    delegated to the subcontractor; and

                           B.       Provides for revoking delegation or imposing
                                    other sanctions if the subcontractor's
                                    performance is inadequate;

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                           C.       The Contractor shall monitor the
                                    subcontractor's performance on an ongoing
                                    basis and subjects it to formal review
                                    according to a periodic schedule established
                                    by the District, consistent with industry
                                    standards or District MCO laws and
                                    regulations; and

                           D.       If the Contractor identifies deficiencies or
                                    areas for improvement, the Contractor and
                                    subcontractor shall take corrective action.

                           E.       In accordance with 42 CFR 438.6(1) All
                                    subcontracts must fulfill the requirements
                                    of 438.6 that are appropriate to the service
                                    or activity delegated under the subcontract.

                           F.       The contractor shall adhere to 42CFR 438.6
                                    Contract requirements.

         H.7.1.1.3         Subcontracts do not terminate the Contractor's legal
                           responsibilities for performance under this contract.

SECTION H.8                Fraud and Abuse Provisions And Protections

         Change from:

         H.8.2.1           In accordance with the Social Security Act
                           (Section 1932(d) (1) as amended by the Balanced
                           Budget Act of 1997) or Executive Order, the
                           Contractor may not knowingly have a director,
                           officer, partner, or person, who has been debarred by
                           the federal government, with more than 5% equity, or
                           have an employment, consulting, or other agreement
                           with such a person for the provision of items and
                           services that are significant and material to the
                           entity contractual obligation with the District. The
                           Contractor shall notify MAA within three (3) days of
                           the time it receives notice that action is being
                           taken against Contractor or any person defined under
                           the provisions of section 1128(a) or (b) of the
                           Social Security Act (42 USC 1320 a-7) or any
                           subcontractor which could result in exclusion,
                           debarment, or suspension of the Contractor or a
                           subcontractor from the Medicaid program or any
                           program listed in Executive Order 12549.

         Change to:

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         H.8.2.1           In accordance with the Social Security Act
                           (Section 1932(d) (1) as amended by the Balanced
                           Budget Act of 1997), 42 CFR 438.610, or Executive
                           Order, the Contractor shall not knowingly have a
                           relationship with an individual or an affiliate of an
                           individual as defined in the Federal Acquisition
                           Regulation, who is debarred, suspended, or otherwise
                           excluded from participating in procurement activities
                           under the Federal Acquisition Regulation or from
                           participating in nonprocurement activities under
                           regulations issued under Executive Order No. 12549 or
                           under guidelines implementing Executive Order No.
                           12549. The relationships between the Contractor or
                           such an individual (or affiliate of such an
                           individual) are as follows: (1) A director, officer,
                           or partner of the Contractor; (2) a person with
                           beneficial ownership of five percent or more of the
                           Contractor; or (3) a person with an employment,
                           consulting or other arrangement with the Contractor
                           for the provision of items and services that are
                           significant and material to the Contractor's
                           obligations under its contract with the District of
                           Columbia. The Contractor shall notify MAA within
                           three (3) days of the time it receives notice that
                           action is being taken against a Contractor or any
                           person defined under the provisions of Section
                           1128(a) or (b) of the Social Security Act (42 USC
                           1320 a-7) or any subcontractor which could result in
                           exclusion, debarment, or suspension of the Contractor
                           or a subcontractor from the Medicaid program or any
                           program listed in Executive Order 12549.

         Change from:

         H.8.3             Fraud and Abuse Compliance Plan

         H.8.3.1           The Contractor shall have a written Fraud and Abuse
                           Compliance Plan. The Contractor shall submit any
                           updates or modifications prior to making them
                           effective to MAA for approval.

         Change to:

         H.8.3             Fraud, Abuse, and Waste Compliance Plan

         H.8.3.1           In accordance with 42 CFR 438.608(a), the Contractor
                           shall have administrative and management arrangements
                           or

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           procedures, including a mandatory compliance plan,
                           that are designed to guard against fraud, abuse, and
                           waste. The Contractor shall submit any updates or
                           modifications prior to making them effective to MAA
                           for approval.

         Change from:

         H.8.3.1.2         The written plan shall contain procedures designed to
                           prevent and detect potential or suspected abuse and
                           fraud in the administration and delivery of services
                           under this contract.

         Change to:

         H.8.3.1.2         In accordance with 42 CFR 42 438.608(b)(1), the
                           written plan shall include policies, procedures, and
                           standards of conduct that articulate the Contractor's
                           commitment to comply with all applicable Federal and
                           District of Columbia standards designed to prevent
                           and detect potential or suspected abuse, fraud, and
                           waste in the administration and delivery of services
                           under this contract.

         Change from:

         H.8.3.1.4         The plan shall contain provisions for the
                           investigation and follow-up of any compliance plan
                           reports.

         Change to:

         H.8.3.1.4         In accordance with 42 CFR 438.608(b)(7), the plan
                           shall include provisions for prompt response to
                           detected offenses and for development of corrective
                           action initiatives related to this contract.

         Change from:

         H.8.3.1.5         The fraud and abuse compliance plan shall ensure that
                           the Contractors of individuals reporting violations
                           of the plan are protected.

         Change to:

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         H.8.3.1.5         The fraud, abuse, and waste compliance plan shall
                           ensure that the Contractors of individuals reporting
                           violations of the plan are protected.

         Change from:

         H.8.3.1.6         The plan shall contain specific and detailed internal
                           procedures for officers, directors, and employees for
                           detecting, reporting, and investigating fraud and
                           abuse compliance plan violations.

         Change to:

         H.8.3.1.6         In accordance with 42 CFR 438.608(b)(4-6), the
                           Contractor shall establish effective lines of
                           communication between the compliance officer and the
                           Contractor's employees. The plan's standards shall be
                           enforced through well-publicized disciplinary
                           guidelines. The plan shall also include provisions
                           for internal monitoring and auditing reported fraud,
                           abuse, and waste violations.

         Change from:

         H.8.3.1.7         The compliance plan shall require that confirmed
                           violations be reported to MAA within 24 hours of it
                           being confirmed.

         Change to:

         H.8.3.1.7         In accordance with 42 CFR 455.1(a)(1) and 455.17,
                           Contractors shall report fraud, abuse, and waste
                           information to the MAA. The fraud, abuse, and waste
                           information that shall be reported includes: (1)
                           number of appeals for fraud, abuse, and waste made to
                           the District that require preliminary investigation;
                           and (2) for each appeal that warrants investigation,
                           the name and I.D. number of the suspected offender,
                           the source of the appeal, the type of provider, the
                           nature of the appeal, the approximate number of
                           dollars involved, and the legal and administrative
                           disposition of the case. Contractors shall report
                           confirmed violations to MAA within 24 hours of the
                           violation being confirmed.

         Change from:

         H.8.3.1.8         The plan shall require any confirmed or suspected
                           fraud and abuse under state or federal law be
                           reported to the District of

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                           Columbia Office of the Inspector General Medicaid
                           Fraud Unit, the Medicaid Program Integrity Section of
                           MAA, and the Office of Managed Care.

         Change to:

         H.8.3.1.8         The plan shall require any confirmed or suspected
                           fraud, abuse, and waste under state or federal law be
                           reported to the District of Columbia Office of the
                           Inspector General Medicaid Fraud Unit, the Medicaid
                           Program Integrity Section of MAA, and the Office of
                           Managed Care.

         Change from:

         H.8.3.1.9         The written plan shall ensure that no individual who
                           reports plan violations or suspected fraud and abuse
                           is retaliated against.

         Change to:

         H.8.3.1.9         The written plan shall ensure that no individual who
                           reports plan violations or suspected fraud, abuse,
                           and waste is retaliated against.

         ADD

         H.8.3.1.10        In accordance with Section 1903(i)(2) of the Social
                           Security Act, please note that the FFP is not
                           available for amounts expended for providers excluded
                           by Medicare, Medicaid, of S-CHIP, except for
                           emergency services.

