**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

**QUARTERLY      REPORT UNDER SECTION 13 OR 15(d)**

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**For      the quarterly period ended June 30, 2007**

**COMMISSION      FILE NUMBER 0-26168**

**CAREADVANTAGE,      INC.**

**(Exact      name of small business issuer as specified in its      charter)**

| **DELAWARE**                                   |   | **52-1849794**                        |
|------------------------------------------------|--------|---------------------------------------|
| (State                or other jurisdiction of |   | (I.R.S.                Employer       |
| Incorporation                or organization)  |   | Identification                Number) |

| **485-C                Route 1 South, Iselin, New Jersey** |   | **08830**                 |
|------------------------------------------------------------|--------|---------------------------|
| (Address                of principal executive offices)    |   | (Zip                Code) |

----

**INDEX**

| **Part                I - Financial Information**                                                                                                                             |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                                          |   |   |
| Item                1. Financial Statements                                                                                                                                   |   |   |
|                                                                                                                                                                          |   |   |
| ·                  Condensed Consolidated Balance Sheets -June 30, 2007 (Unaudited)                and                December 31, 2006                        |   | 2      |
|                                                                                                                                                                          |   |   |
| ·                  Condensed Consolidated Statements of Operations -Three and six months                ended June 30, 2007 and June 30, 2006 (Unaudited)      |   | 3      |
|                                                                                                                                                                          |   |   |
| ·                  Condensed Consolidated Statements of Cash Flows -Six months ended                June 30,                2007 and June 30, 2006 (Unaudited) |   | 4      |
|                                                                                                                                                                          |   |   |
| ·                  Notes to Unaudited Condensed Consolidated Financial                Statements                                                               |   | 5      |
|                                                                                                                                                                          |   |   |
| Item                2. Management’s Discussion and Analysis of Financial Condition and Results                of Operations                                             |   | 6      |
|                                                                                                                                                                          |   |   |
| Item                3. Controls and Procedures                                                                                                                                |   | 10     |
|                                                                                                                                                                          |   |   |
| **Part                II - Other Information**                                                                                                                                |   |   |
|                                                                                                                                                                          |   |   |
| Item                1. Legal Proceedings                                                                                                                                      |   | 10     |
|                                                                                                                                                                          |   |   |
| Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds                                                                             |   | 11     |
|                                                                                                                                                                          |   |   |
| Item                3. Defaults Upon Senior Securities                                                                                                                        |   | 11     |
|                                                                                                                                                                          |   |   |
| Item                4. Submission of Matters to a Vote of Security Holders                                                                                                    |   | 11     |
|                                                                                                                                                                          |   |   |
| Item                5. Other Information                                                                                                                                      |   | 11     |
|                                                                                                                                                                          |   |   |
| Item                6. Exhibits                                                                                                                                               |   | 11     |
|                                                                                                                                                                          |   |   |
| Signature                                                                                                                                                                     |   | 12     |

