<PAGE>

                                                                 EXHIBIT 10.18

                MEDICAID MANAGED CARE MODEL CONTRACT ATTESTATION

I Todd Farha, being an individual authorized to execute agreements on behalf of
Wellcare of New York, INC.(Name of Managed Care Organization) (hereafter
"MCO"), hereby attest that the contract submitted by MCO to Columbia (County
Name) County, follows the latest model contract provided to us by the above
named county. This executed contract contains no deviations from the
aforementioned model contract language.

SEPTEMBER 10, 2004                                 /s/ Todd Farha
------------------                                 -----------------------------
      (Date)                                                 (Signature)

                                                   Todd Farha
                                                   -----------------------------
[SEAL]                                                  (Print Name In Full)

                                                                CEO
                                                   -----------------------------
                                                                Title

/s/ Kathleen R. Casey
---------------------------
(Notary Seal and Signature)

I Paul W. Mossman, attest that the County has reviewed this executed contract
and that it follows the latest model contract provided to us by the New York
State Department of Health.

9/16/04                                            /s/ Paul W. Mossman
-------------------------                          -----------------------------
      (Date)                                                (Signature)

                                                   Paul W. Mossman
                                                   -----------------------------
                                                        (Print Name In Full)

         HOPE E. GLASSER                           Commissioner
Notary Public, State of New York                   -----------------------------
        No. 01GL5073389                                      (Title)
  Qualified in Columbia County
  Commission Expires 2/24/2007

/s/ Hope E. Glasser
------------------------------
  (Notary Seal and Signature)

<PAGE>

                              MEDICAID MANAGED CARE
                                 MODEL CONTRACT

                                 October 1, 2004

<PAGE>

                       TABLE OF CONTENT FOR MODEL CONTRACT

Recitals

Section 1   Definitions

Section 2   Agreement Term, Amendments, Extensions, and General Contract
            Administration Provisions

            2.1   Term

            2.2   Amendments and Extensions

            2.3   Approvals

            2.4   Entire Agreement

            2.5   Renegotiation

            2.6   Assignment and Subcontracting

            2.7   Termination

                  a.    LDSS Initiated Termination of Contract

                  b.    Contractor and LDSS Initiated Termination

                  c.    Contractor Initiated Termination

                  d.    Termination Due to Loss of Funding

            2.8   Close-Out Procedures

            2.9   Rights and Remedies

            2.10  Notices

            2.11  Severability

Section 3   Compensation

            3.1   Capitation Payments

            3.2   Modification of Rates During Contract Period

            3.3   Rate Setting Methodology

            3.4   Payment of Capitation

            3.5   Denial of Capitation Payments

            3.6   SDOH Right to Recover Premiums

            3.7   Third Party Health Insurance Determination

            3.8   Payment for Newborns

            3.9   Supplemental Maternity Capitation Payment

            3.10  Contractor Financial Liability

            3.11  Inpatient Hospital Stop-Loss Insurance

            3.12  Mental Health and Chemical Dependence Stop-Loss

            3.13  Enrollment Limitations

            3.14  Tracking Visits Provide by Indian Health Clinics

Section 4   Service Area

Section 5   Eligible, Exempt and Excluded Populations

            5.1   Eligible Populations

            5.2   Exempt Populations

            5.3   Excluded Populations

            5.4   Family Health Plus

            5.5   Family Enrollment

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<PAGE>

                      TABLE OF CONTENTS FOR MODEL CONTRACT

Section 6   Enrollment

            6.1   Enrollment Guidelines

            6.2   Equality of Access to Enrollment

            6.3   Enrollment Decisions

            6.4   Auto Assignment

            6.5   Prohibition Against Conditions on Enrollment

            6.6   Family Enrollment

            6.7   Newborn Enrollment

            6.8   Effective Date of Enrollment

            6.9   Roster

            6.10  Automatic Re-Enrollment

Section 7   Lock-In Provisions

            7.1   Lock-In Provisions in Voluntary Counties

            7.2   Lock-In Provisions in Mandatory Counties and New York City

            7.3   Disenrollment During Lock-In Period

            7.4   Notification Regarding Lock-In and End of Lock-In Period

Section 8   Disenrollment

            8.1   Disenrollment Guidelines

            8.2   Disenrollment Prohibitions

            8.3   Reasons for Voluntary Disenrollment

            8.4   Processing of Disenrollment Requests

                  a.    Routine Disenrollment

                  b.    Expedited Disenrollment

                  c.    Retroactive Disenrollment

            8.5   Contractor Notification of Disenrollments

            8.6   Contractor's Liability

            8.7   Enrollee Initiated Disenrollment

                  a.    Disenrollment for Good Cause

            8.8   Contractor Initiated Disenrollment

            8.9   LDSS Initiated Disenrollment

Section 9   Guaranteed Eligibility

Section 10  Benefit Package, Covered and Non-Covered Services

            10.1  Contractor Responsibilities

            10.2  Compliance with State Medicaid Plan and Applicable Laws

            10.3  Definitions

            10.4  Provision of Services Through Participating and
                  Non-Participating Providers

            10.5  Child Teen Health Program/Adolescent Preventive Services

            10.6  Foster Care Children

            10.7  Child Protective Services

            10.8  Welfare Reform

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                       TABLE OF CONTENT FOR MODEL CONTRACT

            10.9  Adult Protective Services

            10.10 Court-Ordered Services

            10.11 Family Planning and Reproductive Health Services

            10.12 Prenatal Care

            10.13 Direct Access

            10.14 Emergency Services

            10.15 Medicaid Utilization Thresholds (MUTS)

            10.16 Services for Which Enrollees Can Self-Refer

                  a.    Mental Health and Chemical Dependence Services

                  b.    Vision Services

                  c.    Diagnosis and Treatment of Tuberculosis

                  d.    Family Planning and Reproductive Health Services

                  e.    Article 28 Clinics Operated by Academic Dental Centers

            10.17 Second Opinions for Medical or Surgical Care

            10.18 Coordination with Local Public Health Agencies

            10.19 Public Health Services

                  a.    Tuberculosis Screening, Diagnosis and Treatment;
                        Directly Observed Therapy (TB/DOT)

                  b.    Immunizations

                  c.    Prevention and Treatment of Sexually Transmitted
                        Diseases

                  d.    Lead Poisoning

            10.20 Adults with Chronic Illnesses and Physical or Developmental
                  Disabilities

            10.21 Children with Special Health Care Needs

            10.22 Persons Requiring Ongoing Mental Health Services

            10.23 Member Needs Relating to HIV

            10.24 Persons Requiring Chemical Dependence Services

            10.25 Native Americans

            10.26 Women, Infants, and Children (WIC)

            10.27 Urgently Needed Services

            10.28 Dental Services Provided by Article 28 Clinics Operated by
                  Academic Dental Centers Not Participating in Contractor's
                  Network

            10.29 Coordination of Services

            10.30 Prospective Benefit Package Change for Retroactive SSI
                  Determinations

Section 11  Marketing

            11.1  Marketing Plan

            11.2  Marketing Activities

            11.3  Prior Approval of Marketing Materials, Procedures,
                  Subcontracts

            11.4  Marketing Infractions

            11.5  LDSS Option to Adopt Additional Marketing Guidelines

Section 12  Member Services

            12.1  General Functions

            12.2  Translation and Oral Interpretation

            12.3  Communicating with the Visually, Hearing and Cognitively
                  Impaired

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<PAGE>

                      TABLE OF CONTENTS FOR MODEL CONTRACT

Section 13  Enrollee Notification

            13.1  Provider Directories/Office Hours for Participating Providers

            13.2  Member ID Cards

            13.3  Member Handbooks

            13.4  Notification of Effective Date of Enrollment

            13.5  Notification of Enrolled Rights

            13.6  Enrollee's Rights to Advance Directives

            13.7  Approval of Written Notices

            13.8  Contractor's Duty to Report Lack of Contact

            13.9  Contractor Responsibility to Notify Enrollee of Expected
                  Effective Date of Enrollment

            13.10 LDSS Notification of Enrollee's Change in Address

            13.11 Contractor Responsibility to Notify Enrollee of Effective Date
                  of Benefit Package Change

            13.12 Contractor Responsibility to Notify Enrollee of Termination,
                  Service Area Changes and Network Changes

Section 14  Complaint and Appeal Procedure

            14.1  Contractor's Program to Address Complaints

            14.2  Notification of Complaint and Appeal Program

            14.3  Guidelines for Complaint and Appeal Program

            14.4  Complaint Investigation Determinations

Section 15  Access Requirements

            15.1  Appointment Availability Standards

            15.2  Twenty-Four (24) Hour Access

            15.3  Appointment Waiting Times

            15.4  Travel Time Standards

                  a.    Primary Care

                  b.    Other Providers

            15.5  Service Continuation

                  a.    New Enrollees

                  b.    Enrollees Whose Health Care Provider Leaves Network

            15.6  Standing Referrals

            15.7  Specialist as a Coordinator of Primary Care

            15.8  Specialty Care Centers

Section 16  Quality Assurance

            16.1  Internal Quality Assurance Program

            16.2  Standards of Care

Section 17  Monitoring and Evaluation

            17.1  Right To Monitor Contractor Performance

            17.2  Cooperation During Monitoring And Evaluation

            17.3  Cooperation During On-Site Reviews

            17.4  Cooperation During Review of Services by External Review
                  Agency

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                      TABLE OF CONTENTS FOR MODEL CONTRACT

Section 18  Contractor Reporting Requirements

            18.1  Time Frames for Report Submissions

            18.2  SDOH Instructions for Report Submissions

            18.3  Liquidated Damages

            18.4  Notification of Changes in Report Due Dates, Requirements or
                  Formats

            18.5  Reporting Requirements

                  a.    Annual Financial Statements

                  b.    Quarterly Financial Statements

                  c.    Other Financial Reports

                  d.    Encounter Data

                  e.    Quality of Care Performance Measures

                  f.    Complaint Reports

                  g.    Fraud and Abuse Reporting Requirements

                  h.    Participating Provider Network Reports

                  i.    Appointment Availability/Twenty-Four Hour (24) Access
                        and Availability Surveys

                  j.    Clinical Studies

                  k.    Independent Audits

                  1.    New Enrollee Health Screening Completion Report

                  m.    Additional Reports

                  n.    LDSS Specific Reports

            18.6  Ownership and Related Information Disclosure

            18.7  Revision of Certificate of Authority

            18.8  Public Access to Reports

            18.9  Professional Discipline

            18.10 Certification Regarding Individuals Who Have Been Debarred or
                  Suspended by Federal or State Government

            18.11 Conflict of Interest Disclosure

            18.12 Physician Incentive Plan Reporting

Section 19  Records Maintenance and Audit Rights

            19.1  Maintenance of Contractor Performance Records

            19.2  Maintenance of Financia1 Records and Statistical Data

            19.3  Access to Contractor Records

            19.4  Retention Periods

Section 20  Confidentiality

            20.1  Confidentiality of Identifying Information about Medicaid
                  Recipients and Applicants

            20.2  Medical Records of Foster Children

            20.3  Confidentiality of Medical Records

            20.4  Length of Confidentiality Requirements

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<PAGE>

                      TABLE OF CONTENTS FOR MODEL CONTRACT

Section 21  Participating Providers

            21.1  Network Requirements

                  a.    Sufficient Number

                  b.    Absence of Appropriate Network Provider

                  c.    Suspension of Enrollee Assignments to Providers

                  d.    Notice of Provider Termination

            21.2  Credentialing

                  a.    Licensure

                  b.    Minimum Standards

                  c.    Credentialing/Recredentialing Process

                  d.    Application Procedure

            21.3  SDOH Exclusion or Termination of Providers

            21.4  Evaluation Information

            21.5  Payment In Full

            21.6  Choice/Assignment of PCPs

            21.7  PCP Changes

            21.8  Provider Status Changes

            21.9  PCP Responsibilities

            21.10 Member to Provider Ratios

            21.11 Minimum Office Hours

                  a.    General Requirements

                  b.    Medical Residents

            21.12 Primary Care Practitioners

                  a.    General Limitations

                  b.    Specialists and Sub-specialists as PCPs

                  c.    OB/GYN Providers as PCPs

                  d.    Certified Nurse Practitioners as PCPs

                  e.    Registered Physician's Assistants as Physician Extenders

            21.13 PCP Teams

                  a.    General Requirements

                  b.    Medical Residents

            21.14 Hospitals

                  a.    Tertiary Services

                  b.    Emergency Services

            21.15 Dental Networks

            21.16 Presumptive Eligibility Providers

            21.17 Mental Health and Chemical Dependence Services Providers

            21.18 Laboratory Procedures

            21.19 Federally Qualified Health Centers (FQHCs)

            21.20 Provider Services Function

Section 22  Subcontracts and Provider Agreements

            22.1  Written Subcontracts

            22.2  Permissible Subcontracts

            22.3  Provision of Services Through Provider Agreements

            22.4  Approvals

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<PAGE>

                      TABLE OF CONTENTS FOR MODEL CONTRACT

            22.5  Required Components

            22.6  Timely Payment

            22.7  Restrictions on Disclosure

            22.8  Transfer of Liability

            22.9  Termination of Health Care Professional Agreements

            22.10 Health Care Professional Hearings

            22.11 Non-Renewal of Provider Agreements

            22.12 Physician Incentive Plan

Section 23  Fraud and Abuse Prevention Plan

Section 24  Americans With Disabilities Act Compliance Plan

Section 25  Fair Hearings

            25.1  Enrollee Access to Fair Hearing Process

            25.2  Enrollee Rights to a Fair Hearing

            25.3  Contractor Notice to Enrollees

            25.4  Aid Continuing

            25.5  Responsibilities of SDOH

            25.6  Contractor's Obligations

Section 26  External Appeal

            26.1  Basis for External Appeal

            26.2  Eligibility For External Appeal

            26.3  External Appeal Determination

            26.4  Compliance With External Appeal Laws and Regulations

Section 27  Intermediate Sanctions

Section 28  Environmental Compliance

Section 29  Energy Conservation

Section 30  Independent Capacity of Contractor

Section 31  No Third Party Beneficiaries

Section 32  Indemnification

            32.1  Indemnification by Contractor

            32.2  Indemnification by LDSS

Section 33  Prohibition on Use of Federal Funds for Lobbying

            33.1  Prohibition of Use of Federal Funds for Lobbying

            33.2  Disclosure Form to Report Lobbying

            33.3  Requirements of Subcontractors

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<PAGE>

                      TABLE OF CONTENTS FOR MODEL CONTRACT

Section 34  Non-Discrimination

            34.1  Equal Access to Benefit Package

            34.2  Non-Discrimination

            34.3  Equal Employment Opportunity

            34.4  Native Americans Access to Services From Tribal or Urban
                  Indian Health Facility

Section 35  Compliance with Applicable Laws

            35.1  Contractor and LDSS Compliance With Applicable Laws

            35.2  Nullification of Illegal, Unenforceable, Ineffective or Void
                  Contract Provisions

            35.3  Certificate of Authority Requirements

            35.4  Notification of Changes In Certificate of Incorporation

            35.5  Contractor's Financial Solvency Requirements

            35.6  Compliance With Care For Maternity Patients

            35.7  Informed Consent Procedures for Hysterectomy and Sterilization

            35.8  Non-Liability of Enrollees For Contractor's Debts

            35.9  LDSS Compliance With Conflict of Interest Laws

            35.10 Compliance With PHL Regarding External Appeals

Section 36  New York State Standard Contract Clauses

Section 37  Insurance Requirements

Signature Page

                                TABLE OF CONTENTS
                                 October 1, 2004
                                        8

<PAGE>

                      TABLE OF CONTENTS FOR MODEL CONTRACT

                                   APPENDICES

A.    New York State Standard Clauses and Local Standard Clauses, if applicable

B.    Certification Regarding Lobbying

C.    New York State Department of Health Guidelines for the Provision of Family
      Planning and Reproductive Health Services

D.    New York State Department of Health Marketing Guidelines

E.    New York State Department of Health Member Handbook Guidelines

F.    New York State Department of Health Medicaid Managed Care Complaint and
      Appeals Requirements

G.    New York State Department of Health Guidelines for the Provision of
      Emergency Care and Services

H.    New York State Department of Health Guidelines for the Processing of
      Enrollments and Disenrollments

I.    New York State Department of Health Guidelines for Use of Medical
      Residents

J.    New York State Department of Health Guidelines of Federal Americans with
      Disabilities Act

K.    Prepaid Benefit Package Definitions of Covered and Non-Covered Services

L.    Approved Capitation Payment Rates

M.    Service Area

N.    Contractor-County Specific Agreements

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                                 October 1, 2004
                                        9

<PAGE>

                                AGREEMENT BETWEEN

                                 Columbia County
                   ------------------------------------------
                         County Name of City of New York

                                       And

                           Wellcare of New York, Inc.
                   ------------------------------------------
                                Contractor Name

                      This Agreement is made by and between

                                 Columbia County
              -----------------------------------------------------
              County Name or City of New York ("County" or "City")

                                 Acting through,

                  Columbia County Department of Social Services
            ---------------------------------------------------------
            Department of Social Services ("LDSS") OR Health ("CDOH")

                                   Located at

                                   PO Box 458
                   ------------------------------------------

                               25 Railroad Avenue
                   ------------------------------------------

                             Hudson, New York 12534
                   ------------------------------------------

                                       And

                           Wellcare of New York, Inc.
                   ------------------------------------------
                       Contractor Name ("the Contractor")

                                   LOCATED AT

                           11 West 19th St. 2nd Floor
                   ------------------------------------------

                            New York, New York 10011

                                    RECITALS
                                 October 1, 2004
                                   Page 1 of 2

<PAGE>

                                    RECITALS

      Pursuant to Title XIX of the Federal Social Security Act, codified as 42
U.S.C. Section 1396 et seq. (the "Social Security Act"), and Title 11 of Article
5 of the New York State Social Services Law ("SSL"), codified as N.Y.S.S.L.
Section 363 et seq., a comprehensive program of Medical Assistance for needy
persons exists in the State of New York ("Medicaid").

      Pursuant to Article 44 of the Public Health Law ("PHL"), the New York
State Department of Health ("SDOH") is authorized to issue Certificates of
Authority to establish Health Maintenance Organizations ("HMOs"), PHL Section
4400 et seq., and Prepaid Health Services Plans ("PHSPs"), PHL Section 4403-a.

      The State Social Services Law defines Medicaid to include payment of part
or all of the cost of care and services furnished by an HMO or a PHSP,
identified as Managed Care Organizations ("MCOs") in this Agreement, to Eligible
Persons, as defined in this Agreement, residing in the geographic area specified
in Appendix M (Service Area) when such care and services are furnished in
accordance with an agreement approved by the SDOH that meets the requirements of
federal law and regulations.

      The Contractor is a corporation organized under the laws of New York State
and is certified under Article 44 of the State Public Health Law or Article 43
of the NYS Insurance Law.

      The Contractor offers a comprehensive health services plan and represents
that it is able to make provision for furnishing medical and health service
benefits and has proposed to Columbia Cty. Department of Social Services to
provide these services to Eligible Persons; and

      The Contractor has applied to participate in the Medicaid Managed Care
Program and the SDOH and Columbia Cty. Department of Social Services have
determined that the Contractor meets the qualification criteria
established for participation.

NOW THEREFORE, the parties agree as follows:

                                    RECITALS
                                 October 1, 2004
                                   Page 2 of 2

<PAGE>

1.    DEFINITIONS

      "AUTO-ASSIGNMENT" means a process by which an Eligible Person, who is
      mandated to enroll in managed care, but who has not chosen to enroll
      within sixty (60) days of receipt of the mandatory notice, is assigned to
      a MCO contracted with the LDSS as a Medicaid Managed Care Provider in
      accordance with the auto-assignment algorithm determined by the SDOH.

      "BEHAVIORAL HEALTH SERVICES" means services to address mental health
      disorders and/or chemical dependence.

      "BENEFIT PACKAGE" means the covered services described in Appendix K of
      this Agreement to be provided to the Enrollee, as Enrollee is hereinafter
      defined, by or through the Contractor.

      "CAPITATION RATE" means the fixed monthly amount that the Contractor
      receives for an Enrollee to provide that Enrollee with the Benefit
      Package.

      "CHEMICAL DEPENDENCE SERVICES" means examination, diagnosis, level of care
      determination, treatment, rehabilitation, or habilitation of persons
      suffering from chemical abuse or dependence, and includes the provision of
      alcohol and/or substance abuse services.

      "CHILD/TEEN HEALTH PROGRAM" or "C/THP" means the program of early and
      periodic screening, including inter-periodic, diagnostic and treatment
      services (EPSDT) that New York State offers all Medicaid eligible children
      under twenty-one (21) years of age. Care and services are provided in
      accordance with the periodicity schedule and guidelines developed by the
      New York State Department of Health. The services include administrative
      services designed to help families obtain services for children including
      outreach, information, appointment scheduling, administrative case
      management and transportation assistance, to the extent that
      transportation is included in the Benefit Package.

      "COMPREHENSIVE HIV SPECIAL NEEDS PLAN, OR HIV SNP" means a Managed Care
      Organization certified pursuant to Sect on forty-four hundred three-c
      (4403-c) of Article 44 of the Public Health Law (Article 44) which, in
      addition to providing or arranging for the provision of comprehensive
      health services on a capitated basis, including those for which Medical
      Assistance payment is authorized pursuant to Section three hundred
      sixty-five-a (365-a) of the Social Services Law, also provides or arranges
      for the provision of comprehensive and specialized HIV care to HIV
      positive persons eligible to receive benefits under Title XIX of the
      federal Social Security Act or other public programs.

      "COURT-ORDERED SERVICES" means those services that the Contractor is
      required to provide to Enrollees pursuant to orders of courts of competent
      jurisdiction, provided however, that such ordered services art within the
      Contractor's Medicaid managed care

                                    SECTION 1
                                  (DEFINITIONS)
                                 October 1, 2004
                                       1-1

<PAGE>

      Benefit Package and reimbursable under Title XIX of the Federal Social
      Security Act (SSL364-j(4)(r)).

      "DAYS" means calendar days except as otherwise stated.

      "DETOXIFICATION SERVICES" means Medically Managed Detoxification Services;
      and Medically Supervised Inpatient and Outpatient Withdrawal Services as
      defined in Appendix K.

      "DISENROLLMENT" means the process by which an Enrollee's membership in the
      Contractor's plan terminates.

      "EFFECTIVE DATE OF DISENROLLMENT" means the date on which an Enrollee may
      no longer receive services from the Contractor, pursuant to Section 8.6
      and Appendix H of this Agreement.

      "EFFECTIVE DATE OF ENROLLMENT" means the date on which an Enrollee may
      receive services from the Contractor, pursuant to Section 6.8(b) and
      Appendix H of this Agreement.

      "ELIGIBLE PERSON" means a person whom the LDSS, state or federal
      government determines to be eligible for Medicaid and who meets all the
      other conditions for enrollment in Medicaid managed care as set forth in
      this Agreement.

      "EMERGENCY MEDICAL CONDITION" means a medical or behavioral condition, the
      onset of which is sudden, that manifests itself by symptoms of sufficient
      severity, including severe pain, that a prudent layperson, possessing an
      average knowledge of medicine and health, could reasonably expect the
      absence of immediate medical attention to result in: (i) placing the
      health of the person afflicted with such condition in serious jeopardy, or
      in the case of a behavioral condition, placing the health of the person or
      others in serious jeopardy; or (ii) serious impairment to such person's
      bodily functions; or (iii) serious dysfunction of any bodily organ or part
      of such person; or (iv) serious disfigurement of such person.

      "EMERGENCY SERVICES" means covered medical services that are required to
      treat an Emergency Medical Condition.

      "ENROLLEE" means an Eligible Person who, either personally or through an
      authorized representative, has enrolled (or who as been auto-assigned) in
      the Contractor's plan pursuant to Section 6 of this Agreement.

      "ENROLLMENT" means the process by which an Enrollee's membership in a
      Contractor's Plan begins.

      "ENROLLMENT BROKER" means the state and/or county-contracted entity that
      provides enrollment, education, and outreach services; effectuates
      enrollments and disenrollments

                                    SECTION 1
                                  (DEFINITIONS)
                                 October 1, 2004
                                       1-2

<PAGE>

      in Medicaid managed care; and provides other contracted services on behalf
      of the SDOH and the LDSS.

      "EXPERIENCED HLV PROVIDER" meals an entity grant-funded by the SDOH AIDS
      Institute to provide clinical and/or supportive services or an entity
      licensed or certified by the SDOH to provide HIV/AIDS services.

      "FAMILY" means a mother and child(ren), a father and child(ren), a father
      and mother and child(ren), or a husband and wife residing in the same
      household or persons included in the same case for purposes of family
      enrollment in mandatory counties.

      "FISCAL AGENT" means the entity that processes or pays vendor claims on
      behalf of the Medicaid state agency pursuant to an agreement between the
      entity and such agency.

      "GUARANTEED ELIGIBILITY" means the period beginning on the Enrollee's
      Effective Date of Enrollment with the Contractor and ending six (6) months
      thereafter, during which the Enrollee may be entitled to continued
      enrollment in the Contractor's plan despite the loss of Medicaid
      eligibility as set forth in Section 9 of this Agreement.

      "HEALTH PROVIDER NETWORK" or "HPN" means a closed communication network
      dedicated to secure data exchange and distribution of health related
      information between various health facility providers and the SDOH. HPN
      functions include: collection of Medicaid complaint and disenrollment
      information; collection of Medicaid financial reports; collection and
      reporting of managed care provider networks systems (PNS); and the
      reporting of Medicaid encounter data systems (MEDS).

      "HIV SPECIALIST PCP" means a Primary Care Provider that meets the
      following criteria:

            -     Direct clinical management of persons with HIV as part of a
                  postgraduate program, clinic, hospital-based or private
                  practice during the last two years. Primary ambulatory care of
                  HIV-infected patients should include the management of
                  patients receiving antiretroviral therapy over an extended
                  period of time. This experience should equal twenty
                  patient-years experience, and

            -     Ten hours annually of Continuing Medical Education (CME) that
                  includes information on the use of antiretroviral therapy in
                  the ambulatory care setting.

      "INPATIENT STAY PENDING ALTERNATE LEVEL OF MEDICAL CARE" means continued
      care in a hospital pending placement in an alternate lower medical level
      of care, consistent with the provisions of 18 NYCRR 505.20 and 10 NYCRR,
      Part 85.

      "INSTITUTION FOR MENTAL DISEASE" or "IMD" means a hospital, nursing
      facility, or other institution of more than sixteen (16) beds that is
      primarily engaged in providing diagnosis, treatment or care of persons
      with mental diseases, including medical attention, nursing care and
      related services. Whether an institution is an Institution for Mental
      Disease is determined by its overall character as that of a facility
      established and maintained primarily for the care and treatment of
      individuals with mental diseases,

                                    SECTION 1
                                  (DEFINITIONS)
                                 October 1, 2004
                                       1-3

<PAGE>

      whether or not it is licensed as such. An institution for the mentally
      retarded is not an Institution for Mental Diseases.

      "LOCAL PUBLIC HEALTH AGENCY" means Columbia County Department of Health

      "LOCK-IN PERIOD" means the period of time during which the Enrollee may
      not disenroll from the Contractor's plan, unless the Enrollee becomes
      eligible for an exclusion or an exemption or can demonstrate good cause as
      established in state law and in 18 NYCRR Section 360-10.13.

      "MANAGED CARE ORGANIZATION" or "MCO" means a health maintenance
      organization ("HMO") or prepaid health service plan ("PHSP") certified
      under Article 44 of the New York State PHL.

      "MARKETING" means any activity of the Contractor, subcontractor or
      individuals or entities affiliated with the Contractor by which
      information about the Contractor is made known to Eligible Persons for the
      purpose of persuading such persons to enroll with the Contractor.

      "MARKETING REPRESENTATIVE" means any individual or entity engaged by the
      Contractor to market on behalf of the Contractor.

      "MEDICAID MANAGEMENT INFORMATION SYSTEM" or "MMIS" means the Medical
      Assistance Information and Payment System of the SDOH.

      "MEDICAL RECORD" means a complete record of care rendered by a provider
      documenting the care rendered to the Enrollee, including inpatient,
      outpatient, and emergency care, in accordance with all applicable federal,
      state and local laws, rules and regulations. Such record shall be signed
      by the medical professional rendering the services.

      "MEDICALLY NECESSARY" means health care and services that are necessary to
      prevent, diagnose, manage or treat conditions in the person that cause
      acute suffering, endanger life, result in illness or infirmity, interfere
      with such person's capacity for normal activity, or threaten some
      significant handicap.

      "NATIVE AMERICAN" means, for purposes of this contract, a person
      identified in the Medicaid eligibility system as a Native American.

      "NONCONSENSUAL ENROLLMENT" means Enrollment of an Eligible Person, other
      than through Auto-assignment, newborn enrollment or case addition, in a
      Managed Care Organization without the consent of the Eligible Person or
      consent of a person with the legal authority to act on behalf of the
      Eligible Person at the time of Enrollment.

      "NON-PARTICIPATING PROVIDER" means a provider of medical care and/or
      services with which the Contractor has no Provider Agreement.

                                    SECTION 1
                                  (DEFINITIONS)
                                 October 1, 2004
                                       1-4

<PAGE>

      "PARTICIPATING PROVIDER" means a provider of medical care and/or services
      that has a Provider Agreement with the Contractor.

      "PHYSICIAN INCENTIVE PLAN" or "PlP" means any compensation arrangement
      between the Contractor or one of its contracting entities and a physician
      or physician group that may directly or indirectly have the effect of
      reducing or limiting services furnished to Medicaid recipients enrolled by
      the MCO.

      "PREPAID CAPITATION PLAN ROSTER" OR "ROSTER" means the enrollment list
      generated on a monthly basis by SDOH by which LDSS and Contractor are
      informed of specifically which recipients the Contractor will be serving
      for the coming month, subject to any revisions communicated in writing or
      electronically by SDOH, LDSS, or the Enrollment Broker.

      "PRESUMPTIVE ELIGIBILITY PROVIDER" means a provider designated by the SDOH
      as qualified to determine the presumptive eligibility for pregnant women
      to allow them to receive prenatal services immediately. Such providers
      assist recipients with the completion of the full application for Medicaid
      and they may be comprehensive Prenatal Care Programs, Local Public Health
      Agencies, Certified Home Health Agencies, Public Health Nursing Services,
      Article 28 facilities, and individually licensed physicians and certified
      nurse practitioners.

      "PREVENTIVE CARE" means the care or services rendered to avert
      disease/illness and/or its consequences. There are three levels of
      preventive care: primary, such as immunizations, aimed at preventing
      disease; secondary, such as disease screening programs aimed at early
      detection of disease; and tertiary, such as physical therapy, aimed at
      restoring function after the disease has occurred. Commonly, the term
      "preventive care" is used to designate prevention and early detection
      programs rather than treatment programs.

      "PRIMARY CARE PROVIDER" or "PCP" means a qualified physician, or certified
      nurse practitioner or team of no more than four (4) qualified
      physicians/nurse practitioners which provides all required primary care
      services contained in the Benefit Package to Enrollees.

      "PROVIDER AGREEMENT" means any written contract between the Contractor and
      participating Providers to provide medical care and/or services to
      Contractor's Enrollees.

      "SCHOOL BASED HEALTH CENTERS" or "SBHC" are SDOH approved centers which
      provide comprehensive primary and mental health services including health
      assessments, diagnosis and treatment of acute illnesses, screenings and
      immunizations, routine management of chronic diseases, hea1th education,
      mental health counseling and treatment on-site in schools. Services are
      offered by multi-disciplinary staff from sponsoring Article 28 licensed
      hospitals and community health centers.

      "SERIOUSLY EMOTIONALLY DISTURBED" or "SED" means, a child through
      seventeen (17) years of age who has utilized the following during the
      twelve (12) month period prior to scheduled enrollment:

                                    SECTION 1
                                  (DEFINITIONS)
                                 October 1, 2004
                                       1-5

<PAGE>

      -     ten (10) or more encounters, including visits to a mental health
            clinic, psychiatrist or psychologist, and inpatient hospital days
            relating to a psychiatric diagnosis; or

      -     one (1) or more specialty mental health visits (i.e., psychiatric
            rehabilitation treatment program; day treatment; continuing day
            treatment; comprehensive case management; partial hospitalization;
            rehabilitation services provided to residents of Office of Mental
            Health (OMH) licensed community residences and family-based
            treatment; and mental health clinics for seriously emotionally
            disturbed children).

      "SERIOUSLY AND PERSISTENTLY MENTALLY III" or "SPMI" means an adult
      eighteen (18) years or older who has utilized the following during the
      twelve (12) month period prior to scheduled enrollment:

      -     ten (10) or more encounters, including visits to a mental health
            clinic, psychiatrist or psychologist, and inpatient hospital days
            relating to a psychiatric diagnosis; or

      -     one (1) or more specialty mental health visits (i.e., psychiatric
            rehabilitation treatment program; day treatment; continuing day
            treatment; comprehensive case management; partial hospitalization;
            rehabilitation services provided to residents of OMH licensed
            community residences and family-based treatment; and mental health
            clinics for seriously emotionally disturbed children).

      "SUPPLEMENTAL MATERNITY CAPITATION PAYMENT" means the fixed amount paid to
      the Contractor for the prenatal and postpartum physician care and hospital
      or birthing center delivery costs, limited to those cases in which the
      plan has paid the hospital or birthing center for the maternity stay, and
      can produce evidence of such payment.

      "SUPPLEMENTAL NEWBORN CAPITATION PAYMENT" means the fixed amount paid to
      the Contractor for the inpatient birthing costs for a newborn enrolled in
      the plan, limited to those cases in which the plan has paid the hospital
      or birthing center for the newborn stay, and can produce evidence of such
      payment.

      "TUBERCULOSIS DIRECTLY OBSERVED THERAPY" or "TB/DOT" means the direct
      observation of ingestion of oral TB medications to assure patient
      compliance with the physician's prescribed medication regimen.

      "URGENTLY NEEDED SERVICES" means covered services that are not Emergency
      Services as defined in this Section, provided when an Enrollee is
      temporarily absent from the Contractor's service area, when the services
      are medically necessary and immediately required: (1) as a result of an
      unforeseen illness, injury, or condition; and (2) it was not reasonable
      given the circumstances to obtain the services through the Contractor's
      plan.

                                    SECTION 1
                                  (DEFINITIONS)
                                 October 1, 2004
                                       1-6

<PAGE>

2.    AGREEMENT TERM, AMENDMENTS, EXTENSIONS, AND GENERAL CONTRACT
      ADMINISTRATION PROVISIONS

      2.1   Term

            a)    This Agreement is effective October 1, 2004 and shall remain
                  in effect until September 30, 2005; or until the execution of
                  an extension, renewal or successor Agreement approved by the
                  SDOH and the Department of Health and Human Services (DHHS);
                  or until the effective date of an executed agreement between
                  the Contractor and SDOH for Contractor's participation in the
                  Medicaid managed care program; whichever occurs first.

            b)    The parties to the Agreement shall have the option to renew
                  this Agreement for additional two (2) year and or one (1) year
                  terms, subject to the approval of the LDSS, SDOH, DHHS and any
                  other entities as required by law or regulation.

            c)    However, in no event, shall the maximum duration of this
                  Agreement exceed five (5) years.

      2.2   Amendments and Extensions

            a)    This Agreement may only be modified in writing. Unless
                  otherwise specified in this Agreement, modifications must be
                  signed by the parties and approved by the SDOH, DHHS, and any
                  other entities as required by law or regulation, prior to the
                  end of the quarter in which the amendment is to be effective.

            b)    This Agreement shall not be automatically renewed at its
                  expiration. This Agreement may be extended by written
                  amendment, in accordance with the procedures set forth in this
                  Section.

            c)    An extension to this Agreement may be granted for reasons
                  including, but not limited, to the following:

                  i)    Negotiations for a successor Agreement will not be
                        completed by the expiration date of the current
                        contract; or

                  ii)   The Contractor has submitted a termination notice and
                        transition of Enrollees will not be completed by the
                        expiration date of the current contract.

                                    SECTION 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                 AND GENERAL CONTRACT ADMINISTRATION PROVISIONS)
                                 October 1, 2004
                                       2-1

<PAGE>

            d)    The parties will submit, to the extent practicable, the
                  proposed signed and dated extensions, including all necessary
                  local government approvals, to SDOH prior to the scheduled
                  expiration date of this Agreement.

      2.3   Approvals

            This Agreement and any amendments to this Agreement shall not be
            effective or binding unless and until approved, in writing, by the
            DHHS, the SDOH and any other entity as required in law and
            regulation. SDOH will provide a notice of each such approval to the
            Contractor and the LDSS upon such approval.

      2.4   Entire Agreement

            This Agreement shall supersede all prior Agreements between the
            Contractor and the LDSS. This Agreement, including those
            attachments, schedules, appendices, exhibits, and addenda that have
            been specifically incorporated herein and written plans submitted by
            the Contractor and maintained on file by SDOH and/or LDSS pursuant
            to this Agreement, contains all the terms and conditions agreed upon
            by the parties, and no other Agreement, oral or otherwise, regarding
            the subject matter of this Agreement shall be deemed to exist or to
            bind any of the parties or vary any of the terms contained in this
            Agreement. In the event of any inconsistency or conflict among the
            document elements of this Agreement, such inconsistency or conflict
            shall be resolved by giving precedence to the document elements in
            the following order:

                  1)    Appendix A, Standard Clauses for all New York State
                        Contracts;

                  2)    Local Standard Clauses, if any;

                  3)    The body of this Agreement;

                  4)    The appendices attached to the body of this Agreement,
                        other than Appendix A;

                  5)    The Contractor's approved:

                        i)    Marketing Plan on file with SDOH and LDSS

                        ii)   Complaint and Appeals Procedure on file with SDOH
                              and LDSS

                        iii)  Quality Assurance Plan on file with SDOH and LDSS

                        iv)   Americans with Disabilities Act Compliance Plan on
                              file with SDOH and LDSS

                        v)    Fraud and Abuse Prevention Plan on file with SDOH
                              and LDSS.

                                    SECTION 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                 AND GENERAL CONTRACT ADMINISTRATION PROVISIONS)
                                 October 1, 2004
                                       2-2

<PAGE>

      2.5   Renegotiation

            The parties to this Agreement shall have the right to renegotiate
            the terms and conditions of this Agreement in the event applicable
            local, state or federal law, regulations or policy are altered from
            those existing at the time of this Agreement in order to be in
            continuous compliance therewith. This Section shall not limit the
            right of the parties to this Agreement from renegotiating or
            amending other terms and conditions of this agreement. Such changes
            shall only be made with the consent of the parties and the prior
            approval of the SDOH and the DHHS.

      2.6   Assignment and Subcontracting

            a)    The Contractor shall not, without LDSS and SDOH's prior
                  written consent, assign, transfer, convey, sublet, or
                  otherwise dispose of this Agreement; of the Contractor's
                  right, title, interest, obligations, or duties under the
                  Agreement; of the Contractor's power to execute the Agreement;
                  or, by power of attorney or otherwise, of any of the
                  Contractor's rights to receive monies due or to become due
                  under this Agreement. Any assignment, transfer, conveyance,
                  sublease, or other disposition without LDSS and SDOH's consent
                  shall be void.

            b)    Contractor may not enter into any subcontracts related to the
                  delivery of services to Enrollees, except by written
                  agreement, as set forth in Section 22 of this Agreement. The
                  Contractor may subcontract for provider services and
                  management services. If such written agreement would be
                  between Contractor and a provider of health care or ancillary
                  health services or between Contractor and an independent
                  practice association, the agreement must be in a form
                  previously approved by SDOH. If such subcontract is for
                  management services under 10 NYCRR ss. 98-1.11, it must be
                  approved by SDOH prior to its becoming effective. Any
                  subcontract entered into by Contractor shall fulfill the
                  requirements of 42 CFR Parts 434 and 438 that are appropriate
                  to the service or activity delegated under such subcontract.
                  Contractor agrees that it shall remain legally responsible to
                  LDSS for carrying out all activities under this Agreement and
                  that no subcontract shall limit or terminate Contractor's
                  responsibility.

      2.7   Termination

            a)    LDSS Initiated Termination of Contract

                  i)    LDSS shall have the right to terminate this Agreement,
                        in whole or in part if the Contractor:

                        A)    takes any action that threatens the health,
                              safety, or welfare of its Enrollees;

                                    SECTION 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                 AND GENERAL CONTRACT ADMINISTRATION PROVISIONS)
                                 October 1, 2004
                                       2-3

<PAGE>

                        B)    has engaged in an unacceptable practice under 18
                              NYCRR, Part 515, that affects the fiscal integrity
                              of the Medicaid program;

                        C)    has its Certificate of Authority suspended,
                              limited or revoked by SDOH;

                        D)    materially breaches the Agreement or fails to
                              comply with any term or condition of this
                              Agreement that is not cured within twenty (20)
                              days, or to such longer period as the parties may
                              agree, of LDSS's written request for compliance;

                        E)    becomes insolvent;

                        F)    brings a proceeding voluntarily, or has a
                              proceeding brought against it involuntarily, under
                              Title 11 of the U.S. Code (the Bankruptcy Code);
                              or

                        G)    knowingly has a director, officer, partner or
                              person owning or controlling more than five
                              percent (5%) of the Contractor's equity, or has an
                              employment, consulting, or other agreement with
                              such a person for the provision of items and/or
                              services that are significant to the Contractor's
                              contractual obligation who has been debarred or
                              suspended by the federal, state or local
                              government, or otherwise excluded from
                              participating in procurement activities.

                  ii)   The LDSS will notify the Contractor of its intent to
                        terminate this Agreement for the Contractor's failure to
                        meet the requirements of this Agreement and provide
                        Contractor with a hearing prior to the termination.

                  iii)  If SDOH suspends, limits or revokes Contractor's
                        Certificate of Authority under PHL ss. 4404, this
                        Agreement shall expire on the date the Contractor ceases
                        to have authority to serve the geographic area of the
                        LDSS. No hearing will be required if the contract
                        expires due to SDOH suspension, limitation or revocation
                        of the Contractor's Certificate of Authority.

                  iv)   Prior to the effective date of the termination the LDSS
                        shall notify Enrollees of the termination, or delegate
                        responsibility for such notification to the Contractor,
                        and such notice shall include a statement that Enrollees
                        may disenroll immediately without cause.

            b)    Contractor and LDSS Initiated Termination

                  The Contractor and the LDSS each shall have the right to
                  terminate this Agreement in the event that SDOH and the
                  Contractor fail to reach agreement on the monthly Capitation
                  Rates. In such event, the party exercising its right shall
                  give the other party, LDSS, and SDOH written notice specifying
                  the reason for and the effective date of termination, which

                                    SECTION 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                 AND GENERAL CONTRACT ADMINISTRATION PROVISIONS)
                                 October 1, 2004
                                       2-4

<PAGE>

                  shall not be less time than will permit an orderly
                  disenrollment of Enrollees to the Medicaid fee-for-service
                  payment mechanism or transfer to another MCO, as determined by
                  LDSS, but no more than ninety (90) days.

            c)    Contractor Initiated Termination

                  i)    The Contractor shall have the right to terminate this
                        Agreement in the event that LDSS materially breaches the
                        Agreement or fails to comply with any term or condition
                        of this Agreement that is not cured within twenty (20)
                        days, or to such longer period as the parties may agree,
                        of the Contractor's written request for compliance. The
                        Contractor shall give LDSS written notice specifying the
                        reason for and the effective date of the termination,
                        which shall not be less time than will permit an orderly
                        disenrollment of Enrollees to the Medicaid
                        fee-for-service payment mechanism or transfer to another
                        managed care program, as determined by LDSS, but no more
                        than ninety (90) days.

                  ii)   The Contractor shall have the right to terminate this
                        Agreement in the event that its obligations are
                        materially changed by modifications to this Agreement
                        and its Appendices by SDOH or LDSS. In such event,
                        Contractor shall give LDSS and SDOH written notice
                        within thirty (30) days of notification of changes to
                        the Agreement or Appendices specifying the reason and
                        the effective date of termination, which shall not be
                        less time than will permit an orderly disenrollment of
                        Enrollees to the Medicaid fee-for-service program or
                        transfer to another MCO, as determined by the LDSS, but
                        no more than ninety (90) days.

                  iii)  The Contractor shall also have the right to terminate
                        this Agreement if the Contractor is unable to provide
                        services pursuant to this Agreement because of a natural
                        disaster and/or an act of God to such a degree that
                        Enrollees cannot obtain reasonable access to services
                        within the Contractor's organization, and, after
                        diligent efforts, the Contractor cannot make other
                        provisions for the delivery of such services. The
                        Contractor shall give LDSS written notice of any such
                        termination that specifies:

                        A)    the reason for the termination, with appropriate
                              documentation of the circumstances arising from a
                              natural disaster and/or an act of God that
                              preclude reasonable access to services;

                        B)    the Contractor's attempts to make other provision
                              for the delivery of services; and

                                    SECTION 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                 AND GENERAL CONTRACT ADMINISTRATION PROVISIONS)
                                 October 1, 2004
                                       2-5

<PAGE>

                        C)    the effective date of the termination, which shall
                              not be less time than will permit an orderly
                              disenrollment of Enrollees to the Medicaid
                              fee-for-service payment mechanism or transfer to
                              another MCO, as determined by LDSS, but no more
                              than ninety (90) days.

            d)    Termination Due To Loss of Funding

                  In the event that State and/or Federal funding used to pay for
                  services under this Agreement is reduced so that payments
                  cannot be made in full, this Agreement shall automatically
                  terminate, unless both parties agree to a modification of the
                  obligations under this Agreement. The effective date of such
                  termination shall be ninety (90) days after the Contractor
                  receives written notice of the reduction in payment, unless
                  available funds are insufficient to continue payments in full
                  during the ninety (90) day period, in which case LDSS shall
                  give the Contractor written notice of the earlier date upon
                  which the Agreement shall terminate. A reduction in State
                  and/or Federal funding cannot reduce monies due and owing to
                  the Contractor on or before the effective date of the
                  termination of the Agreement.

      2.8   Close-Out Procedures

            Upon termination or expiration of this Agreement and in the event
            that it is not scheduled for renewal, the Contractor shall comply
            with close-out procedures that the Contractor develops in
            conjunction with LDSS and that the LDSS, and the SDOH have approved.
            The close-out procedures shall include the following:

            a)    The Contractor shall promptly account for and repay funds
                  advanced by SDOH for coverage of Enrollees for periods
                  subsequent to the effective date of termination;

            b)    The Contractor shall give LDSS, SDOH, and other authorized
                  federal, state or local agencies access to all books, records,
                  and other documents and upon request, portions of such books,
                  records, or documents that may be required by such agencies
                  pursuant to the terms of this Agreement;

            c)    The Contractor shall submit to LDSS, SDOH, and other
                  authorized federal, state or local agencies, within ninety
                  (90) days of termination, a final financial statement and
                  audit report relating to this Agreement, made by a certified
                  public accountant or a licensed public accountant, unless the
                  Contractor requests of LDSS and receives written approval from
                  LDSS, SDOH and all other governmental agencies from which
                  approval is required, for an extension of time for this
                  submission;

                                    SECTION 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                 AND GENERAL CONTRACT ADMINISTRATION PROVISIONS)
                                 October 1, 2004
                                       2-6

<PAGE>

            d)    The Contractor shall furnish to SDOH immediately upon receipt
                  all information related to any request for reimbursement of
                  any medical claims that result from services delivered after
                  the date of termination of this Agreement;

            e)    The Contractor shall establish an appropriate plan acceptable
                  to and prior approved by the LDSS and SDOH for the orderly
                  disenrollment of Enrollees to the Medicaid fee-for-service
                  program or enrollment into another MCO. This plan shall
                  include the provision of pertinent information to identified
                  Enrollees who are: pregnant; currently receiving treatment for
                  a chronic or life threatening condition; prior approved for
                  services or surgery; or whose care is being monitored by a
                  case manager to assist them in making decisions which will
                  promote continuity of care.

            f)    SDOH shall promptly pay all claims and amounts owed to the
                  Contractor;

            g)    Any termination of this Agreement by either the Contractor or
                  LDSS shall be done by amendment to this Agreement, unless the
                  contract is terminated by the LDSS due to conditions in
                  Section 2.7 a.(i) or Appendix A of this Agreement.

      2.9   Rights and Remedies

            The rights and remedies of LDSS and the Contractor provided
            expressly in this Article shall not be exclusive and are in addition
            to all other rights and remedies provided by law or under this
            Agreement.

                                    SECTION 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                 AND GENERAL CONTRACT ADMINISTRATION PROVISIONS)
                                 October 1, 2004
                                       2-7

<PAGE>

      2.10  Notices

            All notices to be given under this Agreement shall be in writing and
            shall be deemed to have been given when mailed to, or, if personally
            delivered, when received by the Contractor, LDSS, and the SDOH at
            the following addresses:

            For LDSS:

               Commissioner
               Columbia County Department of Social Services
               PO Box 458, 25 Railroad Avenue
               Hudson, New York 12534
            ________________________________
            [Insert Name and Address]

            For SDOH:
            New York State Department of Health
            Empire State Plaza
            Corning Tower, Rm. 2074
            Albany, NY 12237-0065

            For the Contractor:

            Wellcare of New York, Inc.
            11 West 19th St.
            New York, New York 10011
            ___________________________
            [Insert Name and Address]

      2.11  Severability

            If this Agreement contains any unlawful provision that is not an
            essential part of this Agreement and that was not a controlling or
            material inducement to enter into this Agreement, the provision
            shall have no effect and, upon notice by either party, shall be
            deemed stricken from this Agreement without affecting the binding
            force of the remainder of this Agreement.

                                    SECTION 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                 AND GENERAL CONTRACT ADMINISTRATION PROVISIONS)
                                 October 1, 2004
                                       2-8

<PAGE>

3.    COMPENSATION

      3.1   Capitation Payments

            Compensation to the Contractor shall consist of a monthly capitation
            payment for each Enrollee and the Supplemental Capitation Payments
            as described in Sections 3.1(c) and 3.1(d), where applicable.

            a)    In no event shall monthly capitation payments to the
                  Contractor for the Benefit Package exceed the cost of
                  providing the Benefit Package on a fee-for-service basis to an
                  actuarially equivalent, non-enrolled population group Upper
                  Payment Limit (UPL) as determined by SDOH.

            b)    The monthly Capitation Rates are attached hereto as Appendix L
                  and shall be deemed incorporated into this Agreement without
                  further action by the parties.

            c)    The monthly capitation payments and the Supplemental Newborn
                  Capitation Payment and the Supplemental Maternity Capitation
                  Payment to the Contractor shall constitute full and complete
                  payments to the Contractor for all services that the
                  Contractor provides pursuant to this Agreement subject to
                  stop-loss provisions set forth in Section 3.11 and 3.12 of
                  this Agreement.

            d)    Capitation Rates shall be effective for the entire contract
                  period, except as described in Section 3.2.

      3.2   Modification of Rates During Contract Period

            a)    Any technical modification to Capitation Rates during the term
                  of the Agreement as agreed to by the Contractor, including but
                  not limited to, changes in reinsurance or the Benefit Package,
                  shall be deemed incorporated into this Agreement without
                  further action by the parties, upon approval by SDOH, and upon
                  written notice by SDOH to the LDSS.

            b)    Any other modification to Capitation Rates, as agreed to by
                  SDOH and the Contractor, during the term of the Agreement
                  shall be deemed incorporated into this Agreement without
                  further action by the parties upon approval of such
                  modifications by the SDOH and the State Division of the
                  Budget, and upon written notice by SDOH to the LDSS.

            c)    In the event that SDOH and the Contractor fail to reach
                  agreement on modifications to the monthly Capitation Rates,
                  the SDOH will provide formal written notice to the Contractor
                  and LDSS of the amount and effective date of the modified
                  Capitation Rates approved by the State Division of the Budget.
                  The Contractor shall have the option of terminating this
                  Agreement if such

                                    SECTION 3
                                 (COMPENSATION)
                                 October 1, 2004
                                       3-1

<PAGE>

                  approved modified Capitation Rates are not acceptable. In such
                  case, the Contractor shall give written notice to the SDOH and
                  the LDSS within thirty (30) days of the date of the formal
                  written notice of the modified Capitation Rates from SDOH
                  specifying the reasons for and effective date of termination.
                  The effective date of termination shall be ninety (90) days
                  from the date of the Contractor's written notice, unless the
                  SDOH determines that an orderly disenrollment to Medicaid
                  fee-for-service or transfer to another MCO can be accomplished
                  in fewer days. During the period commencing with the effective
                  date of the SDOH modified Capitation Rates through the
                  effective date of termination of the Agreement, the Contractor
                  shall have the option of continuing to receive capitation
                  payments at the expired Capitation Rates or at the modified
                  Capitation Rates approved by SDOH and State Division of the
                  Budget for the rate period.

                  If the Contractor fails to exercise its right to terminate in
                  accordance with this Section, then the modified Capitation
                  Rates approved by SDOH and the State Division of the Budget
                  shall be deemed incorporated into this Agreement without
                  further action by the parties as of the effective date of the
                  modified Capitation Rates as established by SDOH and approved
                  by State Division of the Budget.

      3.3   Rate Setting Methodology

            Capitation Rates are determined using a prospective methodology
            whereby cost, utilization and other rate-setting data available for
            the time period prior to the time period covered by the rates are
            used to establish premiums. Capitation rates will not be
            retroactively adjusted to reflect actual fee-for-service data or
            plan experience for the time period covered by the rates.

      3.4   Payment of Capitation

            a)    The monthly capitation payments for each Enrollee are due to
                  the Contractor from the Effective Date of Enrollment until the
                  Effective Date of Disenrollment of the Enrollee or termination
                  of this Agreement, whichever occurs first. The Contractor
                  shall receive a full month's capitation payment for the month
                  in which disenrollment occurs. The Roster generated by SDOH
                  with any modification communicated electronically or in
                  writing by the LDSS or the Enrollment Broker prior to the end
                  of the month in which the Roster is generated, shall be the
                  enrollment list for purposes of MMIS premium billing and
                  payment, as discussed in Section 6.9 and Appendix H.

            b)    Upon receipt by the Fiscal Agent of a properly completed claim
                  for monthly capitation payments submitted by the Contractor
                  pursuant to this Agreement, the Fiscal Agent will promptly
                  process such claim for payment through MMIS and use its best
                  efforts to complete such processing within thirty (30)
                  business days from date of receipt of the claim by the Fiscal
                  Agent. Processing of

                                    SECTION 3
                                 (COMPENSATION)
                                 October 1, 2004
                                       3-2

<PAGE>

                  Contractor claims shall be in compliance with the requirements
                  of 42 CFR 447.45. The Fiscal Agent will also use its best
                  efforts to resolve any billing problem relating to the
                  Contractor's claims as soon as possible. In accordance with
                  Section 41 of the State Finance Law, the State and LDSS shall
                  have no liability under this Agreement to the Contractor or
                  anyone else beyond funds appropriated and available for
                  payment of Medical Assistance care, services and supplies.

      3.5   Denial of Capitation Payments

            If the Centers for Medicare and Medicaid Services denies payment for
            new Enrollees, as authorized by Social Security Act (SSA) Section
            1903(m)(5) and 42 CFR Section 434.67, or such other applicable
            federal statutes or regulations, based upon a determination that
            Contractor failed substantially to provide medically necessary items
            and services, imposed premium amounts or charges in excess of
            permitted payments, engaged in discriminatory practices as described
            in SSA Section 1932(e)(l)(A)(iii), misrepresented or falsified
            information submitted to CMS, SDOH, LDSS, the Enrollment Broker, or
            an Enrollee, potential Enrollee, or health care provider, or failed
            to comply with federal requirements (i.e. 42 CFR Section 417.479 and
            42 CFR Section 434.70) relating to the Physician Incentive Plans,
            SDOH and LDSS will deny capitation payments to the Contractor for
            the same Enrollees for the period of time for which CMS denies such
            payment.

      3.6   SDOH Right to Recover Premiums

            The parties acknowledge and accept that the SDOH has a right to
            recover premiums paid to the Contractor for Enrollees listed on the
            monthly Roster who are later determined for the entire applicable
            payment month, to have been in an institution; to have been
            incarcerated; to have moved out of the Contractor's service area
            subject to any time remaining in the Enrollee's Guaranteed
            Eligibility period; or to have died. In any event, the State may
            only recover premiums paid for Medicaid Enrollees listed on a Roster
            if it is determined by the SDOH that the Contractor was not at risk
            for provision of Benefit Package services for any portion of the
            payment period.

      3.7   Third Party Health Insurance Determination

            The Contractor and the LDSS will make diligent efforts to determine
            whether Enrollees have third party health insurance (TPHI). The LDSS
            shall use its best efforts to maintain third party information on
            the WMS/MMIS Third Party Resource System. The Contractor shall make
            good faith efforts to coordinate benefits with and collect TPHI
            recoveries from other insurers, and must inform the LDSS of any
            known changes in status of TPHI insurance eligibility within thirty
            (30) days of learning of a change in TPHI. The Contractor may use
            the Roster as one method to determine TPHI information. The
            Contractor will be permitted to retain 100 percent of any
            reimbursement for Benefit Package services obtained

                                    SECTION 3
                                 (COMPENSATION)
                                 October 1, 2004
                                       3-3

<PAGE>

            from TPHI. Capitation Rates are net of TPHI recoveries. In no
            instances may an Enrollee be held responsible for disputes over
            these recoveries.

      3.8   Payment For Newborns

            a)    The Contractor shall be responsible for all costs and services
                  included in the Benefit Package associated with the Enrollee's
                  newborn, unless the child is excluded from Medicaid Managed
                  Care.

            b)    The Contractor shall receive a capitation payment from the
                  first day of the newborn's month of birth and, in instances
                  where the plan pays the hospital or birthing center for the
                  newborn stay, a Supplemental Newborn Capitation Payment.

            c)    Capitation Rate and Supplemental Newborn Capitation Payment
                  for a newborn will begin the month following certification of
                  the newborn's eligibility and enrollment, retroactive to the
                  first day of the month in which the child was born.

            d)    The Contractor cannot bill for a Supplemental Newborn
                  Capitation Payment unless the newborn hospital or birthing
                  center payment has been paid by the Contractor. The Contractor
                  must maintain on file evidence of payment to the hospital or
                  birthing center of the claim for the newborn stay. Failure to
                  have supporting records may, upon an audit, result in
                  recoupment of the Supplemental Newborn Capitation Payment by
                  SDOH.

      3.9   Supplemental Maternity Capitation Payment

            a)    The Contractor shall be responsible for all costs and services
                  included in the Benefit Package associated with the maternity
                  care of an Enrollee.

            b)    In instances where the Enrollee is enrolled in the
                  Contractor's plan on the date of the delivery of a child, the
                  Contractor shall be entitled to receive a Supplemental
                  Maternity Capitation Payment. The Supplemental Maternity
                  Capitation Payment reimburses the Contractor for the inpatient
                  and outpatient costs of services normally provided as part of
                  maternity care including antepartum care, delivery and
                  post-partum care. The Supplemental Maternity Capitation
                  Payment is in addition to the monthly Capitation Rate paid by
                  the SDOH to the Contractor for the Enrollee.

            c)    In instances where the Enrollee was enrolled in the
                  Contractor's plan for only part of the pregnancy, but was
                  enrolled on the date of the delivery of the child, the plan
                  shall be entitled to receive the entire Supplemental Maternity
                  Capitation Payment. The Supplemental Capitation payment shall
                  not be pro-rated to reflect that the Enrollee was not a member
                  of the Contractor's plan for the entire duration of the
                  pregnancy.

