<PAGE>

                                                                  EXHIBIT 10.8

                              FAMILY HEALTH PLUS
                                 MODEL CONTRACT

                                 OCTOBER 1, 2001

<PAGE>

                        MISCELLANEOUS/CONSULTANT SERVICES

STATE AGENCY (Name and Address):         NYS COMPTROLLER'S NUMBER:

New York State Department of Health
Office of Managed Care
Empire State Plaza
Corning Tower, Room 2074
Albany, NY 12237-0094                    ORIGINATING AGENCY CODE:12000

_________________________________        ___________________________________
CONTRACTOR (Name and Address):           TYPE OF PROGRAM(S):

WellCare of New York, Inc.               Family Health Plus
Hurley Avenue Extension
P.O. Box 4800
Kingston, NY 12402

_________________________________        ___________________________________
CHARITIES REGISTRATION NUMBER:           CONTRACT TERM
                                                FROM: October 1, 2001
                                                TO: September 30, 2003

FEDERAL TAX IDENTIFICATION NUMBER:
                                         FUNDING AMOUNT FOR CONTRACT TERM:
                                         Based on approved capitation rates

MUNICIPALITY NO. (if applicable):

_________________________________        ___________________________________
STATUS:                                  THIS CONTRACT IS RENEWABLE FOR
CONTRACTOR IS ( ) IS NOT ( ) A           ONE ADDITIONAL TWO-YEAR PERIOD AND
        SECTARIAN ENTITY                 A SUBSEQUENT ONE-YEAR PERIOD
CONTRACTOR IS ( ) IS NOT ( ) A NOT-      SUBJECT TO THE APPROVAL OF THE
        FOR-PROFIT ORGANIZATION          STATE DEPARTMENT OF HEALTH, THE
CONTRACTOR IS ( ) IS NOT ( ) A           DEPARTMENT OF HEALTH AND HUMAN
        N Y STATE BUSINESS ENTERPRISE    SERVICES, AND THE OFFICE OF THE
                                         STATE COMPTROLLER

_________________________________        ___________________________________
BID OPENING DATE:

Proposal Due Dates:
March 16, 2001 (Phase I) and
April 13, 2001 (Phase II)


<PAGE>
                 APPENDICES ATTACHED AND PART OF THIS AGREEMENT

<TABLE>
<S>      <C>                  <C>
-X-      APPENDIX A           Standard Clauses as required by the Attorney General for all State contracts.

-X-      APPENDIX B           Certification Regarding Lobbying

-X-      APPENDIX B-1         Standard Contract/Bid Insert Form

-X-      APPENDIX C           New York State Department of Health FHPlus Guidelines for the Provision of Family Planning and
                              Reproductive Health Services

-X-      APPENDIX D           New York State Department of Health FHPlus Marketing Guidelines

-X-      APPENDIX E           New York State Department of Health FHPlus Member Handbook Guidelines

-X-      APPENDIX F           New York State Department of Health FHPlus Complaint and Appeals Program Guidelines

-X-      APPENDIX G           New York State Department of Health Guidelines for the Provision of Emergency Care and Services for
                              the FHPlus Program

-X-      APPENDIX H           New York State Department of Health Guidelines for the Processing of Enrollments and Disenrollments
                              for the FHPlus Program

-X-      APPENDIX I           New York State Department of Health-Guidelines for Use of Medical Residents in the FHPlus Program

-X-      APPENDIX J           New York State Department of Health Guidelines for FHPlus Compliance with the Americans with
                              Disabilities Act

-X-      APPENDIX K           New York State Department of Health FHPlus Prepaid Benefit Package Definitions of Covered and
                              Non-Covered Services

-X-      APPENDIX L           Approved Capitation Payment Rates for the FHPlus Program

-X-      APPENDIX M           Service Area for the FHPlus Program

-X-      APPENDIX N           Proof of Worker's Compensation Coverage

-X-      APPENDIX O           Proof of Disability Insurance Coverage

-X-      APPENDIX P           FHPlus Facilitated Enrollment, if applicable

-X-      APPENDIX X           Modification Agreement Form (to accompany modified appendices for changes in term or consideration on
                              an existing period or for renewal periods)
</TABLE>


<PAGE>

             TABLE OF CONTENTS FOR FAMILY HEALTH PLUS MODEL CONTRACT

Contract Cover Page/Signature Page

Recitals

<TABLE>
<S>             <C>
Section 1       Definitions

Section 2       Agreement Term, Amendments, Extensions, and General Agreement Administration Provisions
                2.1      Term
                2.2      Amendments
                2.3      Approvals
                2.4      Entire Agreement
                2.5      Renegotiation
                2.6      Assignment and Subcontracting
                2.7      Termination
                         a. SDOH initiated Termination of Agreement
                         b. Contractor and SDOH 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 Agreement 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      Supplemental Maternity Capitation Payment
                3.9      Contractor Financial Liability
                3.10     Reinsurance
                3.11     Enrollment Limitations

Section 4       Service Area

Section 5       FHPlus Eligibles
                5.1      Eligible Persons
</TABLE>

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             TABLE OF CONTENTS FOR FAMILY HEALTH PLUS MODEL CONTRACT

<TABLE>
<S>             <C>
Section 6       Enrollment
                6.1      Enrollment Guidelines
                6.2      Equality of Access to Enrollment
                6.3      Enrollment Decisions
                6.4      Prohibition Against Conditions on Enrollment
                6.5      Newborn Enrollment
                6.6      Effective Date of Enrollment
                6.7      Roster
                6.8      Automatic Re-Enrollment

Section 7       Initial Enrollment Period
                7.1      Initial Enrollment Period
                7.2      Disenrollment During Initial Enrollment Period
                7.3      Notifications Regarding Initial Enrollment Period and End of Initial
                         Enrollment Period

Section 8       Disenrollment
                8.1      Disenrollment Guidelines
                8.2      Disenrollment Prohibitions
                8.3      Reasons for Voluntary Disenrollment
                8.4      Processing of Disenrollment Requests
                8.5      Contractor Notification of Disenrollments
                8.6      Contractor's Liability
                8.7      Enrollee Initiated Disenrollment
                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 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/EPSDT
                10.6     Adult Protective Services
                10.7     Court-Ordered Services
                10.8     Family Planning and Reproductive Health Services
                10.9     Prenatal Care
                10.10    Direct Access
                10.11    Emergency Services
</TABLE>

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<TABLE>
<S>             <C>
                10.12    Services for Which Enrollees Can Self-Refer
                         a. Mental Health and Alcohol/Substance Abuse
                         b. Vision Services
                         c. Diagnosis and Treatment of Tuberculosis
                         d. Family Planning/Reproductive Health
                10.13    Second Opinions for Medical or Surgical Care
                10.14    Coordination with Local Public Health Agencies
                10.15    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
                10.16    Adults with Chronic Illnesses and Physical or Developmental Disabilities
                10.17    Persons Requiring Ongoing Mental Health Services
                10.18    Member Needs Relating to HIV
                10.19    Persons Requiring Alcohol/Substance Abuse Services
                10.20    Native Americans
                10.21    Women, Infants, and Children (WIC)
                10.22    Coordination of Services

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     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

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 Enrollee Rights
                13.6     Enrollee's Rights To Advance Directives
                13.7     Approval of Written Notices
</TABLE>

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<S>             <C>
                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
                15.1     Service Continuation
                         a. New Enrollees
                         b. Enrollees Whose Health Care Provider Leaves the 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 Annual On-Site Review
                17.4     Cooperation During Review of Services by External Review Agency

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
</TABLE>

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<TABLE>
<S>             <C>
                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
                         l.  New Enrollee Health Screening Completion Report
                         m.  No Contact Report
                         n.  Additional Reports
                         o.  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 Financial Records and Statistical Data
                19.3     Access to Contractor Records
                19.4     Retention Periods

Section 20      Confidentiality
                20.1     Confidentiality of Identifying Information about FHPlus Enrollees
                         and Applicants
                20.2     Confidentiality of Medical Records
                20.3     Length of Confidentiality Requirements

Section 21      Participating Providers
                21.1     Network Requirements
                21.2     Credentialing
                21.3     SDOH Exclusion or Termination of Providers
                21.4     Evaluation Information
</TABLE>

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<TABLE>
<S>             <C>
                21.5     Payment In Full
                21.6     Choice/Assignment of PCPs
                21.7     PCP Changes
                21.8     PCP Status Changes
                21.9     PCP Responsibilities
                21.10    Member to Provider Ratios
                21.11    Minimum Office Hours
                21.12    Primary Care Practitioners
                21.13    PCP Teams
                21.14    Hospitals
                21.15    Dental Networks
                21.16    Mental Health, Alcohol and Substance Abuse Providers
                21.17    Laboratory Procedures
                21.18    Federally Qualified Health Centers (FQHCs)
                21.19    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
                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
</TABLE>

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             TABLE OF CONTENTS FOR FAMILY HEALTH PLUS MODEL CONTRACT

<TABLE>
<S>             <C>
                26.1     Basis for External Appeal
                26.2     Eligibility For External Appeal
                26.3     External Appeal Determinations
                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 SDOH

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     Disclosure Requirements for Subcontractors

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 SDOH Compliance With Applicable Laws
                35.2     Nullification of Illegal, Unenforceable, Ineffective or Void Agreement
                         Provisions
                35.3     Certificate of Authority Requirements
                35.4     Contractor's Financial Solvency Requirements
                35.5     Compliance With Care For Maternity Patients
                35.6     Informed Consent Procedures for Hysterectomy and Sterilization
                35.7     Non-Liability of Enrollees For Contractor's Debts
                35.8     SDOH Compliance With Conflict of Interest Laws
                35.9     Compliance With PHL Regarding External Appeals
</TABLE>

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                                October 1, 2001

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            TABLE OF CONTENTS FOR FAMILY HEALTH PLUS MODEL CONTRACT

Section 36      New York State Standard Contract Clauses

Section 37      Miscellaneous

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            TABLE OF CONTENTS FOR FAMILY HEALTH PLUS MODEL CONTRACT

                                   APPENDICES

A.   New York State Standard Clauses and Local Standard Clauses

B.   Certification Regarding Lobbying

B-1. Standard Contract/Bid Insert Form

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

D.   New York State Department of Health FHPlus Marketing Guidelines

E.   New York State Department of Health FHPlus Member Handbook Guidelines

F.   New York State Department of Health FHPlus Complaint and Appeals Program
     Guidelines

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

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

I.   New York State Department of Health Guidelines for Use of Medical Residents
     in the FHPlus Program

J.   New York State Department of Health Guidelines for FHPlus Compliance with
     the Americans with Disabilities Act

K.   New York State Department of Health FHPlus Prepaid Benefit Package
     Definitions of Covered and Non-Covered Services

L.   Approved Capitation Payment Rates for the FHPlus Program

M.   Service Area for the FHPlus Program

N.   Proof of Worker's Compensation Coverage

O.   Proof of Disability Insurance Coverage

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             TABLE OF CONTENTS FOR FAMILY HEALTH PLUS MODEL CONTRACT

P. FHPlus Facilitated Enrollment, if applicable

X. Modification Agreement Form

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                                October 1, 2001

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<PAGE>

                               STATE OF NEW YORK
                               FAMILY HEALTH PLUS
                   PARTICIPATING MANAGED CARE PLAN AGREEMENT

This AGREEMENT is hereby made by and between the New York State Department of
Health ("SDOH") and WellCare of New York, Inc. ("Contractor").

                                    RECITALS:

            WHEREAS, pursuant to Title 11-D of Article 5 of the New York State
Social Services Law ("SSL"), codified as SSL Section 369-ee, a comprehensive
health insurance program known as Family Health Plus (FHPlus) has been created
for eligible persons who do not qualify for Medical Assistance pursuant to Title
11 of Article 5 of the SSL; and

            WHEREAS, organizations certified under Article 44 of the New York
State Public Health Law ("PHL") or licensed under Article 43 of the New York
State Insurance Law are eligible to provide comprehensive health care service
programs to Eligible Persons as defined in Title 11-D of the SSL; and

            WHEREAS, the Contractor offers a comprehensive health services plan
that is able to make provision for furnishing health care benefits and has
proposed to SDOH to provide those services to Eligible Persons; and

            WHEREAS, SDOH issued a Recruitment, dated February 2, 2001
("Recruitment"), for the purpose of soliciting proposals from eligible
organizations seeking to enroll and provide comprehensive health care services
to FHPlus beneficiaries, which is on file in the offices of SDOH, and which is
hereby made a part of this Agreement as if fully set forth herein; and

            WHEREAS, the Contractor has submitted a written proposal for the
enrollment and delivery of services to FHPlus beneficiaries, which addresses the
requirements and conditions of participation specified in the Recruitment, and
which is hereby made a part of this Agreement as if set forth fully herein; and

            WHEREAS, SDOH has determined that the Contractor meets the criteria
established for selection as a FHPlus provider pursuant to the Recruitment.

            NOW THEREFORE, the parties agree as follows:

                                     FHPlus
                                    Recitals
                                 October 1, 2001
                                   Page 1 of 1

<PAGE>

1.    DEFINITIONS

      "ALCOHOL AND SUBSTANCE ABUSE SERVICE" means the treatment of addiction to
      alcohol and/or one or more drugs or the treatment of impairments to normal
      development or functioning including, but not limited to, social,
      emotional, familial, educational, vocational or physical impairments due
      to use of alcohol or drugs.

      "BEHAVIORAL HEALTH SERVICE" means is the assessment or treatment of mental
      and/or alcohol disorders and/or substance abuse disorders.

      "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.

      "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 and FHPlus
      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.

      "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 are within the
      Contractor's Benefit Package and reimbursable under Title XIX of the
      Federal Social Security Act (See SSL 364-j(4)(r)).

      "DAYS" means calendar days except as otherwise stated.

      "DESIGNATED THIRD PARTY CONTRACTOR" means the provider who contracts with
      the SDOH to provide Family Planning Services for enrollees in FHPlus plans
      whose benefit package excludes such services.

      "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 6.6(b)
      and Appendix H of this Agreement.

                               FHPlus - Section 1
                                 (DEFINITIONS)
                                October 1, 2001
                                      1-1

<PAGE>

      "EFFECTIVE DATE OF ENROLLMENT" means the date on which an Enrollee may
      receive services from the Contractor pursuant to Section 6.6(b) and
      Appendix H of this Agreement.

      "ELIGIBLE PERSON" means a person whom the local department of social
      services (LDSS), state or federal government determines to be eligible for
      FHPlus in accordance with state and federal law.

      "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.

      "ENROLLEE" means an Eligible Person who, either personally or through an
      authorized representative, has enrolled 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 to potential
      Medicaid managed care Enrollees; effectuates enrollments and
      disenrollments in Medicaid and FHPlus managed care; and provides other
      contracted services on behalf of the SDOH and the LDSS.

      "ENROLLMENT FACILITATOR" means an entity under contract with SDOH, and
      its agents, that assists children and adults in the Medicaid, Family
      Health Plus, Child Health Plus and/or WIC application and enrollment
      process. This includes assisting potentially eligible family members and
      adults in completing the required application form, conducting the
      face-to-face interview, assisting in the collection of required
      documentation, assisting in the health plan selection process, and
      referring individuals to WIC or other appropriate sites.

      "EXPERIENCED HIV PROVIDER" means 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.

                               FHPlus - Section 1
                                 (DEFINITIONS)
                                 October 1, 2001
                                      1-2

<PAGE>

      "FACILITATED ENROLLMENT" means the simplified, user friendly enrollment
      infrastructure established by SDOH to assist children and adults in
      applying for the Medicaid, Family Health Plus or Child Health Plus
      programs or the Special Supplemental Food Program for Women, Infants, and
      Children (WIC), using a joint application.

      "FAMILY HEALTH PLUS OR FHPLUS" means the program established under Title
      11-D, Section 369-ee of the Social Services Law.

      "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 effective date
      of the FHPlus Eligible's initial enrollment in a FHPlus plan 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 FHPlus
      eligibility provided that Federal financial participation in the cost of
      such coverage is available.

      "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/FHPlus complaint and
      disenrollment information; collection of Medicaid/FHPlus financial reports
      collection and reporting of managed care provider networks systems (PNS);
      and the reporting of Medicaid/FHPlus encounter data systems (MEDS).

      "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.

                               FHPlus - Section 1
                                 (DEFINITIONS)
                                October 1, 2001
                                      1-3

<PAGE>

      "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.

      "INITIAL ENROLLMENT PERIOD" means the one year period of time during
      which the Enrollee may not disenroll from the Contractor's plan and enroll
      in a different FHPlus plan, except during the initial 90 days or unless
      the Enrollee can demonstrate good cause as defined by the State Department
      of Health.

      "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 18NYCRR 505.20 and 10NYCRR,
      Part 85.

      "MANAGED CARE ORGANIZATION" or "MCO" means a health maintenance
      organization ("HMO"), prepaid health service plan ("PHSP"), or integrated
      delivery system ("IDS") certified under Article 44 of the New York State
      P.H.L or a corporation licensed pursuant to Article 43 of the State
      Insurance Law.

      "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 potential Enrollees 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

                               FHPlus - Section 1
                                 (DEFINITIONS)
                                October 1, 2001
                                      1-4

<PAGE>

      suffering, endanger life, result in illness or infirmity, interfere with
      such person's capacity for normal activity, or threaten some significant
      handicap.

      "MEMBER HANDBOOK" means the publication prepared by the Contractor and
      issued to new enrollees to inform them how to access health care services
      and explain their rights and responsibilities as a FHPlus enrollee. For
      purposes of Article 48 and 49 of the New York State Insurance Law, the
      Member Handbook shall be deemed a subscriber contract.

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

      "NONCONSENSUAL ENROLLMENT" means Enrollment of an Eligible Person in a
      FHPlus plan 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.

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

      "PHYSICIAN INCENTIVE PLAN" or "PIP" 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 Family Health Plus Enrollees
      enrolled by the Contractor.

      "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.

      "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/certified

                               FHPlus - Section 1
                                  (DEFINITIONS)
                                 October 1, 2001
                                       1-5

<PAGE>

      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.

      "SUPPLEMENTAL MATERNITY CAPITATION PAYMENT" means the fixed amount paid to
      the Contractor in addition to the monthly Capitation Rate for the
      inpatient and outpatient costs of services normally provided as part of
      maternity care including antepartum care, delivery and post-partum care.

      "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.

      "URGENT MEDICAL CONDITION" means a medical or behavioral condition other
      than an emergency condition, manifesting itself by acute symptoms of
      sufficient severity that, in the assessment of a "prudent lay person",
      possessing an average knowledge of medicine and health, could reasonably
      be expected to result in serious impairment of bodily functions, serious
      dysfunction of a bodily organ, body part, or mental ability, or any other
      condition that would place the health or safety of the Enrollee or another
      individual in serious jeopardy in the absence of medical or behavioral
      treatment within twenty-four (24) hours.

                               FHPlus - Section 1
                                 (DEFINITIONS)
                                 October 1, 2001
                                      1-6

<PAGE>

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

      2.1   Term

            a)    This Agreement is effective October 1, 2001 and shall remain
                  in effect until September 30, 2003 or until the execution of
                  an extension, renewal or successor Agreement approved by the
                  SDOH, the Department of Health and Human Services (DHHS), the
                  Office of the State Comptroller (OSC), and any other entities
                  as required by law or regulation, whichever occurs first.

            b)    This Agreement shall not be automatically renewed at its
                  expiration. The parties to this Agreement shall have the
                  option to renew this Agreement for an additional two (2) year
                  term and for a subsequent one (1) year term, subject to the
                  approval of SDOH, DHHS, OSC, and any other entities as
                  required by law or regulation.

            c)    The maximum duration of this Agreementis five (5) years. An
                  extension to this Agreement beyond the five year maximum 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
                           Agreement; or

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

            d)    Notwithstanding the foregoing, this Agreement will
            automatically terminate upon the expiration of federal financial
            participation for the program.

      2.2   Amendments

            This Agreement may be modified only in writing. Unless otherwise
            specified in this Agreement modifications must be approved by the
            DHHS, signed by the parties and approved by OSC 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.

                               FHPlus - Section 2
                          (AGREEMENT TERM, AMENDMENTS,
          EXTENSIONS, AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                 October 1, 2001
                                      2-1

<PAGE>

      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, OSC, and any other entity as required in law and regulation.
            SDOH will provide a notice of such approval to the Contractor.

      2.4   Entire Agreement

            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)    The body of this Agreement;

            3)    The appendices attached to the body of this Agreement; other
                  than Appendix A, the Recruitment Notice and the Contractor's
                  Response

            4)    The Contractor's approved:

                  i)    Marketing Plan on file with SDOH and LDSS

                  ii)   Complaint and Appeals Procedure on file with SDOH

                  iii)  Quality Assurance Plan on file with SDOH

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

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

            5)    New York State Department of Health Recruitment of
                  Participating Managed Care Plans for the Family Health Plus
                  Program, dated February 2, 2001, a copy of which is
                  incorporated by reference herein and is on file with the New
                  York State Department of Health, Office of Medicaid Management
                  ("Recruitment")

            6)    Family Health Plus Plan Recruitment Proposal of WellCare of
                  New York, Inc., dated March 15, 2001, a copy of which is
                  incorporated by reference herein and is on file with the New
                  York State Department of Health, Office of Medicaid Management
                  ("Proposal").

                               FHPlus - Section 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                 October 1, 2001
                                       2-2

<PAGE>

      2.5   Renegotiation

            The parties to this Agreement shall have the right and obligation 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 to renegotiate or
            amend 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 DHHS.