----

**PART      I - FINANCIAL INFORMATION**

**ITEM      1. Financial Statements**

**CAREADVANTAGE,      INC AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                         |   | **June                30,** |        | **December                31,** |   |
|------------------------------------------------------------------------------|--------|-----------------------------|-------------|---------------------------------|--------|
|                                                                         |   | **2007**                    |        | **2006**                        |   |
|                                                                         |   | **Unaudited**               |        |                            |   |
| **ASSETS**                                                                   |   |                        |        |                            |   |
| Current                assets:                                               |   |                        |        |                            |   |
| Cash                and cash equivalents                                     |   | $                           | 338,000     |                            | $      | 371,000 |   |
| Accounts                receivable                                           |   |                        | 368,000     |                            |   | 529,000 |   |
| Other                current assets                                          |   |                        | 170,000     |                            |   | 92,000 |   |
| Total                current assets                                          |   |                        | 876,000     |                            |   | 992,000 |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Property                and equipment, at cost less accumulated depreciation |   |                        | 198,000     |                            |   | 232,000 |   |
| Intangible                assets, net of accumulated depreciation            |   |                        | -           |                            |   | 1,000 |   |
| Other                assets                                                  |   |                        | 167,000     |                            |   | 167,000 |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Total                Assets                                                  |   | $                           | 1,241,000   |                            | $      | 1,392,000 |   |
|                                                                         |   |                        |        |                            |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                      |   |                        |        |                            |   |   |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Current                liabilities:                                          |   |                        |        |                            |   |   |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Accounts                payable                                              |   | $                           | 107,000     |                            | $      | 146,000 |   |
| Accrued                compensation and related benefits                     |   |                        | 106,000     |                            |   | 110,000 |   |
| Accrued                expenses and other current liabilities                |   |                        | 106,000     |                            |   | 127,000 |   |
| Deferred                revenue                                              |   |                        | 37,000      |                            |   | 74,000 |   |
| Capital                lease obligation - current                            |   |                        | 40,000      |                            |   | 40,000 |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Total                current liabilities                                     |   |                        | 396,000     |                            |   | 497,000 |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Long                term liabilities:                                        |   |                        |        |                            |   |   |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Capital                lease obligation - long term                          |   |                        | 121,000     |                            |   | 143,000 |   |
| Deferred                rent                                                 |   |                        | 390,000     |                            |   | 352,000 |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Total                Liabilities                                             |   | $                           | 907,000     |                            | $      | 992,000 |   |
|                                                                         |   |                        |        |                            |   |   |   |
| Stockholders'                equity:                                         |   |                        |        |                            |   |   |   |
| Preferred                stock-par value $.10 per share;                     |   |                        |        |                            |   |   |   |
| authorized                10,000,000 shares; none issued                     |   |                        |        |                            |   |   |   |
| Common                stock-par value $.001 per share;                       |   |                        |        |                            |   |   |   |
| authorized                200,000,000 shares; issued 110,170,374             |   |                        |        |                            |   |   |   |
| shares                and outstanding 56,775,554 shares                      |   |                        | 110,000     |                            |   | 110,000 |   |
| Additional                capital                                            |   |                        | 24,039,000  |                            |   | 24,007,000 |   |
| Accumulated                deficit                                           |   |                        | (23,553,000 | )                               |   | (23,455,000 | ) |
| Treasury                stock at cost, 53,394,820 shares                     |   |                        | (262,000    | )                               |   | (262,000 | ) |
|                                                                         |   |                        |        |                            |   |   |   |
| Total                Stockholders' Equity                                    |   |                        | 334,000     |                            |   | 400,000 |   |
| Total                Liabilities and Stockholders' Equity                    |   | $                           | 1,241,000   |                            | $      | 1,392,000 |   |

----

**CAREADVANTAGE,      INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**(UNAUDITED)**

|                                                                  |   | **Three                Months Ended                June 30,** |       | **Six                Months Ended                June 30,** |   |
|-----------------------------------------------------------------------|--------|---------------------------------------------------------------|------------|-------------------------------------------------------------|--------|
|                                                                  |   | **2007**                                                      |       | **2006**                                                    |   | **2007** |   | **2006** |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |
| License                fees and service revenue                       |   | $                                                             | 1,085,000  |                                                        | $      | 1,095,000 |   | $ | 2,135,000 |   | $ | 2,040,000 |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Costs                of services                                      |   |                                                          | 429,000    |                                                        |   | 416,000 |   |   | 858,000 |   |   | 858,000 |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Gross                profit                                           |   |                                                          | 656,000    |                                                        |   | 679,000 |   |   | 1,277,000 |   |   | 1,182,000 |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Operating                expenses:                                    |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Selling,                general and administrative                    |   |                                                          | 714,000    |                                                        |   | 720,000 |   |   | 1,397,000 |   |   | 1,426,000 |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Operating                (loss)                                       |   |                                                          | (58,000    | )                                                           |   | (41,000 | ) |   | (120,000 | ) |   | (244,000 | ) |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Interest                (expense)/income, net                         |   |                                                          | (4,000     | )                                                           |   | - |   |   | (9,000 | ) |   | - |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Gain                on sale of assets                                 |   |                                                          | 32,000     |                                                        |   | - |   |   | 32,000 |   |   | - |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Provision                for income taxes                             |   |                                                          | 1,000      |                                                        |   | - |   |   | 1,000 |   |   | 1,000 |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Net                (loss)                                             |   | $                                                             | (31,000    | )                                                           | $      | (41,000 | ) | $ | (98,000 | ) | $ | (245,000 | ) |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Net                (loss) per share of common stock                   |   | $                                                             | .00        |                                                        | $      | .00 |   | $ | .00 |   | $ | .00 |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Weighted                average number of common shares outstanding - |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
|                                                                  |   |                                                          |       |                                                        |   |   |   |   |   |   |   |   |   |
| Basic                and diluted                                      |   |                                                          | 56,775,000 |                                                        |   | 55,862,000 |   |   | 56,775,000 |   |   | 54,646,000 |   |

