**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d)**

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**For      the quarterly period ended September 30, 2006**

**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 - September 30, 2006 (Unaudited) and                  December                  31, 2005.                             | 2 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
|                                                                                                                                                                                                                                                        | ·  Condensed                  Consolidated Statements of Operations - Three and nine months ended                  September 30, 2006 and September 30, 2005 (Unaudited)        | 3 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
|                                                                                                                                                                                                                                                        | ·  Condensed                  Consolidated Statements of Cash Flows - Nine months ended September                  30,                  2006 and September 30, 2005 (Unaudited) | 4 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
|                                                                                                                                                                                                                                                        | ·  Notes                  to Unaudited Condensed Consolidated Financial Statements                                                                                              | 5 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Item                  2.                                Management’s                  Discussion and Analysis of Financial Condition and Results of                  Operations | 8                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Item                  3.                                Controls                  and Procedures                                                                                      | 11                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| **Part                  II - Other Information**                                                                                                                                                                                                            |                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Item                  1.                                                                                                                                                                                                                                    | Legal                  Proceedings                                                                                                                                                             | 12 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Item                  2.                                                                                                                                                                                                                                    | Unregistered                  Sales of Equity Securities and Use of Proceeds                                                                                                                   | 12 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Item                  3.                                                                                                                                                                                                                                    | Defaults                  Upon Senior Securities                                                                                                                                               | 12 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Item                  4.                                                                                                                                                                                                                                    | Submission                  of Matters to a Vote of Security Holders                                                                                                                           | 12 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Item                  5.                                                                                                                                                                                                                                    | Other                  Information                                                                                                                                                             | 12 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Item                  6.                                                                                                                                                                                                                                    | Exhibits                                                                                                                                                                                       | 12 |
|                                                                                                                                                                                                                                                        |                                                                                                                                                                                           |   |
| Signature                                                                                                                                                                                                                                                   | 13                                                                                                                                                                                             |