      2.6   Assignment and Subcontracting

            a)    The Contractor shall not, without 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. SDOH
                  agrees that it will not unreasonably withold consent of the
                  Contractor's assignment of this Agreement, in whole or in
                  part, to a parent, affiliate or subsidiary corporation, or to
                  a transferee of all or substantially all of its assets. Any
                  assignment, transfer, conveyance, sublease, or other
                  disposition without SDOH's consent shall be void.

            b)    Contractor may not enter into any subcontracts related to the
                  delivery of services to Enrollees, except by a written
                  agreement, as set forth in Section 22 of this Agreement. The
                  Contractor may subcontract for provider services and
                  management services including, but not limited to, marketing,
                  quality assurance and utilization review activities and such
                  other services as are acceptable to SDOH. 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 Part 98.11, 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 to the extent such
                  regulations are or become effective that are appropriate to
                  the service or activity delegated under such subcontract.
                  Contractor agrees that it shall remain legally responsible to
                  SDOH for carrying out all activities under this

                               FHPlus - Section 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                October 1, 2001
                                      2-3

<PAGE>

                  Agreement and that no subcontract shall limit or terminate
                  Contractor's responsibility.

      2.7   Termination

            a)    SDOH Initiated Termination of Agreement

                  i)    SDOH 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;

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

                        C)    has its Certificate of Authority suspended,
                              limited or revoked by SDOH or has its license
                              suspended, limited or revoked by the State
                              Insurance Department;

                        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 SDOH'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);

                        G)    changes the provider network, such that Enrollees
                              access to the Contractor's services is no longer
                              consistent with the standards set forth in
                              Sections 15, 21 and 22 and Appendix I of this
                              Agreement; or

                        H)    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 SDOH 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.

                               FHPlus - Section 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                October 1, 2001
                                      2-4

<PAGE>

                  iii)  If SDOH suspends, limits or revokes Contractor's
                        Certificate of Authority under P.H.L. Section 4404 or if
                        the State Insurance Department (SID) suspends, limits or
                        revokes Contractor's license, this Agreement shall
                        expire on the date the Contractor ceases to have
                        authority to serve the designated geographic area. The
                        Contractor will be allowed to continue to serve any
                        designated geographic areas not affected by such
                        actions. No hearing will be required if the Agreement
                        expires due to SDOH suspension, limitation or revocation
                        of the Contractor's Certificate of Authority or due to
                        SID suspension, limitation, or revocation of the
                        Contractor's license.

                  iv)   Prior to the effective date of the termination the SDOH
                        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 SDOH Initiated Termination

                  The Contractor and the SDOH 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 written notice specifying the reason for
                  and the effective date of termination, which shall not be less
                  time than will permit an orderly disenrollment of Enrollees or
                  transfer to another MCO, 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 SDOH 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 within such longer period as the parties may
                        agree, of the Contractor's written request for
                        compliance. The Contractor shall give SDOH 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 or
                        transfer to another managed care program, 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. In

                               FHPlus - Section 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                October 1, 2001
                                       2-5

<PAGE>

                        such event, Contractor shall give 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 or transfer to another MCO, 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 SDOH 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

                        C)    the effective date of the termination, which shall
                              not be less time than will permit an orderly
                              disenrollment of Enrollees or transfer to another
                              MCO, 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 SDOH 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.

                               FHPlus - Section 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                 October 1, 2001
                                       2-6

<PAGE>

      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 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 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 SDOH and receives written approval from
                  SDOH and all other governmental agencies from which approval
                  is required, for an extension of time for this submission;

            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 SDOH for the orderly
                  disenrollment of Enrollees or transfer to 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)    The Contractor shall allow an Enrollee who has entered the
                  second trimester of pregnancy to continue treatment with a
                  Participating Provider for a transitional period that includes
                  the provision of post-

                                FHPlus - Section 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                 October 1, 2001
                                      2-7

<PAGE>

                  partum care directly related to the delivery; only if a
                  participating provider is willing 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;

                  ii)   adhere to the Contractor's quality assurance
                        requirements and agree 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;

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

            h)    Any termination of this Agreement by either the Contractor or
                  SDOH shall be done by amendment to this Agreement, unless the
                  contract is terminated by the SDOH 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 SDOH and the Contractor provided
            expressly in this Section shall not be exclusive and are in addition
            to all other rights and remedies provided by law or under this
            Agreement.

      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 and the SDOH at the
            following addresses:

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

                                FHPlus - Section 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                October 1, 2001
                                       2-8

<PAGE>

            For the Contractor:

                  Wellcare of N.Y.
                  280 Broadway
                  New Burg, NY 12550

            ________________________________________
            [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.

                               FHPlus - Section 2
                    (AGREEMENT TERM, AMENDMENTS, EXTENSIONS,
                AND GENERAL AGREEMENT ADMINISTRATION PROVISIONS)
                                 October 1, 2001
                                       2-9

<PAGE>


3.    COMPENSATION

      3.1   Capitation Payments

            Compensation to the Contractor shall consist of a monthly capitation
            payment for each Enrollee and the Supplemental Maternity Capitation
            Payment 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 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.

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

      3.2   Modification of Rates During Agreement 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 to the Benefit Package, shall be
                  deemed incorporated into this Agreement without further action
                  by the parties, upon approval and written notice to the
                  Contractor by SDOH.

            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.

            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
                  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 approved modified Capitation Rates are not acceptable.
                  In such case, the Contractor shall give written notice to

                               FHPlus - Section 3
                                 (COMPENSATION)
                                October 1, 2001
                                       3-1

<PAGE>

                  the SDOH 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 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 this 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 6.7 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

                               FHPlus - Section 3
                                 (COMPENSATION)
                                October 1, 2001
                                       3-2

<PAGE>

                  processing within thirty (30) business days from date of
                  receipt of the claim by the Fiscal Agent. Processing of
                  Contractor claims shall be in compliance with the requirements
                  of 42 CFR Section 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 Family Health Plus care, services and supplies.

      3.5   Denial of Capitation Payments

            If the Health Care Financing Administration (HCFA) 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)(1)(A)(iii),
            misrepresented or falsified information submitted to HCFA, 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 will deny capitation payments to
            the Contractor for the same Enrollees for the period of time for
            which HCFA 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 FHPlus 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

                               FHPlus - Section 3
                                 (COMPENSATION)
                                October 1, 2001
                                       3-3

<PAGE>

            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 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   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 under Family Health Plus 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 under Family Health Plus 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.

            d)    In instances where the Enrollee was enrolled in the
                  Contractor's plan under Family Health Plus 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 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.

                               FHPlus - Section 3
                                 (COMPENSATION)
                                October 1, 2001
                                       3-4

<PAGE>

      3.9   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.

      3.10  Reinsurance

            The Contractor shall purchase reinsurance coverage unless it can
            demonstrate to SDOH's satisfaction the ability to self-insure. The
            cost of purchasing reinsurance shall be allowed in the calculation
            of capitation rates, provided that such costs are determined to be
            reasonable by the SDOH. Recoveries from reinsurance shall also be
            reflected in the Contractor's financial reports as a reduction to
            claims experience and shall be considered in the calculation of
            capitation rates.

      3.11  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)    SDOH shall have the right, upon consultation with LDSS as it
                  deems appropriate, 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, specifying the actions contemplated and the
                  reason(s) for such action(s). Nothing in this paragraph limits
                  other remedies available to the SDOH under this Agreement.

                               FHPlus - Section 3
                                 (COMPENSATION)
                                October 1, 2001
                                       3-5

<PAGE>

4.    SERVICE AREA

      For purposes of this Agreement, the Contractor's service area shall
      consist of the county(ies) described in Appendix M of this Agreement,
      which is hereby made a part of this Agreement as if set forth fully
      herein. The Contractor must request written SDOH approval to expand its
      service area for purposes of providing FHPlus services. In no event,
      however, shall the Contractor provide services to the expanded service
      area until it has received such approval. Any modifications made to
      Appendix M as a result of an approved request to expand the Contractor's
      service area shall become effective fifteen (15) days from the date of the
      written SDOH approval without the need for further action on the part of
      the parties to this Agreement.

                                FHPlus - Section 4
                                 (SERVICE AREA)
                                 October 1, 2001
                                       4-1

<PAGE>

5.    FHPLUS ELIGIBLES

      5.1   Eligible Persons

      An "Eligible Person" is an individual who meets the following criteria:

      a)    Permanent resident of New York State.

      b)    Age 19 through 64.

      c)    Citizen or qualified alien pursuant to the Personal
            Responsibility and Work Reconciliation Act of 1996.

      d)    Not eligible for Medicaid solely due to income and/or
            resources, or is eligible only through the application of
            excess income toward the costs of medical care and services.

      e)    Not in receipt of equivalent health care coverage or insurance
            as defined by the Health Insurance Portability and
            Accountability Act.

      f)    Gross household income at or below the following federal
            poverty levels:

            i)    Parent(s) living with a child(ren) under the age of 21,
                  gross family income up to:

                  -     133% of FPL as of October 1, 2001, and

                  -     150% of FPL as of October 1, 2002

            ii)   Individuals without dependent children in their
                  households will qualify with gross household incomes up
                  to 100% FPL.

                               FHPlus - Section 5
                  (ELIGIBLE, EXEMPT AND EXCLUDED POPULATIONS)
                                October 1, 2001
                                      5-1

<PAGE>

6.    ENROLLMENT

      6.1   Enrollment Guidelines

            a)    A variety of methods and programs for enrollment of Eligible
                  Persons may be employed including, but not limited to,
                  enrollment assisted by the Contractor or SDOH-approved
                  Enrollment Facilitators, 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)    Enrollment of Eligible Persons will be conducted in accordance
                  with the guidelines set forth in Appendix H.

            c)    The SDOH may make modifications to the guidelines set forth in
                  Appendix H. 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 Contractor.

      6.2   Equality of Access to Enrollment

            Eligible Persons shall be enrolled in the Contractor's plan, in
            accordance with the requirements set forth in Appendix H, Section A.
            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.

      6.4   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.

                               FHPlus - Section 6
                                  (ENROLLMENT)
                                 October 1, 2001
                                       6-1

<PAGE>

      6.5   Newborn Enrollment

            a)    All newborn children not in a Medicaid managed care excluded
                  category shall be enrolled in the MCO of the mother, effective
                  from the first day of the child's month of birth, if that MCO
                  also participates in Medicaid.

            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 of Enrollees are enrolled in the
                        Contractor's Medicaid managed care plan, if applicable

                  ii)   Issuing a letter informing Enrollees about their newborn
                        child's enrollment in the Contractor's plan or a member
                        identification card within 14 days of the date on
                        which the Contractor becomes aware of the birth, if
                        applicable

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

                  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 SDOH and LDSSs shall be responsible for ensuring that
                  timely Medicaid eligibility determination and enrollment of
                  the newborn 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.

      6.6   Effective Date of Enrollment

            a)    The Contractor 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 must notify the Enrollee of the
                  change.

                               FHPlus - Section 6
                                  (ENROLLMENT)
                                 October 1, 2001
                                       6-2

<PAGE>


            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 herein after 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 the cost of
                        hospitalization for an Eligible Person, who is
                        hospitalized after completing and submitting an
                        enrollment form to enroll in the Contractor's plan, and
                        who remains hospitalized on or after the Effective Date
                        of Enrollment.

                  iii)  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.

      6.7   Roster

            a)    The combination of the first and second monthly Rosters
                  generated by SDOH 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 Broker, where
                  applicable, prior to the end of the month in which the Roster
                  is generated.

            b)    LDSSs 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 LDSSs or the Enrollment Broker notify the Contractor in
                  writing or electronically of changes in the first (1st) Roster
                  and provide 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. If the
                  Contractor does not receive the Roster before the last
                  business day of the month prior to the Roster effective date,
                  the Contractor shall receive the applicable monthly Capitation
                  Rate for any individual who is no longer on the Roster, was
                  eligible the prior month,

                               FHPlus - Section 6
                                  (ENROLLMENT)
                                 October 1, 2001
                                       6-3

<PAGE>

                  and is inadvertently served by the Contractor before receipt
                  of the Roster.

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

      6.8   Automatic Re-Enrollment

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

            b)    The Contractor agrees that FHPlus Enrollees disenrolled from
                  the Contractor's plan due to loss of FHPlus eligibility who
                  gain full Medicaid eligibility will be enrolled by an LDSS in
                  the Contractor's Medicaid Managed Care Plan, if the Contractor
                  also participates in the Medicaid managed care program in the
                  individual's county of fiscal responsibility, and the Enrollee
                  does not indicate in writing that he/she wishes to enroll in
                  another Medicaid managed care plan or receive coverage through
                  Medicaid fee-for-service.

                               FHPlus - Section 6
                                  (ENROLLMENT)
                                 October 1, 2001
                                       6-4

<PAGE>

7.    INITIAL ENROLLMENT PERIOD

      7.1   Initial Enrollment Period

            Enrollees are subject to a twelve (12) month Initial Enrollment
            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.

      7.2   Disenrollment During Initial Enrollment Period

            a)    An Enrollee may disenroll from the Contractor's plan during
                  the Initial Enrollment Period in the first 90 days without
                  cause and for the duration of the Initial Enrollment Period
                  for "good cause" as that term is defined by the SDOH. Examples
                  of good cause include but are not limited to the following:

                  i)    failure of the Contractor to furnish accessible and
                        appropriate medical care to which the Enrollee is
                        entitled;

                  ii)   nonconsensual enrollment;

                  iii)  Enrollee, MCO, and LDSS agree that a change of MCO is in
                        the best interest of the Enrollee.

            b)    Notwithstanding the above, a pregnant Enrollee may disenroll
                  from the Contractor's plan during the Initial Enrollment
                  Period if she chooses to receive health insurance coverage
                  through Medicaid.

      7.3   Notifications Regarding the Initial Enrollment Period

            The LDSS, either directly or through the Enrollment Broker where
            applicable, shall notify Enrollees of their right to change MCOs in
            the Family Health Plus Acceptance Letter sent to individuals after
            they have selected a MCO. SDOH or he LDSS/ Enrollment Broker will be
            responsible for providing a notice of End of the Initial Enrollment
            Period and the right to change MCOs at east sixty (60) days prior to
            the first plan enrollment anniversary date.

                               FHPlus - Section 7
                           (INITIAL ENROLLMENT PERIOD)
                                October 1, 2001
                                       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, an 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, Sections D and E of this
                  Agreement.

            b)    LDSSs and the Contractor will conduct disenrollments in
                  accordance with the guidelines set forth in Appendix H,
                  Sections D and E of this Agreement.

            c)    The SDOH 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.

            d)    LDSSs shall make the final determination concerning
                  disenrollments, except for Contractor-initiated disenrollments
                  and expedited disenrollments, which may be subject to SDOH
                  approval as specified elsewhere in this Agreement.

      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.

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

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

      8.3   Reasons for Voluntary Disenrollment

            An 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

                               FHPlus - Section 8
                                 (DISENROLLMENT)
                                 October 1, 2001
                                       8-1

<PAGE>

            Unless otherwise specified in Appendix H, Section E, 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 an LDSS or the SDOH. Substantiation of
                        the request by the SDOH or the LDSS will result in an
                        expedited disenrollment in accordance with the
                        guidelines and timeframes as set forth in Appendix H.
                        The LDSS will make this decision unless the LDSS
                        delegates this responsibility to the SDOH.

                  ii)   Enrollees may request an expedited disenrollment by an
                        LDSS or the SDOH based on a complaint of Non-consensual
                        Enrollment. Substantiation of such a request by an LDSS
                        or the SDOH shall result in an expedited disenrollment
                        which may be effected retroactive to the first day of
                        the month of enrollment, if deemed by the SDOH or the
                        LDSS and the Enrollee to be in the best interest of the
                        Enrollee.

            c)    Retroactive Disenrollment

            Retroactive disenrollments may be warranted in rare instances and
            include when an Enrollee is later determined to have entered and
            stayed in a residential institution; to have been incarcerated; to
            have moved out of the county of fiscal responsibility, subject to
            any time remaining in the Enrollee's guaranteed eligibility period;
            or to have died 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 an 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 an 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

                               FHPlus - Section 8
                                 (DISENROLLMENT)
                                 October 1, 2001
                                       8-2

<PAGE>

                  disenrollment. Such consultation shall not be required for the
                  retroactive disenrollment in cases where it is clear that the
                  Contractor was not at 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,
                  an 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 Contractor was not at risk for the
                  provision of Benefit Package services during the month.

      8.6   Contractor's Liability

            The Contractor is not responsible for providing the Benefit Package
            under this Agreement after the Effective Date of Disenrollment
            unless the Enrollee is admitted to a hospital prior to the expected
            Effective Date of Disenrollment and is not discharged from the
            hospital until after the expected Effective Date of Disenrollment,
            in which case the Contractor is responsible for the entire hospital
            claim. 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 may initiate disenrollment from the
                        Contractor's plan for "good cause" as that term is
                        defined by the SDOH at any time during the Initial
                        Enrollment Period and may disenroll from the FHPlus plan
                        for any reason at any time after the twelfth (12th)
                        month following the Effective Date of Enrollment.

                  ii)   An Enrollee 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.

                  iii)  Enrollees granted disenrollment for "good cause" may
                        join another FHPlus plan, if one is available.

                  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
                        Enrollee of his or her right to a fair hearing pursuant
                        to 18 NYCRR Part 358.

                               FHPlus - Section 8
                                 (DISENROLLMENT)
                                 October 1, 2001
                                       8-3

<PAGE>

                        In the event that the Enrollee's request to disenroll is
                        approved, the notice must state the Effective Date of
                        Disenrollment.

                  v)    Once the FHPlus Initial Enrollment Period has expired,
                        an Enrollee may disenroll from the Contractor's plan at
                        any time, for any reason.

            b)    Disenrollment Based on Pregnancy

                  A pregnant Enrollee may initiate disenrollment from the
                  Contractor's plan to receive Medicaid coverage.

      8.8   Contractor Initiated Disenrollment

            a)    Contractor initiated disenrollment(s) will be limited to
                  circumstances in which there is clear and consistent
                  documentation that the individual's behavior is verbally or
                  physically abusive and/or causes harm to other Enrollees or to
                  the plan providers and staff, or is repeatedly non -
                  compliant. Disenrollment may not be initiated due to an
                  Enrollee's refusal to accept a specific treatment nor for
                  behavior resulting from an underlying medical condition,
                  alcohol or substance abuse, mental illness, mental retardation
                  or other developmental disability.

            b)    To request disenrollment to an Enrollee, the Contractor must
                  do the following if applicable:

                  i)    show evidence of professional evaluation ruling out an
                        underlying medical condition, alcohol or substance
                        abuse, mental illness, mental retardation or other
                        developmental disability as cause for Enrollee behavior.

                  ii)   document difficulty encountered with the Enrollee;
                        nature, extent and frequency of abusive or harmful
                        behavior, violence, inability to treat or engage
                        client.

                  iii)  identify and document unique issues that may be
                        affecting the Contractor's ability to provide treatment
                        effectively to certain Enrollees as well as the
                        appropriateness of providers in network.

                  iv)   document special training offered to providers to
                        improve their ability to deal with difficult,
                        non-compliant patients, or those having the above
                        mentioned conditions.

            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. In the event the Contractor is the
                  sole FHPlus MCO in the county, the notice must explain the
                  ramifications of losing FHPlus coverage.

                               FHPlus - Section 8
                                 (DISENROLLMENT)
                                 October 1, 2001
                                       8-4

<PAGE>

            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 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 he 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 SDOH or LDSS will review each Contractor initiated
                  disenrollment request in accordance with protocols established
                  by SDOH. Where applicable, as set out in those protocols, an
                  LDSS or the SDOH, through or with the cooperation of the LDSS,
                  shall consult with local mental health and substance abuse
                  authorities in the County when making the determination to
                  approve or disapprove a Contractor initiated disenrollment
                  request.

            g)    An LDSS will render a decision within thirty (30) days of
                  receipt of the disenrollment request. A 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 the right to a fair hearing. If an
                  Enrollee requests 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.

            i)    In New York City, the Metropolitan Regional Office of the SDOH
                  will assume the LDSS responsibility for reviewing and
                  approving requests as set forth in Sections 8.8(f) and (g) of
                  this Agreement.

      8.9   LDSS Initiated Disenrollment

            a)    An LDSS will promptly initiate disenrollment when:

                  i)    an Enrollee is no longer eligible for FHPlus; or

                               FHPlus - Section 8
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                  ii)   the Guaranteed Eligibility Period ends (See Section 9)
                        and an Enrollee is no longer eligible for FHPlus; or

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

                  iv)   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.

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9.    GUARANTEED ELIGIBILITY

      Except as may otherwise be required by law:

      9.1   A new Enrollee who loses eligibility for FHPlus during the first six
            (6) months of his or her enrollment, other than an Enrollee
            described in Sections 9.2 and 9.7 of this Agreement, is entitled to
            receive FHPlus benefits from the Contractor's plan for a period of
            six (6) months from his or her Effective Date of Enrollment.

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

            i)    death,

            ii)   moving out of State, or

            iii)  incarceration.

      9.3   The services covered during the Guaranteed Eligibility period
            shall be those contained in the Benefit Package, as specified in
            Appendix K.

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

      9.5   An Enrollee who loses and regains FHPlus eligibility within a three
            (3) month period will not be entitled to a new period of six (6)
            months Guaranteed Eligibility.

      9.6   If a FHPlus Enrollee wishes to retain FHPlus eligibility during the
            Guaranteed Eligibility Period, an Enrollee may not change health
            plans.

