<PAGE>   1
                                                                 EXHIBIT 10.06

(Contract Period ______ to ______ )



Contract With Eligible Medicare+Choice Organization Pursuant to sections 1851
through 1859 of the Social Security Act for the operation of a Medicare+Choice
coordinated care plan(s)

CONTRACT (P)


Between

Health Care Financing Administration (hereinafter referred to as HCFA)

and

-----------------------------------------------
(hereinafter referred to as the M+C Organization)


HCFA and the M+C Organization, an entity which has been determined to be an
eligible Medicare+Choice organization by the Administrator of the Health Care
Financing Administration under 42 CFR 422.501, agree to the following for the
purposes of sections 1851 through 1859 of the Social Security Act (hereinafter
referred to as the Act):


(NOTE: Citations indicated in brackets are placed in the text of this contract
to note the authority for certain contract provisions in the regulations
promulgated pursuant to the Balanced Budget Act of 1997. All references to part
422 are to 42 CFR part 422.)




Article I


Term of Contract

A. Term: The term of this contract shall be from January 1, 1999 through
December 31, 1999. This contract governs the transitional phase of the
implementation of the Medicare+Choice program for coordinated care plans and is
based on the interim final regulations published on June 26, 1998.
<PAGE>   2

[422.504]


Article II


Coordinated Care Plan

The Medicare+Choice Organization agrees to operate the following coordinated
care plans (as defined in 42 CFR Section 422.2) in compliance with the
requirements of this contract, and the Federal statutes, regulations, and rules
applicable to the Medicare+Choice program:


------------------------------ ----------------------------
"H" Number/Service Area "H" Number/Service Area


------------------------------ -----------------------------
"H" Number/Service Area "H" Number/Service Area


Article III


Functions To Be Performed By Medicare+Choice Organization

A. PROVISION OF BENEFITS

The M+C Organization agrees to provide enrollees in each of its M+C plans the
basic benefits as required under Section 422.101 and, to the extent applicable,
supplemental benefits under Section 422.102. The M+C Organization agrees to
provide access to such benefits as required under subpart C in a manner
consistent with professionally recognized standards of health care and according
to the access standards stated in Section 422.112.

[422.502(a)(3)]
B. ENROLLMENT REQUIREMENTS

1. The M+C Organization agrees to accept new enrollments, make enrollments
effective, process voluntary disenrollments, and limit involuntary
disenrollments, as provided in subpart B of part 422.
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2. The M+C Organization shall comply with the provisions of Section 422.110 and
Section 422.111 concerning prohibitions against discrimination in beneficiary
enrollment. [422.502(a)(1)]


C. BENEFICIARY PROTECTIONS

1. The Medicare+Choice Organization agrees to comply with all requirements in
subpart M of part 422 governing coverage determinations, grievances, and
appeals. [422.502(a)(7)]

2. The Medicare+Choice Organization agrees to comply with the confidentiality
and enrollee record accuracy requirements in Section 422.118.

3. Beneficiary Financial Protection. The M+C Organization agrees to comply with
the following requirements:

(a) Each M+C Organization must adopt and maintain arrangements satisfactory to
HCFA to protect its enrollees from incurring liability for payment of any fees
that are the legal obligation of the M+C organization. To meet this requirement
the M+C Organization must-

(i) Ensure that all contractual or other written arrangements with providers
prohibit the Organization's providers from holding any beneficiary enrollee
liable for payment of any fees that are the legal obligation of the M+C
Organization; and

(ii) Indemnify the beneficiary enrollee for payment of any fees that are the
legal obligation of the M+C Organization for services furnished by providers
that do not contract, or that have not otherwise entered into an agreement with
the M+C Organization, to provide services to the organization's beneficiary
enrollees. [422.502(g)(1)]

(b) The M+C Organization must provide for continuation of enrollee health care
benefits-

(i) For all enrollees, for the duration of the contract period for which HCFA
payments have been made; and

(ii) For enrollees who are in an inpatient setting on the date its contract with
HCFA terminates, or, in the event of an insolvency, through the date of
discharge. [422.502(g)(2)]

(c) In meeting the requirements of this section (C), other than the provider
contract requirements specified in paragraph (C)(3)(a) of this Article, the M+C
Organization may use-
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(i) Contractual arrangements;

(ii) Insurance acceptable to HCFA;

(iii) Financial reserves acceptable to HCFA; or

(iv) Any other arrangement acceptable to HCFA. [422.502(g)(3)]


D. PROVIDER PROTECTIONS

1. The M+C Organization agrees to comply with all applicable provider
requirements in subpart E of part 422, including provider certification
requirements, anti-discrimination requirements, provider participation and
consultation requirements, the prohibition on interference with provider advice,
limits on provider indemnification, rules governing payments to providers, and
limits on physician incentive plans. [422.506(a)(6)]

2. Prompt Payment.

(a) The M+C Organization must pay 95 percent of the "clean claims" within 30
days of receipt if they are claims for services that are not furnished under a
written agreement between the organization and the provider.

(i) The M+C Organization must pay interest on clean claims that are not paid
within 30 days in accordance with sections 1816(c)(2)(B) and 1842(c)(2)(B) of
the Act.