         H.8.3.1.11        In accordance with Section 1932(d)(4) of the Social
                           Security Act, Contractors shall require each member
                           physician to have a unique identifier when submitting
                           bills/claims for payment.

         H.8.3.1.12        In accordance with 42 CFR 455.1(a)(2), Contractors
                           shall have a method to verify that services provided
                           under this Medicaid managed care contract are
                           actually provided.

         H.8.3.1.13        In accordance with Section 1932(d)(3) of the Social
                           Security Act, a Medicaid managed care organization
                           may not enter into a contract with any State under
                           section 1903(m) unless the State has in effect
                           conflict-of-interest safe-guards with regards with
                           respect to officers and employees of the State with
                           responsibilities relating to contracts with such
                           organizations or

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           to the default enrollment process described in
                           subsection (a)(4)(C)(ii) that are at least as effect
                           as the Federal safe guards provided under Section 27
                           of the Office of Federal Procurement Policy Act (41
                           U.S.C. 423), against conflicts of interest that apply
                           with respect to Federal procurement officials
                           comparable responsibilities with respect to such
                           contract.

         Change from:

         H.8.3.3           Contractors shall designate executive and essential
                           personnel to attend mandatory training in fraud and
                           abuse detection, prevention and reporting. The
                           training will be conducted by the District of
                           Columbia Office of the Inspector General, Medicaid
                           Fraud Unit and will be provided free of charge.
                           Training will be scheduled not later than sixty (60)
                           days after contract award.

         Change to:

         H.8.3.3           In accordance with 42 CFR 438.608(b)(3), the
                           Contractor shall assure effective training and
                           education of the compliance officer (see SECTION
                           H.8.3.4 below) and the organization's employees.
                           Contractors shall designate executive and essential
                           personnel to attend mandatory training in fraud,
                           abuse, and waste detection, prevention and reporting.
                           The training shall be conducted by the District of
                           Columbia Office of the Inspector General, Medicaid
                           Fraud Unit and shall be provided free of charge.
                           Training shall be scheduled not later than sixty (60)
                           days after contract award.

         Change from:

         H.8.3.4           Contractors shall designate an officer or director in
                           its organization who has the responsibility and
                           authority for carrying out the provisions of the
                           fraud and abuse compliance plan.

         Change to:

         H.8.3.4           In accordance with 42 CFR 438.608(b)(2), the
                           Contractor shall designate a compliance officer and
                           compliance committee that are accountable to senior
                           management that have the

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           responsibility and authority for carrying out the
                           provisions of the fraud, abuse, and waste compliance
                           plan.

SECTION H.9                Physician Incentive Plan

       ADD         The Physician Incentive Plan must comply with Section 1903
       (m)(2)(A)(x);42CFR422.208, Section 422.210 Section 438.6(h)

         H.9.1.1           In accordance with 42 CFR 422.208(a), the following
                           definitions apply:

                           A. Bonus - means a payment made to a physician or
                              physician group beyond any salary, fee-for-service
                              payments, capitation, or returned withhold.

                           B. Capitation - means a set dollar payment per
                              patient per unit of time (usually per month) paid
                              to a physician or physician group to cover a
                              specified set of services and administrative costs
                              without regard to the actual number of services
                              provided. The services covered shall include the
                              physician's own services, referral services, or
                              all medical services.

                           C. Physician group - means a partnership,
                              association, corporation, individual practice
                              association, or other group that distributes
                              income from the practice among members.

                           D. Physician incentive plan - means any compensation
                              arrangement to pay a physician or physician group
                              that shall directly or indirectly have the effect
                              of reducing or limiting the services provided to
                              any plan Enrollee.

                           E. Potential payments - means the maximum payments
                              possible to physicians or physician groups
                              including payments for services they furnish
                              directly, and additional payments based on use and
                              costs of referral services, such as withholds,
                              bonuses, capitation, or any other compensation to
                              the physician or physician group. Bonuses and
                              other compensation that are not based on use of
                              referrals, such as quality of care furnished,
                              patient satisfaction, or committee participation,
                              are not considered payments in the determination
                              of substantial financial risk.

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                           F. Referral services - means any specialty,
                              inpatient, outpatient, or laboratory services that
                              a physician or physician group orders or arranges,
                              but does not furnish directly.

                           G. Risk threshold - means the maximum risk, if the
                              risk is based on referral services, to which a
                              physician or physician group shall be exposed
                              under a physician incentive plan without being at
                              substantial financial risk. This is set at 25
                              percent risk.

                           H. Substantial financial risk - means risk for
                              referral services that exceeds the 25 percent risk
                              threshold.

                           I. Withhold - means a percentage of payments or set
                              dollar amounts deducted from a physician's service
                              fee, capitation, or salary payment, and that shall
                              or shall not be returned to the physician,
                              depending on specific predetermined factors.

         H.9.2.1           In accordance with 42 CFR 422.208(b), any physician
                           incentive plan (PIP) the Contractor (and any of its
                           subcontractor arrangements) operates shall meet the
                           following requirements:

                           A. The Contractor shall make no specific payment,
                              directly or indirectly, to a physician or
                              physician group as an inducement to reduce or
                              limit medically necessary services furnished to
                              any particular Enrollee. Indirect payments shall
                              include offerings of monetary value (such as stock
                              options or waivers of debt) measured in the
                              present or in the future.

                           B. If the PIP places a physician or physician group
                              at substantial financial risk (as defined in
                              H.9.1(g)) for services that the physician or
                              physician group does not furnish itself, the
                              Contractor shall assure that all physicians and
                              physician groups at substantial financial risk
                              have either aggregate or per-patient stop-loss
                              protection (see below) and conduct periodic
                              surveys (see also below).

                           For all PIPs, the Contractor shall provide the
                           following information (42 CFR 422.210) to MAA for
                           submission to CMS:

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                           A. Whether services not furnished by the physician or
                              physician group are covered by the PIP;

                           B. The type or types of incentive arrangements, such
                              as withholds, bonus, and capitation;

                           C. The percent of any withhold or bonus used by the
                              plan;

                           D. Assurance that the physicians or physician group
                              have adequate stop-loss protection and the amount
                              of that protection;

                           E. The patient panel size and if the plan uses
                              pooling, the pooling method (as detailed below);
                              and

                           F. A summary of any required Enrollee survey results.

                           The Contractor shall submit Physician Incentive Plans
                           on an annual basis thirty (30) days prior to date of
                           exercise of the following year option. CMS may not
                           approve the Contractor's application for contract
                           unless the Contractor discloses the physician
                           incentive arrangements effective for that contract.

                           The Contractor shall also disclose the following
                           information to any Medicaid beneficiary who requests
                           it - whether the Contractor has a PIP that affects
                           referrals, the type of incentive arrangement, whether
                           stop-loss protection is provided, and the result of
                           any required Enrollee surveys.

         ADD

         H.9.3             In accordance with 42 CFR 422.208(d), the following
                           arrangements may cause substantial financial risk if
                           the physician panel size is not greater than 25,000
                           patients:

                           A. Withholds greater than 25 percent of potential
                              payments;

                           B. Withholds less than 25 percent of potential
                              payments if the physician or physician group is
                              potentially liable for amounts exceeding 25
                              percent of potential payments;

                           C. Bonuses that are greater than 33 percent of
                              potential payments minus the bonus;

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           D. Withholds plus bonuses if the withholds plus
                              bonuses equal more than 25 percent of potential
                              payments. The threshold bonus percentage for a
                              particular withhold percentage shall be calculated
                              using the formula: Withhold percentage (%) =
                              -0.75*(Bonus percentage (%)) + 25 percent (%);

                           E. Capitation arrangements; if:

                              a. The difference between the maximum potential
                                 payments and the minimum potential payments is
                                 more than 25 percent of the maximum potential
                                 payment; and/or

                              b. The maximum and minimum potential payments are
                                 not clearly explained in the contract with the
                                 physician or physician group; and

                           F. Any other incentive arrangements that have the
                              potential to hold a physician or physician group
                              liable for more than 25 percent of potential
                              payments.