      9.7   A FHPlus Enrollee who becomes eligible for Medicaid benefits
            without an income or resource spenddown and remains in the
            Contractor's plan, is not entitled to the six (6) month Guaranteed
            Eligibility Period because he or she has not lost benefits as a
            result of the change in coverage.

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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 FHPlus program,
            subject to the limitations defined in Appendix K, except for
            services specifically excluded by the Agreement, or subsequently
            enacted by Federal or State Law.

      10.2  Compliance with Applicable Laws

            Benefit Package services provided by the Contractor under this
            Agreement shall comply with all applicable requirements of the State
            Public Health and Social Services Laws.

      10.3  Definitions

            By signing this Agreement the Contractor agrees to the terms of the
            entire Agreement, including the definitions of "Benefit Package" and
            "Non-covered Services" contained in Appendix K which is incorporated
            by reference as if fully set forth herein.

      10.4  Provision of Services Through Participating and Non-Participating
            Providers

            With the exception of Emergency Services described in Section 10.11
            of this Agreement, and services for which Enrollees can self refer
            as described in Section 10.12 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 /EPSDT

            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, all of which are incorporated by reference into
                  the Agreement as if fully set forth herein. The Contractor and
                  its Participating Providers are required to provide C/THP
                  services to FHPlus Enrollees under 21 years of age when:

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                  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 enrollees who are pregnant women and or parents
                        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 that focus on health guidance,
                  immunizations, and screening for physical, emotional, and
                  behavioral conditions.

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      10.6  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 that are covered in the FHPlus benefit
            package.

      10.7  Court Ordered Services

            a)    The Contractor shall provide any Benefit Package services to
                  Enrollees as ordered by a court of competent jurisdiction. The
                  MCO must use Non-Participating Providers only in the event
                  that the Court-Ordered Service is a covered service and the
                  MCO does not have a Participating Provider available to
                  provide that service. Non-Participating Providers shall be
                  reimbursed by the Contractor at the Medicaid fee schedule. The
                  Contractor is responsible for court-ordered services to the
                  extent that such services are covered by Family Health Plus.

            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
                  treatment for mental health and/or alcohol and/or substance
                  abuse or dependence), or other FHPlus covered services. The
                  plan is responsible for payment of those FHPlus services
                  covered by the Benefit Package.

      10.8  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 Participating Provider of such services if
                  the MCO provides Family Planning and Reproductive Services, or
                  directly from a provider affiliated with the Designated Third
                  Party Contractor if such services are not provided directly by
                  the MCO 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-1 of Appendix C, which is hereby
                  made a part of this

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                  Agreement as if set forth fully herein, from either the
                  Contractor, if family planning is a part of the Contractor's
                  Benefit Package, or from the Designated Third Party
                  Contractor, where applicable, 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 the Designated Third Party Contractor, where
                  applicable, 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.

            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
                  and/or the Designated Third Party Contractor, where
                  applicable, 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, may share patient information
                  with the Contractor and/or the Designated Third Party
                  Contractor, where applicable, for purposes of claims payment,
                  utilization review and quality assurance when the appropriate
                  patient consent has been obtained. The Contractor and/or
                  Designated Third Party Contractor, where applicable, 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 and educate its practitioners and
                  administrative personnel about policies concerning direct
                  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 this American
                  College of Obstetricians and

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                  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 identify
                  family planning counseling as an integral part of primary and
                  preventive care.

            g)    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
                  Agreement as if set forth herein.

            h)    If Contractor does not include family planning and
                  reproductive health services in its Benefit Package,
                  Contractor must submit to the SDOH, within ninety (90) days of
                  signing this Agreement, 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 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
                  Agreement as if set forth fully herein.

            i)    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 Contractor, such modifications is shall be
                  deemed incorporated into this Agreement without further action
                  by the parties.

      10.9  Prenatal Care

            Contractors are responsible for the provision of comprehensive
            Prenatal Care Services to all pregnant women enrolled in FHPlus,
            including all services enumerated in Subdivision 1, Section 2522 of
            the Public Health Law in a manner consistent with the standards set
            forth in 10 NYCRR Part 85.40 (Prenatal Care Assistance Program),
            both of which are incorporated by reference.

      10.10 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

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            the Contractor's network providers or the Designated Third Party
            Contractor, where applicable, without a referral from the PCP as
            set forth in Public Health Law Section 4406-b(1).

      10.11 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 services for Urgent Medical
                  Conditions. 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
                  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 Agreement
                  as if set forth fully herein.

            e)    Emergency transportation is included in the Contractor's
                  Benefit Package: The Contractor shall reimburse for all
                  emergency ambulance

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            services without regard to final diagnosis or prudent layperson
            standards.

      10.12 Services for Which Enrollees Can Self-Refer

            a)    Mental Health and Alcohol/Substance Abuse

                  The Contractor will allow Enrollees to make self referral or
                  referral for one mental health and one alcohol/substance abuse
                  assessment from a Participating Provider in any calendar year
                  period without requiring pre-authorization or referral from
                  the Enrollee's Primary Care Provider.

                  i)    The Contractor shall make available to all Enrollees a
                        complete listing of their participating mental health
                        and alcohol/substance abuse providers.

                  ii)   The Contractor will also ensure that its Participating
                        Providers have available and use formal assessment
                        instruments to identify Enrollees requiring mental
                        health and alcohol/substance abuse 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 services from
                        appropriate providers based on the findings of their
                        assessment.

            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 10.15 (a) 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 10.8 and Appendix C of
                  this Agreement.

      10.13 Second Opinions for Medical or Surgical Care

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            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.

      10.14 Coordination with Local Public Health Agencies

            The Contractor will coordinate its public health-related activities
            with Local Public Health Agencies. 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 SDOH
            may require the Contractor to comply with local district
            requirements for coordinating with Local Public Health Agencies.

      10.15 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 SDOH 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 TB related
                        services, unless these services are ordered by a court
                        of competent jurisdiction. The Local Public Health
                        Agency will: 1) make reasonable efforts to

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                        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.

                  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) cost. The
                        Contractor agrees to make all reasonable effort to
                        ensure coordination with DOT providers regarding
                        clinical care and services. The Contractor also will not
                        be financially liable for treatments rendered to
                        Enrollees who have been institutionalized as a result
                        of local health commissioner's order due to
                        non-compliance with TB care regimens.

                  viii) The Contractor remains responsible for communicating,
                        cooperating, and coordinating clinical management of TB
                        with the TB/DOT provider.

            b)    Immunizations

                  i)    Immunizations and administration of immunizations for
                        Enrollees 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 be used in the absence of a negotiated

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

            c)    Prevention and Treatment of Sexually Transmitted Diseases

                  The Contractor will be responsible for requiring that its
                  Participating Providers educate their Enrollees about the
                  risk and prevention of sexually transmitted disease (STD). The
                  Contractor also will be responsible for requiring 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.

            d)    Lead Poisoning

                  The Contractor will require its Participating Providers to
                  coordinate lead poisoning screening and follow-up with Local
                  Public Health Agencies to assure appropriate follow -up in
                  terms of environmental investigation, risk management and
                  reporting requirements.

      10.16 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 with 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)    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.

            c)    Satisfactory methods to assure access to pediatric providers
                  and subspecialists, and tertiary care centers for the
                  treatment of individuals with congenital diseases and
                  malformations (e.g. sickle cell disease, cystic fibrosis).

            d)    Satisfactory methods to assure access to specialty care
                  centers for rare disorders both within and outside of New York
                  State.

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            e)    Satisfactory methods for case management of individuals with
                  complex medical needs.

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

            g)    Policies and procedures to allow for the continuation of
                  existing relationships with out-of-network providers,
                  consistent with P.H.L. Section 4403 and Section 15.5 of this
                  Agreement.

      10.17 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 system.

            d)    Satisfactory systems for coordinating service delivery among
                  physical health, alcohol/substance abuse, 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.

      10.18 Member Needs Relating to HIV

            Persons with HIV infection will be permitted to enroll into FHPlus
            health plans.

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

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            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 FHPlus, 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 counselling 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 the 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 CTRNP services 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 Section 98-1.2 and in Subpart 69-I)
                  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
                  withproviders 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 HIV community-based
                  psychosocial case management services.

            f)    Reporting. The Contractor shall require its Participating
                  Providers to 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.

      10.19 Persons Requiring Alcohol/Substance Abuse Services

            The Contractor will have in place all of the following for its
            Enrollees requiring alcohol/substance abuse services:

            a)    Participating Provider networks consisting of licensed
                  providers, as defined in Section 21.16 of this Agreement.

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            b)    Satisfactory methods for identifying persons requiring such
                  services and encouraging self-referral and early entry into
                  treatment. In the case of 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, alcohol/substance abuse, 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 alcohol and substance addictions,
            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 Alcohol/Substance
            Abuse Services and related activities.

      10.20 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.

      10.21 Women, Infants, and Children (WIC)

            The Contractor shall develop linkage agreements or other mechanisms
            to ensure women Enrollees are referred to WIC services if qualified
            to receive such services. The Contractor shall refer pregnant women
            to WIC local agencies for nutritional assessments and supplements.

      10.22 Coordination of Services

            The Contractor shall coordinate care when appropriate for Enrollees
            with:

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

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

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

            d)    WIC

            e)    special needs plans;

            f)    programs funded through the Ryan White CARE Act;

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

            h)    Prenatal Care Assistance Program (PCAP) Providers;

            i)    local governmental units responsible for public health, mental
                  health, mental retardation or alcohol and substance abuse
                  services; and

            j)    specialized providers of long term care for people with
                  developmental disabilities.

      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.

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<PAGE>
11.   MARKETING

      11.1  Marketing Plan

            The Contractor shall have Marketing Plans, that have been
            prior-approved by the SDOH and/or LDSSs, that describe the
            Marketing activities the Contractor will undertake within designated
            geographic areas during the term of this Agreement.

            The Marketing Plans 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.

            County-specific Marketing Plans shall be kept on file in the offices
            of the Contractor, LDSS, and the SDOH. Marketing Plans may be
            modified by the Contractor subject to prior written approval by the
            SDOH and/or the LDSS. The SDOH and/or LDSS will 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 approved
            Marketing Plans.

      11.3  Prior Approval of Marketing Materials, Procedures, Subcontractors

            The Contractor shall submit all subcontracts, procedures, and
            materials related to Marketing to potential Enrollees 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 have not
            approved.

      11.4  Marketing Infractions

            Infractions of the Marketing Guidelines may result in the following
            actions being taken by the SDOH in collaboration with LDSSs to
            protect the interests of the program and its clients.

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

            b)    For subsequent or more serious infractions, the SDOH in
                  collaboration with LDSSs, may impose liquidated damages of

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                  $2,000 or other appropriate non-monetary sanction for each
                  infraction.

            c)    The SDOH in collaboration with LDSSs 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 SDOH in
                  collaboration with LDSSs 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 for a period up to the remainder
                        of the contract; or

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

      11.5  Additional Marketing Guidelines

            The SDOH may require the Contractor to comply with Local District
            specific marketing guidelines.

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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
            callers 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 FHPlus Enrollees or
            FHPlus and Medicaid Managed Care Enrollees if the Contractor also
            participates in the Medicaid program. 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.

      12.2   Translation and Oral Interpretation

            a)    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.

            b)    In addition, verbal interpretation services must be made
                  available to Enrollees who speak a language other than English
                  as a primary

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                  language. Interpreter services must be offered in person where
                  practical, but otherwise may be offered by telephone.

            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.

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<PAGE>

      13.   ENROLLEE NOTIFICATION

            13.1  Provider Directories/Office Hours for Participating Providers

                  a)    The Contractor will provide to each Enrollee, and upon
                        request to each prospective Enrollee, a list of
                        Participating Providers by specialty and a list of
                        facilities for the county/borough in which the Enrollee
                        or prospective Enrollee resides. Such list shall include
                        names, office addresses, telephone numbers, board
                        certification for physicians, and information on
                        language capabilities and wheelchair accessibility of
                        Participating Providers. This information must be
                        provided in the form of a Provider Directory which must
                        be updated by the Contractor quarterly. Updates for
                        three consecutive quarters may be accomplished through
                        inserts which minimally include additions or deletions
                        of Participating Providers. An updated provider
                        directory must be provided in writing to the
                        Contractor's Enrollees at least annually. Provider
                        directories, including all relevant inserts, shall be
                        made available to new Enrollees, and to prospective
                        Enrollees, upon request.

                  b)    In addition, the Contractor must make available to the
                        SDOH/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;
                              and

                        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.

                  b)    If on 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.

                  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

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                        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.

            13.3  Member Handbooks

                  The Contractor shall issue to a new Enrollee within fourteen
                  (14) days of the Effective Date of Enrollment a FHPlus Member
                  Handbook, which is consistent with the SDOH guidelines
                  described in Appendix E, a copy of which is amended hereto
                  and incorporated by reference into the body of this agreement
                  as if fully set forth 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 FHPlus 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
                        Specialty Services and 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.

                  c)    Offer assistance in arranging an initial visit to the
                        Enrollee's PCP for a baseline physical and other
                        preventive services,

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<PAGE>

                        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 the Enrollee has not already chosen a PCP.

      13.6  Enrollee's Rights to Advance Directives

            The Contractor shall, in compliance with the requirements of 42 CFR
            Section 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 for review and prior
            approval to the SDOH and/or LDSS. 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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      13.8  Contractor's Duty to Report Lack of Contact

            The Contractor must inform the LDSS of any Enrollee whom it has been
            unable to contact within ninety (90) days of enrollment using
            reasonable efforts as defined in Section 13.5 of the Agreement and
            who has 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

            SDOH will require LDSS to 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 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 Family Health Plus 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/or LDSS, and shall obtain the prior approval
            of the notification from SDOH and/or LDSS.

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<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 that may be brought by Enrollees,
                        consistent with Articles 44 and 49 of the New York State
                        P.H.L. or Articles 48 and 49 of the New York State
                        Insurance Law ("Insurance Law").

                  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 Family Health Plus Complaint and Appeals
                        Program Guidelines described in Appendix F, a copy of
                        which is annexed hereto and incorporated by reference
                        into the body of this Agreement as if fully set forth
                        herein. The SDOH 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.

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

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

      14.4  Complaint Investigation Determinations

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

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<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.

      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.

            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.

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

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

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                       (EQUALITY OF ACCESS AND TREATMENT)
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                                      15-1

<PAGE>

      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 30
                  minutes in metropolitan areas or 30 minutes/30 miles in
                  non-metropolitan areas, In rural areas, transport time and
                  distance to primary care sites may be greater than 30
                  minutes/30 miles if consistent with the community standard for
                  accessing care or if by Enrollee choice.

            b)    Other Providers

                  Travel time/distance to specialty care, hospitals, mental
                  health, lab and x-ray providers shall not exceed 30 minutes/30
                  miles. In rural areas, transport time and distance to
                  specialty care, hospitals, mental health, lab and x-ray
                  providers may be greater than 30 minutes/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-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:

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                       (EQUALITY OF ACCESS AND TREATMENT)
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                                      15-2

<PAGE>

                  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; and

                  ii)   adhere to the Contractor's quality assurance
                        requirements and 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 the 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
                  P.H.L. Section 4403(6)(e) or insurance law Section 4804 (a).

                  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;

                  ii)   adhere to the Contractor's quality assurance
                        requirements and 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

                              FHPlus - Section 15
                       (EQUALITY OF ACCESS AND TREATMENT)
                                October 1, 2001
                                      15-3

<PAGE>

                        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 participating specialists for Enrollees who
            have ongoing needs for care from such specialists, consistent with
            P.H.L Section 4403(6)(b) unless the Contractor does not have a
            specialist qualified to meet a particular enrollee's needs. In such
            case, the Contractor shall make a referral to an appropriate
            provider consistent with P.H.L. Section 4403(6)(a) or Insurance Law
            Section 4804 (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 participating specialist, who will
            then function as the coordinator of primary and specialty care for
            that Enrollee, consistent with P.H.L. Section 4403(6)(c) unless the
            Contractor does not have a specialist qualified to meet a particular
            enrollee's needs. In such case, the Contractor shall make a referral
            to an appropriate provider consistent with the P.H.L. Section
            4403(6)(a) or Insurance Law Section 4804 (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
            participating specialty care center with expertise in treating the
            life-threatening or degenerative and disabling disease or condition,
            consistent with New York State P.H.L. Section 4403(6)(d) unless the
            Contractor does not have a specialty care center qualified to meet a
            particular enrollee's needs. In such case, the Contractor shall make
            a referral to an appropriate provider consistent with the P.H.L.
            Section 4403(6)(a) or Insurance Law Section 4804 (d).

                              FHPlus - Section 15
                       (EQUALITY OF ACCESS AND TREATMENT)
                                October 1, 2001
                                      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 FHPlus services consistent with
                  P.H.L. Article 49 and 42 CFR Part 456 and Article 48 and 49 of
                  the Insurance Law. Recipients' records must include
                  information needed to perform utilization review consistent
                  with 42 CFR Sections 456.111 and 456.211. The Contractor's
                  approved quality assurance program must be kept on file by the
                  Contractor. The Contractor shall not modify the quality
                  assurance program without the prior written approval of the
                  SDOH.

            b)    The Contractor shall incorporate the findings from reports in
                  Section 18 of this Agreement into its quality assurance
                  program. When 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 a plan for improving
                  performance subject to approval by the SDOH. The Contractor
                  agrees to meet with the SDOH up to twice a year to review
                  improvement plans and quality performance.

      16.2  Standards of Care

            The Contractor must adopt practice guidelines consistent with
            current standards of care, and in compliance 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 had 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.

                              FHPlus - Section 16
                               (QUALITY ASSURANCE)
                                October 1, 2001
                                      16-1

<PAGE>

17.   MONITORING AND EVALUATION

      17.1  Right to Monitor Contractor Performance

            The SDOH and/or LOSS, 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 and/or LDSS, and DHHS in the monitoring and
            evaluation of the services provided under this Agreement.

      17.3  Cooperation During Annual On-Site Review

            The Contractor shall cooperate with SDOH and LDSS in an annual
            on-site review of the MCO's operations. SDOH shall give the
            Contractor notification of the annual review and survey format at
            least forty-five (45) days prior to the annual site visit. This
            requirement shall not preclude SDOH and/or LDSS 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
            the annual review of the quality of services rendered to its
            Enrollees to be performed by an external review agent selected by
            the SDOH.

                              FHPlus - Section 17
                           (MONITORING AND EVALUATION)
                                October 1, 2001
                                      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 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 Instructions for Report Submissions

            SDOH 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 upon sixty (60) days' written notice
            to the Contractor.

      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 SDOH 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 SDOH for each day other reports required by
            this Section are late. The SDOH shall not impose liquidated damages
            for a first time infraction by the Contractor unless the SDOH 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 SDOH. Liquidated damages may be
            waived at the sole discretion of SDOH. Nothing in this Section shall
            limit other remedies or rights available to 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 may extend due dates, or modify report requirements or formats
            upon a written request by the Contractor to the SDOH 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.

                              FHPlus - Section 18
                       (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2001
                                      18-1

<PAGE>

      18.5  Reporting Requirements

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

            a)    Annual Financial Statements:

                  The 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:

                  The 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 SDOH reserves the right to require
                  Contractor to submit such relevant financial reports and
                  documents related to the financial condition of the plan 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
                  records 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.

            e)    Quality of Care Performance Measures:

                              FHPlus - Section 18
                       (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2001
                                      18-2

<PAGE>

                  The Contractor shall prepare and submit reports to SDOH, as
                  specified in the Quality Assurance Reporting Requirements
                  (QARR). The Contractor must arrange for an NCQA-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 the 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.

            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 the following
                        information to the SDOH 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
                              committee the fraud or abuse;

                        D)    A description of the fraud or abuse;

                        E)    The approximate range of dollars involved;

                              FHPlus - Section 18
                       (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2001
                                      18-3

<PAGE>

                        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 Provide 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 FHPlus
                  Enrollees. The report submission must comply with the Managed
                  Care Provider Network Data Dictionary. Networks must be
                  reported separately for each designated geographic area in
                  which the Contractor operates.

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

                  The Contractor will conduct county-specific (or service area
                  if appropriate) reviews 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 SDOH 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 purpose of these studies will be to promote
                  quality improvement within the

                              FHPlus - Section 18
                       (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2001
                                      18-4

<PAGE>

                  MCO. SDOH will provide guidelines for the studies' structure.
                  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.

            l)    New Enrollee Health Screening Completion Report:

                  The Contractor shall submit a quarterly report to the SDOH and
                  LDSS 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 the Agreement.

            m)    No Contact Report:

                  The Contractor shall submit a monthly report within thirty
                  (30) days of the close of the reporting period to the LDSS of
                  any Enrollee it is unable to contact, through reasonable
                  means, including by mail, and by telephone, using methods
                  described in Section 13.5 and/or of any Enrollees who have not
                  utilized any health care services through the Contractor or
                  its Participating Providers, within ninety (90) days of the
                  Effective Date of Enrollment.

            n)    Additional Reports:

                  Upon request by the SDOH, 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 reserves the right to give thirty (30) days
                  notice in circumstances where time is of the essence.

            o)    LDSS Specific Reports:

                  The SDOH may require the Contractor to comply with LDSS
                  specific reporting requirements for FHPlus.

                              FHPlus - Section 18
                       (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2001
                                      18-5

<PAGE>

      18.6  Ownership and Related Information Disclosure

            The Contractor shall report ownership and related information to
            SDOH 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 Sections 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 SDOH of any
            revisions of the Contractor's license under Article 43 of the
            Insurance Law.