(ii) All other claims must be approved or denied within 60 calendar days from
the date of the request. [422.520(a)]

(b) Contracts or other written agreements between the M+C Organization and its
providers must contain a prompt payment provision, the terms of which are
developed and agreed to by both the M+C Organization and the relevant provider.
[422.520(b)]

(c) If HCFA determines, after giving notice and opportunity for hearing, that
the M+C Organization has failed to make payments in accordance with paragraph
(2)(a) of this section, HCFA may provide-

(i) For direct payment of the sums owed to providers, or M+C private
fee-for-service plan enrollees; and

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(ii) For appropriate reduction in the amounts that would otherwise be paid to
the M+C Organization, to reflect the amounts of the direct payments and the cost
of making those payments. [422.520(c)]

E. QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT PROGRAM

1. The M+C Organization agrees to operate an ongoing quality assessment and
performance improvement program (as stated in 422.154 of subpart D). The quality
assurance program must incorporate and meet the standards and guidelines
outlined in the Quality Improvement System for Managed Care (QISMC) Interim
Standards and Guidelines (HCFA Operational Policy Letter 098.72).

2. Quality Assessment and Performance Improvement Projects: The M+C Organization
agrees to:

(a) initiate two quality assessment and performance improvement (QAPI) projects
annually. These projects must be outcomes-oriented and targeted at achieving
demonstrable, sustained improvement in significant aspects of specified clinical
and non-clinical areas which can be expected to have a favorable effect on
enrollees' health outcomes and satisfaction. For 1999, one of the two projects
must focus on diabetes. The M+C Organization may participate in the
HCFA-sponsored national diabetes project or substitute a diabetes project of
their own design; however, the substituted project must utilize the Diabetes
Quality Improvement Project (DQIP) indicators.

(b) QAPI project focus areas must be representative of the entire spectrum of
clinical and non-clinical care areas associated with a plan.

(i) The clinical areas include:

(aa) prevention and care of acute and chronic conditions

(bb) high-volume services

(cc) high-risk services

(dd) continuity and coordination of care

(ii) The non-clinical areas include: 
(aa) appeals, grievances and other complaints

(bb) access to, and availability of services (such as culturally competent care)

(c) HCFA may require that the M+C Organization conduct a QAPI project in a
particular clinical or non-clinical area when HCFA determines that the M+C
Organization's overall performance would be improved significantly by the M+C

<PAGE>   6

Organization's improvement in that particular area. Such a HCFA-mandated QAPI
project would constitute one of the two required QAPI projects.

(d) For each QAPI project, the M+C Organization must:

(i) use quality indicators that are objective, clearly and unambiguously
defined, and based on current clinical knowledge or health services research;

(ii) assure that those quality indicators are capable of measuring outcomes such
as changes in health and functional status, enrollee satisfaction, or valid
proxies of those outcomes;

(iii) assess performance on selected indicators using systematic on-going
collection and analysis of valid, reliable data;

(iv) perform ongoing measurement of performance;

(aa) The M+C Organization must measure and report to HCFA performance achieved
under the project, utilizing standard measures. The standard measures required
by HCFA during the term of this contract will be uniform data collection and
reporting instruments, to include the Health Employer Data Information Set
(HEDIS), Consumer Assessment of Health Plan Satisfaction (CAHPS) survey, and
Health of Seniors (HOS).

(bb) These measures must address clinical areas, including effectiveness of
care, enrollee perception of care and use of services; and non-clinical areas
including access to and availability of services, appeals and grievances, and
organizational characteristics.
[422.152(c)(1)].

(v) conduct system interventions, including the adoption and/or revision of
practice guidelines;

(vi) improve performance; and

(vii) perform systematic follow-up on the effect of the interventions
[422.152(d)]

3. Utilization Review: If the M+C Organization uses written protocols for
utilization review, those policies and procedures must reflect current standards
of medical practice in processing requests for initial or continued
authorization of services.[422.152(b)(3)]. The M+C Organization must also have
in effect mechanisms to detect both underutilization and overutilization of
services.[422.152(b)(4)] .


4. Information Systems:
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(a) The M+C Organization must make available to HCFA information on quality and
outcomes measures that will enable beneficiaries to compare health coverage
options and select among them, as provided in Section 422.64(c)(10).
[422.152(b)(5)].

(b) The M+C Organization must maintain a health information system that:

(i) collects, analyzes and integrates the data necessary to implement its
quality assessment and performance improvement program, and

(ii) assures that the information entered into the system (particularly that
received from providers) is reliable and complete.

(c) The M+C Organization must make all collected data, including information on
quality and outcomes measures, available to HCFA to enable beneficiaries to
compare health coverage options and select among them, as provided in Section
422.64(c)(10). [422.152(b)(5)]

5. External Review: The M+C Organization will have an agreement with an
independent quality review and improvement organization (review organization)
approved by HCFA. [422.154(a)]

(a) The agreement will be consistent with HCFA guidelines and will:

(i) Require that the M+C Organization allocate adequate space for use of the
review organization whenever it is conducting review activities and provide all
pertinent data, including patient care data, at the time the review organization
needs the data to carry out the reviews and make its determinations, and

(ii) Except in the case of complaints about quality, exclude review activities
that HCFA determines would duplicate review activities conducted as part of an
accreditation process or as part of HCFA monitoring. [422.154(b)]

F. COMPLIANCE PLAN

1. The M+C Organization agrees to develop and submit a compliance plan that
includes the elements set forth below, and fully implement all elements of this
plan by December 31, 1999. HCFA will consider the M+C Organization's progress in
implementing this requirement as a factor in its decision, required by May 1,
1999, to renew the M+C Organization's contract for 2000. The compliance plan
required under this article shall consist of the following:

(a) Written policies, procedures, and standards of conduct that articulate the
M+C Organization's commitment to comply with all applicable Federal and State
standards.
<PAGE>   8

(b) The designation of a compliance officer and compliance committee that are
accountable to senior management.