----

**PART      I - FINANCIAL INFORMATION**

**ITEM      1. Financial Statements**

**CAREADVANTAGE,      INC AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

|                                                                                                                                                                                                                  |   |   |   | **September                  30,****2006** |   | **December                  31,****2005** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------------------------------------------|--------|-------------------------------------------|--------|
| **ASSETS**                                                                                                                                                                                                            |   |        |   | **Unaudited**                              |   |                                      |   |
| Current                  assets:                                                                                                                                                                                      |   |   |   |                                       |   |                                      |   |
| Cash                  and cash equivalents                                                                                                                                                                            |   |   |   |                                       | $      | 303,000                                   |   | $ | 114,000 |   |
| Accounts                  receivable, net                                                                                                                                                                             |   |   |   |                                       |   | 427,000                                   |   |   | 457,000 |   |
| Other                  current assets                                                                                                                                                                                 |   |   |   |                                       |   | 56,000                                    |   |   | 108,000 |   |
| Total                  current assets                                                                                                                                                                                 |   |   |   |                                       |   | 786,000                                   |   |   | 679,000 |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Property                  and equipment, net                                                                                                                                                                          |   |   |   |                                       |   | 53,000                                    |   |   | 137,000 |   |
| Intangible                  assets                                                                                                                                                                                    |   |   |        |                                       |   | -                                         |   |   | 2,000 |   |
| Other                  assets                                                                                                                                                                                         |   |   |   |                                       |   | 167,000                                   |   |   | 167,000 |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Total                  Assets                                                                                                                                                                                         |   |   |   |                                       | $      | 1,006,000                                 |   | $ | 985,000 |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                                                                                             |   |   |   |                                       |   |                                      |   |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Current                  liabilities:                                                                                                                                                                                 |   |   |   |                                       |   |                                      |   |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Accounts                  payable                                                                                                                                                                                     |   |   |   |                                       | $      | 140,000                                   |   | $ | 139,000 |   |
| Accrued                  compensation and related benefits                                                                                                                                                            |   |   |   |                                       |   | 72,000                                    |   |   | 105,000 |   |
| Deferred                  revenue                                                                                                                                                                                     |   |   |   |                                       |   | 13,000                                    |   |   | - |   |
| Accrued                  expenses and other current liabilities                                                                                                                                                       |   |   |   |                                       |   | 100,000                                   |   |   | 112,000 |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Total                  current liabilities                                                                                                                                                                            |   |   |   |                                       |   | 325,000                                   |   |   | 356,000 |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Long                  term liabilities:                                                                                                                                                                               |   |   |   |                                       |   |                                      |   |   |   |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Deferred                  rent                                                                                                                                                                                        |   |   |   |                                       |   | 308,000                                   |   |   | 176,000 |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Total                  Liabilities                                                                                                                                                                                    |   |   |   |                                       | $      | 633,000                                   |   | $ | 532,000 |   |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| 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                  110,112,041 shares and outstanding 56,717,221 and 53,417,221                  shares |   |   |   |                                       |   | 110,000                                   |   |   | 107,000 |   |
| Additional                  capital                                                                                                                                                                                   |   |   |   |                                       |   | 23,985,000                                |   |   | 23,952,000 |   |
| Deferred                  compensation cost                                                                                                                                                                           |   |   |   |                                       |   | -                                         |   |   | (40,000 | ) |
| Accumulated                  deficit                                                                                                                                                                                  |   |   |   |                                       |   | (23,460,000                               | )      |   | (23,304,000 | ) |
| Treasury                  stock at cost, 53,394,820 shares                                                                                                                                                            |   |   |   |                                       |   | (262,000                                  | )      |   | (262,000 | ) |
|                                                                                                                                                                                                                  |   |   |   |                                       |   |                                      |   |   |   |   |
| Total                  Stockholders' Equity                                                                                                                                                                           |   |   |   |                                       |   | 373,000                                   |   |   | 453,000 |   |
| Total                  Liabilities and Stockholders' Equity                                                                                                                                                           |   |   |   |                                       | $      | 1,006,000                                 |   | $ | 985,000 |   |

----

**CAREADVANTAGE,      INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF OPERATIONS**

**(UNAUDITED)**

|                                                           |   | **Three                  Months Ended****September                  30,** |       | **Nine                  Months Ended****September                  30,** |   |
|----------------------------------------------------------------|--------|---------------------------------------------------------------------------|------------|--------------------------------------------------------------------------|--------|
|                                                           |   | **2006**                                                                  |       | **2005**                                                                 |   | **2006** |   | **2005** |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |
| License                  fees and service revenue              |   | $                                                                         | 1,234,000  |                                                                     | $      | 755,000 |   | $ | 3,274,000 |   | $ | 1,946,000 |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Costs                  of services                             |   |                                                                      | 453,000    |                                                                     |   | 376,000 |   |   | 1,311,000 |   |   | 1,049,000 |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Gross                  profit                                  |   |                                                                      | 781,000    |                                                                     |   | 379,000 |   |   | 1,963,000 |   |   | 897,000 |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Operating                  cost and expenses:                  |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Selling,                  general and administration           |   |                                                                      | 691,000    |                                                                     |   | 773,000 |   |   | 2,117,000 |   |   | 2,307,000 |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Operating                  income/(loss)                       |   |                                                                      | 90,000     |                                                                     |   | (394,000 | ) |   | (154,000 | ) |   | (1,410,000 | ) |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Interest                  income                               |   |                                                                      | -          |                                                                     |   | 1,000 |   |   | - |   |   | 8,000 |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Provision                  for income taxes                    |   |                                                                      | 1,000      |                                                                     |   | 1,000 |   |   | 2,000 |   |   | 5,000 |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Net                  profit/(loss)                             |   | $                                                                         | 89,000     |                                                                     | $      | (394,000 | ) | $ | (156,000 | ) | $ | (1,407,000 | ) |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Net                  profit/(loss) per share of common stock - |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| basic                  and diluted                             |   | $                                                                         | .00        |                                                                     |   | ($.01 | ) | $ | .00 |   |   | ($.03 | ) |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Weighted                  average number                       |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| of                  common shares outstanding -                |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Basic                                                          |   |                                                                      | 56,717,000 |                                                                     |   | 50,949,000 |   |   | 55,410,000 |   |   | 47,933,000 |   |
|                                                           |   |                                                                      |       |                                                                     |   |   |   |   |   |   |   |   |   |
| Diluted                                                        |   |                                                                      | 61,920,000 |                                                                     |   | 50,949,000 |   |   | 55,410,000 |   |   | 47,933,000 |   |