                                    SECTION 3
                                 (COMPENSATION)
                                 October 1, 2004
                                       3-4

<PAGE>

            d)    In instances where the Enrollee was enrolled in the
                  Contractor's plan for part of the pregnancy, but was not
                  enrolled on the date of the delivery of the child, the
                  Contractor shall not be entitled to receive the Supplemental
                  Maternity Capitation Payment, or any portion thereof.

            e)    Costs of inpatient and outpatient care associated with
                  maternity cases that end in termination or miscarriage shall
                  be reimbursed to the Contractor through the monthly Capitation
                  Rate for the Enrollee and the Contractor shall not receive the
                  Supplemental Maternity Capitation Payment.

            f)    The Contractor may not bill a Supplemental Maternity
                  Capitation Payment until the hospital inpatient or birthing
                  center delivery is paid by the Contractor, and the Contractor
                  must maintain on file evidence of payment of the delivery,
                  plus any other inpatient and outpatient services for the
                  maternity care of the Enrollee to be eligible to receive a
                  Supplemental Maternity Capitation Payment. Failure to have
                  supporting records may, upon audit, result in recoupment of
                  the Supplemental Maternity Capitation Payment by the SDOH.

      3.10  Contractor Financial Liability

            Contractor shall not be financially liable for any services rendered
            to an Enrollee prior to his or her Effective Date of Enrollment in
            the Contractor's plan.

      3.11  Inpatient Hospital Stop-Loss Insurance

            The Contractor must obtain stop-loss coverage for inpatient hospital
            services. A Contractor may elect to purchase stop-loss coverage from
            New York State. In such cases, the Capitation Rates paid to the
            Contractor shall be adjusted to reflect the cost of such stop-loss
            coverage. The cost of such coverage shall be determined by SDOH.

            Under NYS stop-loss coverage, if the hospital inpatient expenses
            incurred by the Contractor for an individual Enrollee during any
            calendar year reaches $50,000, the Contractor shall be compensated
            for 80% of the cost of hospital inpatient services in excess of this
            amount up to a maximum of $250,000. Above that amount, the
            Contractor will be compensated for 100% of cost. All compensation
            shall be based on the lower of the Contractor's negotiated hospital
            rate or Medicaid rates of payment.

            [ ] The Contractor has elected to have NYS provide stop-loss
            reinsurance.

            OR

            [X] Contractor has not elected to have NYS provide stop-loss
            reinsurance.

                                    SECTION 3
                                 (COMPENSATION)
                                 October 1, 2004
                                       3-5

<PAGE>

      3.12  Mental Health and Chemical Dependence Stop-Loss

            a)    The Contractor will be compensated for medically necessary and
                  clinically appropriate Medicaid reimbursable mental health
                  treatment outpatient visits in excess of twenty (20) visits
                  during any calendar year at rates set forth in contracted fee
                  schedules. Any Court Ordered Services for mental health
                  treatment outpatient visits which specify the use of Non-
                  Participating Providers shall be compensated at the Medicaid
                  rate of payment.

            b)    The Contractor will be compensated for medically necessary and
                  clinically appropriate inpatient mental health services and/or
                  Chemical Dependence Inpatient Rehabilitation and Treatment
                  Services as defined in Appendix K in excess of a combined
                  total of thirty (30) days during a calendar year at the lower
                  of the Contractor's negotiated inpatient rate or Medicaid rate
                  of payment.

            c)    Detoxification Services in Article 28 inpatient hospital
                  facilities are subject to the stop-loss provisions specified
                  in Section 3.11 of this Agreement.

      3.13  Enrollment Limitations

            a)    The Contractor may enroll up to the county specific provider
                  network capacity limits determined by SDOH, provided that the
                  Contractor's statewide enrollment does not exceed the MCO's
                  financial capacity as determined annually by SDOH, or more
                  frequently as deemed necessary by SDOH.

            b)    LDSS shall have the right, upon consultation with and notice
                  to the SDOH, to limit, suspend, or terminate enrollment
                  activities by the Contractor and/or enrollment into the
                  Contractor's plan upon ten (10) days written notice to the
                  Contractor. The written notice shall specify the actions
                  contemplated and the reason(s) for such action(s) and shall
                  provide the Contractor with an opportunity to submit
                  additional information that would support the conclusion that
                  limitation, suspension or termination of enrollment activities
                  or enrollment in the Contractor's plan is unnecessary. Nothing
                  in this paragraph limits other remedies available to the LDSS
                  under this Agreement.

            c)    The SDOH shall have the right, upon notice to the LDSS, to
                  limit, suspend or terminate enrollment activities by the
                  Contractor and/or enrollment into the Contractor's plan upon
                  ten (10) days written notice to the Contractor. The written
                  notice shall specify the action(s) contemplated and the

                                    SECTION 3
                                 (COMPENSATION)
                                 October 1, 2004
                                       3-6

<PAGE>

                  reason(s) for such action(s) and shall provide the Contractor
                  with an opportunity to submit additional information that
                  would support the conclusion that limitation, suspension or
                  termination of enrollment activities or enrollment in the
                  Contractor's plan is unnecessary. Nothing in this paragraph
                  limits other remedies available to the SDOH or the LDSS under
                  this Agreement.

      3.14  Tracking Visits Provided by Indian Health Clinics

            The SDOH shall monitor all visits provided by tribal or Indian
            health clinics or urban Indian health facilities or centers to
            enrolled Native Americans, so that the SDOH can reconcile payment
            made for those services, should it be deemed necessary to do so.

                                    SECTION 3
                                 (COMPENSATION)
                                 October 1, 2004
                                       3-7

<PAGE>

4.    SERVICE AREA

      The Service Area described in Appendix M of this Agreement, which is
      hereby made a part of this Agreement as if set forth fully herein, is the
      specific geographic area within which Eligible Persons must reside to
      enroll in the Contractor's plan.

                                    SECTION 4
                                 (SERVICE AREA)
                                 October 1, 2004
                                       4-1
<PAGE>
5.    ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS

      5.1   Eligible Populations

            a)    Except as specified in Section 5.1(b) and 5.3 below, all
                  persons in the following Medicaid-eligible beneficiary
                  categories who reside in the service area shall be eligible
                  for enrollment in the Contractor's plan:

                  i)    Singles/Childless Couples - Cash and Medicaid only

                  ii)   Low Income Families with Children - Cash and Medicaid
                        only

                  iii)  Aid to Families with Dependent Children - Medicaid only

                  iv)   Pregnant women whose net available income is at or below
                        two hundred percent (200%) of the federal poverty level
                        for the applicable household size.

                  v)    Children aged one (1) year or below whose family's net
                        available income is at or below two hundred percent
                        (200%) of the federal poverty level for the applicable
                        household size.

                  vi)   Children between ages one (1) and five (5), whose
                        family's net available income is at or below one hundred
                        and thirty-three percent (133%) of the federal poverty
                        level for the applicable household size.

                  vii)  Children age six (6) up to age nineteen (19), whose
                        family's net available income is at or below one hundred
                        and thirty-three percent (133%) of the federal poverty
                        level for the applicable household size.

                  viii) Transitional Medical Assistance Beneficiaries

                  ix)   Supplemental Security Income (cash) and Supplemental
                        Security Income Related (Medicaid only).

            b)    Medicaid eligible individuals in the following categories may
                  be eligible for enrollment in the Contractor's plan at the
                  LDSS' option, as indicated by an X below.

                  i)    Foster care children in the direct care of LDSS.

                        _______  Mandatory county - children in LDSS direct care
                                 are mandatorily enrolled.

                           X     Mandatory OR voluntary county - children in
                                 LDSS direct care are enrolled on a case-by-case
                                 basis.

                        _______  Mandatory OR voluntary county - all foster care
                                 children are excluded from managed care.

                                    SECTION 5
                   (ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS)
                                October 1, 2004
                                       5-1

<PAGE>

                  ii)   Homeless persons living in shelters outside of New York
                        City may be eligible for enrollment if so determined by
                        the LDSS.

                        _______  Mandatory county - homeless persons are
                                 mandatorily enrolled.

                           X     Mandatory OR voluntary county - homeless
                                 persons are enrolled on a case-by-case basis.

                        _______  Mandatory OR voluntary county - all homeless
                                 persons are excluded from managed care.

5.2   Exempt Populations

      The following populations are exempt from mandatory enrollment in Medicaid
      managed care, but may enroll on a voluntary basis, if otherwise eligible.

      a)    Individuals who are HIV+ or have AIDS.

      b)    Individuals who are Seriously and Persistently Mentally III or
            Seriously Emotionally Disturbed.

      c)    Individuals for whom a Managed Care Provider is not geographically
            accessible so as to reasonably provide services. To qualify for this
            exemption, an individual must demonstrate that no participating MCO
            has a provider located within thirty (30) minutes travel time/thirty
            (30) miles travel distance from the individual's home, who is
            accepting new patients, and that there is a fee-for-service Medicaid
            provider available within the thirty (30) minutes travel time/thirty
            (30) miles travel distance.

      d)    Pregnant women who are already receiving prenatal care from a
            provider authorized to provide such care not participating in any
            Medicaid managed care plan. This status will last through a woman's
            pregnancy, extend through the sixty (60) day post-partum period and
            end at the end of the month in which the sixtieth (60th) day occurs.

      e)    Individuals with a chronic medical condition who, for at least six
            (6) months, have been under active treatment with a
            non-participating sub-specialist physician who is not a network
            provider for any MCO participating in the Medicaid managed care
            program service area. This status will last as long as the
            individual's chronic medical condition exists or until the physician
            joins a participating MCO's network. The SDOH's Office of Managed
            Care, Medical Director will, upon the request of an individual or
            his/her guardian or legally authorized representative (health care
            agent authorized through a health care proxy), review cases of
            individuals with unusually severe chronic care needs for a possible
            exemption from mandatory enrollment in managed care if such
            individuals are not otherwise eligible for an exemption (i.e., meet
            one of the seventeen (17) criteria listed here). The SDOH's OMC
            Medical Director may also authorize a plan disenrollment for such
            individuals. Disenrollment requests

                                    SECTION 5
                   (ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS)
                                 October 1, 2004
                                       5-2

<PAGE>

            should be made in a manner consistent with the overall disenrollment
            request process for "good cause" disenrollment.

      f)    Individuals with End Stage Renal Disease (ESRD).

      g)    Individuals who are residents of Intermediate Care Facilities for
            the Mentally Retarded ("ICF/MR").

      h)    Individuals with characteristics and needs similar to those who are
            residents of ICF/MRs based on criteria cooperatively established
            by the State Office of Mental Retardation and Developmental
            Disabilities (OMRDD) and the SDOH.

      i)    Individuals already scheduled for a major surgical procedure (within
            thirty (30) days of scheduled enrollment) with a provider who is not
            a participant in the network of a Medicaid MCO under contract with
            the LDSS. This exemption will only apply until such time as the
            individual's course of treatment is complete.

      j)    Individuals with a developmental or physical disability who receive
            services through a Medicaid Home-and-Community-Based Services Waiver
            or Medicaid Model Waiver (care-at-home) through a Section 1915c
            waiver, or individuals having characteristics and need similar to
            such individuals (including individuals on the waiting list), based
            on criteria cooperatively established by OMRDD and SDOH.

      k)    Individuals who are residents of Alcohol and Substance Abuse or
            Chemical Dependence Long Term Residential Treatment Programs.

      1)    In New York City, all homeless individuals are exempt. In areas
            outside of NYC, exemption of homeless individuals residing in the
            shelter system is at the discretion of the local district. - See
            Section 5.1 (b).

      m)    Native Americans

      n)    Individuals who cannot be served by a managed care provider due to a
            language barrier which exists when the individual is not capable of
            effectively communicating his or her medical needs in English or in
            a secondary language for which PCPs are available within the
            Medicaid managed care program. Individuals with a language barrier
            will be deemed able to be served if they have a choice, within time
            and distance standards, of three (3) PCPs who are able to
            communicate in the primary language of the eligible individual or
            who have a person on his/her staff capable of translating medical
            terminology. Individuals will be eligible for an exemption when:

            i)    The individual has a relationship with a Medicaid
                  fee-for-service Primary Care Provider who:

                  A)    has the language capability to serve the individual;

                                    SECTION 5
                   (ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS)
                                 October 1, 2004
                                       5-3

<PAGE>

                  B)    does not participate in any of the Medicaid managed care
                        plans contracted for a service area which includes the
                        individual's residence;

                  C)    is located within a thirty (30) minute/thirty (30) mile
                        radius of the eligible individual's residence;

                                             AND

                  D)    there are fewer than three (3) participating PCPs
                        available within the thirty (30) minute/thirty (30) mile
                        radius who are able to communicate in the primary
                        language of the eligible individual or who have a person
                        on his/her staff capable of translating medical
                        terminology.

                                             OR

            ii)   The individual has a relationship with a Medicaid
                  fee-for-service Primary Care Provider who:

                  A)    has the language capability to service the individual;

                  B)    does not participate in any of the Medicaid managed care
                        plans contracted for a service area which includes the
                        individual's residence;

                  C)    is located outside a thirty (30) minute/thirty (30) mile
                        radius of the eligible individual's residence;

                                             AND

                  D)    there are fewer than three (3) participating PCPs
                        available within or outside the thirty (30)
                        minute/thirty (30) mile radius who are able to
                        communicate in the primary language of the eligible
                        individual or who have a person on his/her staff capable
                        of translating medical terminology.

      o)    Individuals temporarily residing out of district, (e.g., college
            students) will be exempt until the last day of the month in which
            the purpose of the absence is accomplished. The definition of
            temporary absence is set forth in Social Services regulations 18
            NYCRR Section 360-1.4(p).

      p)    SSI and SSI-related beneficiaries are considered exempt and may
            enroll on a voluntary basis.

      q)    Individuals with a "County of Fiscal Responsibility" code of 98
            (OMRDD in MMIS) are exempt in counties where program features are
            approved by the State and operational at the local district level to
            permit these individuals to voluntarily enroll in Medicaid managed
            care.

            [ ]   State-approved program features are in place and operational
                  at the local district level to permit individuals with a
                  "County of Fiscal Responsibility" code of 98 to voluntarily
                  enroll in Medicaid managed care.

            OR

            [ ]   State-approved program features are not in place and
                  operational at the local district level, therefore individuals
                  with a "County of Fiscal Responsibility" code of 98 are
                  excluded from enrollment in Medicaid managed care.

                                    SECTION 5
                   (ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS)
                                 October 1, 2004
                                       5-4

<PAGE>

      r)    Individuals who are eligible for Medical Assistance pursuant to the
            "Medicaid buy-in for the working disabled" (subparagraphs twelve or
            thirteen of paragraph (a) of subdivision one of Section 366 of the
            Social Services Law), and who, pursuant to subdivision 12 of Section
            367-a of the Social Services Law, are not required to pay a premium.

5.3   Excluded Populations

      The following populations are ineligible for enrollment in Medicaid
      managed care.

      a)    Individuals who are Dually Eligible for Medicare/Medicaid.

      b)    Individuals who become eligible for Medicaid only after spending
            down a portion of their income (Spend-down).

      c)    Individuals who are residents of State-operated psychiatric
            facilities or residents of State-certified or voluntary treatment
            facilities for children and youth.

      d)    Individuals who are residents of Residential Health Care Facilities
            ("RHCF") at the time of Enrollment, and Enrollees whose stay in a
            RHCF is classified as permanent upon entry into the RHCF or is
            classified as permanent at a time subsequent to entry.

      e)    Individuals enrolled in managed long term care demonstrations
            authorized under Article 4403-f of the New York State PHL.

      f)    Medicaid-eligible infants living with incarcerated mothers.

      g)    Infants weighing less than 1200 grams at birth and other infants
            under six (6) months of age who meet the criteria for the SSI or SSI
            related category (shall not be enrolled or shall be disenrolled
            retroactive to date of birth).

      h)    Individuals with access to comprehensive private health care
            coverage including those already enrolled in an MCD. Such health
            care coverage, purchased either partially or in full, by or on
            behalf of the individual, must be determined to be cost effective by
            the local social services district.

      i)    Foster children in the placement of a voluntary agency.

      j)    Certified blind or disabled children living or expected to be living
            separate and apart from the parent for thirty (30) days or more.

      k)    Individuals expected to be eligible for Medicaid for less than six
            (6) months, except for pregnant women (e.g., seasonal agricultural
            workers).

                                    SECTION 5
                   (ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS)
                                 October 1, 2004
                                       5-5

<PAGE>

      1)    Foster children in direct care (unless LDSS opts to enroll them see
            Section 5.1(b)).

      m)    Youths in the care and custody of the Commissioner of the NYS Office
            of Children and Family Services.

      n)    Individuals in receipt of long-term care services through Long Term
            Home Health Care programs, or Child Care Facilities (except 1CF
            services for the Developmentally Disabled).

      o)    Individuals eligible for Medical assistance benefits only with
            respect to TB related services.

      p)    Individuals placed in State Office of Mental Health licensed family
            care homes pursuant to NYS Mental Hygiene Law, Section 31.03.

      q)    Individuals enrolled in the Restricted Recipient Program.

      r)    Individuals with a "County of Fiscal Responsibility" code of 99.

      s)    Individuals admitted to a Hospice program prior to time of
            enrollment (if an Enrollee enters a Hospice program while enrolled
            in the Contractor's plan, he/she may remain enrolled in the
            Contractor's plan to maintain continuity of care with his/her PCP).
            Hospice services are accessed through the fee-for-service Medicaid
            Program.

      t)    Individuals with a "County of Fiscal Responsibility" code of 97 (OMH
            in MMIS).

      u)    Individuals with a "County of Fiscal Responsibility" code of 98
            (OMRDD in MMIS) will be excluded until program features are approved
            by the State and operational at the local district level to permit
            these individuals to voluntarily enroll in Medicaid managed can.

      v)    Individuals receiving family planning services pursuant to Section
            366(l)(a)(ll) of the Social Services Law who are not otherwise
            eligible for medical assistance and whose net available income is
            200% or less of the federal poverty level.

      w)    Individuals who are eligible for Medical Assistance pursuant to the
            "Medicaid buy-in for the working disabled" (subparagraphs twelve or
            thirteen of paragraph (a) of subdivision one of Section 366 of the
            Social Services Law), and who, pursuant to subdivision 12 of Section
            367-a of the Social Services Law, are required to pay a premium.

      x)    Individuals who are eligible for Medical Assistance pursuant to
            paragraph (v) of subdivision four of Section 366 of the Social
            Services Law (persons who are under 65 years of age, have been
            screened for breast and/or cervical cancer under

                                    SECTION 5
                   (ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS)
                                 October 1, 2004
                                       5-6

<PAGE>

            the Centers for Disease Control and Prevention Breast and Cervical
            Cancer Early Detection Program and need treatment for breast or
            cervical cancer, and are not otherwise covered under creditable
            coverage as defined in the Federal Public Health Service Act).

      5.4   Family Health Plus

            Individuals eligible for Medicaid (Family Health Plus) pursuant to
            Title 11-D of the Social Services Law are not eligible for
            enrollment in Medicaid managed care under this Agreement.

      5.5   Family Enrollment

            In local social service districts where enrollment in managed care
            is mandatory, the Contractor agrees that members of the same family
            (defined as mother and her child(ren), father and his child(ren), a
            husband, wife and child(ren) or a husband and wife residing in the
            same household, or persons included in the same case) will be
            required to enroll in the same health plan, in accordance with
            Section 6.6 of this Agreement.

                                    SECTION 5
                   (ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS)
                                 October 1, 2004
                                       5-7

<PAGE>

6.    ENROLLMENT

      6.1   Enrollment Guidelines

            a)    The LDSS may employ a variety of methods and programs for
                  enrollment of Eligible Persons including, but not limited to
                  enrollment assisted by the Contractor, enrollment assisted by
                  an Enrollment Broker, enrollment by LDSS, or a combination of
                  such. The policies and procedural guidelines which will be
                  used for enrollment are set forth in Appendix H, which is
                  hereby made a part of this Agreement as if set forth fully
                  herein.

            b)    The LDSS and the Contractor agree to conduct enrollment of
                  eligible individuals in accordance with the guidelines set
                  forth in Appendix H.

            c)    The SDOH and LDSS, upon mutual agreement, may make
                  modifications to the guidelines set forth in Appendix H. The
                  parties further acknowledge that such modifications shall be
                  effective and made a part of this Agreement without further
                  action by the parties upon sixty (60) days written notice to
                  the LDSS and the Contractor.

      6.2   Equality of Access to Enrollment

            Eligible Person's shall be enrolled in the Contractor's plan, in
            accordance with the requirements set forth in Appendix H, Section A.
            In those instances in which the Contractor is directly involved in
            enrolling eligible recipients, the Contractor shall accept
            enrollments in the order they are received without regard to the
            Eligible Person's age, sex, race, creed, physical or mental
            handicap/developmental disability, national origin, sexual
            orientation, type of illness or condition, need for health services
            or to the Capitation Rate that the Contractor will receive for such
            Eligible Person.

      6.3   Enrollment Decisions

            An Eligible Person's decision to enroll in the Contractor's plan
            shall be voluntary except as otherwise provided in Section 6.4 of
            the Agreement.

      6.4   Auto Assignment

            An Eligible Person whose enrollment in a MCO is mandatory and who
            fails to select a MCO within sixty (60) days of receipt of notice of
            mandatory enrollment may be assigned by the LDSS to the Contractor's
            plan pursuant to NYS Social Services Law Section 364-j and in
            accordance with Appendix H.

                                    SECTION 6
                                  (ENROLLMENT)
                                 October 1, 2004
                                       6-1

<PAGE>

      6.5   Prohibition Against Conditions on Enrollment

            Unless otherwise required by law or this Agreement, neither the
            Contractor nor LDSS shall condition any Eligible Person's enrollment
            upon the performance of any act or suggest in any way that failure
            to enroll may result in a loss of Medicaid benefits.

      6.6   Family Enrollment

            a)    In local social service districts where enrollment in managed
                  care is mandatory, all eligible members of the Eligible
                  Person's Family shall be enrolled into the same plan.

            b)    In local social service districts where enrollment in managed
                  care is mandatory, the LDSS must inform Enrollees who have
                  Family members enrolled in other MCOs that if anyone in the
                  Family wishes to change plans, all members of the Family must
                  enroll together in the newly-selected plan. The LDSS shall
                  also notify the Enrollee that all members of the Family will
                  be required to enroll together in a single MCO at the time of
                  their next recertification for Medicaid eligibility unless
                  waiver of this requirement is approved by the LDSS.

            c)    Notwithstanding the foregoing,

                  i)    the LDSS may, on a case-by-case basis, waive the same
                        family rule specified in Sections 6.6 (a) and (b) to
                        preserve continuity of care:

                        1)    if one or more members of the Family are
                              receiving prenatal care and/or continuing care for
                              a complex chronic medical condition from
                              Non-Participating Providers; or

                        2)    if one or more members of the Family transition
                              from one government-sponsored insurance program to
                              another.

                  ii)   the LDSS must allow HIV SNP-eligible individuals within
                        a family to enroll in an HIV SNP, in Service Areas in
                        which an HIV SNP exists.

      6.7   Newborn Enrollment

            a)    All newborn children not in an excluded category shall be
                  enrolled in the MCO of the mother, effective from the first
                  day of the child's month of birth.

                                    SECTION 6
                                  (ENROLLMENT)
                                 October 1, 2004
                                       6-2

<PAGE>

            b)    In addition to the responsibilities set forth in Appendix H,
                  the Contractor is responsible for doing all of the following
                  with respect to newborns:

                  i)    Coordinating with the LDSS the efforts to ensure that
                        all newborns are enrolled in the managed care plan;

                  ii)   Issuing a letter informing parent(s) about newborn
                        child's enrollment or a member identification card
                        within 14 days of the date on which the Contractor
                        becomes aware of the birth;

                  iii)  Assuring that enrolled pregnant women select a PCP for
                        an infant prior to birth and the mother to make an
                        appointment with the PCP immediately upon birth; and

                  iv)   Ensuring that the newborn is linked with a PCP prior to
                        discharge from the hospital, in those instances in which
                        the Contractor has received appropriate notification of
                        the birth prior to discharge.

            c)    The LDSS shall be responsible for ensuring that timely
                  Medicaid Eligibility determination and enrollment of the
                  newborns is effected consistent with state laws, regulations,
                  and policy and with the newborn enrollment guidelines set
                  forth in Appendix H, Section B of this Agreement.

      6.8   Effective Date of Enrollment

            a)    The Contractor and the LDSS must notify the Enrollee of the
                  expected Effective Date of Enrollment. This may be
                  accomplished through a "Welcome Letter". To the extent
                  practicable, such notification must precede the Effective Date
                  of Enrollment. In the event that the actual Effective Date of
                  Enrollment changes, the Contractor and the LDSS must notify
                  the Enrollee of the change.

            b)    As of the Effective Date of Enrollment, and until the
                  Effective Date of Disenrollment from the Contractor's plan,
                  the Contractor shall be responsible for the provision and cost
                  of all care and services covered by the Benefit Package and
                  provided to Enrollees whose names appear on the Prepaid
                  Capitation Plan Roster, except as hereinafter provided.

                  i)    Contractor shall not be liable for the cost of any
                        services rendered to an Enrollee prior to his or her
                        Effective Date of Enrollment.

                  ii)   Contractor shall not be liable for any part of the cost
                        of a hospital stay for an Enrollee who is admitted to
                        the hospital prior to the Effective Date of Enrollment
                        in the Contractor's plan and who remains hospitalized on
                        the Effective Date of Enrollment; except when the
                        Enrollee, on or after the Effective Date of Enrollment,
                        1) is transferred from one hospital to another; or 2) is
                        discharged from one unit in the hospital to another unit
                        in the same facility and under Medicaid fee for service
                        payment rules the method of payment changes from: a) DRG

                                    SECTION 6
                                  (ENROLLMENT)
                                 October 1, 2004
                                       6-3

<PAGE>

                        case-based rate of payment per discharge to a per diem
                        rate of payment exempt from DRG case-based payment
                        rates, or b) from a per diem payment rate exempt from
                        DRG case-based payment rates either to another per diem
                        rate, or a DRG case-based payment rate. In such
                        instances, the Contractor shall be liable for the cost
                        of the consecutive stay.

                  iii)  Except for newborns, an Enrollee's Effective Date of
                        Enrollment shall be the first day of the month on which
                        the Enrollee's name appears on the PCP roster for that
                        month.

      6.9   Roster

            a)    The first and second monthly Rosters generated by SDOH in
                  combination shall serve as the official Contractor enrollment
                  list for purposes of MMIS premium billing and payment, subject
                  to ongoing eligibility of the Enrollees as of the first (1st)
                  day of the enrollment month. Modifications to the first (1st)
                  Roster may be made electronically or in writing by the LDSS or
                  the Enrollment Broke prior to the end of the month in which
                  the Roster is generated.

            b)    The LDSS shall make data on eligibility determinations
                  available to the Contractor and SDOH to resolve discrepancies
                  that may arise between the Roster and the Contractor's
                  enrollment files in accordance with the provisions in Appendix
                  H, Section D.

            c)    If LDSS or Enrollment Broker notifies the Contractor in
                  writing or electronically of changes in the first (1st) Roster
                  and provides supporting information as necessary prior to the
                  effective date of the Roster, the Contractor will accept that
                  notification in the same manner as the Roster.

            d)    All Contractors must have the ability to receive these Rosters
                  electronically.

      6.10  Automatic Re-Enrollment

            The Contractor agrees that Eligible Persons who are disenrolled from
            the Contractor's plan due to loss of Medicaid eligibility and who
            regain eligibility within three (3) months will automatically be
            prospectively re-enrolled with the Contractor's plan, subject to
            availability of enrollment capacity in the plan.

                                    SECTION 6
                                  (ENROLLMENT)
                                 October 1, 2004
                                       6-4

<PAGE>

7.    LOCK-IN PROVISIONS

      7.1   Lock-In Provisions in Voluntary Counties

            All Enrollees in local social service districts where enrollment in
            managed care is voluntary shall be subject to a Lock-In Period under
            this Agreement if so required by the LDSS as indicated by an x
            below:

            [ ]   Enrollees are subject to a twelve (12) month Lock-In Period
                  following the Effective Date of Enrollment in the Contractor's
                  plan with an initial ninety (90) day grace period to disenroll
                  from the Contractor's plan without cause.

            [ ]   Enrollees are not subject to a Lock-In Period.

      7.2   Lock-In Provisions in Mandatory Counties and New York City

            All Enrollees in local social service districts where enrollment in
            managed care is mandatory and in New York City are subject to a
            twelve (12) month Lock-In period following the Effective Date of
            Enrollment in the Contractor's plan, with an initial ninety (90) day
            grace period in which to disenroll from the Contractor's plan
            without cause, regardless of whether the Enrollee selected or was
            auto-assigned to the Contractor's plan.

      7.3   Disenrollment During Lock-In Period

            An Enrollee, subject to Lock-In may disenroll from the Contractor's
            plan during the Lock-In period for "good cause" as established in 18
            NYCRR Subpart 360-10 or, if the Enrollee becomes eligible for an
            exemption or exclusion from Medicaid managed care as set forth in
            Sections 5.2 and 5.3 of this Agreement.

      7.4   Notification Regarding Lock-In and End of Lock-In Period

            LDSS, either directly or through the Enrollment Broker, shall notify
            Enrollees of their right to change MCOs in the enrollment
            confirmation notice sent to individuals after they have selected a
            MCO or been auto-assigned (the latter being applicable to areas
            where the mandatory program is in effect). LDSS and the Enrollment
            Broker will be responsible for providing a notice of end of Lock-In
            and the right to change MCOs at least sixty (60) days prior to the
            first plan enrollment anniversary date.

                                    SECTION 7
                              (LOCK-IN PROVISIONS)
                                 October 1, 2004
                                       7-1

<PAGE>

8.    DISENROLLMENT

      8.1   Disenrollment Guidelines

            a)    Disenrollment of an Enrollee from the Contractor's Plan may be
                  initiated by the Enrollee, LDSS or the Contractor under the
                  conditions specified in Sections 8.4, 8.7, 8.8 and 8.9 and as
                  detailed in Appendix H, Section E and F of this Agreement.

            b)    The LDSS and the Contractor agree to conduct disenrollment in
                  accordance with the guidelines set forth in Appendix H,
                  Section E and F of this Agreement.

            c)    The SDOH and LDSS, upon mutual agreement, may modify Appendix
                  H of this Agreement upon sixty (60) days prior written notice
                  to the Contractor and such modifications shall become binding
                  and incorporated into this Agreement without further action by
                  the parties.

            d)    LDSS shall make the final determination concerning
                  disenrollment.

      8.2   Disenrollment Prohibitions

            Disenrollment shall not be based in whole or in part on any of the
            following reasons:

            a)    an existing condition or a change in the Enrollee's health
                  which would necessitate disenrollment pursuant to the terms of
                  this Agreement, unless the change

                  i)    results in the Enrollee being reclassified into an
                        excluded category for Medicaid managed care as listed in
                        Section 5.3 of this Agreement;

                  ii)   results in the Enrollee being reclassified into an
                        exempt category as listed in Section 5.2 of this
                        Agreement and the Enrollee wants to disenroll from
                        managed care.

            b)    any of the factors listed in Section 34 - Non-Discrimination
                  of this Agreement; or

            c)    on the Capitation Rate payable to the Contractor related to
                  the Enrollee's participation with the Contractor.

                                    SECTION 8
                                 (DISENROLLMENT)
                                 October 1, 2004
                                       8-1
<PAGE>

      8.3   Reasons for Voluntary Disenrollment

            The LDSS or the Contractor, as agreed upon between the LDSS and
            Contractor, shall provide Enrollees who disenroll voluntarily with
            an opportunity to identify, in writing, their reason(s) for
            disenrollment.

      8.4   Processing of Disenrollment Requests

            a)    Routine Disenrollment

                  Unless otherwise specified in Appendix H, Section F
                  disenrollment requests will be processed to take effect on the
                  first (1st) day of the next month if the request is made
                  before the date specified in Appendix H. In no event shall the
                  Effective Date of Disenrollment be later than the first (1st)
                  day of the second (2nd) month after the month in which an
                  Enrollee requests a disenrollment.

            b)    Expedited Disenrollment

                  i)    Enrollees with an urgent medical need to disenroll from
                        the Contractor's plan may request an expedited
                        disenrollment by the LDSS. Substantiation of the request
                        by the LDSS will result in an expedited disenrollment in
                        accordance with the guidelines and timeframes as set
                        forth in Appendix H. Individuals who are to be
                        disenrolled from managed care based on their HIV, ESRD
                        or SPMI/SED status are categorically eligible for an
                        expedited disenrollment on the basis of urgent medical
                        need.

                  ii)   Enrollees may request an expedited disenrollment by the
                        LDSS based on a complaint of Non-consensual Enrollment.
                        Substantiation of such a request by the LDSS shall
                        result in an expedited disenrollment retroactive to the
                        first day of the month of enrollment.

                  iii)  In New York City and other districts where homeless
                        individuals are exempt, homeless Enrollees residing in
                        the shelter system may request an expedited
                        disenrollment by the LDSS. Substantiation of such a
                        request by the LDSS will result in an expedited
                        disenrollment in accordance with the guidelines and
                        timeframes as set forth in Appendix H.

            c)    Retroactive Disenrollment

                  i)    Retroactive disenrollments may be warranted in rare
                        instances and include when an individual is enrolled or
                        autoassigned while meeting exclusion criteria or when an
                        Enrollee enters or stays in a residential institution
                        under circumstances which render the

                                    SECTION 8
                                 (DISENROLLMENT)
                                October 1, 2004
                                       8-2

<PAGE>

                        individual excluded from managed care; is incarcerated;
                        is an SSI infant less than six months of age; or dies -
                        as long as the Contractor was not at risk for provision
                        of Benefit Package services for any portion of the
                        retroactive period.

      8.5   Contractor Notification of Disenrollments

            a)    Notwithstanding anything herein to the contrary, the Roster,
                  along with any changes sent by the LDSS to the Contractor in
                  writing or electronically, shall serve as official notice to
                  the Contractor of disenrollment of an Enrollee. In cases of
                  expedited and retroactive disenrollment, the Contractor shall
                  be notified of the Enrollee's effective date of disenrollment
                  by the LDSS.

            b)    In the event that the LDSS intends to retroactively disenroll
                  an Enrollee on a date prior to the first day of the month of
                  the disenrollment request, the LDSS shall consult with the
                  Contractor prior to disenrollment. Such consultation shall not
                  be required for the retroactive disenrollment of SSI infants
                  or in cases where it is clear that the Contractor was not a
                  risk for the provision of Benefit Package services for any
                  portion of the retroactive period.

            c)    In all cases of retroactive disenrollment, including
                  disenrollments effective the first day of the current month,
                  the LDSS must notice the plan at the time of disenrollment, of
                  the Contractor's responsibility to submit to the SDOH's Fiscal
                  Agent voided premium claims for any months of retroactive
                  disenrollment where the Contract was not at risk for the
                  provision of Benefit Package services during the month.

      8.6   Contractor's Liability

            a)    The Contractor is not responsible for providing the Benefit
                  Package under this Agreement after the Effective Date of
                  Disenrollment except as hereinafter provided:

                  i) The Contractor shall be liable for any part of the cost of
                  a hospital stay for an Enrollee who is admitted to the
                  hospital prior to the Effective Date of Disenrollment in the
                  Contractor's plan and who remains hospitalized on the
                  Effective Date of Disenrollment; except when the Enrollee, on
                  or after the Effective Date of Disenrollment, 1) is
                  transferred from one hospital to another; or 2) is discharged
                  from one unit in the hospital to another unit in the same
                  facility and under Medicaid fee for service payment rules, the
                  method of payment changes from: a) DRG case-based rate of
                  payment per discharge to a per diem rate of payment exempt
                  from DRG case-based payment rates, or b) from a per diem
                  payment rate exempt from DRG case-based payment rates to
                  either another per diem rate, or a DRG case-based

                                    SECTION 8
                                 (DISENROLLMENT)
                                October 1, 2004
                                       8-3

<PAGE>

                  payment rate. In such instances, the Contractor shall not be
                  liable for the cost of the consecutive stay. For the purposes
                  of this Section, "hospital stay" does not include a stay in a
                  hospital that is a) certified by Medicare as a long-term care
                  hospital and b) has an average length of stay for all patients
                  greater than ninety-five (95) days as reported in the
                  Statewide Planning and Research Cooperative System (SPARCS)
                  Annual Report 2002; in such instances, Contractor liability
                  will cease on the Effective Date of Disenrollment.

            b)    The Contractor shall notify the LDSS that the Enrollee remains
                  in the hospital and provide the LDSS with information
                  regarding his or her medical status. The Contractor is
                  required to cooperate with the Enrollee and the new MCO (if
                  applicable) on a timely basis to ensure a smooth transition
                  and continuity of care.

      8.7   Enrollee Initiated Disenrollment

            a)    Disenrollment For Good Cause

                  i)    An Enrollee subject to Lock-In may initiate
                        disenrollment from the Contractor's plan for "good
                        cause" as defined in 18 NYCRR Section 360-10 at any time
                        during the Lock-In period and may disenroll for any
                        reason at any time after the twelfth (12th) month
                        following the Effective Date of Enrollment.

                  ii)   An Enrollee subject to Lock-In may initiate
                        disenrollment for "good cause" by filing a written
                        request with the LDSS or the Contractor. The Contractor
                        must notify the LDSS of the request. The LDSS must
                        respond with a determination within thirty (30) days
                        after receipt of the request. The Contractor must
                        respond timely to LDSS inquiries regarding "good cause"
                        disenrollment requests to enable the LDSS to make a
                        determination within 30 days of the receipt of the
                        request from the Enrollee.

                  iii)  Enrollees granted disenrollment for "good cause" in a
                        voluntary county may join another plan, if one is
                        available, or participate in Medicaid fee-for-service
                        program. In mandatory counties, unless the Enrollee
                        becomes exempt or excluded, he/she may be required to
                        enroll with another MCO.

                  iv)   In the event that the LDSS denies an Enrollee's request
                        for disenrollment for "good cause", the LDSS must inform
                        the Enrollee of the denial of the request with a written
                        notice which explains the reason for the denial, states
                        the facts upon which denial is based, cites the
                        statutory and regulatory authority and advises the
                        recipient of his or her right to a fair hearing pursuant
                        to 18 NYCRR Part 358. In the event that the Enrollee's
                        request to disenroll is approved, the notice must state
                        the Effective Date of Disenrollment.

                                    SECTION 8
                                 (DISENROLLMENT)
                                October 1, 2004
                                       8-4

<PAGE>

                  v)    Once the Lock-In Period has expired, an Enrollee may
                        disenroll from the Contractor's plan at any time, for
                        any reason.

      8.8   Contractor Initiated Disenrollment

            a)    The Contractor may initiate an involuntary disenrollment if
                  the Enrollee engages in conduct or behavior that seriously
                  impairs the Contractor's ability to furnish services to either
                  the Enrollee or other Enrollees, provided that the Contractor
                  has made and documented reasonable efforts to resolve the
                  problems presented by the Enrollee.

            b)    Consistent with 42 CFR 438.56 (b), the Contractor may not
                  request disenrollment because of an adverse change in the
                  Enrollee's health status, or because of the Enrollee's
                  utilization of medical services, diminished mental capacity,
                  or uncooperative or disruptive behavior resulting from the
                  Enrollee's special needs (except where continued enrollment in
                  the Contractor's plan seriously impairs the Contractor's
                  ability to furnish services to either the Enrollee or other
                  Enrollees).

            c)    The Contractor must make a reasonable effort to identify for
                  the Enrollee, both verbally and in writing, those actions of
                  the Enrollee that have interfered with the effective provision
                  of covered services as well as explain what actions or
                  procedures are acceptable.

            d)    The Contractor shall give prior verbal and written notice to
                  the Enrollee, with a copy to the LDSS, of its intent to
                  request disenrollment. The written notice shall advise the
                  Enrollee that the request has been forwarded to the LDSS for
                  review and approval. The written notice must include the
                  mailing address and telephone number of the LDSS.

            e)    The Contractor shall keep the LDSS informed of decisions
                  related to all complaints filed by an Enrollee as a result of,
                  or subsequent to, the notice of intent to disenroll.

            f)    The LDSS will review each Contractor initiated disenrollment
                  request in accordance with the provisions of this Section.
                  Where applicable, the LDSS may consult with local mental
                  health and substance abuse authorities in the district when
                  making the determination to approve or disapprove a Contractor
                  initiated disenrollment request.

            g)    The LDSS will render a decision within fifteen (15) days of
                  receipt of the fully documented request for disenrollment.
                  Final written determination will be provided to the Enrollee
                  and the Contractor. If the LDSS determination upholds the
                  Contractor's request to disenroll, the LDSS's written
                  determination must inform the Enrollee of the Effective Date
                  of Disenrollment and include a notice of rights to a fair
                  hearing. Should an

                                   SECTION 8
                                (DISENROLLMENT)
                                October 1, 2004
                                      8-5

<PAGE>

                  Enrollee request a fair hearing as a result of the LDSS
                  determination, the LDSS shall inform the Contractor of the
                  fair hearing request and the Enrollee will remain enrolled in
                  the Contractor's plan until disposition of the fair hearing.

            h)    Once an Enrollee has been disenrolled at the Contractor's
                  request, he/she will not be re-enrolled with the Contractor's
                  plan unless the Contractor first agrees to such re-enrollment.

      8.9   LDSS Initiated Disenrollment

            a)    LDSS will promptly initiate disenrollment when:

                  i)    an Enrollee is no longer eligible for any Medicaid
                        benefits; or

                  ii)   the Guaranteed Eligibility period ends (See Section 9)
                        and an Enrollee is no longer eligible for any Medicaid
                        benefits; or

                  iii)  an Enrollee is no longer the financial responsibility of
                        the LDSS; or

                  iv)   an Enrollee becomes ineligible for enrollment pursuant
                        to Section 5.3 of this Agreement, as appropriate; or

                  v)    an Enrollee resides outside the Service Area covered by
                        this Agreement, unless Contractor can demonstrate that
                        the Enrollee has made an informed choice to continue
                        enrollment with Contractor and that Enrollee will have
                        sufficient access to Contractor's provider network.

                                    SECTION 8
                                 (DISENROLLMENT)
                                October 1, 2004
                                       8-6

<PAGE>

9.    GUARANTEED ELIGIBILITY

      Except as may otherwise be required by law:

      9.1   New Enrollees, other than those identified in Sections 9.2 who would
            otherwise lose Medicaid eligibility during the first six (6) months
            of enrollment will retain the right to remain enrolled in the
            Contractor's plan under this Agreement for a period of six (6)
            months from their Effective Date of Enrollment.

      9.2   Guaranteed eligibility is not available to Enrollees who lose
            Medicaid eligibility for one of the following reasons

            a)    death, moving out of State, or incarceration;

            b)    being a woman with a net available income in excess of
                  medically necessary income but at or below 200% of the federal
                  poverty level who is only eligible for Medicaid while she is
                  pregnant and then through the end of the month in which the
                  sixtieth (60th) day following the end of the pregnancy occurs.

     9.3     If, during the first six (6) months of enrollment in the
             Contractor's plan, an Enrollee becomes eligible for Medicaid only
             as a spend-down, the Enrollee will be eligible to remain enrolled
             in the Contractor's plan for the remainder of the six (6) month
             guarantee period. During the six (6) month guarantee period, an
             Enrollee eligible for spend-down and in need of wraparound services
             has the option of spending down to gain full Medicaid eligibility
             for the wraparound services. In this situation, the LDSS will
             monitor the Enrollee's need for wrap around services and manually
             set coverage codes as appropriate.

     9.4     The services covered during the Guaranteed Eligibility period shall
             be those contained in the Benefit Package, as specified in Appendix
             K, including free access to family planning services as set forth
             in Section 10.12 of this Agreement. During the Guaranteed
             Eligibility period Enrollees are also eligible for pharmacy
             services on a Medicaid fee-for-service basis.

      9.5   An Enrollee-initiated disenrollment from the Contractor's plan
            terminates the Guaranteed Eligibility period.

      9.6   Enrollees who lose and regain Medicaid eligibility within a three
            (3) month period will not be entitled to a new period of six (6)
            months Guaranteed Eligibility.

      9.7   During the guarantee period, an Enrollee may not change health
            plans. An Enrollee may choose to disenroll from the Contractor's
            Plan during the guarantee period but is not eligible to enroll in
            any other MCO because he/she has lost eligibility for Medicaid.

                                    SECTION 9
                            (GUARANTEED ELIGIBILITY)
                                 October 1, 2004
                                       9-1

<PAGE>

10.   BENEFIT PACKAGE, COVERED AND NON-COVERED SERVICES

      10.1  Contractor Responsibilities

            Contractor must provide all services set forth in the Benefit
            Package (Appendix K) that are covered under the Medicaid fee for
            service program except for services specifically excluded by the
            contract, or enacted or affected by Federal or State Law during the
            period of this agreement. SDOH and LDSS shall assure the continued
            availability and accessibility of Medicaid services not covered in
            the Benefit Package.

      10.2  Compliance with State Medicaid Plan and Applicable Laws

            Benefit Package services provided by the Contractor under this
            Agreement shall comply with all standards of the State Medicaid Plan
            established pursuant to Section 363-a of the State Social Services
            Law and shall satisfy all applicable requirements of the State
            Public Health and Social Services Laws.

      10.3  Definitions

            Benefit Package and Non-Covered Service definitions agreed to by the
            Contractor and the LDSS are contained in Appendix K, which is hereby
            made a part of this contract as if set forth fully herein.

      10.4  Provision of Services Through Participating and Non-Participating
            Providers

            With the exception of Emergency services described in Section 10.14
            of this Agreement, Family Planning Services described in Section
            10.11 of this Agreement, and services for which Enrollees can self
            refer as described in Section 10.16 of this Agreement, the Benefit
            Package must be provided and authorized by the Contractor through
            Provider Agreements with Participating Providers, as specified in
            Section 22 of this Agreement. A plan may also arrange for specialty
            or other services for Enrollees with Non-Participating Providers, in
            accordance with Section 21.1(b) of this Agreement.

      10.5  Child Teen Health Program/Adolescent Preventive Services

            a)    The Contractor and its Participating Providers are required to
                  provide the Child Teen Health Program C/THP services outlined
                  in Appendix K (Benefit Package) and comply with applicable
                  EPSDT requirements specified in 42 CFR, Part 441, sub-part B,
                  18NYCRR, Part 508 and the New York State Department of Health
                  C/THP manual. The Contractor and its Participating Providers
                  are required to provide C/THP services to Medicaid Enrollees
                  under 21 years of age when:

                                   SECTION 10
               (BENEFIT PACKAGE, COVERED AND NON-COVERED SERVICES)
                                 October 1, 2004
                                      10-1

<PAGE>

                  i)    The care or services are essential to prevent, diagnose,
                        prevent the worsening of, alleviate or ameliorate the
                        effects of an illness, injury, disability, disorder or
                        condition.

                  ii)   The care or services are essential to the overall
                        physical, cognitive and mental growth and developmental
                        needs of the child.

                  iii)  The care or service will assist the individual to
                        achieve or maintain maximum functional capacity in
                        performing daily activities, taking into account both
                        the functional capacity of the individual and those
                        functional capacities that are appropriate for
                        individuals of the same age.

            The Contractor shall base its determination on medical and other
            relevant information provided by the Enrollee's PCP, other health
            care providers, school, local social services, and/or local public
            health officials that have evaluated the child.

            b)    The Contractor and its Participating Providers must comply
                  with the C/THP program standards and must do at least the
                  following with respect to all Enrollees under age 21:

                  i)    Educate pregnant women and families with under age 21
                        Enrollees about the program and its importance to a
                        child's or adolescent's health.

                  ii)   Educate network providers about the program and their
                        responsibilities under it.

                  iii)  Conduct outreach, including by mail, telephone, and
                        through home visits (where appropriate), to ensure
                        children are kept current with respect to their
                        periodicity schedules.

                  iv)   Schedule appointments for children and adolescents
                        pursuant to the periodicity schedule, assist with
                        referrals, and conduct follow-up with children and
                        adolescents who miss or cancel appointments.

                  v)    Ensure that all appropriate diagnostic and treatment
                        services, including specialist referrals, are furnished
                        pursuant to findings from a C/THP screen.

                  vi)   Achieve and maintain an acceptable compliance rate for
                        screening schedules during the contract period.

            c)    In addition to C/THP requirements, the Contractor and its
                  Participating Providers are required to comply with the
                  American Medical Association's Guidelines for Adolescent
                  Preventive Services which require annual well adolescent
                  preventive visits which focus on health guidance,
                  immunizations, and screening for physical, emotional, and
                  behavioral conditions.

      10.6  Foster Care Children

            The Contractor shall comply with the health requirements for foster
            children specified in 18 NYCRR Section 441.22 and Part 507 and any
            subsequent amendments thereto. These requirements include thirty
            (30) day obligations for

                                   SECTION 10
               (BENEFIT PACKAGE, COVERED AND NON-COVERED SERVICES)
                                October 1, 2004
                                      10-2

<PAGE>

            a comprehensive physical and behavioral health assessment and
            assessment of the risk that the child may be HIV+ and should be
            tested.

      10.7  Child Protective Services

            The Contractor shall comply with the requirements specified for
            child protective examinations, provision of medical information to
            the child protective services investigation and court ordered
            services as specified in 18 NYCRR Section 432, and any subsequent
            amendments thereto. Medically necessary services, whether provided
            in or out of plan, must be provided. Out of plan providers will be
            reimbursed at the Medicaid fee schedule by the Contractor.

      10.8  Welfare Reform

            a)    The LDSS must determine whether each public assistance or
                  combined public assistance/Medicaid applicant is incapacitated
                  or can participate in work activities. As part of this work
                  determination process, the LDSS may require medical
                  documentation and/or an initial mental and/or physical
                  examination to determine whether an individual has a mental or
                  physical impairment that limits his/her ability to engage in
                  work (12 NYCRR Section 1300.2(d)(13)(i)). The LDSS may not
                  require the Contractor to provide the initial district
                  mandated or requested medical examination necessary for an
                  Enrollee to meet welfare reform work participation
                  requirements.

            b)    The Contractor shall require that its Participating Providers,
                  upon Enrollee consent, provide medical documentation and
                  health, mental health and chemical dependence assessments as
                  follows:

                  i)    Within ten (10) days of a request of an Enrollee or a
                        former Enrollee, currently receiving public assistance
                        or who is applying for public assistance, the Enrollee's
                        or former Enrollee's PCP or specialist provider, as
                        appropriate, shall provide medical documentation
                        concerning the Enrollee or former Enrollee's health or
                        mental health status to the LDSS or to the LDSS'
                        designee. Medical documentation includes but is not
                        limited to drug prescriptions and reports from the
                        Enrollee's PCP or specialist provider. The Contractor
                        shall include the foregoing as a responsibility of the
                        PCP and specialist provider in its provider contracts or
                        in their provider manuals.

                  ii)   Within ten (10) days of a request of an Enrollee, who
                        has already undergone, or is scheduled to undergo, an
                        initial LDSS required mental and/or physical
                        examination, the Enrollee's PCP shall provide a health,
                        or mental health and/or chemical dependence assessment,
                        examination or other services as appropriate to identify
                        or quantify an Enrollee's level of incapacitation. Such
                        assessment must contain a specific diagnosis resulting
                        from any medically appropriate tests and specify any
                        work

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                        limitations. The LDSS, may, upon written notice to the
                        Contractor, specify the format and instructions for such
                        an assessment.

            c)    The Contractor shall designate a Welfare Reform liaison who
                  shall work with the LDSS or its designee to (1) ensure that
                  Enrollees receive timely access to assessments and services
                  specified in this Agreement and (2) ensure completion of
                  reports containing medical documentation required by the LDSS.

            d)    The Contractor will continue to be responsible for the
                  provision and payment of Chemical Dependences Services in the
                  Benefit Package for Enrollees mandated by the LDSS under
                  Welfare Reform if such services are already underway and the
                  LDSS is satisfied with the level of care and services.

            e)    The Contractor is not responsible for the provision and
                  payment of Chemical Dependence Inpatient Rehabilitation and
                  Treatment Services for Enrollees mandated by the LDSS as a
                  condition of eligibility for Public Assistance or Medicaid
                  under Welfare Reform (as indicated by Code 83) unless such
                  services are already under way as described in (c) above.

            f)    The Contractor is not responsible for the provision and
                  payment of Medically Supervised Inpatient and Outpatient
                  Withdrawal Services for Enrollees mandated by the LDSS under
                  Welfare Reform (as indicated by Code 83) unless such services
                  are already under way as described in (c) above.

            g)    The Contractor is responsible for the provision and payment of
                  Medically Managed Detoxification Services ordered by the LDSS
                  under Welfare Reform.

            h)    The Contractor is responsible for the provisions of Sections
                  10.10, 10.16 (a) and 10.24 of this Agreement for Enrollees
                  requiring LDSS mandated Chemical Dependence Services.

      10.9  Adult Protective Services

            The Contractor shall cooperate with LDSS in the implementation of 18
            NYCRR Part 457 and any subsequent amendments thereto with regard to
            medically necessary health and mental health services and all Court
            Ordered Services for adults. These services are to be provided in or
            out of plan. Out of plan providers will be reimbursed at the
            Medicaid fee schedule.

      10.10 Court-Ordered Services

            a)    The Contractor shall provide any Benefit Package services to
                  Enrollees as ordered by a court of competent jurisdiction,
                  regardless of whether such services are provided by
                  Participating Providers within the plan or by a

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                  Non-Participating Provider in compliance with such court
                  order. The Non-Participating Provider shall be reimbursed by
                  the Contractor at the Medicaid fee schedule. The Contractor is
                  responsible for court-ordered services to the extent that such
                  court-ordered services are covered by and reimbursable by
                  Medicaid.

            b)    Court Ordered Services are those services ordered by the court
                  performed by, or under the supervision of a physician,
                  dentist, or other provider qualified under State Law to
                  furnish medical, dental, behavioral health (including mental
                  health and/or Chemical Dependence), or other Medicaid covered
                  services. The Contractor is responsible for payment of those
                  Medicaid services as covered by the Benefit Package, even when
                  the providers are not in the Contractor's provider network.

     10.11  Family Planning and Reproductive Health Services

            a)    Nothing in this Agreement shall restrict the right of
                  Enrollees to receive Family Planning and Reproductive Health
                  Services from any qualified Medicaid provider, regardless of
                  whether the provider is a participating provider or a
                  non-participating provider, without referral from the
                  Enrollee's PCP and without approval from the Contractor.

            b)    The Contractor agrees to permit Enrollees to exercise their
                  right to obtain Family Planning and Reproductive Health
                  Services as defined in Part C-l of Appendix C, which is hereby
                  made a part of this contract as if set forth fully herein,
                  from either the Contractor, if family planning is a part of
                  the Contractor's Benefit Package, or from any appropriate
                  Medicaid enrolled Non-Participating Family Planning Provider
                  without a referral from the Enrollee's PCP and without
                  approval by the Contractor.

            c)    The Contractor agrees to permit Enrollees to obtain pre and
                  post-test HIV counseling and blood testing when performed as
                  part of a Family Planning encounter from the Contractor, if
                  Family Planning is a part of the Contractor's Benefit Package,
                  or from any appropriate Medicaid enrolled Non-Participating
                  family planning Provider without a referral from the
                  Enrollee's PCP and without approval by the Contractor.

            d)    The Contractor will inform Enrollees about the availability of
                  in-plan HIV counseling and testing services, out-of-plan HIV
                  counseling and testing services when performed as part of a
                  Family Planning encounter and anonymous counseling and testing
                  services available from SDOH, Local Public Health Agency
                  clinics and other county programs. Counseling and testing
                  rendered outside of a Family Planning encounter, as well as
                  services provided as the result of an HIV+ diagnosis, will be
                  furnished by the Contractor in accordance with standards of
                  care.

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            e)    Contractor must comply with federal, state, and local laws,
                  regulations and policies regarding informed consent and
                  confidentiality. Providers who are employed by the Contractor
                  may share patient information with appropriate Contractor
                  personnel for the purposes of claims payment, utilization
                  review and quality assurance. Providers who have a contract
                  with the Contractor, with an appropriate consent, may share
                  patient information with the Contractor for purposes of claims
                  payment, utilization review and quality assurance. Contractor
                  must ensure that an individual's use of family planning
                  services remains confidential and is not disclosed to family
                  members or other unauthorized parties.

            f)    Contractor must inform its practitioners and administrative
                  personnel about policies concerning free access to family
                  planning services, HIV counseling and testing, reimbursement,
                  enrollee education and confidentiality. Contractor must inform
                  its providers that they must comply with professional medical
                  standards of practice, the Contractor's practice guidelines,
                  and all applicable federal, state, and local laws. These
                  include but are not limited to, standards established by the
                  American College of Obstetricians and Gynecologists, the
                  American Academy of Family Physicians, the U.S. Task Force on
                  Preventive Services and the New York State Child/Teen Health
                  Program. These standards and laws indicate that family
                  planning counseling is an integral part of primary and
                  preventive care.

            g)    The Contractor agrees that if Family Planning is part of the
                  Contractor's Benefit Package, the Contractor will be charged
                  for the services of out of network providers at the applicable
                  Medicaid rate or fee. In such instances, out of network
                  providers will bill Medicaid and the SDOH will issue a
                  confidential charge back to the Contractor. Such charge back
                  mechanism will comply with all applicable patient
                  confidentiality requirements.

            h)    If Contractor includes family planning and reproductive health
                  services in its benefits package, the Contractor shall comply
                  with the requirements for informing Enrollees about family
                  planning and reproductive health services set forth in Part
                  C-2 of Appendix C, which is hereby made a part of this
                  contract as if set forth herein.

            i)    If Contractor does not include family planning and
                  reproductive health services in its Benefit Package, within
                  ninety (90) days of signing this Agreement, Contractor must
                  submit to the SDOH and LDSS a statement of the policy and
                  procedure that the Contractor will use to ensure that its
                  Enrollees are fully informed of their rights to access a full
                  range of family planning and reproductive health services.
                  Refer to Part C-3 of Appendix C for the SDOH Guidelines for
                  Plans That Do Not Provide Family Planning Services in their
                  Capitation. Contractor shall ensure that

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                  prospective Enrollees and Enrollees are advised of the family
                  planning services which are not provided by the Contractor and
                  of their right of access to such services in accordance with
                  the provisions of Part C-3 of Appendix C, which is hereby made
                  a part of this contract as if set forth fully herein.

            j)    SDOH with DHHS approval may issue modifications to Appendix
                  (C) consistent with relevant provisions of federal and state
                  statutes and regulations. Once issued and upon sixty (60) days
                  notice to the LDSS and Contractor, such modifications shall be
                  deemed incorporated into this Agreement without further action
                  by the parties.

     10.12  Prenatal Care

            The Contractor is responsible for arranging for the provision of
            comprehensive Prenatal Care Services to all pregnant Enrollees
            including all services enumerated in Subdivision 1, Section 2522 of
            the Public Health Law in accordance with 10 NYCRR Part 85.40
            (Prenatal Care Assistance Program).

