<PAGE>   1
                                                                   EXHIBIT 10.20


                               AMENDMENT SFY02-#01
                                     TO THE
                           1999 CONTRACT FOR SERVICES
                                     BETWEEN
                   TEXAS DEPARTMENT OF HUMAN SERVICES AND HMO

This Amendment No. SFY02-#01 is entered into between the Texas Department of
Human Services (TDHS) and AMERIGROUP TEXAS, INC.(HMO), to amend the Contract for
Services between the Texas Department of Human Services and HMO in the HARRIS
COUNTY Service Area. The effective date of this amendment is September 1, 2001.
The Parties agree to amend the Contract as follows:

1. Articles II, III, V, VI, VII, VII, X, XII, XIII, XV, XVI, XVIII and XIX are
amended by adding the new BOLD & ITALICIZED language.

      2.0         DEFINITIONS

                  CHEMICAL DEPENDENCY TREATMENT FACILITY: A FACILITY LICENSED BY
                  THE TEXAS COMMISSION ON ALCOHOL AND DRUG ABUSE (TCADA) UNDER
                  SEC. 464.002 OF THE HEALTH AND SAFETY CODE TO PROVIDE CHEMICAL
                  DEPENDENCY TREATMENT.

                  CHEMICAL DEPENDENCY TREATMENT: TREATMENT PROVIDED FOR A
                  CHEMICAL DEPENDENCY CONDITION BY A CHEMICAL DEPENDENCY
                  TREATMENT FACILITY, CHEMICAL DEPENDENCY COUNSELOR OR HOSPITAL

                  CHEMICAL DEPENDENCY CONDITION: A CONDITION WHICH MEETS AT
                  LEAST THREE OF THE DIAGNOSTIC CRITERIA FOR PSYCHOACTIVE
                  SUBSTANCE DEPENDENCE IN THE AMERICAN PSYCHIATRIC ASSOCIATION'S
                  DIAGNOSTIC AND STATISTICAL MANUAL OF MENTAL DISORDERS (DSM
                  IV).

                  CHEMICAL DEPENDENCY COUNSELOR: AN INDIVIDUAL LICENSED BY TCADA
                  UNDER SEC. 504 OF THE OCCUPATIONS CODE TO PROVIDE CHEMICAL
                  DEPENDENCY TREATMENT OR A MASTER'S LEVEL THERAPIST (LMSW-ACP,
                  LMFT OR LPC) OR A MASTER'S LEVEL THERAPIST (LMSW-ACP, LMFT OR
                  LPC) WITH A MINIMUM OF TWO YEARS OF POST LICENSURE EXPERIENCE
                  IN CHEMICAL DEPENDENCY TREATMENT.

                  Experience rebate means: THE PORTION OF THE HMO'S NET INCOME
                  BEFORE TAXES (FINANCIAL STATISTICAL REPORT) THAT IS RETURNED
                  TO THE STATE IN ACCORDANCE WITH ARTICLE 13.2.1.

                  JOINT INTERFACE PLAN (JIP) MEANS A DOCUMENT USED TO
                  COMMUNICATE BASIC SYSTEM INTERFACE INFORMATION OF THE TEXAS
                  MEDICAID ADMINISTRATIVE SYSTEM (TMAS) AMONG AND ACROSS STATE
                  TMAS CONTRACTORS AND PARTNERS SO THAT ALL ENTITIES ARE AWARE
                  OF THE INTERFACES THAT AFFECT THEIR BUSINESS. THIS INFORMATION
                  INCLUDES: FILE STRUCTURE, DATA ELEMENTS, FREQUENCY, MEDIA,
                  TYPE OF FILE, RECEIVER AND SENDER OF THE FILE, AND FILE I.D.
                  THE JIP MUST INCLUDE EACH OF THE HMOS' INTERFACES REQUIRED TO
                  CONDUCT STATE TMAS BUSINESS. THE JIP MUST ADDRESS THE


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                  COORDINATION WITH EACH OF THE CONTRACTOR'S INTERFACE PARTNERS
                  TO ENSURE THE DEVELOPMENT AND MAINTENANCE OF THE INTERFACE;
                  AND THE TIMELY TRANSFER OF REQUIRED DATA ELEMENTS BETWEEN
                  CONTRACTORS AND PARTNERS.