----

**CAREADVANTAGE,      INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

|                                                                                                                    |       | **Six                Months Ended June 30,** | ** ** |
|-------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------|------------|
| ** **                                                                                                              | ** ** | **2007**                                     | ** ** | **2006** |   |
|                                                                                                                    |       |                                         |       |   |   |
| **Cash                flows from operating activities:**                                                                |       |                                         |       |   |   |
|                                                                                                                    |       |                                         |       |   |   |
| Net                loss                                                                                                 |       | $                                            | (98,000    | ) | $ | (245,000 | ) |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Adjustments                to reconcile net loss to net cash (used in)/provided by operating                activities: |       |                                         |       |   |   |   |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Depreciation                and amortization                                                                            |       |                                         | 35,000     |   |   | 60,000 |   |
| Stock                based compensation                                                                                 |       |                                         | 32,000     |   |   | 50,000 |   |
| Deferred                revenue                                                                                         |       |                                         | (37,000    | ) |   | 26,000 |   |
| Gain                on sale of assets                                                                                   |       |                                         | (32,000    | ) |   | - |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| **Change                in:**                                                                                           |       |                                         |       |   |   |   |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Accounts                receivable                                                                                      |       |                                         | 161,000    |   |   | 99,000 |   |
| Other                assets                                                                                             |       |                                         | (78,000    | ) |   | 46,000 |   |
| Accounts                payable                                                                                         |       |                                         | (39,000    | ) |   | (25,000 | ) |
| Deferred                rent                                                                                            |       |                                         | 38,000     |   |   | 88,000 |   |
| Accrued                expenses and other liabilities                                                                   |       |                                         | (25,000    | ) |   | (5,000 | ) |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Net                cash (used in)/provided by operating activities                                                      |       |                                         | (43,000    | ) |   | 94,000 |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| **Cash                flows from investing activity:**                                                                  |       |                                         |       |   |   |   |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Proceeds                from sale of assets                                                                             |       |                                         | 32,000     |   |   | - |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| **Cash                flows from financing activity:**                                                                  |       |                                         |       |   |   |   |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Repayment                of capital leases                                                                              |       |                                         | (22,000    | ) |   | - |   |
| Proceeds                from issuance of common stock                                                                   |       |                                         | -          |   |   | 13,000 |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Net                cash (used in)/provided by financing activities                                                      |       |                                         | (22,000    | ) |   | 13,000 |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Net                (decrease)/increase in cash and cash equivalents                                                     |       |                                         | (33,000    | ) |   | 107,000 |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Cash                and cash equivalents - beginning of period                                                          |       |                                         | 371,000    |   |   | 114,000 |   |
|                                                                                                                    |       |                                         |       |   |   |   |   |
| Cash                and cash equivalents - end of period                                                                |       | $                                            | 338,000    |   | $ | 221,000 |   |

----

**Note      A—Basis of      presentation: **

**[1]**
**Business:**

**[2]**
**Basis      of presentation:**

**[3]      Reclassification:**

**Note      B—Per share data:**

|                                           |   | **June                30,** |           |
|------------------------------------------------|--------|-----------------------------|----------------|
|                                           |   | **2007**                    |           | **2006** |   |
|                                           |   |                        |           |   |   |
| Options                                        |   |                        | **19,852,000** |   |   | 20,110,000 |   |
|                                           |   |                        |           |   |   |   |   |
| Total                Potential Dilutive shares |   |                        | **19,852,000** |   |   | 20,110,000 |   |