         H.9.4             The Contractor shall ensure that compensation to
                           individuals or Contractors that conduct utilization
                           management activities is not structured so as to
                           provide incentives for the individual or Contractor
                           to deny, limit, or discontinue medically necessary
                           services to any Enrollees.

         H.9.5             As mentioned above, the Contractor shall assure that
                           all physicians and physician groups at substantial
                           financial risk have either aggregate or per-patient
                           stop-loss protection in accordance with the following
                           requirements: The contractor must comply with
                           1903(m)(2)(A)(x), 42 CFR417.479, 42 CFR 434.70(a)(3)

                           A. Aggregate stop-loss protection shall cover 90
                              percent of the costs of referral services that
                              exceed 25 percent of potential payments;

                           B. For per-patient stop-loss protection if the
                              stop-loss protection provided is on a per-patient
                              basis, the stop-loss limit (deductible) per
                              patient shall be determined on the same size of
                              the patient panel and shall be a combined policy
                              or consist of separate policies for professional
                              services and institutional practices. In
                              determining patient

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                        AMERIGROUP DISTRICT OF COLUMBIA

                              panel size, the patients shall be pooled in
                              accordance with the panel requirements detailed in
                              H.9.6; and

                           C. Stop-loss protection shall cover 90 percent of the
                              costs of referral services that exceed the
                              per-patient deductible limit. The per-patient
                              stop-loss deductible limits are as follows (see
                              table below):

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
                                                      SEPARATE         SEPARATE
                          SINGLE COMBINED           INSTITUTIONAL    PROFESSIONAL
PANEL SIZE                  DEDUCTIBLE                DEDUCTIBLE       DEDUCTIBLE
---------------------------------------------------------------------------------
<S>                       <C>                       <C>              <C>
1-1,000                     $   6,000                 $  10,000       $  3,000
---------------------------------------------------------------------------------
1,001-5,000                    30,000                    40,000         10,000
---------------------------------------------------------------------------------
5,001-8,000                    40,000                    60,000         15,000
---------------------------------------------------------------------------------
8,001-10,000                   75,000                   100,000         20,000
---------------------------------------------------------------------------------
10,001-25,000                 150,000                   200,000         25,000
---------------------------------------------------------------------------------
> 25,000                        None                      None           None
---------------------------------------------------------------------------------
</TABLE>

         H.9.6             Any Contractor that meets the following pooling
                           conditions shall pool commercial, Medicare, and
                           Medicaid Enrollees or the Enrollees of several
                           Contractors with which a physician or physician group
                           has contracts:

                           A. It is otherwise consistent with the relevant
                              contracts governing the compensation arrangements
                              for the physician or physician group;

                           B. The physician or physician group is at risk for
                              referral services with respect to each of the
                              categories of patients being pooled;

                           C. The terms of the compensation arrangements permit
                              the physician or physician group to spread the
                              risk across the categories of patients being
                              pooled;

                           D. The distribution of payments to physicians from
                              the risk pool is not calculated separately by
                              patient category; and

                           E. The terms of risk borne by the physician or
                              physician group are comparable for all categories
                              of patients being pooled.

         H.9.7             In accordance with 42 CFR 422.208(h), the Contractor
                           shall conduct periodic surveys of current and former
                           Enrollees where

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           substantial financial risk exists. The annual survey
                           results must be disclosed to MAA within 15 business
                           days of completion and disclose to beneficiaries upon
                           request. These surveys shall include at a minimum the
                           following:

                           A. Include either a sample of, or all, current
                              Medicare/Medicaid Enrollees in the Contractor's
                              organization and individuals disenrolled in the
                              past 12 months for reasons other than:

                              a. The loss of Medicaid or Medicare eligibility;

                              b. Relocation outside the District;

                              c. Failure to pay premiums or other charges (this
                                 does not apply due to SECTION G.9);

                              d. For abusive behavior; and

                              e. Retroactive disenrollment.

                           B. Be designed, implemented, and analyzed in
                              accordance with accepted principles of survey
                              design and statistical analysis;

                           C. Measure the degree or Enrollee's/disenrollee's
                              satisfaction with the quality of the services
                              provided and the degree to which the
                              Enrollees/disenrollees have or had access to
                              services provided by the Contractor; and

                           D. Be conducted no later than one year after the
                              effective date of the Contractor's contract and at
                              least annually thereafter.

         H.9.8             Contractors that fail to comply with the requirements
                           of SECTION H.9 shall be subject to intermediate
                           sanctions

         H.9.9             The Contractor shall ensure that compensation to
                           individuals or Contractors that conduct utilization
                           management activities is not structured so as to
                           provide incentives for the individual or Contractor
                           to deny, limit, or discontinue medically necessary
                           services to any Enrollee.

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                        AMERIGROUP DISTRICT OF COLUMBIA

SECTION H.12               Equity Balance, Solvency And Financial Reserves

         Change from:

         H.12.1            Consistent with the Balanced Budget Act of 1997, the
                           Contractor shall maintain a positive net worth, and
                           insolvency reserves or deposits that equal or exceed
                           the minimum requirements established by the District
                           of Columbia's Department of Insurance and Securities
                           Regulations as a condition for maintaining a
                           certificate of authority to operate a health
                           maintenance organization in the District.

         Change to:

         H.12.1            In accordance with 42 CFR 438.116 and the Balanced
                           Budget Act of 1997, the Contractor shall maintain a
                           positive net worth, and insolvency reserves or
                           deposits that equal or exceed the minimum
                           requirements established by the District of
                           Columbia's Department of Insurance and Securities
                           Regulations as a condition for maintaining a
                           certificate of authority to operate a health
                           maintenance organization in the District. This
                           includes the Contractor's provision against the risk
                           of insolvency to ensure that its Enrollees shall not
                           become liable for the Contractor's debts if the
                           Contractor becomes insolvent. Please note that
                           Federally Qualified MCOs, as defined in Section 1310
                           of the Public Health Service Act, are exempt from
                           this requirement (see H.12.3 below).

         ADD

         H.12.3            In accordance with 42 CFR 438.116(b)(2), the solvency
                           standards in this section do not apply to the
                           following Contractors:

                           A. Organizations that do not provide both inpatient
                              hospital and physician services;

                           B. Public Contractors;

                           C. A Contractor that is (or is controlled by) one or
                              more Federally Qualified Health Centers and meets
                              the solvency standards established by the District
                              for those centers; and

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                        AMERIGROUP DISTRICT OF COLUMBIA

                           D. Contractors whose solvency standards are
                              guaranteed by the District.

         H.12.4            As specified in the State Medicaid Manual (2086.6.B),
                           Contractors shall cover continuation of services to
                           Enrollees for duration of period for which payment
                           has been made, as well as for inpatient admissions up
                           until discharge, during periods of Contractor
                           insolvency.

SECTION H.15               Special Provider Payment Arrangement

         Change from:

         H.15.4.4          Upon the District's written request, the Contractor
                           shall permit, and shall assist the Federal
                           government, its agents or the District in the
                           inspection and audit of any financial records of the
                           Contractor or its subcontractors. The records of the
                           Contractor and its subcontractors shall be available
                           for inspection and audit by the District.

         Change to:

         H.15.4.4          In accordance with 42 CFR 438.6(g), upon the
                           District's written request, the Contractor shall
                           permit, and shall assist the Federal government, its
                           agents, or the District in the inspection and audit
                           of any financial records of the Contractor or its
                           subcontractors. The records of the Contractor and its
                           subcontractors shall be available for inspection and
                           audit by the District and Federal Government or its
                           designee.

         ADD:

         H.15.4.7          In accordance with 42 CFR 434.6 (a)(5) SMM 2080.9

                           Evaluation:

                           Provide for evaluation of services performed and for
                           audit and inspection of contractor records. The
                           contractor shall permit the District or District
                           designee, Federal Agencies or Federal Agencies
                           designee to conduct whatever inspections and audits
                           are necessary to assure quality, appropriateness or
                           timeliness of services and reasonableness of their
                           costs.