      3.5         RECORDS REQUIREMENTS AND RECORDS RETENTION

      3.5.8       THE USE OF MEDICAID FUNDS FOR ABORTION IS PROHIBITED UNLESS
                  THE PREGNANCY IS THE RESULT OF A RAPE, INCEST, OR CONTINUATION
                  OF THE PREGNANCY ENDANGERS THE LIFE OF THE WOMAN. A PHYSICIAN
                  MUST CERTIFY IN WRITING THAT BASED ON HIS/HER PROFESSIONAL
                  JUDGMENT, THE LIFE OF THE MOTHER WOULD BE ENDANGERED IF THE
                  FETUS WERE CARRIED TO TERM. HMO MUST MAINTAIN A COPY OF THE
                  CERTIFICATION FOR THREE YEARS.

      5.1.4       The HMO and the State shall develop and implement a method by
                  which Legislative intent related to incentives to improve the
                  quality of care in Long Term Care services and payment of
                  providers delivering services to members is accomplished.

      6.6         BEHAVIORAL HEALTH CARE SERVICES - SPECIFIC REQUIREMENTS

      6.6.12      CHEMICAL DEPENDENCY TREATMENT MUST CONFORM TO THE STANDARDS
                  SET FORTH IN THE TEXAS ADMINISTRATIVE CODE, TITLE 28, PART 1,
                  SUBCHAPTER HH.

      6.8         TEXAS HEALTH STEPS (EPSDT)

      6.8.3       Provider Education and Training. HMO must provide appropriate
                  training to all network providers and provider staff in the
                  providers' area of practice regarding the scope of benefits
                  available and the THSteps program. Training must include
                  THSteps benefits, the periodicity schedule for THSteps
                  checkups and immunizations, THE REQUIRED ELEMENTS OF A THSTEPS
                  MEDICAL SCREEN, PROVIDING OR ARRANGING FOR ALL REQUIRED LAB
                  SCREENING TESTS (INCLUDING LEAD SCREENING), and Comprehensive
                  Care Program (CCP) services available under the THSteps
                  program to Members under age 21 years. Providers must also be
                  educated and trained regarding the requirements imposed upon
                  the department and contracting HMOs under the Consent Decree
                  entered in Frew vs. McKinney, et. Al., Civil Action No.
                  3:93CV65, in the United States District Court for the Eastern
                  District of Texas, Paris Division. Providers should be
                  educated and trained to treat each THSteps visit as an
                  opportunity for a comprehensive assessment of the Member. HMO
                  MUST REPORT PROVIDER EDUCATION AND TRAINING REGARDING THSTEPS
                  IN ACCORDANCE WITH ARTICLE 7.4.4.

      6.14.15     HMO staff providing Care Coordination functions must be
                  located within the STAR+PLUS Service Delivery Area.

      7.3         PROVIDER CONTRACTS

      7.3.5       TDHS reserves the right and retains the authority to make
                  reasonable inquiry


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                  and conduct investigations into provider and Member complaints
                  against HMO or any intermediary entity with whom HMO contracts
                  to deliver health care services under this contract. TDHS may
                  impose appropriate sanctions and contract remedies to ensure
                  HMO compliance with the provisions of this contract.

      7.6         MEMBER PANEL REPORTS

                  HMO must furnish each PCP with a current list of enrolled
                  Members enrolled or assigned to that Provider no later than 5
                  WORKING days after HMO receives the Enrollment File from the
                  Enrollment Broker each month.