(c) Effective training and education between the compliance officer and
organization employees.

(d) Effective lines of communication between the compliance officer and the
organization's employees.

(e) Enforcement of standards through well-publicized disciplinary guidelines.

(f) Provision for internal monitoring and auditing.

2. The M+C Organization's compliance plan shall operate in such a manner as to
ensure a prompt organizational response to detected offenses and development of
corrective action initiatives. The compliance plan shall also establish an
adhered-to process for reporting to HCFA and/or the Office of the Inspector
General credible information of violations of law by the M+C Organization, plan,
subcontractors or enrollees for a determination as to whether criminal, civil,
or administrative action may be appropriate. With respect to enrollees, this
reporting requirement shall be restricted to credible information on violations
of law with respect to enrollment in the plan, or the provision of, or payment
for, health services. When the potential violation of law concerns potential
false claims or fraud on the United States, the M+C Organization shall report
the information directly to HCFA and/or the OIG and shall not file actions under
the qui tam provisions of the False Claims Act, 31 U.S.C. 3729, et seq.
[422.501(b)(3)(vi)]

G. YEAR 2000 READINESS

The M+C Organization shall ensure that all necessary actions and system changes
to internal mission-critical systems have been made and tested so that they are
Year 2000 compliant. Year 2000 compliant means information technology that
accurately processes date and time data (including, but not limited to,
calculating, comparing, and sequencing) from, into, and between the nineteenth,
twentieth, and twenty-first centuries, and the years 1999 and 2000 and leap year
calculations. Furthermore, Year 2000 compliant information technology, when used
in combination with other information technology, must accurately process date
and time data if the other information technology properly exchanges date and
time data with it. Mission-critical systems are defined as those systems and
interfaces which materially affect the M+C Organization's accurate and timely
performance of the functions under this contract.
[422.502(j)]


Article IV

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HCFA Payment to M+C Organization

A. The M+C Organization agrees to develop its annual adjusted community rate
(ACR) proposal and submit to HCFA all required information on premiums,
benefits, and cost sharing by May 1 of each year, as required under 42 CFR 422,
subpart G. [422.502(a)(10)]

B. Methodology. HCFA agrees to pay the M+C Organization under this contract in
accordance with the payment rules in subpart F of part 422. HCFA agrees to make
monthly payments based on the greatest of the blended capitation rate under
Section 422.252(a), the minimum amount rate under Section 422.252(b), or the
minimum percentage increase rate under Section 422.252(c), as adjusted by such
demographic risk factors as a beneficiary's age, disability status, sex,
institutional status, and such factors as HCFA determines appropriate per
Section 422.250(a) [422.502(a)(9)]

C. Certification of data that determine payment. As a condition for receiving a
monthly payment under paragraph B of this article, subpart F of part 422, the
M+C Organization agrees that its chief executive officer (CEO) or chief
financial officer (CFO) must request payment under the contract on the forms
attached as Attachment A (enrollment certification) and Attachment B (inpatient
encounter data and adjusted community rate (ACR) proposal information
certification) hereto which certify the accuracy, completeness, and truthfulness
of the data identified on these attachments. Attachment A requires certification
based on best knowledge, information, and belief, that each enrollee for whom
the M+C Organization is requesting payment is validly enrolled in an M+C plan
offered by the M+C Organization. The M+C Organization shall submit completed
enrollment certification forms to HCFA on a monthly basis.

In addition, the following certifications shall be made on Attachment B by the
CEO or CFO of an M+C Organization when the M+C Organization submits the
following types of information to HCFA:

(1) Based on best knowledge, information, and belief, the inpatient encounter
data the M+C Organization submits under Section 422.257 are accurate, complete,
and truthful. If such encounter data are generated by a related entity,
contractor, or subcontractor of the M+C Organization, such entity, contractor,
or subcontractor must similarly certify the accuracy, completeness, and
truthfulness of the data.[422.502(l)]

(2) Based on best knowledge, information, and belief, all information and
documentation comprising the ACR proposal are accurate, complete, and truthful.
The M+C Organization must submit its ACR proposal(s) to HCFA by May 1 of each
year. [422.502(m)]

Article V
<PAGE>   10


M+C Organization Relationship with Related Entities, Contractors, and
Subcontractors

A. Notwithstanding any relationship(s) that the M+C Organization may have with
related entities, contractors, or subcontractors, the M+C Organization maintains
full responsibility for adhering to and otherwise fully complying with all terms
and conditions of its contract with HCFA. [422.502(i)(1)]