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                        AMERIGROUP DISTRICT OF COLUMBIA

         Change from:

         H.15.4.5          The Contractor shall retain annual audit reports and
                           records for at least five (5) years.

         Change to:

         H.15.4.5          The Contractor shall retain records in accordance
                           with 45 CFR 74 (3 years after the final payment is
                           made and all pending matters closed, plus additional
                           time if an audit, litigation, or other legal action
                           involving the records is started before or during the
                           original 3 year period ends).

         H.15.4.6          THE DISTRICT OF COLUMBIA RECORDS RETENTION FOR THIS
                           CONTRACT IS SIX (6) YEARS AND THREE (3) MONTHS

SECTION H.16

         ADD

         H.16.1.2          The medical records and any other health and
                           enrollment information that identifies a particular
                           Enrollee, the Contractor may use and disclose such
                           individually identifiable health information in
                           accordance with the privacy requirements in 45 CFR
                           parts 160 and 164, subparts A and E and HIPAA, to the
                           extent that these requirements are applicable.

SECTION H.18               Conflict Of Interest

         ADD

         H.18.1.1          In accordance with 42 CFR 438.58, as a condition of
                           contracting with MCOs or PIHP, a State must have in
                           effect safeguards against conflict of interest on the
                           part of the District and local officers and employees
                           and agents of the District who have responsibilities
                           relating to the MCO or PIHP or contracts or the
                           default enrollment process specified in 42 CFR
                           438.50(f), which states:

                           A. For recipients who do not choose a MCO during
                              their enrollment period, the District may have a
                              default

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                        AMERIGROUP DISTRICT OF COLUMBIA

                              enrollment process for assigning those recipients
                              to contracting MCOs;

                           B. The process must seek to preserve existing
                              provider-recipient relationships and relationships
                              with providers that have traditionally served
                              Medicaid recipients. If that is not possible, the
                              District must distribute the recipients equitably
                              among qualified MCOs available to enroll them,
                              excluding those subject to sanction as described
                              in 42 CFR 438.702(a)(4);

                           C. An "existing provider-recipient relationship" is
                              one in which the provider was the main source of
                              Medicaid services for the recipient during the
                              previous year. This may be established through
                              District records of previous managed care
                              enrollment or fee-for-service experience or
                              through contact with the recipient; and

                           D. A provider is considered to have "traditionally
                              served" Medicaid recipients if it has experience
                              in serving the Medicaid population.

         H.18.1.2          No official or employee of the District of Columbia
                           or the Federal government who exercises any functions
                           or responsibilities in the review of approval of the
                           undertaking or carrying out of this contract shall,
                           prior to the completion of the project, voluntarily
                           acquire any personal interest, direct or indirect, in
                           the contract or proposed contract. (DC Procurement
                           Practices Act of 1985, DC Law 6-85 and Chapter 18 of
                           the DC Personnel Regulations).

SECTION H                  Special Contract Requirement

         ADD

         H.21              Compliance by the Contractor

         H.21.1            In accordance with the 42 CFR 438.604 & 438.606, the
                           District shall require certification from the
                           Contractor for any data used by the District to make
                           payments to the Contractor. The data shall be
                           certified include, but are not limited to, enrollment
                           information, encounter data, and other information
                           (e.g., documentation and claims data), required by
                           the District and contained in this contract and any
                           related proposals and


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                        AMERIGROUP DISTRICT OF COLUMBIA

                           documents. These data must be certified by one of the
                           following: (1) the MCO or PIHP Chief Executive
                           Officer; (2) the MCO or PIHP Chief Financial Officer;
                           or (3) an individual who has delegated authority to
                           sign for, and who reports directly to, the MCO or
                           PIHP Chief Executive Officer or Chief Financial
                           Officer. The certification shall attest, based on the
                           best knowledge, information, and belief, to the
                           following: (1) accuracy, completeness and
                           truthfulness of the data; and (2) accuracy
                           completeness, and truthfulness of the documents
                           specified by the District. The MCO, PIHP must submit
                           the certification concurrently with the certified
                           data.

SECTION H.22

         ADD

         H.22              Conditions for Federal Financial Participation (FFP)

         H.22.1            Basic Requirements

         H.22.1.1          FFP is available in expenditures under this contract
                           only for periods during which the contract meets the
                           requirements of this Section (42 CFR 438.802-812 and
                           H.22 of this contract) and is in effect.

         H.22.2            Prior Approval

         H.22.2.1          In accordance with 42 CFR 438.806(a), FFP is
                           available under this Contract only if the CMS
                           Regional Office (RO) has confirmed that the
                           Contractor meets the definition of a MCO or is one of
                           the Contractors described in 42 CFR 438.6(b)(2-5),
                           and the contract meets all the requirements of
                           section 1903(m)(2)(A) of the Act, the applicable
                           requirements of section 1932 of the Social Security
                           Act and the implementing regulations of 42 CFR
                           438.802-812.

         H.22.3            Contracts Subject to CMS Approval

         H.22.3.1          In accordance with 42 CFR 438.806(b-c), prior
                           approval by CMS is a condition for FFP under any MCO
                           contract that extends for less than one full year or
                           that has a value equal to, or greater than, the
                           following threshold amounts:

CONTRACT # POHC-2002-D-0003                                                   99
MODIFICATION # M0009

<PAGE>
]
                        AMERIGROUP DISTRICT OF COLUMBIA

                           A. For 1998, $1,000,000; and

                           B. For subsequent years, the amount is increased by
                              the percentage increase in the consumer price
                              index for urban consumers.

                           FFP is not available for contracts that do not have
                           prior CMS approval.

         H.22.4            Exclusion of Contractors

         H.22.4.1          In accordance with 42 CFR 438.808, the District shall
                           exclude the following Contractors from entering into
                           this contract:

                           A. A Contractor that could be excluded under
                              1128(b)(8) of the Social Security Act;

                           B. A Contractor that has a substantial contractual
                              relationship as defined in 42 CFR 431.55(h)(3),
                              either directly or indirectly, with an individual
                              convicted of certain crimes as described in
                              1128(b)(8)(B) of the Social Security Act; and

                           C. A Contractor that employs or contracts, directly
                              or indirectly, for the furnishing of health care,
                              utilization review, medical social work, or
                              administrative services, with either an individual
                              or Contractor excluded from participation in
                              Federal health care programs under either Section
                              1128 or Section 1129A of the Social Security Act
                              or any Contractor that would provide those
                              services through and excluded individual or
                              Contractor.

         H.22.5            Expenditures for Enrollment Broker Services

                           In accordance with 42 CFR 438.810, the following
                           regulations shall govern enrollment broker services
                           related to this contract:

         H.22.5.1          Choice counseling mean activities such as answering
                           questions and providing information (in an unbiased
                           manner), on available MCO or PIHP delivery system
                           options, and advising on what factors to consider
                           when choosing among them and in selecting a primary
                           care provider.

CONTRACT # POHC-2002-D-0003                                                  100
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<PAGE>

                        AMERIGROUP DISTRICT OF COLUMBIA

         H.22.5.1.1        Enrollment activities mean activities such as
                           distributing, collecting, and processing enrollment
                           materials and taking enrollments by phone or in
                           person.

         H.22.5.1.2        Enrollment broker means an individual or Contractor
                           that performs choice counseling, enrollment
                           activities, or both, and enrollment services means
                           choice counseling, enrollment activities, or both.