      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 obligations 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 P.H.L. 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 sixty (60) 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.

                              FHPlus - Section 18
                       (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2001
                                      18-6

<PAGE>

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

            Contractor will certify to the SDOH initially and immediately upon
            changed circumstances after 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 FHPlus program, consistent with
                  requirements of SSA Section 1932 (d)(1).

      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) on 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 and Section
            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.

                              FHPlus - Section 18
                       (CONTRACTOR REPORTING REQUIREMENTS)
                                October 1, 2001
                                      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 SDOH and any
                  other authorized governmental agency may require including
                  books, accounts, journals, edgers, 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 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 or a period of six (6)
            years thereafter except that the Contractor shall retain Enrollees'
            medical records that are in the

                              FHPlus - Section 19
                     (RECORDS MAINTENANCE AND AUDIT RIGHTS)
                                October 1, 2001
                                      19-1

<PAGE>

            custody of the Contractor 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. 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 review or audit findings involved in the record
            have been resolved and final action taken.

                              FHPlus - Section 19
                     (RECORDS MAINTENANCE AND AUDIT RIGHTS)
                                October 1, 2001
                                      19-2

<PAGE>

20.   CONFIDENTIALITY

      20.1  Confidentiality of Identifying Information about FHPlus Enrollees
            and Applicants

            All information relating to services to FHPlus Enrollees and
            applicants which is obtained by the Contractor shall be confidential
            pursuant to the New York State P.H.L., including P.H.L. 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 FHPlus Enrollees and
            applicants 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 FHPlus information.

      20.2  Confidentiality of Medical Records

            Medical records of FHPlus Enrollees 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.

      20.3  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
            FHPlus Enrollees and applicants.

                              FHPlus - Section 20
                                (CONFIDENTIALITY)
                                October 1, 2001
                                      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 FHPlus prepaid
                        Benefit Package as defined in Appendix K, a copy of
                        which is amended hereto and incorporated by reference
                        herein as if fully set forth in the body of this
                        Agreement, 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

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                  accept assignment of new Enrollees due to capacity
                  limitations, as determined by the SDOH, 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.

            d)    Notice of Provider Termination

                  The Contractor shall immediately notify SDOH of any notice of
                  termination of a provider agreement to the Contractor's
                  provider network received from the following providers

                        i)    Hospital

                        ii)   IPA

                        iii)  Medical Group

                  The Contractor shall also notify 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 SDOH, at
                  least forty-five (45) days prior to the termination or
                  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 providers 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 SDOH. SDOH 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 SDOH, and develop a transition plan on an
                  expedited basis and provide notice to patients subject to the
                  consent of SDOH.

                  Upon Contractor notice of failure to re-execute, or
                  termination of, a provider agreement, the SDOH may waive the
                  requirement of submission of a contingency plan upon a
                  determination by the SDOH 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

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                              of time necessary to provide not less than thirty
                              (30) days notice to Enrollees.

            SDOH reserves 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

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                  with appropriately qualified health care professionals. Upon
                  request, the application procedures and minimum qualification
                  requirements must be made available to health care
                  professionals.

      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 FHPlus
            program, and agrees to no longer utilize the services of the subject
            provider, as applicable. The Contractor will receive a listing of
            currently excluded Medicaid providers mailed monthly to the
            correspondence address, that the Contractor specified to SDOH during
            the initial provider enrollment process. Such listing shall be
            deemed to constitute constructive notice. This notification should
            not be the sole basis for identifying current exclusions or
            termination of previously approved providers. Should the Contractor
            become aware, through any 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.

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      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 will be payment in full for services provided to
            Enrollees.

      21.6  Choice/Assignment of PCPs

            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 who fail to select a PCP. The assignment of a
                  PCP 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 or 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, the 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 date 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.

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            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 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 a PCP to an Enrollee 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 and as a
                        result he/she lives 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)    Prior to 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  PCP Status Changes

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

            a)    Enrollees will be notified within three (3) business days from
                  the date on which the Contractor becomes aware of the change
                  if:

                  i)    Office address/telephone number change.

                  ii)   Office hours change.

            b)    Enrollees will be notified within fifteen (15) days from the
                  date on which the Contractor became aware of the following
                  changes:

                  i)    An Enrollee's PCP ceases participation with the
                        Contractor (in such cases, the Contractor must ensure
                        that a new PCP is

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                        assigned within thirty (30) days of the date of notice
                        to the Enrollee).

                  ii)   An Enrollee is in an ongoing course of treatment with
                        another Participating Provider who becomes unavailable
                        to continue to provide services to such Enrollee. In
                        such cases, the notice shall also describe the
                        procedures for continuing care.

      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, 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 and FHPlus Enrollees, are
            Contractor-specific, and assume the practitioner is a full-time
            equivalent (FTE) (defined as a provider practicing at least forty
            (40) hours per week for the Contractor):

            i)    No more than 1,500 Medicaid and FHPlus 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 and FHPlus 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.

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            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. The physician must be
                  available at least eight (8) hours/week, the physician must be
                  practicing in a Health Provider Shortage Area (HPSA) or other
                  similarly determined shortage area, 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 Contractor 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
                  its 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 Assistants as Physician Extenders

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

      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 I Appendix I which is
                  incorporated by reference herein as if fully set forth in the
                  body of this agreement.

      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 (1) general acute care hospital within thirty (30)
                  minutes/thirty (30) miles travel time (by car or public
                  transportation) from the Enrollee's residence, unless no
                  hospitals are located within such a distance. If no hospitals
                  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.

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<PAGE>

      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 (1) primary care dentist for each
            2,000 Enrollees. Networks must also include at least one oral
            surgeon. Orthognathic surgery, temporal mandibular disorders (TMD)
            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 clinic or inpatient
            setting is the responsibility of the Contractor regardless of
            whether the plan has opted to provide dental services.

      21.16 Mental Health, Alcohol and Substance Abuse Providers

            The Contractor will include a full array of mental health and
            substance abuse providers in its networks in sufficient numbers to
            assure accessibility to services on the part of Enrollees, 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 and substance abuse providers to
            include the following: 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 alcoholism/substance
            abuse services certified or licensed pursuant to Articles 23 or 31
            of Mental Hygiene Law, as appropriate. OASAS programs include
            Certified Drug and Alcohol Counselors employed only by OASAS
            licensed programs.

      21.17 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.

      21.18 Federally Qualified Health Centers (FQHCs)

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            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.

      21.19 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.

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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.

            If the Contractor enters into subcontracts for the performance of
            work pursuant to this Agreement the Contractor shall take full
            responsibility for the acts or omissions of its subcontractors.
            Nothing in the subcontract shall impair the rights of the State
            under this Agreement. No contractual relationship shall be deemed to
            exist between the subcontractor and the State.

            The Contractor agrees not to enter into any agreements, with third
            party organizations for the performance of its obligations, in whole
            or in part, under this Agreement without the State's prior written
            approval of such third parties and the scope of the work to be
            performed by them. The State's approval of the scope of work and the
            subcontractor does not relieve the Contractor of its obligation to
            perform fully under this Agreement. The responsibilities of the
            Contractor and any subcontractors will be limited to those specified
            in the subcontracts.

      22.2  Permissible Subcontracts

            Contractor may subcontract for provider services as set forth in
            Sections 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 only as are
            acceptable to the SDOH.

            All subcontracts, including provider agreements, entered into by the
            Contractor to provide program services for Family Health Plus under
            this Agreement shall contain the provisions specifying:

                  a.    That the work performed by the subcontractor must be in
                        accordance with the terms of this Agreement;

                  b.    That nothing contained in such agreement shall impair
                        the rights of the State; and

                  c.    That the subcontractor specifically agrees to be bound
                        by the confidentiality provisions set forth in the
                        Agreement between the State and the Contractor.

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                                 October 1, 2001
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      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 and any material amendments thereto shall
                  require the approval of SDOH as set forth in P.H.L. 4402 and
                  10 NYCRR Part 98.

            b)    If a subcontract is for management services under 10 NYCRR
                  Section 98.11, it must be approved by SDOH prior to becoming
                  effective.

            c)    Any material modifications to existing or new subcontract
                  arrangements to perform activities relative to service
                  provided under this Agreement must be submitted in writing and
                  approved by SDOH before they may be implemented.

      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 DHHS, SDOH, or the LDSS.

            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 SDOH and the
                  Contractor shall create any contractual relationship between
                  any subcontractor of the Contractor, including Participating
                  Providers, and SDOH.

            d)    Any subcontract entered into by the Contractor shall fulfill
                  the requirements of 42 OFR 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

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<PAGE>

                  in accordance with the subcontract or Provider Agreement, the
                  subcontractor or Participating Provider will not seek payment
                  from the LDSS, SDOH, the Enrollees, their eligible dependents,
                  or anyone authorized to act on an Enrollee's behalf.

            f)    The Contractor shall include in every Provider Agreement a
                  procedure for the resolution of disputes between the
                  Contractor and its Participating Providers.

      22.6  Timely Payment

            Contractor shall make payments to affiliated health care providers
            for items and services covered under this Agreement on a timely
            basis, consistent with the claims payment procedures described in
            Insurance Law Section 3224-a.

      22.7  Restrictions on Disclosure

            The Contractor shall not by contract or by written policy or
            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.

      22.8  Transfer of Liability

            No contract or agreement between the Contractor and a health care
            provider shall contain any cause purporting to transfer to the
            health care provider, other than a medical group, by indemnification
            or otherwise, any

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            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.

      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

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                                      22-4

<PAGE>

                  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 P.H.L 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.

      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.

                               FHPlus - Section 22
                     (SUBCONTRACTS AND PROVIDER AGREEMENTS)
                                 October 1, 2001
                                      22-5

<PAGE>

            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 the agreement between the Contractor and
            each subcontractor.

                               FHPlus - Section 22
                     (SUBCONTRACTS AND PROVIDER AGREEMENTS)
                                 October 1, 2001
                                      22-6

<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.

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
      guidelines in Appendix J of this Agreement a copy of which is amended
      hereto and incorporated into the body of the Agreement as if fully set
      forth herein. Said plan must be approved by the SDOH and be filed with the
      Commissioner of Health and be kept on file by the Contractor.

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 for Article 44 plans
            or Articles 48 and 49 of the State Insurance Law for Article 43
            plans.

      25.3  Contractor Notice to Enrollees

            a)    Contractor must issue a written Notice of Adverse
                  Determination and Fair Hearing Rights to any Enrollee:

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                                  Page 1 of 11

<PAGE>

                  i)    When Contractor or its utilization review agent has
                        denied a request to approve a Benefit Package service
                        ordered by an MCO provider; or

                  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 ten (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)    A description of the action Contractor intends to take;

                  ii)   Contractor's reasons for the intended action;

                  iii)  The circumstances under which expedited complaint or
                        utilization review is available and how to request it;

                  iv)   Notice of Enrollee's right to file a complaint with the
                        Contractor, a complaint with SDOH, and/or request a
                        State fair hearing through the Office of Administrative
                        Hearings (OAH);

                  v)    Instructions to the Enrollee regarding how the Enrollee
                        may file complaints, utilization appeals and State fair
                        hearing requests, including use of the Notice of Right
                        to Request a Fair Hearing which will inform Enrollees of
                        his or her possible right to aid continuing and that
                        such aid can be accessed only if the Enrollee requests a
                        State fair hearing.

      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 has been completed and there is a

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<PAGE>

                  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 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)    Although an Enrollee may request a State fair hearing in any
                  given dispute, Contractor is required to maintain and operate
                  in good faith its own internal 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 disenrollment 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.

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                                 October 1, 2001
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<PAGE>

            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 or requirements imposed by DHHS. 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.

            h)    The information describing fair hearing rights, aid
                  continuing, complaint procedures and utilization review
                  appeals shall be included in all FHPlus 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
                  benefits. In the event

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                                 October 1, 2001
                                  Page 4 of 11

<PAGE>

                  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

            FHPlus 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 FHPlus 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 and
            Article 49 of the Insurance law 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
      resultant administrative codes, rules and regulations related to the
      Medical Assistance Program or to the delivery of the contracted for
      services.

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                                 October 1, 2001
                                  Page 5 of 11

<PAGE>

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
      ("EPA") 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
            and SDOH, 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, agents, employees, or
                  subcontractors, including Participating Providers, in
                  connection with the performance of this Agreement;

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                                 October 1, 2001
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<PAGE>

            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 SDOH will provide the Contractor with prompt
                              written notice of any claim made against the SDOH,
                              and the Contractor, at its sole option, shall
                              defend or settle said claim. The SDOH 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 SDOH, its employees,
                              or agents.

      32.2  Indemnification by SDOH

            The SDOH agrees to indemnify and hold the Contractor harmless, to
            the extent authorized by Article 3, Section 19 of the New York State
            Constitution and subject to the availability of lawful
            appropriations as required by State Finance Law, Section 41, from
            any liability, loss, damage, claim, suit, or judgment, and all
            allowable costs and expenses including but not limited to,
            reasonable counsel fees and disbursements, of any kind or nature, as
            determined by the New York State Court of Claims and arising out of
            the actions or the omissions of the SDOH, its officers, agents or
            employees in connection with this Agreement. Provisions during the
            term of this Agreement are set forth in the New York State Court of
            Claims Act, and any damages arising from such liability shall issue
            from the New York State Court of Claims Fund or applicable, annual
            appropriation of the Legislature of the State of New York.

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

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<PAGE>

            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.

      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  Disclosure Requirements for 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 the Capitation rate that the Contractor will receive for such
            Eligible Persons or Enrollees.

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                                 October 1, 2001
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<PAGE>

      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.

      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 covered
            benefits from or through a tribal health or urban Indian health
            facility or center which is included in the Contractor's network.

35.   COMPLIANCE WITH APPLICABLE LAWS

      35.1  Contractor and SDOH Compliance With Applicable Laws

            Notwithstanding any inconsistent provisions in this Agreement, the
            Contractor and SDOH 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; and
            the Americans with Disabilities Act; Title XIII of the Federal
            Public Health Services Act, 42 U.S.C. Section 300e et 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. The parties
            agree that this Agreement shall be interpreted according to the laws
            of the State of New York.

      35.2  Nullification of Illegal, Unenforceable, Ineffective or Void
            Agreement 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

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<PAGE>

            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  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 FHPlus Program. The
            Contractor shall continue to be financially responsible as defined
            in PHL Section 4403(1 )(c) and shall comply with the contingent
            reserve fund and escrow deposit requirements of 10 NYCFR Section
            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 MCO 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.

      35.5  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.

      35.6  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.

      35.7  Non-Liability of Enrollees for Contractor's Debts

            Contractor agrees that in no event shall the Enrollee or any person
            authorized to act on the Enrollee's behalf become liable for the
            Contractor's debts as set forth in SSA Section 1932(b)(6).

      35.8  SDOH Compliance With Conflict of Interest Laws

            SDOH and its employees shall comply with General Municipal Law
            Article 18 and all other appropriate provisions of New York State
            law, local laws

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<PAGE>

            and ordinances and all resultant codes, rules and regulations
            pertaining to conflicts of interest.

      35.9  Compliance With PHL Regarding External Appeals

            Contractor must comply with Article 49 Title II of the Public Health
            Law and Article 49 of the Insurance Law regarding external appeal of
            adverse determinations.

36.   NEW YORK STATE STANDARD CONTRACT CLAUSES

      Appendix A (Standard Clauses as required by the Attorney General for all
      State contracts) is attached and incorporated as if set forth fully herein
      and any amendment thereto and takes precedence over all other parts of the
      agreement.

37.   MISCELLANEOUS

      The prior review of the State is required before the Contractor or any of
      its employees, agents or independent contractors at any time, either
      during or after termination of, or cessation of the services required by
      this agreement, issue any written statement to the media or issues any
      material for publication through any medium of communication bearing on
      the work performed relating to financial results, enrollment, outcomes,
      utilization patterns, and/or health status under this agreement. Any data
      related to the implementation or outcome of the programs funded pursuant
      to this agreement used for publication in trade or scientific medium shall
      require prior review by the State.

      No report, document or other data produced in whole or in part with the
      funds provided under this agreement may be copyrighted by the Contractor
      without consent by the State, nor shall any notice of copyright be
      registered by the Contractor in connection with any report, document or
      other data developed pursuant to this agreement. All Information and data
      developed under this agreement shall be the property of the State.

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<PAGE>

                                   APPENDIX A

                         NEW YORK STATE STANDARD CLAUSES
                           AND LOCAL STANDARD CLAUSES

                                     FHPlus
                                   Appendix A
                                 October 1, 2001
                                       A-1

<PAGE>

                                   APPENDIX A

                STANDARD CLAUSES FOR ALL NEW YORK STATE CONTRACTS

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 138 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 Contractor 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 or 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), or 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.

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 Workers' Compensation Law.

5.    NON-DISCRIMINATION REQUIREMENTS. In accordance with 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, age,
      disability 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

                                     FHPlus
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                                 October 1, 2001
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<PAGE>
      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 REQUIREMENT. 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 a 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 2401 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 contractors
      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. These 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.

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<PAGE>

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 hours at an office of the Contractor 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
      purpose 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

                                     FHPlus
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<PAGE>

      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 Division 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.

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                                 October 1, 2001
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<PAGE>

15.   LATE PAYMENT. Timeliness of payment and any interest to be paid to
      Contractor for late payment shall be governed by Article XI-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.

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 use 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 not 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 Fair 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.

                                     FHPlus
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                                October 1, 2001
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<PAGE>

      Information on the availability of New York State subcontractors and
      suppliers is available from:

                        Department of Economic Development
                        Division for Small Business
                        30 South Pearl Street
                        Albany, New York 12245
                        Tel. 518-292-5220

      A directory of certified minority and women-owned business enterprises
      is available from:

                        Department of Economic Development
                        Minority and Women's Business Development Division
                        30 South Pearl Street
                        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.
      Contact the Department of Economic Development, Division for Small
      Business, 30 South Pearl Street; Albany New York 12245, for a current list
      of jurisdictions subject to this provision.

Revised November 2000

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                                   Appendix A
                                 October 1, 2001
                                      A-7

<PAGE>

                                   APPENDIX B

                        CERTIFICATION REGARDING LOBBYING

                       NEW YORK STATE DEPARTMENT OF HEALTH

PLAN NAME  Wellcare of New York

                                     FHPlus
                                   APPendix B
                                 October 1, 2001
                                       B-1

<PAGE>

                                   APPENDIX B

                        CERTIFICATION REGARDING LOBBYING

The undersigned certified, 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

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                                 October 1, 2001
                                       B-2

<PAGE>

      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 placed when this transaction was made or entered into. Submission
of this certification is a prerequisite for making or entering into this
transaction pursuant to U.S.C. Section 1352. The failure to file the required
certification shall subject the violator to a civii penalty of not less than
$10,000 and not more than $100,000 for each such failure.

DATE: 8-7-01

SIGNATURE [ILLEGIBLE]

TITLE V.P. Operations

ORGANIZATION Wellcare of N.Y.

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                                   Appendix B
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                                       B-3

<PAGE>

                                  APPENDIX B-1

                               FAMILY HEALTH PLUS

                       STANDARD CONTRACT/BID INSERT FORM

                                     FHPlus
                                  Appendix B-1
                                 October 1, 2001

<PAGE>

                                  APPENDIX B-1
Bid Form                                           Request-<Number>

                                    BID FORM

    WellCare of New York, Inc.          bids a total price of
-----------------------------------
          Name of Firm

$       N/A
 ------------------                       /s/ Darcy Shepard

     3/16/2001                              Signature
-------------------                       Darcy Shepard
        Date                              Vice President of Network [ILLEGIBLE]

Federal Identification Number

14-1676443
-------------------
Print Name                          Title

Name of Company
      WellCare of New York, Inc.

Telephone                           Date

      845-334-7140                  3/16/2001

Address
      P.O.bBox 4800

City Kingston                   State NY Zip Code 12402

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

      Bidders choosing not to bid are requested to complete and return only this
      form. Please check one box:

[  ]

      1.    We do not provide the requested services. Please remove our firm
            from your mailing list.

[  ]

      2.    We are unable to bid at this time because

            Please retain our firm on this list.

                                               /s/ Lori E. Masterson
                                           -------------------------------
                                                 LORI E. MASTERSON
                                           Notary Public, State of New York
                                                  NO. 02MA6002545
                APPENDIX                     Qualified in Ulster County
                                       Commission Expires February 9, 2002

                                                                               7

<PAGE>

                                  APPENDIX B-1

BIDDER'S NAME: WellCare of New York, Inc.    REQUEST NUMBER

STANDARD CONTRACT/BID INSERT FORM

This form must be completed and returned with your response to this proposal. If
awarded to you, the contract will incorporate this form as completed by you.

              NONDISCRIMINATION IN EMPLOYMENT IN NORTHERN IRELAND:
                      MacBRIDE FAIR EMPLOYMENT PRINCIPLES

Note: Failure to stipulate to these principles may result in the contract being
awarded to another bidder. Governmental and non-profit organizations are
exempted from this stipulation requirement.