B. The M+C Organization agrees to require all related entities, contractors, or
subcontractors to agree that-

(1) HHS, the Comptroller General, or their designees have the right to inspect,
evaluate, and audit any pertinent contracts, books, documents, papers, and
records of the related entity(s), contractor(s),or subcontractor(s) involving
transactions related to the this contract; and

(2) HHS's, the Comptroller General's, or their designee's right to inspect,
evaluate, and audit any pertinent information for any particular contract period
will exist through 6 years from the final date of the contract period or from
the date of completion of any audit, whichever is later. [422.502(i)(2)]

C. The M+C Organization agrees that all contracts or written arrangements into
which the M+C Organization enters with providers, related entities, contractors,
or subcontractors on or after January 1, 1999 shall contain each of the contract
elements stated below. For those providers, related entities, contractors, or
subcontractors with which the M+C Organization has a contract or written
agreement prior to January 1, 1999, the M+C Organization agrees to design and
implement a plan for securing on or before December 31, 1999 contracts or
written arrangements with such parties which contain each of the contract
elements stated below. HCFA will consider the M+C Organization's progress in
implementing this requirement as a factor in its decision, required by May 1,
1999, to renew the M+C Organization's contract for 2000. The required contract
elements are as follows:

(1) Enrollee protection provisions that provide-

(a) Consistent with Article III(C), arrangements that prohibit providers from
holding an enrollee liable for payment of any fees that are the legal obligation
of the M+C Organization; and

(b) Consistent with Article III(C), provision for the continuation of benefits.


(2) Accountability provisions that indicate that-
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(a) The M+C Organization oversees and is accountable to HCFA for any functions
or responsibilities that are described in these standards; and

(b) The M+C Organization may only delegate activities or functions to a
provider, related entity, contractor, or subcontractor in a manner consistent
with requirements set forth at paragraph D of this article.

(3) A provision requiring that any services or other activity performed by a
related entity, contractor or subcontractor in accordance with a contract or
written agreement between the related entity, contractor, or subcontractor and
the M+C Organization will be consistent and comply with the M+C Organization's
contractual obligations. [422.502(i)(3)]

D. If any of the M+C Organization's activities or responsibilities under this
contract with HCFA are delegated to other parties, the following requirements
apply to any related entity, contractor, subcontractor, or provider:

(1) Written arrangements must specify delegated activities and reporting
responsibilities.

(2) Written arrangements must either provide for revocation of the delegation
activities and reporting requirements or specify other remedies in instances
where HCFA or the M+C Organization determine that such parties have not
performed satisfactorily.

(3) Written arrangements must specify that the performance of the parties is
monitored by the M+C Organization on an ongoing basis.

(4) Written arrangements must specify that either-

(a) The credentials of medical professionals affiliated with the party or
parties will be either reviewed by the M+C Organization; or

(b) The credentialing process will be reviewed and approved by the M+C
Organization and the M+C Organization must audit the credentialing process on an
ongoing basis.

(5) All contracts or written arrangements must specify that the related entity,
contractor, or subcontractor must comply with all applicable Medicare laws,
regulations, and HCFA instructions. [422.502(i)(4)]

E. If the M+C Organization delegates selection of the providers, contractors, or
subcontractors to another organization, the M+C Organization's written
arrangements with that organization must state that the M+C Organization retains
the right to approve, suspend, or terminate any such arrangement.
[422.502(i)(5)]

Article VI
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Records Requirements

A. MAINTENANCE OF RECORDS

1. The M+C Organization agrees to maintain for 6 years books, records,
documents, and other evidence of accounting procedures and practices that-

(a) Are sufficient to do the following:

(i) Accommodate periodic auditing of the financial records (including data
related to Medicare utilization, costs, and computation of the ACR) of the M+C
Organization.

(ii) Enable HCFA to inspect or otherwise evaluate the quality, appropriateness
and timeliness of services performed under the contract, and the facilities of
the M+C Organization.

(iii) Enable HCFA to audit and inspect any books and records of the M+C
Organization that pertain to the ability of the organization to bear the risk of
potential financial losses, or to services performed or determinations of
amounts payable under the contract.

(iv) Properly reflect all direct and indirect costs claimed to have been
incurred and used in the preparation of the ACR proposal.

(v) Establish component rates of the ACR for determining additional and
supplementary benefits.

(vi) Determine the rates utilized in setting premiums for State insurance agency
purposes and for other government and private purchasers; and

(b) Include at least records of the following:

(i) Ownership and operation of the M+C Organization's financial, medical, and
other record keeping systems.

(ii) Financial statements for the current contract period and six prior periods.

(iii) Federal income tax or informational returns for the current contract
period and six prior periods.

(iv) Asset acquisition, lease, sale, or other action.

(v) Agreements, contracts, and subcontracts.
<PAGE>   13

(vi) Franchise, marketing, and management agreements.

(vii) Schedules of charges for the M+C Organization's fee-for-service patients.

(viii) Matters pertaining to costs of operations.

(ix) Amounts of income received, by source and payment.

(x) Cash flow statements.