         H.22.5.2          State expenditures for enrollment broker services are
                           considered necessary and are eligible for FFP only if
                           the broker meets the following requirements:

                           A. Independence - the broker and its subcontractors
                              are independent of any MCO, PIHP or other health
                              care provider in the District. A broker is not
                              considered "independent" if it is an MCO, PIHP or
                              other health care provider in the District, is
                              owned or controlled by a MCO, PIHP or other health
                              care provider in the District, or owns or controls
                              an MCO, PIHP or other health care provider in the
                              District;

                           B. Freedom from conflict of interest - the broker and
                              its subcontractors are free from conflict of
                              interest. A broker is not considered free from
                              conflict of interest if any person who is the
                              owner, employee, or consultant of the broker or
                              subcontractor or has any contact with them, has
                              any direct or indirect financial interest in any
                              Contractor or health care provider that furnishes
                              services in the District, has been excluded from
                              participation under Titles XVIII or XIX of the
                              Social Security Act, has been debarred by any
                              Federal agency or has been in or is now subject to
                              civil money penalties under the Social Security
                              Act.

         H.22.5.3          The initial contract or memorandum of agreement (MOA)
                           for services performed by the broker has been
                           reviewed and approved by CMS.

         H.22.6            Costs Under Risk and Non-Risk Contracts

         H.22.6.1          As specified in 42 CFR 438.812, please note that
                           under a risk contract the total amount the District
                           and MAA pays for carrying out the contract provisions
                           is a medical assistance cost. Under a non-risk
                           contract, the amount the District and

CONTRACT # POHC-2002-D-0003                                                  101
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<PAGE>

                        AMERIGROUP DISTRICT OF COLUMBIA

                           MAA pays for the furnishing of medical services to
                           eligible recipients is medical assistance cost, while
                           the amount paid for the Contractor's performance of
                           other functions is an administrative cost.

SECTION H.23               Reporting Of Transactions

         ADD

         H.23              Reporting of Transactions

         H.23.1            Parties of Interest

         H.23.1.1          In accordance with Section 1903(m)(4)(A), Contractors
                           shall report a description of certain transactions
                           with parties of interest. As defined in Section
                           1318(b) of the Public Health Service Act (see also
                           the State Medicaid Manual 2087.6(A)), a party or
                           interest is:

                           A. Any director, officer, partner, or employee
                              responsible for management or administration of an
                              MCO and HIO; any person who is directly or
                              indirectly the beneficial owner of more than 5% of
                              the equity of the MCO; any person who is the
                              beneficial owner of a mortgage, deed of trust,
                              note, or other interest secured by, and valuing
                              more than 5% of the MCO; or, in the case of an MCO
                              organized as a nonprofit corporation, an
                              incorporator or member of such corporation under
                              applicable District corporation law;

                           B. Any organization in which a person is a director,
                              officer or partner, has (directly or indirectly) a
                              beneficial interest of more than 5% of the equity
                              of the MCO; or has a mortgage, deed of trust,
                              note, or other interest valuing more than 5% of
                              the assets of the MCO;

                           C. Any person directly or indirectly controlling,
                              controlled by, or under common control with a MCO;
                              or

                           D. Any spouse, child, or parent of an individual
                              previously described.

CONTRACT # POHC-2002-D-0003                                                  102
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<PAGE>

                        AMERIGROUP DISTRICT OF COLUMBIA

         H.23.2            Types of Transactions that Shall Be Disclosed

         H.23.2.1          In accordance with section 1318(b) of the Public
                           Health Service Act (see also the State Medicaid
                           Manual 2087.6(B)), business transactions which shall
                           be disclosed include:

                           A. Any sale, exchange, or lease of any property
                              between the MCO and a party in interest;

                           B. Any lending of money or other extension of credit
                              between the MCO and a party in interest; and

                           C. Any furnishing for consideration of goods,
                              services (including management services), or
                              facilities between the MCO and the party in
                              interest. This does not include salaries paid to
                              employees for services provided in the normal
                              course of their employment.

         H.23.2.2          The information which shall be disclosed for each
                           such transaction includes the name of the party in
                           interest, a description of the the transaction and
                           quantity or units involved, the accrued dollar value
                           during the fiscal year, and justification for the
                           reasonableness of the transaction. If this contract
                           is being renewed or extended, the Contractor shall
                           disclose information on business transactions which
                           occurred during the prior contract period. If the
                           contract is an initial contract with the District but
                           the Contractor has operated previously in the
                           commercial or Medicare markets, information on
                           business transactions for the entire year preceding
                           the initial contract period shall be disclosed. The
                           business transactions which shall be reported are not
                           limited to transactions related to serving the
                           Medicaid enrollment. All of the Contractor's business
                           transactions shall be reported.

SECTION I STANDARD CONTRACT CLAUSES

SECTION I.7

         ADD

         I.7.1.2.1         If the Contractor fails to perform any of the other
                           provisions of this contract or so fails to make
                           progress as to endanger performance of this contract
                           in accordance with its terms, and

CONTRACT # POHC-2002-D-0003                                                  103
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<PAGE>

                        AMERIGROUP DISTRICT OF COLUMBIA

                           in either of these two circumstances does not cure
                           such failure within ten (10) days (or such longer
                           period as the Contracting Officer shall authorize in
                           writing) after receipt of notice from the Contracting
                           Officer specifying such failure. In accordance with
                           42 CFR 438.708, the District also has authority to
                           terminate this contract and enroll the Contractor's
                           Enrollees in other MCOs or provide their Medicaid
                           benefits through other options included in the
                           District's plan, if the District determines that the
                           Contractor has failed to do either of the following:

                           -  Carry out the substantive terms of the contract;
                              or

                           -  Meet applicable requirements in Sections 1932,
                              1903(m), and 1905(t) of the Social Security Act.

                           In accordance with Section 1932(e)(5) Termination.
                           The District may provide the contractor with, notice
                           and such other due process protections as the
                           District may provide, Except that the District may
                           not provide a managed care entity pre-termination
                           hearing before the appointment of temporary
                           management. The Termination shall be in accordance
                           with the District of Columbia HMO regulations
                           process.

         ADD

         I.7.1.3           Pre-Termination Hearing

                           In accordance with 42 CFR 438.710(b), before
                           terminating a contract, the District may provide the
                           Contractor notification of a pre-determination
                           hearing. The District will:

                           A. Give the Contractor written notice of the
                              District's intent to terminate, the reason for the
                              termination, and the time and place of the
                              pre-termination hearing;

                           B. Give the Contractor after the pre-termination
                              hearing written notice of the decision affirming
                              or reversing the proposed termination of the
                              contract and for an affirming decision, the
                              effective date of termination; and

                           C. For an affirming decision, give the Contractor's
                              Enrollees notice of the termination and
                              information, consistent with 42 CFR 438.10, on
                              their options for receiving Medicaid services
                              following the effective date of termination.

CONTRACT # POHC-2002-D-0003                                                  104
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<PAGE>

                        AMERIGROUP DISTRICT OF COLUMBIA

         ADD

         I.7.1.4           In accordance with 42 CFR 438.722, following its
                           written notification to the Contractor of its intent
                           to terminate the contract, the District reserves the
                           right to the following actions:

                           A. To provide the Contractor's Enrollees with written
                              notification of the District's intent to terminate
                              the contract; and/or

                           B. Allow the Contractor's Enrollees to disenroll
                              immediately without cause.

SECTION I.9

         ADD

         I.9.2             In accordance with 42 CFR 455.100 through 42 CFR
                           455.106 the Contractor shall disclose to the District
                           the name and address of each person with an ownership
                           or control interest in the disclosing Contractor or
                           in any subcontractor in which the disclosing
                           Contractor has direct or indirect ownership interest
                           of 5% or more. In addition, the Contractor shall also
                           disclose whether any of the persons so named is
                           related to another as spouse, parent child, or
                           sibling. Please note the FFP is not available to
                           Contractors who fail to provide ownership or control
                           information.

SECTION I.32

         ADD

         I.32.3.2          Medical records and any other health and enrollment
                           information that identifies a particular Enrollee,
                           the Contractor shall use and disclose such
                           individually identifiable health information in
                           accordance with the privacy requirements in 45 CFR
                           parts 160 and 164, subparts A and E and HIPAA, to the
                           extent that these requirements are applicable.