**Note      C—Stock-Based Compensation:**

----

**Note      D—Contingencies: **

*Alan      Fontes v. CareAdvantage, Inc.*

**Note      E—Concentration of Credit Risk:**

**Note      F—Income Taxes:**

**Note      G—Leased Space:**

**ITEM      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations**

**Cautionary      Statements: **

----

**GENERAL      OVERVIEW:**

|  | · | track                population and member-related disease progression changes over time; |
|--|--------|-------------------------------------------------------------------------------------------|

|  | · | compare                health plan sub-populations on a valid and reliable basis; |
|--|--------|-----------------------------------------------------------------------------------|

|  | · | profile                providers using case mix and severity-adjusted techniques; |
|--|--------|-----------------------------------------------------------------------------------|

|  | · | select                and prioritize members to optimize the allocation and assess the                impact of                care management resources, direct interventions and initiatives;                and |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | reduce                client dependence on internal information technology resources. |
|--|--------|---------------------------------------------------------------------------------------|

***RESULTS      OF OPERATIONS:***

***Three      Months Ended June 30, 2007, Compared to Three Months Ended June 30,      2006***

**Revenues:      **

**Cost      of services: **

----

**Selling,      general and administrative expenses: **

**Net      Loss:**

***Six      Months Ended June 30, 2007, Compared to Six Months Ended June 30,      2006***

**Revenues:      **

**Cost      of services: **

**Selling,      general and administrative expenses: **

**Net      Loss:**

***LIQUIDITY,      FINANCIAL CONDITION AND CAPITAL RESOURCES***
*:*

**General      overview:**

**Financial      condition:**

----

**Critical      Accounting Policies:**

*Revenue      recognition*

*Accounting      for stock-based compensation*

----

*Recent      Accounting Pronouncements*

**ITEM      3. Controls and Procedures**

**PART      II—OTHER INFORMATION**

**Item      1. Legal Proceedings**

*CareAdvantage,      Inc. v. Blue Cross & Blue Shield of Rhode Island and Coordinated Health      Partners*

----

**Item      2. Unregistered Sales of Equity Security and Use of      Proceeds**

**Item      3. Defaults Upon Senior Securities**

**Item      4. Submission of Matters to a Vote of Security Holders**

**Item      5. Other Information**

**Item      6. Exhibits **

|   | (a) | Exhibits |
|--------|-----|----------|

----

**SIGNATURES**

|                         |                                                                                     |                 |
|------------------------------|------------------------------------------------------------------------------------------|----------------------|
|                         | CareAdvantage, Inc                                                                       |
|                    |                                                                                |            |
| August              14, 2007 |                                                                                | /s/ Dennis J. Mouras |
|                         | Dennis              J. Mouras                                                            |
|                         | Chief              Executive Officer and acting Principal Financial              Officer |

----

| Exhibit No. | Description of              Exhibit |
|-------------|-------------------------------------|