      7.8         PROVIDER QUALIFICATIONS - GENERAL

      7.8         CHEMICAL DEPENDENCY TREATMENT FACILITY: A FACILITY LICENSED BY
                  THE TEXAS COMMISSION ON ALCOHOL AND DRUG ABUSE (TCADA) UNDER
                  SEC. 464.002 OF THE HEALTH AND SAFETY CODE TO PROVIDE CHEMICAL
                  DEPENDENCY TREATMENT.

                  CHEMICAL DEPENDENCY COUNSELOR: AN INDIVIDUAL LICENSED BY TCADA
                  UNDER SEC. 504 OF THE OCCUPATIONS CODE TO PROVIDE CHEMICAL
                  DEPENDENCY TREATMENT OR A MASTER'S LEVEL THERAPIST (LMSW-ACP,
                  LMFT OR LPC) WITH A MINIMUM OF TWO YEARS OF POST-LICENSURE
                  EXPERIENCE IN CHEMICAL DEPENDENCY TREATMENT.

      7.11        SPECIALTY CARE PROVIDERS

      7.11.1      HMO must maintain specialty providers, ACTIVELY SERVING WITHIN
                  THAT SPECIALTY, including pediatric specialty providers AND
                  CHEMICAL DEPENDENCY SPECIALTY PROVIDERS, within the network in
                  sufficient numbers and areas of practice to meet the needs of
                  all Members requiring specialty care services.

      7.12        SPECIAL HOSPITALS AND SPECIALTY CARE FACILITIES

      7.12.4      HMO must include all medically necessary specialty services
                  through its network specialists, sub-specialists and specialty
                  care facilities (e.g., children's hospitals, LICENSED CHEMICAL
                  DEPENDENCY TREATMENT FACILITIES and tertiary care hospitals).

      8.2         MEMBER HANDBOOK

      8.2.1       HMO must mail each newly enrolled Member a Member Handbook no
                  later than 5 WORKING days after HMO receives the Enrollment
                  File. The Member Handbook must be written at a 4th - 6th grade
                  reading comprehension level. The Member Handbook must contain
                  all critical elements specified by TDHS. See Appendix D,
                  Required Critical Elements, for specific details regarding
                  content requirements. HMO must submit a Member Handbook to
                  TDHS for approval prior to the effective date of the contract
                  unless previously approved (see Article 3.4.1 regarding the
                  process for plan materials review).


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      8.3         MEMBER ID CARDS

                  HMO must issue a Member Identification Card (ID) to the Member
                  within 5 WORKING days from the date the HMO receives the
                  monthly Enrollment File from the Enrollment Broker. The ID
                  Card must include, at a minimum, the following: Member's name;
                  Member's Medicaid number; either the issue date of the card or
                  effective date of the PCP assignment; PCP's name, address, and
                  telephone number; name of HMO; name of IPA to which the
                  Member's PCP belongs, if applicable; the 24-hour, seven (7)
                  day a week toll-free telephone number operated by HMO; the
                  toll-free number for behavioral health care services; and
                  directions for what to do in an emergency. The ID Card must be
                  reissued if the Member reports a lost card, there is a Member
                  name change, if Member requests a new PCP, or for any other
                  reason which results in a change to the information disclosed
                  on the ID Card.


      10.1        MODEL MIS REQUIREMENTS

      10.1.3      HMO must have a system that can be adapted to the change in
                  Business Practices/Policies WITHIN THE TIMEFRAME NEGOTIATED
                  BETWEEN TDHS AND THE HMO.

      10.1.3.1    HMO MUST NOTIFY TDHS OF MAJOR SYSTEMS CHANGES AND
                  IMPLEMENTATIONS. HMO IS REQUIRED TO PROVIDE AN IMPLEMENTATION
                  PLAN AND SCHEDULE OF PROPOSED SYSTEM CHANGE AT THE TIME OF
                  THIS NOTIFICATION.