CONTRACT # POHC-2002-D-0003                                                  105
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<PAGE>

                        AMERIGROUP DISTRICT OF COLUMBIA

SECTION I.36

         ADD

         I.36.1            EEO Provisions

                           In accordance with 45 CFR 74 Appendix A (1), the
                           Contractor shall comply with E.O. 11246 "Equal
                           Employment Opportunity" as amended by 11375,
                           "Amending Executive Order 11246 Relating to Equal
                           Employment Opportunity," and as supplemented at 41
                           CFR 60, "Office of Federal Contract Compliance
                           Programs, Equal Employment Opportunity, Department of
                           Labor."

         I.36.2            Copeland "Anti-Kickback" Act (18 U.S.C. 874 and 40
                           U.S.C. 276c)

                           In accordance with 45 CFR 74 Appendix A (2), all
                           contracts and subgrants issued under this contract in
                           excess of $2,000 for construction or repair awarded
                           by the Contractor and subcontractors shall include a
                           provision complying with the Copeland "Anti-Kickback"
                           Act, 18 U.S.C. 874, as supplemented by Department of
                           Labor regulations, 29 CFR 3, "Contractors and
                           Subcontractors on Public Building or Public Work
                           Financed in Whole or in Part by Loans or Grants from
                           the United States." Each Contractor and subcontractor
                           shall be prohibited from inducing, by any means, any
                           person employed in the construction, complete or
                           repair of public work, to give up any part of the
                           compensation to which he is otherwise entitled. The
                           Contractor or subcontractor shall report all
                           suspected or reported violations to CMS.

         I.36.3            Contract Work Hours and Safety Standards Act (40
                           U.S.C. 327-333)

                           In accordance with 45 CFR 74 Appendix A (4), when
                           applicable all contracts awarded by the Contractor in
                           excess of $100,000 for contraction contracts and for
                           other contracts that involve employment of mechanics
                           or laborers shall include a provision for compliance
                           with section 102 and 107 of the Contract Work Hours
                           and Safety Standards Act, 40 U.S.C. 327-333, as
                           supplemented by Department of Labor regulations, 29
                           CFR 5. Under Section 102 of the Act, the Contractor
                           shall be required to compute the wages of every
                           mechanic and laborer

CONTRACT # POHC-2002-D-0003                                                  106
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<PAGE>

                        AMERIGROUP DISTRICT OF COLUMBIA

                           on the basis of a standard workweek of 40 hours. Work
                           in excess of the standard work -week is permissible
                           provided that the worker is compensated at a rate of
                           not less than 1 1/2 times the basic rate of pay for
                           all hours worked in excess of 40 hours in the work
                           week. Section 107 of the Act is applicable to
                           construction work and provides that no laborer or
                           mechanic shall be required to work in surroundings or
                           under working conditions which are unsanitary,
                           hazardous, or dangerous. These requirements do not
                           apply to the purchases of supplies or materials or
                           articles ordinarily available on the open market or
                           contracts for transportation or transmission of
                           intelligence.

         I.36.4            Clean Air Act (42 U.S.C. 7401 et seq.) and the
                           Federal Water Pollution Control Act as Amended (33
                           U.S.C. 1251 et seq.)

                           In accordance with 45 CFR 74 Appendix A (6),
                           contracts and subgrants of amount in excess of
                           $100,000 shall contain a provision that requires the
                           Contractor to agree to comply with all applicable
                           standards, orders, or regulations issued pursuant to
                           the Clean Air Act, Pollution Control Act, 42 U.S.C.
                           7401 et seq., and the Federal Water Pollution Control
                           Act, as amended 33 U.S.C. 1251 et seq. Violations
                           shall be reported to the HHS and the appropriate
                           Regional Office of the Environmental Protection
                           Agency. The Contractor shall comply with all
                           applicable standards, orders or requirements issued
                           under Section 306 of the Clean Air Act (42 U.S.C.
                           1857(h)), Section 508 of the Clean Water Act (33
                           U.S.C. 1368), Executive Order 11738, and
                           Environmental Protection Agency regulations (40 CFR
                           15).

         I.36.5            Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)

                           In accordance with 45 CFR Appendix A (7), Contractors
                           who apply or bid for an award of more than $100,000
                           shall file the required certification. Each tier
                           certifies to the tier above that it will not and has
                           not used Federal appropriated funds to pay any person
                           or organization for influencing or attempting to
                           influence an officer or employee of any Federal
                           agency, a member of Congress or an employee of a
                           member of Congress in connection with obtaining any
                           Federal contract, grant or other award covered by 31
                           U.S.C. 1352. Each tier shall also disclose any
                           lobbying with non-Federal funds that takes place in
                           connection with obtaining any Federal award. Such
                           disclosures are forwarded from tier to tier up to the
                           Contractor.

CONTRACT # POHC-2002-D-0003                                                  107
MODIFICATION # M0009

<PAGE>

                        AMERIGROUP DISTRICT OF COLUMBIA

         I.36.6            Debarment and Suspension (E.O.s 12549 and 12689)

                           In accordance with 45 CFR 74 Appendix A (8), certain
                           contracts shall not be made to parties listed on the
                           non-procurement portion of the General Services
                           Administration's "Lists of Parties Excluded from
                           Federal Procurement or Nonprocurement Programs" in
                           accordance with E.O.s 12549 and 12689, "Debarment and
                           Suspension." This list contains the names of parties
                           debarred, suspended, or otherwise excluded by
                           agencies, and Contractors declared ineligible under
                           statutory authority other than E.O. 12549.
                           Contractors with awards that exceed the simplified
                           acquisition threshold ($100,000) shall provide the
                           required certification regarding their exclusion
                           status and that of their principals prior to award.
                           See also SECTION H.8.2 of this contract.

         I.36.6.1          In accordance with 42CFR 438.210 (d) The MCO, PIHP
                           may Not employ or contract with providers excluded
                           from Participation in Federal health care programs
                           under either Section 1128 or section 1128 of the Act.

         I.36.7            Intellectual Property

                           In accordance with 45 CFR Appendix G(14), the
                           Contractor shall comply with CMS' grantor agency
                           requirements and regulations pertaining to reporting
                           and patient rights under an contract involving
                           research, developmental, experimental, or
                           demonstration work with respect to any discovery or
                           invention which arises or is developed in the course
                           of or under such contract, and of CMS requirements
                           and regulations pertaining to copyrights and rights
                           in data.

         I.36.8            Energy Efficiency

                           The Contractor shall recognize mandatory standards
                           and policies related to energy efficiency which are
                           contained in the District's energy conservation plan
                           issued in compliance with the Energy Policy and
                           Conservation Act (Public Law 94-165).

         I.36.9            The contractor shall adhere to 45CFR 74 Appendix A
                           Davis -Bacon Act, amended (40 U.S.C. 276a to a-7)

CONTRACT # POHC-2002-D-0003                                                  108
MODIFICATION # M0009
<PAGE>

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

                                                                  Page of Pages
                                                                 1             1
1.  Contract Number
    POHC-2002-D-0003

2.  Amendment/Modification Number
        'M0010

3.  Effective Date
        AUGUST 9, 2003

4.  Requisition/Purchase Request No.

5.  Project No. (If applicable)

6.  Issued By                                                        Code ______
    Office of Contracting and Procurement
    Department of Health Bureau
    441 4th Street, NW, Suite 700 South
    Washington, DC 20001

7.  Administered By (If other than line 6)
    Department of Health, Office of Managed Care
    Medical Assistance Administration
    825 North Capitol Street, N.E.
    Attention: Ms. Maude Holt
    Telephone: (202)442-9074

8.  Name and Address of Contractor (No. Street, city, country, state and
    ZIP Code)

    AMERIGROUP DISTRICT OF COLUMBIA
    750 1 ST STREET, N.E, SUITE 1120
    WASHINGTON, DC 20004
    ATTN: MS. JANE THOMPSON

    Code _____________                              Facility _______________

(X) 9A.  Amendment of Solicitation No.