In accordance with Chapter 807 of the Laws of 1992 (State Finance Law Section
174-b), the bidder, by submission of this bid, certifies that it or any
individual or legal entity in which the bidder holds a 10% or greater ownership
interest, or any individual or legal entity hat holds a 10% or greater ownership
interest in the bidder, either

- has business operations in Northern Ireland     Y          N    xx
                                                   --------    --------

- if yes to above, shall take lawful steps in good faith to conduct any business
operations they have in Northern Ireland in accordance with the MacBride Fair
Employment Principles relating to non-discrimination in employment and freedom
of workplace opportunity regarding such operations in Northern Ireland, and
shall permit independent monitoring of their compliance with such Principles:
Y      N
 -----  -----

OMNIBUS PROCUREMENT ACT OF 1992

Is the Bidder a New York State Business Enterprise? Y  X     N
                                                      ---      -----

The State Finance Law defines a "New York State Business Enterprise" as a
business enterprise, including a sole proprietorship, partnership, or
corporation, which offers for sale or lease or other form of exchange, goods
which are sought by the department and which are substantially manufactured,
produced or assembled in New York State, or services which are sought by the
department and which are substantially performed within New York State. The
Department of Health considers "substantially" to mean "over 50%".

- 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.

                                    APPENDIX

                                                                               8

<PAGE>

-     Information on the availability of New York State subcontractors and
      suppliers is available from:

                            Empire State Development
                          Division for Small Business
                                  (518)474-7756

-     A directory of minority-and women-owned business enterprises is available
      from:

                   Empire State Development
                   Minority and Women's Business Development Division
                   (518)474-1979

FOR ALL CONTRACTS WHERE THE TOTAL BID AMOUNT IS $1 MILLION OR MORE

The Omnibus Procurement Act of 1992 requires that, by signing this bid proposal,
contractors certify that whenever the total bid amount is greater than
$1 million:

1.    The contractor has made all reasonable efforts to encourage the
      participation of New York State Business Enterprises as suppliers and
      subcontractors on this project, and has retained the documentation of
      these efforts to be provided upon request to the State;

2.    The contractor has complied with the Federal Equal Opportunity Act of 1972
      (P.L. 92-261), as amended;

3.    The contractor agrees to make all 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;

4.    The contractor acknowledges notice that New York 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.

                                    APPENDIX

                                                                               9

<PAGE>

                                   APPENDIX C

                       NEW YORK STATE DEPARTMENT OF HEALTH

                               FAMILY HEALTH PLUS

                         GUIDELINES FOR THE PROVISION OF
                FAMILY PLANNING AND REPRODUCTIVE HEALTH SERVICES

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                                      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 the Designated Third
Party Contractor.

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 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.

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,

                                     FHPlus
                                   Appendix C
                                 October 1, 2001
                                       C-2

<PAGE>

and 10 NYCRR Section 751.9 and Part 753 relating to informed consent and
confidentiality.

Routine obstetric and/or gynecologic care, including hysterectomies, pre-natal,
delivery and post-partum care are the responsibility of the Contractor if they
are covered contract services.

                                     FHPlus
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<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 provider without referral or approval. The
notification must contain the following:

1)    notification of the FHPlus 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 a
      Contractor's Participating Provider 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.

The Contractor must notify its Participating Providers that all claims for
family planning services must be billed to the Contractor.

                                     FHPlus
                                   Appendix C
                                 October 1, 2001
                                       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 Agreement.

      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 included
                  in the Contractor's Benefit Package.

            b.    Such services may be obtained through a third party
                  specifically under contract with SDOH for the provision of
                  these services.

            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 the above 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.

      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.

      4)    The member handbook and marketing materials indicating that the
            Contractor has elected not to cover certain reproductive health and
            family planning services,

                                     FHPlus
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                                 October 1, 2001
                                       C-5

<PAGE>


            and explaining the right of all Enrollees to secure such services
            through the Designated Third Party Contractor.

      5)    Mechanisms to provide all new Enrollees with an SDOH approved letter
            explaining how to access family planning services through the
            Designated Third Party Contractor and the list of participating
            providers available through that arrangement. This material will be
            furnished by SDOH to the Contractor and must be mailed with the
            first new Enrollee communication.

      6)    If an Enrollee or prospective Enrollee requests information about
            these family planning and reproductive health services, the
            Contractor will advise the Enrollee or prospective Enrollee as
            follows:

            a.    Certain family planning and reproductive health services such
                  as abortion, sterilization and birth control are not covered
                  directly by the Contractor.

            b.    Enrollees can receive these non-covered services using the
                  Designated Third Party Contractor.

            c.    The Contractor will mail to each Enrollee or prospective
                  Enrollee who calls for information about family planning and
                  reproductive health services, a copy of the SDOH approved
                  letter explaining the Enrollee's right to receive these
                  services through the Designated Third Party Contractor and the
                  list Participating Providers available through that
                  arrangement. 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 list of providers available through the
                  Designated Third Party Contractor for family planning
                  services.

      7)    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 approved list
            were mailed. The Contractor will review this log monthly and upon
            request, submit a copy to SDOH by county.

      8)    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 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
            provide the Enrollee with a list of providers available through the
            Designated Third Party Contractor, or give the Enrollee the member
            services number to call to obtain this listing.

      9)    The Contractor must recognize that the exchange of medical
            information, when indicated in accordance with generally accepted
            standards of professional

                                     FHPlus
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<PAGE>

            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 separate contract with SDOH.

      10)   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 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.
                  Call monitoring 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 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 all new employees with a copy of
                  this policy. The Contractor's orientation programs 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.

                                     FHPlus
                                   Appendix C
                                 October 1, 2001
                                       C-7

<PAGE>

                                   APPENDIX D

                      NEW YORK STATE DEPARTMENT OF HEALTH

                               FAMILY HEALTH PLUS

                              MARKETING GUIDELINES

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       D-1

<PAGE>

                              MARKETING GUIDELINES

                                  INTRODUCTION

The purpose of these guidelines is to provide an operational framework for
localities and FHPlus 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.

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       D-2

<PAGE>

                               A. Marketing Plans

1.    The MCO shall develop marketing plans that meet SDOH guidelines and any
      local requirements as approved by the State Department of Health (SDOH).

2.    The SDOH and/or 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 authorized by Section
      11.5 of this Agreement must be described in the MCO's county-specific
      marketing plans.

4.    The MCO must have on file with the SDOH and each LDSS an approved
      marketing plan, prior to the contract award date or before marketing and
      enrollment begin, whichever is sooner. Subsequent changes to the marketing
      plans must be submitted to the LDSS or SDOH for approval at least sixty
      (60) days before implementation.

5.    The marketing 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.

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       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 FHPlus and/or a MCO's FHPlus care product. The target
            audience for these marketing materials is low-income, uninsured
            people who do not qualify for Medicaid, and who are living in a
            defined service area.

      b)    Marketing materials include any information that references the
            FHPlus 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 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.

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       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 "You get free, unlimited visits." Materials must not use
            broad, sweeping statements-- for example, "If you are uninsured, you
            are eligible for FHPlus and/or the XYZ Health Plan."

      f)    The material must accurately reflect general information, which is
            applicable to the average customer of FHPlus.

      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 take 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, enrollment broker, SDOH-approved
            Enrollment Facilitators 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 Contractor shall advise potential Enrollees, in written
            materials related to enrollment, to verify with the medical services
            providers they prefer, or have existing relationships with, that
            such medical services providers participate in the selected FHPlus
            MCO's network and are available to serve the Enrollee.

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 applicable LDSSs.

            b)    The SDOH will delegate to LDSSs review and approval of the
                  following marketing material:

                  i) MCO marketing plans;

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       D-5
<PAGE>

            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;

            iv)     MCO informational brochures to be included in LDSS
                    enrollment packets or to be used by SDOH-approved Enrollment
                    Facilitators; and

            v)      All direct mailing from MCOs targeted to the FHPlus 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 Contractor Outreach Materials

        The Contractor shall provide to the LDSS and/or Enrollment Broker or
        SDOH-approved Enrollment Facilitators upon request, an approved
        marketing/informational brochure or alternative informational document
        that describes coverage in the service area.

        The Contractor shall, upon request, submit to the LDSS, Enrollment
        Broker, or SDOH-approved Enrollment Facilitators a current provider
        directory, together with information that describes how to determine
        whether a provider is presently available.

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       D-6
<PAGE>

                             C. Marketing Activities

1. Definitions

      a)    Marketing activities are occasions during which marketing
            information and material regarding FHPlus 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 fully capitated for family planning
                        services, the representative must tell the prospective
                        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
                              from the Designated Third Party Contractor;

                        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 MCC-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 FHPlus eligibles only.

      c)    Media campaigns are the distribution of information/materials
            regarding the FHPlus program and/or a specific MCO for the purpose
            of encouraging the uninsured to join a FHPlus 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 affected LDSSs.

2. Marketing Sites

      a)    With prior LOSS approval, MCOs 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
                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       D-7
<PAGE>

            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.

      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 MCOs 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 FHPlus program, or the
            program or policy requirements of the LDSS or the SDOH.

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       D-8
<PAGE>

      b)    MCOs are PROHIBITED from purchasing or otherwise acquiring or using
            mailing lists of FHPlus eligibles 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.

      d)    MCOs 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 the Capitation Rate that the Contractor will receive for such
            Eligible Person. 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 FHPlus eligibles 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 FHPlus Enrollees. Examples of inappropriate behavior include
            interfering with other health plan presentations, talking negatively
            about another health plan, and participating with FHPlus Enrollees
            during the verification interview with LDSS staff.

      g)    MCOs may offer nominal gifts of 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

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                       D-9
<PAGE>

            completion of immunizations or other health related programs. Such
            rewards may not exceed $5000 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 financial or other kinds of incentives to
            marketing representatives that use the number of Enrollees as a
            factor in compensation. MCOs may reward representatives based on the
            achievement of health goals by the Enrollee. For example, an MCO may
            offer an incentive to a marketing representative who has enrolled an
            individual who subsequently completes a smoking cessation session
            and stops smoking.

      j)    Individuals employed by MCOs as marketing representatives and
            employees of marketing subcontractors must have successfully
            completed a training program about the basic concepts of managed
            care and the FHPlus enrollee's rights and responsibilities relating
            to membership in managed care. MCOs must submit a copy of the
            training curriculum for their marketing representative 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.

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                      D-10
<PAGE>

                            D. MARKETING INFRACTIONS

1.    Infractions of the marketing guidelines may result in the following
      actions being taken by the SDOH in collaboration with LDSSs to protect the
      interests of the program and its clients.

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

      b)    For subsequent or more serious infractions, the SDOH, in
            collaboration with LDSSs, may impose liquidated damages of
            $2,000.00, or other appropriate non-monetary sanctions for each
            infraction.

      c)    The SDOH in collaboration with LDSSs 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 SDOH in collaboration with LDSSs may:

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

            ii)     suspend new enrollments, for a period up to the remainder of
                    the Agreement; or

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

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                      D-11
<PAGE>

                      E. LDSS SPECIFIC MARKETING GUIDELINES

Local districts may adopt, subject to SDOH approval, additional and/or more
restrictive marketing guidelines to the extent appropriate to local conditions
and circumstances. The SDOH may require the Contractor to comply with local
district-specific marketing guidelines.

                                     FHPlus
                                   Appendix D
                                 October 1, 2001
                                      D-12
<PAGE>

                                   APPENDIX E

                      NEW YORK STATE DEPARTMENT OF HEALTH

                               FAMILY HEALTH PLUS

                           MEMBER HANDBOOK GUIDELINES

                                     FHPlus
                                   Appendix E
                                 October 1, 2001
                                       E-1
<PAGE>

                                  INTRODUCTION

This document contains member handbook guidelines for use by managed care
organizations (MCOs) under contract to serve New York FHPlus 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 in its review of all FHPlus 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
family planning; self-referral policies; 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 listings 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 SDOH Family Health Plus
Program.

GENERAL FORMAT

Member handbooks must be written in a style and reading level that will
accommodate the reading skills of many FHPlus Enrollees. 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 percent (5%) 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 outreach activities.

b)    Provider Listing, including Site Locations

                                     FHPlus
                                   Appendix E
                                 October 1, 2001
                                       E-2
<PAGE>

      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.

      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)    Choice of Primary Care Provider (including how to make an appointment)

      i)    Explanation of the role of POP 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.

d)    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.

e)    Referrals to Specialists (in and out-of-plan)

      i)    Explanation of specialist care and 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 specialized medical care over a prolonged
            period of time, may request

                                     FHPlus
                                   Appendix E
                                 October 1, 2001
                                       E-3
<PAGE>

            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.

f)    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 contract definition).

      iii)  Services not covered by the plan or FHPlus.

      iv)   Prior authorization and other requirements for treatments and
            services.

      v)    Family planning and reproductive health services policy.

      vi)   HIV counseling and testing policy.

      vii)  Plan toll-free number for Enrollee to call for more information.

g)    Out of Area Coverage

      i)    Explanation of what to do and who to call if medical care is
            required when Enrollee is out of plan's service area.

h)    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.).

i)    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.

      v)    Right to an appeal, including expedited and standard appeals
            processes and the time frames for such appeals.

      vi)   Right to designate a representative.

                                     FHPlus
                                   Appendix E
                                 October 1, 2001
                                       E-4
<PAGE>

      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).

j)    Enrollment and Disenrollment Procedures

      i)    Explanation of the Initial Enrollment Period, and initial grace
            period when a person may change plans.

      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.

k)    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.

l)    Language

      i)    Description of how the Contractor addresses the needs of non-English
            speaking Enrollees.

m)    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.

      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.

                                     FHPlus
                                   Appendix E
                                 October 1, 2001
                                       E-5
<PAGE>

      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.

n)    Fair Hearing

      Explain that:

      i)    Enrollee has a right to a State Fair Hearing and Aid 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 FHPlus 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).

o)    External Appeals

      i)    Description of circumstances when 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.

p)    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.

q)    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.

                                     FHPlus
                                   Appendix E
                                 October 1, 2001
                                       E-6
<PAGE>

r)    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, if
      applicable.

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.

                                     FHPlus
                                   Appendix E
                                 October 1, 2001
                                       E-7
<PAGE>

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.

                                     FHPlus
                                   Appendix E
                                 October 1, 2001
                                       E-8
<PAGE>

                                   APPENDIX F

                      NEW YORK STATE DEPARTMENT OF HEALTH

                               FAMILY HEALTH PLUS

                    COMPLAINT AND APPEALS PROGRAM GUIDELINES

                                     FHPLUS
                                   APPENDIX F
                                 October 1, 2001
                                       F-1
<PAGE>

I.    OVERALL OBJECTIVES

      The FHPlus 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 defined as a written or verbal contact to the plan
            in which the Enrollee or provider describes a concern with any of
            the following:

            -     A determination made by the MCO, other than a determination of
                  medical necessity or a determination that a service is
                  considered experimental or investigational;

            -     Treatment experienced through the MCO, its providers, or
                  Contractors; or

            -     Any other concern with the MCO, its benefits, employees or
                  providers.

      b)    An "inquiry" is defined as a request for information by an Enrollee.
            Inquiries may include instances where a MCO clarifies the Benefit
            Packages or procedures for accessing services; or other issues
            relative to an Enrollee's question.

      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; or determines that a requested benefit is not
            covered in the MCO's Benefit Package, the MCO shall provide written
            notice of the procedures for the

                                     FHPlus
                                   APPENDIX F
                                 October 1, 2001
                                       F-2
<PAGE>

            Enrollee to file a complaint, including the notice containing
            information on the right to request a fair hearing.

      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)    The Enrollee shall be informed of the toll-free number to call in
            order to file a complaint and of their right to complain to the SDOH
            and LDSS (phone numbers and address) at anytime.

      e)    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 to an Enrollee's health.

      f)    Determinations of all clinical complaints involving clinical
            decisions shall be made by qualified clinical personnel.

      g)    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

The MCO shall send a notice to the Enrollee upon receipt of the following types
of complaints anytime the MCO: 1) 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 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.

                                     FHPlus
                                   APPENDIX F
                                 October 1, 2001
                                       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 the 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.

                                     FHPlus
                                   APPENDIX F
                                 October 1, 2001
                                       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. The determination shall include:

            i)    the detailed reasons for the determination;

            ii)   the clinical rationale for the determination, if applicable;

            iii)  the procedures for the filing of an appeal of the
                  determination including required appeal forms;

            iv)   the Enrollee's option to also contact the State Department of
                  Health (800-206-8125) with their complaint;

            v)    the notice containing fair hearing rights.

      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 a 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 designed, 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 matters 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 pare 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

                                     FHPlus
                                   APPENDIX F
                                 October 1, 2001
                                       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 fair 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;

                                     FHPlus
                                   APPENDIX F
                                 October 1, 2001
                                       F-6
<PAGE>

      e)    date and copy of the Enrollee's appeal;

      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.

                                     FHPlus
                                   APPENDIX F
                                 October 1, 2001
                                      F-7
<PAGE>

                                   APPENDIX G

                     NEW YORK STATE DEPARTMENT OF HEALTH -
                          GUIDELINES FOR THE PROVISION
                         OF EMERGENCY CARE and SERVICES
                       FOR THE FAMILY HEALTH PLUS PROGRAM

                                     FHPlus
                                   APPENDIX G
                                 October 1, 2001
                                       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, including psychiatric stabilization and medical detoxification
      from drugs or alcohol, that are provided for an emergency medical
      condition.

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.

      Failure by the participating ED to notify the MCO for visits that do not
      meet the definition of an Emergency Medical Condition should not be the
      sole basis for denial of triage fee or other payment-unless it can be
      shown to be part of a pattern of non-notification by the participating ED.
      Non-participating EDs cannot be denied payment on the basis of non-
      notification.

PROTOCOL FOR ACCEPTABLE TRANSFER BETWEEN FACILITIES

      All relevant COBRA requirements must be met.

                                     FHPlus
                                   Appendix G
                                October 1, 2001
                                       G-2

<PAGE>

      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 been 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.

      Payment of the triage fee is contingent on reasonable notification efforts
      by a participating hospital to the health plan and/or patient's primary
      care provider, so that appropriate follow-up can occur.

                                     FHPlus
                                   Appendix G
                                October 1, 2001
                                       G-3

<PAGE>

                                   APPENDIX H

             NEW YORK STATE DEPARTMENT OF HEALTH GUIDELINES FOR THE
                  PROCESSING OF ENROLLMENTS AND DISENROLLMENTS
                       FOR THE FAMILY HEALTH PLUS PROGRAM

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-1

<PAGE>

                                    APPENDIX H

                                SDOH GUIDELINES
              FOR THE PROCESSING OF ENROLLMENTS AND DISENROLLMENTS
                             FOR THE FHPLUS PROGRAM

This appendix is intended to provide general guidelines to MCOs for the
processing of enrollments and disenrollments. Where an enrollment broker exists,
the enrollment broker may be responsible for some or all of LDSS
responsibilities. To allow LDSSs flexibility in developing processes that will
meet their needs, SDOH may require MCOs to follow local district modifications
to specific timeframes and procedures.

A. ENROLLMENT

SDOH RESPONSIBILITIES:

1.    The SDOH is responsible for monitoring enrollment activities, including
      facilitated enrollment, and providing technical assistance to LDSSs 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:

LDSSs are responsible for FHPlus eligibility determinations and the enrollment
of eligible persons into FHPlus MCOs.

1.    LDSSs are responsible for coordinating the FHPlus application and
      enrollment process with SDOH-approved Enrollment Facilitators consistent
      with SDOH Administration Directives on Family Health Plus and Facilitated
      Enrollment. Such coordination shall include, but not be limited to:

      i)    working with SDOH-approved Enrollment Facilitators to develop/amend
            protocols for the receipt and processing of applications and for the
            provision of information on managed care options to potential
            Enrollees.

      ii)   providing information to SDOH-approved Enrollment Facilitators to
            assist in determining a health care provider's participation in
            Medicaid managed care or FHPlus.

      iii)  accepting Medicaid managed care/FHPlus enrollment forms from
            SDOH-approved Enrollment Facilitators and pending the enrollment
            until eligibility has been established and enrollment can be
            completed in the PCP Subsystem.

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-2

<PAGE>

      iv)   providing feedback to SDOH-approved Enrollment Facilitators on
            incomplete or incorrect applications so that problems may be
            addressed in a timely fashion.

      v)    delegating the Medicaid/FHPlus face-to-face interview with the
            applying individual/families to the Enrollment Facilitators or
            establish procedures that allow the facilitator to act as the
            authorized representative for the applicant, for the purposes of a
            face-to-face interview with local district staff.

2.    LDSSs are responsible for ensuring that pre-enrollment information
      provided to individuals eligible for FHPlus is consistent with Social
      Services Law, Section 369-ee and may train persons providing counseling to
      potential Enrollees, including SDOH-approved Enrollment Facilitators.

3.    LDSSs must ensure that potential Enrollees are informed of the
      availability of FHPlus MCOs and the scope of services covered by each.

4.    LDSSs must ensure that potential Enrollees are informed of the right to
      confidential face-to-face counseling and will make confidential
      face-to-face sessions available upon request.

5.    LDSSs shall ensure that potential Enrollees are advised, 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 plan's
      provider network and are available to serve the participant.

6.    For enrollments made during face-to-face counseling, if the potential
      Enrollee has a preference for particular medical services providers, LDSSs
      shall ensure that enrollment counselors verify with the medical services
      providers that such medical services providers whom the potential Enrollee
      prefers participate in the MCO's network and are available to serve the
      participant.

7.    LDSSs will approve the Contractor's phone enrollment process, if
      applicable.

8.    LDSSs will determine the status of enrollment applications. Applications
      will be enrolled, pended or denied.

9.    LDSSs enter individual enrollment form data and transmit 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

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-3

<PAGE>

      iii)  LDSS electronically transfers data, via a dedicated line or
            Electronic Medicaid Eligibility Verification System (EMEVS) to the
            PCP Subsystem.