     10.13  Direct Access

            The Contractor shall offer female Enrollees direct access to primary
            and preventive obstetrics and gynecology services, follow-up care as
            a result of a primary and preventive visit, and any care related to
            pregnancy from the Contractor's network providers without referral
            from the PCP as set forth in Public Health Law Section 4406-b(l).

     10.14  Emergency Services

            a)    The Contractor shall maintain coverage utilizing a toll free
                  telephone number twenty-four (24) hours per day seven (7) days
                  per week, answered by a live voice, to advise Enrollees of
                  procedures for accessing services for Emergency Medical
                  Conditions and for accessing Urgently Needed Services.
                  Emergency mental health calls must be triaged via telephone by
                  a trained mental health professional.

            b)    The Contractor agrees that it will not require prior
                  authorization for services in a medical or behavioral health
                  emergency. The Contractor agrees to inform its Enrollees that
                  access to Emergency Services is not restricted and Emergency
                  Services may be obtained from a Non-Participating Provider
                  without penalty. The Contractor may require Enrollees to
                  notify the plan or their PCP within a specified time frame
                  after receiving emergency care and to obtain prior
                  authorization for any follow-up care delivered pursuant to the
                  emergency, as stated in Appendix G. Nothing herein precludes
                  the Contractor from entering into contracts with providers or
                  facilities that require providers or facilities to provide
                  notification to the Contractor after Enrollees present for

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                  Emergency Services and are subsequently stabilized. Except as
                  otherwise provided by contractual agreement between the
                  Contractor and a Participating Provider, the Contractor must
                  pay for services for Emergency Medical Conditions whether
                  provided by a Participating Provider or a Non-Participating
                  Provider, and may not deny payments if notification is not
                  timely.

            c)    Emergency Services rendered by Non-Participating Providers:
                  The Contractor shall advise its Enrollees how to obtain
                  Emergency Services when it is not feasible for Enrollees to
                  receive Emergency Services from or through a Participating
                  Provider. The Contractor shall bear the cost of providing
                  Emergency Services through Non-Participating Providers.

            d)    The Contractor agrees to abide by guidelines for the provision
                  and payment of Emergency Care and Services which are specified
                  in Appendix G, which is hereby made a part of this contract as
                  if set forth fully herein.

            e)    When emergency transportation is included in the Contractor's
                  Benefit Package, the Contractor shall reimburse for all
                  emergency ambulance services without regard to final diagnosis
                  or prudent layperson standards.

     10.15  Medicaid Utilization Thresholds (MUTS)

            Enrollees may be subject to MUTS for outpatient pharmacy services
            which are billed Medicaid fee-for-service and for dental services
            provided without referral at Article 28 clinics operated by academic
            dental centers as described in Section 10.28 of this Agreement.
            Enrollees are not otherwise subject to MUTS for services included in
            the Benefit Package.

     10.16  Services for Which Enrollees Can Self-Refer

            a)    Mental Health and Chemical Dependence Services

                  The Contractor will allow Enrollees or LDSS officials on the
                  Enrollee's behalf to make self referral or referral for one
                  mental health assessment from a Participating Provider and
                  one chemical dependence assessment from a Detoxification or
                  Chemical Dependence Inpatient Rehabilitation and Treatment
                  Participating Provider in any calendar year period without
                  requiring preauthorization or referral from the Enrollee's
                  Primary Care Provider. In the case of children, such
                  self-referrals may originate at the request of a school
                  guidance counselor (with parental or guardian consent, or
                  pursuant to procedures set forth in Section 33.21 of the
                  Mental Hygiene Law), LDSS Official, Judicial Official,
                  Probation Officer, parent or similar source.

                  i)    The Contractor shall make available to all Enrollees a
                        complete listing of their participating mental health
                        and Chemical Dependence Services

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                        providers. The listing should specify which provider
                        groups or practitioners specialize in children's mental
                        health services.

                  ii)   The Contractor will also ensure that its Participating
                        Providers have available and use formal assessment
                        instruments to identify Enrollees requiring mental
                        health and Chemical Dependence Services, and to
                        determine the types of services that should be
                        furnished.

                  iii)  The Contractor will implement policies and procedures to
                        ensure that Enrollees receive follow-up Benefit Package
                        services from appropriate providers based on the
                        findings of their mental health and/or Detoxification or
                        Chemical Dependence Inpatient Rehabilitation and
                        Treatment assessment(s).

                  iv)   The Contractor will implement policies and procedures to
                        ensure that Enrollees are referred to appropriate
                        Chemical Dependence outpatient rehabilitation and
                        treatment providers based on the findings of the
                        Chemical Dependence assessment by the Contractor's
                        Participating Provider.

            b)    Vision Services

                  The Contractor will allow its Enrollees to self-refer to any
                  participating provider of vision services (optometrist or
                  ophthalmologist) for refractive vision services. (See Appendix
                  K).

            c)    Diagnosis and Treatment of Tuberculosis

                  Enrollees may self-refer to public health agency facilities
                  for the diagnosis and/or treatment of TB as described in
                  Section 10.19 (a)(i) of this Agreement.

            d)    Family Planning and Reproductive Health Services.

                  Enrollees may self-refer to family planning and reproductive
                  health services as described in Section 10.11 and Appendix C
                  of this Agreement.

            e)    Article 28 Clinics Operated by Academic Dental Centers

                  Enrollees may self-refer to Article 28 clinics operated by
                  academic dental centers to obtain covered dental services as
                  described in Section 10.28 of this Agreement.

     10.17  Second Opinions for Medical or Surgical Care

            The Contractor will allow Enrollees to obtain a second opinion
            within the Contractor's network of providers for diagnosis of a
            condition, treatment or surgical procedure.

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     10.18  Coordination with Local Pubic Health Agencies

            The Contractor will coordinate its public health-related activities
            with the Local Public Health Agency. Coordination mechanisms and
            operational protocols for addressing public health issues will be
            negotiated with the Local Public Health and Social Services
            Departments and be customized to reflect County public health
            priorities. Negotiations must result in agreements regarding
            required health plan activities related to public health. The
            outcome of negotiations may take the form of an informal agreement
            among the parties which may include memos; a separate memorandum of
            understanding signed by the Local Public Health Agency, LDSS, and
            the Contractor; or an appendix to the contract between the LDSS and
            the Contractor which shall be included in Appendix N as if set forth
            fully herein.

     10.19  Public Health Services

            a)    Tuberculosis Screening, Diagnosis and Treatment; Directly
                  Observed Therapy(TB\DOT):

                  i)    Consistent with New York State law, public health
                        clinics are required to provide or arrange for treatment
                        to individuals presenting with tuberculosis, regardless
                        of the person's insurance or enrollment status. It is
                        the State's preference that the Contractor's Enrollees
                        receive TB diagnosis and treatment through the
                        Contractor's plan, to the extent that providers
                        experienced in this type of care are available in the
                        Contractor's network of Participating Providers,
                        although Enrollees may self-refer to public health
                        agency facilities for the diagnosis and/or treatment of
                        TB. The Contractor agrees to reimburse public health
                        clinics when physician visit and patient management or
                        laboratory and radiology services are rendered to their
                        Enrollees, within the context of TB diagnosis and
                        treatment.

                  ii)   The Contractor's Participating Providers must report TB
                        cases to the Local Public Health Agency. The LDSS will
                        have the Local Public Health Agency review the
                        tuberculosis treatment protocols and networks of
                        Participating Providers of the Contractor, to verify
                        their readiness to treat Tuberculosis patients. The
                        Contractor's protocols will be evaluated against State
                        and local guidelines. State and local departments of
                        health also will be available to offer technical
                        assistance to the Contractor in establishing TB policies
                        and procedures.

                  iii)  The Contractor may require the Local Public Health
                        Agency to give notification before delivering services,
                        unless these services are ordered by a court of
                        competent jurisdiction. The Local Public Health Agency
                        will: 1) make reasonable efforts to verify with the
                        Enrollee's PCP that he/she has not already provided TB
                        care and treatment, and 2) provide documentation of
                        services rendered along with the claim.

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                  iv)   The Contractor may use locally negotiated fees. In
                        addition, SDOH will establish fee schedules for these
                        services, which the Contractor may use in the absence of
                        locally negotiated fees.

                  v)    Contractors may require prior authorization for
                        non-emergency inpatient hospital admissions, except that
                        prior authorization will not be required for an
                        admission pursuant to a court order or an order of
                        detention issued by the local commissioner or director
                        of public health.

                  vi)   The Contractor shall provide the Local Public Health
                        Agency with access to health care practitioners on a
                        twenty-four (24) hour a day, seven (7) day a week basis
                        who can authorize inpatient hospital admissions. The
                        Contractor shall respond to the Local Public Health
                        Agency's request for authorization within the same day.

                  vii)  The Contractor will not be capitated or financially
                        liable for Directly Observed Therapy (DOT) costs. The
                        Contractor agrees to make ail reasonable efforts to
                        ensure coordination with DOT providers regarding
                        clinical care and services. HIV counseling and testing
                        during a TB related visit at a public health clinic,
                        directly operated by a county health department or the
                        New York City Department of Health and Mental Hygiene,
                        will be covered by Medicaid fee-for-service (FFS) at
                        rates established by the State. The Contractor also will
                        not be financially liable for treatments rendered to
                        Enrollees who have been institutionalized as a result of
                        a local health commissioner's order due to
                        non-compliance with TB care regimens.

                 viii)  While all other clinical management of tuberculosis is
                        covered by the Contractor, TB/DOT where applicable, can
                        be billed directly to Medicaid by any SDOH approved
                        fee-for-service Medicaid TB/DOT provider. The Contractor
                        remains responsible for communicating, cooperating, and
                        coordinating clinical management of TB with the TB/DOT
                        provider. The Enrollee reserves the right to use any
                        fee-for-service DOT provider because TB/DOT is a
                        non-covered benefit.

            b)    Immunizations

                  i)    Immunizations for adults and administration of
                        immunizations for children will be included in the
                        Benefit Package and the Contractor will be required to
                        reimburse the Local Public Health Agency when Enrollees
                        self-refer.

                  ii)   In order to be eligible for reimbursement, a Local
                        Public Health Agency must make reasonable efforts to (1)
                        determine the Enrollee's managed care membership status;
                        and (2) ascertain the Enrollee's immunization status.
                        Such efforts shall consist of client interviews and,
                        when available, access to the Immunization Registry.
                        When an Enrollee presents a membership card with a PCP's
                        name, the Local Public Health Agency shall call the PCP.
                        If the agency is unable to verify the immunization
                        status from the PCP or learns that immunization is
                        needed, the agency shall proceed to deliver the service
                        as appropriate, and the Contractor will reimburse the
                        Local Public Health Agency at the negotiated rate or at
                        a fee schedule to

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                        be used in the absence of a negotiated rate. Upon
                        implementation of the immunization registry, the Local
                        Public Health Agency shall not be required to contact
                        the PCP.

                  iii)  If the immunization is administered by the PCP,
                        immunization materials for children should be obtained
                        free of charge from the "Vaccine For Children Program".
                        The Contractor will be reimbursed only for administering
                        the vaccine to children.

            c)    Prevention and Treatment of Sexually Transmitted Diseases

                  The Contractor will be responsible for ensuring that its
                  Participating Providers educate their Enrollees about the risk
                  and prevention of sexually transmitted disease (STD). The
                  Contractor also will be responsible for ensuring that its
                  Participating Providers screen and treat Enrollees for STDs
                  and report cases of STD to the Local Public Health Agency and
                  cooperate in contact investigation, in accordance with
                  existing state and local laws and regulations. HIV counseling
                  and testing provided during a STD related visit at a public
                  health clinic, directly operated by a county health department
                  or the New York City Department of Health and Mental Hygiene,
                  will be covered by Medicaid FFS at rates established by the
                  State.

            d)    Lead Poisoning

                  The Contractor will be responsible for carrying out and
                  ensuring that its Participating Providers comply with lead
                  poisoning screening and follow-up as specified in 10 NYCRR,
                  Sub-part 67.1. The Contractor shall coordinate the care of
                  such children with Local Public Health Agencies to assure
                  appropriate follow-up in terms of environmental investigation,
                  risk management and reporting requirements.

     10.20  Adults with Chronic Illnesses and Physical or Developmental
            Disabilities

            The Contractor will implement all of the following to meet the needs
            of their adult Enrollees with chronic illnesses and physical or
            developmental disabilities:

            a)    Satisfactory methods for ensuring that the Contractor is in
                  compliance with the Americans with Disabilities Act ("ADA")
                  and Section 504 of the Rehabilitation Act of 1973. Program
                  accessibility for persons with disabilities shall be in
                  accordance with Section 24 of this Agreement.

            b)    Clinical case management which uses satisfactory
                  methods/guidelines for identifying persons at risk of, or
                  having, chronic diseases and disabilities and determining
                  their specific needs in terms of specialist physician
                  referrals, durable medical equipment, home health services,
                  self-management education and training, etc. The Contractor
                  shall:

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                  i)    develop protocols describing the Contractor's case
                        management services and minimum qualification
                        requirements for case management staff;

                  ii)   develop and implement protocols for monitoring
                        effectiveness of case management based on patient
                        outcomes;

                  iii)  develop and implement protocols for monitoring service
                        utilization including emergency room visits and
                        hospitalizations, with adjustment of severity of patient
                        conditions;

                  iv)   provide regular information to network providers on the
                        case management services available to the Contractor's
                        Enrollees and the criteria for referring Enrollees to
                        the Contractor for case management services.

            c)    Satisfactory methods/guidelines for determining which patients
                  are in need of case management services, including
                  establishment of severity thresholds, and methods for
                  identification of patients including monitoring of
                  hospitalizations and ER visits, provider referrals, new
                  Enrollee health screenings and self referrals by Enrollees.

            d)    Guidelines for determining specific needs of Enrollees in case
                  management, including specialist physician referrals, durable
                  medical equipment, home health services, self management
                  education and training, etc.

            e)    Satisfactory systems for coordinating service delivery with
                  out-of-network providers, including behavioral health
                  providers for all Enrollees.

            f)    Policies and procedures to allow for the continuation of
                  existing relationships with out-of-network providers,
                  consistent with PHL 4403 6(e) and Section 15.5 of this
                  Agreement.

     10.21  Children with Special Health Care Needs

            Children with special health care needs are those who have or are
            suspected of having a serious or chronic physical, developmental,
            behavioral, or emotional condition and who also require health and
            related services of a type or amount beyond that required by
            children generally. The Contractor will be responsible for
            performing all of the same activities for this population as for
            adults. In addition, the Contractor will implement the following for
            these children:

            a)    Satisfactory methods for interacting with school districts,
                  preschool services, child protective service agencies, early
                  intervention officials, behavioral health, and developmental
                  disabilities service organizations for the purpose of
                  coordinating and assuring appropriate service delivery.

            b)    An adequate network of pediatric providers and
                  sub-specialists, contractual relationships with tertiary
                  institutions, to meet their medical needs.

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            c)    Satisfactory methods for assuring that children with serious,
                  chronic, and rare disorders receive appropriate diagnostic
                  work-ups on a timely basis.

            d)    Satisfactory arrangements for assuring access to specialty
                  centers in and out of New York State for diagnosis and
                  treatment of rare disorders.

            e)    A satisfactory approach for assuring access to allied health
                  professionals (Physical Therapists, Occupational Therapists,
                  Speech Therapists, and Audiologists) experienced in dealing
                  with children and families.

      10.22 Persons Requiring Ongoing Mental Health Services

            The Contractor will implement all of the following for its Enrollees
            with chronic or ongoing mental health service needs:

            a)    Inclusion of all of the required provider types listed in
                  Section 21 of this Agreement.

            b)    Satisfactory methods for identifying persons requiring such
                  services and encouraging self-referral and early entry into
                  treatment.

            c)    Satisfactory case management systems or satisfactory case
                  management.

            d)    Satisfactory systems for Coordinating service delivery between
                  physical health, chemical dependence, and mental health
                  providers, and coordinating services with other available
                  services, including Social Services.

            The Contractor agrees to participate in the local planning process
            for serving persons with mental health needs to the extent requested
            by the LDSS. At the LDSS' discretion, the Contractor will develop
            linkages with local governmental units on coordination, procedures
            and standards related to mental health services and related
            activities.

      10.23 Member Needs Relating to HIV

            Persons with HIV infection are exempt from mandatory enrollment;
            however, they will be permitted to enroll voluntarily into Managed
            Care Organizations. The Contractor must inform Enrollees newly
            diagnosed with HIV infection or AIDS, known to the Contractor, of
            their enrollment options including the ability to return to
            fee-for-service or to disenroll from the Contractor's plan and to
            enroll into HIV Special Needs Plans (SNPs) as such plans become
            available.

            The Contractor agrees that anonymous testing may be furnished to the
            Enrollee without prior approval by the Contractor and may be
            conducted at anonymous testing sites available to clients. Services
            provided for HIV treatment may only

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            be obtained from the Contractor during the period the Enrollee is
            enrolled in the Contractor's plan.

            To adequately address the HIV prevention needs of uninfected
            Enrollees, as well as the special needs of individuals with HIV
            infection who do enroll in managed care, the Contractor shall have
            in place all of the following:

            a)    Methods for promoting HIV prevention to all Plan Enrollees.
                  HIV prevention information, both primary, as well as secondary
                  should be tailored to the Enrollee's age, sex, and risk
                  factor(s), (e.g., injection drug use and sexual risk
                  activities), and should be culturally and linguistically
                  appropriate. HIV primary prevention means the reduction or
                  control of causative factors for HIV, including the reduction
                  of risk factors. HIV Primary prevention includes strategies to
                  help prevent uninfected Enrollees from acquiring HIV, i.e.,
                  behavior counseling for HIV negative Enrollees with risk
                  behavior. Primary prevention also includes strategies to help
                  prevent infected Enrollees from transmitting HIV infection,
                  i.e., behavior counseling with an HIV infected Enrollee to
                  reduce risky sexual behavior or providing antiviral therapy to
                  a pregnant, HIV infected female to prevent transmission of HIV
                  infection to a newborn. HIV Secondary Prevention means
                  promotion of early detection and treatment of HIV disease in
                  an asymptomatic Enrollee to prevent the development of
                  symptomatic disease. This includes: regular medical
                  assessments; routine immunization for preventable infections;
                  prophylaxis for opportunistic infections; regular dental,
                  optical, dermatological and gynecological care; optimal
                  diet/nutritional supplementation; and partner notification
                  services which lead to the early detection and treatment of
                  other infected persons. All plan Enrollees should be informed
                  of the availability of HIV counseling, testing, referral and
                  partner notification (CTRPN) services.

            b)    Policies and procedures promoting the early identification of
                  HIV infection in Enrollees. Such policies and procedures shall
                  include at a minimum: assessment methods for recognizing the
                  early signs and symptoms of HIV disease; initial and routine
                  screening for HIV risk factors through administration of
                  sexual behavior and drug and alcohol use assessments; and the
                  provision of information to all Enrollees regarding the
                  availability of in-plan HIV CTRPN services, out of plan CTRPN
                  services as part of a family planning visit, and anonymous
                  CTRPN services from New York State, New York City and Local
                  Public Health Agencies.

            c)    The Contractor shall comply with the requirements set forth
                  in Title 10 NYCRR (including Part 98 and in Subpart 69-1)
                  which mandate that HIV counseling with testing, presented as a
                  clinical recommendation, be provided to all women in prenatal
                  care and their newborns. Consistent with these requirements,
                  the Contractor shall ensure that Participating Providers refer
                  such Enrollees determined to have HIV infection for clinically
                  appropriate services.

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            d)    Network Sufficiency. A network of providers sufficient to meet
                  the needs of its Enrollees with HIV. Satisfaction of the
                  network requirement may be accomplished by inclusion of HIV
                  specialists within the network or the provision of HIV
                  specialist consultation to non-HIV specialists serving as PCPs
                  for persons with HIV infection; inclusion of Designated AIDS
                  Center Hospitals or other hospitals experienced in HIV care in
                  the Contractor's network; and contracts or linkages with
                  providers funded under the Ryan White CARE Act. The Contractor
                  shall inform the providers in its network how to obtain
                  information about the availability of Experienced HIV
                  Providers and HIV Specialist PCPs.

            e)    Case Management Assessment for Enrollees with HIV Infection.
                  The Contractor shall establish policies and procedures to
                  ensure that Enrollees who have been identified as having HIV
                  infection are assessed for case management services. The
                  Contractor shall arrange for any Enrollee identified as having
                  HIV infection and needing case management services to be
                  referred to an appropriate case management services provider,
                  including in-plan case management, and/or, with appropriate
                  consent of the Enrollee, COBRA Comprehensive Medicaid Case
                  Management (CMCM) services and/or HIV community-based
                  psychosocial case management services.


            f)    Reporting. The Contractor shall require that its Participating
                  Providers shall report positive HIV test results and diagnoses
                  and known contacts of such persons to the New York State
                  Commissioner of Health. In New York City, these shall be
                  reported to the New York City Commissioner of Health. Access
                  to partner notification services must be consistent with 10
                  NYCRR Part 63.

            g)    Updates and Dissemination of HIV Practice Guidelines. The
                  Contractor's Medical Director shall review Contractor's HIV
                  practice guidelines at least annually and update them as
                  necessary for compliance with recommended SDOH AIDS Institute
                  and federal government clinical standards. The Contractor will
                  disseminate the HIV Practice Guidelines or revised guidelines
                  to Participating Providers at least annually, or more
                  frequently as appropriate.

      10.24 Persons Requiring Chemical Dependence Services

            The Contractor will have in place all of the following for its
            Enrollees requiring Chemical Dependence Services:

            a)    Participating Provider networks consisting of licensed
                  providers, as defined in Section 21.17 of this contract.

            b)    Satisfactory methods for identifying persons requiring such
                  services and encouraging self-referral and early entry into
                  treatment. In the case of

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                  pregnant women, having methods for referring to OASAS for
                  appropriate services beyond the Contractor's Benefit Package
                  (e.g., halfway houses).

            c)    Satisfactory systems of care (provider networks and referral
                  processes sufficient to ensure that emergency services can be
                  provided in a timely manner), including crisis services.

            d)    Satisfactory case management systems.

            e)    Satisfactory systems for coordinating service delivery between
                  physical health, chemical dependence, and mental health
                  providers, and coordinating in-plan services with other
                  services, including Social Services.

            The Contractor agrees to also participate in the local planning
            process for serving persons with chemical dependence, to the extent
            requested by the LDSS. At the LDSS's discretion, the Contractor will
            develop linkages with local governmental units on coordination
            procedures and standards related to Chemical Dependence Services and
            related activities.

      10.25 Native Americans

            If the Contractor's Enrollee is a Native American and the Enrollee
            chooses to access primary care services through their tribal health
            center, the PCP authorized by the Contractor to refer the Enrollee
            for plan benefits must develop a relationship with the Enrollee's
            PCP at the tribal health center to coordinate services for said
            Native American Enrollee.

      10.26 Women, Infants, and Children (WIC)

            The Contractor shall develop linkage agreements or other mechanisms
            to ensure women and children enrollees are referred to WIC services
            if qualified to receive such services. The Contractor shall refer
            pregnant women and children, younger than five (5) years of age, to
            WIC local agencies for nutritional assessments and supplements.

      10.27 Urgently Needed Services

            a)    The Contractor is responsible for Urgently Needed Services.

            b)    Urgently Needed Services are covered only in the United
                  States, the Commonwealth of Puerto Rico, the U.S. Virgin
                  Islands, Guam, American Samoa, the Northern Mariana Islands
                  and Canada.

            c)    The Contractor must disclose to all Enrollees the procedures
                  to be followed to obtain Urgently Needed Services.

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            d)    The Contractor may require Enrollees or the Enrollee's
                  designee to coordinate with the Contractor or the Enrollee's
                  PCP prior to receiving care, to ensure that the needed care
                  will be authorized and covered by the plan as Urgently Needed
                  Services.

      10.28 Dental Services Provided by Article 28 Clinics Operated by Academic
            Dental Centers Not Participating in Contractor's Network

            a)    Consistent with Chapter 697 of Laws of 2003 amending Section
                  364 (j) of the Social Services Law, dental services provided
                  by Article 28 clinics operated by academic dental centers may
                  be accessed directly by Medicaid managed care Enrollees
                  without prior approval and without regard to network
                  participation.

            b)    If dental services are part of the Contractor's Benefit
                  Package, the Contractor will reimburse non-participating
                  Article 28 clinics operated by academic dental centers for
                  covered dental services provided to Enrollees on or after
                  November 19, 2003 at approved Article 28 Medicaid clinic rates
                  in accordance with the protocols issued by the SDOH.

      10.29 Coordination of Services

            a)    The Contractor shall coordinate care for Enrollees with:

                  i)    the court system (for court ordered evaluations and
                        treatment);

                  ii)   specialized providers of health care for the homeless,
                        and other providers of services for victims of domestic
                        violence;

                  iii)  family planning clinics, community health centers,
                        migrant health centers, rural health centers;

                  iv)   WIC, Head Start, Early Intervention;

                  v)    special needs plans;

                  vi)   programs funded through the Ryan White CARE Act;

                  vii)  other pertinent entities that provide services out of
                        network;

                  viii) Prenatal Care Assistance Program (PCAP) Providers;

                  ix)   local governmental units responsible for public health,
                        mental health, mental retardation or Chemical Dependence
                        Services;

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                  x)    specialized providers of long term care for people with
                        developmental disabilities; and

                  xi)   School-based health centers.

            b)    Coordination may involve contracts or linkage agreements (if
                  entities are willing to enter into such agreement), or other
                  mechanisms to ensure coordinated care for Enrollees, such as
                  protocols for reciprocal referral and communication of data
                  and clinical information on MCO Enrollees.

      10.30 Prospective Benefit Package Change for Retroactive SSI
            Determinations

            The managed care Benefit Package and associated Capitation Rate for
            Enrollees who become SSI or SSI related retroactively shall be
            changed prospectively as of the effective date of the Roster on
            which the Enrollee's status change appears.

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                                October 1, 2004
                                     10-19

<PAGE>

11.   MARKETING

      11.1  Marketing Plan

            The Contractor shall have a Marketing Plan, that has been
            prior-approved by the SDOH and/or LDSS, that describes the Marketing
            activities the Contractor will undertake within the local district
            during the term of this Agreement.

            The Marketing Plan and all marketing activities must be consistent
            with the Marketing Guidelines which are set forth in Appendix D,
            which is hereby made a part of this Agreement as if set forth fully
            herein.

            The Marketing Plan shall be kept on file in the offices of the
            Contractor, LDSS, and the SDOH. The Marketing Plan may be modified
            by the Contractor subject to prior written approval by the SDOH
            and/or the LDSS. The LDSS or SDOH must take action on the changes
            submitted within sixty (60) calendar days of submission or the
            Contractor may deem the changes approved.

      11.2  Marketing Activities

            Marketing activities by the Contractor shall conform to the approved
            Marketing Plan.

      11.3  Prior Approval of Marketing Materials, Procedures, Subcontracts

            The Contractor shall submit all subcontracts, procedures, and
            materials related to Marketing to Eligible Persons to the SDOH
            and/or LDSS for prior written approval. The Contractor shall not
            enter into any subcontracts or use any marketing subcontractors,
            procedures, or materials that the SDOH and/or LDSS has not approved.
            I

      11.4  Marketing Infractions

            Infractions of the Marketing Guidelines may result in the following
            actions being taken by the LDSS to protect the interests of the
            program and its clients. These actions shall be taken at the sole
            discretion of the LDSS.

            a)    If an MCO or its representative commits a first time
                  infraction of marketing guidelines and the LDSS deems the
                  infraction to be minor or unintentional in nature, the LDSS
                  may issue a warning letter to the MCO.

            b)    For subsequent or more serious infractions, the LDSS may
                  impose liquidated damages of $2,000 or other appropriate
                  non-monetary sanction for each infraction.

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                                  (MARKETING)
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            c)    The LDSS may require the MCO to prepare a corrective action
                  plan with a specified deadline for implementation.

            d)    If the MCO commits further infractions, fails to pay
                  liquidated damages within the specified timeframe, fails to
                  implement a corrective action plan in a timely manner or
                  commits an egregious first-time infraction, the LDSS may:

                  i)    prohibit the plan from conducting any marketing
                        activities for a period up to the end of the contract
                        period;

                  ii)   suspend new enrollments, other than newborns, for a
                        period up to the remainder of the contract; or

                  iii)  terminate the contract pursuant to termination
                        procedures described therein.

11.5  LDSS Option to Adopt Additional Marketing Guidelines

      The LDSS may adopt, subject to SDOH approval, additional and/or more
      restrictive terms in the Marketing Guidelines to the extent appropriate to
      local conditions and circumstances, which shall be appended to Appendix D,
      Section E.

                                   SECTION 11
                                  (MARKETING)
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                                      11-2

<PAGE>

12.   MEMBER SERVICES

      12.1  General Functions

            The Contractor shall operate a Member Services function during
            regular business hours, which must be accessible to Enrollees via a
            toll-free telephone line. Personnel must also be available via a
            toll-free telephone line (which can be the member services toll-free
            line or separate toll-free lines) not less than during regular
            business hours to address complaints and utilization review
            inquiries. In addition, the Contractor must have a telephone system
            capable of accepting, recording or providing instruction to incoming
            calls regarding complaints and utilization review during other than
            normal business hours and measures in place to ensure a response to
            those calls the next business day after the call was received. At a
            minimum, the Member Services Department must be staffed at a ratio
            of at least one (1) full time equivalent Member Service
            Representative for every 4,000 or fewer Enrollees. Member Services
            staff must be responsible for the following:

            a)    Explaining the Contractor's rules for obtaining services and
                  assisting Enrollees in making appointments.

            b)    Assisting Enrollees to select or change Primary Care
                  Providers.

            c)    Fielding and responding to Enrollee questions and complaints,
                  and advising Enrollees of the prerogative to complain to the
                  SDOH and LDSS at any time.

            d)    Clarifying information in the member handbook for Enrollees.

            e)    Advising Enrollees of the Contractor's complaint and appeals
                  program, the utilization review process, and Enrollee's rights
                  to a fair hearing or external review.

            f)    Clarifying for potential Enrollees current categories of
                  exemptions and exclusions. The Contractor may refer to the
                  LDSS or the Enrollment Broker, where one is in place, if
                  necessary, for more information on exemptions and exclusions.

      12.2  Translation and Oral Interpretation

      a)    The Contractor must make available written marketing and other
            informational materials (e.g., member handbooks) in a language other
            than English whenever at least five percent (5%) of the potential
            Enrollees of the Contractor in any county of the service area speak
            that particular language and do not speak English as a first
            language.

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                                (MEMBER SERVICES)
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            b)    In addition, verbal interpretation services must be made
                  available to Enrollees who speak a language other than English
                  as a primary language. Interpreter services must be offered in
                  person where practical, but otherwise may be offered by
                  telephone.

            c)    The SDOH will determine the need for other than English
                  translations based on County-specific census data or other
                  available measures.

      12.3  Communicating with the Visually, Hearing and Cognitively Impaired

            The Contractor also must have in place appropriate alternative
            mechanisms for communicating effectively with persons with visual,
            hearing, speech, physical or developmental disabilities. These
            alternative mechanisms include Braille or audio tapes for the
            visually impaired, TTY access for those with certified speech or
            hearing disabilities, and use of American Sign Language and/or
            integrative technologies.

                                   SECTION 12
                                (MEMBER SERVICES)
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                                      12-2

<PAGE>

13    ENROLLEE NOTIFICATION

      13.1  Provider Directories/Office Hours for Participating Providers

            a)    The Contractor shall maintain and update, on a quarterly
                  basis, a listing by specialty of the names, addresses and
                  telephone numbers of all Participating Providers, including
                  facilities. Such a list/directory shall include names, office
                  addresses, telephone numbers, board certification for
                  physicians, and information on language capabilities and
                  wheelchair accessibility of Participating Providers.

            b)    New Enrollees, and upon request, prospective Enrollees, must
                  receive the most current complete listing in hardcopy, along
                  with any updates to such listing.

            c)    Enrollees must be notified of updates in writing at least
                  annually in one of the following methods: provide updates in
                  hardcopy; provide a new complete listing/directory in
                  hardcopy; or provide written notification that a new complete
                  listing/directory is available and will be provided upon
                  request either in hardcopy, or electronically if the
                  Contractor has the capability of providing such data in an
                  electronic format and the data is requested in that format by
                  an Enrollee.

            d)    In addition, the Contractor must make available to the LDSS
                  the office hours for Participating Providers. This requirement
                  may be satisfied by providing a copy of the list or Provider
                  Directory described in this Section with the addition of
                  office hours or by providing a separate listing of office
                  hours for Participating Providers.

      13.2  Member ID Cards

            a)    The Contractor must issue an identification card to the
                  Enrollee containing the following information:

                  i)    the name of the Enrollee's clinic (if applicable);

                  ii)   the name of the Enrollee's PCP and the PCP's telephone
                        number;

                  iii)  the member services toll free telephone number;

                  iv)   the twenty-four (24) hour toll free telephone number
                        that Enrollees may use to access information on
                        obtaining services when his/her PCP is not available;
                        and

                  v)    for ID Cards issued after October 1, 2004, the
                        Enrollee's Client Identification Number (CIN).

            b)    If an Enrollee is being served by a PCP team, the name of the
                  individual shown on the card should be the lead provider. PCP
                  information may be embossed on the card or affixed to the card
                  by a sticker.

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            c)    The Contractor shall issue an identification card within
                  fourteen (14) days of an Enrollee's Effective Date of
                  Enrollment. If unforeseen circumstances, such as the lack of
                  identification of a PCP, prevent the MCO from forwarding the
                  official identification card to new Enrollees within the
                  fourteen (14) day period, alternative measures by which
                  Enrollees may identify themselves such as use of a Welcome
                  Letter or a temporary identification card shall be deemed
                  acceptable until such time as a PCP is either chosen by the
                  Enrollee or auto assigned by the Contractor. The Contractor
                  agrees to implement an alternative method by which individuals
                  may identify themselves as Enrollees prior to receiving the
                  card (e.g., using a "welcome letter" from the plan) and to
                  update PCP information on the identification card. Newborns of
                  Enrollees need not present ID cards in order to be seen by the
                  MCO and its Participating Providers.

13.3  Member Handbooks

      The Contractor shall issue to a new Enrollee within fourteen (14) days of
      the Effective Date of Enrollment a Member Handbook, which is consistent
      with the SDOH guidelines described in Appendix E, which is hereby made a
      part of this Agreement as if set forth fully herein.

13.4  Notification of Effective Date of Enrollment

      The Contractor shall inform each Enrollee in writing within fourteen (14)
      days of the Effective Date of Enrollment of any restriction on the
      Enrollee's right to terminate enrollment. The initial enrollment
      information and the Member Handbook shall be adequate to convey this
      notice.

13.5  Notification of Enrollee Rights

      The Contractor agrees to make all reasonable efforts to contact new
      Enrollees, in person, by telephone, or by mail within thirty (30) days of
      their Effective Date of Enrollment. "Reasonable efforts" are defined to
      mean at least three (3) attempts, with more than one method of contact
      being employed. Upon contacting the new Enrollee(s), the Contractor agrees
      to do at least the following:

      a)    Inform the Enrollee about the Contractor's policies with respect to
            obtaining medical services, including services for which the
            Enrollee may self-refer, and what to do in an emergency.

      b)    Conduct a brief health screening to assess the Enrollee's need for
            any special health care (e.g., prenatal or behavioral health
            services) or language/communication needs. If a special need is
            identified, the Contractor shall assist the Enrollee in arranging
            for an appointment with his/her PCP or other appropriate provider.

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<PAGE>

      c)    Offer assistance in arranging an initial visit to the Enrollee's PCP
            for a baseline physical and other preventive services, including an
            assessment of the Enrollee's potential risk, if any, for specific
            diseases or conditions.

      d)    Inform new Enrollees about their rights for continuation of certain
            existing services.

      e)    Provide the Enrollee with the Contractor's toll free telephone
            number that may be called twenty-four (24) hours a day, seven (7)
            days a week if the Enrollee has questions about obtaining services
            and cannot reach his/her PCP (this telephone number need not be the
            Member Services line and need not be staffed to respond to Member
            Services-related inquiries). The Contractor must have appropriate
            mechanisms in place to accommodate Enrollees who do not have
            telephones and therefore cannot readily receive a call back.

      f)    Advise Enrollee about opportunities available to learn about MCO
            policies and benefits in greater detail (e.g., welcome meeting,
            Enrollee orientation and education sessions).

      g)    Provide the Enrollee with a complete list of network providers that
            may be accessed directly, without referral. The list should group
            providers by service type and must include addresses and telephone
            numbers.

      h)    Assist the Enrollee in selecting a primary care provider if one has
            not already been chosen.

13.6  Enrollee's Rights to Advance Directives

      The Contractor shall, in compliance with the requirements of 42 CFR
      434.28, maintain written policies and procedures regarding advance
      directives and inform each Enrollee in writing at the time of enrollment
      of an individual's rights under State law to formulate advance directives
      and of the Contractor's policies regarding the implementation of such
      rights. The Contractor shall include in such written notice to the
      Enrollee materials relating to advance directives and health care proxies
      as specified in 10 NYCRR Sections 98.14(f) and 700.5.

13.7  Approval of Written Notices

      The Contractor shall submit the format and content of all written
      notifications described in this Section to LDSS for review and prior
      approval by LDSS or SDOH. All written notifications must be written at a
      fourth (4th) to sixth (6th) grade level and in at least ten (10) point
      print.

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                             (ENROLLEE NOTIFICATION)
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                                      13-3

<PAGE>

13.8  Contractor's Duty to Report Lack of Contact

      The Contractor must inform the LDSS of any Enrollee they are unable to
      contact within ninety (90) days of enrollment using reasonable efforts as
      defined in Section 13.5 of the Agreement and who have not presented for
      any health care services through the Contractor or its Participating
      Providers.

13.9  Contractor Responsibility to Notify Enrollee of Expected Effective Date of
      Enrollment

      The Contractor must notify the Enrollee of the expected Effective Date of
      Enrollment. In the event that the actual Effective Date of Enrollment is
      different from that given to the Enrollee the Contractor must notify the
      Enrollee of the actual date of enrollment. This may be accomplished
      through a Welcome Letter. To the extent practicable, such notification
      must precede the Effective Date of Enrollment.

13.10 LDSS Notification of Enrollee's Change in Address

      The LDSS must notify the Contractor of any known change in address of
      Enrollees in the Contractor's plan.

13.11 Contractor Responsibility to Notify Enrollee of Effective Date of Benefit
      Package Change

      The Contractor must provide written notification of the effective date of
      any Contractor-initiated, SDOH and LDSS-approved benefit package change to
      Enrollees in the Contractor's plan. Notification to Enrollees must be
      provided at least 30 days in advance of the effective date of such change.

13.12 Contractor Responsibility to Notify Enrollee of Termination, Service Area
      Changes and Network Changes

      With prior notice to and approval of the SDOH and LDSS, the Contractor
      shall inform each Enrollee in writing of any withdrawal by the Contractor
      from the Medicaid managed care program pursuant to Section 2.7, withdrawal
      from the Service Area encompassing the Enrollee's zip code, and/or
      significant changes to the Contractor's provider network pursuant to
      Section 21.1(d), except that the Contractor need not notify Enrollees who
      will not be affected by such changes.

      The Contractor shall provide the notifications within the timeframes
      specified by SDOH and LDSS, and shall obtain the prior approval of the
      notification from SDOH and LDSS.

                                   SECTION 13
                             (ENROLLEE NOTIFICATION)
                                 October 1, 2004
                                      13-4

<PAGE>

14.   COMPLAINT AND APPEAL PROCEDURE

      14.1  Contractor's Program to Address Complaints

            a)    The Contractor shall establish and maintain a comprehensive
                  program designed to address clinical and other complaints, and
                  appeals of complaint determinations, which may be brought by
                  Enrollees, consistent with Articles 44 and 49 of the New York
                  State PHL.

            b)    The program must include methods for prompt internal
                  adjudication of Enrollee complaints and appeals and provide
                  for the maintenance of a written record of all complaints and
                  appeals received and reviewed and their disposition.

            c)    The Contractor shall ensure that persons with authority to
                  require corrective action participate in the complaint and
                  appeal process.

      14.2  Notification of Complaint and Appeal Program

            a)    The Contractor's specific complaint and appeal program shall
                  be described in the Contractor's member handbook and shall be
                  made available to all Enrollees.

            b)    The Contractor will advise Enrollees of their right to a fair
                  hearing as appropriate and comply with the procedures
                  established by SDOH for the Contractor to participate in the
                  fair hearing process, as set forth in Section 25 of this
                  Agreement. The Contractor will also advise Enrollees of their
                  right to an external appeal, in accordance with Section 26 of
                  this Agreement.

      14.3  Guidelines for Complaint and Appeal Program

            a)    The Contractor's complaint and appeal program will comply with
                  the Managed Care Complaint and Appeals Program Guidelines
                  described in Appendix F, which is hereby made a part of this
                  Agreement as if set forth fully herein. The SDOH and LDSS may
                  modify Appendix F of this Agreement upon sixty (60) days prior
                  written notice to the Contractor and such modifications shall
                  become binding and incorporated into this Agreement without
                  further action by the parties.

            b)    The Contractor's complaint and appeal procedures shall be
                  approved by the SDOH and LDSS and kept on file with the
                  Contractor, LDSS and SDOH.

            c)    The Contractor shall not modify its complaint and appeals
                  procedure without the prior written approval of SDOH, in
                  consultation with LDSS, and shall provide LDSS and SDOH with a
                  copy of the approved modification within fifteen (15) days
                  after its approval.

                                   SECTION 14
                        (COMPLAINT AND APPEAL PROCEDURE)
                                October 1, 2004
                                      14-1

<PAGE>

      14.4  Complaint Investigation Determinations

            The MCO must adhere to determinations resulting from complaint
            investigations conducted by SDOH.

                                   SECTION 14
                        (COMPLAINT AND APPEAL PROCEDURE)
                                October 1, 2004
                                      14-2
<PAGE>

15.   ACCESS REQUIREMENTS

      15.1  Appointment Availability Standards

            The Contractor shall comply with the following appointment
            availability standards(1).

            a)    For emergency care: immediately upon presentation at a service
                  delivery site.

            b)    For urgent care: within twenty-four (24) hours of request.

            c)    Non-urgent "sick" visit: within forty-eight (48) to
                  seventy-two (72) hours of request, as clinically indicated.

            d)    Routine non-urgent, preventive appointments: within four (4)
                  weeks of request.

            e)    Specialist referrals (not urgent): within four (4) to six (6)
                  weeks of request.

            f)    Initial prenatal visit: within three (3) weeks during first
                  trimester, within two (2) weeks during the second trimester
                  and within one (1) week during the third trimester.

            g)    Adult Baseline and routine physicals: within twelve (12) weeks
                  from enrollment. (Adults >21)

            h)    Well child care: within four (4) weeks of request.

            i)    Initial family planning visits: within two (2) weeks of
                  request.

            j)    In-plan mental health or substance abuse follow-up visits
                  (pursuant to an emergency or hospital discharge): within five
                  (5) days of request, or as clinically indicated.

            k)    In-plan, non-urgent mental health or substance abuse visits:
                  within two (2) weeks of request.

            1)    Initial PCP office visit for newborns: within two (2) weeks of
                  hospital discharge.

            m)    Provider visits to make health, mental health and substance
                  abuse assessments for the purpose of making recommendations
                  regarding a recipient's ability to perform work when requested
                  by a LDSS: within ten (10) days of request by an Enrollee, in
                  accordance with Section 10.8 of this Agreement.

      15.2  Twenty-Four (24) Hour Access

            a)    The Contractor must provide access to medical services and
                  coverage to Enrollees, either directly or through their PCPs
                  and OB/GYNs, on a twenty-four (24) hour a day, seven (7) day a
                  week basis. The Contractor must instruct Enrollees on what to
                  do to obtain services after business hours and on weekends.

-------------------

(1) These are general standards and are not intended to supersede sound clinical
judgment as to the necessity for care and services on a more expedient basis,
when judged clinically necessary and appropriate.

                                   SECTION 15
                       (EQUALITY OF ACCESS AND TREATMENT)
                                 October 1, 2004
                                      15-1

<PAGE>

            b)    The Contractor may satisfy the requirement in Section 15.2(a)
                  by requiring their PCPs and OB/GYNs to have primary
                  responsibility for serving as an after hours "on-call"
                  telephone resource to members with medical problems. Under no
                  circumstances may the Contractor routinely refer calls to an
                  emergency room.

      15.3  Appointment Waiting Times

            Enrollees with appointments shall not routinely be made to wait
            longer than one hour.

      15.4  Travel Time Standards

            The Contractor will maintain a network that is geographically
            accessible to the population to be served.

            a)    Primary Care

                  Travel time/distance to primary care sites shall not exceed
                  thirty (30) minutes in metropolitan areas or thirty (30)
                  minutes/thirty (30) miles in non-metropolitan areas. Transport
                  time and distance in rural areas to primary care sites may be
                  greater than thirty (30) minutes/thirty (30) miles if based on
                  the community standard for accessing care or if by Enrollee
                  choice.

                  Enrollees may, at their discretion, select participating PCPs
                  located farther from their homes as long as they are able to
                  arrange and pay for transportation to the PCP themselves.

            b)    Other Providers

                  Travel time/distance to specialty care, hospitals, mental
                  health, lab and x-ray providers shall not exceed thirty (30)
                  minutes/thirty (30) miles. Transport time and distance in
                  rural areas to specialty care, hospitals, mental health, lab
                  and x-ray providers may be greater than thirty (30)
                  minutes/thirty (30) miles if based on the community standard
                  for accessing care or if by Enrollee choice.

      15.5  Service Continuation

            a)    New Enrollees

                  If a new Enrollee has an existing relationship with a health
                  care provider who is not a member of the Contractor's provider
                  network, the contractor shall permit the Enrollee to continue
                  an ongoing course of treatment by the Non-Participating
                  Provider during a transitional period of up to sixty (60) days
                  from the Effective Date of Enrollment, if, (1) the Enrollee
                  has a life-

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                       (EQUALITY OF ACCESS AND TREATMENT)
                                October 1, 2004
                                      15-2
<PAGE>

                  threatening disease or condition or a degenerative and
                  disabling disease or condition, or (2) the Enrollee has
                  entered the second trimester of pregnancy at the Effective
                  Date of Enrollment, in which case the transitional period
                  shall include the provision of post-partum care directly
                  related to the delivery up until sixty (60) days post partum.
                  If the Enrollee elects to continue to receive care from such
                  Non-Participating Provider, such care shall be authorized by
                  the Contractor for the transitional period only if the
                  Non-Participating Provider agrees to:

                  i)    accept reimbursement from the Contractor at rates
                        established by the Contractor as payment in full, which
                        rates shall be no more than the level of reimbursement
                        applicable to similar providers within the Contractor's
                        network for such service; and

                  ii)   adhere to the Contractor's quality assurance
                        requirements and agrees to provide to the Contractor
                        necessary medical information related to such care; and

                  iii)  otherwise adhere to the Contractor's policies and
                        procedures including, but not limited to procedures
                        regarding referrals and obtaining pre-authorization in
                        a treatment plan approved by the Contractor.

            In no event shall this requirement be construed to require the
            Contractor to provide coverage for benefits not otherwise covered.

            b)    Enrollees Whose Health Care Provider Leaves Network

                  The Contractor shall permit an Enrollee, whose health care
                  provider has left the Contractor's network of providers, for
                  reasons other than imminent harm to patient care, a
                  determination of fraud or a final disciplinary action by a
                  state licensing board that impairs the health professional's
                  ability to practice, to continue an ongoing course of
                  treatment with the Enrollee's current health care provider
                  during a transitional period, consistent with New York State
                  PHL Section 4403(6)(e).

                  The transitional period shall continue up to ninety (90) days
                  from the date of notice to the Enrollee of the provider's
                  disaffiliation from the network; or, if the Enrollee has
                  entered the second trimester of pregnancy, for a transitional
                  period that includes the provision of post-partum care
                  directly related to the delivery through sixty (60) days post
                  partum. If the Enrollee elects to continue to receive care
                  from such Non-Participating Provider, such care shall be
                  authorized by the Contractor for the transitional period only
                  if the Non-Participating Provider agrees to:

                  i)    accept reimbursement from the Contractor at rates
                        established by the Contractor as payment in full, which
                        rates shall be no more than the level of reimbursement
                        applicable to similar providers within the Contractor's
                        network for such services.

                                   SECTION 15
                       (EQUALITY OF ACCESS AND TREATMENT)
                                October 1, 2004
                                      15-3
<PAGE>

                  ii)   adhere to the Contractor's quality assurance
                        requirements and agrees to provide to the Contractor
                        necessary medical information related to such care; and

                  iii)  otherwise adhere to the Contractor's policies and
                        procedures including, but not limited to procedures
                        regarding referrals and obtaining pre-authorization in a
                        treatment plan approved by the Contractor.

            In no event shall this requirement be construed to require the
            Contractor to provide coverage for benefits not otherwise covered.

      15.6  Standing Referrals

            The Contractor will implement policies and procedures to allow for
            standing referrals to specialist physicians for Enrollees who have
            ongoing needs for care from such specialists, consistent with PHL
            Section 4403(6)(b).

      15.7  Specialist as a Coordinator of Primary Care

            The Contractor will implement policies and procedures to allow
            Enrollees with a life-threatening or degenerative and disabling
            disease or condition, which requires prolonged specialized medical
            care, to receive a referral to a specialist, who will then function
            as the coordinator of primary and specialty care for that Enrollee,
            consistent with PHL Section 4403(6)(c).

      15.8  Specialty Care Centers

            The Contractor will implement policies and procedures to allow
            Enrollees with a life-threatening or a degenerative and disabling
            condition or disease, which requires prolonged specialized medical
            care to receive a referral to an accredited or designated specialty
            care center with expertise in treating the life-threatening or
            degenerative and disabling disease or condition, consistent with New
            York State PHL Section 4403(6)(d).

                                   SECTION 15
                       (EQUALITY OF ACCESS AND TREATMENT)
                                 October 1, 2004
                                      15-4
<PAGE>

16.   QUALITY ASSURANCE

      16.1  Internal Quality Assurance Program

            a)    Contractor must operate a quality assurance program which is
                  approved by SDOH and which includes methods and procedures to
                  control the utilization of Medicaid services consistent with
                  PHL Article 49 and 42 CFR Part 456. Recipients' records must
                  include information needed to perform utilization review as
                  specified in 42 CFR Sections 456.111 and 456.211. The
                  Contractor's approved quality assurance program must be kept
                  on file by the Contractor and the LDSS. The Contractor shall
                  not modify the quality assurance program without the prior
                  written approval of the SDOH, and notice to the LDSS.

            b)    The Contractor shall incorporate the findings from reports in
                  Section 18 of this Agreement into its quality assurance
                  program. Where performance is less than the statewide average
                  or another standard as defined by the SDOH and developed in
                  consultation with plans and appropriate clinical experts, the
                  Contractor will be required to develop and implement a plan
                  for improving performance that is approved by the SDOH and
                  LDSS and that specifies the expected level of improvement and
                  timeframes for actions expected to result in such improvement.
                  In the event that such approved plan does not result in the
                  expected level of improvement, the Contractor shall work with
                  the SDOH and the LDSS to develop and implement alternative
                  plans to achieve improvement. The Contractor agrees to meet
                  with the SDOH and LDSS to review improvement plans and quality
                  performance.

      16.2  Standards of Care

            The Contractor must adopt practice guidelines consistent with
            current standards of care, complying with recommendations of
            professional specialty groups or the guidelines of programs such as
            the American Academy of Pediatrics, the American Academy of Family
            Physicians, the U.S. Task Force on Preventive Care, the New York
            State Child/Teen Health Program (C/THP) standards for provision of
            care to individuals under age 21, the American Medical Association's
            Guidelines for Adolescent and Preventive Services, the US Department
            of Health and Human Services Center for Substance Abuse Treatment,
            the American College of Obstetricians and Gynecologists, the
            American Diabetes Association, and the AIDS Institute clinical
            standards for adult, adolescent, and pediatric care. The Contractor
            must have mechanisms in place to disseminate any changes in practice
            guidelines to its network providers at least annually, or more
            frequently, as appropriate. The Contractor shall develop and
            implement protocols for identifying providers who do not adhere to
            practice guidelines and for making reasonable efforts to improve the
            performance of these providers. Annually, the Contractor shall
            select a minimum of two practice guidelines and monitor

                                   SECTION 16
                              (QUALITY ASSURANCE)
                                OCTOBER 1, 2004
                                      16-1
<PAGE>

            performance of appropriate providers (or a sample of providers)
            against such guidelines.

                                   SECTION 16
                              (QUALITY ASSURANCE)
                                OCTOBER 1, 2004
                                      16-2
<PAGE>

17.   MONITORING AND EVALUATION

      17.1  Right to Monitor Contractor Performance

            The SDOH, LDSS, and DHHS shall each have the right, during the
            Contractor's normal operating hours, and at any other time a
            Contractor function or activity is being conducted, to monitor and
            evaluate, through inspection or other means, the Contractor's
            performance, including, but not limited to, the quality,
            appropriateness, and timeliness of services provided under this
            Agreement.

      17.2  Cooperation During Monitoring and Evaluation

            The Contractor shall cooperate with and provide reasonable
            assistance to the SDOH, LDSS, and DHHS in the monitoring and
            evaluation of the services provided under this Agreement.

      17.3  Cooperation During On-Site Reviews

            The Contractor shall cooperate with SDOH and LDSS in any on-site
            review of the MCO's operations. SDOH shall give the Contractor
            notification of the date(s) and survey format for any full
            operational review at least forty-five (45) days prior to the site
            visit. This requirement shall not preclude LDSS or SDOH from site
            visits upon shorter notice for other monitoring purposes.

      17.4  Cooperation During Review of Services by External Review Agency

            The Contractor shall comply with all requirements associated with
            any review of the quality of services rendered to its Enrollees to
            be performed by an external review agent selected by the SDOH.

                                   SECTION 17
                          (MONITORING AND EVALUATION)
                                OCTOBER 1, 2004
                                      17-1
<PAGE>

18.   CONTRACTOR REPORTING REQUIREMENTS

      18.1  Time Frames for Report Submissions

            Except as otherwise specified herein, the Contractor shall prepare
            and submit to SDOH and the LDSS the reports required under this
            Agreement in an agreed media format within sixty (60) days of the
            close of the applicable semi-annual or annual reporting period, and
            within fifteen (15) business days of the close of the applicable
            quarterly reporting period.

      18.2  SDOH Instruction for Report Submissions

            SDOH, with prior notice to the LDSS, will provide Contractor with
            instructions for submitting the reports required by Section 18.5(a)
            through (n), including time frames, and requisite formats. The
            instructions, time frames and formats may be modified by SDOH with
            prior notice to the LDSS, and thereafter upon sixty (60) days
            written notice to the Contractor. The LDSS, with prior notice to
            SDOH, shall provide the Contractor with instructions for submitting
            the reports, required by Section 18.5(o) including time frames and
            requisite formats.

      18.3  Liquidated Damages

            The Contractor shall pay liquidated damages of $2,500 if any report
            required pursuant to this Section is materially incomplete, contains
            material misstatements or inaccurate information, or is not
            submitted on time in the requested format. The Contractor shall pay
            liquidated damages of $2,500 to the LDSS if its monthly encounter
            data submission is not received by the Fiscal Agent by the due date
            specified in Section 18.5(d). The Contractor shall pay liquidated
            damages of $500 to the LDSS for each day other reports required by
            this Section are late. The LDSS shall not impose liquidated damages
            for a first time infraction by the Contractor unless the LDSS deems
            the infraction to be a material misrepresentation of fact or the
            Contractor fails to cure the first infraction within a reasonable
            period of time upon notice from the LDSS. Liquidated damages may be
            waived at the sole discretion of LDSS. Nothing in this Section shall
            limit other remedies or rights available to LDSS and SDOH relating
            to the timeliness, completeness and/or accuracy of Contractor's
            reporting submission.

      18.4  Notification of Changes in Report Due Dates, Requirements or Formats

            SDOH or LDSS may extend due dates, or modify report requirements or
            formats upon a written request by the Contractor to the SDOH or LDSS
            with a copy of the request to the other agency, where the Contractor
            has demonstrated a good and compelling reason for the extension or
            modification. The determination to grant a modification or,
            extension of time shall be made by SDOH with regard to annual and
            quarterly statements, complaint reports, audits, encounter data,
            change of ownership, clinical studies, QARR, and provider network
            reports. The

                                   SECTION 18
                      (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2004
                                      18-1

<PAGE>

            determination to grant a modification or extension of time shall be
            made by the LDSS with respect to No-Contact, PCP auto assignment,
            and reports required by Sections 18.5(n) and (o) of the Agreement.

      18.5  Reporting Requirements

            The Contractor shall submit the following reports to SDOH and to the
            LDSS except in those instances in which this Agreement specifies the
            reports shall be submitted solely to SDOH:

            a)    Annual Financial Statements:

                  Contractor shall submit Annual Financial Statements to SDOH.
                  The due date for annual statements shall be April 1 following
                  the report closing date.

            b)    Quarterly Financial Statements:

                  Contractor shall submit Quarterly Financial Statements to
                  SDOH. The due date for quarterly reports shall be forty-five
                  (45) days after the end of the calendar quarter.

            c)    Other Financial Reports:

                  Contractor shall submit financial reports, including certified
                  annual financial statements, and make available documents
                  relevant to its financial condition to SDOH and the State
                  Insurance Department (SID) in a timely manner as required by
                  State laws and regulations including but not limited to PHL
                  Sections 4403-a, 4404 and 4409, Title 10 NYCRR Sections 98.11,
                  98.16 and 98.17 and applicable Insurance Law Sections 304,
                  305, 306, and 310. The LDSS reserves the right to require
                  Contractor to submit such relevant financial reports and
                  documents related to the financial condition of the MCO to the
                  LDSS, as set forth in Section 18.5(o) of this Agreement.

            d)    Encounter Data:

                  The Contractor shall prepare and submit encounter data on a
                  monthly basis to SDOH through its designated Fiscal Agent.
                  Each provider is required to have a unique identifier.
                  Submissions shall be comprised of encounter records, or
                  adjustments to previously submitted records, which the
                  Contractor has received and processed from provider encounter
                  or claim records of any contracted services rendered to the
                  Enrollee in the current or any preceding months. Monthly
                  submissions must be received by the Fiscal Agent by the
                  Tuesday before the last Monday of the month to assure the
                  submission is included in the Fiscal Agent's monthly
                  production processing.

                                   SECTION 18
                      (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2004
                                      18-2
<PAGE>

            e)    Quality of Care Performance Measures:

                  The Contractor shall prepare and submit reports to SDOH, as
                  specified in the Quality Assurance Reporting Requirements
                  (QARR). The Contractor must arrange for an NCCA-certified
                  entity to audit the QARR data prior to its submission to the
                  SDOH, unless this requirement is specifically waived by the
                  SDOH. The SDOH will select the measures which will be audited.

            f)    Complaint Reports:

                  The Contractor must provide the SDOH on a quarterly basis, and
                  within fifteen (15) business days of the close of the quarter,
                  a summary of all complaints received during the preceding
                  quarter on the Health Provider Network ("HPN").