      10.1.3.2    The State CONDUCTS A SYSTEMS READINESS TEST TO VALIDATE THE
                  CONTRACTOR'S ABILITY TO MEET THE MMIS REQUIREMENTS. THIS IS
                  DONE THROUGH SYSTEMS DEMONSTRATION AND PERFORMANCE OF SPECIFIC
                  MMIS AND SUBSYSTEM FUNCTIONS. THE SYSTEM READINESS TEST MAY
                  INCLUDE A DESK REVIEW AND/OR AN ONSITE REVIEW AND IS CONDUCTED
                  FOR THE FOLLOWING EVENTS:

                  - A NEW PLAN IS BROUGHT INTO THE PROGRAM
                  - AN EXISTING PLAN BEGINS BUSINESS IN A NEW SDA
                  - AN EXISTING PLAN CHANGES LOCATION
                  - AN EXISTING PLAN CHANGES THEIR PROCESSING SYSTEM

      10.1.3.3    DESK REVIEW. HMO MUST COMPLETE AND PASS SYSTEMS DESK REVIEW
                  PRIOR TO ONSITE SYSTEMS TESTING CONDUCTED BY THE STATE.

      10.1.3.4    ONSITE REVIEW. HMO IS REQUIRED TO PROVIDE A DETAILED AND
                  COMPREHENSIVE DISASTER AND RECOVERY PLAN, AND COMPLETE AND
                  PASS AN ONSITE SYSTEMS FACILITY REVIEW DURING THE STATE'S
                  ONSITE SYSTEMS TESTING.


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      10.1.3.5    HMO IS REQUIRED TO PROVIDE A CORRECTIVE ACTION PLAN IN
                  RESPONSE TO THE STATE'S SYSTEMS READINESS TESTING DEFICIENCIES
                  NO LATER THAN 10 BUSINESS DAYS AFTER NOTIFICATION OF
                  DEFICIENCIES BY TDHS.

      10.1.3.6    HMO IS REQUIRED TO PROVIDE REPRESENTATION TO ATTEND AND
                  PARTICIPATE IN ANY MEDICAID MANAGED CARE SYSTEMS WORKGROUP.

      10.1.9      HMO MUST SUBMIT A JOINT INTERFACE PLAN (JIP) IN A FORMAT
                  SPECIFIED BY TDHS. THE JIP WILL INCLUDE REQUIRED INFORMATION
                  ON ALL CONTRACTOR INTERFACES THAT SUPPORT THE MEDICAID
                  INFORMATION SYSTEMS. THE SUBMISSION OF THE JIP WILL BE IN
                  COORDINATION WITH OTHER TMAS CONTRACTORS AND IS DUE NO LATER
                  THAN 10 WORKING DAYS AFTER THE END OF EACH STATE FISCAL YEAR.

      10.3        ENROLLMENT ELIGIBILITY SUBSYSTEM

      (11)        Send PCP assignment updates to the State OR ITS DESIGNEE, in
                  the format specified by the State OR ITS DESIGNEE. UPDATES CAN
                  BE SENT AS OFTEN AS DAILY BUT MUST BE SENT AT LEAST WEEKLY.

      10.7        UTILIZATION/QUALITY IMPROVEMENT SUBSYSTEM

                  (14) HMO must electronically transmit MDS-HC information on
                  any Member living in the community and receiving long term
                  care services. The MDS-HC should be submitted within 30 days
                  of the initiation of long term care services. The MDS-HC must
                  be updated annually.

      12.1        FINANCIAL REPORTS


      12.1.1      MCFS Report. HMO must submit the Managed Care Financial
                  Statistical Report (MCFS) in the format provided by TDHS. The
                  report must be submitted to TDHS no later than 30 days after
                  the end of each state fiscal year quarter (i.e., Dec. 30,
                  March 30, June 30, Sept. 30) and must include complete AND
                  UPDATED financial and statistical information for each month
                  OF THE STATE FISCAL YEAR-TO-DATE REPORTING PERIOD. The MCFS
                  Report must be submitted for each claims processing
                  subcontractor in accordance with this Article. HMO must
                  incorporate financial and statistical data received by its
                  delegated networks (IPAs, ANHCs, Limited Provider Networks) in
                  its MCFS Report.