(xi) Any financial reports filed with other Federal programs or State
authorities. [422.502(d)] 2. Access to facilities and records. The M+C
Organization agrees to the following:

(a) The Department of Health and Human Services (HHS), the Comptroller General,
or their designee may evaluate, through inspection or other means-

(i) The quality, appropriateness, and timeliness of services furnished to
Medicare enrollees under the contract;

(ii) The facilities of the M+C Organization; and

(iii) The enrollment and disenrollment records for the current contract period
and six prior periods.

(b) HHS, the Comptroller General, or their designees may audit, evaluate, or
inspect any books, contracts, medical records, documents, papers, patient care
documentation, and other records of the M+C Organization, related entity,
contractor, subcontractor, or its transferee that pertain to any aspect of
services performed, reconciliation of benefit liabilities, and determination of
amounts payable under the contract, or as the Secretary may deem necessary to
enforce the contract.

(c) The M+C Organization agrees to make available, for the purposes specified in
section (A) of this article, its premises, physical facilities and equipment,
records relating to its Medicare enrollees, and any additional relevant
information that HCFA may require, in a manner that meets HCFA record
maintenance requirements.

(d) HHS, the Comptroller General, or their designee's right to inspect,
evaluate, and audit extends through 6 years from the final date of the contract
period or completion of audit, whichever is later unless-

(i) HCFA determines there is a special need to retain a particular record or
group of records for a longer period and notifies the M+C Organization at least
30 days before the normal disposition date;
<PAGE>   14

(ii) There has been a termination, dispute, or fraud or similar fault by the M+C
Organization, in which case the retention may be extended to 6 years from the
date of any resulting final resolution of the termination, dispute, or fraud or
similar fault; or

(iii) HHS, the Comptroller General, or their designee determine that there is a
reasonable possibility of fraud, in which case they may inspect, evaluate, and
audit the M+C Organization at any time. [422.502(e)]

B. REPORTING REQUIREMENTS

1. The M+C Organization shall have an effective procedure to develop, compile,
evaluate, and report to HCFA, to its enrollees, and to the general public, at
the times and in the manner that HCFA requires, and while safeguarding the
confidentiality of the doctor-patient relationship, statistics and other
information as described in the remainder of this section (B). [422.516(a)]

2. The M+C Organization agrees to submit to HCFA certified financial information
that must include the following:

(a) Such information as HCFA may require demonstrating that the organization has
a fiscally sound operation, including:

(i) The cost of its operations;

(ii) A description, submitted to HCFA annually and within 120 days of the end of
the fiscal year, of significant business transactions (as defined in Section
422.500) between the M+C Organization and a party in interest showing that the
costs of the transactions listed in paragraph (1)(d) of this section do not
exceed the costs that would be incurred if these transactions were with someone
who is not a party in interest; or

(iii) If they do exceed, a justification that the higher costs are consistent
with prudent management and fiscal soundness requirements.

(iv) A combined financial statement for the M+C Organization and a party in
interest if either of the following conditions is met:

(aa) Thirty-five percent or more of the costs of operation of the M+C
Organization go to a party in interest.

(bb) Thirty-five percent or more of the revenue of a party in interest is from
the M+C Organization. [422.516(b)]
<PAGE>   15

(v) Requirements for combined financial statements.

(aa) The combined financial statements required by paragraph (1)(c) must display
in separate columns the financial information for the M+C Organization and each
of the parties in interest.

(bb) Inter-entity transactions must be eliminated in the consolidated column.

(cc) The statements must have been examined by an independent auditor in
accordance with generally accepted accounting principles and must include
appropriate opinions and notes.

(dd) Upon written request from the M+C Organization showing good cause, HCFA may
waive the requirement that the organization's combined financial statement
include the financial information required in this paragraph (1)(d) with respect
to a particular entity.
[422.516(c)]


(vi) A description of any loans or other special financial arrangements the M+C
Organization makes with contractors, subcontractors, and related entities.

(b) Such information as HCFA may require pertaining to the disclosure of
ownership and control of the M+C Organization. [422.502(f)(1)(ii)]

(c) Patterns of utilization of the M+C Organization's services.


3. The M+C Organization agrees to participate in surveys required by HCFA and to
submit to HCFA all information that is necessary for HCFA to administer and
evaluate the program and to simultaneously establish and facilitate a process
for current and prospective beneficiaries to exercise choice in obtaining
Medicare services. This information includes, but is not limited to:

(a) The benefits covered under the M+C plan;
(b) The M+C monthly basic beneficiary premium and M+C monthly supplemental
beneficiary premium, if any, for the plan.

(c) The service area and continuation area, if any, of each plan and the
enrollment capacity of each plan;

(d) Plan quality and performance indicators for the benefits under the plan
including -

(i) Disenrollment rates for Medicare enrollees electing to receive benefits
through the plan for the previous 2 years;
<PAGE>   16

(ii) Information on Medicare enrollee satisfaction;

(iii) The patterns of utilization of plan services;

(iv) The availability, accessibility, and acceptability of the plan's services;

(v) Information on health outcomes and other performance measures required by
HCFA;

(vi) The recent record regarding compliance of the plan with requirements of
this part, as determined by HCFA; and

(vii) Other information determined by HCFA to be necessary to assist
beneficiaries in making an informed choice among M+C plans and traditional
Medicare;

(e) Information about beneficiary appeals and their disposition;

(f) Information regarding all formal actions, reviews, findings, or other
similar actions by States, other regulatory bodies, or any other certifying or
accrediting organization;

(g) Any other information deemed necessary by HCFA for the administration or
evaluation of the Medicare program. [422.502(f)(2)]

4. The M+C Organization agrees to provide to its enrollees and upon request, to
any individual eligible to elect an M+C plan, all informational requirements
under Section 422.64 and, upon an enrollee's, request, the financial disclosure
information required under Section 422.516. [422.502(f)(3)]

5. Reporting and disclosure under ERISA.

(a) For any employees' health benefits plan that includes an M+C Organization in
its offerings, the M+C Organization must furnish, upon request, the information
the plan needs to fulfill its reporting and disclosure obligations (with respect
to the M+C Organization) under the Employee Retirement Income Security Act of
1974 (ERISA).