| 2.1 | Deposit                    Agreement dated October 31, 1994 among Midlantic Bank, N.A.,                    PMDX and the                    Registrant incorporated by reference to Exhibit 2.1 filed with                    the                    Company's Registration Statement on Form S-1 (File No.                    33-89176). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.2 | Certificate                of Merger of Care Advantage Health Systems (f/k/a Advantage Health                Systems, Inc.), a Georgia corporation into CareAdvantage Health Systems,                Inc., a Delaware corporation incorporated by reference to Exhibit                2.2                filed with the Company's Registration Statement on Form S-1 (File                No.                33-89176). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1 | Registrant's                Certificate of Incorporation incorporated by reference to Exhibit                3.1                filed with the Company's Registration Statement on Form S-1 (File                No.                33-89176). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1(a) | Amended                and Restated Certificate of Incorporation incorporated by reference                to the                Company's Information Statement dated September 1996. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Registrant's                By-Laws incorporated by reference to Exhibit 3.2 filed with the Company's                Registration Statement on Form S-1 (File No. 33-89176). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2(a) | Amendment                to the Company’s Bylaws incorporated by reference to Exhibit 3.2(a) filed                with the Company’s Form 10-KSB for the year ended December 31,                2006. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | Lease                Agreement dated April 14, 1995 between the Registrant and Metropolitan                Life Insurance Company incorporated by reference to Exhibit 10.13                filed                with the Company's Registration Statement on Form S-1 (File No. 33-89176). |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Registrant’s                1996 Stock Option Plan incorporated by reference to the Company's                Information Statement dated September                1996. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Registrant’s                1996 Director Stock Option Plan incorporated by reference to the                Company's                Information Statement dated September                1996. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Confidentiality,                Invention, and Non-Compete Agreement between the Company and David                Noone,                dated as of January 8, 1999, incorporated by reference to Exhibit                10.33                filed with the Company’s Form 10KSB for the year ended September 30,                1998. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | Employment                Agreement, effective as of April 19, 1999, between Dennis M. Mouras,                and                the Company, incorporated by reference to Exhibit 10.40 filed with                the                Company’s Form 10KSB for the year ended December 31,                1999. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | Second                Amendment to Lease Agreement between CareAdvantage Health Systems,                Inc.                and Corporate Plaza Associates, L.L.C., incorporated by reference                to                Exhibit 10.1 filed on the Company’s Form 8-K filed on January 11,                2005. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7 | Services                and License Agreement between the Company and Kaiser Foundation Health                Plan of the Northwest ("Kaiser"), effective as of January 1, 2005,                incorporated by reference to Exhibit 10.49 filed with the Company’s Form                10-KSB for the year ended December31, 2004. Portions of this exhibit                (indicated by asterisks) have been omitted pursuant to a request                for                confidential treatment pursuant to Rule 24b-2 of the Securities Exchange                Act of 1934. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8 | Amendment                to Employment Agreement between the Company and Dennis J. Mouras,                dated as                of November 11, 2005, and Employment Agreement between the Company                and                Dennis J. Mouras, dated as of October 25,2000, incorporated by reference                to Exhibit 10.50 filed with the Company’s Form 10-QSB for the quarter                ended September 30, 2005. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 10.9 | First                Amendment to Services and License Agreement between the Company and                Kaiser                Foundation Health Plan of the Northwest (“Kaiser”), effective as of                January 1, 2006, incorporated by reference to Exhibit 10.51 filed                with the                Company’s Form 10-KSB for the year ended December 31, 2005. Portions of                this exhibit (indicated by asterisks) have been omitted pursuant                to a                request for confidential treatment pursuant to Rule 24b-2 of the                Securities Exchange Act of 1934. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10 | Second                Amendment to Services and License Agreement between the Company and                Kaiser, effective as of April 1, 2006, incorporated by reference                as                Exhibit 10.52 filed with the Company’s Form 10-KSB for the year ended                December 31, 2005. Portions of this exhibit (indicated by asterisks)                have                been omitted pursuant to a request for confidential treatment pursuant                to                Rule 24b-2 of the Securities Exchange Act of                1934. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11 | Services                and License Agreement between the Company and Blue Cross Blue Shield                of                Texas (“BCBSTX”), effective as of August 18, 2003,                incorporated by reference to Exhibit 10.53 filed with the Company's                Form                10-QSB for the quarter ended June 30, 2006.                Portions of this exhibit (indicated by asterisks) have been omitted                pursuant to a request for confidential treatment pursuant to Rule                24b-2 of                the Securities Exchange Act of                1934. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | Amendment                to Services and License Agreement between the Company and BCBSTX,                effective as of June 1, 2006,                incorporated by reference to Exhibit 10.54 filed with the Company's                Form                10-QSB for the quarter ended June 30, 2006.                Portions of this exhibit (indicated by asterisks) have been omitted                pursuant to a request for confidential treatment pursuant to Rule                24b-2 of                the Securities Exchange Act of                1934. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13 | Letter                from Kaiser Foundation Health Plan of the Northwest terminating Services                and License Agreement, incorporated by reference to Exhibit 10.1                filed on                the Company’s Form 8-K filed on October 3,                2006. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.1 | Letter                regarding change in accountants, incorporated by reference to Exhibit                16.1                filed on the Company’s Form 8-K dated June 6,                1996. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.2 | Letter                regarding change in accountants, incorporated by reference to Exhibit                16                filed on the Company’s Form 8-K dated July 31,                2001. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 16.3 | Letter                regarding change in accountants, incorporated by reference to Exhibit                16.1                filed on the Company’s Form 8-K dated June 6,                2002. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31 | Certifications                pursuant to Rule 13a-14(a), promulgated under the Securities Exchange                Act                of 1934, as amended, and Section 302 of the Sarbanes-Oxley Act of                2002* |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32 | Certifications                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002 ** |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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