      12.1.4      Final MCFS Reports. HMO must file two Final Managed Care
                  Financial-Statistical Reports AFTER THE END OF THE SECOND YEAR
                  OF THE CONTRACT FOR THE FIRST TWO-YEAR PORTION OF THE CONTRACT
                  AND AGAIN AFTER THE THIRD OF THE CONTRACT FOR THE THIRD YEAR
                  (SECOND PORTION) OF THE CONTRACT. The first final report must
                  reflect expenses incurred through the 90th day after the end
                  of THE FIRST TWO-YEAR PORTION OF THE CONTRACT AND AGAIN AFTER
                  THE END OF THE THIRD YEAR OF THE CONTRACT FOR THE THIRD YEAR
                  (SECOND PORTION) OF THE CONTRACT. The first final report must
                  be filed on


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                  or before the 120th day after the end of EACH PORTION OF the
                  contract. The second final report must reflect data completed
                  through the 334th day after the end of THE SECOND YEAR OF THE
                  CONTRACT FOR THE FIRST TWO YEAR PORTION OF THE CONTRACT AND
                  AGAIN AFTER THE END OF THE THIRD YEAR OF THE CONTRACT FOR THE
                  THIRD YEAR (SECOND PORTION) OF THE CONTRACT and must be filed
                  on or before the 365th day following the end of EACH PORTION
                  OF the contract

      12.5        PROVIDER NETWORK REPORTS

      12.5.3      PCP ERROR REPORT. HMO MUST SUBMIT TO THE ENROLLMENT BROKER AN
                  ELECTRONIC FILE SUMMARIZING CHANGES IN PCP ASSIGNMENTS. THE
                  FILE MUST BE SUBMITTED IN A FORMAT SPECIFIED BY TDHS AND CAN
                  BE SUBMITTED AS OFTEN AS DAILY BUT MUST BE SUBMITTED AT LEAST
                  WEEKLY. WHEN HMO RECEIVES A PCP ASSIGNMENT ERROR REPORT/FILE,
                  HMO MUST SEND CORRECTIONS TO TDHS OR ITS DESIGNEE WITHIN FIVE
                  WORKING DAYS.

      13.1.2.1    Once HMO has received ITS capitation rates established by TDHS
                  for the second year of this contract, HMO may terminate this
                  contract as provided in Article 18.1.6. ONCE HMO HAS RECEIVED
                  ITS PROPOSED CAPITATION RATES FROM TDHS FOR THE THIRD YEAR OF
                  THIS CONTRACT, HMO MAY TERMINATE THIS CONTRACT AS PROVIDED IN
                  ARTICLE 18.1.6.

      13.1.8      HMO renewal rates reflect program increases appropriated by
                  the 76th AND 77TH legislature for physician (to include
                  THSteps providers) and outpatient facility services. HMO must
                  report to TDHS any change in rates for participating
                  physicians (to include THSteps providers) and outpatient
                  facilities resulting from this increase. The report must be
                  submitted to TDHS at the end of the first quarter of the
                  FY2000, FY2001 AND FY2002 contract years according to the
                  deliverables matrix schedule set for HMO.

      13.2        EXPERIENCE REBATE TO THE STATE

      13.2.1      For the contract Period. HMO must pay to TDHS an experience
                  rebate calculated in accordance with the tiered rebate method
                  listed below based on the excess of allowable HMO STAR+PLUS
                  revenues over allowable HMO STAR+PLUS expenses as measured by
                  any positive amount on the Final Managed Care Financial
                  Statistical Report and confirmed by TDHS. TDHS reserves the
                  right to have an independent audit performed to verify the
                  information provided by HMO.