10.   LDSSs are required to send SDOH-prescribed notices to applicants or
      Enrollees, which may include but are not limited to the following:

      i)    Notice of Acceptance: This letter informs the applicant of approval
            of eligibility for FHPlus and the name of the MCO selected by the
            applicant.

      ii)   Enrollment Confirmation Notice: This letter indicates the Effective
            Date of Enrollment, the name of the FHPlus MCO and all individuals
            who are being enrolled.

      iii)  Notice of Denial of Enrollment: This letter is used when an
            individual has been determined by LDSS to be ineligible for
            enrollment into FHPlus and it includes notice of fair hearing
            rights.

MCO RESPONSIBILITIES:

1.    In those instances in which the Contractor is directly involved in
      assisting in enrolling Eligible Persons, the Contractor will submit to
      LDSSs, enrollments along with attestations (if applicable) within a
      maximum of five (5) business days from the day the complete enrollment
      application 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.

3.    The Contractor must report any changes in status for its enrolled members
      to LDSSs within five (5) business days of such information becoming known
      to the Contractor.

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 network and are available to serve the
      participant.

B. NEWBORN ENROLLMENTS:

If the Contractor is also a Medicaid MCO, the Contractor agrees to enroll and
provide coverage for eligible newborn children of FHPlus 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 its of Section 366-g of the
      Social Services Law as amended by Chapter 412 of the Laws of 1999.

LDSS Responsibilities:

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                       H-4

<PAGE>

1.    Grant Medicaid eligibility for newborns for one (1) year if born to a
      woman eligible for and receiving FHPlus on the date of birth. (Social
      Services Law Section 366 (4) (1))

2.    LDSSs must insure that Medicaid coverage is authorized for the unborn
      child as soon as a pregnancy is medically verified.

3.    In the event that an LDSS learns of an Enrollee's pregnancy prior to the
      Contractor, the LDSS is to establish Medicaid eligibility and enroll the
      unborn in the plan of the pregnant woman if that plan participates in
      Medicaid managed care. If the plan does not participate in Medicaid
      managed care, the pregnant woman will be asked to select a Medicaid
      managed care plan for the unborn. If Medicaid managed care is unavailable
      in the district, or is not chosen by the mother, the newborn will be
      eligible for Medicaid fee-for-service coverage, and such information will
      be entered on the WMS.

4.    Upon notification of the birth by the Contractor, Enrollee or hospital,
      the LDSS will update WMS with the demographic data for the newborn. If the
      MCO participates in Medicaid and enrollment has not already taken place,
      LDSSs will enroll the newborn in the mother's plan. The PCP subsystem will
      automatically be updated and the newborn will appear as Medicaid eligible
      on the next month's Roster after the update to WMS. In districts where
      Medicaid managed care is unavailable or is not chosen by the mother, the
      newborn will be eligible for Medicaid fee-for-service coverage.

5.    When an unborn has not been pre-enrolled with the Contractor, LDSSs, upon
      receiving notification of the birth from the Contractor, Enrollee or
      hospital, must retroactively enroll the newborn back to the first (1st)
      day of the month of birth, if the mother was enrolled at that time,
      provided the plan also participates in Medicaid. If not, the newborn will
      be covered by fee-for service Medicaid until such time as the mother
      selects a plan, if available and appropriate.

6.    Where newborns will be enrolled in the mother's MCO, LDSSs must ensure
      that the mother is informed that the effective date of enrollment will be
      the first day of the month of birth.

7.    LDSSs 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
      Identification Number (CIN), and the Expected Date of Confinement (EDC).

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-5

<PAGE>

2.    Upon the newborn's birth, the Contractor must send verification of
      infant's demographic data to the LDSS, within five (5) days after
      knowledge of the birth. The 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, the Contractor may submit an
      electronic enrollment of the newborn to the Enrollment Broker.

4.    MCOs that participate in Medicaid managed care will follow the Enrollment
      Guidelines as outlined in Appendix H of the Medicaid managed care model
      contract.

C. 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 LDSSs. SDOH uses data contained in
      both these files to generate the Roster.

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 LDSSs can
      be accomplished via paper transmission, magnetic media, or via an
      electronic bulletin board.

3.    The SDOH shall also forward an error report as necessary to each MCO and
      LDSS.

4.    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 LDSSs a second Roster which contains any additional Enrollees that an
      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)    LDSSs must notify the Contractor in writing of changes in the Roster and
      error report, no later than the end of the month. (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 that remain
      unresolved beyond the end of the month.

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-6

<PAGE>

2)    Enrollment and eligibility issues are reconciled by the LDSS to the extent
      possible, adjusting 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.

2)    The Contractor must submit claims to the State's Fiscal Agent for all
      Eligible Persons that are on the 1st and 2nd Rosters, 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 Package
      services. Mere payment of subcapitation does not constitute "provision of
      Benefit Package services."

D. DISENROLLMENT:

SDOH RESPONSIBILITIES:

      1.    LDSSs may delegate to SDOH the responsibility for the review and
            approval of a MCO-initiated request to disenroll an Enrollee. The
            SDOH will be responsible for notification of the Enrollee of the
            status of the MCO request and if appropriate the right to request a
            fair hearing.

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. LDSSs must utilize the State's Disenrollment
            form.

      2.    Enrollees may initiate a request for an expedited disenrollment to
            LDSSs or the SDOH. LDSSs will expedite the disenrollment process in
            those cases where an Enrollee's request for disenrollment involves
            an urgent medical need, or a complaint of non-consensual enrollment.
            If approved, the LDSS will manually process the disenrollment
            through the PCP Subsystem.

      3.    LDSSs 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 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.

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-7

<PAGE>

      4.    LDSSs will disenroll Enrollees automatically upon death or loss of
            FHPlus eligibility (subject to any remaining a applicable "six
            months guaranteed eligibility" coverage). All such disenrollments
            will be effective at the end of the month in which the death or loss
            of eligibility occurs. However, if a FHPlus Enrollee gains full
            Medicaid eligibility and FHPlus Plan is also a Medicaid managed care
            plan, the LDSS will enroll the individual in the Medicaid Managed
            Care product of the FHPlus plan, unless the individual indicates in
            writing that he/she wishes to enroll in another Medicaid managed
            care plan or receive coverage through Medicaid fee-for-service.

      5.    LDSSs will promptly disenroll Enrollees who request disenrollment
            during their Initial Enrollment Period upon determination that they
            meet good cause criteria as defined by SDOH. The LDSS will provide
            Enrollees with notice of their right to request a fair hearing if
            their disenrollment request is denied. LDSSs will transfer Eligible
            persons to another FHPlus plan, if one is available, upon a
            determination that good cause criteria for disenrollment during the
            Initial Enrollment period are met.

      6.    Retroactive disenrollments are to be used only when absolutely
            necessary. Circumstances warranting a retroactive disenrollment are
            rare and include when an Enrollee is later determined to have
            entered and stayed in a residential institution; to have been
            incarcerated; to have moved out of the County of fiscal
            responsibility subject to any time remaining in the Enrollee's
            guaranteed eligibility period; or to have died - as long as the
            Contractor was not at risk for provision of Benefit Package services
            for any portion of the retroactive period. LDSSs must notify the
            Contractor of a retroactive disenrollment prior to the action. LDSSs
            must find out if the Contractor has made payments to providers on
            behalf of the Enrollee prior to disenrollment. After this
            information is obtained, LDSSs and the Contractor will agree on a
            retroactive disenrollment or prospective disenrollment date.

            a)    Generally the effective dates of retroactive disenrollment for
                  specific circumstances are described below:

<TABLE>
<CAPTION>
               REASON FOR DISENROLLMENT                           EFFECTIVE DATE OF DISENROLLMENT
               ------------------------                           -------------------------------
<S>                                                       <C>
-    Death of Enrollee                                    -    First day of the month after death

-   Enrollee  entered  or  stayed                         -    First day of the month following entry or
    in  a residential institution                              first day of the month following
                                                               classification of the stay as permanent,
                                                               subsequent to entry

-    Incarceration                                        -    First day of the month following entry

-    Move by Enrollee outside                             -    First day of the month after the update of
     of District/County of Fiscal Responsibility               the system with the new address
</TABLE>

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-8

<PAGE>

         b)    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.

   7.    LDSSs are responsible for informing Enrollees of their right to change
         MCOs including any applicable Initial Enrollment Period restrictions.

   8.    LDSSs are responsible for sending SDOH-prescribed notices to Enrollees
         regarding their enrollment status. Where practicable, the process will
         allow for timely notification to Enrollees unless there is "good cause"
         to disenroll more expeditiously. Such notices may include, but are not
         limited to:

         a)    Notice of Disenrollment: This letter will advise the Enrollee of
               the status of an Enrollee initiated (voluntary) disenrollment for
               "good cause", or of an LDSS or Contractor initiated (involuntary)
               disenrollment, including the effective date of disenrollment.

         b)    When LDSSs deny an Enrollee's request for disenrollment for "good
               cause" pursuant to Section 8 of the Agreement; LDSSs 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 Initial Enrollment Period Notice: Enrollees must be
               notified sixty (60) days before the end of their Initial
               Enrollment Period.

         d)    End of FHPlus Coverage: These notices will advise the Enrollee
               that their FHPlus coverage is ending and contain pertinent
               information regarding fair hearing rights.

   9.    LDSSs or the SDOH will render a decision within thirty (30) days of the
         receipt of a fully documented request for disenrollment. A final
         written determination will be provided to the Enrollee and the
         Contractor by LDSSs or the SDOH. This will include notification to the
         Enrollee of their right to request a fair hearing.

   10.   In those instances where LDSSs and/or the SDOH approve 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
         allowed by law.

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-9

<PAGE>


   11.   LDSSs and/or the SDOH will review each Contractor requested
         disenrollment in accordance with protocols established by SDOH in
         conjunction with the applicable oversight agency. Where applicable,
         LDSSs and/or the SDOH, shall consult with local mental health and
         substance abuse authorities in the county when making the determination
         to approve or disapprove the request.

   12.   LDSSs may establish procedures whereby MCOs refer cases which are
         appropriate for an LDSS-initiated disenrollment, and submit supporting
         documentation to the LDSS. The Contractor shall notify the LDSS when it
         learns that its Enrollees have died, moved, been incarcerated, or are
         in receipt of equivalent insurance coverage.

   13.   After LDSSs receive and, if appropriate, approve a request for
         disenrollment either from the Enrollee or the Contractor LDSSs will
         update the PCP subsystem file with an end date. EMEVS and the Fiscal
         Agent are then updated and 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 disenrollment requests to
      LDSSs for processing within five (5) business days. During pulldown week
      these forms may be faxed to the LDSS, followed by transmission of a hard
      copy.

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 Client Identification
      number.

3.    To initiate an involuntary disenrollment of an Enrollee, the Contractor
      must where applicable:

        a)    Show evidence of professional evaluation ruling out an underlying
              medical condition, alcohol or substance abuse, mental illness,
              mental retardation or other developmental disability as a cause
              for Enrollee behavior.

        b)    Document difficulty encountered with the Enrollee; nature, extent
              and frequency of abusive or harmful behavior, violence, inability
              to treat or engage Enrollee and outreach efforts to Enrollee
              employed.

        c)    Identify and document unique cultural issues that may be affecting
              the Contractor's ability to provide treatment effectively to
              certain Enrollees as well as the appropriateness of providers in
              the network.

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-10

<PAGE>

        d)    Document special training offered to providers to improve their
              ability to deal with difficult, non-compliant patients, or those
              having the above mentioned conditions.

4.    The Contractor, once the actions in # 3 above have been taken, will
      provide prior verbal and written notice to the Enrollee, with a copy to
      the LDSS or the SDOH of its intent to request disenrollment. The notice
      will advise the Enrollee that the request has been forwarded to the LDSS
      or the SDOH for review and approval. The notice must include the mailing
      address and telephone number of the LDSS or the SDOH.

5.    The Contractor will not consider an Enrollee disenrolled without
      confirmation from the LDSS or the Roster (as described in Section C of
      this Appendix).

E. EXPEDITED DISENROLLMENTS

Enrollees may request an expedited disenrollment if they have an urgent medical
need to disenroll or if they were non-consensually enrolled in FHPlus. Enrollees
may request expedited disenrollment by LDSSs or SDOH as stated in Section 8.4
(b) of this Agreement.

LDSS RESPONSIBILITIES:

      1.    LDSSs, to the extent possible, will process an expedited
            disenrollment within two business days of its determination that an
            expedited disenrollment is warranted. The effective date of
            disenrollments resulting from expedited processing are as follows:

<TABLE>
<CAPTION>
 REASON FOR DISENROLLMENT              EFFECTIVE DATE OF DISENROLLMENT
 ------------------------              -------------------------------
<S>                           <C>
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,
                                if determined to be in the best interest
                                of the Enrollee.
</TABLE>

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-11

<PAGE>

F. LDSS SPECIFIC PROCEDURES

The SDOH may require the Contractor to comply with local district
specific procedures for enrollment and disenrollment.

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      H-12

<PAGE>

                                   APPENDIX I

                       NEW YORK STATE DEPARTMENT OF HEALTH

                   GUIDELINES FOR THE USE OF MEDICAL RESIDENTS

                       IN THE FAMILY HEALTH PLUS PROGRAM

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      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 certified 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 nurse practitioner to act as
            their PCP, though residents on the team may perform
            all or many of the visits to the Enrollee 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. Patients 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>

                                     FHPlus
                                   APPENDIX H
                                October 1, 2001
                                      I-2

<PAGE>
            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.

      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.

                                     FHPlus
                                   Appendix I
                                 October 1, 2001
                                       I-3

<PAGE>

(b) MEDICAL RESIDENTS AS SPECIALTY CARE PROVIDERS

      (1)   Residents may participate in the specialty care of FHPlus 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
            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 the 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.

                                     FHPlus
                                   Appendix I
                                 October 1, 2001
                                       I-4

<PAGE>

      (7)   All training programs participating in FHPlus 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.

      (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 payer. Training sites must integrate the care of Medicaid,
FHPlus uninsured and private patients in the same settings.

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                                   APPENDIX J

                      NEW YORK STATE DEPARTMENT OF HEALTH
                                 GUIDELINES FOR
                               FAMILY HEALTH PLUS
                               COMPLIANCE WITH THE
                         AMERICANS WITH DISABILITIES ACT

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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 FHPlus is a government program, health services provided
through FHPlus Managed Care must be accessible to all that 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 FHPlus program, an MCO 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 MCO Qualification Standards to qualify MCOs for
participation in the FHPlus Program. Pursuant to the State's responsibility to
assure program access to all FHPlus enrollees, 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 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.

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      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 MCOs as they develop a plan to assure
            compliance with the Americans with Disabilities Act (ADA); and

      -     To provide standards for the review of the 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, Braille 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.

III.  SCOPE OF MCO COMPLIANCE PLAN

      The MCO Compliance Plan must address accessibility to services at 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

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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.

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, and audiotapes) 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
            MCO marketing representatives

      5.    Enrollee health promotion material/activities targeted specifically
            to persons with disabilities (e.g. secondary infection prevention,
            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

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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 drop-offs

      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

      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

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      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 necessary 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

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 MCOs prior to enrollment. Once a MCO
      has been chosen, a health assessment form may be used to assess the
      person's health care needs.

      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

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      COMPLIANCE PLAN SUBMISSION

            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 conditions which may require more intensive case management

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 MCO. 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
            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
            MCO 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

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<PAGE>

      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 the 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

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 MCOs by receiving, processing,
      and resolving grievances and complaints in an expeditious manner, with the
      goal of ensuring resolution of complaints and access to appropriate
      services as rapidly as possible.

            All enrollees must be informed about the complaint process within
      their MCO and the procedure for filing complaints. This information will
      be made available through the member handbook, SDOH toll-free complaint
      line [1-(800) 206-8125] and the MCO'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.

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            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 the 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 the MCO monitors 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.

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

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      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

D.    PARTICIPATING PROVIDERS

      STANDARD FOR COMPLIANCE

            MCO 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

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      1.    Process for the 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 a 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 TTV (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 the 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 an accessible to persons with disabilities, the
                  health plan 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 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

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            -     This may include the implementation of a referral system to
                  ensure that the health care needs of enrollees with
                  disabilities are met appropriately

            -     The 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 the ADA Compliance Summary Report or health plan
      statement that data submitted to SDOH on the Health Provider Network (HPN)
      files is an accurate reflection of each network's physical accessibility

E.    POPULATIONS WITH 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.    Linkages with behavioral health agencies, disability and advocacy
            organizations, etc.

      3.    Adequate network of providers and sub-specialists (including
            pediatric providers and sub-specialists) and contractual
            relationships with tertiary institutions

      4.    Procedures for assuring that these populations receive appropriate
            diagnostic work-ups on a timely basis

      5.    Procedures for assuring that these populations receive appropriate
            access to durable medical equipment on a timely basis

      6.    Procedures for assuring that these populations receive appropriate
            allied health professionals (Physical, Occupational and Speech
            Therapists, Audiologists) on a timely basis

      7.    State designation as a Well Qualified Plan to serve the 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

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            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, child protective service
            agencies, early intervention officials, behavioral health, and
            disability and advocacy organizations.

      3.    A description of the sub-specialist network, including contractual
            relationships with tertiary institutions to meet the health care
            needs of people with disabilities

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 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

                                     FHPlus
                                   APPENDIX J
                                 October 1, 2001
                                      J-13
<PAGE>

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.

                                     FHPlus
                                   APPENDIX J
                                October 1, 2001
                                      J-14

<PAGE>

                                   APPENDIX K

                      NEW YORK STATE DEPARTMENT OF HEALTH

                               FAMILY HEALTH PLUS

                            PREPAID BENEFIT PACKAGE

                DEFINITIONS OF COVERED AND NON-COVERED SERVICES

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                       K-1

<PAGE>

COVERED SERVICES

      The categories of services in the FHPlus 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 services are in summary form; the full description and scope of each of
the FHPlus covered services 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 emergency services and emergency transportation,
including air ambulance.

INPATIENT HOSPITAL SERVICES

      Inpatient hospital services, shall include, except as otherwise specified,
medically necessary care, treatment, maintenance and nursing services, on an
inpatient hospital basis, up to 365 days per year (366 in leap years). MCOs will
not be responsible for hospital stays that commence prior to the effective
enrollment date, but will be responsible for stays that commence prior to the
effective disenrollment date. Among other services, inpatient hospital services
encompass a full range of medically necessary diagnostic and therapeutic care
including medical, surgical, nursing, radiological, and rehabilitative services.
Services are provided under the direction of a physician, nurse practitioner, or
dentist, and include inpatient detoxification services provided in Article 28
hospitals for all enrollees. Inpatient dental services are also covered (see
dental definition).

INPATIENT STAY PENDING ALTERNATE LEVEL OF MEDICAL CARE

      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.

PROFESSIONAL AMBULATORY SERVICES

      Outpatient hospital services are provided through ambulatory care
facilities including hospital outpatient Departments (OPDs), diagnostic and
treatment centers (D&Ts or free-standing clinics), and emergency rooms. These
facilities may provide those medically necessary medical, surgical, and
rehabilitative services and items authorized by their operating certificates.
Outpatient services (clinic) also include preventive, primary medical,
specialty, mental health, alcohol, Child/Teen Health Plan (C/THP) services,
ambulatory dental surgery, and family planning services provided by ambulatory
care facilities.

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                       K-2

<PAGE>

      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.

PREVENTIVE HEALTH SERVICES

      Preventive care means care and services 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 restorative programs.

      MCOs must offer the following preventive services essential for promoting
wellness and preventing illness:

      -     General health education classes.

      -     Pneumonia and influenza immunizations for at risk populations.

      -     Smoking cessation classes, with targeted outreach for young adults
            and pregnant women.

      -     Childbirth education classes.

      -     Parenting classes covering topics such as bathing, feeding, injury
            prevention, sleeping, illness prevention, steps to follow in an
            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 testing and counseling.

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-3

<PAGE>

LABORATORY SERVICES

      Laboratory services include medically necessary tests and procedures
ordered by a qualified medical professional and listed in the Medicaid fee
schedule for laboratory services.

      All laboratory testing sites providing services 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 the
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.

RADIOLOGY SERVICES

      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.

EARLY PERIODIC SCREENING DIAGNOSIS AND TREATMENT (EPSDT) SERVICES THROUGH THE
CHILD TEEN HEALTH PROGRAM (C/THP) AND ADOLESCENT PREVENTIVE SERVICES

      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 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 in obtaining services, including outreach, education, appointment
scheduling, administrative case management and transportation assistance.

HOME HEALTH SERVICES

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-4

<PAGE>

      FHPlus will cover up to 40 home health care visits per year in lieu of a
skilled nursing facility stay or hospitalization. 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 Public Health Law as a Certified Home Health
Agency (CHHA). Home health services mean the following services when prescribed
by a provider and provided to an 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 serves the county, 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 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 plan has no CHHA
            available, a registered nurse, or therapist.

      Personal care tasks performed by a home health aide incidental to a CHHA
visit, and pursuant to an established care plan, are covered.

      Services include care rendered directly to the individual and instructions
to his/her family or caretaker in the procedures necessary for the patient's
treatment or maintenance.

      The plan must provide up to two post-partum home visits for 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), and
the first visit must occur within forty-eight (48) hours of discharge.

EMERGENCY ROOM SERVICES

      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.

      Emergency room services are 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

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-5

<PAGE>

average knowledge of medicine and health, could reasonably expect the absence of
medical attention to result in:

      -     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;

      -     Serious impairment of such person's bodily functions;

      -     Serious dysfunction of any bodily organ or part of such person; or

      -     Serious disfigurement of such person.