                  The Contractor also agrees to provide on a quarterly basis,
                  via the HPN, the total number of complaints that have been
                  unresolved for more than forty-five (45) days. The Contractor
                  shall maintain records on these and other complaints which
                  shall include all correspondence related to the complaint, and
                  an explanation of disposition. These records shall be readily
                  available for review by the SDOH or LDSS upon request.

                  Nothing in this Section is intended to limit the right of the
                  SDOH and the LDSS to obtain information immediately from a
                  Contractor pursuant to investigating a particular Enrollee or
                  provider complaint.

                  The LDSS reserves the right to require the Contractor to
                  submit a hardcopy of complaint reports in Section 18.5(o) of
                  this Agreement.

            g)    Fraud and Abuse Reporting Requirements:

                  i)    The Contractor must submit quarterly, via the HPN
                        complaint reporting format, the number of complaints of
                        fraud or abuse made to the Contractor that warrant
                        preliminary investigation by the Contractor.

                  ii)   The Contractor must also submit to the SDOH the
                        following on an ongoing basis for each confirmed case of
                        fraud and abuse it identifies through complaints,
                        organizational monitoring, contractors, subcontractors,
                        providers, beneficiaries, Enrollees, etc:

                        A) The name of the individual or entity that committed
                           the fraud or abuse;

                        B) The source that identified the fraud or abuse;

                        C) The type of provider, entity or organization that
                           committed the fraud or abuse;

                        D) A description of the fraud or abuse;

                                   SECTION 18
                      (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2004
                                      18-3
<PAGE>

                        E) The approximate range of dollars involved;

                        F) The legal and administrative disposition of the case
                           including actions taken by law enforcement officials
                           to whom the case has been referred; and

                        G) Other data/information as prescribed by SDOH.

                  iii)  Such report shall be submitted when cases of fraud and
                        abuse are confirmed, and shall be reviewed and signed by
                        an executive officer of the Contractor.

            h)    Participating Provider Network Reports:

                  The Contractor shall submit electronically, to the HPN, an
                  updated provider network report on a quarterly basis. The
                  Contractor shall submit an annual notarized attestation that
                  the providers listed in each submission have executed an
                  agreement with the Contractor to serve Contractor's Medicaid
                  Enrollees. The report submission must comply with the Managed
                  Care Provider Network Data Dictionary. Networks must be
                  reported separately for each county in which the Contractor
                  operates.

            i)    Appointment Availability/Twenty-four (24) Hour Access and
                  Availability Surveys:

                  The Contractor will conduct a county specific (or service area
                  if appropriate) review of appointment availability and
                  twenty-four (24) hour access and availability surveys
                  annually. Results of such surveys must be kept on file and be
                  readily available for review by the SDOH or LDSS, upon
                  request. Guidelines for such studies may be obtained by
                  contacting the SDOH, Office of Managed Care, Bureau of
                  Certification and Surveillance.

                  The LDSS reserves the right to require the Contractor to
                  conduct appointment availability and twenty-four (24) hour
                  access studies twice a year, and to submit these reports to
                  the LDSS, as stated in Section 18.5(o) of this Agreement.

            j)    Clinical Studies:

                  The Contractor will participate in up to four (4) SDOH
                  sponsored focused clinical studies annually. The purpose of
                  these studies will be to promote quality improvement within
                  the MCO.

                  The Contractor will be required to conduct at least one (1)
                  internal focused clinical study each year in a priority topic
                  area of its choosing, from a list to be generated through the
                  mutual agreement of the SDOH and the Contractor's Medical
                  Director. The Contractor may conduct its internal focused
                  clinical study in conjunction with one or more MCOs. The

                                   SECTION 18
                      (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2004
                                      18-4
<PAGE>

                  purpose of these studies will be to promote quality
                  improvement within the MCO. SDOH will provide guidelines which
                  address study structure and plan collaboration. Results of
                  these studies will be provided to the SDOH and the LDSS.

            k)    Independent Audits:

                  The Contractor must submit copies of all certified financial
                  statements and a QARR validation audit by independent auditors
                  of their plan to the SDOH and the LDSS within thirty (30) days
                  of receipt by the Contractor.

            1)    New Enrollee Health Screening Completion Report:

                  The Contractor shall submit a quarterly report within thirty
                  (30) days of the close of the quarter showing the percentage
                  of new Enrollees for which the Contractor was able to complete
                  a health screening consistent with Section 13.5(b) of this
                  Contract.

            m)    Additional Reports:

                  Upon request by the SDOH and/or the LDSS, the Contractor shall
                  prepare and submit other operational data reports. Such
                  requests will be limited to situations in which the desired
                  data is considered essential and cannot be obtained through
                  existing Contractor reports. Whenever possible, the Contractor
                  will be provided with ninety (90) days notice and the
                  opportunity to discuss and comment on the proposed
                  requirements before work is begun. However, the SDOH and the
                  LDSS reserve the right to give thirty (30) days notice in
                  circumstances where time is of the essence.

            n)    LDSS Specific Reports:

                  {INSERT LDSS SPECIFIC REPORTS AS APPLICABLE}

      18.6  Ownership and Related Information Disclosure

            The Contractor shall report ownership and related information to
            SDOH and the LDSS, and upon request to the Secretary of Department
            of Health and Human Services and the Inspector General of Health and
            Human Services, in accordance with 42 U.S.C. Section 1320a-3 and
            1396b(m)(4) (Sections 1124 and 1903(m)(4) of the Federal Social
            Security Act).

      18.7  Revision of Certificate of Authority

            The Contractor shall give prompt written notice to LDSS of any
            revisions of its Certificate of Authority issued pursuant to Article
            44 of the State Public Health Law.

                                   SECTION 18
                      (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2004
                                      18-5
<PAGE>

      18.8  Public Access to Reports

            Any data, information, or reports collected and prepared by the
            Contractor and submitted to NYS authorities in the course of
            performing their duties and obligation under this program will be
            deemed to be owned by the State of New York subject to and
            consistent with the requirements of Freedom of Information Law. This
            provision is made in consideration of the Contractor's use of public
            funds in collecting and preparing such data, information, and
            reports.

      18.9  Professional Discipline

            a)    Pursuant to PHL Section 4405-b, the Contractor shall have in
                  place policies and procedures to report to the appropriate
                  professional disciplinary agency within thirty (30) days of
                  occurrence, any of the following:

                  i)    the termination of a health care provider contract
                        pursuant to Section 4406-d of the Public Health Law for
                        reasons relating to alleged mental and physical
                        impairment, misconduct or impairment of patient safety
                        or welfare;

                  ii)   the voluntary or involuntary termination of a contract
                        or employment or other affiliation with such Contractor
                        to avoid the imposition of disciplinary measures; or

                  iii)  the termination of a health care provider contract in
                        the case of a determination of fraud or in a case of
                        imminent harm to patient health.

            b)    The Contractor shall make a report to the appropriate
                  professional disciplinary agency within thirty (30) days of
                  obtaining knowledge of any information that reasonably appears
                  to show that a health professional is guilty of professional
                  misconduct as defined in Articles 130 and 131(a) of the State
                  Education Law.

      18.10 Certification Regarding Individuals Who Have Been Debarred Or
            Suspended By Federal or State Government

            Contractor will certify to the SDOH and LDSS initially and
            immediately upon changed circumstances from the last such
            certification that it does not knowingly have an individual who has
            been debarred or suspended by the federal or state government, or
            otherwise excluded from participating in procurement activities:

            a)    as a director, officer, partner or person with beneficial
                  ownership of more than 5% of the Contractor's equity; or

            b)    as a party to an employment, consulting or other agreement
                  with the Contractor for the provision of items and services
                  that are significant and material to the Contractor's
                  obligations in the Medicaid managed care program, consistent
                  with requirements of SSA Section 1932(d)(l).

                                   SECTION 18
                      (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2004
                                      18-6
<PAGE>

      18.11 Conflict of Interest Disclosure

            Contractor shall report to SDOH, in a format specified by SDOH,
            documentation, including but not limited to the identity of and
            financial statements of, person(s) or corporation(s) with an
            ownership or contract interest in the managed care plan, or with any
            subcontract(s) in which the managed care plan has a 5% or more
            ownership interest, consistent with requirements of SSA section 1903
            (m)(2)(a)(viii) and 42 CFR Sections 455.100-455.104

      18.12 Physician Incentive Plan Reporting

            The Contractor shall submit to SDOH annual reports containing the
            information on all of its Physician Incentive Plan arrangements in
            accordance with 42 CFR Section 434.70 or, if no such arrangements
            are in place, attest to that. The contents and time frame of such
            reports shall comply with the requirements of 42 CFR Section 417.479
            and be in a format provided by SDOH.

                                   SECTION 18
                      (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2004
                                      18-7
<PAGE>

19.   RECORDS MAINTENANCE AND AUDIT RIGHTS

      19.1  Maintenance of Contractor Performance Records

            The Contractor shall maintain and shall require its subcontractors,
            including its Participating Providers, to maintain appropriate
            records relating to Contractor performance under this Agreement,
            including:

            a)    records related to services provided to Enrollees, including a
                  separate Medical Record for each Enrollee;

            b)    all financial records and statistical data that LDSS, SDOH and
                  any other authorized governmental agency may require including
                  books, accounts, journals, ledgers, and all financial records
                  relating to capitation payments, third party health insurance
                  recovery, and other revenue received and expenses incurred
                  under this Agreement;

            c)    appropriate financial records to document fiscal activities
                  and expenditures, including records relating to the sources
                  and application of funds and to the capacity of the Contractor
                  or its subcontractors, including its Participating Providers,
                  if relevant, to bear the risk of potential financial losses.

      19.2  Maintenance of Financial Records and Statistical Data

            The Contractor shall maintain all financial records and statistical
            data according to generally accepted accounting principles.

      19.3  Access to Contractor Records

            The Contractor shall provide LDSS, SDOH, the Comptroller of the
            State of New York, DHHS, the Comptroller General of the United
            States, and their authorized representatives with access to all
            records relating to Contractor performance under this Agreement for
            the purposes of examination, audit, and copying (at reasonable cost
            to the requesting party) of such records. The Contractor shall give
            access to such records on two (2) business days prior written
            notice, during normal business hours, unless otherwise provided or
            permitted by applicable laws, rules, or regulations.

      19.4  Retention Periods

            The Contractor shall preserve and retain all records relating to
            Contractor performance under this Agreement in readily accessible
            form during the term of this Agreement and for a period of six (6)
            years thereafter except that the Contractor shall retain Enrollees
            medical records that are in the custody of the Contractor for six
            (6) years after the date of service rendered to the Enrollee or

                                   SECTION 19
                     (RECORDS MAINTENANCE AND AUDIT RIGHTS)
                                October 1, 2004
                                      19-1
<PAGE>

            cessation of Contractor operation, and in the case of a minor, for
            six (6) years after majority. The Contractor shall require and make
            reasonable efforts to assure that Enrollees' medical records are
            retained by providers for six (6) years after the date of service
            rendered to the Enrollee or cessation of Contractor operation, and
            in the case of a minor, for six (6) years after majority. All
            provisions of this Agreement relating to record maintenance and
            audit access shall survive the termination of this Agreement and
            shall bind the Contractor until the expiration of a period of six
            (6) years commencing with termination of this Agreement or if an
            audit is commenced, until the completion of the audit, whichever
            occurs later. If the Contractor becomes aware of any litigation,
            claim, financial management review or audit that is started before
            the expiration of the six (6) year period, the records shall be
            retained until all litigation, claims, financial management reviews
            or audit findings involved in the record have been resolved and
            final action taken.

                                   SECTION 19
                     (RECORDS MAINTENANCE AND AUDIT RIGHTS)
                                October 1, 2004
                                      19-2
<PAGE>

20.   CONFIDENTIALITY

      20.1  Confidentiality of Identifying Information about Medicaid Recipients
            and Applicants

            All information relating to services to Medicaid recipients and
            applicants which is obtained by the Contractor shall be confidential
            pursuant to the New York State Public Health Law including PHL
            Article 27 F, the provisions of Section 369(4) of the NYS Social
            Services Law, 42 U.S.C. Section 1396a(a)(7) (Section 1902(a)(7) of
            the Federal Social Security Act), Section 33.13 of the Mental
            Hygiene Law, and regulations promulgated under such laws including
            42 CFR Part 2 pertaining to Alcohol and Substance Abuse Services.
            Such information including information relating to services to
            Medicaid recipients and applicants as these relate to the provision
            of services to the recipient or applicant under this Agreement shall
            be used or disclosed by the Contractor only for a purpose directly
            connected with performance of the Contractor's obligations. It shall
            be the responsibility of the Contractor to inform its employees and
            contractors of the confidential nature of Medicaid information.

      20.2  Medical Records of Foster Children

            Medical records of enrolled Medicaid recipients enrolled in foster
            care programs shall be disclosed to local social service officials
            in accordance with State Social Services Law including Sections
            358-a, 384-a and 392 and 18 NYCRR Section 507.1.

      20.3  Confidentiality of Medical Records

            Medical records of Medicaid recipients enrolled pursuant to this
            Agreement shall be confidential and shall be disclosed to and by
            other persons within the Contractor's organization including
            Participating Providers, only as necessary to provide medical care,
            to conduct quality assurance functions and peer review functions, or
            as necessary to respond to a complaint and appeal under the terms of
            this Agreement

      20.4  Length of Confidentiality Requirements

            The provisions of this Section shall survive the termination of this
            Agreement and shall bind the Contractor so long as the Contractor
            maintains any individually identifiable information relating to
            Medicaid recipients and applicants.

                                   SECTION 20
                               (CONFIDENTIALITY)
                                October 1, 2004
                                      20-1
<PAGE>

21.   PARTICIPATING PROVIDERS

      21.1  Network Requirements

            a)    Sufficient Number

                  i)    The Contractor will establish and maintain a network of
                        Participating Providers.

                  ii)   The Contractor's network must contain all of the
                        provider types necessary to furnish the prepaid Benefit
                        Package, including but not limited to: hospitals,
                        physicians (primary care and specialists), mental health
                        and substance abuse providers, allied health
                        professionals, ancillary providers, DME providers and
                        home health providers.

                  iii)  To be considered accessible, the network must contain a
                        sufficient number and array of providers to meet the
                        diverse needs of the Enrollee population. This includes
                        being geographically accessible (meeting time/distance
                        standards) and being accessible for the disabled.

                  iv)   The Contractor shall not include in its network any
                        provider who has been sanctioned or prohibited from
                        serving Medicaid recipients or receiving Medical
                        Assistance payments.

            b)    Absence of Appropriate Network Provider

                  In the event that the Contractor determines that it does not
                  have a Participating Provider with appropriate training and
                  experience to meet the particular health care needs of an
                  Enrollee, the Contractor shall make a referral to an
                  appropriate Non-Participating Provider, pursuant to a
                  treatment plan approved by the Contractor in consultation with
                  the Primary Care Provider, the Non-Participating Provider and
                  the Enrollee or the Enrollee's designee. The Contractor shall
                  pay for the cost of the services in the treatment plan
                  provided by the Non-Participating Provider.

            c)    Suspension of Enrollee Assignments To Providers

                  The Contractor shall ensure that there is sufficient capacity,
                  consistent with SDOH standards, to serve Enrollees under this
                  Agreement. In the event any of the Contractor's Participating
                  Providers are no longer able to accept assignment of new
                  Enrollees due to capacity limitations, as determined by the
                  SDOH and the LDSS, the Contractor will suspend assignment of
                  any additional Enrollees to such Participating Provider until
                  it is capable of further accepting Enrollees. When a
                  Participating Provider has more than one (1) site, the
                  suspension will be made by site.

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                       (PROVIDER NETWORK AND AGREEMENTS)
                                October 1, 2004
                                      21-1
<PAGE>

               d)    Notice of Provider Termination

                      The Contractor shall notify LDSS and SDOH of any notice of
                      termination of

                      an IPA, hospital or medical group provider agreement which
                      affects an Enrollee's access to care.

                      Such notification to the LDSS and the SDOH shall be made
                      ninety (90) days prior to the effective date of the
                      termination of the provider agreement or immediately upon
                      notice from such provider if less than ninety (90) days.

                      The Contractor shall also notify LDSS and SDOH in the
                      event that the Contractor and the providers have failed to
                      re-execute a renewal provider agreement forty-five (45)
                      days prior to the expiration of the agreement.

                      The Contractor shall submit a contingency plan to LDSS and
                      SDOH, at least forty-five (45) days prior to the
                      termination of expiration of the agreement, identifying
                      the number of Enrollees affected by the potential
                      withdrawal, if applicable, and specifying how services
                      previously furnished by the participating providers will
                      be provided in the event of their withdrawal. If the
                      provider is a participating hospital, the Contractor shall
                      identify the number of doctors who would not have
                      admitting privileges in the absence of such participating
                      hospital.

                      The Contractor shall develop a transition plan for
                      patients of the departing providers subject to approval by
                      LDSS and SDOH. SDOH and LDSS may direct the Contractor to
                      provide notice to the patients of PCPs or specialists
                      including available options for the patients, and
                      availability of continuing care, consistent with Section
                      13.7, not less than thirty (30) days prior to the
                      termination of the provider agreement. In the event that
                      provider agreements are terminated with less than the
                      notice period required by this section, the Contractor
                      shall immediately notify LDSS and SDOH, and develop a
                      transition plan on an expedited basis and provide notice
                      to patients subject to the consent of LDSS and SDOH.

                      Upon Contractor notice of failure to re-execute, or
                      termination of, a provider agreement, the SDOH and the
                      LDSS, in their sole discretion, may waive the requirement
                      of submission of a contingency plan upon a determination
                      by the SDOH and the LDSS that:

                      i)   the impact upon Enrollees is not significant, and/or

                      ii)  the Contractor and provider are continuing to
                           negotiate in good faith and consent to extend the
                           provider agreement for a period of time necessary to
                           provide not less than thirty (30) days notice to
                           Enrollees.

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                        (PROVIDER NETWORK AND AGREEMENTS)
                                October 1, 2004
                                      21-2

<PAGE>

                SDOH and the LDSS reserve the right to take any other actions
                permitted by this Agreement and under regulatory or statutory
                authority, including but not limited to contract termination.

        21.2    Credentialing

                a)    Licensure

                      The Contractor shall ensure, in accordance with Article 44
                      of the Public Health Law, that persons and entities
                      providing care and services for the Contractor in the
                      capacity of physician, dentist, physician's assistant,
                      registered nurse, other medical professional or
                      paraprofessional, or other such person or entity satisfy
                      all applicable licensing, certification, or qualification
                      requirements under New York law and that the functions and
                      responsibilities of such persons and entities in providing
                      Benefit Package services under this Agreement do not
                      exceed those permissible under New York law.

                b)    Minimum Standards

                      The Contractor agrees that all network physicians will
                      meet at least one (1) of the following standards, except
                      as specified in Section 21.13(b) and Appendix I of this
                      agreement:
                      i) Be board-certified or -eligible in their area of
                      specialty;
                      ii) Have completed an accredited residency program; or
                      iii) Have admitting privileges at one (1) or more
                      hospitals participating in the Contractor's network.

                c)    Credentialing/Recredentialing Process

                      The Contractor shall have in place a formal process for
                      credentialing Participating Providers on a periodic basis
                      (not less than once every three (3) years) and for
                      monitoring Participating Providers performance.

                d)    Application Procedure

                      The Contractor shall establish a written application
                      procedure to be used by a health care professional
                      interested in serving as a Participating Provider with the
                      Contractor. The criteria for selecting providers,
                      including the minimum qualification requirements that a
                      health care professional must meet to be considered by the
                      Contractor, must be defined in writing and developed in
                      consultation with appropriately qualified health care
                      professionals. Upon request, the application procedures
                      and minimum qualification requirements must be made
                      available to health care professionals.

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                        (PROVIDER NETWORK AND AGREEMENTS)
                                October 1, 2004
                                      21-3

<PAGE>

        21.3    SDOH Exclusion or Termination of Providers

                If SDOH excludes or terminates a provider from its Medicaid
                Program, the Contractor shall, upon learning of such exclusion
                or termination, immediately terminate the provider agreement
                with the Participating Provider as it pertains to the
                Contractor's Medicaid program, and agrees to no longer utilize
                the services of the subject provider, as applicable. The
                Contractor shall access information pertaining to excluded
                Medicaid providers through the SDOH Health Provider Network
                (HPN). Such information available to the Contractor on the HPN
                shall be deemed to constitute constructive notice. The HPN
                should not be the sole basis for identifying current exclusions
                or termination of previously approved providers. Should the
                Contractor become aware, through the HPN or any other source, of
                an SDOH exclusion or termination, the Contractor shall validate
                this information with the Office of Medicaid Management, Bureau
                of Enforcement Activities and comply with the provisions of this
                Section.

        21.4    Evaluation Information

                The Contractor shall develop and implement policies and
                procedures to ensure that health care professionals are
                regularly advised of information maintained by the Contractor to
                evaluate the performance or practice of health care
                professionals. The Contractor shall consult with health care
                professionals in developing methodologies to collect and analyze
                health care professional profiling data. The Contractor shall
                provide any such information and profiling data and analysis to
                health care professionals. Such information, data or analysis
                shall be provided on a periodic basis appropriate to the nature
                and amount of data and the volume and scope of services
                provided. Any profiling data used to evaluate the performance or
                practice of a health care professional shall be measured against
                stated criteria and an appropriate group of health care
                professionals using similar treatment modalities serving a
                comparable patient population. Upon presentation of such
                information or data, each health care professional shall be
                given the opportunity to discuss the unique nature of the health
                care professional's patient population which may have a bearing
                on the health care professional's profile and to work
                cooperatively with the Contractor to improve performance.

        21.5    Payment In Full

                Contractor must limit participation to providers who agree that
                payment received from the Contractor for services included in
                the Benefit Package is payment in full for services provided to
                Enrollees.

                                   SECTION 21
                        (PROVIDER NETWORK AND AGREEMENTS)
                                October 1, 2004
                                      21-4

<PAGE>

        21.6    Choice/Assignment of PCP's

                a)    The Contractor shall offer each Enrollee the choice of no
                      fewer than three (3) Primary Care Providers within program
                      distance/travel time standards. Contractor must assign a
                      PCP to individuals that fail to select a PCP. The
                      assignment of a PCB by the Contractor may occur after
                      written notification of Contractor by LDSS of the
                      enrollment (through Roster or other method) and after
                      written notification of the Enrollee by the Contractor but
                      in no event later than thirty (30) days after notification
                      of enrollment, and only after the Contractor has made
                      reasonable efforts as set forth in Section 13.5 of this
                      Agreement to contact the Enrollee and inform him/her of
                      his/her right to choose a PCP.

                b)    PCP assignments should be made taking into consideration
                      the following: i) Enrollee's geographic location; ii) any
                      special health care needs, if known by the Contractor; and
                      iii) any special language needs, if known by the
                      Contractor.

                c)    In circumstances where the Contractor operates or
                      contracts with a multi-provider clinic to deliver primary
                      care services, the Enrollee must choose or be assigned a
                      specific provider or provider team within the clinic to
                      serve as his/her PCP. This "lead" provider will be held
                      accountable for performing the PCP duties.

        21.7    PCP Changes

                a)    The Contractor must allow Enrollees the freedom to change
                      PCPs, without cause, within thirty (30) days of the
                      Enrollee's first appointment with the PCP. After the first
                      thirty (30) days PCP may be changed once every six (6)
                      months without cause.

                b)    The Contractor must process a request to change PCPs and
                      advise the Enrollee of the effective late of the change
                      within forty-five (45) days of receipt of the request. The
                      change must be effective no later than the first (1st) day
                      of the second (2nd) month following the month in which the
                      request is made.

                c)    The Contractor will provide Enrollees with an opportunity
                      to select a new PCP in the event that the Enrollee's
                      current PCP leaves the network or otherwise becomes
                      unavailable. Such changes shall not be considered in the
                      calculation of changes for cause allowed within a six (6)
                      month period.

                d)    In the event that an assignment of a new PCP is necessary
                      due to the unavailability of the Enrollee's former PCP,
                      such assignment shall be

                                   SECTION 21
                        (PROVIDER NETWORK AND AGREEMENTS)
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                                      21-5

<PAGE>

                      made  in accordance with the requirements of Section 21.6
                      of this Agreement.

                e)    In addition to those conditions and circumstances under
                      which the Contractor may assign an Enrollee a PCP when the
                      Enrollee fails to make an affirmative choice of a PCP, the
                      Contractor may initiate a PCP change for an Enrollee under
                      the following circumstances:

                      i)    The Enrollee requires specialized care for an acute
                            or chronic condition and the Enrollee and Contractor
                            agree that reassignment to a different PCP is in the
                            Enrollee's interest.

                      ii)   The Enrollee's place of residence has changed such
                            that he/she has moved beyond the PCP travel
                            time/distance standard.

                      iii)  The Enrollee's PCP ceases to participate in the
                            Contractor's network.

                      iv)   The Enrollee's behavior toward the PCP is disruptive
                            and the PCP has made all reasonable efforts to
                            accommodate the Enrollee.

                      v)    The Enrollee has taken legal action against the PCP.

                f)    Whenever initiating a change, the Contractor must offer
                      affected Enrollees the opportunity to select a new PCP in
                      the manner described in this Section.

        21.8    Provider Status Changes

                1)    PCP Changes

                      The Contractor agrees to notify its Enrollees of any of
                      the following PCP changes:

                      a)    Enrollees will be notified within fifteen (15) days
                            from the date on which the Contractor becomes aware
                            that such Enrollee's PCP has changed his or her
                            office address or telephone number.

                      b)    If a PCP ceases participation in the Contractor's
                            network, the Contractor shall provide written notice
                            within fifteen (15) days from the date that the
                            Contractor becomes aware of such change in status to
                            each Enrollee who has chosen the provider as their
                            PCP. In such cases, the notice shall describe the
                            procedures for choosing an alternative PCP and, in
                            the event that the Enrollee is in an ongoing course
                            of treatment, the procedures for continuing care
                            consistent with subdivision 6 (e) of PHL Section
                            4403.

                      c)    Where an Enrollee's PCP ceases participation with
                            the Contractor, the Contractor must ensure that a
                            new PCP is assigned within thirty (30) days of the
                            date of the notice to the Enrollee.

                2)    Other Provider Changes

                      In the event that an Enrollee is in an ongoing course of
                      treatment with another Participating Provider who becomes
                      unavailable to continue to provide

                                   SECTION 21
                        (PROVIDER NETWORK AND AGREEMENTS)
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                                      21-6

<PAGE>

                services to such Enrollee, the Contractor shall provide written
                notice to the Enrollee within fifteen 15) days from the date on
                which the Contractor becomes aware of the Participating
                Provider's unavailability to the Enrollee. In such cases, the
                notice shall describe the procedures for continuing care
                consistent with subdivision 6 (e) of PHL Section 4403 and for
                choosing an alternative provider.

        21.9    PCP Responsibilities

                In conformance with the Benefit Package, the PCP shall provide
                health counseling and advice; conduct baseline and periodic
                health examinations; diagnose and treat conditions not requiring
                the services of a specialist; arrange inpatient care,
                consultation with specialists, and laboratory and radiological
                services when medically necessary; coordinate the findings of
                consultants and laboratories; and interpret such findings to the
                Enrollee and the Enrollee's family, subject to the
                confidentiality provisions of Section 20 of this Agreement, and
                maintain a current medical record for the Enrollee. The PCP
                shall also be responsible for determining the urgency of a
                consultation with a specialist and shall arrange for all
                consultation appointments within appropriate time frames.

        21.10   Member to Provider Ratios

                The Contractor agrees to adhere to the member-to-PCP ratios
                shown below. These ratios are for Medicaid Enrollees only, are
                Contractor-specific, and assume the practitioner is a full time
                equivalent (FTE) (defined as a provider practicing forty (40)
                hours per week for the Contractor):

                i)    No more than 1,500 Medicaid Enrollees for each physician,
                      or 2,400 for a physician practicing in combination with a
                      registered physician assistant or a certified nurse
                      practitioner.

                ii)   No more than 1,000 Medicaid Enrollees for each certified
                      nurse practitioner.

                The Contractor agrees that these ratios will be prorated for
                Participating Providers who represent less than a FTE to the
                Contractor.

        21.11   Minimum Office Hours

                a)    General Requirements

                      A PCP must practice a minimum of sixteen (16) hours a week
                      at each primary care site.

                b)    The minimum office hours requirement may be waived under
                      certain circumstances. A request for a waiver must be
                      submitted by the MCO to the Medical Director of the Office
                      of Managed Care for review and approval; and the physician
                      must be available at least eight hours/week; and the

                                   SECTION 21
                        (PROVIDER NETWORK AND AGREEMENTS)
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                                      21-7

<PAGE>

                      physician must be practicing in a Health Provider Shortage
                      Area (HPSA) or other similarly determined shortage area;
                      and the physician must be able to fulfill the other
                      responsibilities of a PCP (as described in this Section);
                      and the waiver request must demonstrate there are systems
                      in place to guarantee continuity of care and to meet all
                      access and availability standards, (24-hr/7 day week
                      coverage, appointment availability, etc.) SDOH shall
                      notify the LDSS when a waiver has been granted.

        21.12   Primary Care Practitioners

                a)    General Limitations

                      The Contractor agrees to limit its PCPs to the following
                      primary care specialties: Family Practice, General
                      Practice, General Pediatrics, General Internal Medicine,
                      except as specified in (b), (c), (d) and (e) of this
                      Section.

                b)    Specialist and Sub-specialist as PCPs

                      The Contractor is permitted to use specialist and
                      sub-specialist physicians as PCPs when such an action is
                      considered by the Contractor to be medically appropriate
                      and cost-effective. As an alternative, the Contractor may
                      restrict it's PCP network to primary care specialties
                      only, while relying on standing referrals to specialists
                      and sub-specialists for Enrollees who require regular
                      visits to such physicians.

                c)    OB/GYN Providers as PCPs

                      The Contractor, at its option is permitted to use OB/GYN
                      providers as PCPs, subject to SDOH qualifications.

                d)    Certified Nurse Practitioners as PCPs

                      The Contractor is permitted to use certified nurse
                      practitioners as PCPs, subject to their scope of practice
                      limitations under New York State Law.

                e)    Registered Physician's Assistants as Physician Extenders

                      The Contractor is permitted to use registered physician's
                      assistants as physician-extenders, subject to their scope
                      of practice limitations under New York State Law.

                                   SECTION 21
                        (PROVIDER NETWORK AND AGREEMENTS)
                                October 1, 2004
                                      21-8

<PAGE>

        21.13   PCP Teams

                a)    General Requirements

                      The Contractor may designate teams of physicians/certified
                      nurse practitioners to serve as PCPs for Enrollees. Such
                      teams may include no more than four (4)
                      physicians/certified nurse practitioners and, when an
                      Enrollee chooses or is assigned to a team, one of the
                      practitioners must be designated as "lead provider" for
                      that Enrollee. In the case of teams comprised of medical
                      residents under the supervision of an attending physician,
                      the attending physician must be designated as the lead
                      physician.

                b)    Medical Residents

                      The Contractor shall comply with SDOH Guidelines for use
                      of Medical Residents as found in Appendix I, which is
                      hereby made a part of this Agreement as if set forth fully
                      herein.

        21.14   Hospitals

                a)    Tertiary Services

                      The Contractor will establish hospital networks capable of
                      furnishing the full range of tertiary services to
                      Enrollees. Contractors shall ensure that all Enrollees
                      have access to at least one (l) general acute care
                      hospital within thirty (30) minutes/thirty I (30) miles
                      travel time (by car or public transportation) from the
                      Enrollee's residence, unless none are located within such
                      a distance. If none are located within thirty (30) minutes
                      travel time/thirty (30) miles travel distance, the
                      Contractor must include the next closest site in its
                      network.

                b)    Emergency Services

                      The Contractor shall ensure and demonstrate that it
                      maintains relationships with hospital emergency
                      facilities, including comprehensive psychiatric emergency
                      programs (where available) within and around its Service
                      Area to provide Emergency Services.

        21.15   Dental Networks

                If the Contractor includes dental services in its Benefit
                Package, the Contractor's dental network shall include
                geographically accessible general dentists sufficient to offer
                each Enrollee a choice of two (2) primary care dentists in their
                Service Area and to achieve a ratio of at least one (l) primary
                care dentist for each 2,000 Enrollees. Networks must also
                include at least one (1) pediatric dentist and one (1) oral
                surgeon. Orthognathic surgery, temporal mandibular disorders
                (TMD)

                                   SECTION 21
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<PAGE>

                and oral/maxillofacial prosthodontics must be provided through
                any qualified dentist, either in-network or by referral.
                Periodontists and endodontists must also be available by
                referral. The network should include dentists with expertise in
                serving special needs populations (e.g., HIV+ and
                developmentally disabled patients).

                Dental surgery performed in an ambulatory or inpatient setting
                is the responsibility of the Contractor whether dental services
                are a covered benefit or not, as set forth in Appendix K-II -
                B-Optional Service, Dental Services.

        21.16   Presumptive Eligibility Providers

                Contractors must offer Presumptive Eligibility Providers the
                opportunity to contract at terms which are at least as favorable
                as the terms offered to other providers performing equivalent
                services (prenatal care). Contractors need not contract with
                every Presumptive Eligibility Provider in their County, but must
                include a sufficient number in their networks of Participating
                Providers to meet the distance/travel time standards defined for
                primary care.

        21.17   Mental Health and Chemical Dependence Services Providers

                The Contractor will include a full array of mental health and
                Chemical Dependence Services providers in its networks, in
                sufficient numbers to assure accessibility to Benefit Package
                services on the part of both children and adults, using either
                individual, appropriately licensed practitioners or New York
                State Office of Mental Health (OMH) and Office of Alcohol and
                Substance Abuse Services (OASAS) licensed programs and clinics,
                or both.

                The State defines mental health land Chemical Dependence
                Services providers to include the following: Individual
                Practitioners, Psychiatrists, Psychologists, Psychiatric Nurse
                Practitioners, Psychiatric Clinical Nurse Specialists, Licensed
                Certified Social Workers, OMH and OASAS Programs and Clinics,
                and providers of mental health and/or Chemical Dependence
                Services certified or licensed pursuant to Article 31 or 32 of
                the Mental Hygiene Law, as appropriate.

        21.18   Laboratory Procedures

                The Contractor agrees to restrict its laboratory provider
                network to entities having either a CLIA certificate of
                registration or a CLIA certificate of waiver.

        21.19   Federally Qualified Health Centers (FQHCs)

                In voluntary counties, the Contractor is not required to
                contract with FQHCs.

                However, when an FQHC is part of the provider network (voluntary
                or mandatory counties) the Provider Agreement must include a
                provision whereby the

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<PAGE>

                Contractor agrees to compensate the FQHC for services provided
                to Enrollees at a payment rate that is not less than the level
                and amount for a similar set of services which the Contractor
                would make to a provider that is not an FQHC.

                In mandatory counties, the Contractor shall contract with FQHCs
                operating in its Service Area. However, the Contractor has the
                option to make a written request to the SDOH for an exemption
                from the FQHC contracting requirement, if the Contractor can
                demonstrate, with supporting documentation, that it has adequate
                capacity and will provide a comparable level of clinical and
                enabling services (e.g., outreach, referral services, social
                support services, culturally sensitive services such as training
                for medical and administrative staff, medical and non-medical
                and case management services) to vulnerable populations in lieu
                of contracting with an FQHC in its Service Area. Written
                requests for exemption from this requirement are subject to
                approval by HCFA.

                When the Contractor is participating in a county where an MCO
                that is sponsored, owned and/or operated by one or more FQHCs
                exists, the Contractor is not required to include any FQHCs
                within its network in that county.

        21.20   Provider Services Function

                The Contractor will operate a Provider Services function during
                regular business hours. At a minimum, the Contractor's Provider
                Services staff must be responsible for the following:

                a)    Assisting providers with prior authorization and referral
                      protocols.

                b)    Assisting providers with claims payment procedures.

                c)    Fielding and responding to provider questions and
                      complaints.

                                   SECTION 21
                        (PROVIDER NETWORK AND AGREEMENTS)
                                October 1, 2004
                                      21-11

<PAGE>

22.     SUBCONTRACTS AND PROVIDER AGREEMENTS

        22.1    Written Subcontracts

                Contractor may not enter into any subcontracts related to the
                delivery of services to Enrollees, except by a written
                agreement.

        22.2    Permissible Subcontracts

                Contractor may subcontract for provider services as set forth in
                Section 2.6 and 21 of this contract and management services
                including, but not limited to, marketing, quality assurance and
                utilization review activities and such other services as are
                acceptable to the SDOH.

        22.3    Provisions of Services through Provider Agreements

                All medical care and/or services covered under this Agreement,
                with the exception of seldom used subspecialty and Emergency
                Services, Family Planning Services, and services for which
                Enrollees can self refer, shall be provided through Provider
                Agreements with Participating Providers.

        22.4    Approvals

                a)    Provider Agreements shall require the approval of SDOH as
                      set forth in PHL 4402 and 10 NYCRR Part 98.

                b)    If a subcontract is for management services under 10 NYCRR
                      Section 98-1.11, it must be approved by SDDH prior to its
                      becoming effective.

                c)    The Contractor shall notify SDOH of any material
                      amendments to any Provider Agreement as SIT forth in 10
                      NYCRR Section 98-1.8.

        22.5    Required Components

                a)    The Contractor shall impose obligations and duties on its
                      subcontractors, including its Participating Providers,
                      that are consistent with this Agreement, and that do not
                      impair any rights accorded to LDSS, SDOH, or DHHS.

                b)    No subcontract, including any Provider Agreement shall
                      limit or terminate the Contractor's duties and obligations
                      under this Agreement.

                c)    Nothing contained in this Agreement between LDSS and the
                      Contractor shall create any contractual relationship
                      between any subcontractor of the Contractor, including
                      Participating Providers, and the County or LDSS.

                                   SECTION 22
                             (PROVIDER AGREEMENTS)
                                October 1, 2004
                                      22-1
<PAGE>

            d)    Any subcontract entered into by the Contractor shall fulfill
                  the requirements of 42 CFR Part 434 that are appropriate to
                  the service or activity delegated under such subcontract.

            e)    The Contractor shall also ensure that, in the event the
                  Contractor fails to pay any subcontractor, including any
                  Participating Provider in accordance with the subcontract or
                  Provider Agreement, the subcontractor or Participating
                  Provider will not seek payment from the LDSS, the Enrollees,
                  or their eligible dependents.

            f)    The Contractor shall include in every Provider Agreement a
                  procedure for the resolution of disputes between the
                  Contractor and its Participating Providers.

            g)    The Contractor shall ensure that all Provider Agreements
                  entered into with Providers require acceptance of a woman's
                  enrollment in the MCO as sufficient to provide services to her
                  newborn, unless the newborn is excluded from participating in
                  Medicaid managed care.

      22.6  Timely Payment

            Contractor shall make payments to health care providers for items
            and services covered under this Agreement on a timely basis,
            consistent with the claims payment procedures described in NYS
            Insurance Law Section 3224-a.

      22.7  Restrictions on Disclosure

            The Contractor shall not by contract or written policy or written
            procedure prohibit or restrict any health care provider from the
            following:

            a)  disclosing to any subscriber Enrollee, patient, designated
                representative or, where appropriate, prospective Enrollee any
                information that such provider deems appropriate regarding:

                  i)    a condition or a course of treatment with such
                        subscriber, Enrollee, patient, designated representative
                        or prospective Enrollee, including the availability of
                        other therapies, consultations, or tests; or

                  ii)   The provisions, terms or requirements of the
                        Contractor's products as they relate to the Enrollee,
                        where applicable.

            b)  filing a complaint, making a report or comment to an appropriate
                governmental body regarding the policies or practices of the
                Contractor when they believe that the policies or practices
                negatively impact upon the quality of, or access to, patient
                care.

            c)  advocating to the Contractor on behalf of the Enrollee for
                approval or coverage of a particular treatment or for the
                provision of health care services.

                                   SECTION 22
                             (PROVIDER AGREEMENTS)
                                October 1, 2004

                                      22-2

<PAGE>

      22.8  Transfer of Liability

            No contract or agreement between the Contractor and a health care
            provider shall contain any clause purporting to transfer to the
            health care provider, other than a medical group, by indemnification
            or otherwise, any liability relating to activities, actions or
            omissions of the Contractor as opposed to those of the health care
            provider.

      22.9  Termination of Health Care Professional Agreements

            The Contractor shall not terminate a contract with a health care
            professional unless the Contractor provides to the health care
            professional a written explanation of the reasons for the proposed
            termination and an opportunity for a review or hearing as
            hereinafter provided. For purposes of this Section a health care
            professional is an individual licensed, registered or certified
            pursuant to Title 8 of the Education Law.

            These requirements shall not apply in cases involving imminent harm
            to patient care, a determination of fraud, or a final disciplinary
            action by a state licensing board or other governmental agency that
            impairs the health care professional's ability to practice.

            When the Contractor desires to terminate a contract with a health
            care professional, the notification of the proposed termination by
            the Contractor to the health care professional shall include:

            a)    the reasons for the proposed action;

            b)    notice that the health care professional has the right to
                  request a hearing or review, at the provider's discretion,
                  before a panel appointed by the Contractor;

            c)    a time limit of not less than thirty (30) days within which a
                  health care professional may request a hearing; and

            d)    a time limit for a hearing date which must be held within
                  thirty (30) days after the date of receipt of a request for a
                  hearing.

            No contract or agreement between the Contractor and a health care
            professional shall contain any provision which shall supersede or
            impair a health care professional's right to notice of reasons for
            termination and the opportunity for a hearing or review concerning
            such termination.

                                   SECTION 22
                              (PROVIDER AGREEMENTS)
                                 October 1, 2004

                                      22-3

<PAGE>

      22.10 Health Care Professional Hearings

            A health care professional that has been notified of his or her
            proposed termination must be allowed a hearing. The procedures for
            this hearing must meet the following standards:

            a)  The hearing panel shall be comprised of at least three persons
                appointed by the Contractor. At least one person on such panel
                shall be a clinical peer in the same discipline and the same or
                similar specialty as the health care professional under review.
                The hearing panel may consist of more than three persons,
                provided however that the number of clinical peers on such panel
                shall constitute one-third or more of the total membership of
                the panel.

            b)  The hearing panel shall render a decision on the proposed action
                in a timely manner. Such decision shall include reinstatement of
                the health care professional by the Contractor, provisional
                reinstatement subject to conditions set forth by the Contractor
                or termination of the health care professional. Such decision
                shall be provided in writing to the health care professional.

            c)  A decision by the hearing panel to terminate a health care
                professional shall be effective not less than thirty (30) days
                after the receipt by the health care professional of the hearing
                panel's decision. Notwithstanding the termination of a health
                care professional for cause or pursuant to a hearing, a plan
                shall permit an Enrollee to continue an on-going course of
                treatment for a transition period of up to ninety (90) days, and
                post-partum care, subject to provider agreement, pursuant to PHL
                Section 4406(6)(e).

            d)  In no event shall termination be effective earlier than sixty
                (60) days from the receipt of the notice of termination.

      22.11 Non-Renewal of Provider Agreements

            Either party to a contract may exercise a right of non-renewal at
            the expiration of the contract period set forth therein or, for a
            contract without a specific expiration date, on each January first
            occurring after the contract has been in effect for at least one
            year, upon sixty (60) days notice to the other party; provided,
            however, that any non-renewal shall not constitute a termination for
            the purposes of this Section.

                                   SECTION 22
                              (PROVIDER AGREEMENTS)
                                 October 1, 2004

                                      22-4

<PAGE>

      22.12 Physician Incentive Plan

            If Contractor elects to operate a Physician Incentive Plan,
            Contractor agrees that no specific payment will be made directly or
            indirectly under the plan to a physician or physician group as an
            inducement to reduce or limit medically necessary services furnished
            to an Enrollee. Contractor agrees to submit to SDOH annual reports
            containing the information on its physician incentive plan in
            accordance with 42 CFR Section 434.70. The contents of such reports
            shall comply with the requirements of 42 CFR Section 417.479 and be
            in a format to be provided by SDOH.

            The Contractor must ensure that any agreements for contracted
            services covered by this Agreement, such as agreements between the
            Contractor and other entities or between the Contractor's
            subcontracted entities and their contractors, at all levels
            including the physician level, include language requiring that the
            physician incentive plan information be provided by the
            sub-contractor in an accurate and timely manner to the Contractor in
            the format requested by SDOH.

            In the event that the incentive arrangements place the physician or
            physician group at risk for services beyond those provided directly
            by the physician or physician group for an amount beyond the risk
            threshold of 25% of potential payments for covered services
            (substantial financial risk), the Contractor must comply with all
            additional requirements listed in regulation, such as: conduct
            enrollee/disenrollee satisfaction surveys; disclose the requirements
            for the physician incentive plans to its beneficiaries upon request;
            and ensure that all physicians and physician groups at substantial
            financial risk have adequate stop-loss protection. Any of these
            additional requirements that are passed on to the subcontractors
            must be clearly stated in their Agreement.

                                   SECTION 22
                              (PROVIDER AGREEMENTS)
                                 October 1, 2004

                                      22-5

<PAGE>

23.   FRAUD AND ABUSE PREVENTION PLAN

      A Fraud and Abuse Prevention Plan for the detection, investigation and
      prevention of fraudulent activities must be filed by the Contractor with
      the Commissioner of Health to the extent required by SDOH regulations. A
      copy of this plan must be submitted to the LDSS, upon request of the LDSS.

24.   AMERICANS WITH DISABILITIES ACT COMPLIANCE PLAN

      Contractor must comply with Title II of the Americans with Disabilities
      Act (ADA) and Section 504 of the Rehabilitation Act of 1973 for program
      accessibility, and must develop an ADA Compliance Plan consistent with the
      SDOH Guidelines for Medicaid MCO Compliance with the ADA which are set
      forth in Appendix J, which is hereby made a part of this Agreement as if
      set forth fully herein. Said plan must be approved by the SDOH and/or the
      LDSS, and filed with the Contractor, SDOH and the LDSS.

25.   FAIR HEARINGS

      25.1  Enrollee Access To Fair Hearing Process

            Enrollees may access the fair hearing process in accordance with
            applicable federal and state laws and regulations. Contractors must
            abide by and participate in New York State's Fair Hearing Process
            and comply with determinations made by a fair hearing officer.

      25.2  Enrollee Rights to a Fair Hearing

            Enrollees may request a fair Hearing regarding adverse LDSS
            determinations concerning enrollment, disenrollment and eligibility,
            and regarding the denial, termination, suspension or reduction of a
            clinical treatment or other Benefit Package services by the
            Contractor. For issues related to disputed services, Enrollees must
            have received an adverse determination from the Contractor or its
            approved utilization review agent either overriding a recommendation
            to provide services by a Participating Provider or confirming the
            decision of a Participating Provider to deny those services. An
            Enrollee may also seek a fair hearing for a failure by the
            Contractor to act with reasonable promptness with respect to such
            services. Reasonable promptness shall mean compliance with the time
            frames established for review of grievances and utilization review
            in Sections 44 and 49 of the Public Health Law.

      25.3  Contractor Notice to Enrollees

            a)  Contractor must issue a written Notice of Adverse Determination
                and Fair Hearing Rights to any Enrollee:

              i)  When Contractor or its utilization review agent has denied a
                  request to approve a Benefit Package service ordered by an MCO
                  provider; or

                             SECTION 23 - SECTION 37
                                October 1, 2004

                                      -1-

<PAGE>

              ii) When an Enrollee is denied a requested service or benefit by
                  an MCO provider and has exhausted the Contractor's approved
                  internal complaint and appeal procedures or utilization review
                  processes; or

              iii) At least 10 days before the effective date of Contractor's
                  termination, suspension or reduction of a benefit or treatment
                  already in progress for that Enrollee.

            b)  Contractor agrees to serve notice on affected Enrollees by mail
                and must maintain documentation of such.

            c)  Contractor's Notice of Adverse Determination and Notice of a
                Right to Request a Fair Hearing shall include the following:

                i)     the description of the action Contractor intends to take;

                ii)    the reasons for the determination including the clinical
                       rationale, if any;

                iii)   the process for filing a grievance/complaint with the
                       organization;

                iv)    the timeframes within which a grievance/complaint must be
                       made;

                v)     the right of an Enrollee to designate a representative to
                       file a grievance/complaint on behalf of the Enrollee;

                vi)    the notice of the right of the Enrollee to contact the
                       New York State Department of Health (800 206-8125) with
                       their complaint; and

                vii)   the notice entitled "Managed Care Action Taken"
                       containing the Enrollee's fair hearing and aid continuing
                       rights.

            d)  The Contractor's Notice of Adverse Determination and Notice of a
                Right to Request a Fair Hearing for Article 49 Utilization
                Review Determinations shall include the following:

                (i)    a description of the action Contractor intends to take;

                (ii)   the reasons for the determination including the clinical
                       rationale, if any;

                (iii)  instructions on how to initiate standard and expedited
                       appeals pursuant to section 4904 of the Public Health Law
                       (PHL);

                (iv)   instructions on how to initiate an external appeal
                       pursuant to section 4914 of the PHL;

                (v)    notice of availability of the clinical review criteria
                       relied upon to make such determination;

                (vi)   the additional, if any, necessary information to be
                       provided to, or obtained by, the UR agent in order to
                       render a decision on the appeal;

                (vii)  notice of the right of the Enrollee to contact the New
                       York State Department of Health (800 206-8125) with their
                       complaint; and

                (viii) the notice entitled "Managed Care Action Taken"
                       containing the Enrollee's fair hearing and aid continuing
                       rights.

                             SECTION 23 - SECTION 37
                                 October 1, 2004
                                      - 2 -

<PAGE>

      25.4  Aid Continuing

            Contractor shall be required to continue the provision of the
            Benefit Package services that are the subject of the fair hearing to
            an Enrollee (hereafter referred to as "aid continuing") if so
            ordered by the OAH under the following circumstances:

            i)    Contractor has or is seeking to reduce, suspend or terminate a
                  treatment or Benefit Package service currently being provided;

            ii)   Enrollee has filed a timely request for a fair hearing with
                  OAH; and

            iii)  There is a valid order for the treatment or service from a
                  participating provider. Contractor shall provide aid
                  continuing until the matter has been resolved to the
                  Enrollee's satisfaction or until the administrative process is
                  completed and there is a determination from OAH that Enrollee
                  is not entitled to receive the service, the Enrollee withdraws
                  the request for aid continuing and/or the fair hearing in
                  writing, or the treatment or service originally ordered by the
                  provider has been completed, whichever occurs first

            iv)   If the services and/or benefits in dispute have been
                  terminated, suspended or reduced and the Enrollee timely
                  requests a fair hearing, Contractor shall, at the direction of
                  either SDOH or LDSS, restore the disputed services and/or
                  benefits consistent with the provisions of Section 25.4(iii)
                  of this Agreement.

      25.5  Responsibilities of SDOH

            SDOH will make every reasonable effort to ensure that the Contractor
            receives timely notice in writing by fax, or e-mail, of all
            requests, schedules and directives regarding fair hearings.

      25.6  Contractor's Obligations

            a)  Contractor shall appear at all scheduled fair hearings
                concerning its clinical determinations and/or
                Contractor-initiated disenrollments to present evidence as
                justification for its determination or submit written evidence
                as justification for its determination regarding the disputed
                benefits and/or services. If Contractor will not be making a
                personal appearance at the fair hearing, the written material
                must be submitted to OAH and Enrollee or Enrollee's
                representative at least three (3) business days prior to the
                scheduled hearing. If the hearing is scheduled fewer than three
                (3) business days after the request, Contractor must deliver the
                evidence to the hearing site no later than one (1) business day
                prior to the hearing, otherwise Contractor must appear in
                person. Notwithstanding the above provisions, Contractor may be
                required to make a personal appearance at the discretion of the
                hearing officer and/or SDOH.

            b)  Despite an Enrollee's request for a State fair hearing in any
                given dispute, Contractor is required to maintain and operate in
                good faith its own internal

                            SECTIONS 23 - SECTION 37
                                October 1, 2004
                                      - 3-

<PAGE>

                complaint and appeal process as required under state and federal
                laws and by Section 14 and Appendix F of this Agreement.
                Enrollees may seek redress of adverse determinations
                simultaneously through Contractor's internal process and the
                State fair hearing process. If Contractor has reversed its
                initial determination and provided the service to the Enrollee,
                Contractor may request a waiver from appearing at the hearing
                and, in submitted papers, explain that it has withdrawn its
                initial determination and is providing the service or treatment
                formerly in dispute.

            c)  Contractor shall comply with all determinations rendered by OAH
                at fair hearings. Contractor shall cooperate with SDOH efforts
                to ensure that Contractor is in compliance with fair hearing
                determinations. Failure by Contractor to maintain such
                compliance shall constitute breach of this Agreement. Nothing in
                this Section shall limit the remedies available to SDOH, LDSS or
                the federal government relating to any non-compliance by
                Contractor with a fair hearing determination or Contractor's
                refusal to provide disputed services.

            d)  If SDOH investigates a complaint that has as its basis the same
                dispute that is the subject of a pending fair hearing and, as a
                result of its investigation, concludes that the disputed
                services and/or benefits should be provided to the Enrollee,
                Contractor shall comply with SDOH's directive to provide those
                services and/or benefits and provide notice to OAH and Enrollee
                as required by Section 25.6(b) of this Agreement.

            e)  If SDOH, through its complaint investigation process, or OAH, by
                a determination after a fair hearing, directs Contractor to
                provide a service that was initially denied by Contractor,
                Contractor may either directly provide the service, arrange for
                the provision of that service or pay for the provision of that
                service by a Non-Participating Provider.

            f)  Contractor agrees to abide by changes made to this Section of
                the Agreement with respect to the fair hearing, grievance and
                complaint processes by SDOH in order to comply with any
                amendments to applicable state or federal statutes or
                regulations. Such changes shall become effective without need
                for any further action by the parties to this Agreement.

            g)  Contractor agrees to identify a contact person within its
                organization who will serve as a liaison to SDOH for the purpose
                of receiving fair hearing requests, scheduled fair hearing dates
                and adjourned fair hearing dates and compliance with State
                directives. Such individual: shall be accessible to the State by
                e-mail; shall monitor e-mail for correspondence from the State
                at least once every business day; and shall agree, on behalf of
                Contractor, to accept notices to Contractor transmitted via
                e-mail as legally valid.

                             SECTION 23 - SECTION 37
                                 October 1, 2004
                                      -4-

<PAGE>

            h)  The information describing fair hearing rights, aid continuing,
                complaint procedures and utilization review appeals shall be
                included in all Medicaid managed care member handbooks and shall
                comply with SDOH's member handbook guidelines.

            i)  Contractor shall bear the burden of proof at hearings regarding
                the reduction, suspension or termination of ongoing services. In
                the event that Contractor's initial adverse determination is
                upheld as a result of a fair hearing, any aid continuing
                provided pursuant to that hearing request, may be recouped by
                Contractor.

26.   EXTERNAL APPEAL

      26.1  Basis for External Appeal

            Managed care Enrollees are eligible to request an external appeal
            when one or more covered health care services have been denied by
            the Contractor on the basis that the service(s) is not medically
            necessary or is experimental or investigational.

      26.2  Eligibility for External Appeal

            An Enrollee is eligible for an external appeal when the Enrollee has
            exhausted the Contractor's internal utilization review procedure or
            both the Enrollee and the Contractor have agreed to waive internal
            appeal procedures in accordance with New York State P.H.L. Section
            4914(2)2(a). A provider is also eligible for an external appeal of
            retrospective denials.

      26.3  External Appeal Determination

            The external appeal determination is binding on the Contractor,
            however, a fair hearing determination supercedes an external appeal
            determination for Medicaid Enrollees.

      26.4  Compliance with External Appeal Laws and Regulations

            MCOs must comply with the provisions of New York State P.H.L.
            Sections 4910-4914 and Title 10 of NYCRR Subpart 98-2 regarding the
            external appeal program.

27.   INTERMEDIATE SANCTIONS

      Contractor is subject to the imposition of sanctions as authorized by
      State law including the SDOH's right to impose sanctions for unacceptable
      practices as set forth in Title 18 of the Official Compilation of Codes,
      Rules and Regulations of the State of New York (NYCRR) Part 515 and civil
      and monetary penalties pursuant to 18 NYCRR Part 516 and such other
      sanctions and penalties as are authorized by local laws and ordinances and

                             SECTION 23 - SECTION 37
                                October 1, 2004
                                      -5-

<PAGE>

      resultant administrative codes, rules and regulations related to the
      Medical Assistance Program or to the delivery of the contracted for
      services.

28.   ENVIRONMENTAL COMPLIANCE

      The Contractor shall comply with all applicable standards, orders, or
      requirements issued under Section 306 of the Clean Air Act 42 U.S.C.
      Section 1857(h), Section 508 of the Clean Water Act (33 U.S.C. Section
      1368), Executive Order 11738, and the Environmental Protection Agency
      ("ERA") regulations (40 CFR, Part 15) that prohibit the use of the
      facilities included on the EPA List of Violating Facilities. The
      Contractor shall report violations to SDOH and to the Assistant
      Administrator for Enforcement of the EPA.

29.   ENERGY CONSERVATION

      The Contractor shall comply with any applicable mandatory standards and
      policies relating to energy efficiency that are contained in the State
      Energy Conservation regulation issued in compliance with the Energy Policy
      and Conservation Act of 1975 (Pub. L. 94-165) and any amendment to the
      Act.

30.   INDEPENDENT CAPACITY OF CONTRACTOR

      The parties agree that the Contractor is an independent Contractor, and
      that the Contractor, its agents, officers, and employees act in an
      independent capacity and not as officers or employees of LDSS, DHHS or the
      SDOH.

31.   NO THIRD PARTY BENEFICIARIES

      Only the parties to this Agreement and their successors in interest and
      assigns have any rights or remedies under or by reason of this Agreement.

32.   INDEMNIFICATION

      32.1  Indemnification by Contractor

            The Contractor shall indemnify, defend, and hold harmless the LDSS,
            its officers, agents, and employees and the Enrollees and their
            eligible dependents from:

            a)    any and all claims and losses accruing or resulting to any and
                  all Contractors, subcontractors, materialmen, laborers, and
                  any other person, firm, or corporation furnishing or supplying
                  work, services, materials, or supplies in connection with the
                  performance of this Agreement;

            b)    any and all claims and losses accruing or resulting to any
                  person, firm, or corporation that may be injured or damaged by
                  the Contractor, its officers,

                             SECTION 23 - SECTION 37
                                 October 1, 2004
                                       -6-

<PAGE>

                  agents, employees, or subcontractors, including Participating
                  Providers, in connection with the performance of this
                  Agreement;

            c)    any liability, including costs and expenses, for violation of
                  proprietary rights, copyrights, or rights of privacy, arising
                  out of the publication, translation, reproduction delivery,
                  performance, use, or disposition of any data furnished under
                  this Agreement, or based on any libelous or otherwise unlawful
                  matter contained in such data.

                  i)  The LDSS will provide the Contractor with prompt written
                      notice of any claim made against the LDSS, and the
                      Contractor, at its sole option, shall defend or settle
                      said claim. The LDSS shall cooperate with the Contractor
                      to the extent necessary for the Contractor to discharge
                      its obligation under Section 32.1.

                  ii) The Contractor shall have no obligation under this section
                      with respect to any claim or cause of action for damages
                      to persons or property solely caused by the negligence of
                      LDSS, its employees, or agents.