(b) The M+C Organization must furnish the information to the employer or the
employer's designee, or to the plan administrator, as the term "administrator"
is defined in ERISA. [422.516(d)]

6. Electronic communication. The M+C Organization must have the capacity to
communicate with HCFA electronically. [422.502(b)]

7. Encounter data. The M+C Organization agrees to comply with the requirements
in Section 422.257 for submitting encounter data to HCFA. [422.502(a)(8)]
<PAGE>   17

Article VII


Renewal of the M+C Contract

A. Renewal of contract: In accordance with Section 422.506, the contract is
renewable annually only if-

(1) HCFA informs the M+C Organization that it authorizes a renewal; and

(2) The M+C Organization has not provided HCFA with a notice of intention not to
renew. [422.504(c)]

B. Nonrenewal of contract:

(1) Nonrenewal by the Organization.

(a) In accordance with Section 422.506, the M+C Organization may elect not to
renew its contract with HCFA as of the end of the term of the contract for any
reason, provided it meets the time frames for doing so set forth in paragraphs
(b) and (c) of this paragraph.

(b) If the M+C Organization does not intend to renew its contract, it must
notify-

(i) HCFA in writing, by May 1 of the year in which the contract would end;

(ii) Each Medicare enrollee, at least 90 days before the date on which the
nonrenewal is effective. This notice must include a written description of all
alternatives available for obtaining Medicare services within the service area
of the M+C plans that the M+C Organization offers, including alternative M+C
plans, original Medicare, and Medigap options and must receive HCFA approval.

(iii) The general public, at least 90 days before the end of the current
calendar year, by publishing a HCFA-approved notice in one or more newspapers of
general circulation in each community located in the M+C Organization's service
area.

(c) HCFA may accept a nonrenewal notice submitted after May 1 if-

(i) The M+C Organization notifies its Medicare enrollees and the public in
accordance with paragraph (1)(b)(ii) and (1)(b)(iii) of this section; and

(ii) Acceptance is not inconsistent with the effective and efficient
administration of the Medicare program.
<PAGE>   18

(d) If the M+C Organization does not renew a contract under this paragraph (1),
HCFA will not enter into a contract with the Organization for 5 years from the
date of contract separation unless there are special circumstances that warrant
special consideration, as determined by HCFA. [422.506(a)]

(2) HCFA decision not to renew.

(a) HCFA may elect not to authorize renewal of a contract for any of the
following reasons:

(i) The M+C Organization has not fully implemented or shown discernable progress
in implementing quality assessment and performance improvement projects as
defined in Section 422.152(d).

(ii) The M+C Organization's level of enrollment, growth in enrollment, or
insufficient number of contracted providers is determined by HCFA to threaten
the viability of the organization under the M+C program and or be an indicator
of beneficiary dissatisfaction with the M+C plan(s) offered by the organization.

(iii) For any of the reasons listed in Section 422.510(a) [Article VII, section
(B)(1)(a) of this contract], which would also permit HCFA to terminate the
contract.

(iv) The M+C Organization has committed any of the acts in Section 422.752(a)
that would support the imposition of intermediate sanctions or civil money
penalties under subpart O of part 422.

(b) Notice. HCFA shall provide notice of its decision whether to authorize
renewal of the contract as follows:

(i) To the M+C Organization by May 1 of the contract year.

(ii) To the M+C Organization's Medicare enrollees by mail at least 90 days
before the end of the current calendar year.

(iii) To the general public at least 90 days before the end of the current
calendar year, by publishing a notice in one or more newspapers of general
circulation in each community or county located in the M+C Organization's
service area.

(c) Notice of appeal rights. HCFA shall give the M+C Organization written notice
of its right to reconsideration of the decision not to renew in accordance with
Section 422.644. [422.506(b)]


Article VIII
<PAGE>   19


Modification or Termination of the Contract

A. Modification or Termination of Contract by Mutual Consent

1. The M+C Organization agrees to include in this contract such other terms and
conditions as HCFA may find necessary and appropriate in order to implement the
requirements of the M+C program.

2. This contract may be modified or terminated at any time by written mutual
consent.

(a) If the contract is terminated by mutual consent, except as provided in
section (A)(3) of this article, the M+C Organization must provide notice to its
Medicare enrollees and the general public as provided in Section 422.512(b)(2)
and (b)(3) [Article VIII, section B(2)(b) of this contract].

(b) If the contract is modified by mutual consent, the M+C Organization must
notify its Medicare enrollees of any changes that HCFA determines are
appropriate for notification within time frames specified by HCFA.