----

**CAREADVANTAGE,      INC. AND SUBSIDIARIES**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(UNAUDITED)**

|                                                                                                                          |   | **Nine                  Months Ended September 30,** |     |
|-------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|----------|
|                                                                                                                          |   | ** ****2006**                                   |     | ** ****2005** |   |
|                                                                                                                          |   |                                                 |     |   |   |
| **Cash                  flows from operating activities:**                                                                    |   |                                                 |     |   |   |
|                                                                                                                          |   |                                                 |     |   |   |
| Net                  (loss)                                                                                                   |   | $                                                    | (156,000 | ) | $ | (1,407,000 | ) |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Adjustments                  to reconcile net (loss) to net cash provided by/(used in) operating                  activities: |   |                                                 |     |   |   |   |   |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Depreciation                  and amortization                                                                                |   |                                                 | 91,000   |   |   | 155,000 |   |
| Employee                  stock compensation cost                                                                             |   |                                                 | 63,000   |   |   | 57,000 |   |
|                                                                                                                          |   |                                                 |     |   |   |  |   |
| **Change                  in assets and liabilities:**                                                                        |   |                                                 |     |   |   |   |   |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Accounts                  receivable                                                                                          |   |                                                 | 30,000   |   |   | (246,000 | ) |
| Other                  assets                                                                                                 |   |                                                 | 52,000   |   |   | 1,000 |   |
| Accounts                  payable                                                                                             |   |                                                 | 1,000    |   |   | 72,000 |   |
| Deferred                  rent                                                                                                |   |                                                 | 132,000  |   |   | 132,000 |   |
| Deferred                  revenue                                                                                             |   |                                                 | 13,000   |   |   | - |   |
| Accrued                  expenses and other liabilities                                                                       |   |                                                 | (45,000  | ) |   | (71,000 | ) |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Net                  cash provided by/ (used in) operating activities                                                         |   |                                                 | 181,000  |   |   | (1,307,000 | ) |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| **Cash                  flows from investing activity:**                                                                      |   |                                                 |     |   |   |   |   |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Capital                  expenditures                                                                                         |   |                                                 | (5,000   | ) |   | (39,000 | ) |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| **Cash                  flows from financing activity:**                                                                      |   |                                                 |     |   |   |   |   |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Proceeds                  from exercise of common stock options                                                               |   |                                                 | 13,000   |   |   | 69,000 |   |
| Transfer                  from restricted cash                                                                                |   |                                                 | -        |   |   | 100,000 |   |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Net                  cash provided by financing activities                                                                    |   |                                                 | 13,000   |   |   | 169,000 |   |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Net                  increase/ (decrease) in cash                                                                             |   |                                                 | 189,000  |   |   | (1,177,000 | ) |
|                                                                                                                          |   |                                                 |     |   |   |   |   |
| Cash                  and cash equivalents - beginning of period                                                              |   |                                                 | 114,000  |   |   | 1,488,000 |   |
|                                                                                                                          |   |                                                 |          |   |   |   |   |
| Cash                  and cash equivalents - end of period                                                                    |   | $                                                    | 303,000  |   | $ | 311,000 |   |