      32.2  Indemnification by LDSS

            The LDSS shall indemnify and hold harmless the Contractor and its
            officers, agents, and employees from any and all claims for damages
            resulting from actions by the LDSS or their Contractors in
            connection with their performance under this Agreement, except for
            such damages, costs, and expenses resulting from the negligence or
            culpable act of the Contractor, its officers, agents, employees, or
            subcontractors, including Participating Providers.

33.  PROHIBITION ON USE OF FEDERAL FUNDS FOR LOBBYING

      33.1  Prohibition of Use of Federal Funds for Lobbying

            The Contractor agrees, pursuant to 31 U.S.C. Section 1352 and 45 CFR
            Part 93, that no Federally appropriated funds have been paid or will
            be paid to any person by or on behalf of the Contractor for the
            purpose of influencing or attempting to influence an officer or
            employee of any agency, a Member of Congress, an officer or employee
            of Congress, or an employee of a Member of Congress in connection
            with the award of any Federal contract, the making of any federal
            grant, the making of any Federal loan, the entering into of any
            cooperative agreement, or the extension, continuation, renewal,
            amendment, or modification of any Federal contract, grant, loan, or
            cooperative agreement. The Contractor agrees to complete and submit
            the "Certification Regarding Lobbying", Appendix B attached hereto
            and incorporated herein, if this Agreement exceeds $100,000.

                             SECTION 23 - SECTION 37
                                 October 1, 2004
                                      -7-

<PAGE>

      33.2  Disclosure Form to Report Lobbying

            If any funds other than Federally appropriated funds have been paid
            or will be paid to any person for the purpose of influencing or
            attempting to influence an officer or employee of any agency, a
            Member of Congress, an officer or employee of Congress, or an
            employee of a Member of Congress in connection with the award of any
            Federal contract, the making of any Federal grant, the making of any
            Federal loan, the entering into of any cooperative agreement, or the
            extension, continuation, renewal, amendment, or modification of any
            Federal contract, grant, loan, or cooperative agreement, and the
            Agreement exceeds $100,000, the Contractor shall complete and submit
            Standard Form-LLL "Disclosure Form to Report Lobbying," in
            accordance with its instructions.

      33.3  Requirements of Subcontractors

            The Contractor shall include the provisions of this section in its
            subcontracts, including its Provider Agreements. For all
            subcontracts, including Provider Agreements, that exceed $100,000,
            the Contractor shall require the subcontractor, including any
            Participating Provider to certify and disclose accordingly to the
            Contractor.

34.   NON-DISCRIMINATION

      34.1  Equal Access to Benefit Package

            Except as otherwise provided in applicable sections of this
            Agreement the Contractor shall provide the Benefit Package to all
            Enrollees in the same manner, in accordance with the same standards,
            and with the same priority as Enrollees of the Contractor under any
            other contracts.

      34.2  Non-Discrimination

            The Contractor shall not discriminate against Eligible Persons or
            Enrollees on the basis of age, sex, race, creed, physical or mental
            handicap/developmental disability, national origin, sexual
            orientation, type of illness or condition, need for health services,
            or Capitation Rate that the Contractor will receive for such
            Eligible Persons or Enrollees.

      34.3  Equal Employment Opportunity

            Contractor must comply with Executive Order 11246, entitled "Equal
            Employment Opportunity", as amended by Executive Order 11375, and as
            supplemented in Department of Labor regulations.

                             SECTION 23 - SECTION 37
                                October 1, 2004
                                     - 8 -

<PAGE>

      34.4  Native Americans Access to Services From Tribal or Urban Indian
            Health Facility

            The Contractor shall not prohibit, restrict or discourage enrolled
            Native Americans from receiving care from or accessing Medicaid
            reimbursed health services from or through a tribal health or urban
            Indian health facility or center.

35.   COMPLIANCE WITH APPLICABLE LAWS

      35.1  Contractor and LDSS Compliance With Applicable Laws

            Notwithstanding any inconsistent provisions in this Agreement, the
            Contractor and LDSS shall comply with all applicable requirements of
            the State Public Health Law; the State Social Services Law; Title
            XIX of the Social Security Act; Title VI of the Civil Rights Act of
            1964 and 45 C.F.R. Part 80, as amended; Section 504 of the
            Rehabilitation Act of 1973 and 45 C.F.R. Part 84, as amended; Age
            Discrimination Act of 1975 and 45 C.F.R. Part 91, as amended; the
            Americans with Disabilities Act Title XIII of the Federal Public
            Health Services Act, 42 U.S.C. Section [ILLEGIBLE] seq., regulations
            promulgated there under; the Health Insurance Portability and
            Accountability Act of 1996 (P.L. 104-191) and related regulations;
            and all other applicable legal and regulatory requirements in effect
            at the time that this Agreement is signed and as adopted or amended
            during the term of this Agreement.

      35.2  Nullification of Illegal, Unenforceable, Ineffective or Void
            Contract Provisions

            Should any provision of this Agreement be declared or found to be
            illegal or unenforceable, ineffective or void, then each party shall
            be relieved of any obligation arising from such provision; the
            balance of this Agreement, if capable of performance, shall remain
            in full force and effect.

      35.3  Certificate of Authority Requirements

            The Contractor must satisfy conditions for issuance of a certificate
            of authority, including proof of financial solvency, as specified in
            10 NYCRR, Section 98.6.

      35.4  Notification of Changes in Certificate of Incorporation

            The Contractor shall notify LDSS of any amendment to its Certificate
            of Incorporation in the same manner as and simultaneously with the
            notice given to SDOH pursuant to 10 NYCRR Section 98.4(a).

      35.5  Contractor's Financial Solvency Requirements

            The Contractor, for the duration of this Agreement, shall remain in
            compliance with all applicable state requirements for financial
            solvency for MCOs participating in the Medicaid Program. The
            Contractor shall continue to be

                              SECTION 23 SECTION 37
                                October 1, 2004
                                      -9-

<PAGE>

            financially responsible as defined in PHL Section 4403(1)(c) and
            shall comply with the contingent reserve fund and escrow deposit
            requirements of 10 NYCRR Sections 98.11(d) and 98.11(e),
            respectively, and must meet minimum net worth requirements
            established by SDOH and the State Insurance Department. The
            Contractor shall make provision satisfactory to SDOH, for
            protections for SDOH, LDSS and the Enrollees in the event of HMO or
            subcontractor insolvency, including but not limited to, hold
            harmless and continuation of treatment provisions in all provider
            agreements which protect SDOH, LDSS and Enrollees from costs of
            treatment and assures continued access to care for Enrollees.

      35.6  Compliance With Care for Maternity Patients

            Contractor must comply with Section 2803-n of the Public Health Law
            and Section 3216 (i) (10) (a) of the State Insurance Law related to
            hospital care for maternity patients.

      35.7  Informed Consent Procedures for Hysterectomy and Sterilization

            The Contractor is required and shall require Participating Providers
            to comply with the informed consent procedures for Hysterectomy and
            Sterilization specified in 42 CFR, Part 441, sub-part F, and 18
            NYCRR Section 505.13.

      35.8  Non-Liability of Enrollees for Contractor's Debts

            Contractor agrees that in no event shall the Enrollee become liable
            for the Contractor's debts as set forth in SSA Section 1932(b)(6).

      35.9  LDSS Compliance With Conflict of Interest Laws

            LDSS and its employees shall comply with General Municipal Law
            Article 18 and all other appropriate provisions of New York State
            law, local laws and ordinances and all resultant codes, rules and
            regulations pertaining to conflicts of interest.

      35.10 Compliance With PHL Regarding External Appeals

            Contractor must comply with Article 49 Title II of the Public Health
            Law regarding external appeal of adverse determinations.

36.   NEW YORK STATE STANDARD CONTRACT CLAUSES

      The parties agree to be bound by the standard clauses for all New York
      State contracts and standard clauses, if any, for local government
      contracts contained in Appendix A, attached to and incorporated as if set
      forth fully herein, and any amendment thereto.

                             SECTION 23 - SECTION 37
                                October 1, 2004
                                     - 10 -

<PAGE>

37.   INSURANCE REQUIREMENTS

      Model Contract Note: The LDSS may propose insurance requirements based on
      the contract practices of its County. Such requirements must be reasonable
      and consistent with the attainment of managed care program objectives.

      [X]   The LDSS has insurance requirements (attached) as Section 37 of this
            Agreement.

      [ ]   The LDSS does not have insurance requirements.

                             SECTION 23 - SECTION 37
                                October 1, 2004
                                     - 11 -
<PAGE>

                                 COLUMBIA COUNTY             DEPUTY COMMISSIONER
[COLUMBIA COUNTY LOGO]    DEPARTMENT OF SOCIAL SERVICES       JOHN M. RUTKEY JR.
                         25 RAILROAD AVE., P.O. BOX 458
                             HUDSON, NEW YORK 12534           DIRECTOR OF INCOME
PAUL W. MOSSMAN                                                  MAINTENANCE
 COMMISSIONER                                                   LYNN A. KUTSKI

                           TELEPHONE (518)828-9411         DIRECTOR OF SERVICES
                            FAX (518)822-9089                 DEBORAH AMERLING

         INSURANCE REQUIREMENTS FOR MEDICAID MANAGED CARE ORGANIZATIONS
                        CONTRACTING WITH COLUMBIA COUNTY

At all times during the term of the Contract, Wellcare of New York, Inc. shall
maintain at its own cost and expense the following insurance and provide proof
thereof to the County, in the form of a Certificate of Insurance naming the
County as the insured, prior to commencing work under this agreement:

      a.    Statutory Workers' Compensation and NYS Disability coverage in
            compliance with the Compensation Law of the State of New York.

      b     Professional liability with minimum limits of $1,000,000 per
            occurrence subject to an aggregate of not less than $2,000,000.

      c     General liability with minimum 1imits of $1,000,000 per occurrence
            subject to an aggregate of not less than $2,000,000. This
            requirement may be waived if the Professional Liability provides for
            bodily injury and property damage. Notation of this fact must be in
            evidence on the Certificate of Insurance.

      d     Automobile Liability with minimum limits of $1,000,000 each
            accident. Coverage shall provide for any vicarious liability of the
            County of Columbia and be applicable to all owned, non-owned, hired,
            borrowed or temporarily used vehicles by the Contractor.

<PAGE>

      IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
dates appearing below their respective signatures.

      This Agreement is effective October 1, 2004 and shall remain in effect
until September 30, 2005 or until the execution on of an extension, renewal or
successor agreement as provided for in the Agreement.

For the COUNTY OF COLUMBIA

                                        By: /s/ Paul W. Mossman
                                           ------------------------------------
                                            Paul W. Mossman
                                            Commissioner

                                        Dated: 9/30/04

For the WELLCARE OF NEW YORK, INC.

                                        By: /s/ Daniel Parietti
                                            ----------------------------------
                                            Daniel Parietti
                                            Chief Operating Officer

                                        Dated: 9/29/04

<PAGE>

                                   APPENDIX A

                        NEW YORK STATE STANDARD CLAUSES
                           AND LOCAL STANDARD CLAUSES

                                   APPENDIX A
                                October 1, 2004

<PAGE>

STANDARD CLAUSES FOR NYS CONTRACTS                              APPENDIX A

      The parties to the attached contract, license, lease, amendment or other
agreement of any kind (hereinafter, "the contract" or "this contract") agree to
be bound by the following clauses which are hereby made a part of the contract
(the word "Contractor" herein refers to any party other than the State, whether
a contractor, licenser, licensee, lessor, lessee or any other party):

1. EXECUTORY CLAUSE. In accordance with Section 41 of the State Finance Law, the
State shall have no liability under this contract to the Contractor or to anyone
else beyond funds appropriated and available for this contract.

2. NON-ASSIGNMENT CLAUSE. In accordance with Section 188 of the State Finance
Law, this contract may not be assigned by the contractor or its right, title or
interest therein assigned, transferred, conveyed, sublet or otherwise disposed
of without the previous consent, in writing, of the State and any attempts to
assign the contract without the State's written consent are null and void. The
contract may, however, assign its right to receive payment without the State's
prior written consent unless this contract concerns Certificates of
Participation pursuant to Article 5-A of the State Finance Law.

3. COMPTROLLER'S APPROVAL. In accordance with Section 112 of the State Finance
Law (or, if this contract is with the State University or City University of New
York Section 355 of Section 6218 of the Education Law), if this contract exceeds
$15,000 (or the minimum thresholds agreed to by the Office of the State
Comptroller for certain S.U.N.Y. and C.U.N.Y. contracts), of if this is an
amendment for any amount, to a contract which, as so amended, exceeds said
statutory amount, or if, by this contract, the State agrees to give something
other than money when the value or reasonably estimated value of such
consideration exceeds $10,000, it shall not be valid, effective or binding upon
the State until it has been approved by the State Comptroller and filed in his
office. Comptroller's approval of contracts let by the Office of General
Services is required when such contracts exceed $30,000(State Finance Law
Section 163.6a).

4. WORKERS' COMPENSATION BENEFITS. In accordance with Section 142 of the State
Finance Law, this contract shall be void and of no force and effect unless the
Contractor shall provide and maintain coverage during the life of this contract
for the benefit of such employees as are required to be covered by the
provisions of the Worker's Compensation Law.

5. NON-DISCRIMINATION REQUIREMENTS. To the extent required by Article 15 of the
Executive Law (also known as the Human Rights Law) and all other State and
Federal statutory and constitutional non-discrimination provisions, the
Contractor will not discriminate against any employee or applicant for
employment because of race, creed, color, sex, national origin, sexual
orientation, age, disability, genetic predisposition or carrier status, or
marital status. Furthermore, in accordance with Section 220-e of the Labor Law,
if this is a contract for the construction, alteration or repair of any public
building or public work or for the manufacture, sale or distribution of
materials, equipment or supplies, and to the extent that this contract shall be
performed within the State of New York, Contractor agrees that neither it nor
its subcontractors shall, by reason of race, creed, color, disability, sex, or
national origin: (a) discriminate in hiring against any New York State citizen
who is qualified and available to perform the work; or (b) discriminate against
or intimidate any employee hired for the performance of work under this
contract. If this is a building service contract as defined in Section 230 of
the Labor Law, then, in accordance with Section 239 thereof, Contractor agrees
that neither it nor its subcontractors shall by reason of race, creed, color,
national origin, age, sex or disability: (a) discriminate in hiring against any
New York State citizen who is qualified and available to perform the work; or
(b) discriminate against or intimidate any employee hired for the performance of
work under this contract. Contractor is subject to fines of $50.00 per person
per day for any violation of Section 220-e or Section 239 as well as possible
termination of this contract and forfeiture of all moneys due hereunder for a
second or subsequent violation.

6. WAGE AND HOURS PROVISIONS. If this is a public work contract covered by
Article 8 of the Labor Law or a building service contract covered by Article 9
thereof, neither Contractor's employees nor the employees of its subcontractors
may be required or permitted to work more than the number of hours or days
stated in said statutes, except as otherwise provided in the Labor Law and as
set forth in prevailing wage and supplement schedules issued by the State Labor
Department. Furthermore, Contractor and its subcontractors must pay at least the
prevailing wage rate and pay or provide the prevailing supplements, including
the premium rates for overtime pay, as determined by the State Labor Department
in accordance with the Labor Law.

7. NON-COLLUSIVE BIDDING CERTIFICATION. In accordance with Section 139-d of the
State Finance Law, if this contract was awarded based upon the submission of
bids, Contractor warrants, under penalty of perjury, that its bid was arrived at
independently and without collusion aimed at restricting competition. Contractor
further warrants that, at the time Contractor submitted its bid, an authorized
and responsible person executed and delivered to the State non-collusive bidding
certification on Contractor's behalf.

8. INTERNATIONAL BOYCOTT PROHIBITION. In accordance with Section 220-f of the
Labor Law and Section 139-h of the State Finance Law, if this contract exceeds
$5,000, the Contractor agrees, as a material condition of the contract, that
neither the Contractor nor any substantially owned or affiliated person, firm,
partnership or corporation has participated, is participating, or shall
participate in an international boycott in violation of the federal Export
Administration Act of 1979(50 USC App. Sections 2410 et seq.) or regulations
thereunder. If such Contractor, or any of the aforesaid affiliates of
Contractor, is convicted or is otherwise found to have violated said laws or
regulations upon the final determination of the United States Commerce
Department or any other appropriate agency of the United States subsequent to
the contract's execution, such contract, amendment or modification thereto shall
be rendered forfeit and void. The Contractor shall so notify the State
Comptroller within five (5) business days of such conviction, determination or
disposition of appeal (2NYCRR 105.4).

9. SET-OFF RIGHTS. The state shall have all of its common law equitable and
statutory rights of set-off. Theses rights shall include, but not be limited to,
the State's option to withhold for the purposes of set-off any moneys due to the
Contractor under this contract up to any amounts due and owing to the State with
regard to this contract, any other contract with any State department or agency,
including any contract for a term commencing prior to the term of this contract,
plus any amounts due and owing to the State for any other reason including,
without limitation, tax delinquencies, fee delinquencies or monetary penalties
relative thereto. The State shall exercise its set-off rights in accordance with
normal State practices including, in cases of set-off pursuant to an audit, the
finalization of such audit by the State agency, its representatives, or the
State Comptroller.

10. RECORDS. The Contractor shall establish and maintain complete and accurate
books, records, documents, accounts and other evidence directly pertinent to
performance under this contract (hereinafter, collectively, "the Records"). The
Records must be kept for the balance of the calendar year in which they were
made and for six(6) additional years thereafter. The State Comptroller, the
Attorney General and any other person or entity authorized to conduct an
examination, as well as the agency or agencies involved in this contract, shall
have access to the Records during normal business hour at an office of the
Contractor

Page 1                                                                  May 2003

<PAGE>

STANDARD CLAUSES FOR NYS CONTRACTS                              APPENDIX A

within the State of New York or, if no such office is available, at a mutually
agreeable and reasonable venue within the State, for the term specified above
for the purposes of inspection, auditing and copying. The State shall take
reasonable steps to protect from public disclosure any of the Records which are
exempt from disclosure under Section 87 of the Public Officers Law (the
"Statute") provided that: (i) the Contractor shall timely inform an appropriate
State official, in writing, that said records should not be disclosed; and (ii)
said records shall be sufficiently identified; and (iii) designation of said
records as exempt under the Statute is reasonable. Nothing contained herein
shall diminish, or in any way adversely affect, the State's right to discovery
in any pending or future litigation.

11. IDENTIFYING INFORMATION AND PRIVACY NOTIFICATION. (a) FEDERAL EMPLOYER
IDENTIFICATION NUMBER and/or FEDERAL SOCIAL SECURITY NUMBER. All invoices or New
York State standard vouchers submitted for payment for the sale of goods or
services or the lease of real or personal property to a New York State agency
must include the payee's identification number, i.e., the seller's or lessor's
identification number. The number is either the payee's Federal employer
identification number or Federal social security number, or both such numbers
when the payee has both such numbers. Failure to include this number or numbers
may delay payment. Where the payee does not have such number or numbers, the
payee, on its invoice or New York State standard voucher, must give the reason
or reasons why the payee does not have such number or numbers.

(b) PRIVACY NOTIFICATION. (1) The authority to request the above personal
information from a seller of goods or services or a lessor of real or personal
property, and the authority to maintain such information, is found in Section 5
of the State Tax Law. Disclosure of this information by the seller or lessor to
the State is mandatory. The principal purpose for which the information is
collected is to enable the State to identify individuals, businesses and others
who have been delinquent in filing tax returns or may have understated their tax
liabilities and to generally identify persons affected by the taxes administered
by the Commissioner of Taxation and Finance. The information will be used for
tax administration purposes and for any other purpose authorized by law.

(2) The personal information is requested by the purchasing unit of the agency
contracting to purchase the goods or services or lease the real or personal
property covered by this contract or lease. The information is maintained in New
York State's Central Accounting System by the Director of Accounting Operations,
Office of the State Comptroller, AESOB, Albany, New York 12236.

12. EQUAL EMPLOYMENT OPPORTUNITIES FOR MINORITIES AND WOMEN. In accordance with
Section 312 of the Executive Law, if this contract is: (i) a written agreement
or purchase order instrument, providing for a total expenditure in excess of
$25,000.00, whereby a contracting agency is committed to expend or does expend
funds in return for labor, services, supplies, equipment, materials or any
combination of the foregoing, to be performed for, or rendered or furnished to
the contracting agency; or (ii) a written agreement in excess of $100,000.00
whereby a contracting agency is committed to expend or does expend funds for the
acquisition, construction, demolition, replacement, major repair or renovation
of real property and improvements thereon; or (iii) a written agreement in
excess of $100,000.00 whereby the owner of a State assisted housing project is
committed to expend or does expend funds for the acquisition, construction,
demolition, replacement, major repair or renovation of real property and
improvements thereon for such project, then:

(a) The Contractor will not discriminate against employees or applicants for
employment because of race, creed, color, national origin, sex, age, disability
or marital status, and will undertake or continue existing programs of
affirmative action to ensure that minority group members and women are afforded
equal employment opportunities without discrimination. Affirmative action shall
mean recruitment, employment, job assignment, promotion, upgradings, demotion,
transfer, layoff, or termination and rates of pay or other forms of
compensation;

(b) at the request of the contracting agency, the Contractor shall request each
employment agency, labor union, or authorized representative of workers with
which it has a collective bargaining or other agreement or understanding, to
furnish a written statement that such employment agency, labor union or
representative will not discriminate on the basis of race, creed, color,
national origin, sex, age, disability or marital status and that such union or
representative will affirmatively cooperate in the implementation of the
contractor's obligations herein; and

(c) the Contractor shall state, in all solicitations or advertisements for
employees, that, in the performance of the State contract, all qualified
applicants will be afforded equal employment opportunities without
discrimination because of race, creed, color, national origin, sex, age,
disability or marital status.

Contractor will include the provisions of "a", "b", and "c" above, in every
subcontract over $25,000.00 for the construction, demolition, replacement, major
repair, renovation, planning or design of real property and improvements thereon
(the "Work") except where the Work is for the beneficial use of the Contractor.
Section 312 does not apply to: (i) work, goods or services unrelated to this
contract; or (ii) employment outside New York State; or (iii) banking services,
insurance policies or the sale of securities. The State shall consider
compliance by a contractor or subcontractor with the requirements of any federal
law concerning equal employment opportunity which effectuates the purpose of
this section. The contracting agency shall determine whether the imposition of
the requirements of the provisions hereof duplicate or conflict with any such
federal law and if such duplication or conflict exists, the contracting agency
shall waive the applicability of Section 312 to the extent of such duplication
or conflict. Contractor will comply with all duly promulgated and lawful rules
and regulations of the Governor's Office of Minority and Women's Business
Development pertaining hereto.

13. CONFLICTING TERMS. In the event of a conflict between the terms of the
contract (including any and all attachments thereto and amendments thereof) and
the terms of this Appendix A, the terms of this Appendix A shall control.

14. GOVERNING LAW. This contract shall be governed by the laws of the State of
New York except where the Federal supremacy clause requires otherwise.

15. LATE PAYMENT. Timeliness of payment and any interest to be paid to
Contractor for late payment shall be governed by Article 11-A of the State
Finance Law to the extent required by law.

16. NO ARBITRATION. Disputes involving this contract, including the breach or
alleged breach thereof, may not be submitted to binding arbitration (except
where statutorily authorized), but must, instead, be heard in a court of
competent jurisdiction of the State of New York.

17. SERVICE OF PROCESS. In addition to the methods of service allowed by the
State Civil Practice Law & Rules ("CPLR"), Contractor hereby consents to service
of process upon it by registered or certified mail, return receipt requested.
Service hereunder shall be complete upon Contractor's actual receipt of process
or upon the State's receipt of the return thereof by the United States Postal
Service as refused or undeliverable. Contractor must promptly notify the State,
in writing, of each and every change of address to which service of process can
be made. Service by the State to the last known address shall be sufficient.
Contractor will have thirty (30) calendar days after service hereunder is
complete in which to respond.

Page 2                                                                 May, 2003

<PAGE>

STANDARD CLAUSES FOR NYS CONTRACTS                              APPENDIX A

18. PROHIBITION ON PURCHASE OF TROPICAL HARDWOODS. The Contractor certifies and
warrants that all wood products to be used under this contract award will be in
accordance with, but not limited to, the specifications and provisions of State
Finance Law Section.165. (Use of Tropical Hardwoods) which prohibits purchase
and use of tropical hardwoods, unless specifically exempted, by the State or any
governmental agency or political subdivision or public benefit corporation-
Qualification for an exemption under this law will be the responsibility of the
contractor to establish to meet with the approval of the State.

In addition, when any portion of this contract involving the use of woods,
whether supply or installation, is to be performed by any subcontractor, the
prime Contractor will indicate and certify in the submitted bid proposal that
the subcontractor has been informed and is in compliance with specifications and
provisions regarding us of tropical hardwoods as detailed in section.165 State
Finance Law. Any such use must meet with the approval of the State; otherwise,
the bid may net be considered responsive. Under bidder certifications, proof of
qualification for exemption will be the responsibility of the Contractor to meet
with the approval of the State.

19. MACBRIDE FAIR EMPLOYMENT PRINCIPLES. In accordance with the MacBride Fair
Employment Principles (Chapter 807 of the Laws of 1992), the Contractor hereby
stipulates that the Contractor either (a) has no business operations in Northern
Ireland or (b) shall take lawful steps in good faith to conduct any business
operations in Northern Ireland in accordance with the MacBride lair Employment
Principles (as described in Section 165 of the New York State Finance Law), and
shall permit independent monitoring of compliance with such principles.

20. OMNIBUS PROCUREMENT ACT OF 1992. It is the policy of New York State to
maximize opportunities for the participation of New York State business
enterprises, including minority and women-owned business enterprises as
bidders, subcontractors and suppliers on Its procurement contracts. Information
on the availability of New York State subcontractors and suppliers is available
from:

      NYS Department of Economic Development
      Division for Small Business
      30 South Pearl St - 7* Floor
      Albany, New York 12245
      Telephone: 518-292-5220

A directory of certified minority and women-owned business enterprises is
available from:

      NYS Department of Economic Development
      Division of Minority and Women's Business Development
      30 South Pearl St -- 2nd Floor
      Albany, New York 12245
      http://www.empire.state.ny.us

The Omnibus Procurement Act of 1992 requires that by signing this bid proposal
or contract, as applicable, Contractors certify that whenever the total bid
amount is greater than $1 million:

(a) The Contractor has made reasonable efforts to encourage the participation of
New York State Business Enterprises as suppliers and subcontractors, including
certified minority and women-owned business enterprises, on this project, and
has retained the documentation of these efforts to be provided upon request to
the State;

(b) The Contractor has complied with the Federal Equal Opportunity Act  of 1972
(P.L. 92-261), as amended;

(c) The Contractor agrees to make reasonable efforts to provide notification to
New York State residents of employment opportunities on this project through
listing any such positions with the job Service Division of the New York State
Department of Labor, or providing such notification in such manner as is
consistent with existing collective bargaining contracts or agreements. The
Contractor agrees to document these efforts and to provide said documentation to
the State upon request; and

(d) The Contractor acknowledges notice that the State may seek to obtain offset
credits from foreign countries as a result of this contract and agrees to
cooperate with the State in these efforts.

21. RECIPROCITY AND SANCTIONS PROVISIONS. Bidders are hereby notified that if
their principal place of business is located in a country, nation, province,
state or political subdivision that penalizes New York State vendors, and if the
goods or services they offer will be substantially produced or performed outside
New York State, the Omnibus Procurement Act 1994 and 2000 amendments (Chapter
684 and Chapter 383, respectively) require that they be denied contracts which
they would otherwise obtain. NOTE: As of May 15, 2002, the list of
discriminatory jurisdictions subject to this provision includes the states of
South Carolina, Alaska, West Virginia, Wyoming, Louisiana and Hawaii. Contact
NYS Department of Economic Development for a current list of jurisdictions
subject to this provision.

22. PURCHASES OF APPAREL. In accordance with State Finance Law 162 (4-a), the
State shall not purchase any apparel from any vendor unable or unwilling to
certify that: (i) such apparel was manufactured in compliance with all
applicable labor and occupational safety laws, including, but not limited to,
child labor laws, wage and hours laws and workplace safety laws, and (ii) vendor
will supply, with its bid (or, if not a bid situation, prior to or at the time
of signing a contract with the State), if known, the names and addresses of each
subcontractor and a

Page 3                                                                  May 2003

<PAGE>

                                   APPENDIX B

                        CERTIFICATION REGARDING LOBBYING

                                    APPENDIX B
                                October 1, 2004
                                       B-1

<PAGE>

                                   APPENDIX B
                        CERTIFICATION REGARDING LOBBYING

The undersigned certifies, to the best of his or her knowledge, that:

1.    No Federal appropriated funds have been paid or will be paid to any person
      by or on behalf of the Contractor for the purpose of influencing or
      attempting to influence an officer or employee of any agency, a Member of
      Congress, an officer or employee of a Member of Congress in connection
      with the award of any Federal loan, the entering into of any cooperative
      agreement, or the extension, continuation, renewal, amendment, or
      modification of any Federal contract, grant, loan, or cooperative
      agreement.

2.    If any funds other than Federal appropriated funds have been paid or will
      be paid to any person for the purpose of influencing or attempting to
      influence an officer or employee of any agency, a Member of Congress in
      :connection with the award of any Federal contract, the making of any
      Federal grant, the making of any Federal loan, the entering into of any
      cooperative agreement, or the extension, continuation, renewal, amendment,
      or modification of any Federal contract, grant, loan, or cooperative
      agreement, and the Agreement exceeds $100,000, the Contractor shall
      complete and submit Standard Form - LLL "Disclosure Form to Report
      Lobbying", in accordance with its instructions.

3.    The Contractor shall include the provisions of this section in all
      provider Agreements under this Agreement and require all Participating
      providers whose Provider Agreements exceed $100,000 to certify and
      disclose accordingly to the Contractor.

      This certification is a material representation of fact upon which
reliance was place when this transaction was made or entered into. Submission of
this certification is a prerequisite for making or entering into this
transaction pursuant it to U.S.C. Section 1352. The failure to file the required
certification shall subject the violator to a civil penalty of not less than
$10,000 and not more than $100,000 for each such failure.

DATE: SEPTEMBER 10, 2004

SIGNATURE: TODD S. FARHA

TITLE: CEO/President

ORGANIZATION: Wellcare of New York, Inc.

                                   APPENDIX B
                                October 1, 2004
                                       B-2

<PAGE>

                                   APPENDIX C

                       NEW YORK STATE DEPARTMENT OF HEALTH
                         GUIDELINES FOR THE PROVISION OF
                FAMILY PLANNING AND REPRODUCTIVE HEALTH SERVICES

                                   APPENDIX C
                                October 1, 2004
                                       C-1

<PAGE>

                                       C.1

                         GUIDELINES FOR THE PROVISION OF
                FAMILY PLANNING AND REPRODUCTIVE HEALTH SERVICES

Enrollees may obtain family planning and or reproductive health services and HIV
blood testing and pre- and post-test counseling when performed as part of a
family planning encounter from either the Contractor or from any appropriate
MMIS-enrolled health care provider of the Enrollee's choice. Pharmacy
prescriptions, Medical Supplies, and over the counter drugs are to be billed
fee-for-service by all providers.

Family planning services means the offering, arranging and furnishing of those
health services which enable individuals, including minors who may be sexually
active, to prevent or reduce the incidence of unwanted pregnancies.

Family planning and reproductive health services include: the following
medically-necessary services, related drugs and supplies which are furnished or
administered under the supervision of a physician or certified nurse
practitioner during the course of a family planning visit for the purpose of:

-     contraception, including insertion/removal of an intrauterine device
      (IUD), insertion/removal of Norplant, and injection procedures involving
      Pharmaceuticals such as Depo-Provera;

-     sterilization;

-     screening, related diagnosis, and referral to participating provider for
      pregnancy;

-     medically-necessary induced abortions and for New York City recipients,
      elective induced abortions.

Such services include those education and counseling services to render the
services effective. Medically-necessary induced abortions are procedures, either
medical or surgical, which result in the termination of pregnancy. The
determination of medical necessity shall include positive evidence of pregnancy,
with an estimate of its duration.

When clinically indicated, the following services may be provided as a part of
a family planning and reproductive health visit:

-     screening, related diagnosis, ambulatory treatment and referral as needed
      for dysmenorrhea, cervical cancer, or other pelvic abnormality/pathology.

-     screening, related diagnosis and referral for anemia, cervical cancer,
      glycosuria, proteinuria, hypertension and breast disease.

-     screening and treatment for sexually transmissible disease.

                                   APPENDIX C
                                October 1, 2004
                                       C-2

<PAGE>

Providers of family planning and reproductive health care shall comply with all
of the requirements set forth in Sections 17 and 18 of the New York State
Public Health Law, and 10 NYCRR Section 751.9 and Part 753 relating to informed
consent and confidentiality.

The above family planning and reproductive health services are the only services
which are covered under the free access policy. Routine obstetric and/or
gynecologic care, including hysterectomies, pre-natal, delivery and post-partum
care are not covered under the free access policy, and are the responsibility of
the Contractor if they are covered contract services.

                                   APPENDIX C
                                October 1, 2004
                                       C-3

<PAGE>

                                       C.2

    GUIDELINES FOR PLANS THAT INCLUDE FAMILY PLANNING AND REPRODUCTIVE HEALTH
                        SERVICES IN THEIR BENEFIT PACKAGE

If the Contractor includes family planning and reproductive health services in
its benefit package, the Contractor must notify all Enrollees of reproductive
age (including minors who may be sexually active) at the time of enrollment
about their right to obtain family planning and reproductive health services and
supplies from any network or non-network provider without referral or approval.
The notification must contain the following:

1)    notification of the Medicaid Enrollee's right to obtain the full range of
      family planning and reproductive health services (including HIV counseling
      and testing when performed as part of a family planning encounter) from
      either a Contractor's participating provider or any qualified non-network
      provider who accepts Medicaid who undertakes to provide such services to
      them, without referral, approval or notification;

2)    a current list of qualified network family planning providers, within the
      geographic area, including addresses and telephone numbers, who provide
      the full range of family planning and reproductive health services.
      Contractor may also choose to provide a list of qualified non-network
      Medicaid providers who provide the full range of family planning and
      reproductive health services;

3)    information that the cost of the Enrollee's care will be fully covered by
      Medicaid, when services are obtained in accordance with #1 above,
      regardless of where the Enrollee obtains services.

The Contractor must notify its participating providers that all claims for
family planning services must be billed to the Contractor and not the Medicaid
fee-for-service program.

                                   APPENDIX C
                                October 1, 2004
                                       C-4

<PAGE>

                                       C.3

           GUIDELINES FOR POLICY AND PROCEDURES FOR PLANS THAT DO NOT
              INCLUDE FAMILY PLANNING SERVICES IN THEIR CAPITATION

      Any Contractor who does not include family planning services in its
Benefit Package must notify all Enrollees and prospective Enrollees that these
services are not covered through the plan and submit a statement of the policy
and procedure they will use to inform Enrollees, prospective Enrollees, and
network providers using the following guidelines. The statement must be sent to
Director, Office of Managed Care, NYS Department of Health, Corning Tower, Room
2001, Albany, NY 12237 before signing the contract.

      The policy and procedure statement regarding family planning services must
contain the following:

1)    A statement that the Contractor will inform prospective Enrollees, new
      Enrollees and current Enrollees that:

      a.    Certain family planning and reproductive health services (such as
            abortion, sterilization and birth control) are not covered by the
            Contractor.

      b.    Such services may be obtained through fee-for-service Medicaid from
            any provider who accepts Medicaid.

      c.    No referral is needed for such services, and that there will be no
            cost to the Enrollee for such services.

2)    A statement that this information will be provided in the following
      manner:

      a.    Through the Contractor's written marketing materials, including the
            member handbook

      b.    Orally at the time of enrollment and any time an inquiry is made
            regarding family planning and reproductive health services.

      c.    Included on any web site of the Contractor which includes
            information concerning its Medicaid managed care program. Such
            information shall be prominently displayed and easily navigated.

3)    The procedure for informing the Contractor's primary care providers,
      obstetricians, and gynecologists that the Contractor has elected not to
      cover certain reproductive and family planning services, but that such
      Participating Providers may provide, make referrals, or arrange for these
      services in accordance with MA fee-for-service billing policies.

                                   APPENDIX C
                                October 1, 2004
                                       C-5

<PAGE>

4)    Mechanisms to inform the Contractor's providers who also participate in
      the fee-for-service Medicaid program that, if they render
      non-covered reproductive health and family planning services, they do so
      as a fee-for-service Medicaid practitioner, independent of the Contractor.

5)    The member handbook and marketing materials indicating that the Contractor
      has elected not to cover certain reproductive health and family planning
      services, and explaining the right of all Enrollees to secure such
      services through fee-for-service Medicaid from any Medicaid
      provider/clinic which offers these services.

6)    With the advent of mandatory enrollment and auto-assignment, mechanisms to
      provide all new Enrollees with an SDOH approved letter explaining how to
      access family planning services and the SDOH approved or LDSS approved
      list of family planning providers. This material will be furnished by SDOH
      or LDSS to the plan and mailed with the first new member communication,
      prior to the enrollment effective date.

7)    If an Enrollee or prospective Enrollee requests information about these
      non-covered services, the Contractor's marketing or enrollment staff or
      member services department will advise the Enrollee or prospective
      Enrollee as follows:

      a.    Family planning and reproductive health services such as abortion,
            sterilization and birth control are not covered through the plan.

      b.    Enrollees can receive these non-covered services using their
            Medicaid card from any doctor or clinic that provides these services
            and accepts Medicaid.

      c.    The Contractor will mail to each Enrollee or prospective Enrollee
            who calls, a copy of the SDOH or LDSS approved letter explaining
            the Enrollee's right to receive these non-covered services and an
            SDOH approved or LDSS approved list of family planning providers,
            who participate in Medicaid in the Enrollee's community. The
            Contractor will mail these materials within 48 hours of the contact.

      d.    Enrollees can call the Contractor's member services number or the
            New York State Growing-Up-Healthy Hotline (1-800 522-5006) to
            request a copy of the list of Family Planning Providers and for
            further information about how to obtain these non-covered services.

8)    The procedure for maintaining a manual log of all requests for such
      information, including the date of the call, the Enrollee's ID number, and
      the date the SDOH approved letter and SDOH or LDSS approved list were
      mailed. The Contractor will review this log monthly and upon request,
      submit a copy to SDOH or the LDSS.

9)    Mechanisms to inform participating providers that, if requested by the
      Enrollee, or, if in the provider's best professional judgement, certain
      reproductive health and family

                                   APPENDIX C
                                October 1, 2004
                                      C-6

<PAGE>

      planning services not offered through the Contractor are medically
      indicated in accordance with generally accepted standards of professional
      practice, an appropriately trained professional should so advise the
      Enrollee and either: (1) offer those services on a fee-for-service basis;
      or (2) provide the Enrollee with a copy of the SDOH approved or LDSS
      approved list of Medicaid family planning providers, or (3) give the
      Enrollee the member services number to call to obtain this listing.

10)   The Contractor must recognize that the exchange of medical information,
      when indicated in accordance with generally accepted standards of
      professional practice, is necessary for the overall coordination of
      Enrollees' care and will assist primary care providers in providing the
      highest quality care to the Contractor's Enrollees. The Contractor must
      acknowledge that medical record information maintained by network
      providers may include information relating to family planning services
      provided under the fee-for-service Medicaid program.

11)   Quality assurance initiatives to ensure compliance with this policy. These
      should include the following procedures:

      a.    The Contractor will submit any materials to be furnished to
            Enrollees and providers relating to access to non-covered
            reproductive health and family planning services to SDOH, Office of
            Managed Care for its review and approval before issuance. Such
            materials include, but are not limited to, member handbooks,
            provider manuals, and marketing materials.

      b.    Monitoring calls to member services and providers will be conducted
            to assess the quality of the information provided. These calls will
            be performed weekly by the manager/director or his or her designee.

      c.    Every month, the plan will prepare a list of Enrollees who have been
            sent a copy of the SDOH approved letter and the SDOH approved or
            LDSS approved list of family planning providers. This information
            will be submitted to the Chief Operating Officer and President/CEO
            on a monthly basis.

      d.    The Contractor will provide a new employees with a copy of this
            policy. The Contractor's orientation programs is will include a
            thorough discussion of all aspects of this policy and procedure,
            Annual retraining programs for all employees will also be conducted
            to ensure continuing compliance with this policy.

                                    APPENDIX
                                October 1, 2004
                                       C-7

<PAGE>

                                   APPENDIX D

                      NEW YORK STATE DEPARTMENT OF HEALTH
                              MARKETING GUIDELINES

                                   APPENDIX D
                                October 1, 2004
                                       D-1

<PAGE>

                              MARKETING GUIDELINES
                                  INTRODUCTION

The purpose of these guidelines is to provide an operational framework for
localities and Medicaid managed care organizations (MCOs) in the development of
MCO marketing plans, materials, and activities and to describe SDOH's marketing
rules, MCO marketing requirements, and prohibited practices.

The guidelines are consistent with those issued to all states by the Health
Care Financing Administration (HCFA), U.S. Department of Health and Human
Services (DHHS) in August 1994. These guidelines are consistent with the
requirements of New York State.

                                   APPENDIX D
                                October 1, 2004
                                      D-2

<PAGE>

A. MARKETING PLANS

1.    The MCO shall develop a marketing plan that meets SDOH guidelines and any
      local requirements as approved by the State Department of Health (SDOH).

2.    The LDSS is responsible for the review and approval of MCO marketing
      plans, using a SDOH approved checklist.

3.    Approved marketing plans set forth the allowable terms and conditions and
      the proposed activities that the MCO intends to undertake during the
      contract period. Locally determined variations, as specified in Section E
      of this Appendix, must be described in the MCO's specific marketing plan
      for each LDSS the MCO contracts with.

4.    The MCO must have on file with the SDOH and each LDSS with which it will
      contract, an approved marketing plan, prior to the contract award date or
      before marketing and enrollment begin, whichever is sooner. Subsequent
      changes to the plan must be submitted to the LDSS or SDOH for approval at
      least sixty (60) days before implementation.

5.    The plan shall include: a stated marketing goal and strategies; marketing
      activities; and staff training, development and responsibilities. The
      following must be included in the plan's description of materials to be
      used: distribution methods; primary marketing locations, and a listing of
      the kinds of community service events the MCO anticipates sponsoring
      and/or participating in, during which it will provide information and/or
      distribute marketing materials.

6.    The MCO must describe how it is able to meet the informational needs,
      related to marketing, for the physical and cultural diversity of its
      potential membership. This may include, but not be limited to, a
      description of the MCO's other-than English language provisions,
      interpreter services, alternate communication mechanisms, including sign
      language, Braille, audio tapes, and/or use of Telecommunications Device
      for the Deaf (TDD)/TTY services.

7.    The MCO shall describe measures for monitoring and enforcing compliance
      with the guidelines by its marketing representatives and its providers
      including: the prohibition of door-to-door solicitation and cold-call
      telephoning; a description of the development of pre-enrollee mailing
      lists, that maintains client confidentiality and that honors the client's
      express request for direct contact by the MCO; the selection and
      distribution of pre-enrollment gifts and incentives to consumers; and a
      description of the training, compensation and supervision of its marketing
      representatives.

                                   APPENDIX D
                                October l, 2004
                                       D-3

<PAGE>

B. MARKETING MATERIALS

1.    Definitions

      a)    Marketing materials generally include the concepts of advertising,
            public service announcements, printed publications, and other
            broadcast or electronic messages designed to increase awareness and
            interest in Medicaid managed care and/or a MCO's Medicaid managed
            care product. The target audience for these marketing materials is
            Medicaid-eligible persons who are not enrolled in a Medicaid managed
            care plan, and who are living in a defined service area.

      b)    Marketing materials include any information that references the
            Medicaid managed care program, is intended for general distribution,
            and is produced in a variety of print, broadcast, and direct
            marketing mediums. These generally include: radio, television,
            billboards, newspapers, leaflets, informational brochures, videos,
            telephone book yellow page ads, letters, and posters. Additional
            materials requiring marketing approval include a listing of items to
            be provided as nominal gifts or incentives.

2.    Marketing Material Requirements

      a)    Marketing materials must be written in prose that is understood at a
            fourth-to sixth-grade reading level and must be printed in at least
            ten (10) point type.

      b)    The Contractor must make available written marketing and other
            informational materials (e.g., member handbooks) in a language other
            than English whenever at least five percent (5%) of the potential
            Enrollees of the Contractor in any county of the service area speak
            that particular language and do not speak English as a first
            language. SDOH will inform the LDSS and LDSS will inform the
            Contractor when the 5% threshold has been reached. Marketing
            materials to be translated include those key materials, such as
            informational brochures, that are produced for routine distribution,
            and which are included within the MCO's marketing plan. SDOH will
            determine the need for other than English translations based on
            county specific census data or other available measures.

      c)    Alternate forms of communications must be provided for persons with
            visual, hearing, speech, physical, or developmental disabilities.
            These alternate forms include Braille or audiotapes for the visually
            impaired, TTY access for those with certified speech or hearing
            disabilities, and use of American Sign Language and/or integrative
            technologies.

      d)    The plan name, mailing address (and location, if different), and
            toll free phone number must be prominently displayed on the cover of
            all multi-paged marketing materials.

                                   APPENDIX D
                                 October 1, 2004
                                       D-4

<PAGE>
      e)    Marketing materials must not contain false, misleading, or ambiguous
            information -- such as "You have been pre-approved for the XYZ
            Health Plan," or "If you do not choose a plan you will lose your
            Medicaid coverage," or "You get free, unlimited visits." Materials
            must not use broad, sweeping statements -- for example, "If you are
            eligible for Medicaid, you are eligible for Medicaid Managed Care
            and/or the XYZ Health Plan."

      f)    The material must accurately reflect general information, which is
            applicable to the average consumer of Medicaid managed care.

      g)    The Contractor may not use logos or wording used by government
            agencies if such use could imply or cause confusion about a
            connection between a governmental agency and the Contractor.

      h)    Marketing materials may not make reference to incentives that may be
            available to Enrollees after they join a plan, such as "If you join
            the XYZ Plan, you will receive a free baby carriage after you
            complete eight prenatal visits."

      i)    Marketing materials that are prepared for distribution or
            presentation by the LDSS or enrollment broker must be provided in a
            manner that is easily understood and appropriate to the target
            audience. The material covered must include sufficient information
            to assist the individual in making an informed choice of MCO.

      j)    The MCO shall advise potential Enrollees, in written materials
            related to enrollment, to verify with the medical services providers
            they prefer, or have an existing relationship with, that such
            medical services providers participate in the selected managed care
            provider's network and are available to serve the participant.

3. Prior Approvals

      a)    The SDOH will review and approve MCO, marketing videos, materials
            for broadcast (radio, television, or electronic), billboards, mass
            transit (bus, subway or other livery) and statewide/regional print
            advertising materials. These materials must be submitted to the SDOH
            for review. A copy must be simultaneously provided to the LDSS.

      b)    The LDSS will review and approve the following marketing material:

            i)    MCO marketing plans;

            ii)   Scripts or outlines of presentations and materials used at
                  health fairs and other LDSS approved events and locations;

            iii)  All pre-enrollment written marketing materials -- written
                  marketing materials include brochures and leaflets, and
                  presentation materials used by marketing representatives;

                                   APPENDIX D
                                October 1, 2004
                                       D-5

<PAGE>

            iv)   County specific MCO informational brochures to be included in
                  LDSS enrollment packets; and

            v)    All direct mailing from MCOs targeted to the Medicaid market.

      c)    Both SDOH and LDSS will adhere to a sixty (60) day "file and use"
            policy, whereby materials submitted by the MCO must be reviewed and
            commented on within sixty (60) days of submission or the MCO may
            assume the materials have been approved if the reviewer has not
            submitted any written comment.

      d)    The Contractor shall submit all subcontracts, procedures, and
            materials related to Marketing to Eligible Persons to the SDOH
            and/or LDSS for prior written approval. The Contractor shall not
            enter into any subcontracts or use any marketing subcontractors,
            procedures, or materials that the SDOH and/or LDSS has not approved.

4. Dissemination of LDSS Outreach Materials

      The Contractor shall provide to the LDSS and/or Enrollment Broker upon
      request, a marketing/informational brochure or alternative informational
      document that describes coverage in the county specific service area.

      The Contractor shall, upon request, submit to the LDSS or Enrollment
      Broker, a current provider directory, together with information that
      describes how to determine whether a provider is presently available.

                                   APPENDIX D
                                October 1, 2004
                                       D-6

<PAGE>

C. MARKETING ACTIVITIES

1. Definitions

      a)    Marketing activities are occasions during which marketing
            information and material regarding Medicaid managed care and
            information about a particular MCO's affiliated products are
            presented. Typically, such information is presented both in verbal
            exchanges and through the distribution of written materials,
            together with the giving away of nominal gifts. The informal nature
            of the marketing activity requires MCOs to be forthright in their
            presentations to allow potential Enrollees the exercise of informed
            choice, and localities must provide the best assurances that
            marketing practices are consistent with established guidelines. Any
            exchange of verbal marketing information must include the following:

            i)    if the plan is not capitated for family planning services, the
                  representative must tell potential Enrollees that:

                  a)    certain family planning and reproductive health services
                        (such as abortion, sterilization and birth control) are
                        not covered by the Contractor;

                  b)    whenever needed, such services may be obtained through
                        fee-for-service Medicaid from any provider who accepts
                        Medicaid;

                  c)    no referral is needed for such services;

                  d)    there will be no cost to the enrollee for such services.

      b)    With prior local approval MCOs may engage in marketing
            activities that include community-sponsored social gatherings,
            provider-hosted informational sessions, or MCO-sponsored events.
            Events may include such activities as health fairs workshops on
            health promotion, holiday parties, after school programs, raffles,
            etc. These events must not be restricted to Medicaid Recipients
            only.

      c)    Media campaigns are the distribution of information/materials
            regarding the Medicaid managed care program and/or a specific MCO
            for the purpose of encouraging Medicaid recipients to join a managed
            care plan. All mediums -- including television, radio, billboards,
            subway and bus posters, and electronic messages -- must be
            pre-approved by the SDOH at least thirty (30) days prior to the
            campaign. A copy must be simultaneously submitted to the SDOH and
            the LDSS.

2. Marketing Sites

      a)    With prior LDSS approval, MCCs may distribute approved marketing
            material in such places as, an income support maintenance center,
            community centers (if the center agrees and allows all MCOs to use
            the center), markets, pharmacies, hospitals and other provider
            sites, schools, health fairs, a resource center established by the
            LDSS or the enrollment counseling contractor, and other areas where
            potential Enrollees are likely to gather.

                                   APPENDIX D
                                October 1, 2004
                                      D-7

<PAGE>

      b)    MCOs are PROHIBITED from door-to-door solicitation of potential
            Enrollees, or distribution of material, and may not engage in "cold
            calling" inquiries or solicitation.

      c)    MCOs are PROHIBITED from direct marketing or distribution of
            material in hospital emergency rooms including emergency room
            waiting areas. Marketing may not take place in patient rooms or
            treatment areas (except for waiting areas) or other prohibited sites
            unless requested by the individual. LDSS may not allow MCO to market
            in individual homes without permission of the individual.

      d)    MCOs may not require its participating Providers to distribute
            plan-prepared communications to their patients.

      e)    Participating Providers may display the marketing materials of their
            contracting MCOs provided that appropriate notice is conspicuously
            posted for all other MCOs with whom the Provider has a contract.

      f)    Participating Providers are encouraged to communicate with their
            patients about managed care options and to advise their patients in
            determining the MCO that best meets the health needs of the patient
            and his/her family. Such advice, whether presented verbally or in
            writing, must be individually based and not merely a promotion of
            one plan over another. Providers who wish to let their patients know
            of their affiliation with one or more MCOs must list each MCO with
            whom they hold contracts. In the event marketing material is
            included with such communication, the material, together with the
            intended communication, must be pre-approved by the LDSS before
            distribution.

      g)    In the event a provider is no longer affiliated with a particular
            MCO but remains affiliated with other participant MCOs, the provider
            may notify his/her/its patients of the new status and the impact of
            such change on the patient.

3 Restricted Marketing Activities

      a)    MCOs are PROHIBITED from misrepresenting the Medicaid program, the
            Medicaid managed care program, or the program or policy requirements
            of the LDSS or the SDOH.

      b)    MCOs are PROHIBITED from purchasing or otherwise acquiring or using
            mailing lists of Medicaid recipients from third party vendors,
            including providers and LDSS offices.

      c)    MCOs are PROHIBITED from using raffle tickets and event attendance
            or sign-in sheets to develop mailing lists of potential Enrollees.

                                   APPENDIX D
                                October 1, 2004
                                      D-8

<PAGE>

      d)    MCOs may not discriminate against a potential Enrollee based
            on his/her current health status or anticipated need for future
            health care. The MCO may not discriminate on the basis of disability
            or perceived disability of an Enrollee or their family member.
            Health assessments may not be performed by MCOs prior to enrollment.
            MCOs may inquire about existing primary care relationships of the
            applicant and explain whether and how such relationships may be
            maintained. Upon request, each potential Enrollee shall be provided
            with a listing of all Participating Providers including specialists
            and facilities in the MCO's network. The MCO may respond to a
            potential Enrollee's question about whether a particular specialist
            is in the network. However, MCOs are prohibited from inquiring about
            the types of specialists utilized by the potential Enrollee.

      e)    MCOs may not offer incentives of any kind to Medicaid recipients to
            join a health plan. "Incentives" are defined as any type
            of inducement whose receipt is contingent upon the recipients,
            Joining the plan.

      f)    MCOs are responsible for ensuring that their marketing
            representatives engage in professional and courteous behavior in
            their interactions with LDSS staff, staff from other health plans,
            and Medicaid clients. Examples of inappropriate behavior include
            interfering with other health plan presentations, talking negatively
            about another health plan, and participating with Medicaid clients
            during the verification interview with LDSS staff.

      g)    MCOs may offer nominal gifts not more than $5.00 in fair-market
            value as part of a health fair or other marketing activity to
            stimulate interest in managed care and/or the MCO. Such gifts must
            be pre-approved by the LDSS, and offered without regard to
            enrollment. The MCO must submit a listing of intended items to be
            distributed at marketing activities as nominal gifts. The submission
            of actual samples or photographs of intended nominal gifts will not
            be routinely required, but must be made available upon request by
            the state or local reviewer. Listings of item donors or co-sponsors
            must be submitted along with the description of items.

      h)    MCOs may offer its Enrollees rewards for completing a health goal,
            such as finishing all prenatal visits, participating in a smoking
            cessation session, attending initial orientation sessions upon
            enrollment, and timely completion of immunizations or other health
            related programs. Such rewards may not exceed $50.00 in fair-market
            value per Enrollee over a twelve (12) month period, and must be
            related to a health goal. MCOs may not make reference to these
            rewards in their pre-enrollment marketing materials or discussions
            and all such rewards must be approved by the LDSS.

      i)    MCOs may not offer compensation to marketing representatives,
            including salary increases or bonuses, based solely on the number of
            individuals they enroll. However, MCOs may base compensation of
            marketing representatives on periodic performance evaluations which
            consider enrollment productivity as one

                                   APPENDIX D
                                October 1, 2004
                                      D-9

<PAGE>

            of several performance factors during a performance period, subject
            to the following requirements:

            1)    "Compensation" shall mean any remuneration required to be
                  reported as income or compensation for federal tax purposes;

            2)    MCOs may not pay a "commission" or fixed amount per
                  enrollment;

            3)    Bonuses may not be awarded more frequently than quarterly, and
                  the annual amount awarded as bonus compensation to a marketing
                  representative may not exceed 10% of his/her total annual
                  compensation;

            4)    Performance evaluations used as a basis for such bonus or
                  salary increase shall be set forth in writing and available
                  for inspection by SDOH or the LDSS;

            5)    Other appropriate factors which may be considered by an MCO in
                  awarding merit salary increase or bonuses to marketing
                  representatives include but are not limited to:

                  -     Ratio of "clear" or successful enrollments submitted;
                        quality of applications;

                  -     Attendance; adherence to marketing schedules; timeliness

                  -     Observed marketing behavior; absence/paucity of
                        complaints regarding marketing conduct

            6)    Affiliated providers engaged in marketing on behalf of an MCO
                  shall be considered "marketing representatives" for purposes
                  of Section C (3)(i) of Appendix D.

      j)    Individuals employed by MCO's as marketing representatives, and
            employees of marketing subcontractors must have successfully
            completed a training program about the basic concepts of managed
            care and the Medicaid recipients' rights and responsibilities
            relating to membership in managed care. MCOs must submit a copy of
            the training curriculum for their marketing representatives to SDOH
            and the LDSS as part of the marketing plan. The MCO shall be
            responsible for the activities of its marketing representatives and
            the activities of any subcontractor or management entity. A
            marketing representative means any individual or entity engaged by
            the Contractor to market on behalf of the Contractor.

                                   APPENDIX D
                                October 1, 2004
                                      D-10
<PAGE>

D. MARKETING INFRACTIONS

1.    Infractions of the marketing guideline may result in the following actions
      being taken by the LDSS to protect the interests of the program and its
      clients. These actions shall be taken at the sole discretion of the LDSS.

      a)    If an MCO or its representative commits a first time infraction of
            marketing guidelines and the LDSS deems the infraction to be minor
            or unintentional in nature, the LDSS may issue a warning letter to
            the MCO.

      b)    For subsequent or more serious infractions, the LDSS may impose
            liquidated damages of $2,000.00, or other appropriate non-monetary
            sanctions for each infraction.

      c)    The LDSS may require the MCO to prepare a corrective action plan
            with a specified deadline for implementation.

      d)    If the MCO commits further infractions, fails to pay liquidated
            damages within the specified timeframe or fails to implement a
            corrective action plan in a timely manner or commits an egregious
            first-time infraction, the LDSS may:

            i)    prohibit the plan from conducting any marketing activities for
                  a period up to the end of the contract period;

            ii)   suspend new enrollments, other than newborns, for a period up
                  to the remainder of the contract; or

            iii)  terminate the contract pursuant to termination procedures
                  described therein.

                                   APPENDIX D
                                October 1, 2004
                                      D-11

<PAGE>

E.    LDSS SPECIFIC MARKETING GUIDELINES

{insert LDSS specific marketing guidelines as applicable}.

LDSS: Columbia County Department of Social Services

MCO: Wellcare of New York, Inc.

                                   APPENDIX D
                                October 1, 2004
                                      D-12

<PAGE>

                                   APPENDIX E

                      NEW YORK STATE DEPARTMENT OF HEALTH
                           MEMBER HANDBOOK GUIDELINES

                                   APPENDIX E
                                October 1, 2004
                                      E-1

<PAGE>

                                  INTRODUCTION

This document contains member handbook guidelines for use by managed care
organizations (MCOs) under contract to serve New York Medicaid beneficiaries.
These guidelines may be revised from time to time based on changes in the law
and the changing needs of the program. The guidelines reflect the review
criteria used by the SDOH Office of Managed Care in its review of all Medicaid
managed care member handbooks. Handbooks and addenda must be approved by SDOH
prior to printing and distribution by MCOs. In addition, the SDOH has developed
a model member handbook at the fourth to sixth grade reading level for use by
MCOs. The model member handbook contains language to address required disclosure
regarding free access for family planning; self referral polices; obtaining
OB/GYN services; the definitions of medical necessity and emergency services;
protocols for complaints, utilization review, external appeals, fair hearings
and newborn enrollments; and listing of member entitlements, including benefits,
rights and responsibilities, and information available upon request. MCOs must
use the language provided in these required disclosure: areas in their member
handbooks. A copy of the model handbook is available from the Office of
Managed Care, Bureau of Intergovernmental Affairs.