3. If this contract is terminated by mutual consent and replaced the day
following such termination by a new M+C contract, the M+C Organization is not
required to provide the notice specified in section B of this article. [422.508]

B. Termination of the Contract by HCFA or the M+C Organization

1. Termination by HCFA.

(a) HCFA may terminate a contract for any of the following reasons:

(i) The M+C Organization has failed substantially to carry out the terms of its
contract with HCFA.

(ii) The M+C Organization is carrying out its contract with HCFA in a manner
that is inconsistent with the effective and efficient implementation of this
part.

(iii) HCFA determines that the M+C Organization no longer meets the requirements
of this part for being a contracting organization.

(iv) The M+C Organization commits or participates in fraudulent or abusive
activities affecting the Medicare program, including submission of fraudulent
data.

(v) The M+C Organization experiences financial difficulties so severe that its
ability to make necessary health services available is impaired to the point of
posing an imminent 

<PAGE>   20


and serious risk to the health of its enrollees, or otherwise fails to make
services available to the extent that such a risk to health exists.

(vi) The M+C Organization substantially fails to comply with the requirements in
subpart M of this part relating to grievances and appeals.

(vii) The M+C Organization fails to provide HCFA with valid encounter data as
required under Section 422.257.

(viii) The M+C Organization fails to implement an acceptable quality assessment
and performance improvement program as required under subpart D of Section 422.

(ix) The M+C Organization substantially fails to comply with the prompt payment
requirements in Section 422.520.

(x) The M+C Organization substantially fails to comply with the service access
requirements in Section 422.112 or Section 422.114.

(xi) The M+C Organization fails to comply with the requirements of Section
422.208 regarding physician incentive plans.

(b) Notice. If HCFA decides to terminate a contract for reasons other than the
grounds specified in section (B)(1)(a) above, it will give notice of the
termination as follows:

(i) HCFA will notify the M+C Organization in writing 90 days before the intended
date of the termination.

(ii) The M+C Organization will notify its Medicare enrollees of the termination
by mail at least 30 days before the effective date of the termination.

(iii) The M+C Organization will notify the general public of the termination at
least 30 days before the effective date of the termination by publishing a
notice in one or more newspapers of general circulation in each community or
county located in the M+C Organization's service area.

(c) Immediate termination of contract by HCFA.

(i) For terminations based on violations prescribed in paragraph (B)(1)(a)(v) of
this article, HCFA will notify the M+C Organization in writing that its contract
has been terminated effective the date of the termination decision by HCFA. If
termination is effective in the middle of a month, HCFA has the right to recover
the prorated share of the capitation payments made to the M+C Organization
covering the period of the month following the contract termination.
<PAGE>   21

(ii) HCFA will notify the M+C Organization's Medicare enrollees in writing of
HCFA's decision to terminate the M+C Organization's contract. This notice will
occur no later than 30 days after HCFA notifies the plan of its decision to
terminate this contract. HCFA will simultaneously inform the Medicare enrollees
of alternative options for obtaining Medicare services, including alternative
M+C Organizations in a similar geographic area and original Medicare.

(iii) HCFA will notify the general public of the termination no later than 30
days after notifying the M+C Organization of HCFA's decision to terminate this
contract. This notice will be published in one or more newspapers of general
circulation in each community or county located in the M+C Organization's
service area.

(d) Corrective action plan

(i) General. Before terminating a contract for reasons other than the grounds
specified in section (B)(1)(a)(v) of this article, HCFA will provide the M+C
Organization with reasonable opportunity, not to exceed time frames specified at
subpart N of Section 422, to develop and receive HCFA approval of a corrective
action plan to correct the deficiencies that are the basis of the proposed
termination.

(ii) Exception. If a contract is terminated under section (B)(1)(a)(v) of this
article, the M+C Organization will not have the opportunity to submit a
corrective action plan.

(e) Appeal rights. If HCFA decides to terminate this contract, it will send
written notice to the M+C Organization informing it of its termination appeal
rights in accordance with subpart N of Section 422. [422.510]

2. Termination by the M+C Organization

(a) Cause for termination. The M+C Organization may terminate this contract if
HCFA fails to substantially carry out the terms of the contract.

(b) Notice. The M+C Organization must give advance notice as follows:

(i) To HCFA, at least 90 days before the intended date of termination. This
notice must specify the reasons why the M+C Organization is requesting contract
termination.

(ii) To its Medicare enrollees, at least 60 days before the termination
effective date. This notice must include a written description of alternatives
available for obtaining Medicare services within the service area, including
alternative M+C plans, Medigap options, and original Medicare and must receive
HCFA approval.

(iii) To the general public at least 60 days before the termination effective
date by publishing a HCFA-approved notice in one or more newspapers of general
circulation in each community or county located in the M+C Organization's
geographic area.
<PAGE>   22

(c) Effective date of termination. The effective date of the termination will be
determined by HCFA and will be at least 90 days after the date HCFA receives the
M+C Organization's notice of intent to terminate.

(d) HCFA's liability. HCFA's liability for payment to the M+C Organization ends
as of the first day of the month after the last month for which the contract is
in effect.