    9B.  Dated (See item 11)

    10A. Modification Of Contract/Order No.
      POHC-2002-D-0003
 X
    10B. Dated (See item 13)
      AUGUST 1, 2002

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

[ ] The above numbered solicitation is amended to set forth in Item 14. The
    hour and data specified for receipt of Offers [ ] is extended. [ ] is not
    extended. Offers must acknowledge receipt of this amendment prior to the
    hour and date specified in the solicitation or as amended, by one of the
    following methods: (a) By completing items 8 and 15, and returning
    _________ copies of the amendment; (b) By acknowledging receipt of this
    amendment on each copy of the offer submitted; or (c) By separate letter or
    telegram which includes a reference to the solicitation and amendment
    number. FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE
    DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED
    MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you
    desire to change an offer already submitted, such change may be made by
    letter or, telegram, provided each letter or telegram makes reference to
    the solicitation and this amendment, and is received prior to the opening
    hour and date specified.

12. Accounting and Appropriation Data (If Required)

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
    IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14

(X) A. This change order is issued pursuant to: (Specify Authority)

    IN ACCORDANCE TO DCMR CHAPTER 36, SECTION 3601.2 (C) OPTION

 X  The changes set forth in Item 14 are made in the contract/order no. in
    Item 10A.

    B. The above numbered contract/order is modified to reflect the
    administrative changes (such as changes in paying office, appropriation
    date, etc.) set forth in Item 14, pursuant to the authority of 27 dCMR
    Chapter 36, Section 3601.2.

    C. This supplemental agreement is entered into pursuant to authority of:
    DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2 (c) Bilateral Contract
    Modification and agreement between the parties

    D. Other (Specify type of modification and authority)

    E. IMPORTANT:     Contractor [ ] is not, [X] is required to sign this
    document and return 2 copies to the issuing office.

14. Description of amendment/modification (Organized by USC Section headings,
    including solicitation/contract subject matter where feasible.)

    THE CONTRACT REFERENCED IN BLOCK 10A ABOVE IS MODIFIED AS FOLLOWS:

    1. THE DISTRICT HEREBY EXERCISES ITS OPTION TO RENEW THIS CONTRACT IN
       ACCORDANCE TO SECTION F1.2, TERM OF CONTRACT FOR THE PERIOD OF AUGUST 9,
       2003 THROUGH AUGUST 18, 2003. THE CONTINUATION OF THIS CONTRACT IS
       SUBJECT TO CITY COUNCIL'S APPROVAL AND AVAILABILITY OF FUNDS.

            ALL OTHER CONTRACT TERMS AND CONDITIONS REMAIN UNCHANGED

Except as provided herin, all terms and conditions of the document referenced
in item (9A or 10A as heretofore changed, remains unchanged and in full force
and effect

15A. Name and Title of Signer (Type or print)
     JANE E. THOMPSON
     CEO - DC Operations

15B. Name of Contractor
     AMERIGROUP District of Columbia

     /s/ Jane E. Thompson
     --------------------------------------------
     (Signature of person authorized to sign)

15C. Date Signed
     8/8/03

16A. Name of Contracting Officer
     ESTHER M. SCARBOROUGH

16B. District of Colombia

     /s/ E. M. Scarborough
     -------------------------------------------
     (Signature of Contracting Officer)

16C. Date Signed
     8/8/03

*** Government of the District of Columbia

    [OFFICE OF CONTRACTING & PROCUREMENT LOGO]

    DC OCP 202(7-99)
<PAGE>

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

                                                                  Page of Pages
                                                                 1             1

1.   Contract Number
     POHC-2002-0003

2.   Amendment/Modification Number
             'M0011

3.   Effective Date
              AUGUST 19, 2003

4.   Requisition/Purchase Request No.
     SEE BLOCK 12 BELOW

5.   Project No. (if applicable)

6.   Issued By                                                      Code ______
     Office of Contracting and Procurement
     Department of Health Bureau
     441 4th Street, NW, Suite 700 South
     Washington, DC 20001

7.   Administered By (If other than line 6)
     Department of Health, Office of Managed Care
     Medical Assistance Administration
     825 North Capitol Street, N.E.
     Attention: Ms. Maude Holt
     Telephone: (202) 442-9074

8.   Name and Address of Contractor (No. Street, city, country, state and ZIP
     Code)

     AMERIGROUP DISTRICT OF COLUMBIA
     750 1 ST STREET, N.E. SUITE 1120
     WASHINGTON, DC 20004
     ATTN: MS. JANE THOMPSON
     TELEPHONE NO.: (202) 218-4900

     Code _____________________                    Facility ____________________

(X)  9A. Amendment of Solicitation No.

     9B. Dated (See item 11)

     10A. Modification of Contract/Order No.
     POHC-2002-D-0003
 X
     10B. Dated (See Item 13)
     AUGUST 1, 2002

11.  THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

[ ]  The above numbered solicitation is amended as set forth in Item 14. The
     hour and date specified for receipt of Offers [ ] is extended. [ ] is not
     extended. Offers must acknowledge receipt of this amendment prior to the
     hour and date specified in the solicitation or as amended, by one of the
     following methods: (a) By completing items 8 and 15, and returning ______
     copies of the amendment: (b) By acknowledging receipt of this amendment on
     each copy of the offer submitted; or (c) By separate letter or telegram
     which includes a reference to the solicitation and amendment number.
     FAILURE OF YOUR ACKNOWLEDGEMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR
     THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN
     REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to
     change an offer already submitted, such change may be made by letter or
     telegram, provided each letter or telegram makes reference to the
     solicitation and this amendment, and is received prior to the opening hour
     and date specified.

12.  Accounting and Appropriation Date (If Required)
     *CFO CERTIFICATION LETTER DATED JUNE 28,2003

13.  THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS,
     IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14

(X)  A. This change order is issued pursuant to: (Specify Authority)

     The changes set forth in Item 14 are made in the contract/order no. In item
     10A.

     B. The above numbered contract/order is modified to reflect the
     administrative changes (such as changes in paying office, appropriation
     date, etc.) set forth in item 14, pursuant to the authority of 27 dCMR,
     Chapter 36, section 3601.2.

     C. This supplemental agreement is entered into pursuant to authority of:
     DISTRICT OF COLUMBIA MUNICIPAL REGULATIONS 3601.2(c) Bilateral Contract
     Modification and agreement between the parties

(X)  D. Other (Specify type of modification and authority)
     IN ACCORDANCE TO DCMR CHAPTER 36, SECTION 3601.2(C) OPTION

     E. IMPORTANT:    Contractor [ ] is not, [X] is required to sign this
     document and return 2 copies to the issuing office.

14.  Description of amendment/modification (Organized by USC Section headings,
     including solicitation/contract subject matter where feasible.)

     THE CONTRACT REFERENCED IN BLOCK 10A ABOVE IS MODIFIED AS FOLLOWS:

     THE DISTRICT HEREBY EXERCISES ITS OPTION TO RENEW THIS CONTRACT IN
     ACCORDANCE TO SECTION F1.2, TERM OF CONTRACT FOR THE PERIOD OF AUGUST 1,
     2003 THROUGH JULY 31, 2004. THE TOTAL PRICE FOR THIS OPTION IS
     $82,931,806.84.

<TABLE>
<S>                                                                    <C>
1st PARTIAL OPTION (AUGUST 1, 2003 THROUGH AUGUST 4, 2003)             $   908,841.71
2nd PARTIAL OPTION (AUGUST 5, 2003 THROUGH AUGUST 8, 2003)             $   908,841.71
3rd PARTIAL OPTION (AUGUST 9, 2003 THROUGH AUGUST 18, 2003)            $ 2,272,104.90
REMAINING OF OPTION YEAR ONE (AUGUST 19, 2003 THROUGH JULY 31, 2004)   $78,842,018.12

           TOTAL FOR OPTION YEAR 1                                     $82,931,805.54
</TABLE>

                ALL OTHER CONTRACT TERMS AND CONDITIONS REMAIN UNCHANGED

Except as provided herin, all terms and conditions of the document referenced
in item (9A or 10A as heretofore changed, remains unchanged and in full force
and effect.