GENERAL FORMAT

Member handbooks must be written in a style and reading level that will
accommodate the reading skills of many Medicaid recipients. In general the
writing should be at no higher than a sixth-grade level, taking into
consideration the need to incorporate and explain certain technical or
unfamiliar terms to assure accuracy. The text must be printed in at least ten
(10) point font. The SDOH reserves the right to require evidence that a handbook
has been tested against the sixth-grade reading-level standard. Member handbooks
must be available in languages other than English whenever at least five (5)
percent of the potential enrollees of the MCO in any county in the MCO's service
area speak a language other than English as a first language.

HANDBOOK REQUIREMENTS

a)    General Overview (how the plan works)

      i)    Explanation of the plan, including what happens when you become a
            member.

      ii)   Explanation of the plan ID card, obtaining routine medical care,
            help by telephone, and general information pertaining to the plan,
            i.e., location of the plan, providers, etc.

      iii)  Invitation to attend scheduled orientation sessions and other
            educational and out reach activities.

b)    Provider Listing, including Site Locations

      Note: The information described here can be included in the handbook or as
      an insert to the handbook, or can be produced as a separate document and
      referenced in the handbook.

                                   APPENDIX E
                                October 1, 2004
                                      E-2

<PAGE>

      i)    A current listing of providers, including facilities.

      ii)   For physicians, separate listings of primary care practitioners and
            specialty providers; include location, phone number, and board
            certification status.

      iii)  Listing also must include a notice of how to determine whether a
            participating provider is accepting new patients.

c)    Voluntary or Mandatory Enrollment

      i)    Must indicate whether enrollment is voluntary or mandatory.

      ii)   If plan participates in both mandatory and voluntary counties,
            explanation of the difference, i.e., disenrollment, family members
            in the same plan, etc.

d)    Choice of Primary Care Provider (including how to make an appointment)

      i)    Explanation of the role of PCP as a coordinator of care, giving some
            examples, and how to choose one for self and family.

      ii)   How to make an appointment with the PCP, importance of base line
            physical, immunizations and well-child care.

      iii)  Explanation of different types of PCPs, i.e., family practice,
            pediatricians, internists, etc.

      iv)   Notification that the plan will assign the member to a PCP if one is
            not chosen in thirty (30) days.

      v)    OB/GYN choice rules for women

e)    Changing Primary Care Provider

      i)    Explanation of plan policy, time frames, and process related to
            changing PCP.

      ii)   Explanation of process for changing OB/GYN when applicable.

      iii)  Explanation of requirements for choosing a specialist as PCP.

f)    Referrals to Specialists (in and out-of-plan)

      i)    Explanation of specialist care an how referrals are accomplished.

      ii)   Explanation of process for changing specialists.

      iii)  Explanation of self-referral services, i.e., OB/GYN services, HIV
            counseling and testing, eye exams, etc.

      iv)   Notice that Enrollee may obtain a referral to a Non-Participating
            Provider when the plan does not have a Participating Provider with
            appropriate training or experience to meet the needs of the
            Enrollee; and the procedure for obtaining such referrals.

      v)    Notice that an Enrollee with a condition that requires ongoing care
            from a specialist may request a standing referral to such a
            specialist; procedure for obtaining such referrals.

      vi)   Notice that an Enrollee with a life-threatening condition or
            disease, or a degenerative and disabling condition or disease,
            either of which require

                                   APPENDIX E
                                October 1, 2004
                                       E-3
<PAGE>

            Specialized medical care over a prolonged period of time, may
            request access to a specialist responsible for providing or
            coordinating the Enrollee's medical care; and the procedure for
            obtaining such a specialist.

      vii)  Notice that an Enrollee with a life-threatening condition or
            disease, or a degenerative and disabling condition or disease,
            either of which require specialized medical care over a prolonged
            period of time, may request access to a specialty care center; and
            the procedure for obtaining such access.

g)    Covered and Non-Covered Services

      i)    Benefits and services covered by the plan, including benefit
            maximums and limits.

      ii)   Definition of medical necessity used to determine whether benefits
            will be covered (same as plan-county contract definition).

      iii)  Medicaid services not covered by the plan or excluded from managed
            care; how to access these services.

      iv)   Prior authorization and other requirements for treatments and
            services.

      v)    Family planning and reproductive health services free access policy.

      vi)   HIV counseling and testing free access policy.

      vii)  Direct access policy for dental services provided at Article 28
            clinics operated by academic dental centers when dental is in the
            Benefit Package.

      viii) Plan policy relating to transportation, including who to call and
            what to do if plan does not cover transportation.

      ix)   Plan toll-free number for Enrollee to call for more information.

h)    Out of Area Coverage

      i)    Explanation of what to do and who to call if medical care is
            required when beneficiary is out of plan's service area.

i)    Emergency Care Access

      i)    Definition of emergency services, as defined in law including
            examples of situations that constitute an emergency and situations
            that do not.

      ii)   What to do in an emergency, including notice that services in a true
            emergency are not subject to prior approval.

      iii)  A phone number to call if PCP is not available.

      iv)   Explanation of what to do in non-emergency situations (PCP, urgent
            care, etc.).

j)    Utilization Review

      i)    Circumstances under which utilization review will be undertaken.

      ii)   Toll-free telephone number of the utilization review agent.

      iii)  Time frames under which UR decisions must be made for prospective,
            retrospective, and concurrent decisions.

      iv)   Right to reconsideration.

                                   APPENDIX E
                                October 1, 2004
                                      E-4

<PAGE>

      v)    Right to an appeal, including expedited and standard appeals
            processes and the time frames for such appeals.

      vi)   Right to designate a representative.

      vii)  A notice that all denials of claims will be made by qualified
            clinical personnel and that all notices will include information
            about the basis of the decision, and further appeal rights (if any).

k)    Enrollment and Disenrollment Procedures

      i)    Where appropriate, explanation of Lock-In requirements, and initial
            grace period when person may change plans, or return to
            fee-for-service in voluntary areas.

      ii)   Choice of PCP (each person can have his/her own PCP and can change
            thirty (30) days after the initial appointment with their PCP, and
            once every six months thereafter).

      iii)  Procedures for disenrollment.

      iv)   Opportunities for change

      v)    LDSS/or enrollment broker phone number for information on
            enrollment and disenrollment.

1)    Rights and Responsibilities of Enrollees

      i)    Explanation of what an Enrollee has the right to expect from the
            Contractor in the way of medical care and treatment of the
            Enrollee.

      ii)   Responsibilities of the Enrollee (general).

      iii)  Enrollee's financial responsibility for payment when services are
            furnished by a provider who is not part of the Contractor's network
            or by any provider without required authorization or when a
            procedure, treatment, or service is not a covered benefit; also note
            exceptions such as family planning and HIV counseling/testing.

      iv)   Enrollee's rights under State law to formulate advance directives.

      v)    The manner in which Enrollees may participate in the development of
            plan policies.

m)    Language

      i)    Description of how the Contractor addresses the needs of non-English
            speaking Enrollees.

n)    Grievance Procedures (complaints)

      i)    Right to file a grievance regarding any dispute between the
            Contractor and an Enrollee.

      ii)   Right to file a grievance orally when the dispute is about referrals
            or covered benefits.

      iii)  Explanation of who in the plan to call, along with the Contractor's
            toll-free number.

      iv)   Time frames and circumstances for expedited and standard grievances.

                                   APPENDIX E
                                 October 1, 2004
                                      E-5

<PAGE>

      v)    Right to appeal a grievance determination and the procedures for
            filing such an appeal.

      vi)   Time frames and circumstances for expedited and standard appeals.

      vii)  Right to designate a representative.

      viii) A notice that all decisions involving clinical disputes will be
            made by qualified clinical personnel and that all notices will
            include information about the basis of the decision, and further
            appeal rights (if any).

      ix)   NYSDOH number for medically related complaints (1-800-206-8125).

      x)    New York State Insurance Department number for certain complaints
            relating to billing.

o)    Fair Hearing

      Explain that:

      i)    Enrollee has a right to a State Fair Hearing and Aid to Continuing
            in some situations.

      ii)   Describe situations when the Enrollee may ask for a fair hearing as
            described in Section 25 of this Agreement including State or LDSS
            decision about staying in or leaving the plan; decision the
            Contractor makes that stops or limits Medicaid benefits; Contractor
            decision agreeing with doctor who will not order services (must
            complain to the plan first).

      iii)  Describe how to request a fair hearing (assistance through member
            services, LDSS, State fair hearing contact).

p)    External Appeals

      i)    Description of circumstances where a person may request an external
            appeal

      ii)   Time frames for applying for appeal and for decision-making

      iii)  How and where to apply

      iv)   Describe expedited appeal time frame

      v)    Process for Contractor and Enrollee to agree on waiving the UR
            appeal process.

q)    Payment Methodologies

      i)    Description prepared annually of the types of methodologies the plan
            uses to reimburse providers, specifying the type of methodology used
            to reimburse particular types of providers or for the provision of
            particular types of services.

r)    Physician Incentive Plan Arrangements

      i)    The Member Handbook must contain a statement indicating the
            Enrollees and potential Enrollees are entitled to ask if the MCO has
            special financial arrangements with physicians that can affect the
            use of referrals and other services that they might need and how to
            obtain this information.

                                   APPENDIX E
                                October 1, 2004
                                      E-6

<PAGE>

s)    How and Where to Get More Information

      i)    How to access a member services representative through a toll-free
            number.

      ii)   How and when to contact LDSS for assistance.

OTHER INFORMATION AVAILABLE UPON ENROLLEE'S REQUEST

a)    List of the names, business addresses, and official positions of the
      membership of the board of directors, officers, controlling persons,
      owners or partners of the Contractor.

b)    Copy of the most recent annual certified financial statement of the
      Contractor, including a balance sheet and summary of receipts and
      disbursements prepared by a CPA.

c)    Copy of the most recent individual, direct pay subscriber contracts.

d)    Information relating to consumer complaints compiled pursuant to Section
      210 of the insurance law.

e)    Procedures for protecting the confidentiality of medical records and other
      Enrollee information.

f)    Written description of the organizational arrangements and ongoing
      procedures of the Contractor's quality assurance program.

g)    Description of the procedures followed by the Contractor in making
      decisions about the experimental or investigational nature of medical
      devices, or treatments in clinical trials.

h)    Individual health practitioner affiliations with participating hospitals.

i)    Specific written clinical review criteria relating to a particular
      condition or disease and, where appropriate, other clinical information
      which the plan might consider in its utilization review process.

j)    Written application procedures and minimum qualification requirements for
      health care providers to be considered by the plan.

k)    Upon request, MCOs are required to provide the following information on
      the incentive arrangements affecting the MCO's physicians to current,
      previous and prospective Enrollees:

      1.    Whether the MCO's contract or subcontracts include Physician
            Incentive Plans that affect the use of referral services.

      2.    Information on the type of incentive arrangements used.

      3.    Whether stop-loss protection is provided for physicians and
            physicians groups.

      4.    If the MCO is at substantial financial risk, as defined in the PIP
            regulations, a summary of the required customer satisfaction survey
            results.

                                   APPENDIX E
                                October 1, 2004
                                      E-7
<PAGE>

                                   APPENDIX F

                       New York State Department of Health
           Medicaid Managed Care Complaint and Appeals Requirements

                                   APPENDIX F
                                October 1, 2004
                                       F-1

<PAGE>

I.    OVERALL OBJECTIVES

      The Medicaid managed care program complaint process accomplishes four
      objectives:

      a)    Ensures that each MCO resolves its Enrollees' problems promptly and
            at the lowest level of formality, wherever possible.

      b)    Ensures that the MCO reports the full extent of complaint activity
            to governmental oversight entities.

      c)    Ensures that the MCO uses complaint information to assess and
            improve program performance.

      d)    Provides an independent process for complaint resolution when issues
            are not resolved by the MCO.

II.   DEFINITIONS

      a)    A complaint is a written or verbal contact to the MCO in which the
            Enrollee or designee describes a dissatisfaction with the MCO, its
            employees, benefits, providers or contractors, including but not
            limited to:

            -     a determination made by the MCO;

            -     treatment experienced through the MCO, its providers, or
                  contractors.

            Medical necessity determinations pursuant to Article 49 of the
            Public Health Law are not included in the definition of a complaint.

      b)    An inquiry is a written or verbal question or request for
            information posed to the MCO with regard to such issues as benefits,
            contracts, and organization rules. Inquiries do not reflect Enrollee
            complaints or disagreements with MCO determinations.

      c)    Summary Complaint Forms are forms developed by the State that
            categorize the type of complaints received. These forms should be
            submitted via the HPN on a quarterly basis to the SDOH.

III.  COMPLAINT PROCEDURES

      a)    The MCO shall describe its complaint and appeal procedure in the
            member handbook, and it must be accessible to non-English speaking,
            visually, and hearing impaired Enrollees. The handbook shall comply
            with Section 13.3 and The Member Handbook Guidelines (Appendix E) of
            this Agreement.

      b)    Anytime the MCO denies access to a referral; denies or reduces
            benefits or services; determines that a requested benefit is not
            covered in the MCO's benefit package, or denies payment of a claim
            for services, the MCO shall provide written notice of the procedures
            for the Enrollee to file a complaint, including:

                                   APPENDIX F
                                 October 1, 2004
                                      F-2

<PAGE>

            i)    the description of the action Contractor intends to take;

            ii)   the reasons for the determination including the clinical
                  rationale, if any;

            iii)  the process for filing a grievance/complaint with the
                  organization;

            iv)   the timeframes within which a  grievance/complaint
                  determination must be made;

            v)    the right of an Enrollee to designate a representative to file
                  a grievance/complaint on behalf of the Enrollee;

            vi)   the notice of the right of the member to contact the New York
                  State Department of Health (800 206-8125) with their
                  complaint; and

            vii)  the notice entitled "Managed Care Action Taken" containing
                  the member's fair hearing and aid continuing rights.

      c)    If the MCO immediately resolves a verbal complaint to the Enrollee's
            satisfaction, that complaint may be considered resolved without any
            additional written notification to the Enrollee. Such complaints
            must be logged by the MCO and included in the MCO's quarterly HPN
            complaint report submitted to SDOH.

      d)    MCO procedures for accepting complaints shall include:

            i)    toll-free telephone number;

            ii)   designated staff to receive calls;

            iii)  "live" phone coverage at least 40 hours a week during normal
                  business hours;

            iv)   a mechanism to receive after hours calls including either:

                  A)    telephone system available to take calls and a plan to
                        respond to all such calls no later than on the next
                        business day after the call was recorded.

                  Or

                  B)    a mechanism to have available on a twenty-four (24)
                        hour, seven (7) day a week basis designated staff to
                        accept telephone complaints, whenever a delay would
                        significantly increase the risk an Enrollee's health.

      e)    Determinations of all clinical complaints involving clinical
            decisions shall be made by qualified clinical personnel.

      f)    Upon receipt of a complaint, the MCO shall send a notice to the
            Enrollee specifying what information must be provided to the MCO
            in order for a determination to be made.

IV.   Notice TO ENROLLEE PROCEDURES

Upon receipt of the following type of complaints; 1) anytime that the MCO denies
access to a referral; 2) denies or reduces benefits or services; 3) determines
that a requested benefit is not covered by the MCO's benefit package, the MCO
shall send a notice to the Enrollee. The notice shall describe:

      a)    The Enrollee's right to file a complaint regarding any dispute with
            the MCO.

      b)    The information to be provided to the MCO in order for a
            determination to be made.

                                   APPENDIX F
                                October 1, 2004
                                       F-3
<PAGE>

      c)    The fact that the MCO will not retaliate or take any discriminatory
            action against the Enrollee because he/she filed a complaint or
            appeal.

      d)    The right of the Enrollee to designate a representative to file
            complaints and appeals on his/her behalf.

      e)    The MCO's requirements for accepting written complaints, which can
            be either a letter or MCO supplied form.

      f)    The Enrollee's right to file a verbal complaint when the dispute is
            about referrals or covered benefits. The MCO must list a toll-free
            number which Enrollee may use to file a verbal complaint.

      g)    For verbal complaints, whether the Enrollee is required to sign an
            acknowledgment and description of the complaint prepared by the MCO.
            The acknowledgment must clearly advise the Enrollee that the
            Enrollee may amend the description but must sign and return it in
            order to initiate the complaint.

V.    TIMEFRAMES FOR COMPLAINT RESOLUTION BY THE MCO.

Procedures should indicate the following specific timeframes regarding complaint
resolution:

      a)    The MCO has to provide written acknowledgment of the complaint
            including the name, address and telephone number of the individual
            or department handling the complaint within fifteen (15) days of
            receipt of the complaint.

      b)    Complaints shall be resolved whenever a delay would significantly
            increase the risk to an Enrollee's health within forty-eight (48)
            hours after receipt of all necessary information.

      c)    Complaints shall be resolved in the case of requests for referrals
            or determinations concerning benefits covered by the contractual
            benefit package within thirty (30) days after the receipt of all
            necessary information.

      d)    All other complaints shall be resolved within forty-five (45) days
            after the receipt of all necessary information. The MCO shall
            maintain reports of complaints unresolved after forty-five (45) days
            in accordance with Section 18 of this Agreement.

VI.   COMPLAINT DETERMINATIONS

Procedures regarding the resolution of Enrollee complaints should include the
following:

      a)    Complaints shall be reviewed by one or more qualified personnel.

                                   APPENDIX F
                                October 1, 2004
                                       F-4

<PAGE>

      b)    Complaints pertaining to clinical matters shall be reviewed by one
            or more licensed, certified or registered health care professionals
            in addition to whichever non-clinical personnel the MCO designates.

      c)    Determinations by the MCO shall be made in writing to the Enrollee
            or his/her designee and include:

            i)    the detailed reasons for the determination;

            ii)   in cases where the determination has a clinical basis, the
                  clinical rationale for the determination;

            iii)  the procedures for the filing of an appeal of the
                  determination, including a form for the filing of such an
                  appeal;

            iv)   notice of the right of the Enrollee to contact the State
                  Department of Health (800 206-8125) with their complaint; and

            v)    if applicable, the notice entitled "Managed Care Action
                  Taken," containing the Enrollee's fair hearing and aid
                  continuing rights if not provided with the initial action.

      d)    Notices of determinations shall be sent to the Enrollee or the
            Enrollee's designee within three (3) business days after a
            determination is made.

      e)    In cases where delay would significantly increase the risk to an
            Enrollee's health, notice of a determination shall be made by
            telephone directly to the Enrollee or to the Enrollee's designee, or
            when no phone is available some other method of communication, with
            written notice to follow within three (3) business days.

VII.  Appeals

Procedures regarding Enrollee appeals of MCO complaint determinations should
include the following:

      a)    The Enrollee or designee has no less than sixty (60) business days
            after receipt of the notice of the complaint determination to file a
            written appeal. Appeals may be submitted by letter or by form
            provided by the MCO.

      b)    Within fifteen (15) business days of receipt of the appeal, the MCO
            shall provide written acknowledgment of the appeal including the
            name, address and telephone number of the individual designated to
            respond to the appeal. The MCO shall indicate what additional
            information, if any, must be provided for the MCO to render a
            decision.

      c)    Appeals of clinical matter must be decided by personnel qualified to
            review the appeal including licensed, certified or registered health
            care professionals who did not make the initial determination, at
            least one of whom must be a clinical peer reviewer. Clinical peer
            reviewers may be physicians who possess a current and valid
            non-restricted license to practice medicine. A clinical peer
            reviewer also may be a health care professional, who where
            applicable, possesses a current and valid non-restricted license,
            certification or registration, or where no provision for a license,
            certification, or registration exists, is

                                   APPENDIX F
                                 October 1, 2004
                                      F-5

<PAGE>

            credentialed by the national accrediting body appropriate to the
            profession. The clinical peer reviewer must be a physician or other
            health care professional practicing in the same professional
            specialty as the healthcare provider who typically manages the
            medical condition, procedure or treatment under review.

      d)    Appeals of non-clinical matters shall be determined by qualified
            personnel at a higher level than the personnel who made the original
            complaint determination.

      e)    Appeals shall be decided and notification provided to the Enrollee
            no more than:

            i)    two (2) business days after the receipt of all necessary
                  information when a delay would significantly increase the risk
                  to an Enrollee's health;

            ii)   thirty (30) business days after the receipt of all necessary
                  information in all other instances.

      f)    The notice of an appeal determination shall include:

            i)    the detailed reasons for the determination and the clinical
                  rationale for the determination;

            ii)   if applicable, a notice containing pair hearing rights;

            iii)  the notice shall also inform the Enrollee of his/her option
                  to also contact the State Department of Health (800-206-8125)
                  with his/her complaint;

            iv)   instructions for any further appeal.

VIII. RIGHT TO AN EXTERNAL APPEAL

The MCO shall describe its utilization review policies and procedures including
a notice of the right to an external appeal together with a description of the
external appeal process and the timeframes for external appeal, in the member
handbook. It must be accessible to non-English speaking, visually, and hearing
impaired Enrollees. The handbook shall comply with Section 13 and The Member
Handbook Guidelines (Appendix E) of this Agreement.

IX.   RECORDS

The MCO shall maintain a file on each complaint and appeal, if any. The file
shall include:

      a)    date the complaint was filed;

      b)    copy of the complaint, if written;

      c)    date of receipt of and copy of the Enrollee's acknowledgment, if
            any;

      d)    log of complaint determination including the date of the
            determination and the titles of the personnel and credentials of
            clinical personnel who reviewed the complaint;

      e)    date and copy of the Enrollee's appeal

                                   APPENDIX F
                                October 1, 2004
                                       F-6



<PAGE>

      f)    determination and date of determination of the appeal;

      g)    the titles, and credentials of clinical staff who reviewed the
            appeal.

In addition, the Contractor shall maintain a list of the following:

      a)    complaints unresolved for greater than 45 days;

      b)    complaints referred for external appeal.

                                   APPENDIX F
                                October 1, 2004
                                       F-7
<PAGE>

                                   APPENDIX G

                       NYSDOH GUIDELINES FOR THE PROVISION
                         OF EMERGENCY CARE AND SERVICES

                                   APPENDIX G
                                October 1, 2004
                                      G-1
<PAGE>

             NYSDOH GUIDELINES FOR THE PROVISION OF EMERGENCY CARE AND SERVICES

DEFINITION OF AN "EMERGENCY MEDICAL CONDITION"

      The term "Emergency Medical Condition" means a medical or behavioral
      condition, the onset of which is sudden, that manifests itself by symptoms
      of sufficient severity, including severe pain, that a prudent layperson,
      possessing an average knowledge of medicine and health, could reasonably
      expect the absence of immediate medical attention to result in:

      i.    Placing the health of the person afflicted with such condition in
            serious jeopardy or, in the case of a behavioral condition, placing
            the health of the person or others in serious jeopardy; or

      ii.   serious impairment to such person's bodily functions; or

      iii.  serious dysfunction of any bodily organ or part of such person; or

      iv.   serious disfigurement of such person.

      Emergency Medical Services include health care procedures, treatments or
      services needed to evaluate or stabilize an Emergency Medical Condition
      including psychiatric stabilization and medical detoxification from drugs
      or alcohol.

PROTOCOLS FOR NOTIFICATION/AUTHORIZATION

      Preauthorization for treatment of an Emergency Medical Condition is never
      required.

      In circumstances where notification of arrival in the emergency department
      (ED) is requested by the managed care organization following the
      assessment and stabilization of the Enrollee, the notification process for
      the participating ED should require no more than one (1) phone call (or
      fax), and include a limited amount of standard clinical and demographic
      information.

                                   APPENDIX G
                                 October 1, 2004
                                      G-2

<PAGE>

PROTOCOL FOR ACCEPTABLE TRANSFER BETWEEN FACILITIES

      All relevant COBRA requirements must be met.

      MCOs must provide for an appropriate (as determined by the ED physician)
      transfer method/level with personnel as needed.

      MCOs must contact/arrange for an available, accepting physician and
      patient bed at the receiving institution.

      If a patient is not transferred within eight (8) hours to an appropriate
      inpatient setting, after the decision to admit has beet made, then
      admission at the original facility is deemed authorized.

PROTOCOLS FOR DISPOSITION

      If, pursuant to a screening evaluation,ED staff determines that a patient
      requires further services (other than emergency medical services), the MCO
      will have two (2) hours to respond to a call from the ED with the
      appropriate person to discuss the case. If such response is longer than
      two (2) hours, that admission or treatment is deemed "authorized" for
      purposes of payment.

      In the event that the MCO/provider suggests a level of care for a specific
      patient deemed inappropriate by the attending physician in the ED, and
      no agreement as to disposition can be reached, a physician from the plan
      must physically come to the ED and evaluate/take responsibility for this
      patient.

TRIAGE FEES

      For emergency room services that do not meet the definition of Emergency
      Medical Condition, the MCO shall pay the hospital a triage fee of $40.00
      in the absence of a negotiated rate.

      Non-participating EDs cannot be denied payment on the basis of
      non-notification.

                                   APPENDIX G
                                October 1, 2004
                                      G-3

<PAGE>

                                   APPINDIX H

             NEW YORK STATE DEPARTMENT OF HEALTH GUIDELINES FOR THE
                  PROCESSING OF ENROLLMENTS AND DISENROLLMENTS

                                   APPENDIX H
                                October 1, 2004
                                      H-1

<PAGE>

                                   APPENDIX H
                                 SDOH GUIDELINES
              FOR THE PROCESSING OF ENROLLMENTS AND DISENROLLMENTS

This appendix is intended to provide general guidelines to LDSS and MCOs for THE
processing of enrollments and disenrollments. Where an enrollment broker exists,
THE enrollment broker may be responsible for some or all of the LDSS
responsibilities. TO allow LDSS and MCOs flexibility in developing processes
that will meet the needs OF both parties, SDOH may allow modifications to
timeframes and some procedures. Modifications are to be specified in Section G
of this Appendix and must be agreed to BY both parties and receive prior
approval from SDOH.

A.    ENROLLMENT

SDOH RESPONSIBILITIES:

1.    The SDOH is responsible for monitoring Local District program activities
      and providing technical assistance to the LDSS and MCOs to ensure
      compliance with the State's policies and procedures.

2.    SDOH reviews and approves proposed enrollment materials prior to MCOs
      publishing and disseminating or otherwise using the materials.

LDSS RESPONSIBILITIES:

The LDSS has the primary responsibility for the enrollment process.

1.    Each local district determines Medicaid eligibility. To the extent
      practicable, the LDSS will follow up with Enrollees when the MCO provides
      documentation of any change in status which may affect the Enrollee's
      Medicaid and/or managed care eligibility.

2.    LDSS will provide pre-enrollment information to beneficiaries, consistent
      with Social Services Law, Section 364-j(4)(e)(iv) and train persons
      providing enrollment counseling to beneficiaries.

3.    The LDSS must inform beneficiaries of the availability of MCOs and HIV
      SNPs and the scope of services covered by each.

4.    LDSS will inform beneficiaries of the right to confidential face-to-face
      enrollment counseling and will make confidential face-to-face sessions
      available upon request.

5.    The LDSS shall advise potential Enrollees, in written materials related to
      enrollment, to verify with the medical services providers they prefer, or
      have an existing relationship with that such medical services providers
      participate in the selected managed care provider's network and are
      available to serve the participant.

                                   APPENDIX H
                                 October 1, 2004
                                      H-2

<PAGE>

6.    For enrollments made during face-to-face counseling, if the participant
      has a preference for particular medical services providers, enrollment
      counselors shall verify with the medical services providers that such
      medical services providers whom the participant prefers participate in the
      MCO's network and are available to serve the participant.

7.    The LDSS is responsible for the timely processing of managed care
      enrollment applications, exemptions, and exclusions and ensuring
      attestations are on file for all Enrollees.

8.    The LDSS will determine the status of enrollment applications.
      Applications will be enrolled, pended or denied.

9.    The LDSS will notify the Contractor of plan-assisted enrollment
      applications that are denied.

10.   The LDSS enters individual enrollment form data and transmits that data to
      the State's Prepaid Capitation Plan (PCP) Subsystem. The transfer of
      enrollment information may be accomplished by any of the following:

      i)    LDSS directly enters data into PCP Subsystem; or

      ii)   LDSS or Contractor submits a tape to the State, to be edited and
            entered into PCP Subsystem; or

      iii)  LDSS electronically transfers data, via a dedicated line or Medicaid
            Eligibility Verification System (MEVS) to the PCP Subsystem.

11.   The LDSS is required to send the following notices to Eligible Persons:

      i)    Initial Notification Letter: This letter informs the Eligible
            Persons about the mandatory program and the timeframes for choosing
            a plan. Included with the letter are managed care brochures, an
            enrollment form, and information on their rights and
            responsibilities under this program, including the option for
            HIV/AIDS infected individuals who are categorically exempt from the
            mainstream Medicaid Managed Care program to enroll in an HIV SNP on
            a voluntary basis in districts where HIV SNPs exist. (MANDATORY
            PROGRAM ONLY)

      ii)   Reminder Letter: A letter to all Eligible Persons in a mandatory
            category who have not responded by submitting a completed enrollment
            form within thirty (30) days of being sent or given an enrollment
            packet. (MANDATORY PROGRAM ONLY)

      iii)  Enrollment Confirmation Notice: This notice indicates the Effective
            Date of Enrollment, the name of the MCO and all individuals who are
            being enrolled. This notice should also be used for case additions
            and re-enrollments into the same plan.

      iv)   Notice of Denial of Enrollment: This notice is used when an
            individual has been determined by LDSS to be ineligible for
            enrollment into a Medicaid managed care plan. This notice must
            include fair hearing rights. Note: This notice is not required when
            Medicaid eligibility is being denied (or closed).

                                   APPENDIX H
                                October 1, 2004
                                      H-3
<PAGE>
      v)    Exemption and Exclusion Request Forms: Exemption forms are provided
            to Eligible Persons upon request if they wish to apply for an
            exemption. Exclusion forms are provided to individuals in New York
            City who self-identify as qualifying for an exclusion. Individuals
            precoded on the system as meeting exemption or exclusion criteria do
            not need to complete an exemption or exclusion request form.

      vi)   Exemption and Exclusion Request Approval or Denial: This notice is
            designed to inform a recipient who applied for an exemption or
            exclusion of the LDSS's disposition of the request, including the
            right to a fair hearing if the request for exemption or exclusion is
            denied.

MCO RESPONSIBILITIES:

1.    In those instances in which the Contractor is marketing to persons already
      in receipt of Medicaid, the Contractor will submit plan enrollments to the
      LDSS, within a maximum of five (5) business days from the day the
      enrollment is received by the Contractor (unless otherwise agreed to by
      SDOH and LDSS).

2.    The Contractor must notify new Enrollees of their Effective Date of
      Enrollment. To the extent practicable, such notification must precede the
      Effective Date of Enrollment. (Section 13 of the Model Contract).

3.    The Contractor must report any changes in status for its enrolled members
      to the LDSS within five (5) business days of such information becoming
      known to the Contractor. This includes, but is not limited to, factors
      that may impact Medicaid eligibility such as address changes, verification
      of pregnancy, incarceration, third party insurance, etc.

4.    The Contractor shall advise potential Enrollees, in written materials
      related to enrollment, to verify with the medical services providers they
      prefer, or have an existing relationship with, that such medical services
      providers participate in the MCO's selected network and are available to
      serve the participant.

5.    The Contractor shall accept all enrollments as ordered by the Office of
      Temporary and Disability Assistance's Office of Administrative Hearings
      due to fair hearing requests or decisions.

B.    NEWBORN ENROLLMENTS:

The Contractor agrees to enroll and provide coverage for eligible newborn
children of Enrollees effective from the time of birth. |

SDOH Responsibilities:

1.    The SDOH will update WMS with information on the newborn received from
      hospitals, consistent with the requirements of Section 366-g of the Social
      Services Law as amended by Chapter 412 of the Laws of 1999.

                                   APPENDIX H
                                October 1, 2004
                                       H-4

<PAGE>

2.    Upon notification of the birth by the hospital or birthing center, the
      SDOH will update WMS with the demographic data for the newborn and enroll
      the newborn in the mother's MCO if not already enrolled. The newborn will
      be retroactively enrolled back to the first (1st) day of the month of
      birth. Based on the transaction date of the enrollment of the newborn on
      the PCP subsystem, the newborn will appear on either the next month's
      roster or the subsequent month's roster. On plan rosters for upstate and
      NYC, the "PCP Effective From Date" will indicate the first day of the
      month of birth, as described in 01 OMM/ADM 5 "Automatic Medicaid
      Enrollment for Newborns."

LDSS Responsibilities:

1.    Grant Medicaid eligibility for newborn for one (1) year if born to a woman
      eligible for and receiving MA assistance on the date of birth. (SOCIAL
      SERVICES LAW SECTION 366 (4) (1))

2.    LDSS must add eligible unborns to all WMS cases that include a pregnant
      woman as soon as the pregnancy is medically verified (NYS DSS
      ADMINISTRATIVE DIRECTIVE 85 ADM-33)

3.    In the event that the LDSS learns of an Enrollee's pregnancy prior to the
      Contractor, the LDSS is to establish MA eligibility and enroll the unborn
      in the Contractor's plan.

4.    The LDSS is responsible for newborn enrollment should it not be
      successfully competed under the "SDOH Responsibilities" process as
      outlined in #2 above.

5.    When a newborn is enrolled in managed care, the LDSS must send an
      Enrollment Confirmation Notice to inform the mother of the Effective Date
      of Enrollment, which is the first (1st) day of the month of birth, and the
      plan in which the newborn is enrolled.

6.    The LDSS may develop a transmittal form to be used for unborn/newborn
      notification between the Contractor and the LDSS.

MCO RESPONSIBILITIES:

1.    The Contractor must notify the LDSS in writing of any Enrollee that is
      pregnant within thirty (30) days of knowledge of the pregnancy.
      Notifications should be transmitted to the LDSS at least monthly. The
      notifications should contain the pregnant woman's name, Client ID Number
      (CIN), and the expected date of confinement (EDC).

2.    Upon the newborn's birth, the Contractor must send verifications of
      infant's demographic data to the LDSS, within five (5) days after
      knowledge of the birth. The

                                   APPENDIX H
                                October 1, 2004
                                      H-5

<PAGE>

      demographic data must include: the mother's name and CIN, the newborn's
      name and CIN (if newborn has a CIN), sex and the date of birth.

3.    In districts that use an Enrollment Broker, the Contractor shall not
      submit electronic enrollments of newborns to the Enrollment Broker, as
      this will interfere with the retroactive enrollment of the newborn back to
      the first (1st) day of the month of birth. For newborns whose mothers are
      not enrolled in the Contractor's plan and who were not pre-enrolled into
      the plan as an unborn, the Contractor may submit an electronic enrollment
      of the newborn to the Enrollment Broker. In such cases, the Effective Date
      of Enrollment will be prospective.

4.    In voluntary counties, the Contractor will accept applications for unborns
      if that is the mother's intent, even if the mother is not and/or will not
      be enrolled in the Contractor's plan. In all Counties when a mother is
      ineligible for enrollment or chooses not to enroll, the Contractor will
      accept applications for pre-enrollment of unborns who are eligible.

5.    The Contractor is responsible for provision of services to the newborn and
      payment of the hospital or birthing center bill, if the mother is an
      Enrollee at the time of the newborn's birth, even if the newborn is lot
      yet on the Roster.

6.    The Contractor will reimburse the hospital or birthing center at the
      Medicaid rate (or at another rate if contractually agreed to between the
      Contractor and the hospital or birthing center) for this episode of care.
      Hospitals and birthing centers have been advised by SDOH to expeditiously
      bill MCOs to allow MCOs to arrange for care for the Enrollees. However,
      the Contractor may not deny the inpatient hospital or birthing center
      costs if billing/notification is not timely except as otherwise provided
      by contractual agreement by the Contractor and hospital or birthing
      center.

7.    Within fourteen (14) days of the date on which the Contractor becomes
      aware of the birth, the Contractor will issue a letter informing parent(s)
      about the newborn's enrollment and how to access care or a member
      identification card.

8.    In those cases in which the Contractor is aware of the pregnancy, the
      Contractor will ensure that enrolled pregnant women select a PCP for their
      infants prior to birth.

9.    The Contractor will ensure that the newborn is linked with a PCP prior to
      discharge from the hospital or birthing center, in those instances in
      which the Contractor has received appropriate notification of birth prior
      to discharge.

C.    AUTO-ASSIGNMENT PROCESS (MANDATORY PROGRAM ONLY):

This section only applies to a LDSS where CMS has given approval and the LDSS
has begun mandatory enrollment. The details of the auto-assignment process are
contained in Section 12 of the State's Operational Protocol.

                                   APPENDIX H
                                October 1, 2004
                                       H-6

<PAGE>

SDOH RESPONSIBILITIES:

1.    SDOH will provide information to LDSS on a daily basis of those
      individuals who have been added to the tickler file through the Potential
      Auto-Assign List.

2.    SDOH, LDSS or Enrollment Broker will assign eligible individuals not
      pre-coded in WMS as exempt or excluded, who have not chosen an MCO in the
      required time period to an MCO using an algorithm as specified in State
      Law SSL Section 364-j(4)(d).

3.    SDOH will ensure the auto-assignment process automatically updates the PCP
      Subsystem, and will notify the MCO of auto-assigned individuals
      electronically.

4.    SDOH will notify the LDSS electronically on a daily basis of those
      individuals for whom the State has selected a health plan through the
      Automated PCP Update Report. Note: This will not apply in Local Districts
      that utilize an enrollment broker.

LDSS RESPONSIBILITIES:

1.    The LDSS is responsible for tracking an individual's choice period.

2.    The LDSS will use the information contained in the Potential Auto-Assign
      List for education and outreach purposes.

3.    The LDSS will send at least one reminder notice to individuals who fail to
      return the enrollment application within thirty (30) days. The LDSS may
      employ other methods during the choice period to encourage individuals to
      choose an MCO prior to auto- assignment.

4.    The LDSS is responsible for providing notification to individuals
      regarding their enrollment status as specified in Section A of this
      Appendix.

MCO RESPONSIBILITIES:

1)    The Contractor is also responsible for providing notification to
      individuals regarding their enrollment status as specified in Section A of
      this Appendix.

D.    ROSTER RECONCILIATION:

All enrollments are effective the first of the month.

SDOH Responsibilities:

1)    The SDOH maintains both the PCP subsystem enrollment files and the WMS
      eligibility files, using data input by the LDSS. SDOH uses data contained
      in both these files to generate the Roster.

                                   APPENDIX H
                                October 1, 2004
                                       H-7

<PAGE>

2)    SDOH shall send each MCO and LDSS monthly (according to a schedule
      established by SDOH), a complete list of all Enrollees for which the
      Contractor is expected to assume medical risk beginning on the 1st of the
      following month (First Monthly Roster). Notification to MCOs and LDSS will
      be accomplished via paper transmission, magnetic media, or the HPN.

3)    SDOH shall send each MCO and LDSS monthly, at the time of the first
      monthly roster production, a Disenrollment Report listing those Enrollees
      from the previous month's roster who were disenrolled, transferred to
      another MCO, or whose enrollments were deleted from the file. Notification
      to the MCOs and LDSSs will be accomplished via paper transmission,
      magnetic media, or the HPN.

4)    The SDOH shall also forward an error report as necessary to each MCO and
      LDSS.

5)    On the first (1st) weekend after the first (1st) day of the month
      following the generation of the first (1st) Roster, SDOH shall send MCOs
      and LDSS a second Roster which contains any additional Enrollees that the
      LDSS has added for enrollment for the current month. The SDOH will also
      include any additions to the error report that have occurred since the
      initial error report was generated.

LDSS RESPONSIBILITIES:

1)    LDSS must notify the Contractor electronically or in writing of changes in
      the First Roster and error report, no later than the end of the month.
      (Note: To the extent practicable the date specified must allow for timely
      notice to Enrollees regarding their enrollment status. MCOs and the LDSS
      may develop protocols for the purpose of resolving Roster discrepancies
      than remain unresolved beyond the end of the month. These protocols should
      be contained in Section G of this Appendix.)

2)    Enrollment and eligibility issues are reconciled by the LDSS to the extent
      possible, through manual adjustments to the PCP subsystem enrollment and
      WMS eligibility files, if appropriate.

MCO RESPONSIBILITIES:

1)    The Contractor is at risk for providing Benefit Package services for those
      Enrollees listed on the 1st and 2nd rosters for the month in which the 2nd
      Roster is generated. Contractor is not at risk for providing services to
      Enrollees who appear on the monthly disenrollment report.

2)    The Contractor must submit claims to the State's Fiscal Agent for all
      Eligible Persons that are on the 1st and 2nd Rosters (see Appendix H, page
      7), adjusted to add Eligible Persons enrolled by the LDSS after Roster
      production and to remove individuals disenrolled by LDSS after Roster
      production (as notified to the Contractor). In the cases of retroactive
      disenrollments, the Contractor is responsible for submitting an adjustment
      to void any previously paid premiums for the period of retroactive
      disenrollment, where the Contractor was not at risk for the provision of
      Benefit

                                   APPENDIX H
                                 October 1, 2004
                                       H-8

<PAGE>

      Package services. Payment of sub capitation does not constitute "provision
      of Benefit Package services."

E.    DISENROLLMENT:

LDSS RESPONSIBILITIES:

      1.    The LDSS will accept requests for disenrollment directly from
            Enrollees and may not require Enrollees to approach the MCO for a
            disenrollment form. Where an LDSS is authorized to mandate
            enrollment, all requests for disenrollment must be directed to the
            LDSS or the enroll lent broker. LDSSs and the enrollment broker must
            utilize the State-approved Disenrollment forms.

      2.    Enrollees may initiate a request for an expedited disenrollment to
            the LDSS. The LDSS will expedite the disenrollment process in those
            cases where an Enrollee's request for disenrollment involves an
            urgent medical need, a complaint of non-consensual enrollment or,
            in New York City and other local districts where homeless
            individuals are exempt, homeless individuals in the shelter system.
            If approved, the LDSS will manually process the disenrollment
            through the PCP Subsystem.

      3.    The LDSS will process routine disenrollment requests to take effect
            on the first (1st) day of the following month if the request is made
            before the fifteenth (15th) day of the month. In no event shall 1
            the Effective Date of Disenrollment be later than the first (1st)
            day of the second month after the month in which an Enrollee
            requests a disenrollment.

      4.    The LDSS will disenroll Enrollees automatically upon death or loss
            of Medicaid eligibility. All such disenrollment will be effective at
            the end of the month in which the death or loss of eligibility
            occurs or at the end of the last month of guaranteed eligibility,
            where applicable.

      5.    In districts where the LDSS has the authority to operate a mandatory
            program, and in voluntary counties that enforce lock-in, the LDSS
            will disenroll Enrollees who request disenrollment upon
            determination that they meet good cause requirements as specified in
            Section 7.3 and 8.7 of this Agreement. The LDSS will provide
            Enrollees with notice of their right to request a fair hearing if
            their disenrollment request is denied. This notice must outline the
            reason(s) for the denial.

      6.    The LDSS will promptly disenroll an Enrollee whose managed care
            eligibility or health status changes such that he/she is deemed by
            the LDSS to meet the exclusion criteria. The LDSS will provide
            Enrollees with a notice of their right to request a fair hearing.

                                   APPENDIX H
                                 October 1, 2004
                                       H-9

<PAGE>

      7.    In instances where an Enrollee requests disenrollment due to
            exclusion, the LDSS must notify the Enrollee of the approval or
            denial of exclusion/disenrollment status, including fair hearing
            rights if disenrollment is denied.

      8.    The LDSS agrees that retroactive disenrollments are to be used only
            when absolutely necessary. Circumstances warranting a retroactive
            disenrollment are rare and include when an individual is enrolled or
            auto assigned while meeting exclusion criteria or when an Enrollee
            enters or resides in a residential institution under circumstances
            which render he individual excluded from managed care; is
            incarcerated; is an SSI infant less than six (6) months of age; or
            dies - as long as the Contractor was not at risk for provision of
            Benefit Package services for any portion of the retroactive period.
            Payment of sub capitation does not constitute "provision of Benefit
            Package services." The LDSS must notify the Contractor of the
            retroactive disenrollment prior to the action. The LDSS must find
            out if the Contractor has made payments to providers on behalf of
            the Enrollee prior to disenrollment. After this information is
            obtained, the LDSS and Contractor will agree on a retroactive
            disenrollment or prospective disenrollment date.

            In all cases of retroactive disenrollment, including disenrollments
            effective the first day of the current month, the local district
            must notice the Contractor at the time of disenrollment, of the
            Contractor's responsibility to submit to the SDOH's Fiscal Agent
            voided premium claims for any full months of retroactive
            disenrollment where the Contractor was not at risk for the provision
            of Benefit Package services during the month However, failure by the
            LDSS to so notify the Contractor does not affect the right of the
            SDOH to recover the premium payment as authorized by Section 3.6 of
            this Agreement.

                                   APPENDIX H
                                 October 1, 2004
                                      H-10

<PAGE>

      9.    Generally the effective dates of disenrollment are prospective.
            Effective dates for other than routine disenrollments are described
            below:

REASON FOR DISENROLLMENT                     EFFECTIVE DATE OF DISENROLLMENT

-     Infants weighing less than 1200     -     First Day of the month of birth
      grams at birth and other infants          or the month of onset of
      under six (6) months of age who           disability, whichever is later
      meet the criteria for the SSI or
      SSI related category

-     Death of Enrollee                   -     First day of the month after
                                                death

-     Incarceration                       -     First day of the month after
                                                incarceration

-     Enrollee entered or stayed in a     -     First day of the month following
      residential institution under             entry or first day of the month
      circumstances which rendered the          following classification of the
      individual excluded from managed          stay as permanent, subsequent to
      care, including when an Enrollee          entry(1)
      is admitted to a hospital that
      1) is certified by Medicare as a
      long-term care hospital and 2)
      has an average length on stay
      for all patients greater than
      ninety- five (95) days as
      reported in the State wide
      Planning and Research
      Cooperative System (SPARCS)
      Annual Report 2002.

-     Individual enrolled or auto         -     Effective Date of Enrollment in
      assigned while meeting exclusion          the Contractor's Plan.
      criteria

Move by Enrollee

      -     (Non-NYC)-Enrollee moved      -     First day of the month after the
            outside of the Service              update of the system with the
            Area of the contract                new address(2)

      -     (NYC)-Enrollee moved          -     first day of month after the
            outside of New York City            update of the system with the
                                                new address(3)

            (1) Local districts shall make adjustments as necessary to allow a
            residential institution to be reimbursed by SDOH's Fiscal Agent for
            services provided by the residential institution if such stay is
            under circumstances which render the Enrollee excluded from managed
            care. However in such instances, if the Contractor was at risk for
            providing Benefit Package services to the Enrollee for a portion of
            the month, the Contractor is entitled to keep the capitation payment
            for the month.

            (2) In counties outside of New York City, LDSSs should work together
            to ensure continuity of care through the Contractor if the
            Contractor's service area includes the county to which the Enrollee
            has moved and the Enrollee, with continuous eligibility, wishes to
            stay enrolled in the Contractor's plan.

                                   APPENDIX H
                                October 1, 2004
                                      H-11

<PAGE>

            (3)In New York City, Enrollees, not in guaranteed status, who move
            out of the Contractor's Service Area but not outside, of the City of
            New York (e.g., move from one borough to another), will not be
            involuntarily disenrolled, but must request a disenrollment or
            transfer These disenrollments will be performed on a routine basis
            unless there is an urgent medical need to expedite the
            disenrollment.

10.   The LDSS is responsible for informing Enrollees of their right to change
      MCOs including any applicable lock-in restrictions. For those LDSSs that
      have implemented a mandatory enrollment program, families or members of a
      case wishing to change MCOs will be required to do so as a unit, unless
      the LDSS determines a "good cause" reason to waive this requirement as
      specified in Section 6.6 (c) (i) of this Agreement.

11.   The LDSS will render a decision within thirty (30) days of the receipt of
      a fully documented request for disenrollment, except for
      Contractor-initiated disenrollments where the LDSS decision must be made
      within fifteen (15) days as specified in Section 8.8 (g) of this
      Agreement.

12.   The LDSS is responsible for sending the following notices to Enrollees
      regarding their disenrollment status. Where practicable, the process will
      allow for timely notification to Enrollees unless There is "good cause" to
      disenroll more expeditiously. I

      a)    Notice of Disenrollment: These notices will advise the Enrollee of
            the LDSS's determination regarding an Enrollee-initiated,
            LDSS-initiated or Contractor- initiated disenrollment and will
            include the Effective Date of Disenrollment. In cases where the
            Enrollee is being involuntarily disenrolled, the notice must contain
            fair hearing rights.

      b)    When the LDSS denies any Enrollee's request for disenrollment
            pursuant to Section 8 of the contract, the LDSS must inform the
            Enrollee in writing explaining the reason for the denial, stating
            the facts upon which the denial is based, citing the statutory and
            regulatory authority and advising the Enrollee of his/her right to a
            fair hearing pursuant to 18NYCRR Part 358.

      c)    End of Lock-In Notice: When Lock-In provisions are enforced,
            Enrollees must be notified sixty (60) days Before the end of their
            Lock-In Period.

      d)    Notice of Change to "Guarantee Coverage": This notice will advise
            the Enrollee that his or her Medicaid coverage is ending and how
            this affects his or her enrollment in Medicaid managed care. This
            notice contains pertinent information regarding "guaranteed
            eligibility" benefits and dates of coverage. If an Enrollee is not
            eligible for guarantee, this notice is not necessary.

                                   APPENDIX H
                                October 1, 2004
                                      H-12

<PAGE>

13.   The LDSS may require that an individual that has been disenrolled at the
      request of the Contractor be returned to the Medicaid fee-for-service
      program.

14.   In those instances where the LDSS approves the Contractor's request to
      disenroll an Enrollee, and the Enrollee requests a fair hearing, the
      Contractor will continue to keep the Enrollee in the plan until the
      disposition of the fair hearing, when Aid to Continue is ordered by OAH.

15.   The LDSS will review each Contractor requested disenrollment in accordance
      with the provisions of Section 8.8 of this Agreement. Where applicable,
      the LDSS may consult with local mental health and substance abuse
      authorities in the district when making the determination to approve or
      disapprove the request.

16.   The LDSS shall establish procedures whereby the Contractor refers cases
      which are appropriate for an LDSS-initiated disenrollment and submits
      supporting documentation to the LDSS.

17.   After the LDSS receives and, if appropriate, approves the request for
      disenrollment either from the Enrollee or the Contractor, the LDSS will
      update the PCP subsystem file with an end date. MEVS and the. Fiscal Agent
      is then updated to reflect the Enrollee's return to fee-for-service
      processing. The Enrollee is removed from the Contractor's Roster.

MCO RESPONSIBILITIES:

1.    In those instances where the Contractor directly receives disenrollment
      forms, the Contractor will forward these disenrollments to the LDSS for
      processing within five (5) business days (or according to Section F of
      this Appendix). During pulldown week, these forms may be faxed to the LDSS
      with the hard copy to follow.

2.    The Contractor must accept and transmit all requests for voluntary
      disenrollments from its Enrollees to the LDSS, and shall not impose any
      barriers to disenrollment requests. The Contractor may require that a
      disenrollment request be in writing, contain the signature of the
      Enrollee, and state the Enrollee's correct MCO or Medicaid identification
      number.

3.    Following LDSS procedures, the Contractor will refer cases which are
      appropriate for an LDSS-initiated disenrollment an will submit supporting
      documentation to the LDSS. This includes, but is not limited to, changes
      in status for its enrolled members that may impact eligibility for
      enrollment in an MCO such as address changes, incarceration, death,
      exclusion from managed care, etc.

4.    With respect to Contractor-initiated disenrollments:

      a)    The Contractor may initiate an involuntary disenrollment if the
            Enrollee engages in conduct or behavior that seriously impairs the
            Contractor's ability

                                   APPENDIX H
                                 October 1, 2004
                                      H-13

<PAGE>

            to furnish services to either the Enrollee or other Enrollee's,
            provided that the Contractor has made and documented reasonable
            efforts to resolve the problems presented by the Enrollee.

      b)    The Contractor may not request disenrollment because of an adverse
            change in the Enrollee's health status, or because of the Enrollee's
            utilization of medical services, diminished mental capacity, or
            uncooperative or disruptive behavior resulting from the Enrollee's
            special needs (except where continued enrollment in the Contractor's
            plan seriously impairs the Contractor's ability to furnish services
            to either the Enrollee or other Enrollees).

      c)    The Contractor must make a reasonable effort to identify for the
            Enrollee, both verbally and in writing, those actions of the
            Enrollee that have interfered with the effective provision of
            covered services as well as explain what actions or procedures are
            acceptable.

      d)    The Contractor shall give prior verbal and written notice to the
            Enrollee, with a copy to the LDSS, of its intent to request
            disenrollment. The written notice shall advise the Enrollee that the
            request has been forwarded to the LDSS for review and approval. The
            written notice must include the mailing address and telephone number
            of the LDSS.

      e)    The Contractor shall keep the LDSS informed of decisions related to
            all complaints filed by an Enrollee as a result of, or subsequent
            to, the notice of intent to disenroll.

5.    The Contractor will not consider an Enrollee disenrolled without
      confirmation from the LDSS or the Roster (as described in section D of
      this Appendix).

F.    EXPEDITED DISENROLLMENTS

Enrollees may request an expedited disenrollment if they have an urgent medical
need to disenroll, if they were non-consensually enrolled in a managed care
plan, or, if they are homeless and residing in the shelter system in New York
City or other local districts where homeless individuals are exempt. Individuals
who request to be disenrolled from managed care based on their documented HIV,
ESRD, or SPMI/SED status are categorically eligible for an expedited
disenrollment on the basis of urgent medical need.

LDSS RESPONSIBILITIES:

1.    The LDSS, to the extent possible, will process an expedited disenrollment
      within two business days of its determination that an expedited
      disenrollment is warranted. A disenrollment notice must be sent to the
      Enrollee outlining approval of the disenrollment request, including the
      Effective Date of Disenrollment.

                                   APPENDIX H
                                October 1, 2004
                                      H-14

<PAGE>

2.    The Effective Date of Disenrollments resulting from expedited processing
      are as follows:

REASON FOR DISENROLLMENT                  EFFECTIVE DATE OF DISENROLLMENT

Urgent medical need                       -     First day of the next month
                                                after determination except where
                                                medical need requires an earlier
                                                disenrollment

Non-consensual enrollment                 -     Retroactive to the first day of
                                                the month of enrollment

Homeless individuals residing in the      -     Retroactive to the first day of
shelter system in NYC or in other               the month of the request
districts where homeless individuals
are exempt

G. LDSS AND PLAN SPECIFIC ADDENDA TO APPENDIX H.

LDSS Name Columbia County Department of Social Services

MCO Name Wellcare of New York, Inc.

                                   APPENDIX H
                                October 1, 2004
                                      H-15
<PAGE>

                                   APPENDIX I

                      NEW YORK STATE DEPARTMENT OF HEALTH
                     GUIDELINES FOR USE OF MEDICAL RESIDENTS

                                   APPENDIX I
                                 October 1, 2004

                                      I-1

<PAGE>

                                   APPENDIX I
                                MEDICAL RESIDENTS

      (a)   Medical Residents as Primary Care Providers. MCOs may utilize
            medical residents as participants (but not designated as 'primary
            care providers') in the care of Enrollees as long as all of the
            following conditions are met:

            1)    Residents are a part of patient care teams headed by fully
                  licensed and MCO credentialed attending physicians serving
                  patients in one or more training sites in an "up weighted" or
                  "designated priority" residency program. Residents in a
                  training program which was disapproved as a designated
                  priority program solely due to the outcome measurement
                  requirement for graduates may be eligible to participate in
                  such patient care teams.

            2)    Only the attending physicians and nurse practitioners on the
                  training team, not residents, may be credentialed to the MCO
                  and may be empanelled with Enrollees. Enrollees must be
                  assigned an attending physician or certified nurse
                  practitioner to act as their PCP, though residents on the team
                  may perform all or many of the visits to the Enrollees as long
                  as the majority of these visits are under the direct
                  supervision of the Enrollee's designated PCP. Enrollees have
                  the right to request care by their PCP in addition or instead
                  of being seen by a resident.

            3)    Residents may work with attending physicians and certified
                  nurse practitioners to provide continuity of care to patients
                  under the supervision of the patient's PCP. Patient must be
                  made aware of the resident/attending relationship and be
                  informed of their rights to be cared for directly by their
                  PCP.

            4)    Residents eligible to be involved in a continuity relationship
                  with patients must be available at least 20% of the total
                  training time in the continuity of care setting and no less
                  than 10% of training time in any training year must be in the
                  continuity of care setting and no fewer than nine (9) months a
                  year must be spent in the continuity of care setting.

            5)    Residents meeting these criteria provide increased capacity
                  for enrollment to their team according to the following
                  formula:

                  <TABLE>
                  <S>           <C>
                  PGY-1         300 per FTE
                  PGY-2         750 per FTE
                  PGY-3         1125 per FTE
                  PGY-4         1500 per FTE
                  </TABLE>

                  Only hours spent routinely scheduled for patient care in the
                  continuity of care training site may count as providing
                  capacity and are based on 1.0 FTE = 40 hours.

                                   APPENDIX I
                                 October 1, 2004
                                       I-2

<PAGE>

            6)    In order for a resident to provide continuity of care to an
                  Enrollee, both the resident and the attending PCP must have
                  regular hours in the continuity site and must be scheduled to
                  be in the site together the majority of the time.

            7)    A preceptor/attending is required to be present a minimum of
                  sixteen (16) hours of combined precepting and direct patient
                  care in the primary care setting to be counted as a team
                  supervising PCP and accept an increased number of Enrollees
                  based upon the residents working on his/her team. Time spent
                  in patient care activities at other clinical sites or in other
                  activities off-site is not counted towards this requirement.

            8)    A sixteen (16) hour per week attending may have no more than
                  four (4) residents on their team. Attendings spending
                  twenty-four (24) hours per week in patient care/supervisory
                  activity at the continuity site could have six (6) residents
                  per team. Attendings spending thirty-two (32) hours per week
                  could have eight (8) residents on their team. Two (2) or more
                  attendings may join together to form a larger team as long as
                  the ratio of attending to residents does not exceed 1:4 and
                  all attendings comply with the sixteen (16) hour minimum.

            9)    Specialty consults must be performed or directly supervised by
                  a MCO credentialed specialist. The specialist may be assisted
                  by a resident or fellow.

            10)   Responsibility for the care of the Enrollee remains with the
                  attending physician. All attending/resident teams must provide
                  adequate continuity of care, twenty-four (24) hour a day,
                  seven (7) day a week coverage, and appointment and
                  availability access.

            11)   Residents who do not qualify to act as continuity providers as
                  part of an attending/resident team may still participate in
                  the episodic care of Enrollees as long as that care is under
                  the supervision of an attending physician credentialed to a
                  MCO. Such residents would not add to the capacity of that
                  attending to empanel Enrollees, however.