<TABLE>
<CAPTION>
                                          Graduated Rebate

                   NET INCOME BEFORE TAXES
                     as a Percentage of
                          Revenues            HMO Share      State Share
                          --------            ---------      -----------
<S>                <C>                        <C>            <C>
                         0% - 3%                100%              0%
                       Over 3% - 7%              75%             25%
                      Over 7% - 10%              50%             50%
                      Over 10% - 15%             25%             75%
                         Over 15%                 0%            100%
</TABLE>


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      13.2.2.1    THE EXPERIENCE REBATE FOR THE HMO SHALL BE CALCULATED BY
                  APPLYING THE EXPERIENCE REBATE FORMULA IN ARTICLE 13.2.1 TO
                  THE SUM OF THE NET INCOME BEFORE TAXES (FINANCIAL STATISTICAL
                  REPORT, PART 1, LINE 7) FOR ALL STAR MEDICAID SERVICE AREAS
                  CONTRACTED BETWEEN THE STATE AND HMO.

      13.2.5      There will be two settlements for payment(s) of the experience
                  rebate FOR FY 2000-2001 AND TWO SETTLEMENTS FOR PAYMENT(S) FOR
                  THE EXPERIENCE REBATE FOR FY 2002. The first settlement FOR
                  THE SPECIFIED TIME PERIOD shall equal 100 percent of the
                  experience rebate as derived from Line 7 of Part 1 (Net Income
                  Before Taxes) of the first final Managed Care Financial
                  Statistical (MCFS) Report and shall be paid on the same day
                  the first final MCFS Report is submitted to TDHS FOR THE
                  SPECIFIED TIME PERIOD. The second settlement shall be an
                  adjustment to the first settlement and shall be paid to TDHS
                  on the same day that the second final MCFS Report is submitted
                  to TDHS FOR THAT SPECIFIED TIME PERIOD if the adjustment is a
                  payment from HMO to TDHS. IF THE ADJUSTMENT IS A PAYMENT FROM
                  TDHS TO HMO, TDHS SHALL PAY SUCH ADJUSTMENT TO HMO WITHIN
                  THIRTY (30) DAYS OF RECEIPT OF THE SECOND FINAL MCFS REPORT.
                  TDHS or its agent may audit or review the MCFS report. If TDHS
                  determines that corrections to the MCFS reports are required,
                  based on a TDHS audit/review of other documentation acceptable
                  to TDHS, to determine an adjustment to the amount of the
                  second settlement, then final adjustment shall be made within
                  two years from the date that HMO submits the second final MCFS
                  report. HMO must pay the first and second settlements on the
                  due dates for the first and second final MCFS reports
                  respectively as identified in Article 12.1.4. TDHS may adjust
                  the experience rebate if TDHS determines HMO has paid
                  affiliates amounts for goods or services that are higher than
                  the fair market value of the goods and services in the service
                  area. Fair market value may be based on the amount HMO pays a
                  non-affiliate(s) or the amount another HMO pays for the same
                  or similar service in the service area. TDHS has final
                  authority in auditing and determining the amount of the
                  experience rebate.

      15.6        ASSIGNMENT

      15.6        This contract was awarded to HMO based on HMO's qualifications
                  to perform personal and professional services. HMO cannot
                  assign this contract without the written consent of TDHS. This
                  provision does not prevent HMO from subcontracting duties and
                  responsibilities to qualified subcontractors. If TDHS consents
                  to an assignment of this contract, a transition period of 90
                  days will run from the date the assignment is approved by TDHS
                  so that Members' services are not interrupted and, if
                  necessary, the notice provided for in Article 15.7 can be


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                  sent to Members. The assigning HMO must also submit a
                  transition plan, as set out in Article 18.2.1, subject to
                  TDHS's approval.