VISION CARE

      Emergency, preventive and routine eye care is covered. Eye care includes
the services of 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 MCO does not include upgraded eyeglasses or additional
features such as scratch coating, progressive lenses, or photo-gray 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 are covered only as necessary and as required by the individual's
particular condition. Examinations that include refraction may be limited to
every two years unless otherwise justified as medically necessary.

      Eyeglasses do not require changing more frequently than every two 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
ophthalmologist and supplies eyeglasses or other vision aids upon the order of a
qualified practitioner.

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-6

<PAGE>

      Enrollees may self-refer to any participating provider of vision services
(optometrist or ophthalmologist) for refractive vision services.

DURABLE MEDICAL EQUIPMENT

      Durable medical equipment (DME) are devices and equipment ordered for the
treatment of a medical condition which can withstand repeated use for a
protracted period of time; are primarily and customarily used for medical
purposes; are generally not useful in the absence of illness or injury; and are
usually not fitted or designed for a particular person's use unless customized
or custom-made. DME is covered when medically necessary as ordered by an MCO's
participating provider and procured from a participating provider. Coverage
includes equipment servicing, but excludes disposable medical supplies.

AUDIOLOGY, HEARING AID SERVICES AND PRODUCTS

      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.

      Audiology services include audiometric examinations and testing, hearing
aid evaluations and hearing and prescriptions or recommendations, as medically
indicated.

      Hearing aid products include hearing aids, earmolds, special fittings, and
replacement parts. (batteries are covered as part of the prescription benefit)

FAMILY PLANNING AND REPRODUCTIVE HEALTH SERVICES

[x]   COVERED                               [ ]   NOT COVERED

      Family planning and reproductive health services means the offering,
arranging and furnishing of those health services which enable individuals 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 are HIV counseling and testing when provided as part of a
family planning visit. Additionally, reproductive health care includes coverage
of

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-7

<PAGE>

all medically necessary abortions. Elective induced abortions must be covered
for New York City residents. Fertility services are not covered.


      MCOs that do not include family planning services in the capitation are
still required to provide the following services:

      -     Screening, related diagnosis, ambulatory treatment, and referral to
            participating providers as needed for dysmenorrhea, cervical
            cancer, or other pelvic abnormality/pathology.

      -     Screening, related diagnosis, and referral to participating
            providers for anemia, cervical cancer, glycosuria, proteinuria,
            hypertension, breast disease, or pregnancy.

      (See Appendix C, New York State Department of Health FHPlus Guidelines for
the Provision of Family Planning and Reproductive Health Services).

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, and
respiratory, circulatory and obstetrical emergencies.

      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. Emergency transportation
via 911 or any other emergency call system is a covered benefit and the
Contractor is responsible for payment. The Contractor shall reimburse for all
emergency ambulance services without regard to final diagnosis or prudent lay
person standard.

DENTAL

[x]   COVERED                               [ ]   NOT COVERED

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-8

<PAGE>

      MCOs opting to include dental services in their benefit package will cover
medically necessary preventive, prophylactic and other routine dental care,
services and supplies and dental prosthetics required to alleviate a serious
health condition, including one which affects employability.

      Routine dental care, procedures which help prevent oral disease from
occurring, and emergency treatment required to alleviate pain and suffering
caused by dental disease or trauma are covered consistent with the policies
outlined in the MMIS Provider Manual for Dental Services, and include, but are
not limited to:

      -     Prophylaxis every six (6) months

      -     Topical fluoride applications at 6 month intervals where the local
            water supply is not fluoridated and documented as medically
            necessary for adults

      -     Examinations, visits and consultations every six months

      -     Full mouth/panoramic x-rays every three (3) years if necessary

      -     Bitewing x-rays at six-twelve (6-12) month intervals

      -     Other x-rays as required

      -     Simple extractions and other routine dental surgery, including pre-
            and postoperative care and in-office conscious sedation

      -     Amalgam or composite restorations and stainless steel or porcelain
            fused to metal crowns

      -     Endodontic procedures for treatment of diseased pulp chamber and
            pulp canals, where hospitalization is not required

      -     Complete or partial dentures including (six) 6 months of follow-up
            care

      -     Insertion of identification slips, repairs, relines and rebases

      -     Treatment of cleft palate

      -     Fixed bridges are not covered unless required due to the presence of
            a neurologic or physiologic condition that would preclude the
            placement of a removable prosthesis.

      -     Cosmetic dentistry, implants and orthodontia are not covered.

      All MCOs must cover ambulatory or inpatient surgical services (subject to
prior authorization by the plan). This coverage excludes the professional
services of the dentist if dental services are not covered by the MCO's benefit
package

PROSTHETICS

      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. Prosthetics are covered when medically necessary as ordered by the

                                     FHPlus
                                   Appendix K
                                 October 1, 2001
                                       K-9

<PAGE>

MCO's participating provider. Artificial eyes are covered as part of the eye
care benefit.

ORTHOTICS

      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. Covered when medically necessary as ordered by the MCO's
participating provider.

MENTAL HEALTH/ALCOHOL AND SUBSTANCE ABUSE SERVICES (OUTPATIENT)

      FHPlus will cover up to a total of 60 visits per year for mental health
and for the diagnosis and treatment of alcoholism and substance abuse, when
medically necessary.

      Outpatient alcoholism/substance abuse services involve a planned
combination of multiple non-residential services provided to persons suffering
from alcohol abuse or alcoholism or substance abuse or to their significant
others under the supervision of a physician. Services include but are not
limited to assessment; individual, group, or family counseling; education;
treatment planning; preventive counseling; discharge planning; and services to
significant others. Services may be provided in facilities licensed by the
Office of Alcoholism and Substance Abuse or by licensed individual
practitioners. Enrollees must be allowed to self refer for one alcohol/substance
abuse assessment from a plan's participating provider in a calendar year.

      Outpatient mental health services include but are 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 the Office of Mental Health. Services may be provided
in-home, in a provider's office or in the community. Services may be provided by
licensed OMH providers or by other providers of mental health services including
clinical psychologists, and physicians.

      Enrollees must be allowed to self refer for one mental health assessment
from a plan's participating provider in a calendar year.

MENTAL HEALTH/ALCOHOL AND SUBSTANCE ABUSE SERVICES (INPATIENT)

      FHPlus will cover up to a combined total of thirty (30) days per year of
medically necessary inpatient mental health and alcoholism and substance abuse
services.

                                     FHPlus
                                   Appendix K
                                 October 1,2001
                                      K-10

<PAGE>

      Inpatient mental health services include voluntary or involuntary
admissions for mental health services.

      Inpatient alcoholism and substance abuse treatment and rehabilitation
services involve a program of continuous twenty-four (24) hour care and services
under medical direction for the treatment of alcoholism or substance abuse
dependency or withdrawal. Services include, but are not limited to: assessment;
management of detoxification and withdrawal conditions; group, individual or
family counseling; alcohol and substance abuse education; rehabilitation; and
discharge planning.

      Inpatient detoxification in a hospital setting is considered an inpatient
hospital benefit covered up to 365 medically necessary days per year (366 days
for leap years).

EXPERIMENTAL AND/OR INVESTIGATIONAL TREATMENT

      Services and treatment that may be deemed experimental and/or
investigational treatment may be covered on a case-by-case basis. If a FHPlus
MCO denies coverage on the basis that the service or treatment is experimental
and/or investigational, the Enrollee may appeal that determination in accordance
with Article 49 of the Public Health Law (Utilization Review and External
Appeal).

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.

PHYSICIAN SERVICES

      Physician services, whether furnished in the office, the Enrollee's home,
a hospital, or elsewhere, means services furnished by a physician:

      -     Within the scope of practice of medicine or osteopathy as defined in
            law by the New York State Education Department; and

      -     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.

      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.

                                     FHPlus
                                   Appendix K
                                 October 1,2001
                                      K-ll

<PAGE>

      The following are 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 and school.

      -     Health and mental health assessments for the purpose of making
            recommendations regarding an enrollee's disability status for
            Federal SSI applications.

      -     Annual preventive health visits for adolescents.

      -     Health screening, assessment and treatment of refugees, including
            the completion of SDOH/LDSS required forms.

      -     Child/Teen Health Program or EPSDT services which are comprehensive
            primary health care services provided to children under twenty-one
            (21) years of age.

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 nurse practitioner's licensure and
collaborative practice agreement with a licensed physician in accordance with
the requirements of the Department of Education.

      The following services are also included in the nurse practitioner's scope
of services, without limitation:

      -     C/THP or EPSDT services which are comprehensive primary health care
            services provided to children under 21.

      -     Physical examinations including those that are necessary for
            employment and school.

REHABILITATION SERVICES

      Short-term rehabilitation services are covered for the maximum reduction
of physical or mental disability and restoration to the individual's best
functional level. Rehabilitation services include care and services rendered by
physical therapists and occupational therapists, up to twenty (20) visits per
year. Covered speech therapy services are those required for a condition
amenable to significant clinical improvement within a two-month period.
Rehabilitation services may be provided in an Article 28 inpatient or outpatient
facility, an enrollee's home, by an approved home health agency, in the office
of a private practicing therapist or speech pathologist, or in a Residential
Health Care Facility (RHCF), as long as the Enrollee's stay is classified as a
rehabilitative stay.

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-12

<PAGE>

Rehabilitation services are covered as medically necessary when ordered by the
MCO's participating provider, and if applicable, with prior approval by the MCO.

MIDWIFERY

      Midwifery services include the management of a 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 State Education Department.

CLINICAL PSYCHOLOGICAL SERVICES

      Clinical psychological services include psychological evaluation and
testing and therapeutic treatment for personality or behavior disorders.
Clinical psychology visits are subject to the applicable mental health benefit
limits.

PRESCRIPTION DRUGS

      Medically necessary prescription drugs are covered under FHPlus, but may
be limited to generic medications where medically acceptable. All medications
used for preventive and therapeutic purposes are covered, as well as family
planning or contraceptive medications or devices. Coverage includes enteral
formulas for home use for which a physician or other provider authorized to
prescribe has issued a written order. Enteral formulas for the treatment of
specific diseases shall be distinguished from nutritional supplements taken
electively. Coverage for certain inherited diseases of amino acid and organic
acid metabolism shall include modified solid food products that are low-protein
or which contain modified protein. Vitamins are not covered except when
necessary to treat a diagnosed illness or condition.

      Experimental investigational drugs are generally excluded, except where
approved in the course of experimental/investigational treatment. Drugs
prescribed for cosmetic purposes are excluded. Over-the-counter items are
excluded with the exception of diabetic supplies, including insulin and smoking
cessation agents.

SECOND MEDICAL/SURGICAL OPINIONS

      MCOs will allow enrollees to obtain second opinions for diagnosis of a
condition, treatment or surgical procedure by a qualified physician or
appropriate specialist, including one affiliated with a specialty care center. A
second opinion in the event of a positive or negative diagnosis of cancer, a
recurrence of cancer, or a recommendation of a course of treatment of cancer is
covered also. In the

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-13

<PAGE>

event that the Contractor determines that it does not have a Participating
Provider in its network with appropriate training and experience rendering the
Participating Provider capable of providing a second opinion, the Contractor
shall make a referral to an appropriate Non-Participating Provider. The
Contractor shall pay for the cost of the services provided by the
Non-Participating Provider.

SMOKING CESSATION PRODUCTS

      MCOs must cover at least two courses of smoking cessation therapy per
person per year, as medically necessary. A course of treatment is defined as no
more than a 90-day supply, (an original prescription and two (2) refills, even
if less than a 30-day supply is dispensed in any fill). Duplicative use of one
agent is not allowed (i.e., same drug/same dosage form/same strength). Both
prescription and over-the-counter treatments/agents are covered; this includes
nicotine patches, inhalers, nasal sprays, gum, and Zyban (bupropion).

COURT ORDERED SERVICES

      Court ordered services are those services ordered by a court of competent
jurisdiction which are performed by or under the supervision of a physician,
dentist, or other provider qualified under State Law to furnish medical, dental,
behavioral health (including treatment for mental health and/or alcohol and/or
substance abuse or dependence), or other FHPlus covered services. The MCO is
responsible for payment of those services as covered by the benefit package.

NON-COVERED SERVICES

FHPlus MCOs are not required to provide the following services.

NON-EMERGENT TRANSPORTATION SERVICES

Since enrollees qualify for FHPlus by virtue of meeting higher income
guidelines, it has been assumed that Enrollees will be able to meet the
occasional transportation expenses associated with accessing medical care and
services (the exception being transportation assistance for 19 and 20 year olds
receiving EPSDT services). Local districts will not be administering a
transportation program for FHPlus enrollees.

(Only emergency transportation by ambulance and air ambulance is covered under
FHPlus.)

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-14

<PAGE>

PERSONAL CARE AGENCY SERVICES

Personal care services are the provision of some or total assistance with
personal hygiene, dressing and feeding; and nutritional and environmental
support (meal preparation and housekeeping). Individuals eligible to receive
such services are generally expected to be in receipt of such services for an
extended period of time (years). They would generally be expected to qualify for
Medicaid, which administers this program through the LDSS. Local districts will
not be administering a personal care program for FHPlus enrollees.

FHPlus does cover short-term home health care, which may include some personal
care tasks provided by home health aides incidental to a certified home health
agency visit; these services are covered in lieu of hospitalization or as part
of a post-partum home visit only.

PRIVATE DUTY NURSING SERVICES

FHPlus does not cover private duty nursing services provided by a private
practitioner.

(FHPlus only covers up to 40 certified home health agency visits per year in
lieu of hospitalization or as part of a post-partum home visit only.)

LONG TERM CARE SKILLED NURSING FACILITIES

FHPlus does not cover skilled nursing services in a RHCF (see 18 NYCRR Section
360-1.4(k)).

(Short-term (i.e., less than 30 days) rehabilitation in such a setting, is a
covered benefit.)

NON-PRESCRIPTION (OTC) DRUGS AND MEDICAL SUPPLIES

Over-the-counter drugs and medical/surgical supplies are not included in the
benefit package. These items are: consumable, non-reusable, disposable, or serve
a specific rather than incidental purpose, and generally have no salvageable
value (e.g. gauze pads, bandages and diapers).

(Medical supplies routinely furnished on administered as part of a clinic or
office visit are covered. Smoking cessation products, hearing aids and supplies
including batteries, and diabetic supplies and equipment are covered under
FHPlus.)

                                     FHPlus
                                   Appendix K
                                 October 1,2001
                                       K-15

<PAGE>

ALCOHOL AND SUBSTANCE ABUSE (ASA) SERVICES ORDERED BY THE LDSS

FHPlus enrollees will not be assessed by the LDSS for employability, and will
not be mandated to receive such alcohol and substance abuse services as a
condition of eligibility for FHPlus.

OFFICE OF MENTAL HEALTH/ OFFICE OF MENTAL RETARDATION AND DEVELOPMENTAL
DISABILITIES SERVICES

FHPlus does not cover residential services (intermediate care facilities or
community residences) or care.

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 months or less. Hospice is not a
covered service under FHPlus.

SCHOOL SUPPORTIVE HEALTH SERVICES

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 through the age of 21. These services are not covered under FHPlus.

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). FHPlus does not cover
Comprehensive Medicaid Case Management.

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.

(Clinical management of tuberculosis is covered in the FHPlus benefit package.
The plan's responsibility is limited to communicating, cooperating and
coordinating clinical management of TB with the TB/DOT provider, if applicable.)

                                     FHPlus
                                   Appendix K
                                October 1, 2001
                                      K-16

<PAGE>

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 services than can be
provided in any single setting, but do not require the level of services
provided in a residential health care setting. This is not a covered service
under FHPlus, however plans should coordinate and refer to these services.

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. This is not a covered service under FHPlus, however
plans should coordinate and refer to these services.

HOME AND COMMUNITY BASED SERVICES WAIVER

Home and Community Based Services Waivers are programs designed as alternatives
to institutionalization or residential placement for special populations under
the Medicaid program. They are not covered under FHPlus.

                                     FHPlus
                                   Appendix K
                                 October 1, 2001
                                       K-17
<PAGE>

                                   Appendix L

                               Family Health Plus

                        Approved Capitation Payment Rates

                             for the FHPlus Program

                                     FHPlus
                                   Appendix L
                                 October 1, 2001

<PAGE>

                           WELLCARE OF NEW YORK, INC.

                            FAMILY HEALTH PLUS RATES
                            EFFECTIVE OCTOBER 1, 2001

<TABLE>
<CAPTION>
                   Adults with     Adults without     Adults without   Maternity
    County      Children 19 - 64  Children 19 - 29   Children 30 - 64    Kick
-------------   ----------------  ----------------   ----------------  ---------
<S>             <C>               <C>                <C>               <C>
Albany              $229.55           $281.46             $329.15      $5,113.66
Broome              $232.68           $283.10             $346.48      $5,192.46
Columbia            $252.53           $279.91             $388.32      $5,134.88
Delaware            $252.53           $279.91             $388.32      $5,134.88
Dutchess            $251.55           $259.48             $327.31      $5,137.95
Greene              $252.53           $279.91             $388.32      $5,134.88
New York City       $256.04           $247.85             $376.40      $5,934.00
Orange              $251.55           $259.48             $327.31      $5,137.95
Otsego              $252.53           $279.91             $388.32      $5,134.88
Rensselaer          $229.55           $281.46             $329.15      $5,113.66
Rockland            $277.29           $331.12             $358.58      $5,528.75
Saratoga            $229.55           $281.46             $329.15      $5,113.66
Sullivan            $251.55           $259.48             $327.31      $5,137.95
Tioga               $232.68           $283.10             $346.48      $5,192.46
Ulster              $251.55           $259.48             $327.31      $5,137.95
</TABLE>

<PAGE>

                                   Appendix M

                 Service Area for the Family Health Plus Program

                                     FHPlus
                                   Appendix M
                                 October 1, 2001

<PAGE>

                                   Appendix M

WellCare of New York, Inc.'s Family Health Plus Service Area includes the
following counties in their entirety:

      Albany
      Bronx
      Columbia
      Dutchess
      Greene
      Kings
      New York
      Queens
      Rensselaer
      Rockland
      Ulster

                                     FHPlus
                                   Appendix M
                                October 1, 2001

<PAGE>

                                   Appendix N

                               Family Health Plus

                     Proof of Worker's Compensation Coverage

                                     FHPlus
                                   Appendix N
                                 October 1, 2001

<PAGE>


                               STATE OF NEW YORK
                          WORKERS' COMPENSATION BOARD

         APPLICATION FOR CERTIFICATE OF WORKERS' COMPENSATION INSURANCE

        The undersigned Employer [ILLEGIBLE] to obtain a Certificate of
                    Workers' Compensation insurance from the
Insurance Carrier Transportation Insurance Company as satisfactory proof
required under the provisions of Section 57 of the Workers' Compensation Law, to
be filed with

Name: WellCare of New York Inc.
      -------------------------------------------------------------------
                          (Name of Bureau, [ILLEGIBLE]

Address: 6800 N. Dale Mabry Hwy., Suite 270-299 Tampa, FL 33614

Locations of Operations: 280 Broadway, 3rd Floor Newburgh, NY 12550

Date operations to begin________________________________________________________

Telephone No 813-290-6200      Signature /s/ Carol K. [ILLEGIBLE]     8/14/01
                                         ------------------------     -------
                                         (Name of Employer)            (Date)

NOTE  This application must be signed by the Employer of an individual, or if a
      copartnership, by a member of the copartnership, or by an officer of a
      corporation.

                 CERTIFICATE OF WORKERS' COMPENSATION INSURANCE

This is to certify that WellCare of New York, Inc. is insured with the
Transportation Insurance Company under Policy No. [ILLEGIBLE] covering the
entire obligation of this employer for workers' compensation under the New York
Workers' Compensation Law with respect to the locations named in the foregoing
application. The policy term covers the period from 01/01/01 to 01/01/02.

If said policy is changed or cancelled during its term in such manner as to
affect this Certificate, thirty (30) days written notice of such change or
cancellation [ten (10) days written notice in the event of cancellation for
non-payment of premiums] will be given to
_______________________________________________________________________________
NYS Dept of Health Bureau of Intergovernmental Affairs Corning Tower, Rm
2074, Albany, NY 12237-0084
--------------------------------------------------------------------------------
[ILLEGIBLE]                                                          [ILLEGIBLE]

In accordance with whose requirements, this Certificate has been issued Notice
by registered or certified mail, return receipt requested, so addressed shall be
[ILLEGIBLE]

Carrier Transportation Insurance Co    By [ILLEGIBLE]                    8/16/01
                                         -------------------------       -------
                                               (Signature)                (Date)

Telephone No (707)797-5193             Title Executive Vice President

THE WORKERS' COMPENSATION BOARD EMPLOYS AND [ILLEGIBLE] PEOPLE WITH DISABILITIES
                             WITHOUT DISCRIMINATION

C-105.2 (10-94)
<PAGE>

                                   Appendix O

                               Family Health Plus

                     Proof of Disability Insurance Coverage

                                     FHPlus
                                   Appendix O
                                 October 1, 2001

<PAGE>


                               STATE OF NEW YORK
                          WORKERS' COMPENSATION BOARD

 EMPLOYER'S APPLICATION FOR CERTIFICATE OF COMPLIANCE WITH DISABILITY BENEFITS
                                      LAW

INSTRUCTIONS TO EMPLOYER: COMPLETE PART I ONLY AND HAVE YOUR DISABILITY BENEFITS
INSURANCE CARRIER COMPLETE PART II.