            12)   Certified nurse practitioners and registered physician's
                  assistants may not act as attending preceptors for resident
                  physicians.

(B)   MEDICAL RESIDENTS AS SPECIALTY CARE PROVIDERS

            (1)   Residents may participate in the specialty care of Medicaid
                  managed care patients in all settings supervised by fully
                  licensed and MCO/PHSP credentialed specialty attending
                  physicians.

            (2)   Only the attending physicians, not residents or fellows, may
                  be credentialed by the MCO. Each attending must be
                  credentialed by each

                                   APPENDIX I
                                October 1, 2004
                                       I-3

<PAGE>

                  MCO with which they will participate. Residents may perform
                  all or many of the clinical services for the Enrollee as long
                  as these clinical services are under the supervision of an
                  appropriately credentialed specialty physician. Even when
                  residents are credentialed by their program in particular
                  procedures, certifying their competence to perform and teach
                  those procedures, the overall care of each Enrollee remains
                  the responsibility of the supervising MCO-credentialed
                  attending.

            (3)   It is understood that many Enrollees will identify a resident
                  as their specialty provider but the responsibility for all
                  clinical decision-making remains with the attending physician
                  of record.

            (4)   Enrollees must be given the name of the responsible attending
                  physician in writing and be told how they may contact their
                  attending physician or covering physician, if needed. This
                  allows Enrollees to assist in the communication between their
                  primary care provider and specialty attending and enables them
                  to reach the specialty attending if an emergency arises in the
                  course of their care. Enrollees must be made aware of the
                  resident/attending relationship and must have a right to be
                  cared for directly by the responsible attending physician, if
                  requested.

            (5)   Enrollees requiring ongoing specialty care must be cared for
                  in a continuity of care setting. This requires the ability to
                  make follow-up appointments with a particular
                  resident/attending physician, or if that provider team is not
                  available, with a member of the provider's coverage group in
                  order to insure ongoing responsibility for the patient by
                  his/her MCO credentialed specialist. The responsible
                  specialist and his/her specialty coverage group must be
                  identifiable to the patient as well as to the referring
                  primary care provider.

            (6)   Attending specialists must be available for emergency
                  consultation and care during non-clinic hours. Emergency
                  coverage may be provided by residents under adequate
                  supervision. The attending or a member of the attending's
                  coverage group must be available for telephone and/or in-
                  person consultation when necessary.

            (7)   All training programs participating in Medicaid managed care
                  must be accredited by the appropriate academic accrediting
                  agency.

            (8)   All sites in which residents train must produce legible
                  (preferably typewritten) consultation reports. Reports must be
                  transmitted such they are received in a time frame consistent
                  with the clinical condition of the patient, the urgency of the
                  problem and the need for follow-up by the primary care
                  physician. At a minimum, reports should be transmitted so that
                  they are received no later than two (2) weeks from the date of
                  the specialty visit.

                                   APPENDIX I
                                 October 1, 2004
                                       I-4

<PAGE>

            (9)   Written reports are required at the time of initial
                  consultation and again with the receipt of all major
                  significant diagnostic information or changes in therapy. In
                  addition, specialists must promptly report to the referring
                  primary care physician any significant findings or urgent
                  changes in therapy which result from the specialty
                  consultation.

      All training sites must deliver the same standard of care to all patients
      irrespective of payor. Training sites must integrate the care of
      Medicaid, uninsured and private patients in the same settings.

                                   APPENDIX I
                                 October 1, 2004
                                      I-5

<PAGE>

                                   APPENDIX J

           NEW YORK STATE DEPARTMENT OF HEALTH GUIDELINES OF FEDERAL
                        AMERICANS WITH DISABILITIES ACT

                                    APENDIX J
                                October 1, 2004
                                       J-1

<PAGE>

                     GUIDELINES FOR MEDICAID MCO COMPLIANCE
                 WITH THE AMERICANS WITH DISABILITIES ACT (ADA)

I. OBJECTIVES

Title II of the Americans With Disabilities Act (ADA) and Section 504 of the
Rehabilitation Act of 1973 (Section 504) provides that no qualified individual
with a disability shall, by reason of such disability, be excluded from
participation in or denied access to the benefits of services, programs or
activities of a public entity, or be subject to discrimination by such an
entity. Public entities include State and local government and ADA and Section
504 requirements extend to all programs and services provided by State and local
government. Since Medicaid is a government program, health services provided
through Medicaid Managed Care must be accessible to all who qualify for the
program.

MCO responsibilities for compliance with the ADA are imposed under Title II and
Section 504 when, as a contractor in a Medicaid program, a plan is providing a
government service. If an individual provider under contract with the MCO is not
accessible, it is the responsibility of the MCO to make arrangements to assure
that alternative services are provided. The MCO may determine it is expedient to
make arrangements with other providers, or to describe reasonable alternative
means and methods to make these services accessible through its existing
contractors. The goals of compliance with ADA Title II requirements are to offer
a level of services that allows people with disabilities access to the program
in its entirety, and the ability to achieve the same health care results as any
program participant.

MCO responsibilities for compliance with the ADA are also imposed under Title
III when the MCO functions as a public accommodation providing services to
individuals (e.g. program areas and sites such as marketing, education, member
services, orientation, complaints and appeals). The goals of compliance with ADA
Title III requirements are to offer a level of services that allows people with
disabilities full and equal enjoyment of the goods, services, facilities or
accommodations that the entity provides for its customers or clients. New and
altered areas and facilities must be as accessible as possible. Whenever MCOs
engage in new construction or renovation, compliance is also required with
accessible design and construction standards promulgated pursuant to the ADA as
well as State and local laws. Title III also requires that public accommodations
undertake "readily achievable barrier removal" in existing facilities where
architectural and communications barriers can be removed easily and without much
difficulty or expense.

The state uses Plan Qualification Standards to qualify MCOs for participation in
the Medicaid Managed Care Program. Pursuant to the state's responsibility to
assure program access to all recipients, the Plan Qualification Standards
require each MCO to submit an ADA Compliance Plan that describes in detail how
the MCO will make services, programs and activities readily accessible and
useable by

                                   APPENDIX J
                                 October 1, 2004
                                       J-2

<PAGE>

individuals with disabilities. In the event that certain program sites are not
readily accessible, the MCO must describe reasonable alternative methods for
making the services or activities accessible and usable.

The objectives of these guidelines are threefold:

      -     to ensure that MCOs take appropriate steps to measure access and
            assure program accessibility for persons with disabilities;

      -     to provide a framework for managed care organizations (MCOs) as they
            develop a plan to assure compliance with the Americans with
            Disabilities Act (ADA); and

      -     to provide standards for the review of MCO Compliance Plans.

These guidelines include a general standard followed by a discussion of specific
considerations and suggestions of methods for assuring compliance. Please be
advised that, although these guidelines and any subsequent reviews by State and
local governments can give the contractor guidance, it is ultimately the
contractor's obligation to ensure that it complies with its contractual
obligations, as well as with the requirements of the ADA, Section 504, and other
federal, state and local laws. Other federal, state and local statutes and
regulations also prohibit discrimination on the basis of disability and may
impose requirements in addition to those established under ADA. For example,
while the ADA covers those impairments that "substantially" limit one or more of
the major life activities of an individual, New York City Human Rights Law
deletes the modifier "substantially".

II. DEFINITIONS

A.    "Auxiliary aids and services" may include qualified interpreters, note
      takers, computer-aided transcription services, written materials,
      telephone handset amplifiers, assistive listening systems, telephones
      compatible with hearing aids, closed caption decoders, open and closed
      captioning, telecommunications devices for enrollees who are deaf or hard
      of hearing (TTY/TDD), video test displays, and other effective methods of
      making aurally delivered materials available to individuals with hearing
      impairments; qualified readers, taped texts, audio recordings, Brailled
      materials, large print materials, or other effective methods of making
      visually delivered materials available to individuals with visual
      impairments.

B.    "Disability" means a mental or physical impairment that substantially
      limits one or more of the major life activities of an individual; a record
      of such impairment; or being regarded as having such an impairment.

                                   APPENDIX J
                                 October 1, 2004
                                       J-3

<PAGE>

III.  SCOPE OF MCO COMPLIANCE PLAN

      The MCO Compliance Plan must address accessibility to services at the
      MCO's program sites, including both participating provider sites and MCO
      facilities intended for use by enrollee.

IV.   PROGRAM ACCESSIBILITY

Public programs and services, when viewed in their entirety, must be readily
accessible to and useable by individuals with disabilities. This standard
includes physical access, non-discrimination in policies and procedures and
communication. Communications with individuals with disabilities are required to
be as effective as communications with others. The MCO Compliance Plan must
include a detailed description of how MCO services, programs and activities are
readily accessible and usable by individuals with disabilities. In the event
that full physical accessibility is not readily available for people with
disabilities, the MCO Compliance Plan will describe the steps or actions the MCO
will take to assure accessibility to services equivalent to those offered at the
inaccessible facilities.

IV.   PROGRAM ACCESSIBILITY

A.    PRE-ENROLLMENT MARKETING AND EDUCATION

STANDARD FOR COMPLIANCE:

Marketing staff, activities and materials will be made available to persons with
disabilities. Marketing materials will be made available in alternative formats
(such as Braille, large print, audio tapes) so that they are readily usable by
people with disabilities.

SUGGESTED METHODS FOR COMPLIANCE

1.    Activities held in physically accessible location, or staff at activities
      available to meet with person in an accessible location as necessary

2.    Materials available in alternative formats, such as Braille, large print,
      audio tapes

3.    Staff training which includes training and information regarding
      attitudinal barriers related to disability

4.    Activities and fairs that include sign language interpreters or the
      distribution of a written summary of the marketing script used by plan
      marketing representatives

5.    Enrollee health promotion material/activities targeted specifically to
      persons with disabilities (e.g. secondary infection prevention,

                                   APPENDIX J
                                 October 1, 2004
                                       J-4

<PAGE>

      decubitus prevention, special exercise programs, etc.)

6.    Policy statement that marketing representatives will offer to read or
      summarize to blind or vision impaired individuals any written material
      that is typically distributed to all enrollees

7.    Staff/resources available to assist individuals with cognitive impairments
      in understanding materials

COMPLIANCE PLAN SUBMISSION

1.    A description of methods to ensure that the MCO's marketing presentations
      (materials and communications) are accessible to persons with auditory,
      visual and cognitive impairments

2.    A description of the MCO's policies and procedures, including marketing
      training, to ensure that marketing representatives neither screen health
      status nor ask questions about health status or prior health care services

IV.   PROGRAM ACCESSIBILITY

B.    MEMBER SERVICES DEPARTMENT

Member services functions include the provision to enrollees of information
necessary to make informed choices about treatment options, to effectively
utilize the health care resources, to assist enrollees in making appointments
and to field questions and complaints, to assist enrollees with the complaint,
process.

B1.   ACCESSIBILITY

STANDARD FOR COMPLIANCE:

Member Services sites and functions will be made accessible to, and usable by,
people with disabilities.

SUGGESTED METHODS FOR COMPLIANCE (include, but are not limited to those
identified below)

1.    Exterior routes of travel, at least 36" wide, from parking areas or public
      transportation stops into the MCO's facility

2.    If parking is provided, spaces reserved for people with disabilities,
      pedestrian ramps at sidewalks, and dropoffs

3.    Routes of travel into the facility are stable, slip-resistant, with all
      steps > 1/2" ramped, doorways with minimum 32" opening

4.    Interior halls and passageways providing a clear and unobstructed path or
      travel at least 36" wide to bathrooms and other rooms commonly used by
      enrollees

5.    Waiting rooms, restrooms, and other rooms used by enrollees are accessible
      to people with disabilities

6.    Sign language interpreters and other auxiliary aids and services provided
      in appropriate circumstances

                                   APPENDIX J
                                 October 1, 2004
                                       J-5

<PAGE>

7.    Materials available in alternative formats, such as Braille, large print,
      audio tapes

8.    Staff training which includes sensitivity training related to disability
      issues [Resources and technical assistance are available through the NYS
      Office of Advocate for Persons with Disabilities - V/TTY (800) 522-4369;
      and the NYC Mayor's Office for People with Disabilities - (212) 788-2830
      or TTY (212)788-2838]

9.    Availability of activities and educational materials tailored to specific
      conditions/illnesses and secondary conditions that affect these
      populations (e.g. secondary infection prevention, decubitus prevention,
      special exercise programs, etc.)

10.   MCO staff trained in the use of telecommunication devices for enrollees
      who are deaf or hard of hearing (TTY/TDD) as well as in the use of NY
      Relay for phone communication

11.   New enrollee orientation available in audio or by interpreter services

12.   Policy that when member services staff receive calls through the NY Relay,
      they will offer to return the call utilizing a direct TTY/TDD connection

COMPLIANCE PLAN SUBMISSION

1.    A description of accessibility to the member services department or
      reasonable alternative means to access member services for enrollees using
      wheelchairs (or other mobility aids)

2.    A description of the methods the member services department will use to
      communicate with enrollees who have visual or hearing impairments,
      including any auxiliary aid/services for enrollees who are deaf or hard of
      hearing,and TTY/TDD technology or NY Relay Service available through a
      toll-free telephone number

3.    A description of the training provided to member services staff to assure
      that staff adequately understands how to implement the requirements of the
      program, and of these guidelines, and are sensitive to the needs of
      persons with disabilities

IV.   PROGRAM ACCESSIBILITY

B2. IDENTIFICATION OF ENROLLEES WITH DISABILITIES

STANDARD FOR COMPLIANCE:

MCOs must have in place satisfactory methods/guidelines for identifying persons
at risk of, or having, chronic diseases and disabilities and determining their
specific needs in terms of specialist physician referrals, durable medical
equipment, medical supplies, home health services etc. MCOs may not discriminate
against a potential enrollee based on his/her current health status or
anticipated need for future health care. MCOs may not discriminate on the basis
of disability, or perceived disability of an enrollee or their family member.
Health assessment forms may not be used by plans prior to enrollment. (Once a
plan has been chosen, a health assessment form may be used to assess the
person's health care needs.)

                                   APPENDIX J
                                 October 1, 2004
                                       J-6

<PAGE>

SUGGESTED METHODS FOR COMPLIANCE

1.    Appropriate post enrollment health screening for each enrollee, using an
      appropriate health screening tool

2.    Patient profiles by condition/disease for comparative analysis to national
      norms, with appropriate outreach and education

3.    Process for follow-up of needs identified by initial screening; e.g.
      referrals, assignment of case manager, assistance with scheduling/keeping
      appointments

4.    Enrolled population disability assessment survey

5.    Process for enrollees who acquire a disability subsequent to enrollment to
      access appropriate services

COMPLIANCE PLAN SUBMISSION

1.    A description of how the MCO will identify special health care, physical
      access or communication needs of enrollees on a timely basis, including
      but not limited to the health care needs of enrollees who:

      -     are blind or have visual impairments, including the type of
            auxiliary aids and services required by the enrollee

      -     are deaf or hard of hearing, including the type of auxiliary aids
            and services required by the enrollee

      -     have mobility impairments, including the extent, if any, to which
            they can ambulate

      -     have other physical or mental impairments or disabilities, including
            cognitive impairments have condition which may require more
            intensive case management

IV.   PROGRAM ACCESSIBILITY

B3.   NEW ENROLLEE ORIENTATION

STANDARD FOR COMPLIANCE:

Enrollees will be given information sufficient to ensure that they understand
how to access medical care through the plan. This information will be made
accessible to, and usable by, people with disabilities.

SUGGESTED METHODS FOR COMPLIANCE

1.    Activities held in physically accessible location, or staff at activities
      available to meet with person in an accessible location as necessary

2.    Materials available in alternative formats, such as Braille, large print,
      audio tapes

3.    Staff training which includes sensitivity training related to disability
      issues [Resources and technical assistance are available

                                   APPENDIX J
                                October 1, 2004
                                       J-7

<PAGE>

      through the NYS Office of Advocate for Persons with Disabilities - V/TTY
      (800) 522-4369; and the NYC Mayor's Office for People with Disabilities -
      (212) 788-2830 or TTY (212)788-2838]

4.    Activities and fairs that include sign language interpreters or the
      distribution of a written summary of the marketing script used by plan
      marketing representatives

5.    Include in written/audio materials available to all enrollees information
      regarding how and where people with disabilities can access help in
      getting services, for example help with making appointments or for
      arranging special transportation, an interpreter or assistive
      communication devices

6.    Staff/resources available to assist individuals with cognitive impairments
      in understanding materials

COMPLIANCE PLAN SUBMISSION

1.    A description of how the MCO will advise enrollees with disabilities,
      during the new enrollee orientation on how to access care

2.    A description of how the MCO will assist new enrollees with disabilities
      (as well as current enrollees who acquire a disability) in selecting or
      arranging an appointment with a Primary Care Practitioner (PCP)

      -     This should include a description of how the MCO will assure and
            provide notice to enrollees who are deaf or hard of hearing, blind
            or who have visual impairments, of their right to obtain necessary
            auxiliary aids and services during appointments and in scheduling
            appointments and follow-up treatment with participating providers

      -     In the event that certain provider sites are not physically
            accessible to enrollees with mobility impairments, the MCO will
            assure that reasonable alternative site and services are available

3.    A description of how the MCO will determine the specific needs of an
      enrollee with or at risk of having a disability/chronic disease, in terms
      of specialist physician referrals, durable medical equipment (including
      assistive technology and adaptive equipment), medical supplies and home
      health services and will assure that such contractual services are
      provided

4.    A description of how the MCO will identify if an enrollee with a
      disability requires on-going mental health services and how MCO will
      encourage early entry into treatment

5.    A description of how the MCO will notify enrollees with disabilities as to
      how to access transportation, where applicable

IV.   PROGRAM ACCESSIBILITY

B4.   COMPLAINTS AND APPEALS

STANDARD FOR COMPLIANCE;

The MCO will establish and maintain a procedure to protect the rights and
interests of both enrollees and managed care plans by receiving, processing, and
resolving grievances and complaints in an expeditious manner, with the goal of
ensuring resolution of complaints and_

                                   APPENDIX J
                                 October 1, 2004
                                       J-8

<PAGE>

access to appropriate services as rapidly as possible.

All enrollees must be informed about the complaint process within their plan and
the procedure for filing complaints. This information will be made available
through the member handbook, the SDOH toll-free complaint line [1-(800)
206-8125] and the plan's complaint process annually, as well as when the MCO
denies a benefit or referral. The MCO will inform enrollees of: the MCO's
complaint procedure; enrollees' right to contact the local district or SDOH with
a complaint, and to file an appeal or request a fair hearing; the right to
appoint a designee to handle a complaint or appeal; the toll free complaint
line. The MCO will maintain designated staff to take and process complaints, and
be responsible for assisting enrollees in complaint resolution.

The MCO will make all information regarding the complaint process available to
and usable by people with disabilities, and will assure that people with
disabilities have access to sites where enrollees typically file complaints and
requests for appeals.

SUGGESTED METHODS FOR COMPLIANCE

1.    800 complaint phone line with TDD/TTY capability

2.    Staff trained in complaint process, and able to provide interpretive or
      assistive support to enrollee during the complaint process

3.    Notification materials and complaint forms in alternative formats for
      enrollees with visual or hearing impairments

4.    Availability of physically accessible sites, e.g. member services
      department sites

5.    Assistance for individuals with cognitive impairments

COMPLIANCE PLAN SUBMISSION

1.    A description of how MCO's complaint and appeal procedures shall be
      accessible for persons with disabilities, including:

      -     procedures for complaints and appeals to be made in person at sites
            accessible to persons with mobility impairments

      -     procedures accessible to persons with sensory or other impairments
            who wish to make verbal complaints, and to communicate with such
            persons on an ongoing basis as to the status or their complaints and
            rights to further appeals

      -     description of methods to ensure notification material is available
            in alternative formats for enrollees with vision and hearing
            impairments

2.    A description of how MCOs monitor complaints and grievances related to
      people with disabilities. Also, as part of the Compliance Plan, MCOs must
      submit a summary report based on the MCO's most recent year's complaint
      data.

                                   APPENDIX J
                                 October 1, 2004
                                       J-9

<PAGE>

IV.   PROGRAM ACCESSIBILITY

C.    CASE MANAGEMENT

STANDARD FOR COMPLIANCE:

MCOs must have in place adequate case management systems to identify the service
needs of all enrollees, including enrollees with chronic illness and enrollees
with disabilities, and ensure that medically necessary covered benefits are
delivered on a timely basis. These systems must include procedures for standing
referrals, specialists as PCPs, and referrals to specialty centers for enrollees
who require specialized medical care over a prolonged period of time (as
determined by a treatment plan approved by the MCO in consultation with the
primary care provider, the designated specialist and the enrollee or his/her
designee), out of plan referrals and continuation of existing treatment
relationships with out-of-plan providers (during transitional period).

SUGGESTED METHODS FOR COMPLIANCE

1.    Procedures for requesting specialist physicians to function as PCP

2.    Procedures for requesting standing referrals to specialists and/or
      specialty centers out of plan referrals,and continuation of existing
      treatment relationships

3.    Procedures to meet enrollee needs for, durable medical equipment, medical
      supplies, home visits as appropriate

4.    Appropriately trained MCO staff to function as case managers for special
      needs populations, or sub-contract arrangements for case management

5.    Procedures for informing enrollees about the availability of case
      management services

COMPLIANCE PLAN SUBMISSION

1.    A description of the MCO case management program for people with
      disabilities, including case management functions, procedures for
      qualifying for and being assigned a case manager, and description of case
      management staff qualifications

2.    A description of the MCO's model protocol to enable participating
      providers, at their point of service, to identify enrollees who require a
      case manager

3.    A description of the MCO's protocol for assignment of specialists as PCP,
      and for standing referrals to specialists and specialty centers,
      out-of-plan referrals and continuing treatment relationships

4.    A description of the MCO's notice procedures to enrollees regarding the
      availability of case management services, specialists as PCPs, standing
      referrals to specialists and specialty centers, out-of-plan referrals and
      continuing treatment relationships

                                   APPENDIX J
                                 October 1, 2004
                                      J-10

<PAGE>

IV.   PROGRAM ACCESSIBILITY

D.    PARTICIPATING PROVIDERS

STANDARD FOR COMPLIANCE:

MCOs networks will include all the provider types necessary to furnish the
benefit package, to assure appropriate and timely health care to all enrollees,
including those with chronic illness and/or disabilities. Physical accessibility
is not limited to entry to a provider site, but also includes access to services
within the site, e.g. exam tables and medical equipment.

SUGGESTED METHODS FOR COMPLIANCE

1.    Process for MCO to evaluate provider network to ascertain the degree of
      provider accessibility to persons with disabilities, to identify barriers
      to access and required modifications to policies/procedures

2.    Model protocol to assist participating providers, at their point of
      service, to identify enrollees who require case manager, audio, visual,
      mobility aids, or other accommodations

3.    Model protocol for determining needs of enrollees with mental disabilities

4.    Use of Wheelchair Accessibility Certification Form (see attached)

5.    Submission of map of physically accessible sites

6.    Training for providers re: compliance with Title III of ADA, e.g. site
      access requirements for door widths, wheelchair ramps, accessible
      diagnostic/treatment rooms and equipment; communication issues;
      attitudinal barriers related to disability, etc. [Resources and technical
      assistance are available through the NYS Office of Advocate for Persons
      with Disabilities - V/TTY (800) 522-4369; and the NYC Mayor's Office for
      People with Disabilities - (212) 788-2830 or TTY (212)788-2838]

7.    Use of ADA Checklist for Existing Facilities and NYC Addendum to OAPD ADA
      Accessibility Checklist as guides for evaluating existing facilities and
      for new construction and/or alteration.

COMPLIANCE PLAN SUBMISSION

1.    A description of how MCO will ensure that its participating provider
      network is accessible to persons with disabilities. This includes the
      following:

      -     Policies and procedures to prevent discrimination on the basis of
            disability or type of illness or condition

      -     Identification of participating provider sites which are accessible
            by people with mobility impairments, including people using mobility
            devices. If certain provider sites are not physically accessible to
            persons with disabilities, the MCO shall describe reasonable,
            alternative means that result in making the provider services
            readily accessible.

      -     Identification of participating provider sites which do not have
            access to sign language interpreters or reasonable alternative

                                   APPENDIX J
                                 October 1, 2004
                                      J-ll

<PAGE>

            means to communicate with enrollees who are deaf or hard of hearing;
            and for those sites describe reasonable alternative methods to
            ensure that services will be made accessible

      -     Identification of participating providers which do not have adequate
            communication systems for enrollees who are blind or have vision
            impairments (e.g. raised symbol and lettering or visual signal
            appliances), and for those sites describe reasonable alternative
            methods to ensure that services will be made accessible

2.    A description of how the MCO's specialty network is sufficient to meet the
      needs of enrollees with disabilities

3.    A description of methods to ensure the coordination of out-of-network
      providers to meet the needs of the enrollees with disabilities

      -     This may include the implementation of a referral system to ensure
            that the health care needs of enrollees with disabilities are met
            appropriately

      -     MCO shall describe policies and procedures to allow for the
            continuation of existing relationships with out-of-network
            providers, when in the best interest of the enrollee with a
            disability

4.    Submission of ADA Compliance Summary Report (see attached - county
      specific/borough specific for NYC) or MCO statement that data submitted to
      SDOH on the Health Provider Network (HPN) files is an accurate reflection
      of each network's physical accessibility

IV    PROGRAM ACCESSIBILITY

E.    POPULATIONS SPECIAL HEALTH CARE NEEDS

STANDARD FOR COMPLIANCE:

MCOs will have satisfactory methods for identifying persons at risk of, or
having, chronic disabilities and determining their specific needs in terms of
specialist physician referrals, durable medical equipment, medical supplies,
home health services, etc. MCOs will have satisfactory systems for coordinating
service delivery and, if necessary, procedures to allow continuation of existing
relationships with out-of-network provider for course of treatment.

SUGGESTED METHODS FOR COMPLIANCE

1.    Procedures for requesting standing referrals to specialists and/or
      specialty centers, specialist physicians to function as PCP, out of plan
      referrals, and continuation of existing relationships with out-of-network
      providers for course of treatment

2.    Contracts with school-based health centers

3.    Linkages with preschool services, child protective agencies, early
      intervention officials, behavioral health agencies, disability and
      advocacy organizations, etc.

4.    Adequate network of providers and subspecialists (including pediatric
      providers and sub-specialists) and contractual relationships

                                   APPENDIX J
                                 October 1, 2004
                                      J-12

<PAGE>

      with tertiary institutions

5.    Procedures for assuring that these populations receive appropriate
      diagnostic workups on a timely basis

6.    Procedures for assuring that these populations receive appropriate access
      to durable medical equipment on a timely basis

7.    Procedures for assuring that these populations receive appropriate allied
      health professionals (Physical, Occupational and Speech Therapists,
      Audiologists) on a timely basis

8.    State designation as a Well Qualified Plan to serve OMRDD population and
      look-alikes

COMPLIANCE PLAN SUBMISSION

1.    A description of arrangements to ensure access to specialty care providers
      and centers in and out of New York State, standing referrals, specialist
      physicians to function as PCP, out of plan referrals, and continuation of
      existing relationships (out-of-plan) for diagnosis and treatment of rare
      disorders.

2.    A description of appropriate service delivery for children with
      disabilities. This may include a description of methods for interacting
      with school districts, preschool services, child protective service
      agencies, early intervention officials, behavioral health, and disability
      and advocacy organizations and School Based Health Centers.

3.    A description of the pediatric provider and sub-specialist network,
      including contractual relationships with tertiary institutions to meet the
      health care needs of children with disabilities

V.    ADDITIONAL ADA RESPONSIBILITIES FOR PUBLIC ACCOMMODATIONS

Please note that Title III of the ADA applies to all non-governmental providers
of health care. Title III of the Americans With Disabilities Act prohibits
discrimination on the basis of disability in the full and equal enjoyment of
goods, services, facilities, privileges, advantages or accommodations of any
place of public accommodation. A public accommodation is a private entity that
owns, leases or leases to, or operates a place of public accommodation. Places
of public accommodation identified by the ADA include, but are not limited to,
stores (including pharmacies) offices (including doctors' offices), hospitals,
health care providers, and social service centers.

New and altered areas and facilities must be as accessible as possible. Barriers
must be removed from existing facilities when it is readily achievable, defined
by the ADA as easily accomplishable without much difficulty or expense. Factors
to be considered when determining if barrier removal is readily achievable
include the cost of the action, the financial resources of the site involved,
and, if applicable, the overall financial resources of any parent corporation or
entity. If barrier removal is not readily achievable, the ADA requires alternate
methods of making goods and services available. New facilities must be
accessible unless structurally impracticable.

Title III also requires places of public accommodation to provide any auxiliary
aids and services that are needed to ensure equal access to the services it
offers, unless a fundamental alteration in the nature of services or an undue
burden would result. Auxiliary aids include but

                                   APPENDIX J
                                 October 1, 2004
                                      J-13

<PAGE>

are not limited to qualified sign interpreters, assistive listening systems,
readers, large print materials, etc. Undue burden is defined as "significant
difficulty or expense". The factors to be considered in determining "undue
burden" include, but are not limited to, the nature and cost of the action
required and the overall financial resources of the provider. "Undue burden" is
a higher standard than "readily achievable" in that it requires a greater level
of effort on the part of the public accommodation.

Please note also that the ADA is not the only law applicable for people with
disabilities. In some cases, State or local laws require more than the ADA. For
example, New York City's Human Rights Law, which also prohibits discrimination
against people with disabilities, includes people whose impairments are not as
"substantial" as the narrower ADA and uses the higher "undue burden"
("reasonable") standard where the ADA requires only that which is "readily
achievable". New York City's Building Code does not permit access waivers for
newly constructed facilities and requires incorporation of access features as
existing facilities are renovated. Finally, the State Hospital code sets a
higher standard than the ADA for provision of communication (such as sign
language interpreters) for services provided at most hospitals, even on an
outpatient basis.

                                   APPENDIX J
                                 October 1, 2004
                                      J-14

<PAGE>

                                   APPENDIX K

                             PREPAID BENEFIT PACKAGE
                           DEFINITIONS OF COVERED AND
                              NON-COVERED SERVICES

                                   APPENDIX K
                                 October 1, 2004
                                       K-1

<PAGE>

                                   APPENDIX K
                             PREPAID BENEFIT PACKAGE
                DEFINITIONS OF COVERED AND NON-COVERED SERVICES

The categories of services in the Medicaid Managed Care Benefit Package, when
listed as covered services shall be provided by the Contractor to Enrollees
when medically necessary under the terms of this Agreement. The definitions of
covered and non-covered services therein are in summary form; the full
description and scope of each Medicaid covered service as established by the New
York Medical Assistance Program are set forth in the applicable MMIS Provider
Manual.

All care provided by the Contractor, pursuant to this Agreement, must be
provided, arranged, or authorized by the Contractor or its Participating
Providers with the exception of most behavioral health services to SSI or SSI
related beneficiaries (see Benefit Package K-2), and emergency services,
emergency transportation, family planning, mental health and chemical dependence
assessments (one (1) of each per year), court ordered services, and services
provided by Local Public Health Agencies as described in Section 10 of this
Agreement.

This Appendix contains the following two (2) charts:

K-l A summary of services provided by the Contractor to all Non-SSI Enrollees.
K-2 A summary of services provided by the Contractor to all SSI Enrollees.

ALSO INCLUDED:

I.    Prepaid Benefit Package Definitions of Covered Services

      A)    Medical Services

                  1.    Inpatient Hospital Services

                  1a.   Inpatient Stay Pending Alternate Level of Medical Care

                  2.    Professional Ambulatory Services

                  3.    Physician Services

                  4.    Home Health Services

                  5.    Private Duty Nursing Services

                  6.    Emergency Room Services

                  7.    Services of Other Practitioners

                  8.    Eye Care and Low Vision Services

                  9.    Laboratory Services

                  10.   Radiology Services

                  11.   Early Periodic Screening Diagnosis and Treatment (EPSDT)
                        Services Through the Child Teen Health Program (C/THP)
                        and Adolescent Preventive Services

                  12.   Durable Medical Equipment (DME)

                  13.   Audiology, Hearing Aid Services and Products

                  14.   Preventive Care

                  15.   Prosthetic/Orthotic Orthopedic Footwear

                  16.   Renal Dialysis

                                   APPENDIX K
                                 October 1, 2004
                                       K-2

<PAGE>

                  17.   Experimental or Investigational Treatment

            B)    Behavioral Health Services

                  1.    Chemical Dependence Services

                        a)    Detoxification Services

                              i)    Medically Managed Inpatient Detoxification

                              ii)   Medically Supervised Withdrawal

                        b)    Chemical Dependence Inpatient Rehabilitation and
                              Treatment Services

                        c)    Chemical Dependence Assessment Self-Referral

                  2.    Mental Health Services

                        a)    Inpatient Services

                        b)    Outpatient Services

            C)    Other Covered Service

                  1.    Federally Qualified Health Center (FQHC) Services

II.   Optional Covered Services (at discretion of LDSS and/or Contractor) [See
      Schedule A of Appendix K for Coverage Status]

            A)    Family Planning and Reproductive Health Care

            B)    Dental Services

            C)    Transportation Services

                  1.    Non-Emergency Transportation

                  2.    Emergency Transportation

III.  Definitions of Non-Covered Services

            A)    Medical Non-Covered Services

                  1.    Personal Care Agency Services

                  2.    Residential Health Care Facilities (RHCF)

                  3.    Hospice Program

                  4.    Prescription and Non-Prescription (OTC) Drugs, Medical
                        Supplies, and Enteral Formula

            B)    Non-Covered Behavioral Health Services

                  1.    Chemical Dependence Services

                        a)    Outpatient Rehabilitation and Treatment Services

                              i)    Methadone Maintenance Treatment Program
                                    (MMTP)

                              ii)   Medically Supervised Ambulatory Chemical
                                    Dependence Outpatient Clinic Programs

                              iii)  Medically Supervised Chemical Dependence
                                    Outpatient Rehabilitation Programs

                              iv)   Outpatient Chemical Dependence for Youth
                                    Programs

                        b)    Chemical Dependence Services Ordered by the LDSS

                  2.    Mental Health Services

                        a)    Intensive Psychiatric Rehabilitation Treatment
                              Programs (IPRT)

                                   APPENDIX K
                                 October 1, 2004
                                       K-3

<PAGE>

                        b)    Day Treatment

                        c)    Continuing Day Treatment

                        d)    Day Treatment Programs Serving Children

                        e)    Home and Community Based Services Waiver for
                              Seriously Emotionally Disturbed Children

                        f)    Case Management

                        g)    Partial Hospitalization

                        h)    Services Provided through OMH Designated Clinics
                              for Children With a Diagnosis of Serious Emotional
                              Disturbance (SED)

                        i)    Assertive Community Treatment (ACT)

                        j)    Personalized Recovery Oriented Services (PROS)

                  3.    Rehabilitation Services Provided to Residents of OMH
                        Licensed Community Residences (CRs) and Family Based
                        Treatment Programs

                        a)    OMH Licensed CRs

                        b)    Family-Based Treatment

                  4.    Office of Mental Retardation and Developmental
                        Disabilities (OMRDD) Services

                        a)    Long Term Therapy Services Provided by Article
                              16-Clinic Treatment Facilities or Article 28
                              Facilities

                        b)    Day Treatment

                        c)    Medicaid Service Coordination (MSC)

                        d)    Home and Community Based Services Waivers (HCBS)

                        e)    Services Provided Through the Care at Home Program
                              (OMRDD)

            C)  Other Non-Covered Services

                  1.    The Early Intervention Program (EIP) - Children Birth to
                        Two (2) Years of Age

                  2.    Preschool Supportive Health Services - Children Three
                        (3) Through Four (4) Years of Age

                  3.    School Supportive Health Services - Children Five (5)
                        Through Twenty-One (21) Years of Age

                  4.    Comprehensive Medicaid Case Management (CMCM)

                  5.    Directly Observation Therapy for Tuberculosis Disease

                  6.    AIDS Adult Day Health Care

                  7.    HIV COBRA Case Management

                  8.    Fertility Services

                  9.    Adult Day Health Care

                  10.   Personal Emergency Response Systems (PERS)

                  11.   School-Based Health Centers

IV.   Schedule A of Appendix K, Prepaid Benefit Package, Coverage Status of
      Optional Covered Services

                                   APPENDIX K.
                                 October l, 2004
                                       K-4

<PAGE>

                                  APPENDIX K-l
                    MANAGED CARE PLAN PREPAID BENEFIT PACKAGE

<TABLE>
<CAPTION>
<S>                               <C>                                                <C>
COVERED SERVICES                  MANAGED CARE PLAN SCOPE OF BENEFIT                 COVERED BY MEDICAID FEE-FOR-SERVICE
----------------                  ----------------------------------                 -----------------------------------
Inpatient Hospital Services       Up to 365 medically necessary days per year
                                  (366 for leap year) in accordance with the
                                  stop-loss provisions of Section 3.10 of this
                                  Agreement. Includes inpatient detoxification
                                  services provided in Article 28 hospitals for
                                  all Enrollees. Inpatient dental services are
                                  covered. (See dental definition)

Inpatient Stay Pending            Continued care in a hospital pending placement
Alternate                         in an alternate lower medical level of care,
Level of Medical Care             consistent with the provisions of 18 NYCRR
                                  505.20 and 10 NYCRR, Part 85.

Professional Ambulatory           Provided through ambulatory care facilities
Services                          including hospital outpatient departments, D&T
                                  centers, and emergency rooms. Services include
                                  medical, surgical, preventive, primary,
                                  rehabilitative, specialty care, mental health,
                                  family planning, C/THP services and ambulatory
                                  dental surgery. Covered as needed based on
                                  medical necessity.

Preventive Health Services        Care or service to avert disease/illness
                                  and/or its consequences. Preventive care
                                  includes primary care, secondary care and
                                  tertiary care. Coverage includes general health
                                  education classes, smoking cessation classes,
                                  childbirth education classes, parenting
                                  classes and nutrition counseling (with
                                  targeted outreach to persons with diabetes and
                                  pregnant women). HIV counseling and testing is
                                  a covered service for all Enrollees.

Laboratory Services               Covered when medically necessary as ordered by     HIV phenotypic, HIV virtual phenotypic and HIV
                                  a qualified medical professional, and when         genotypic drug resistance tests with a
                                  listed in the Medicaid fee schedule. Coverage      Provider's order.
                                  excludes HIV phenotypic, HIV virtual
                                  phenotypic and HIV genotypic drug resistance
                                  tests.

Radiology Services                Covered when medically necessary as ordered by
                                  a qualified medical professional, and when
                                  ordered and provided by a qualified medical
                                  professional/practitioner.

EPSDT Services/Child Teen         EPSDT is a package of early and periodic           Services not included in the managed care
Health Program (C/THP)            screening, including inter-periodic                Benefit Package ordered by the child's
                                  screens and, diagnostic and treatment services     physician based on the results of a
                                  that are offered to all Medicaid eligible          screening.
                                  children under twenty-one (21) years of age
                                  known in New York State as the Child Teen
                                  Health Program (C/THP).
</TABLE>

                                   APPENDIX K.
                                 October l, 2004
                                       K-5

<PAGE>

<TABLE>
<CAPTION>
COVERED SERVICES            MANAGED CARE PLAN SCOPE OF BENEFIT                COVERED BY MEDICAID FEE-FOR-SERVICE
----------------            ----------------------------------                -----------------------------------
<S>                         <C>                                               <C>
Home Health Services        Home health care services include medically       Services rendered by a personal care agency which
                            necessary nursing, home health aide services,     are approved by the Local Social Services District
                            equipment and appliances, physical therapy,       when ordered by the Enrollee's Primary Care
                            speech/language pathology, occupational           Provider (PCP). The district will determine the
                            therapy, social work services or nutritional      applicant's need for personal care agency services
                            services provided by a home health care agency    and coordinate a plan of care with the personal care
                            pursuant to an established care plan. Personal    agency.
                            care tasks performed by a home health aide in
                            connection with a home health care agency
                            visit, and pursuant to an established care
                            plan, are covered.

Private Duty Nursing        Covered service when with the
Services                    medically necessary in accordance
                            ordering physician, registered physician
                            assistant or certified nurse practitioner's
                            written treatment plan.

Emergency Room Services     Covered for emergency conditions, medical or
                            behavioral, the onset of which is sudden,
                            manifesting itself by symptoms of sufficient
                            severity, including severe pain, that a
                            prudent layperson, possessing an average
                            knowledge of medicine and health, could
                            reasonably expect the absence of medical
                            attention to result in (a) placing the health
                            of the person afflicted with such condition in
                            serious jeopardy, or in the case of a
                            behavioral condition placing the health of
                            such person or others in serious jeopardy; (b)
                            serious impairment of such person's bodily
                            functions; (c) serious dysfunction of any
                            bodily organ or part of such person; or (d)
                            serious disfigurement of such person.
                            Emergency services include health care
                            procedures treatments or services, including
                            psychiatric stabilization and medical
                            detoxification from drugs or alcohol that
                            are provided for an emergency medical condition.
                            A medical assessment (triage) is covered for
                            non-emergent conditions.

Foot Care Services          Foot care when the Enrollee's (any age)
                            physical condition poses a hazard due to the
                            presence of localized illness, injury or
                            symptoms involving the foot, or when performed
                            as a necessary and integral part of otherwise
                            covered services such as the diagnosis and
                            treatment of diabetes, ulcers, and infections.

Eye Care and Low Vision     Eye care includes the services of an
Services                    ophthalmologist, optometrist and an ophthalmic
                            dispenser and coverage for contact lenses,
                            polycarbonate lenses, artificial eyes and
                            replacement of lost or destroyed glasses
                            (including repairs) when medically necessary.

                            Artificial eyes are covered as ordered by a
                            Contractor's Participating Provider.
</TABLE>

                                   APPENDIX K
                                 October 1, 2004
                                       K-6

<PAGE>

<TABLE>
<CAPTION>
COVERED SERVICES               MANAGED CARE PLAN SCOPE OF BENEFIT               COVERED BY MEDICAID FEE-FOR-SERVICE
----------------               ----------------------------------               -----------------------------------
<S>                            <C>                                              <C>
Durable Medical Equipment      DME are devices and equipment other than         Excluded services, such as disposable
(DME)                          medical/surgical supplies, enteral formula,      medical/surgical supplies and enteral formula with a
                               and prosthetic or orthotic appliances.           Provider's order.
                               Covered when medically necessary as ordered
                               by a Contractor's Participating Provider and
                               procured from a Participating Provider.
                               Coverage excludes disposable medical/surgical
                               supplies and enteral formula.

Hearing Aids Services          Provided when medically necessary to             Excluded services, such  as hearing aid batteries
                               alleviate disability caused by the loss or       with a Provider's order.
                               impairment of hearing. Hearing aid products
                               include hearing aids, earmolds, special
                               fittings, and replacement parts. Coverage
                               excludes hearing aid batteries.

Family Planning and            Family planning means the offering,               Enrollees may always obtain family planning and
Reproductive Health Services   arranging, and furnishing of those health         HIV testing and counseling services, when part of a
                               services which enable individuals, including      family planning visit, outside of the plan's
SEE SCHEDULE A OF APPENDIX K   minors, who may be sexually active, to            network from any Provider that accepts Medicaid.
FOR COVERAGE STATUS            prevent or reduce the incidence of unintended
                               pregnancies and includes the screening,
                               diagnosis and treatment, as medically
                               necessary, for sexually transmissible
                               diseases, sterilization services and
                               screening for pregnancy. Reproductive health
                               services also includes all medically
                               necessary abortions.

</TABLE>

                                   APPENDIX K
                                 October 1, 2004
                                       K-7

<PAGE>

<TABLE>
<CAPTION>
COVERED SERVICES                  MANAGED CARE PLAN SCOPE OF BENEFIT             COVERED BY MEDICAID FEE-FOR-SERVICE
----------------                  ----------------------------------             -----------------------------------
<S>                               <C>                                            <C>
Transportation Services           NON-EMERGENCY TRANSPORTATION:
                                  Transportation expenses are covered when       For Contractors that do not cover transportation
                                  transportation is essential in order for an    services, these services are paid for fee
Non-Emergency Transportation      Enrollee to obtain necessary medical care and  -for-service. Non-emergent transportation requests
                                  services which are covered under this Benefit  should be referred to the LDSS.
SEE SCHEDULE A OF APPENDIX K      Package (or by fee-for-service Medicaid for
FOR COVERAGE STATUS               carved-out services). Non-emergent
                                  transportation guidelines may be developed
                                  in conjunction with the LDSS, based on the
                                  LDSS' approved transportation plan.
                                                                                 For Contractors that cover non-emergency
                                  Transportation services means transportation   transportation in the Benefit Package,
                                  by ambulance, ambulette or invalid coach,      transportation costs to MMTP services may be
                                  taxicab, livery, public transportation, or     reimbursed by Medicaid fee-for-service in
                                  other means appropriate to the Enrollee's      accordance with the LDSS transportation policies in
                                  medical condition; and a transportation        local districts where there is a systematic method
                                  attendant to accompany the Enrollee, if        to discretely identify and reimburse such
                                  necessary. Such services may include the       transportation costs.
                                  transportation attendant's transportation,
                                  meals, lodging and salary; however, no salary
                                  will be paid to a transportation attendant
                                  who is a member of the Enrollee's family.

                                  For Enrollees with disabilities, the method
                                  of transportation must reasonably accommodate
                                  their needs, taking into account the severity
                                  and nature of the disability.

Emergency Transportation          EMERGENCY TRANSPORTATION
                                  Emergency transportation can only be provided
                                  by an ambulance service.

SEE SCHEDULE A OF APPENDIX K      Emergency transportation is covered for
FOR COVERAGE STATUS               Enrollees suffering from severe, life-
                                  threatening or potentially disabling
                                  conditions which require the provision of
                                  emergency medical services while the Enrollee
                                  is being transported.

Dental Services                   Optional Benefit Package dental services       Routine exams, orthodontic services and appliances,
                                  include:                                       dental office surgery, fillings, prophylaxis,
                                  - Medically necessary preventive,              provided to Enrollees of plans not electing
SEE SCHEDULE A OF APPENDIX K        prophylactic and other routine dental care,  to cover dental services.
FOR COVERAGE STATUS                 services and supplies and dental prosthetics
                                    required to alleviate a serious health
                                    condition, including one which affects
                                    employability.

                                  As described in Sections 10.16 and 10.28 of    Orthodontic services are always covered by
                                  this Agreement, Enrollees may self-refer to    fee-for-service.
                                  Article 28 clinics operated by academic
                                  dental centers to obtain covered dental
                                  services.

                                  All Contractors must cover the following,
                                  even if dental services is not a plan covered
                                  benefit:

                                  - Ambulatory or inpatient surgical services
                                    (subject to prior authorization by the
                                    Contractor).

                                  Coverage excludes the professional services
                                  of the dentist if dental services are not
                                  covered by the Contractor's Benefit Package.

</TABLE>

                                   APPENDIX K
                                October 1, 2004
                                       K-8

<PAGE>

<TABLE>
<CAPTION>
COVERED SERVICES                  MANAGED CARE PLAN SCOPE OF BENEFIT             COVERED BY MEDICAID FEE-FOR-SERVICE
----------------                  ----------------------------------             -----------------------------------
<S>                               <C>                                            <C>
Court-Ordered Services            Coverage includes such services ordered by a
                                  court of competent jurisdiction if the
                                  services are in the Contractor's Benefit
                                  Package.

Prosthetic/Orthotic               Covered when medically necessary as ordered
Services/Orthopedic Footwear      by the Contractor's Participating Provider.

Mental Health Services            Covered when medically necessary, in           All services in excess of twenty (20) outpatient
                                  accordance with the stop-loss provisions as    visits and thirty (30) inpatient days in accordance
                                  described in Section 3.12 of this Agreement.   with the stop-loss provisions in Section 3.12 of
                                  Enrollees must be allowed to self-refer for    this Agreement. Contractor continues to reimburse
                                  one (1) mental health assessment from a        mental health service providers and
                                  Contractor's Participating Provider in a       coordinate care. The Contractor is reimbursed for
                                  twelve (12) month period. In the case of       payment through the stop-loss provisions.
                                  children, such self-referrals may originate
                                  at the request of a school guidance counselor
                                  or similar source.

Detoxification Services           Covered when medically necessary on either an  Medically Supervised Inpatient and Outpatient
                                  inpatient or outpatient basis. Such services   Withdrawal Services, when ordered by the LDSS
                                  are referred to as "Medically Managed          under Welfare Reform (as indicated by "code 83").
                                  Detoxification Services" when provided in
                                  facilities licensed under Title 14 NYCRR Part
                                  816.6 or Article 28 of the Public Health
                                  Law; and "Medically Supervised Inpatient and
                                  Outpatient Withdrawal Services" when provided
                                  in facilities licensed under Title 14 NYCRR
                                  Part 816.7.

Chemical Dependence Inpatient     Covered when medically necessary in            Chemical Dependence Inpatient Rehabilitation and
Rehabilitation and Treatment      accordance with the stop-loss provisions       Treatment Services when ordered by the LDSS
Services                          described in Section 3.12 of this Agreement.   under Welfare Reform (as indicated by "code 83")

Chemical Dependence               Enrollees must be allowed to self refer for
Assessment Self-Referral          one (1) assessment from a Contractor's
                                  participating provider in a twelve (12) month
                                  period.

Experimental and/or               Covered on a case by case basis in accordance
Investigational Treatment         with the provisions of Section 4910 of the
                                  New York State P.H.L.

Renal Dialysis                    Renal dialysis is covered when medically
                                  necessary as ordered by a qualified medical
                                  professional. Renal dialysis may be provided
                                  in an inpatient hospital setting, in an
                                  ambulatory care facility, or in the home on
                                  recommendation from a renal dialysis center.
</TABLE>

                                   APPENDIX K
                                October 1, 2004
                                       K-9

<PAGE>

                                       K-2
              MANAGED CARE PLAN PREPAID HEALTH ONLY BENEFIT PACKAGE
                        FOR SSI AND SSI RELATED RECIPIENT

<TABLE>
<CAPTION>
COVERED SERVICES                    MANAGED CARE PLAN SCOPE OF BENEFIT               COVERED BY MEDICAID FEE-FOR-SERVICE
----------------                    ----------------------------------               -----------------------------------
<S>                                <C>                                               <C>
Inpatient Hospital Services        Up to 365 medically necessary days per year
                                   (366 for leap year) in accordance with the
                                   stop-loss provisions of Section 3.10 of this
                                   Agreement. Includes inpatient detoxification
                                   services provided in Article 28 hospitals for
                                   all Enrollees. Inpatient dental services are
                                   covered.

Inpatient Stay Pending Alternate   Continued care in a hospital pending
Level of Medical Care              placement in an alternate lower medical level
                                   of care, consistent with the provisions of 18
                                   NYCRR 505.20 and 10 NYCRR, Part 85.

Professional Ambulatory Services   Provided through ambulatory care facilities       Mental Health and Chemical Dependence services.
                                   including hospital outpatient departments,
                                   D&T centers, and emergency rooms. Services
                                   include medical, surgical, preventive,
                                   primary, rehabilitative, specialty care,
                                   family planning, C/THP services and
                                   ambulatory dental surgery. Covered as needed
                                   based on medical necessity.

EPSDT Services/ Child Teen         EPSDT is a package of early and periodic          Services not included in the managed care
Health Program (C/THP)             screening including inter-periodic screens        Benefit Package ordered by the child's
                                   and diagnostic and treatment services that        physician based on the results of a
                                   are offered to all Medicaid children under        screening.
                                   twenty-one (21) years of age, known in New
                                   York State as the Child Teen Health Plan
                                   (C/THP).

Preventive Health Services         Care and services to avert disease/illness
                                   and/or its consequences. Preventive care
                                   includes primary care, secondary care and
                                   tertiary care. Coverage includes general
                                   health education classes, smoking cessation
                                   classes, childbirth education classes,
                                   parenting classes and nutrition counseling
                                   (with targeted outreach to persons with
                                   diabetes and pregnant women). HIV counseling
                                   and testing is a covered service for all
                                   Enrollees

Home Health Services               Home health care services include medically       Services rendered by a personal care agency
                                   necessary nursing, home health aide services,     which are approved by the Local Social
                                   equipment and appliances, physical therapy,       Services District when ordered by the
                                   speech/language pathology, occupational           Enrollee's Primary Care Provider (PCP). The
                                   therapy, social work services or nutritional      district will determine the applicant's need
                                   services provided by a home health care           for personal care agency services and
                                   agency pursuant to an established care plan.      coordinate with the personal care agency a
                                   Personal care tasks performed by a home           plan of care.
                                   health aide in connection with a home health
                                   care agency visit, and pursuant to an
                                   established care plan, are covered.
</TABLE>

                                   APPENDIX K.
                                 October l, 2004
                                      K-10

<PAGE>

<TABLE>
<CAPTION>
COVERED SERVICES                   MANAGED CARE PLAN SCOPE OF BENEFIT                COVERED BY MEDICAID FEE-FOR-SERVICE
----------------                   ----------------------------------                -----------------------------------
<S>                                <C>                                               <C>
Private Duty Nursing Services      Covered service when medically necessary in
                                   accordance with the ordering physician,
                                   registered physician assistant or certified
                                   nurse practitioner's written treatment plan.

Emergency Room Services            Covered for emergency conditions, medical or
                                   behavioral, the onset of which is sudden,
                                   manifesting itself by symptoms of sufficient
                                   severity, including severe pain, that a
                                   prudent layperson, possessing an average
                                   knowledge of medicine and health, could
                                   reasonably expect the absence of medical
                                   attention to result in (a) placing the health
                                   of the person afflicted with such condition
                                   in serious jeopardy, or in the case of a
                                   behavioral condition placing the health of
                                   such person or others in serious jeopardy;
                                   (b) serious impairment of such person's
                                   bodily functions; (c) serious dysfunction of
                                   any bodily organ or part of such person; or
                                   (d) serious disfigurement of such person.
                                   Emergency services include health care
                                   procedures, treatments or services, including
                                   psychiatric stabilization and medical
                                   detoxification from drugs or alcohol that are
                                   provided for an emergency medical condition.
                                   A medical assessment (triage) is covered for
                                   non-emergent conditions.

Foot Care Services                 Foot care when the Enrollee's (of any age)
                                   physical condition poses a hazard due to the
                                   presence of localized illness, injury or
                                   symptoms involving the foot, or when
                                   performed as a necessary and integral part of
                                   otherwise covered services such as the
                                   diagnosis and treatment of diabetes, ulcers,
                                   and infections.

Eye Care and Low Vision            Eye care includes the service of an
Services                           opthalmologist, optometrist and an ophthalmic
                                   dispenser and coverage for contact lenses,
                                   polycarbonate lenses, artificial eyes and
                                   replacement of lost or destroyed glasses
                                   (including repairs) when medically necessary.
                                   Artificial eyes are covered as ordered by the
                                   Contractor's Participating Provider.
</TABLE>

                                   APPENDIX K.
                                 October l, 2004
                                      K-11

<PAGE>

<TABLE>
<CAPTION>
COVERED SERVICES                   MANAGED CARE PLAN SCOPE OF BENEFIT                COVERED BY MEDICAID FEE-FOR-SERVICE
----------------                   ----------------------------------                -----------------------------------
<S>                                <C>                                               <C>
Dental Services                    Optional Benefit Package dental services          Routine exams, orthodontic services and
                                   include:                                          appliances, dental office surgery, fillings,
                                                                                     prophylaxis, provided to Enrollees of MCOs
                                   - Medically necessary preventive,                 not electing to cover de services.
SEE SCHEDULE A OF APPENDIX K         prophylactic and other routine dental care,
FOR COVERAGE STATUS                  services and supplies and dental prosthetics
                                     required to alleviate s serious health
                                     condition, including one which affects
                                     employability.

                                   As described in Sections 10.16 and 10.28 of
                                   this Agreement, Enrollees may self-refer to
                                   Article 28 clinics operated by academic
                                   dental centers to obtain covered dental
                                   services.

                                   All Contractors must cover the following,
                                   even if dental services is not a plan covered
                                   benefit:

                                   - Ambulatory or inpatient surgical services
                                     (subject to prior authorization by the
                                     Contractor).

                                   Coverage excludes the professional services
                                   of the dentist if dental services are not
                                   covered by the Contractor's Benefit Package.

Family Planning and                Family planning means the offering,               Enrollees may always obtain family planning
Reproductive Health Services       arranging, and furnishing of those health         and HIV testing and counseling services, when
                                   services which enable individuals, including      part of a family planning visit, outside of
SEE SCHEDULE A OF APPENDIX K       minors, who may be sexually active, to            the Contractor's network from any provider
FOR COVERAGE STATUS                prevent or reduce the incidence of unintended     that accepts Medicaid.
                                   pregnancies and includes the screening,
                                   diagnosis and treatment as medically
                                   necessary for sexuality transmissible
                                   diseases, sterilization services and
                                   screening for pregnancy. Reproductive health
                                   services also includes all medically
                                   necessary abortions.
</TABLE>

                                   APPENDIX K.
                                 October l, 2004
                                       K-12

<PAGE>

<TABLE>
<CAPTION>
COVERED SERVICES                   MANAGED CARE PLAN SCOPE OF BENEFIT                COVERED BY MEDICAID FEE-FOR-SERVICE
----------------                   ----------------------------------                -----------------------------------
<S>                                <C>                                               <C>
Transportation Services            NON-EMERGENCY TRANSPORTATION:
                                   Transportation expenses are covered when          For Contractors that do not cover
Non-Emergency Transportation:      transportation is essential in order for an       transportation services, these services are
                                   Enrollee to obtain necessary medical care and     paid for fee-for-service. Non-emergent
SEE SCHEDULE A OF APPENDIX K       services which are covered under this Benefit     transportation requests should be referred to
FOR COVERAGE STATUS                Package (or by fee-for-service Medicaid for       the LDSS.
                                   carved-out services). Non-emergent
                                   transportation guidelines may be developed in
                                   conjunction with the LDSS, based on the LDSS,
                                   approved transportation plan.

                                                                                     For Contractors that cover non-emergency
                                   Transportation services means transportation      transportation in the Benefit Package,
                                   by ambulance, ambulette or invalid coach,         transportation costs to MMTP services may be
                                   taxicab, livery, public transportation, or        reimbursed by Medicaid fee-for-service in
                                   other means appropriate to the Enrollee's         accordance with the LDSS transportation
                                   medical condition; and a transportation           polices in local districts where there is a
                                   attendant to accompany the Enrollee, if           systematic method to discretely identify and
                                   necessary. Such services may include the          reimburse such transportation costs.
                                   transportation attendant's transportation,
                                   meals, lodging and salary; however, no salary
                                   will be paid to a transportation attendant
                                   who is a member of the Enrollee's family.

                                   For Enrollees with disabilities, the method
                                   of transportation must reasonably accommodate
                                   their needs, taking into account the severity
                                   and nature of the disability.

Emergency Transportation:          EMERGENCY TRANSPORTATION
                                   Emergency transportation can only be provided
                                   by an ambulance service.
SEE SCHEDULE A OF APPENDIX K       Emergency transportation is covered for
FOR COVERAGE STATUS                Enrollees suffering from severe, life-
                                   threatening or potentially disabling
                                   conditions which require the provision of
                                   emergency medical services while the Enrollee
                                   is being transported.