----

**Note      A--Basis of presentation: **

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

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

**Note      B--Per share data:**

|                                           |   | **September                30,** |           |
|------------------------------------------------|--------|----------------------------------|----------------|
|                                           |   | **2006**                         |           | **2005** |   |
|                                           |   |                             |           |   |   |
| Options                                        |   |                             | **20,110,000** |   |   | 12,757,000 |   |
|                                           |   |                             |           |   |   |   |   |
| Total                Potential Dilutive shares |   |                             | **11,532,000** |   |   | 12,757,000 |   |

----

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

|                                                                                                                                          |   | **Three                  Months Ended September 30,** |     | **Nine                  Months Ended September 30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------|----------|------------------------------------------------------|--------|
|                                                                                                                                          |   | **2005**                                              |     | **2005**                                             |   |
| Reported                  net (loss)                                                                                                          |   |                                                  | (394,000 | )                                                    |   | (1,407,000 | ) |
| Stock-based                  employee compensation included in reported net (loss)                                                            |   |                                                  | 20,000   |                                                 |   | 57,000 |   |
|                                                                                                                                          |   |                                                  |          |                                                 |   |  |   |
| Stock-based                  employee compensation determined under the fair value based method,                  net of                  tax |   |                                                  | (7,000   | )                                                    |   | (54,000 | ) |
| Pro                  forma net (loss)                                                                                                         |   |                                                  | (381,000 | )                                                    |   | (1,404,000 | ) |
|                                                                                                                                          |   |                                                  |     |                                                 |   |   |   |
| Basic                  and diluted (loss) per share:                                                                                          |   |                                                  |     |                                                 |   |   |   |
| As                  reported                                                                                                                  |   |                                                  | (.01     | )                                                    |   | (.03 | ) |
| Pro                  forma                                                                                                                    |   |                                                  | (.01     | )                                                    |   | (.03 | ) |

----

|                                                       |   |       |       | **Weighted** |   | **Weighted                  Average** |   |          |   |
|------------------------------------------------------------|--------|------------|------------|--------------|--------|---------------------------------------|--------|---------------|--------|
|                                                       |   |       |       | **Average**  |   | **Remaining**                         |   | **Aggregate** |   |
|                                                       |   |       |       | **Exercise** |   | **Contractual**                       |   | **Intrinsic** |   |
|                                                       |   | **Shares** |       | **Price**    |   | **Term**                              |   | **Value**     |   |
|                                                       |   |       |       |         |   |                                  |   |          |   |
| Number                  of shares under option:            |   |       |       |         |   |                                  |   |          |   |
| Outstanding                  at December 31, 2005          |   |       | 12,832,000 |         | $      | 0.010                                 |   |          |   |   |   |   |   |
| Granted                                                    |   |       | 8,578,000  |         | $      | 0.015                                 |   |          |   |   |   |   |   |
| Exercised                                                  |   |       | (1,300,000 | )            | $      | 0.010                                 |   |          |   |   |   |   |   |
| Canceled                  or expired                       |   |       | -          |         |   | -                                     |   |          |   |   |   |   |   |
| Outstanding                  as of September 30, 2006      |   |       | 20,110,000 |         | $      | 0.012                                 |   |          | 8.62   |   | $ | 144,000 |   |
|                                                       |   |       |       |         |   |                                  |   |          |   |   |   |   |   |
| Exercisable                  at September 30, 2006         |   |       | 6,500,000  |         | $      | 0.010                                 |   |          | 7.50   |   | $ | 60,000 |   |
|                                                       |   |       |       |         |   |                                  |   |          |   |   |   |   |   |
| Expected                  to vest after September 30, 2006 |   |       | 13,611,000 |         | $      | 0.013                                 |   |          | 2.14   |   | $  |  84,000 |   |