PART I. TO BE COMPLETED BY EMPLOYER

EMPLOYER'S NAME AND ADDRESS (Home or Main
Office)                                          LOCATION OF OPERATIONS
-----------------------------------------------  -----------------------------
The WellCare Management Group, Inc.              280 Broadway, 3rd floor,
6800 N. Dale Mabry                               Newburgh, NY 12550
Tampa, FL 3361/

NAME UNDER WHICH BUSINESS IS CONDUCTED           OPERATIONS TO BEGIN ON OR
IF DIFFERENT FROM ABOVE                          ABOUT:
-----------------------------------------------  -----------------------------
WellCare of New York, Inc.

DISABILITY BENEFITS CARRIER (If More Than One,   NYS UNEMPLOYMENT INSURANCE
List All)                                        EMPLOYERS REGISTRATION NUMBER
-----------------------------------------------  -----------------------------
Mutual of Omaha                                  02-12093

Application is hereby made to the CARRIER for a Certificate of Compliance with
the Disability Benefits Law.

Date Signed   8/29/01                            By /s/ [ILLEGIBLE]
                                                    ----------------------------
                                                      (Signature of Owner,
                                                 Partner, or Authorized Officer)

Telephone No. [ILLEGIBLE]                        Title CAO

PART II. TO BE COMPLETED BY DISABILITY BENEFITS CARRIER

             CERTIFICATE OF COMPLIANCE WITH DISABILITY BENEFITS LAW

This is to certify that the above-named employer is insured with
Mutual of Omaha OMNY6X007A20 and that the policy covers:
----------------------------
   (Name of Carrier)

     *a.    [X] ALL of the EMPLOYER'S employees eligible under the New York
            Disability Benefits Law.

     *b.    [ ] ONLY the following class or classes of the EMPLOYER'S employees:

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

Date Signed 8/29/01                     By Hana Rubin  /s/ Hana Rubin
                                           -------------------------------------
                                        Signature of Carrier's Authorized
                                        Representative (Currently on File with
                                        D.B. Bureau)

Telephone No. 914-591-7111              Title Disability Administrator

*IMPORTANT:       If BOX "a" is CHECKED; this certificate is COMPLETE. Mail it
                  directly to the employer.

                  If BOX 'b' is CHECKED, this certificate is NOT COMPLETE for
                  purposes of Section 220. Subd. 8 of the Disability
                  Benefits Law. It must be mailed for completion to the Workers'
                  Compensation Board, Disability Benefits Bureau, 180 Livingston
                  Street, Brooklyn, New York 11248-0005.

PART III. TO BE COMPLETED BY WORKERS' COMPENSATION BOARD (ONLY IF BOX "b" OF
PART II HAS BEEN CHECKED)

                                STATE OF NEW YORK
                           WORKERS' COMPENSATION BOARD

There is on file with the Workers' Compensation Board, Certificates of insurance
indicating that the above-named employer has complied with the Disability
Benefits Law with respect to all of his/her employees.

                                               DISABILITY-BENEFITS BUREAU

Date___________________________         By___________________________________

Telephone No___________________         Title________________________________

THE WORKERS' COMPENSATION BOARD EMPLOYS AND [ILLEGIBLE] PEOPLE WITH DISABILITIES
                             WITHOUT DISCRIMINATION
DB-120.1 (9-92)
<PAGE>

                                   Appendix P

                               Family Health Plus

                          FHPlus Facilitated Enrollment

                                     FHPlus
                                   Appendix P
                                 October 1, 2001

<PAGE>


                                   APPENDIX P

                          Plan Name: WellCare of N. Y.

1.    EFFECTIVE DATE OF AGREEMENT/SERVICE AREA

      This Appendix shall become effective on the date specified in the written
      notice from SDOH to the Contractor to initiate Facilitated Enrollment
      services. The Contractor will perform FHPlus/MA Facilitated Enrollment in
      the counties/boroughs identified by the Department by written notice.

2.    FACILITATED ENROLLMENT STANDARDS

      The Contractor agrees to perform FHPlus/MA Facilitated Enrollment in
      accordance with the following standards:

(A)   To provide an efficient and cost effective Facilitated Enrollment process
      approved by SDOH, including use of the "train-the-trainer" approach.

(B)   To assure that all facilitators Participate in the SDOH-sponsored
      FHPlus/MA training program to be conducted by a private contractor to be
      selected by SDOH or other training approved by SDOH.

(C)   To provide a sufficient number of facilitators at sites accessible and
      convenient to the population being serve to assure applicants have timely
      access to facilitated enrollment. The Contractor will provide SDOH and
      local districts with a list of the fixed enrollment facilitation sites
      (including any new sites established to attract the new adult population)
      and must update the list on a monthly basis. Subject to SDOH and local
      district approval, the Contractor may offer Facilitated Enrollment at
      additional sites not on the list that has already been submitted to SDOH
      and LDSS.

(D)   To offer Facilitated Enrollment during hours that accommodate the patterns
      of the community being served, which must include early morning, evening,
      and/or weekend hours.

(E)   To hire staff or designate existing staff who are culturally and
      linguistically reflective of the community the Contractor serves,
      including facilitators who are able to communicate to vulnerable and
      hard-to-reach populations (e.g., non-English speaking).

<PAGE>

(F)   To have mechanisms in place to communicate effectively with applicants who
      are vision or hearing impaired  e.g., the services of an interpreter,
      including sign language assistance for applicants who require such
      assistance, telecommunication devices for the deaf (TTY), etc.

(G)   To conduct the face-to-face interview in accordance with Medicaid
      requirements, policies and procedures. In any LDSS in which the personal
      interview is not delegated to the facilitator, one of the Contractor's
      facilitators shall act as the enrollee's authorized representative at the
      personal interview, which will be conducted by an LDSS representative with
      the facilitator.

(H)   To comply with procedures and protocols that have been established by the
      LDSS and approved by SDOH and LDSS pursuant to Medicaid Administrative
      Directive 00 OMM/ADM-2 ("Facilitated Enrollment of Children into Medicaid,
      Child Health Plus and WIC") and any other directives issued by SDOH to
      assure that facilitators are authorized to perform the Medicaid
      face-to-face interview. To assist applicants to complete the
      FHPlus/MA/CHPlus joint application, and screen adults and family
      applicants to assess their potential eligibility for various programs
      using a documentation checklist and screening tool.

(J)   To explain the application and documentation required and to help
      applicants obtain required documentation. The Contractor will also
      follow-up with applicants to ensure application/enrollment and
      documentation completion.

(K)   To educate all eligible applicants, including adults and families, about
      managed care and how to access benefits in a managed care environment.
      This will include the distribution of SDOH approved material in English
      and other languages reflective of the community regarding all of New York
      State's health insurance coverage. This includes brochures and
      information developed by SDOH to explain health insurance coverage
      options available through FHPlus, CHPlus, and Medicaid Programs and
      various other public programs designed to support self sufficiency.

(L)   To counsel all eligible applicants, including adult individuals and
      families regarding selection of a participating FHPlus/CHPlus/Medicaid
      Managed Care ("MMC") healthcare plan, and describe the important role of a
      primary care provider ("PCP") and the benefits of preventive health care.
      Facilitators must help applicants to determine the appropriate plan to
      select based on their current health care needs and PCP availability. The
      Contractor will ensure that facilitators have information available about
      the providers who participate in each plan and have established procedures
      for inquiring into existing relationships with health care providers in
      order that the facilitators are able to provide assistance with PCP
      selection and enable applicants to maintain existing relationships with
      providers to the fullest extent possible.

<PAGE>

(M)   To ensure that facilitators perform Facilitated Enrollment counseling in a
      neutral manner so that every applicant is able to make an informed
      decision in selecting the appropriate health care plan for the applicant's
      needs.

(N)   To comply with LDSS procedures for transmitting the FHPlus or MA
      applicant's managed care plan choice directly to the appropriate LDSS or
      enrollment broker, when applicable.

(O)   To follow-up on each application after a prescribed period of time with
      the appropriate LDSS to ensure that applications are being processed and
      that applicants are able to enroll and receive services in a timely
      manner.

(P)   To monitor the progress of each Facilitated Enrollment application on
      which the Contractor's facilitators have provided assistance, using the
      Internet-based system developed by SDOH for that purpose, and to report
      the following information:

      (i)   time from initial encounter to completed application;

      (ii)  date and disposition of each application;

      (iii) number of applications completed;

      (iv)  number of applicants; and

      (v)   any other data SDOH determines is necessary to monitor contract
            performance.

The required information must be continually updated by the Contractor on the
Internet-based system no later than the tenth day following the end of each
month to ensure timely and accurate tracking of the applications.

(Q)   To provide all applicants with  information about their rights regarding
      making a complaint to the LDSS about an eligibility determination and
      making a complaint to the managed care plan, LDSS or SDOH about a service
      decision.

(R)   To submit the completed application and required documentation directly to
      the appropriate LDSS responsible for processing the application and making
      the eligibility determination.

(S)   To assist individuals and families enrolled in FHPlus with renewing their
      coverage prior to the expiration of their 12-month enrollment period,
      including assisting in the completion of the renewal form and collection
      of the required documentation on a timely basis, when an enrollee seeks a
      facilitator's assistance with renewal.

<PAGE>

      (T)   To cooperate with SDOH and LDSS monitoring efforts, including
            unannounced site visits.

      (U)   To comply with all applicable Federal or State law, regulation,
            and/or administrative guidance, including any authority which
            supplements or supersedes the provisions set forth in Attachment B2
            of the Recruitment Notice, which is incorporated by reference as if
            fully set forth herein.

3.    SDOH RESPONSIBILITIES

      SDOH will be responsible for ensuring that the facilitator's policies and
      procedures related to enrollment and marketing are appropriate to meet the
      needs of applicants and comply with State and Federal laws, regulations,
      and administrative guidance as outlined in Attachment B2 to the
      Recruitment Notice.

      Prior to commencement and/or expansion of the Contractor's facilitated
      enrollment to FHPlus/MA applicants, SDOH will:

      (A)   Conduct a review to assure that the Contractor has established
            policies and procedures satisfactory to SDOH regarding the
            processing of applications, communications, contact persons, and
            interactions with other MCOs, if applicable.

      (B)   Review schedules of sites and times, staffing, and Facilitated
            Enrollment locations.

      (C)   Reimburse the Contractor in accordance with Schedule II to this
            Appendix, a copy of which is attached hereto.

      (D)   Ensure that all facilitators have undergone the required training.

      (E)   Approve amended written protocols between the LDSS and the
            Contractor, which details FHPlus/MA operations and practices to
            assure that the unique needs and concerns of the local districts are
            addressed.

      (F)   Assess the facilitator's plan selection process to assure that
            applicants are presented with unbiased information regarding MCO
            selection.

      (G)   Approve all subcontracting arrangements and all publicity and
            educational materials submitted by plans to assure that enrollment
            information is comprehensive.

      (H)   Monitor Facilitated Enrollment through fixed site monitoring,
            complaint monitoring, and surveys of individuals enrolled in
            Medicaid managed care or FHPlus as a result of Facilitated
            Enrollment.

<PAGE>

(I)   Approve written internal quality assurance protocols for Facilitated
      Enrollment.

4.    QUALITY ASSURANCE

      The Contractor will establish a quality assurance plan, including
      protocols to be reviewed and approved by SDOH, which ensures timely
      access to Facilitated Enrollment counseling for applicants. The Contractor
      will ensure that all applications completed with the assistance of the
      Contractor's facilitators are reviewed for quality and completed prior to
      being submitted to the LDSS, and are completed and submitted to the LDSS
      within the time frames required by the protocols.

      SDOH will monitor and evaluate the Contractor's performance of FHPlus/MA
      Facilitated Enrollment in accordance with the terms and conditions
      contained in section 3 above. SDOH may, at its discretion, conduct
      targeted review to assess the performance of facilitators, including
      reviews of incomplete or erroneous applications.

5.    CONFIDENTIALITY

      The Contractor shall maintain confidentiality of applicant and enrollee
      information in accordance with protocols developed by the Contractor and
      approved by SDOH.

      Information concerning the determination of eligibility for MA, CHPlus,
      and FHPlus may be shared by the Contractor (including its employees and/or
      subcontractors) and the programs and agencies identified in this
      agreement, provided that the applicant has given appropriate written
      authorization on the Application and that the release of information is
      being provided solely for purposes of determining eligibility or
      evaluating the success of the program.

      Contractor acknowledges that any other disclosure of Medicaid Confidential
      Data ("MCD") without prior, written approval of the SDOH MCD Review
      Committee ("MCDRC") is prohibited. Accordingly, the Contractor will
      require and ensure that any approved agreement or contract pertaining to
      the above programs contains a statement that the subcontractor or other
      contracting party may not further disclose the MCD without such approval.

      Contractor assures that all persons performing Facilitated Enrollment
      activities will receive appropriate training regarding the confidentiality
      of MCD and provide SDOH with a copy of the procedures that Contractor has
      developed to sanction such persons for any violation of MCD
      confidentiality.

      Upon termination of this Agreement for any reason, Contractor shall ensure
      that program data reporting is complete and shall certify that any
      electronic or paper copies of MCD collected or maintained in connection
      with this Agreement have been removed and destroyed.

<PAGE>

6.    OUTREACH AND INFORMATION DISSEMINATION

      Contractor agrees to comply with the following restrictions regarding
      Facilitated Enrollment:

      (i)   No Facilitated Enrollment will be permitted in emergency rooms or
            treatment areas; Facilitated Enrollment may be permitted in patient
            rooms only upon request by the patient or their representative.

      (ii)  No telephone cold-calling, door-to-door solicitations at the homes
            of prospective enrollees;

      (iii) No incentives to prospective enrollees to enroll in an MCO are
            allowed.

      Contractor will be responsible for local publicity regarding locations and
      hours of operation of Facilitated Enrollment sites. Only SDOH approved
      information can be used in conducting Facilitated Enrollment but the
      Contractor can tailor materials to the needs of individual communities,
      subject to SDOH approval of any such modifications.

7.    SANCTIONS FOR NON-COMPLIANCE

      If the Contractor is found to be out of compliance with the terms and
      conditions required under FHPlus/MA Facilitated Enrollment, SDOH may
      terminate the plan's responsibilities relating to Facilitated Enrollment
      and reduce the Comptroller's capitation rate to reflect that the
      Contractor is no longer performing these functions. SDOH will give the
      Contractor sixty (60) days written notice if it determines that the
      Contractor's Facilitated Enrollment responsibilities must be terminated.

8.    CONTRACTOR TERMINATION OF FACILITATED ENROLLMENT

      The Contractor may terminate its Facilitated Enrollment responsibilities
      under this Agreement upon sixty (60) day written notice to the SDOH.

<PAGE>

                            SCHEDULE I OF APPENDIX P

                      Plan Name: WellCare of New York, Inc.

      SDOH shall reimburse the Contractor $10.00 per member per month for
Facilitated Enrollment activities up to a maximum amount of $500,000 during the
first twelve months of this Agreement. Such maximum amount shall be reimbursed
to the Contractor in addition to the Capitation Rates shown in Appendix L of
this Agreement. The Contractor acknowledges and accepts the SDOH's right to
discontinue the per member per month payment for Facilitated Enrollment
activities if, during the first twelve months of the Agreement, the above
maximum dollar amount has been reimbursed to the Contractor. The Contractor
acknowledges and accepts the SDOH's right to recover from the Contractor any
amount reimbursed in excess of the agreed upon maximum amount for Facilitated
Enrollment activities during this twelve-month period.

      For the remainder of the agreement term, the maximum amount and/or per
member per month amounts agreed to by SDOH and the Contractor shall be
incorporated by reference into this Agreement without further action by the
parties. The Contractor acknowledges and accepts the SDOH's right to discontinue
the per member per month payment for Facilitated Enrollment activities if the
maximum dollar amount is reimbursed to the Contractor during the applicable time
period. The Contractor also acknowledges and accepts the SDOH's right to recover
from the Contractor any amount reimbursed in excess of the maximum amount
allowed for Facilitated Enrollment activities during any applicable time period
under the Agreement. In the event that the SDOH and the Contractor fail to reach
agreement on modifications to the cap on Facilitated Enrollment reimbursement
for a subsequent time period under the Agreement, the Contractor's
responsibilities and functions under this Appendix shall end sixty (60) days
from the date of SDOH written notice of termination to the Contractor.

<PAGE>

                                   Appendix X

                               Family Health Plus

                           Modification Agreement Form

<PAGE>


                                   APPENDIX X

Agency Code _____________________________      Contract No. ____________________
Period __________________________________      Funding Amount for Period________

This is an AGREEMENT between THE STATE OF NEW YORK, acting by and through
_____________, having its principal office at _____________, (hereinafter
referred to as the STATE), and _________________,(hereinafter referred to as the
CONTRACTOR), for modification of Contract Number _________________ as amended in
attached Appendix(ices) ________________.

All other provisions of said AGREEMENT shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT as of the
dates appearing under their signatures.

CONTRACTOR SIGNATURE                STATE AGENCY SIGNATURE

By: ___________________________     By: _______________________________

    ___________________________         _______________________________
         Printed Name                           Printed Name

Title: ________________________     Title: ____________________________

Date: _________________________     Date: _____________________________

                                    State Agency Certification:

                                    "In addition to the acceptance of this
                                    contract, I also certify that original
                                    copies of this signature page will be
                                    attached to all other exact copies of
                                    this contract."

STATE OF NEW YORK         )
                          )   SS.:
County of _______________ )

On the ____ day of ____ 19 ___, before me personally appeared_______, to me
known, who being by me duly sworn, did depose and say that he/she resides
at_________, that he/she is the _____________ of the, the corporation described
herein which executed the foregoing instrument; and that he/she signed his/her
name thereto by order of the board of directors of said corporation.

(Notary)

STATE COMPTROLLER'S SIGNATURE               Title: ____________________________

__________________________________          Date: _____________________________

<PAGE>


                                   APPENDIX X

Agency Code 12000        Contract No C017720

Period 4/1/04-9/30/05    Funding Amount for Period Based on approved capitation
                         rates

This is an AGREEMENT between THE STATE OF NEW YORK, acting by and through The
New York State Department of Health, having its principal office at Corning
Tower, Room 2001, Empire State Plaza, Albany NY 12237, (hereinafter referred to
as the STATE), and WellCare of New York, Inc. (hereinafter referred to as the
CONTRACTOR), to modify Contract Number C017720 by substituting the attached
Appendix L Approved Capitation Payment Rates for the FHPlus Program. The
effective date of these modifications is April 1, 2004.

All other provisions of said AGREEMENT shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT as of the
dates appearing under their signatures.

CONTRACTOR SIGNATURE                 STATE AGENCY SIGNATURE

By: /s/ Todd S. Farha                By: /s/ DONNA FRESCATORE
    ---------------------------          ---------------------------------------

    Todd S. Farha                        DONNA FRESCATORE
    ---------------------------          ---------------------------------------
           Printed Name                               Printed Name

Title: President & Chief Executive   Title: DEPUTY DIRECTOR, OMC
       Officer

Date: April 27, 2004                 Date: 4/28/04

          [APPROVED AS TO            State Agency Certification:
             FORM NYS                In addition to the acceptance of this
         ATTORNEY GENERAL            contract, I also certify that original
            MAY 18 2004              copies of this signature page will be
            ILLEGIBLE]               attached to all other exact copies of
                                     this contract.

STATE OF NEW YORK FLORIDA  )
                           )SS.:
County of Hillsborough     )

On the 27th day of April 2004, before me personally appeared Todd S. Farha, to
me known, who being by me duly sworn, did depose and say that he/she resides in
New York, that he/she is the CEO & President of WellCare of New York, Inc., the
corporation described herein which executed the foregoing instrument and that
he/she signed his/her name thereto by order of the board of directors of said
corporation

(Notary)                 KATHLEEN R. CASEY
                Notary Public - State of Florida
               My Commission Expires Apr 22, 2008      KATHLEEN R. CASEY
                      Commission # DD305227
                 Bonded By National Notary Assn.

                                                               APPROVED
STATE COMPTROLLER'S SIGNATURE                  Title:  DEPT. OF AUDIT & CONTROL
                                               Date:          MAY 21 2004
________________________________________                      [ILLEGIBLE]
                                                       FOR THE STATE COMPTROLLER




<PAGE>

                           WELLCARE OF NEW YORK, INC.

                            FAMILY HEALTH PLUS RATES
                 EFFECTIVE APRIL 1, 2004 THROUGH MARCH 31, 2005

<TABLE>
<CAPTION>
                ADULTS WITH      ADULTS WITHOUT     ADULTS WITHOUT     MATERNITY
 COUNTY      CHILDREN 19 - 64   CHILDREN 19 - 29   CHILDREN 30 - 64      KICK
----------   ----------------   ----------------   ----------------    ---------
<S>          <C>                <C>                <C>                 <C>
Albany            $261.83            $321.04            $375.43        $4,526.04
Columbia          $288.04            $319.28            $442.93        $4,526.04
Dutchess          $235.64            $286.69            $350.88        $4,526.04
Greene            $288.04            $319.28            $442.93        $4,526.04
NYC               $226.90            $219.64            $333.56        $4,693.40
Rensselaer        $261.83            $321.04            $375.43        $4,526.04
Rockland          $266.03            $317.67            $344.03        $4,526.04
Ulster            $235.64            $286.69            $350.88        $4,526.04
</TABLE>

OPTIONAL BENEFITS INCLUDED IN THE ABOVE RATES:

FAMILY PLANNING: YES                DENTAL: YES