      16.3        DEFAULT BY HMO

      16.3.15     FAILURE OF HMO TO PERFORM A MATERIAL DUTY OR RESPONSIBILITY AS
                  SET OUT IN THIS CONTRACT IS A DEFAULT UNDER THIS CONTRACT IS A
                  DEFAULT UNDER THIS CONTRACT AND TDHS MAY IMPOSE ONE OR MORE OF
                  THE REMEDIES CONTAINED WITHIN ITS PROVISIONS AND ALL OTHER
                  REMEDIES AVAILABLE TO TDHS BY LAW OR IN EQUITY.

      16.3.15.1   REMEDIES TO PERFORM A MATERIAL DUTY OR RESPONSIBILITY

                  ALL OF THE LISTED REMEDIES ARE IN ADDITION TO ALL OTHER
                  REMEDIES AVAILABLE TO TDHS BY LAW OR IN EQUITY, ARE JOINT AND
                  SEVERAL, AND MAY BE EXERCISED CONCURRENTLY OR CONSECUTIVELY.
                  EXERCISE OF ANY REMEDY IN WHOLE OR IN PART DOES NOT LIMIT TDHS
                  IN EXERCISING ALL OR PART OF ANY REMAINING REMEDIES.

                  FOR HMO'S FAILURE TO PERFORM AN ADMINISTRATIVE FUNCTION UNDER
                  THIS CONTRACT, TDHS MAY:

                  - TERMINATE THE CONTRACT IF THE APPLICABLE CONDITIONS SET OUT
                    IN ARTICLE 18.1.1 ARE MET;

                  - SUSPEND NEW ENROLLMENT AS SET OUT IN ARTICLE 18.3;

                  - ASSESS LIQUIDATED MONEY DAMAGES AS SET OUT IN ARTICLE 18.4;
                    AND/OR

                  - REQUIRE FORFEITURE OF ALL OR PART OF THE TDI PERFORMANCE
                    BOND AS SET OUT IN ARTICLE 18.9.

      18.1        TERMINATION BY HMO

      18.1.6      HMO may terminate this contract if TDHS fails to pay HMO as
                  required under Article XIII of this contract or otherwise
                  materially defaults in its duties and responsibilities under
                  this contract, or by giving notice no later than 30 days after
                  receiving the capitation rates for the second OR THIRD
                  contract yearS. Retaining premium, recoupment, sanctions, or
                  penalties that are allowed under this contract or that result
                  from HMO's failure to perform or HMO's default under the terms
                  of this contract is not cause for termination.

      18.2.1.1    DUTIES OF CONTRACTING PARTIES UPON TERMINATION

      18.2.2      If the contract is terminated by TDHS for any reason other
                  than federal or state funds for the Medicaid program no longer
                  being available or if HMO terminates the contract based on
                  lower capitation rates for the second OR THIRD contract yearS
                  as set out in Article 13.1.2.1:

      18.2.3      If the contract is terminated by HMO for any reason other than
                  based on lower capitation rates for the second OR THIRD
                  contract years as set out in Article


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                  13.1.2.1:


      Article XIX TERM

      19.1        The effective date of this contract is September 1, 1999. This
                  contract will terminate on August 31, 2002, unless terminated
                  earlier as provided for elsewhere in the contract.


AGREED AND SIGNED by an authorized representative of the parties on
________________2001.

TEXAS DEPARTMENT OF                             AMERICAID TEXAS, INC.
HUMAN SERVICES


BY:_____________________________                BY:_____________________________

        JERRY W. FRIEDMAN                                JAMES DONOVAN JR.
   EXECUTIVE DEPUTY COMMISSIONER                         PRESIDENT AND CEO


DATE SIGNED:____________________                DATE SIGNED:____________________


APPROVED AS TO FORM:



____________________________
Office of General Counsel






                                                    Contract Extension Amendment
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