|                                              |   |       |       | **Weighted** |   |
|---------------------------------------------------|--------|------------|------------|--------------|--------|
|                                              |   |       |       | **Average**  |   |
|                                              |   |       |       | **Exercise** |   |
|                                              |   | **Shares** |       | **Price**    |   |
|                                              |   |       |       |         |   |
|                                              |   |       |       |         |   |
| Non-vested                  at January 1, 2006    |   |       | 9,155,000  |         | $      | 0.010 |   |
| Granted                                           |   |       | 8,578,000  |         | $      | 0.015 |   |
| Exercised                                         |   |       | (1,300,000 | )            | $      | 0.010 |   |
| Canceled                  or expired              |   |       | -          |         |   | - |   |
| Vested                                            |   |       | (2,822,000 | )            | $      | 0.009 |   |
| Non-vested                  at September 30, 2006 |   |       | 13,611,000 |         | $      | 0.013 |   |

|                                     |  **September                  30,** |   | **September                  30,** |
|------------------------------------------|------------------------------------------|--------|------------------------------------|
|                                     | ** ****2006**                  |   |  **2005**                     |
|                                     |                                     |   |                               |
| Risk                  free interest rate | 4.99%                                    |   | 4.13%                              |
| Dividend                  yield          | 0%                                       |   | 0%                                 |
| Volatility                  factor       | 91%                                      |   | 185%                               |
| Expected                  life in years  | 5                                        |   | 5                                  |

----

** **

**Note      D--Contingencies: **

*Alan      Fontes v. CareAdvantage, Inc.*

**Note      E—Concentration of Credit Risk**

**Note      F—Recent Accounting Pronouncements**

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

**Cautionary      Statements: **

----

**GENERAL      OVERVIEW:**

***RESULTS      OF OPERATIONS:***

| ·   | 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. |
|--------------------|---------------------------------------------------------------------------------------|

***Three      Months Ended September 30, 2006, Compared to Three Months Ended September 30,      2005***

**Revenues:      **

----

**Cost      of services: **

**.      **

**Selling,      general and administrative expenses: **

***Nine      Months Ended September 30, 2006, Compared to Nine Months Ended September 30,      2005***

**Revenues:      **

**Cost      of services: **

**.      **

**Selling,      general and administrative expenses: **

----

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

**General      overview:**

**Financial      condition:**

**Application      of Critical Accounting Policies:**

**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 |
|-----------------|----------|

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**SIGNATURES**

|              |                                                                                                                        |                                    |
|-------------------|-----------------------------------------------------------------------------------------------------------------------------|-----------------------------------------|
|              | CareAdvantage,                Inc                                                                                           |
|         |                                                                                                                   |                               |
| November 14, 2006 |                                                                                                                        |  /s/              Dennis J. Mouras |
|              | Dennis                J. MourasChief                Executive Officer and acting Principal Financial                Officer |
|              |                                                                                                                             |