15A. Name and Title of Signer (Type or print)
     JANE. E. THOMPSON
     CEO - DC OPERATIONS

15B. Name of Contractor
     AMERIGROUP DISTRICT OF COLUMBIA

     /s/ Jane E. Thompson
     -------------------------------------------
     (Signature of person authorized to sign)

15C. Date Signed
     8/19/03

16A. Name of Contracting Officer
     ESTHER M. SCARBOROUGH

16B. District of Columbia

     /s/ E. M. Scarborough
     -------------------------------------------
     (Signature of Contracting Officer)

16C. Date Signed
     8/18/03

***  Government of the District of Columbia

     [OFFICE OF CONTRACTING & PROCUREMENT LOGO]

     DC OCP 202 (7-99)
<PAGE>

                                                                     PAGE 1 OF 2

[OFFICE OF CONTRACTING & PROCUREMENT LOGO]

                                 DELIVERY ORDER

DISTRICT OF COLUMBIA
SOLICITATION, OFFER AND AWARD FOR COMMERCIAL ITEMS
OFFEROR TO COMPLETE BLOCKS 17, 23 & 29

1.   REQUESTION NUMBER
     *See Block 25 Below

2.   CONTRACT NO.
     POHC-2002-D-0003

3.   Award/Effective Date
     AUGUST 1, 2003

4.   ORDER NUMBER
     POHC-2002-F-0002

5.   SOLICITATION NUMBER

6.   SOLICITATION ISSUE DATE

7.   FOR SOLICITATION INFORMATION
     CONTACT:

A.   NAME
     Esther M. Scarborough

B.   TELEPHONE [ILLEGIBLE]
     (202) 724-2144
     FACIMILE NUMBER
     (202) 724-5673
     Email: ester.scarborough@_.gov

8.   OFFER DUE DATE;

9.   ISSUED BY

     District of Columbia
     Office of Contracting and Procurement
     Department of Health Bureau
     441 4th Street, N.W., Suite 700 South
     Washington, D.C. 20001


10.  THIS ACQUISITION IS

[X]  UNRESTRICTED
[ ]  SET ASIDE  %FOR
[ ]  SMALL BUSINESS
[ ]  SMALL DISADV.BUS.
[ ]  [ILLEGIBLE]

SIC:
SIZE STANDARD:

11.  DELIVERY FOR FOB
     DESTINATION UNLESS
     BLOCK IS MARKED

[ ]  SEE SCHEDULE

12.  PAYMENT DISCOUNT TERMS

     NET 30

[X]  13A. DATE OF DELIVERY OR COMPLETION
     JULY 31, 2004

[ ]  13B. RESERVED

14.  METHOD OF SOLICITATION

[ ] RFQ   [ ] IFB  [ ] RFP [ ]2-STEP


15.  DELIVER TO

     D.C. Department of Health, Administrator, Office of
     Managed Care Medical Assistance Administration
     825 North Capitol Street, N.E,
     Washington, D.C. 20002
     Attn: Ms. Maude Holt/Phone (202) 442-9074

16.  ADMINISTERED BY

     Same as Block 15

17A. CONTRACTOR/ OFFEROR

     Amerigroup District of Columbia
     750 1st Street, N.E., Suite 1120
     Washington, D.C. 20004
     Attn: Ms. Jane Thompson
     Telephone Number: (202)218-4900

CODE   TAX ID NO.51-0387378

17B. CHECK IF REMITTANCE IS DIFFERENT AND PUT SUCH ADDRESS IN OFFEROR [ ]

18A. PAYMENT WILL BE MADE BY
     District of Columbia                                            CODE [    ]
     Department of Health, Office of the Chief Financial Officer
     Post Office Box 77676
     Washington, D.C. 20013-9998
     Attn: Accounts Payable

18B. SUBMIT INVOICES TO ADDRESS SHOWN IN BLOCK 18A UNLESS BLOCK BELOW IS
     CHECKED [ ] SEE ADDENDUM

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
 19
ITEM                               20                                         21        22           23               24
 NO.                  SCHEDULE OF SUPPLIES/SERVICE                         QUANTITY    UNIT      UNIT PRICE         AMOUNT
-----------------------------------------------------------------------------------------------------------------------------------
<S>      <C>                                                               <C>         <C>      <C>               <C>
0002     The contractor shall provide the healthcare                          12        Mos.    $ 6,910,983.82    $82,931,805.84
         services for the D.C. Healthy Family Program
         (DCHFP) as required by the Contract Identified in
         Block 2 and page 2 of this Delivery Order from
         August l,  2003 through July 31, 2004.
</TABLE>

25.  ACCOUNTING AND APPROPRIATION DATA
     *CFO Certification Letter Dated June 26, 2003

26.  TOTAL AWARD [ILLEGIBLE]
     $ 82,931,805.34

27.  CONTRACTOR IS REQUIRED TO SIGN THIS DOCUMENT AND RETURN COPIES TO THE
     ISSUING OFFICE. CONTRACTER AGREES TO FURNISH AND DELIVER ALL ITEMS SET
     FORTH OR OTHERWISE IDENTIFIED ABOVE AND ON ANY ADDITIONAL PAGES SUBJECT TO
     THE TERMS AND CONDITIONS SPECIFIED HEREIN

28.  AWARD OF CONTRACT; REFERENCE _____ OFFER DATED ____ YOUR OFFER ON
     SOLICITATION (BLOCK 5), INCLUDING ANY ADDITIONS OR CHANGES WHICH ARE SET
     FORTH HEREIN, IS ACCEPTED AS TO ITEMS.

29A. SIGNATURE OF OFFICER/CONTRACTOR

     /s/ Jane E. Thompson
     --------------------

29B. NAME AND TITLE OF SIGNER (TYPE OR PRINT)
     JANE E. THOMPSON
     -------------------
     CE0 - DC Operations

29C. DATE SIGNED
     8/18/03

30A. DISTRICT OF COLUMBIA(SIGNATURE OF CONTRACTING OFFICER)

     /s/ E.M. Scarborough
     --------------------

30B. NAME OF CONTRACTING OFFICER (TYPE OR PRINT)

     /s/ ESTHER M. SCARBOROUGH
     ----------------------------

30C. DATE SIGNED
     8/18/03
<PAGE>

DISTRICT OF COLUMBIA            DCHFP RATE SUMMARY
                AMERIGROUP DISTRICT OF COLUMBIA 2003-2004 RATES

Section B - Contract Line Item Number (CLIN) for DC Healthy Families Program
(DCHFP), below is a table rate trend for the period from August 1, 2003 through
July 31, 2004.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------
 CLIN                     SUPPLIES/SERVICES/RATE CELL               TOTAL PMPM
------------------------------------------------------------------------------
<S>                       <C>                                       <C>
0001                       < 1 Male & Female                        $   263.08
------------------------------------------------------------------------------
0001AA                     1 - 12 Male & Female                     $   112.50
------------------------------------------------------------------------------
0001AB                     13 - 18 Female                           $   185.44
------------------------------------------------------------------------------
0001AC                     13 - 18 Male                             $   188.44
------------------------------------------------------------------------------
0001AD                     19 - 36 Female                           $   187.07
------------------------------------------------------------------------------
0001AE                     19 - 36 Male                             $   119.73
------------------------------------------------------------------------------
0001AF                     37+ Female                               $   312.43
------------------------------------------------------------------------------
0001AG                     37+ Male                                 $   267.42
------------------------------------------------------------------------------
0001AH                     Infant's Month of Birth                  $ 5,109.97
------------------------------------------------------------------------------
0001AI                     Mother's Month of Delivery               $ 5,439.59
------------------------------------------------------------------------------
</TABLE>

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