Laboratory Services                Covered when medically necessary as ordered       HIV phenotypic, HIV virtual phenotypic and
                                   by a medical professional, and when listed in     HIV genotypic drug resistance tests with a
                                   the Medicaid fee schedule. Coverage excludes      Provider's order.
                                   HIV phenotypic, HIV virtual phenotypic and
                                   HIV genotypic drug resistance tests.

Radiology Services                 Covered when medically necessary as ordered
                                   by a medical professional, and when ordered
                                   and provided by a qualified medical
                                   professional/practitioner.

Durable Medical Equipment          DME are devices and equipment other than          Excluded services, such as disposable
(DME)                              medical/surgical supplies enteral formula,        medical/surgical supplies and enteral formula
                                   and prosthetic or orthotic appliances.            with a Provider's order.
                                   Covered when medically necessary as ordered
                                   by the Contractor's Participating Provider
                                   and procured from a Participating Provider.
                                   Coverage excludes disposable medical/surgical
                                   supplies and enteral formula.
</TABLE>

                                   APPENDIX K
                                 October l, 2004
                                      K-13
<PAGE>

<TABLE>
<CAPTION>
COVERED SERVICES             MANAGED CARE PLAN SCOPE OF BENEFIT    COVERED BY MEDICAID FEE-FOR-SERVICE
-------------------------    -----------------------------------   -----------------------------------
<S>                          <C>                                   <C>
Hearing Aid Services         Provided when medically necessary     Excluded services, such as hearing
                             to alleviate disability caused        aid batteries with a Provider's
                             by the loss or impairment of          order.
                             hearing. Hearing aid products
                             include hearing aids, earmolds,
                             special fittings, and replacement
                             parts. Coverage excludes hearing
                             aid batteries.

Court-Ordered Services       Coverage includes such services
                             ordered by a court of competent
                             jurisdiction if the services are in
                             the Contractor's Benefit Package.

Prosthetic/Orthotic          Covered when medically necessary as
Services/ Orthotic           ordered by a managed care plan
Footwear                     qualified medical professional.

Renal Dialysis               Renal dialysis is covered when
                             medically necessary as ordered by a
                             qualified medical professional.
                             Renal dialysis may be provided in
                             an inpatient hospital setting,in an
                             ambulatory care facility, or in the
                             home on recommendation from a renal
                             dialysis center.

Experimental and/or          Covered on a case by case basis in
Investigational              accordance with the provisions of
Treatment                    Section 4910 of the New York State
                             P.H.L.

Detoxification Services      Covered when medically necessary on
                             either an inpatient or outpatient
                             basis. Such services are referred to
                             as "Medically Managed Detoxification
                             Services" when provided in
                             facilities licensed under Title 14
                             NYCRR Part 816.6 or Article 28 of
                             the Public Health Law; and
                             "Medically Supervised Inpatient and
                             Outpatient Withdrawal Services" when
                             provided in facilities licensed
                             under Title 14 NYCRR Part 816.7.
</TABLE>

                                   APPENDIX K
                                 October 1, 2004
                                      K-14
<PAGE>

I.    PREPAID BENEFIT PACKAGE DEFINITIONS OF COVERED SERVICES

A.    MEDICAL SERVICES

1.    INPATIENT HOSPITAL SERVICES

Inpatient hospital services, as medically necessary, shall include, except as
otherwise specified, the care, treatment, maintenance and nursing services as
may be required, on an inpatient hospital basis, up to 365 days per year (366
days in leap year). Among other services, inpatient hospital services
encompass a full range of necessary diagnostic and therapeutic care including
medical, surgical, nursing, radiological, and rehabilitative services. Services
are provided under the direction of a physician, certified nurse practitioner,
or dentist.

1a.   INPATIENT STAY PENDING ALTERNATE LEVEL OF MEDICAL CARE

Inpatient stay pending alternate level of medical care, or continued care in a
hospital pending placement in an alternate lower medical level of care,
consistent with the provisions of 18 NYCRR 505.20 and 10 NYCRR, Part 85.

2.    PROFESSIONAL AMBULATORY SERVICES

Outpatient hospital services are provided through ambulatory care facilities.
Ambulatory care facilities include hospital outpatient departments (OPD),
diagnostic and treatment centers (free standing clinics) and emergency rooms.
These facilities may provide those necessary medical, surgical, and
rehabilitative services and items authorized by their operating certificates.
Outpatient services (clinic) also include preventive, primary medical,
specialty, mental health, C/THP and family planning services provided by
ambulatory care facilities.

Hospital OPDs and D&T centers may perform ordered ambulatory services. The
purpose of ordered ambulatory services is to make available to the Participating
Provider those services needed to complement the provision of ambulatory care in
his/her office. Examples are: diagnostic testing and radiology.

3.    PHYSICIAN SERVICES

"Physicians' services," whether furnished in the office, the Enrollee's home, a
hospital, a skilled nursing facility, or elsewhere, means services furnished by
a physician:

      (1)   within the scope of practice of medicine or osteopathy as defined in
            law by the New York State Education Department; and

      (2)   by or under the personal supervision of an individual licensed and
            currently registered by the New York State Education Department to
            practice medicine or osteopathy.

                                   APPENDIX K
                                 October 1, 2004
                                      K-15

<PAGE>


Physician services include the full range of preventive care services, primary
care medical services and physician specialty services that fall within a
physician's scope of practice under New York State law.

The following are also included without limitations:

      -     pharmaceuticals and medical supplies routinely furnished or
            administered as part of a clinic or office visit;

      -     physical examinations, including those which are necessary for
            employment, school, and camp;

      -     physical and/or mental health, or chemical dependence examinations
            of children and their parents as requested by the LDSS to fulfill
            its statutory responsibilities for the protection of children and
            adults and for children in foster care;

      -     health and mental health assessments for the purpose of making
            recommendations regarding a Enrollee's disability status for Federal
            SSI applications;

      -     health assessments for the Infant/Child Assessment Program (ICHAP);

      -     annual preventive health visits for adolescents;

      -     new admission exams for school children if required by the LDSS;

      -     health screening, assessment and treatment of refugees, including
            completing SDOH/LDSS required forms;

      -     Child/Teen Health Program (C/THP) services which are comprehensive
            primary health care services provided to children under twenty-one
            (21) years of age (see Section 10 of this Agreement).

4.    HOME HEALTH SERVICES
      18 NYCRR 505.23(a)(3)

Home health care services are provided to Enrollees in their homes by a home
health agency certified under Article 36 of the New York State P.H.L. (Certified
Home Health Agency-CHHA). Home health services mean the following services when
prescribed by a Provider and provided to a Medicaid managed care Enrollee in his
or her home:

            -     nursing services provided on a part-time or intermittent basis
                  by a CHHA or, if there is no CHHA that services the
                  county/district, by a registered professional nurse or a
                  licensed practical nurse acting under the direction of the
                  Enrollee's PCP;

            -     physical therapy, occupational therapy, or speech pathology
                  and audiology services; and

            -     home health services provided by a person who meets the
                  training requirements of the SDOH, is assigned by a registered
                  professional nurse to provide home health aid services in
                  accordance with the Enrollee's plan of care, and is supervised
                  by a registered professional nurse from a CHHA or if the
                  Contractor has no CHHA available, a registered nurse, or
                  therapist.

                                   APPENDIX K
                                 October 1, 2004
                                      K-16

<PAGE>

Personal care tasks performed by a home health aide incidental to a certified
home health care agency visit, and pursuant to an established care plan, are
covered.

Services include care rendered directly to the Enrollee and instructions to
his/her family or caretaker such as teacher or day care provider in the
procedures necessary for the Enrollee's treatment or maintenance.

The Contractor must provide up to two (2) post partum home visits for high risk
infants and/or high risk mothers, as well as to women with less than a
forty-eight (48) hour hospital stay after a vaginal delivery or less than a
ninety-six (96) hour stay after a cesarean delivery. Visits must be made by a
qualified health professional (minimum qualifications being an RN with
maternal/child health background), the first visit to occur within forty-eight
(48) hours of discharge.

5.    PRIVATE DUTY NURSING SERVICES

Private duty nursing services shall be provided by a person possessing a license
and current registration from the NYS Education Department to practice as a
registered professional nurse or licensed practical nurse. Private duty nursing
services can be provided through an approved certified home health agency, a
licensed home care agency, or a private Practitioner. The location of nursing
services may be in the Enrollee's home or in the hospital.

Private duty nursing services are covered only when determined by the attending
physician to be medically necessary. Nursing services may be intermittent,
part-time or continuous and provided in accordance with the ordering physicians,
or certified nurse practitioner's written treatment plan.

6.    EMERGENCY ROOM SERVICES

Emergency conditions, medical or behavioral, the onset of which is sudden,
manifesting itself by symptoms of sufficient severity, including severe pain,
that a prudent layperson, possessing an average knowledge of medicine and
health, could reasonably expect the absence of medical attention to result in
(a) placing the health of the person afflicted with such condition in serious
jeopardy, or in the case of a behavioral condition placing the health of such
person or others in serious jeopardy; (b) serious impairment of such person's
bodily functions; (c) serious dysfunction of any bodily organ or part of such
person; or (d) serious disfigurement of such person are covered. Emergency
services include health care procedures, treatments or services, needed to
evaluate or stabilize an Emergency Medical Condition including psychiatric
stabilization and medical detoxification from drugs or alcohol. A medical
assessment (triage) is covered for non-emergent conditions.

7.    SERVICES OF OTHER PRACTITIONERS

a)    Nurse Practitioner Services

Nurse practitioner services include preventive services, the diagnosis of
illness and physical conditions, and the performance of therapeutic and
corrective measures, within the scope of the certified nurse practitioner's
licensure and collaborative practice agreement with a licensed physician in
accordance with the requirements of the NYS Education Department.

                                   APPENDIX K
                                 October 1, 2004
                                      K-17

<PAGE>

The following services are also included in the certified nurse practitioner's
scope of services, without limitation:

-     Child/Teen Health Program (C/THP) services which are comprehensive primary
      health care services provided to children under twenty-one (21) (see page
      20 of this Appendix and Section 10.5 of this Agreement);

-     Physical examinations including those which are necessary for employment,
      school and camp.

b.    Rehabilitation Services
      18 NYCRR 505.11

Rehabilitation services are provided for the maximum reduction of physical or
mental disability and restoration of the Enrollee to his or her best functional
level. Rehabilitation services include care and services rendered by physical
therapists, speech-language pathologists and occupational therapists.
Rehabilitation services may be provided in an Article 28 inpatient or outpatient
facility, an Enrollee's home, in an approved home health agency, in the office
of a qualified private practicing therapist or speech pathologist, or for a
child in a school, pre-school or community setting, or in a Residential Health
Care Facility (RHCF) as long as the Enrollee's stay is classified as a
rehabilitative stay. Rehabilitation services are covered as medically necessary,
when ordered by the Contractor's Participating Provider.

c.    Midwifery Services
      SSA Section 1905 (a)(17), Education Law Section 6951(i).

Midwifery services include the management of normal pregnancy, childbirth and
postpartum care as well as primary preventive reproductive health care to
essentially healthy women as specified in a written practice agreement and shall
include newborn evaluation, resuscitation and referral for infants. The care may
be provided on an inpatient or outpatient basis including in a birthing center
or in the Enrollee's home as appropriate. The midwife must be licensed by the
NYS Education Department.

d.    Clinical Psychological Services
      18 NYCRR 505.18(a)

Clinical psychological services include psychological evaluation, testing and
therapeutic treatment for personality or behavior disorders.

e.    Foot Care Services

Covered services must include routine foot care when any Enrollee's (regardless
of age) physical condition poses a hazard due to the presence of localized
illness, injury or symptoms involving the foot, or when performed as a necessary
and integral part of otherwise covered services such as the diagnosis and
treatment of diabetes, ulcers, and infections.

                                   APPENDIX K
                                 October 1, 2004
                                      K-18


<PAGE>


Services provided by a podiatrist for persons under twenty-one (21) must be
covered upon referral of a physician, registered physician's assistant,
certified nurse practitioner or certified midwife.

Routine hygienic care of the feet, the treatment of corns and calluses, the
trimming of nails, and other hygienic care such as cleaning or soaking feet, is
not covered in the absence of a pathological condition.

8.    EYE CARE AND LOW VISION SERVICES
      18 NYCRR  Section 505.6(b)(l-3)

Eye care includes the services of ophthalmologists, optometrists and ophthalmic
dispensers, and includes eyeglasses, medically necessary contact lenses and
polycarbonate lenses, artificial eyes (stock or custom-made), low vision aids
and low vision services. Eyecare coverage includes the replacement of lost or
destroyed eyeglasses. The replacement of the complete pair of eyeglasses should
duplicate the original prescription and frames. Coverage also includes the
repair or replacement of parts in situations where the damage is the result of
causes other than defective workmanship. Replacement parts should duplicate the
original prescription and frames. Repairs to, and replacements of, frames and/or
lenses must be rendered as needed.

MCOs that allow upgrades of eyeglass frames or additional features, cannot apply
the eyeglass benefit towards the cost and bill the difference to the Enrollee.
However, if the Contractor does not include upgraded eyeglasses or additional
features such as scratchcoating, progressive lenses, or photogray lenses, the
Enrollee may choose to purchase the upgraded frame or feature by paying the
entire cost as a private customer.

Examinations for diagnosis and treatment for visual defects and/or eye disease
is provided only as necessary and as required by the Enrollee's particular
condition. Examinations which include refraction are limited to every two (2)
years unless otherwise justified as medically necessary.

Eyeglasses do not require changing more frequently than every two (2) years
unless medically indicated, such as a change in correction greater than 1/2
diopter, or unless the glasses are lost, damaged, or destroyed.

An ophthalmic dispenser fills the prescription of an optometrist or
opthalmologist and supplies eyeglasses or other vision aids upon the order of a
qualified practitioner.

Enrollees may self-refer to any Participating Provider of vision services
(optometrist or opthalmologist) for refractive vision services.

9.    LABORATORY SERVICES
      18 NYCRR Section 505.7(a)

Laboratory services include medically necessary tests and procedures ordered by
a qualified medical professional and listed in the Medicaid fee schedule for
laboratory services, with the exception of HIV phenotypic, HIV virtual
phenotypic and HIV genotypic drug resistance tests, which are not included in
the Benefit Package and are covered by Medicaid fee-for-service.

                                   APPENDIX K
                                 October 1, 2004
                                      K-19


<PAGE>


All laboratory testing sites providing service under this Contract must have a
permit issued by the New York State Department of Health and a Clinical
Laboratory Improvement Act (CLIA) certificate of waiver, a physician performed
microscopy procedures (PPMP) certificate, or a certificate of registration along
with a CLIA identification number. Those laboratories with certificates of
waiver or a PPMP certificate may perform only those specific tests permitted
under the terms of their waiver. Laboratories with certificates of registration
may perform a full range of laboratory tests for which they have been certified.
Physicians providing laboratory testing may perform only those specific limited
laboratory procedures identified in the Physician's MMIS Provider Manual.

10.   RADIOLOGY SERVICES
      18 NYCRR Section 505.17(c)(7)(d)

Radiology services include medically necessary services provided by qualified
practitioners in the provision of diagnostic radiology, diagnostic ultrasound,
nuclear medicine, radiation oncology, and magnetic resonance imaging (MRI).
These services may only be performed upon the order of a qualified practitioner.

11.   EARLY PERIODIC SCREENING DIAGNOSIS AND TREATMENT (EPSDT) SERVICES THROUGH
      THE CHILD TEEN HEALTH PROGRAM (C/THP) AND ADOLESCENT PREVENTIVE SERVICES
      18 NYCRR Section 508.8

Child/Teen Health Program (C/THP) is a package of early and periodic screening,
including inter-periodic screens and, diagnostic and treatment services that New
York State offers all Medicaid eligible children under twenty-one (21) years of
age. Care and services shall be provided in accordance with the periodicity
schedule and guidelines developed by the New York State Department of Health.
The care includes necessary health care, diagnostic services, treatment and
other measures (described in Section 1905(a) of the Social Security Act) to
correct or ameliorate defects, and physical and mental illnesses and conditions
discovered by the screening services (regardless of whether the service is
otherwise included in the New York State Medicaid Plan). The package of services
includes administrative services designed to assist families obtain services for
children that include outreach, education, appointment scheduling,
administrative case management and transportation assistance.

12.   DURABLE MEDICAL EQUIPMENT (DME)
      18 NYCRR Section 505.5(a)(l) and Section 4.4 of the MMIS DME, Medical and
      Surgical Supplies and Prosthetic and Orthotic Appliances Provider Manual

Durable Medical Equipment (DME) are devices and equipment, other than
medical/surgical supplies, enteral formula, and prosthetic or orthotic
appliances, and have the following characteristics:

      (i)   can withstand repeated use for a protracted period of time;

      (ii)  are primarily and customarily used for medical purposes;

      (iii) are generally not useful to a person in the absence of illness or
            injury; and

      (iv)  are usually not fitted, designed or fashioned for a particular
            individual's use. Where equipment is intended for use by only one
            (1) person, it may be either custom made or customized.

                                   APPENDIX K
                                 October 1, 2004
                                      K-20


<PAGE>


DME must be ordered by a qualified practitioner and procured from a
Participating Provider.

13.   AUDIOLOGY, HEARING AID SERVICES AND PRODUCTS
      18 NYCRR Section 505.31 (a)(l)(2) and Section 4.7 of the MMIS Hearing Aid
      Provider Manual

a)    Hearing aid services and products are provided in compliance with Article
      37-A of the General Business Law when medically necessary to alleviate
      disability caused by the loss or impairment of hearing. Hearing aid
      services include: selecting, fitting and dispensing of hearing aids,
      hearing aid checks following dispensing of hearing aids, conformity
      evaluation, and hearing aid repairs.

b)    Audiology services include audiometric examinations and testing, hearing
      aid evaluations and hearing aid prescriptions or recommendations, as
      medically indicated.

c)    Hearing aid products include hearing aids earmolds, special fittings, and
      replacement parts (hearing aid batteries are excluded from the Benefit
      Package, but are covered by Medicaid fee-for-service as part of the
      prescription benefit ).

14.   PREVENTIVE CARE

Preventive care means care and services to avert disease/illness and/or its
consequences. There are three (3) levels of preventive care: 1) primary, such as
immunizations, aimed at preventing disease; 2) secondary, such as disease
screening programs aimed at early detection of disease; and 3) tertiary, such as
physical therapy, aimed at restoring function after the disease has occurred.
Commonly, the term "preventive care" is used to designate prevention and early
detection programs rather than restorative programs.

The following preventive services are also included in the managed care Benefit
Package. These preventive services are essential for promoting wellness and
preventing illness. MCOs must offer the following:

-     General health education classes.

-     Pneumonia and influenza immunizations for at risk populations.

-     Smoking cessation classes, with targeted outreach for adolescents and
      pregnant women.

-     Childbirth education classes.

-     Parenting classes covering topics such as bathing, feeding, injury
      prevention, sleeping, illness prevention, steps to follow in a emergency,
      growth and development, discipline, signs of illness, etc.

-     Nutrition counseling, with targeted outreach for diabetics and pregnant
      women.

-     Extended care coordination, as needed, for pregnant women.

-     HIV counseling and testing.

                                   APPENDIX K
                                 October 1, 2004
                                      K-21

<PAGE>

15.   PROSTHETIC/ORTHOTIC ORTHOPEDIC FOOTWEAR

      Section 4.5, 4.6 and 4.7 of the MMIS DME, Medical and Surgical Supplies
      and Prosthetic and Orthotic Appliances Provider Manual

a. PROSTHETICS are those appliances or devices ordered for an Enrollee by a
Participating Provider which replace or perform the function of any missing part
of the body. Artificial eyes are covered as part of the eye care benefit.

b. ORTHOTICS are those appliances or devices, ordered for an Enrollee by a
qualified practitioner which are used for the purpose of supporting a weak or
deformed body part or to restrict or eliminate motion in a diseased or injured
part of the body.

c. ORTHOPEDIC FOOTWEAR means shoes, shoe modifications, or shoe additions which
are used to correct, accommodate or prevent a physical deformity or range of
motion malfunction in a diseased or injured part of the ankle or foot; to
support a weak or deformed structure of the ankle or foot, or to form an
integral part of a brace.

16.   RENAL DIALYSIS

Renal dialysis is covered when medically necessary as ordered by a qualified
medical professional. Renal dialysis may be provided in an inpatient hospital
setting, in an ambulatory care facility, or in the home on recommendation from a
renal dialysis center.

17.   EXPERIMENTAL OR INVESTIGATIONAL TREATMENT

Experimental and investigational treatment is covered on a case by case basis.

Experimental or investigational treatment for life-threatening and/or disabling
illnesses may also be considered for coverage under the external appeal process
pursuant to the requirements of Section 4910 of New York State P.H.L. under the
following conditions:

(1)   The Enrollee has had coverage of a health care service denied on the basis
      that such service is experimental and investigational, and

(2)   The Enrollee's attending physician has certified that the Enrollee has a
      life-threatening or disabling condition or disease:

      (a)   for which standard health services or procedures have been
            ineffective or would be medically inappropriate, or

      (b)   for which there does not exist a more beneficial standard health
            service or procedure covered by the health care plan, or

      (c)   for which there exists a clinical trial and

                                   APPENDIX K
                                October 1, 2004
                                      K-22


<PAGE>


(3)   The Enrollee's provider, who must be a licensed, board-certified or
      board-eligible physician, qualified to practice in the area of practice
      appropriate to treat the Enrollee's life-threatening or disabling
      condition or disease, must have recommended either:

      (a)   a health service or procedure that, based on two (2) documents from
            the available medical and scientific evidence, is likely to be more
            beneficial to the Enrollee than any covered standard health service
            or procedure; or

      (b)   a clinical trial for which the Enrollee is eligible; and

(4)   The specific health service or procedure recommended by the attending
      physician would otherwise be covered except for the MCO's determination
      that the health service or procedure is experimental or investigational.

B.    BEHAVIORAL HEALTH SERVICES

These services include Chemical Dependence and Mental Health Services.

-     CHEMICAL DEPENDENCE SERVICES:

      For all Enrollees not categorized as SSI or SSI related, Chemical
      Dependence Services in the Benefit Package include inpatient treatment
      services including inpatient rehabilitation and treatment services
      programs, Detoxification Services (Medically Managed Inpatient
      Detoxification and Medically Supervised Inpatient and Outpatient
      Withdrawal Services) and self-referral for assessment as described below.

      For all Enrollees categorized as SSI or SSI related, the Benefit Package
      includes Detoxification Services (Medically Managed Inpatient
      Detoxification and Medically Supervised Inpatient and Outpatient
      Withdrawal Services). All other Chemical Dependence Services, including
      Chemical Dependence Inpatient Rehabilitation and Treatment, are covered on
      a Medicaid fee-for-service basis for the SSI population.

-     MENTAL HEALTH SERVICES:

      The Mental Health Services listed below are in the Benefit Package for all
      Enrollees not categorized as SSI or SSI related. For Enrollees who are
      categorized as SSI or SSI related, all Mental Health Services are covered
      on a Medicaid fee-for-service basis.

1.    CHEMICAL DEPENDENCE SERVICES

a.    Detoxification Services

i)    Medically Managed Inpatient Detoxification

      These programs provide medically directed twenty-four hour care on an
      inpatient basis to individuals who are at risk of severe alcohol or
      substance abuse withdrawal, incapacitated, a risk to self or others, or
      diagnosed with an acute physical or mental co-morbidity. Specific services
      include, but are not limited to: medical management, bio-psychosocial
      assessments, stabilization of medical psychiatric / psychological
      problems, individual and group

                                   APPENDIX K
                                October 1, 2004
                                      K-23


<PAGE>


      counseling, level of care determinations and referral and linkages to
      other services as necessary. Medically Managed Detoxification Services are
      provided by facilities licensed by OASAS under Title 14 NYCRR Part 816.6
      and the Department of Health as a general hospital pursuant to Article 28
      of the Public Health Law or by the Department of Health as a general
      hospital pursuant to Article 28 of the Public Health Law.

 ii)   Medically Supervised Withdrawal

      (a) Medically Supervised Inpatient Withdrawal

      These programs offer treatment for moderate withdrawal on an inpatient
      basis. Services must include medical supervision and direction under the
      care of a physician in the treatment for moderate withdrawal. Specific
      services must include, but are not limited to: medical assessment within
      twenty four hours of admission; medical supervision of intoxication and
      withdrawal conditions; bio-psychosocial assessments; individual and group
      counseling and linkages to other services as necessary. Maintenance on
      methadone while a patient is being treated for withdrawal from other
      substances may be provided where the provider is appropriately authorized.
      Medically Supervised Inpatient Withdrawal services are provided by
      facilities licensed under Title 14 NYCRR Part 816.7.

      (b) Medically Supervised Outpatient Withdrawal

      These programs offer treatment for moderate withdrawal on an outpatient
      basis. Required services include, but are not limited to: medical
      supervision of intoxication and withdrawal conditions; bio-psychosocial
      assessments; individual and group counseling; level of care
      determinations; discharge planning; and referrals to appropriate services.
      Maintenance on methadone while a patient is being treated for withdrawal
      from other substances may be provided where the provider is appropriately
      authorized. Medically Supervised Outpatient Withdrawal services are
      provided by facilities licensed by Title 14 NYCRR Part 816.7.

      All detoxification and withdrawal services are a covered benefit for all
      Enrollees, including those categorized as SSI or SSI related.

      Detoxification Services in Article 28 inpatient hospital facilities are
      subject to the stop-loss provisions specified in Section 3.11 of this
      Agreement.

b.    Chemical Dependence Inpatient Rehabilitation and Treatment Services

      Services provided include intensive management of chemical dependence
      symptoms and medical management of physical or mental complications from
      chemical dependence to clients who cannot be effectively served on an
      outpatient basis and who are not in need of medical detoxification or
      acute care. These services can be provided in a hospital or free-standing
      facility. Specific services can include, but are not limited to:
      comprehensive admission evaluation and treatment planning; individual
      group, and family counseling; awareness and relapse prevention; education
      about self-help groups; assessment and referral services; vocational and
      educational assessment; medical and psychiatric consultation; food and
      housing; and HIV and AIDS education. These services may be provided by
      facilities

                                   APPENDIX K
                                October 1, 2004
                                      K-24

<PAGE>

      licensed by OASAS to provide: Chemical Dependence Inpatient Rehabilitation
      and Treatment Services under Title 14 NYCRR Part 818. Maintenance on
      methadone while a patient is being treated for withdrawal from other
      substances may be provided where the provider is appropriately authorized.

      MCOs will be reimbursed for qualifying inpatient days of chemical
      dependence inpatient treatment beyond thirty (30) days according to
      stop-loss provisions contained in Section 3.12 of this Agreement.

c.    Chemical Dependence Assessment Self-Referral

      Enrollees must be allowed to self refer for one (1) assessment from a
      Contractor's participating provider in a twelve (12) month period.

2.    MENTAL HEALTH SERVICES

Mental Health Services are subject to the stop-loss provisions specified in
Section 3.12 of this Agreement.

a.    Inpatient Services

All inpatient mental health services, including voluntary or involuntary
admissions for mental health services. The Contractor may provide the covered
benefit for medically necessary mental health inpatient services through
hospitals licensed pursuant to Article 28 of the New York State P.H.L.

b.    Outpatient Services

Outpatient services including but not limited to: assessment, stabilization,
treatment planning, discharge planning, verbal therapies, education, symptom
management, case management services, crisis intervention and outreach services,
chlozapine monitoring and collateral services as certified by OMH. Services may
be provided in-home, office or the community. Services may be provided by
licensed OMH providers or by other providers of mental health services including
clinical psychologists and physicians. For further information regarding service
coverage consult the following MMIS Provider Manuals: Clinic, Ambulatory
Services for Mental Illness (Clinic Treatment Program), Clinical Psychology, and
Physician (Psychiatric Services).

Enrollees must be allowed to self-refer for one (1) mental health assessment
from a Contractor's Participating Provider in a twelve (12) month period. In the
case of children, such self-referrals may originate at the request of a school
guidance counselor or similar source.

Services provided through OMH designated clinics for Enrollees with a clinical
diagnosis of SED are covered by Medicaid fee-for-service.

                                   APPENDIX K
                                 October 1, 2004
                                      K-25


<PAGE>


C.    OTHER COVERED SERVICES

1. Federally Qualified Health Center (FQHC) Services

FQHC services include physician services, services and supplies covered under
SSA Section 1861(s)(2) (A). Services include primary health, referral for
supplemental health services, health education, patient case management,
including outreach, counseling, referral and follow-up services (see 42 USC
Section 254c(a) & (b)).

                                   APPENDIX K
                                 October 1, 2004
                                      K-26


<PAGE>


                             PREPAID BENEFIT PACKAGE
     II OPTIONAL COVERED SERVICES (AT DISCRETION OF LDSS AND/OR CONTRACTOR)

A.    FAMILY PLANNING AND REPRODUCTIVE HEALTH CARE

      Family Planning and Reproductive Health Care services means the offering,
      arranging and furnishing of those health services which enable Enrollees,
      including minors, who may be sexually active to prevent or reduce the
      incidence of unwanted pregnancy. These include: diagnosis and all
      medically necessary treatment, sterilization, screening and treatment for
      sexually transmissible diseases and screening for disease and pregnancy.

      Also included is HIV counseling and testing when provided as part of a
      family planning visit. Additionally, reproductive health care includes
      coverage of all medically necessary abortions. Elective induced abortions
      must be covered for New York City recipients. Fertility services are not
      covered.

      If the Contractor excludes family planning from its Benefit Package, the
      Contractor is still required to provide the following services:

      i)    screening, related diagnosis, ambulatory treatment, and referral to
            Participating Provider as needed for dysmenorrhea, cervical cancer
            or other pelvic abnormality/pathology;

      ii)   screening, related diagnosis, and referral to Participating Provider
            for anemia, cervical cancer, glycosuria, proteinuria, hypertension,
            breast disease and pregnancy.

B.    DENTAL SERVICES

      Dental care includes preventive, prophylactic and other routine dental
      care, services, supplies and dental prosthetics required to alleviate a
      serious health condition, including one which affects employability.

      Dental surgery performed in an ambulatory or inpatient setting is the
      responsibility of the Contractor whether dental services are a covered
      plan benefit, or not. Inpatient claims and referred ambulatory claims for
      dental services provided in an inpatient or outpatient hospital setting
      for surgery, anesthesiology, X-rays, etc are the responsibility of the
      Contractor. In these situations, the professional services of the dentist
      are covered by Medicaid fee-for-service. The Contractor should set up
      procedures to prior approve dental services provided in inpatient and
      ambulatory settings.

      As described in Sections 10.16 and 10.28 of this Agreement, Enrollees may
      self-refer to Article 28 clinics operated by academic dental centers to
      obtain covered dental services.

      If Contractor's Benefit Package excludes dental services:

      i)    Enrollees may obtain routine exams, orthodontic services and
            appliances, dental office surgery, fillings, prophylaxis, and other
            Medicaid covered dental services from any qualified Medicaid
            provider who shall claim reimbursement from MMIS; and

                                   APPENDIX K
                                 October 1, 2004
                                      K-27


<PAGE>


      ii)   Inpatient and referred ambulatory claims for medical services
            provided in an inpatient or outpatient hospital setting in
            conjunction with a dental procedure (e.g. anesthesiology, X-rays),
            are the responsibility of the Contractor. In these situations, the
            professional services of the dentist are covered Medicaid
            fee-for-service.

C.    TRANSPORTATION SERVICES
      18 NYCRR Section 505.10

      a. Non-Emergency Transportation

      Transportation expenses are covered when transportation is essential in
      order for an Enrollee to obtain necessary medical care and services which
      are covered under the Medicaid program (either as part of the Contractor's
      Benefit Package or by fee-for-service Medicaid). Non-emergent
      transportation guidelines may be developed in conjunction with the LDSS,
      based on the LDSS' approved transportation plan.

      Transportation services means transportation by ambulance, ambulette fixed
      wing or airplane transport, invalid coach, taxicab, livery, public
      transportation, or other means appropriate to the Enrollee's medical
      condition; and a transportation attendant to accompany the Enrollee, if
      necessary. Such services may include the transportation attendant's
      transportation, meals, lodging and salary; however, no salary will be paid
      to a transportation attendant who is a member of the Enrollee's family.

      When the Contractor is capitated for non-emergency transportation, the
      Contractor is also responsible for providing transportation to Medicaid
      covered services that are not part of the Contractor's Benefit Package.

      For Contractors that cover non-emergency transportation in the Benefit
      Package, transportation costs to MMTP services may be reimbursed by
      Medicaid fee-for-service in accordance with the LDSS transportation
      polices in local districts where there is a systematic method to
      discretely identify and reimburse such transportation costs.

      For Enrollees with disabilities, the method of transportation must
      reasonably accommodate their needs, taking into account the severity and
      nature of the disability.

      b. Emergency Transportation

      Emergency transportation can only be provided by an ambulance service
      including air ambulance service. Emergency ambulance transportation means
      the provision of ambulance transportation for the purpose of obtaining
      hospital services for an Enrollee who suffers from severe,
      life-threatening or potentially disabling conditions which require the
      provision of emergency medical services while the Enrollee is being
      transported.

      Emergency medical services means the provision of initial urgent medical
      care including, but not limited to, the treatment of trauma, burns,
      respiratory, circulatory and obstetrical emergencies.

                                    APPENDIX
                                 October 1, 2004
                                      K-28


<PAGE>


Emergency ambulance transportation is transportation to a hospital emergency
room generated by a "Dial 911" emergency system call or some other request for
an immediate response to a medical emergency. Because of the urgency of the
transportation request, insurance coverage or other billing provisions are not
addressed until after the trip is completed. When the Contractor is capitated
for this benefit, emergency transportation via 911 or any other emergency call
system is a covered benefit and the Contractor is responsible for payment.

                                   APPENDIX K
                                October 1, 2004
                                      K-29


<PAGE>

                            PREPAID BENEFIT PACKAGE
                    III. DEFINITIONS OF NON-COVERED SERVICES

The following services are excluded from the Contractor's Benefit Package, but
are covered, in most instances, by Medicaid fee-for-service:

A.    MEDICAL NON-COVERED SERVICES

1.    PERSONAL CARE AGENCY SERVICES

Personal care services (PCS) are the provision of some or total assistance with
personal hygiene, dressing and feeding; and nutritional and environmental
support (meal preparation and housekeeping). Such services must be essential to
the maintenance of the Enrollee's health and safety in his or her own home. The
service his to be ordered by a physician, and there has to be a medical need for
the service. Licensed home care services agencies, as opposed to certified home
health agencies, are the primary providers of PCS. Enrollee's receiving PCS have
to have a stable medical condition and are generally expected to be in receipt
of such services for an extended period of time (years).

Services rendered by a personal care agency which are approved by the LDSS are
not covered under the Benefit Package. Should it be medically necessary for the
PCP to order personal care agency services, the PCP (or the Contractor on the
physician's behalf) must first contact the Enrollee's LDSS contact person for
personal care. The district will determine the Enrollee's need for personal care
agency services and coordinate with the personal care agency a plan of care.

2.    RESIDENTIAL HEALTH CARE FACILITIES (RHCF)

Permanent residency in a Residential Health Care Facility (RHCF) is not covered
(see 18 NYCRR Section 360-1.4 (k)). Rehabilitation services in such a setting
are covered as medically necessary when ordered by the Contractor's
Participating Provider.

3.    HOSPICE PROGRAM

Hospice is a coordinated program of home and inpatient care that provides
non-curative medical and support services for persons certified by a physician
to be terminally ill with a life expectancy of six (6) months or less. Hospice
programs provide patients and families with palliative and supportive care to
meet the special needs arising out of physical, psychological, spiritual, social
and economic stresses which are experienced during the final stages of illness
and during dying and bereavement.

Hospices are organizations which must be certified under Article 40 of the NYS
P.H.L. All services must be provided by qualified employees and volunteers of
the hospice or by qualified staff through contractual arrangements to the extent
permitted by federal and state requirements. All services must be provided
according to a written plan of care which reflects the changing needs of the
patient/family.

                                   APPENDIX K
                                 October 1, 2004
                                      K-30


<PAGE>


If an Enrollee in the Contractor's plan becomes terminally ill and receives
Hospice Program services he or she may remain enrolled and continue to access
the Contractor's Benefit Package while Hospice costs are paid for by Medicaid
fee-for-service.

4.    PRESCRIPTION AND NON-PRESCRIPTION (OTC) DRUGS, MEDICAL SUPPLIES, AND
      ENTERAL FORMULA

Coverage for drugs dispensed by community pharmacies, over the counter drugs,
medical/surgical supplies and enteral formula are not included in the Benefit
Package and will be paid for by Medicaid fee-for-service. Medical/surgical
supplies are items other than drugs, prosthetic or orthotic appliances, or DME
which have been ordered by a qualified practitioner in the treatment of a
specific medical condition and which are: consumable, non-reusable, disposable,
or for a specific rather than incidental purpose, and generally have no
salvageable value (e.g. gauze pads, bandages and diapers). Pharmaceuticals and
medical supplies routinely furnished or administered as part of a clinic or
office visit are covered.

                                   APPENDIX K
                                 October 1, 2004
                                      K-31


<PAGE>


B.    NON-COVERED BEHAVIORAL HEALTH SERVICES

1.    CHEMICAL DEPENDENCE SERVICES

a.    OUTPATIENT REHABILITATION AND TREATMENT SERVICES

i).   Methadone Maintenance Treatment Program (MMTP)

Consists of drug detoxification, drug dependence counseling, and rehabilitation
services which include chemical management of the patient with methadone.
Facilities that provide methadone maintenance treatment do so as their principal
mission and are certified by the Office of Alcohol and Substance Abuse Services
(OASAS) under Title 14 NYCRR, Part 828.

ii).  Medically Supervised Ambulatory Chemical Dependence Outpatient Clinic
      Programs

Medically Supervised Ambulatory Chemical Dependence Outpatient Clinic Programs
are licensed under Title 14 NYCRR Part 822 and provide chemical dependence
outpatient treatment to individuals who suffer from chemical abuse or dependence
and their family members or significant others.

iii). Medically Supervised Chemical Dependence Outpatient Rehabilitation
      Programs

Medically Supervised Chemical Dependence Outpatient Rehabilitation Programs
provide full or half-day services to meet the needs of a specific target
population of chronic alcoholic persons who need a range of services which are
different from those typically provided in an alcoholism outpatient clinic.
Programs are licensed by as Chemical Dependence Outpatient Rehabilitation
Programs under Title 14 NYCRR Part 822.9.

iv).  Outpatient Chemical Dependence for Youth Programs

Outpatient Chemical Dependence for Youth Programs (OCDY) licensed under Title 14
NYCRR Part 823, establishes programs and service regulations for OCDY programs.
OCDY programs offer discrete, ambulatory clinic services to chemically-dependent
youth in a treatment setting that supports abstinence from chemical dependence
including alcohol and substance abuse) services.

b.    CHEMICAL DEPENDENCE SERVICES ORDERED BY THE LDSS

The Contractor is not responsible for the provision and payment of Chemical
Dependence Inpatient Rehabilitation and Treatment Services ordered by the LDSS
and provided to Enrollees who have:

            -     been assessed as unable to work by the LDSS and are mandated
                  to receive Chemical Dependence Inpatient Rehabilitation and
                  Treatment Services as a condition of eligibility for Public
                  Assistance or Medicaid, or

                                   APPENDIX K
                                 October 1, 2004
                                      K-32


<PAGE>

            -     have been determined to be able to work with limitations (work
                  limited) and are simultaneously mandated by the district into
                  Chemical Dependence Inpatient Rehabilitation and Treatment
                  Services (including alcohol and substance abuse treatment
                  services )pursuant to work activity requirements.

The Contractor is not responsible for the provision and payment of Medically
Supervised Inpatient and Outpatient Withdrawal Services ordered by the LDSS
under Welfare Reform (as indicated by Code 83).

The Contractor is responsible for the provision and payment of Medically Managed
Detoxification Services in this Agreement.

If the Contractor is already providing an Enrollee with Chemical Dependence
Inpatient Rehabilitation and Treatment Services and Detoxification Services and
the LDSS is satisfied with the level of care and services, then the Contractor
will continue to be responsible for the provision and payment of these services.

2.    MENTAL HEALTH SERVICES

a.    Intensive Psychiatric Rehabilitation Treatment Programs (IPRT)

A time limited active psychiatric rehabilitation designed to assist a patient in
forming and achieving mutually agreed upon goals in living, learning, working
and social environments, to intervene with psychiatric rehabilitative
technologies to overcome functional disabilities. IPRT services are certified by
OMH under 14 NYCRR, Part 587.

b.    Day Treatment

A combination of diagnostic, treatment, and rehabilitative procedures which,
through supervised and planned activities and extensive client-staff
interaction, provides the services of the clinic treatment program, as well as
social training, task and skill training and socialization activities. Services
are expected to be of six (6) month duration. These services are certified by
OMH under 14 NYCRR, Part 587.

c.    Continuing Day Treatment

Provides treatment designed to maintain or enhance current levels of functioning
and skills, maintain community living, and develop self- awareness and
self-esteem. Includes: assessment and treatment planning; discharge planning;
medication therapy; medication education; case management; health screening and
referral; rehabilitative readiness development; psychiatric rehabilitative
readiness determination and referral; and symptom management. These services are
certified by OMH under 14 NYCRR, Part 587.

d.    Day Treatment Programs Serving Children

Day treatment programs are characterized by a blend of mental health and special
education services provided in a fully integrated program. Typically these
programs include: special

                                   APPENDIX K
                                 October 1, 2004
                                      K-33


<PAGE>


education in small classes with an emphasis on individualized instruction,
individual and group counseling, family services such as family counseling,
support and education, crisis intervention, interpersonal skill development,
behavior modification, art and music therapy.

e.    Home and Community Based Services Waiver for Seriously Emotionally
      Disturbed Children

This waiver is in select counties for children and adolescents who would
otherwise be admitted to an institutional setting if waiver services were not
provided. The services include individualized care coordination, respite, family
support, intensive in-home skill building, and crisis response.

f.    Case Management

The target population consists of individuals who are seriously and persistently
mentally ill (SPMI), require intensive, personal and proactive intervention to
help them obtain those services which will permit functioning in the community
and either have symptomology which is difficult to treat in the existing mental
health care system or are unwilling or unable to adapt to the existing mental
health care system. Three case management models are currently operated pursuant
to an agreement with OMH or a local governmental unit, and receive Medicaid
reimbursement pursuant to 14 NYCRR Part 506.

Please note: See generic definition of Comprehensive Medicaid Case Management
(CMCM) under OTHER NON-COVERED SERVICES.

g.    Partial Hospitalization

Provides active treatment designed to stabilize and ameliorate acute systems,
serves as an alternative to inpatient hospitalization, or reduces the length of
a hospital stay within a medically supervised program by providing the
following: assessment and treatment planning; health screening and referral;
symptom management; medication therapy; medication education; verbal therapy;
case management; psychiatric rehabilitative readiness determination and referral
and crisis intervention. These services are certified by OMH under NYCRR Part
587.

h.    Services Provided Through OMH Designated Clinics for Children With A
      Diagnosis of Serious Emotional Disturbance (SED)

These are services provided by designated OMH clinics to children and
adolescents with a clinical diagnosis of SED.

i.    Assertive Community Treatment (ACT)

ACT is a mobile team-based approach to delivering comprehensive and flexible
treatment, rehabilitation, case management and support services to individuals
in their natural living setting. ACT programs deliver integrated services to
recipients and adjust services over time to meet the recipient's goals and
changing needs; are operated pursuant to approval or certification by OMH; and
receive Medicaid reimbursement pursuant to l4 NYCRR Part 508.

j.    Personalized Recovery Oriented Services (PROS)

                                   APPENDIX K
                                 October 1, 2004
                                      K-34

<PAGE>

PROS, licensed and reimbursed pursuant to 14 NYCCR Part 512, are designed to
assist individuals in recovery from the disabling effects of mental illness
through the coordinated delivery of a customized array of rehabilitation,
treatment, and support services in traditional settings and in off-site
locations. Specific components of PROS include Community Rehabilitation and
Support, Intensive Rehabilitation, Ongoing Rehabilitation and Support and
Clinical Treatment.

3.    REHABILITATION SERVICES PROVIDED TO RESIDENTS OF OMH LICENSED COMMUNITY
RESIDENCES (CRS) AND FAMILY BASED TREATMENT PROGRAMS, AS FOLLOWS:

a.    OMH Licensed CRs*

Rehabilitative services in community residences are interventions, therapies and
activities which are medically therapeutic and remedial in nature, and are
medically necessary for the maximum reduction of functional and adaptive
behavior defects associated with the person's mental illness.

b.    Family-Based Treatment*

Rehabilitative services in family-based treatment programs are intended to
provide treatment to seriously emotionally disturbed children and youth to
promote their successful functioning and integration into the natural family,
community, school or independent living situations. Such services are provided
in consideration of a child's developmental stage. Those children determined
eligible for admission are placed in surrogate family homes for care and
treatment.

*These services are certified by OMH under 14 NYCRR Part 586.3, 594 and 595.

4.    OFFICE OF MENTAL RETARDATION AND DEVELOPMENTAL DISABILITIES (OMRDD)
      SERVICES

a.    Long Term Therapy Services Provided by Article 16-Clinic Treatment
      Facilities or Article 28 Facilities

These services are provided to persons with developmental disabilities including
medical or remedial services recommended by a physician or other licensed
practitioner of the healing arts for a maximum reduction of the effects of
physical or mental disability and restoration of the person to his or her best
possible functional level. It also includes the fitting, training, and
modification of assistive devices by licensed practitioners or trained others
under their direct supervision. Such services are designed to ameliorate or
limit the disabling condition and to allow the person to remain in or move to,
the least restrictive residential and/or day setting. These services are
certified by OMRDD under 14 NYCRR, Part 679 (or they are provided by Article 28
Diagnostic and Treatment Centers that are explicitly designated by the SDOH as
serving primarily persons with developmental disabilities). If care of this
nature is provided in facilities other than Article 28 or Article 16 centers, it
is a covered service.

b.    Day Treatment

                                   APPENDIX K
                                 October 1, 2004
                                      K-35


<PAGE>


A planned combination of diagnostic, treatment and rehabilitation services
provided to developmentally disabled individuals in need of a broad range of
services, but who do not need intensive twenty-four (24) hour care and medical
supervision. The services provided as identified in the comprehensive assessment
may include nutrition, recreation, self-care, independent living, therapies,
nursing, and transportation services. These services are generally provided in
ICF or a comparable setting. These services are certified by OMRDD under 14
NYCRR, Part 690.

c.    Medicaid Service Coordination (MSC)

Medicaid Service Coordination (MSC) is a Medicaid State Plan service provided by
OMRDD which assists persons with developmental disabilities and mental
retardation to gain access to necessary services and supports appropriate to the
needs of the needs of the individual. MSC is provided by qualified service
coordinators and uses a person centered planning process in developing,
implementing and maintaining an Individualized Service Plan (ISP) with and for a
person with developmental disabilities and mental retardation. MSC promotes the
concepts of a choice, individualized services and consumer satisfaction.

MSC is provided by authorized vendors who have a contract with OMRDD, and who
are paid monthly pursuant to such contract. Persons who receive MSC must not
permanently reside in an ICF for persons with developmental disabilities, a
developmental center, a skilled nursing facility or any other hospital or
Medical Assistance institutional setting that provides service coordination.
They must also not concurrently be enrolled in any other comprehensive Medicaid
long term service coordination program/service including the Care at Home
Waiver.

Please note: See generic definition of Comprehensive Medicaid Case Management
(CMCM) under OTHER NON-COVERED SERVICES.

d.    Home And Community Based Services Waivers (HCBS)

The Home and Community-Based Services Waiver serves persons with developmental
disabilities who would otherwise be admitted to an ICF/MR if waiver services
were not provided. HCBS waivers services include residential habilitation, day
habilitation, prevocational, supported work, respite, adaptive devices,
consolidated supports and services, environmental modifications, family
education and training, live-in caregiver, and plan of care support services.
These services are authorized pursuant to a SSA Section 1915(c| waiver from
DHHS.

e.    Services Provided Through the Care At Home Program (OMRDD)

The OMRDD Care at Home III, Care at Home IV, and Care at Home VI waivers, serve
children who would otherwise not be eligible for Medicaid because of their
parents' income and resources, and who would otherwise be eligible for an ICF/MR
level of care. Care at Home waiver services include service coordination,
respite and assistive technologies. Care at Home waiver services are authorized
pursuant to a SSA section 1915(c) waiver from DHHS.

                                   APPENDIX K
                                 October 1, 2004
                                      K-36


<PAGE>


C.    OTHER NON-COVERED SERVICES

1.    THE EARLY INTERVENTION PROGRAM (EIP) - CHILDREN BIRTH TO TWO (2) YEARS OF
      AGE

This program provides early intervention services to certain children, from
birth through two (2) years of age, who have a developmental delay or a
diagnosed physical or mental condition that has a high probability of resulting
in developmental delay. All managed care providers MUST refer infants and
toddlers suspected of having a delay to the local designated Early Intervention
agency in their area. (In most municipalities, the County Health Department is
the designated agency, except: New York City - the Department of Health, Mental
Retardation and Alcoholism Services; Erie County - The Department of Youth
Services; Jefferson County - the Office of Community Services; and Ulster County
- the Department of Social Services).

Early intervention services provided to this eligible population are categorized
as Non-Covered. These services, which are designed to meet the developmental
needs of the child and the needs of the family related to enhancing the child's
development, will be identified on MMIS by unique rate codes by which only the
designated early intervention agency can claim reimbursement. Contractor covered
and authorized services will continue to be provided by the Contractor.
Consequently, the Contractor will be expected to refer any enrolled child
suspected of having a developmental delay to the locally designated early
intervention agency in their area and participate in the development of the
Child's Individualized Family Services Plan (IFSP). Contractor's participation
in the development of the IFSP is necessary in order to coordinate the provision
of early intervention services and services covered by the Contractor.

Additionally, the locally designated early intervention agencies will be
instructed on how to identify a managed care Enrollee and the need to contact
the Contractor to coordinate service provision.

2.    PRESCHOOL SUPPORTIVE HEALTH SERVICES-CHILDREN THREE (3) THROUGH FOUR (4)
      YEARS OF AGE

The Preschool Supportive Health Services Program (PSHSP) enables counties and
New York City to obtain Medicaid reimbursement for certain educationally related
medical services provided by approved preschool special education programs for
young children with disabilities. The Committee on Preschool Special Education
in each school district is responsible for the development of an Individualized
Education Program (IEP) for each child evaluated in need of special education
and medically related health services.

PSHSP services rendered to children three (3) through four (4) years of age in
conjunction with an approved IEP are categorized as Non-Covered

The PSHSP services will be identified on MMIS by unique rate codes through which
only counties and New York City can claim reimbursement. In addition, a limited
number of Article 28 clinics associated with approved pre-school programs are
allowed to directly bill Medicaid fee-for-service for these services.
Contractor covered and authorized services will continue to be provided by the
Contractor.

                                   APPENDIX K
                                 October 1, 2004
                                      K-37


<PAGE>


3.    SCHOOL SUPPORTIVE HEALTH SERVICES-CHILDREN FIVE (5) THROUGH TWENTY-ONE
      (21) YEARS OF AGE

The School Supportive Health Services Program (SSHSP) enables school districts
to obtain Medicaid reimbursement for certain educationally related medical
services provided by approved special education programs for children with
disabilities. The Committee on Special Education in each school district is
responsible for the development of an Individualized Education Program (IEP) for
each child evaluated in need of special education and medically related
services.

SSHSP services rendered to children five (5) through twenty-one (21) years of
age in conjunction with an approved IEP are categorized as Non-Covered.

The SSHSP services are identified on MMIS by unique rate codes through which
only school districts can claim Medicaid reimbursement. Contractor covered and
authorized services will continue to be provided by the Contractor.

4.    COMPREHENSIVE MEDICAID CASE MANAGEMENT (CMCM)

A program which provides "social work" case management referral services to a
targeted population (e.g.: pregnant teens, mentally ill) A CMCM case manager
will assist a client in accessing necessary services in accordance with goals
contained in a written case management plan. CMCM programs do not provide
services directly, but refer to a wide range of service Providers. Some of these
services are: medical, social, psycho-social, education, employment, financial,
and mental health. CMCM referral to community service agencies and/or medical
providers requires the case manager to work out a mutually agreeable case
coordination approach with the agency/medical providers. Consequently, if an
Enrollee of the Contractor is participating in a CMCM program, the Contractor
should work collaboratively with the CMCM case manager to coordinate the
provision of services covered by the Contractor. CMCM programs will be
instructed on how to identify a managed care Enrollee on EMEVS and informed on
the need to contact the Contractor to coordinate service provision.

5.    DIRECTLY OBSERVED THERAPY FOR TUBERCULOSIS DISEASE

Tuberculosis directly observed therapy (TB/DOT) is the direct observation of
oral ingestion of TB medications to assure patient compliance with the
physician's prescribed medication regimen. While the clinical management of
tuberculosis is covered in the Benefit Package, TB/DOT where applicable, can be
billed directly to MMIS by any SDOH approved fee-for-service Medicaid TB/DOT
Provider. The Contractor remains responsible for communicating, cooperating and
coordinating clinical management of TB with the TB/DOT Provider.

6.    AIDS ADULT DAY HEALTH CARE

Adult Day Health Care Programs (ADHCP) are programs designed to assist
individuals with HIV disease to live more independently in the community or
eliminate the need for residential health care services. Registrants in ADHCP
require a greater range of comprehensive health care

                                   APPENDIX K
                                 October 1, 2004
                                      K-38


<PAGE>


services than can be provided in any single setting, but do not require the
level of services provided in a residential health care setting. Regulations
require that a person enrolled in an ADHCP must require at least three (3) hours
of health care delivered on the basis of at least one (1) visit per week. While
health care services are broadly defined in this setting to include general
medical care, nursing care, medication management, nutritional services,
rehabilitative services, and substance abuse and mental health services, the
latter two (2) cannot be the sole reason for admission to the program. Admission
criteria must include, at a minimum, the need for general medical care and
nursing services.

7.    HIV COBRA CASE MANAGEMENT

The HIV COBRA (Community Follow-up Program) Case Management Program is a program
that provides intensive, family-centered case management and community follow-up
activities by case managers, case management technicians, and community
follow-up workers. Reimbursement is through an hourly rate billable to Medicaid.
Reimbursable activities include intake, assessment, reassessment, service plan
development and implementation, monitoring, advocacy, crisis intervention, exit
planning, and case specific supervisory case-review conferencing.

8.    FERTILITY SERVICES

Fertility services are not covered by the Benefit Package nor by Medicaid
fee-for-service.

9. ADULT DAY HEALTH CARE

ADULT DAY HEALTH CARE means care and services provided to a registrant in a
residential health care facility or approved extension site under the medical
direction of a physician and which is provided by personnel of the adult day
health care program in accordance with a comprehensive assessment of care needs
and individualized health care plan, ongoing implementation and coordination of
the health care plan, and transportation.

REGISTRANT means a person who is a nonresident of the residential health care
facility who is functionally impaired and not homebound and who requires certain
preventive, diagnostic, therapeutic, rehabilitative or palliative items or
services provided by a general hospital, or residential health care facility;
and whose assessed social and health care needs, in the professional judgment of
the physician of record, nursing staff, Social Services and other professional
personnel of the adult day health care program can be met in while or in part
satisfactorily by delivery of appropriate services in such program.

10.   PERSONAL EMERGENCY RESPONSE SERVICES (PERS)

Personal Emergency Response Services (PERS are not covered by the Benefit
Package. PERS are covered on a fee-for-service basis through contracts between
the LDSS and PERS vendors.

                                   APPENDIX K
                                 October 1, 2004
                                      K-39


<PAGE>


11.   SCHOOL-BASED HEALTH CENTERS

A School-Based Health Center (SBHC) is an Article 28 extension clinic that is
located in a school and provides students with primary and preventive physical
and mental health care services, acute or first contact care, chronic care, and
referral as needed. SBHC services include comprehensive physical and mental
health histories and assessments, diagnosis and treatment of acute and chronic
illnesses, screenings (e.g., vision, hearing, dental, nutrition, TB), routine
management of chronic diseases (e.g., asthma, diabetes), health education,
mental health counseling and/or referral, immunizations and physicals for
working papers and sports.

                                   APPENDIX K
                                October 1, 2004
                                      K-40


<PAGE>


                          IV. SCHEDULE A OF APPENDIX K

                             PREPAID BENEFIT PACKAGE
                  COVERAGE STATUS OF OPTIONAL COVERED SERVICES

COUNTY: Columbia County Department of Social Services

MCO: Wellcare of New York, Inc.

<TABLE>
<CAPTION>
                                                      COVERAGE STATUS
                                           ---------------------------------------
                                           COVERED BY               NOT COVERED BY
           SERVICE                         CONTRACTOR                CONTRACTOR
---------------------------------------------------------------------------------
<S>                                        <C>                      <C>
Family Planning                                x
Dental Services                                                          x
Emergency Transportation                       x
Non-Emergency Transportation                   x
</TABLE>

                                   APPENDIX K
                                 October 1, 2004
                                      K-41


<PAGE>

                                   APPENDIX L

                        APPROVED CAPITATION PAYMENT RATES

                                   APPENDIX L
                                 October 1, 2004
                                       L-1

<PAGE>

                           WELLCARE OF NEW YORK, INC.

                           Medicaid Managed Care Rates

MMIS  ID#: 01182503                              Effective Date: 04/01/04
Approved by DOB: Yes                             Region: Central
DOH HMO #: 04-036                                County: Columbia
Reinsurance: Private                             Status: Mandatory

<TABLE>
<CAPTION>
PREMIUM GROUP                                         RATE AMOUNT
-----------------------                               -----------
<S>                                                   <C>
TANF/SN <6MO M/F                                       $  211.62
TANF/SN 6MO-14 F                                       $   73.52
TANF/SN 15-20 F                                        $  177.41
TANF/SN 6MO-20 M                                       $   79.67
TANF 21+ M/F                                           $  195.67
SN 21-29 M/F                                           $  199.03
SN 30+ M/F                                             $  297.75
SSI 6MO-20 M/F                                         $  172.78
SSI 21-64 M/F                                          $  376.53
SSI 65+ M/F                                            $  334.94
MATERNITY KICK PAYMENT                                 $4,526.04
NEWBORN KICK PAYMENT                                   $2,374.29
</TABLE>

Optional  Benefits Offered:

      [x] Emergency Transportation                          [ ] Dental

      [x] Non-Emergent Transportation                       [x] Family Planning

       BOX WILL BE CHECKED IF THE OPTIONAL BENEFIT IS COVERED BY THE PLAN

Benefit Limitations:

      Outpatient Mental Health Cap of 20 visits

      Inpatient Mental Health\Substance Abuse Cap of 30 Days


<PAGE>


                                   APPENDIX M
                                  SERVICE AREA

                                   APPENDIX M
                                October 1, 2004
                                       M-1


<PAGE>


The Contractor's Medicaid managed care service area is comprised of Columbia
County in its entirety.

                                   APPENDIX M
                                 October 1, 2004
                                       M-2


<PAGE>


                                   APPENDIX N

                      CONTRACTOR-COUNTY SPECIFIC AGREEMENTS

                                   APPENDIX N
                                October 1, 2004