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| ExhibitNo. | 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. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.1(b) | Amendment                to Amended and Restated Certificate of Incorporation incorporated                by                reference to the Company’s Information Statement dated December 29,                2000. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | Letter                of intent dated September 30, 1994 between the Registrant and New                Jersey                BCBS, amendments thereto of December 29, 1994, February 27, 1995                and April                4, 1995 and Interim Services Agreement as of April 1, 1995 between                the                Registrant and New Jersey BCBS incorporated by reference to Exhibit                10.12                filed with the Company's Registration Statement on Form S-1 (File                No.                33-89176). |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1(a) | December                22, 1995 Letter Agreement between the Registrant and New Jersey BCBS                extending the Letter of Intent and Interim Services Agreement to                March 31,                1996 incorporated by reference to Exhibit 10.12(a) filed with the                Company's Annual Report on Form 10-KSB for the year ended October                31,                1996. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | 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). |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Letter                of Intent dated January 2, 1996 between CW Ventures II, L.P., the                Registrant and its CareAdvantage Health Systems, Inc. subsidiary                incorporated by reference to Exhibit 10.14 filed with the Company's                Annual                Report on Form 10-KSB for the year ended October 31,                1996. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Securities                Purchase Agreement dated February 22, 1996 among CW Ventures, CAHS                and the                Registrant incorporated by reference to Exhibit 10.15 filed with                the                Company's Annual Report on Form 10-KSB for the year ended October                31,                1996. |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | CW                Exchangeable Note incorporated by reference to Exhibit 10.16 filed                with                the Company's Annual Report on Form 10-KSB for the year ended October                31,                1996. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | Stock                Acquisition Agreement dated February 22, 1996 among EHC, CHCM, CAHS                and                the Registrant incorporated by reference to Exhibit 10.17 filed with                the                Company's Annual Report on Form 10-KSB for the year ended October                31,                1996. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10.7 | EHC                Exchangeable Note incorporated by reference to Exhibit 10.18 filed                with                the Company's Annual Report on Form 10-KSB for the year ended October                31,                1996. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8 | Services                Agreement dated February 22, 1996 among Horizon BCBSNJ, CHCM, CAHS                and the                Registrant incorporated by reference to Exhibit 10.19 filed with                the                Company's Annual Report on Form 10-KSB for the year ended October                31,                1996. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.9 | Stockholders’                Agreement dated February 22, 1996 among EHC, CW Ventures and the                Registrant incorporated by reference to Exhibit 10.20 filed with                the                Company's Annual Report on Form 10-KSB for the year ended October                31,                1996. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.10 | Joint                Services Agreement, dated May 29, 1997, among Allied Health Group,                Inc.,                CAHS, Inc. and the Company incorporated by reference to Exhibit 10(c)                filed with the Company's Form 10-QSB for the quarter ended April                30,                1997. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.11 | Agreement,                dated as of January 1, 1997 between Blue Cross and Blue Shield of                Rhode                Island (“BCBSRI”) and CAHS, Inc. incorporated by reference to Exhibit                10(a) filed with the Company's Form 10-QSB for the quarter ended                July 31,                1997. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.12 | Consultant                Agreement dated March 17, 1997, between Coordinated Health Partners,                Inc.                d/b/a Blue Chip, and CAHS, Inc. incorporated by reference to Exhibit                10(d)                filed with the Company's Form 10-QSB for the quarter ended April                30,                1997. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.13 | Letter                Agreement, dated as of March 1, 1997, between Medigroup of New Jersey,                Inc. d/b/a HMO Blue, the Company and Allied Health Group, Inc.                incorporated by reference to Exhibit 10(e) filed with the Company's                Form                10-QSB for the quarter ended April 30,                1997. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.14 | First                Amendment and Restatement of Services Agreement, dated as of June                13,                1997, among CAHS, Inc., CHCM, the Company and Horizon BCBSNJ incorporated                by reference to Exhibit 10(b) filed with the Company's Form 10-QSB                for the                quarter ended April 30, 1997. |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.15 | Credit                Agreement among Summit Bank, the Company and Horizon BCBSNJ, dated                June                13, 1997 incorporated by reference to Exhibit 10(f) filed with the                Company's Form 10-QSB for the quarter ended April 30,                1997. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.16 | Revolving                Credit Note, dated June 13, 1997 by the Company in favor of Summit                Bank in                the original principal amount of $1,500,000 incorporated by reference                to                Exhibit 10(f)(1) filed with the Company's Form 10-QSB for the quarter                ended April 30, 1997. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.17 | Term                Note, dated June 13, 1997, by the Company in favor of Summit Bank                in the                original principal amount of $1,500,000 incorporated by reference                to                Exhibit 10(f)(2) filed with the Company's Form 10-QSB for the quarter                ended April 30, 1997. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.18 | Promissory                Note and Security Agreement, dated April 1, 1997, by CHCM in favor                of                Horizon BCBSNJ, in the original principal amount of $1,862,823                incorporated by reference to Exhibit 10(f)(3) filed with the Company's                Form 10-QSB for the quarter ended April 30,                1997. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.19 | Employment                Agreement between the Company and Thomas Riley, dated June 10, 1997,                as                supplemented by a side agreement with CW and Horizon BCBSNJ, of even                date                therewith incorporated by reference to Exhibit 10(a) filed with the                Company's Form 10-QSB for the quarter ended April 30,                1997. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.20 | Services                Agreement as of January 5, 1998, by and between New York Care Plus                Insurance Company, Inc. and the Company, incorporated by reference                to                Exhibit 10.20 filed with the Company's Form 10KSB for the year ended                October 31, 1997. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10.21 | Consultation                Agreement dated October 1, 1997 by and between the Company and David                McDonnell, an independent director of the Company, incorporated by                reference to Exhibit 10.21 filed with the Company's Form 10KSB for                the                year ended October 31, 1997. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.22 | Mutual                Release Agreement dated as of January 6, 1998 between the Company                and                MEDecision, Inc., incorporated by reference to Exhibit 10.22 filed                with                the Company's Form 10KSB for the year ended October 31,                1997. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.23 | Separation                Agreement dated April 20, 1995 between PMDX and the Registrant                incorporated by reference to Exhibit 10.1 filed with the Company's                Registration Statement on Form S-1 (File No.                33-89176). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.24 | Agreement                dated as of January 1, 1995, between Maine BCBS and CAHS incorporated                by                reference to Exhibit 10.2 filed with the Company's Registration Statement                on Form S-1 (File No. 33-89176). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.25 | Products                and Services Agreement dated November 7, 1994 between MEDecision,                Inc. and                CAHS incorporated by reference to Exhibit 10.3 filed with the Company's                Registration Statement on Form S-1 (File No.                33-89176). |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.26 | Registrant’s                1995 Comprehensive Stock Incentive Plan incorporated by reference                to                Exhibit 4.2 filed with the Company's Registration Statement on Form                S-1                (File No. 33-89176). |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.27 | Registrant’s                1996 Stock Option Plan incorporated by reference to the Company's                Information Statement dated September                1996. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.28 | Registrant’s                1996 Director Stock Option Plan incorporated by reference to the                Company's                Information Statement dated September                1996. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.29 | Option                Agreement between CW Ventures and Horizon BCBSNJ incorporated by                reference                to Exhibit 5 of Schedule 13(d) of Horizon BCBSNJ respecting beneficial                ownership of Common Stock of the Company dated June                1997. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.30 | Settlement                and Release Agreement dated January 13, 1998 between the Company                and John                Petillo incorporated by reference to Exhibit 10.30 filed with the                Company's Form 10KSB for the year ended October 31,                1997. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.31 | Settlement                and Release Agreement dated December 19, 1997 between the Company                and                Vince Achilarre incorporated by reference to Exhibit 10.31 filed                with the                Company's Form 10KSB for the year ended October 31,                1997. |
|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.32 | Employment                Agreement between the Company and David Noone, dated January 8, 1999,                incorporated by reference to Exhibit 10.32 filed with the Company’s Form                10KSB for the year ended September 30,                1998. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.33                       | 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. |
|---------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.34                      | Settlement                and Release Agreement entered into among Horizon BCBSNJ, the Company,                CAHS, and CHCM, Enterprise Holding Company, Inc. ("EHC") and CW Ventures,                incorporated by reference to Exhibit 10(a) filed with the Company’s Form                10-QSB for the quarter ended July 31,                1998. |
|---------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.35                      | Services                Agreement dated as of January 1, 1999, by and between HealthNow New                York,                Inc. ("HNNY") and the Company, incorporated by reference to Exhibit                10.35                filed with the Company’s Form 10KSB for the year ended September 30,                1998 |
|---------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10.36 | Amended                and Restated Employment Agreement, dated as of September 29, 1998,                with                Richard W. Freeman, M.D., CAHS and the Company (the “Freeman Employment                Agreement”), incorporated by reference to Exhibit 10.36 filed with the                Company’s Form 10KSB for the year ended September 30,                1998. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.37 | Employment                Agreement, dated as of March 25, 1997, by and between the Company                and                Elaine del Rossi, incorporated by reference to Exhibit 10.37 filed                with                the Company’s Form 10KSB for the year ended September 30,                1998. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.38 | Confidentiality,                Invention and Non-Compete Agreement dated as of March 25, 1998 between                the                Company and Elaine del Rossi, incorporated by reference to Exhibit                10.38                filed with the Company’s Form 10KSB for the year ended September 30,                1998. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.39 | Employment                Agreement, effective as of April 28, 1998, by and among Stephan D.                Deutsch, M.D., the Company and CAHS, incorporated by reference to                Exhibit                10.39 filed with the Company’s Form 10KSB for the year ended September 30,                1998.  |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.40 | 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. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.41 | Settlement                Agreement dated August 9, 2000 among the Company, Horizon Healthcare                of                New Jersey, Inc. and Allied Specialty Care Services, Inc., incorporated                by                reference to Exhibit 10.1 filed with the Company’s Form 10QSB for the                quarter ended September 30, 2000. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.42 | Employment                Agreement, effective as of April 17, 2000, between Christopher Minor                and                the Company, incorporated by reference to Exhibit 10.2 filed with                the                Company’s Form 10QSB for the quarter ended September 30,                2000. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.43 | Satisfaction                of Debt Agreement among Horizon Blue Cross Blue Shield of New Jersey,                Horizon Healthcare of New Jersey, Inc., CareAdvantage Inc., CareAdvantage                Health Systems, Inc. and Contemporary Healthcare Management, Inc.,                incorporated by reference to Exhibit 10.1 filed on the Company’s Form 8-K                dated December 5, 2000 and filed on December 13, 2000. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.44 | Amendment                dated March 26, 2001 to Satisfaction of Debt Agreement dated as of                November 1, 2000 among Horizon BCBSNJ, Horizon Healthcare of New                Jersey,                Inc., CareAdvantage, Inc., CareAdvantage Health Systems, Inc. and                Contemporary HealthCare Management, Inc, incorporated by reference                to                Exhibit 10.1 filed with the Company’s Form 10-QSB for the quarter ended                March 31, 2001. |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.45                      | Service                Agreement dated as of January 1, 2000 between Blue Cross Blue Shield                of                Rhode Island, Coordinated Health Partners, Inc. and CareAdvantage                Health                Systems, Inc., incorporated by reference to Exhibit 10.2 filed with                the                Company’s Form 10-QSB for the quarter ended March 31,                2001. |
|---------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.46                      | Amendment                dated as of August 9, 2001 to Satisfaction of Debt Agreement dated                as of                November 1, 2000 among Horizon BCBSNJ, Horizon Healthcare of New                Jersey,                Inc., CareAdvantage, Inc., CareAdvantage Health Systems, Inc. and                Contemporary Healthcare Management, Inc. incorporated by reference                to                Exhibit 10.1 filed with the Company’s Form 10-QSB for the quarter ended                June 30, 2001. |
|---------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.47                      | Settlement                Agreement between CareAdvantage, Inc. and Horizon Blue Cross Blue                Shield                of New Jersey, effective as of October 1, 2004, incorporated by reference                to Exhibit 10.1 filed on the Company’s Form 8-K filed on October 1,                2004. |
|---------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.48                    | 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. |
|---------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 10.49 | 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. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.50 | 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. |
|-------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.51 | 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. |
|-------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.52 | 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. |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.53 | Services                    and License Agreement between the Company and Blue Cross Blue                    Shield of                    Texas (“BCBSTX”), effective as of August 18, 2003. 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.* |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.54 | Amendment                          to Services and License Agreement between the Company and                          BCBSTX,                          effective as of June 1, 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.* |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.55 | 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* |
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| 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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