(e) Effect of termination by the organization. HCFA will not enter into an
agreement with the M+C Organization for a period of five years from the date the
Organization has terminated this contract, unless there are circumstances that
warrant special consideration, as determined by HCFA. [422.512]


Article IX


Requirements of Other Laws and Regulations

A. The M+C Organization agrees to comply with-

(1) Title VI of the Civil Rights Act of 1964 as implemented by regulations at 45
CFR part 84;

(2) The Age Discrimination Act of 1975 as implemented by regulations at 45 CFR
part 91;

(3) The Americans With Disabilities Act; and

(4) Other laws applicable to recipients of Federal funds; and

(5) All other applicable laws, regulations, and rules. [422.502(h)(1)]

B. The M+C Organization is receiving Federal payments under this contract, and
related entities, contractors, and subcontractors paid by the M+C Organization
to fulfill its obligations under this contract are subject to certain laws that
are applicable to individuals and entities receiving Federal funds. The M+C
Organization agrees to inform all related entities, contractors and
subcontractors that payments that they receive are, in whole or in part, from
Federal funds. [422.502(h)(2)]

C. In the event that any provision of this contract conflicts with the
provisions of any statute or regulation applicable to an M+C Organization, the
provisions of the statute or regulation shall have full force and effect.
[422.502(j)]

<PAGE>   23

Article X


Severability

The M+C Organization agrees that, upon HCFA's request, this contract will be
amended to exclude any M+C plan or State-licensed entity specified by HCFA, and
a separate contract for any such excluded plan or entity will be deemed to be in
place when such a request is made.[422.502(k)]

In witness whereof, the parties hereby execute this contract.

FOR THE M+C ORGANIZATION


---------------------------- --------------------------
Printed Name                        Title


---------------------------- ---------------------------
Signature                                   Date


---------------------------- ---------------------------
Organization


---------------------------
Address



FOR THE HEALTH CARE FINANCING ADMINISTRATION




--------------------------
Gary A. Bailey
Director, Health Plan Purchasing
and Administration Group
Center for Health Plans and Providers

<PAGE>   24

ATTACHMENT A

CERTIFICATION OF ENROLLMENT INFORMATION
RELATING TO HCFA PAYMENT


TO A MEDICARE+CHOICE ORGANIZATION

Pursuant to the contract(s) between the Health Care Financing Administration
(HCFA) and (INSERT NAME OF M+C ORGANIZATION), hereafter referred to as the "M+C
Organization," governing the operation of the following Medicare +Choice plans
(INSERT PLAN IDENTIFICATION NUMBERS HERE), the M+C Organization hereby requests
payment under the contract, and in doing so, makes the following certifications
concerning HCFA payments to the M+C Organization. The M+C Organization
acknowledges that the information described below directly affects the
calculation of HCFA payments to the M+C Organization and that misrepresentations
to HCFA about the accuracy of such information may result in Federal civil
action and/or criminal prosecution.

1. The M+C Organization has reported to HCFA for the month of (INDICATE MONTH
AND YEAR) all new enrollments, disenrollments, and changes in enrollees'
institutional status with respect to the above-stated M+C plans. Based on best
knowledge, information, and belief, all information submitted to HCFA in this
report is accurate, complete, and truthful.


2. The M+C Organization has reviewed the HCFA monthly membership report and
reply listing for the month of (INDICATE MONTH AND YEAR) for the above-stated
M+C plans and has reported to HCFA any discrepancies between the report and the
M+C Organization's records. For those portions of the monthly membership report
and the reply listing to which the M+C Organization raises no objection, the M+C
Organization, through the certifying CEO/CFO, will be deemed to have attested,
based on best knowledge, information, and belief, to their accuracy,
completeness, and truthfulness.

-----------------------------
(INDICATE TITLE [CEO or CFO])

on behalf of


(INDICATE M+C ORGANIZATION)


<PAGE>   25




ATTACHMENT B

CERTIFICATION OF ENCOUNTER AND ADJUSTED COMMUNITY RATE INFORMATION RELATING TO
HCFA PAYMENT

TO A MEDICARE+CHOICE ORGANIZATION

Pursuant to the contract(s) between the Health Care Financing Administration
(HCFA) and (INSERT NAME OF M+C ORGANIZATION), hereafter referred to as the "M+C
Organization," governing the operation of the following Medicare +Choice plans
(INSERT PLAN IDENTIFICATION NUMBERS HERE), the M+C Organization hereby requests
payment under the contract, and in doing so, makes the following certifications
concerning HCFA payments to the M+C Organization. The M+C Organization
acknowledges that the information described below directly affects the
calculation of HCFA payments to the M+C Organization or additional benefit
obligations of the M+C Organization and that misrepresentations to HCFA about
the accuracy of such information may result in Federal civil action and/or
criminal prosecution.

1. The M+C Organization has reported to HCFA for the period of (INDICATE DATES)
all inpatient encounter data with respect to the above-stated M+C plans. Based
on best knowledge, information, and belief, all information submitted to HCFA in
this report is accurate, complete, and truthful.

2. The M+C Organization has submitted to HCFA an adjusted community rate (ACR)
proposal for the period (INDICATE DATES). Based on best knowledge, information,
and belief, all of the information submitted to HCFA in this ACR proposal is
accurate, complete, and truthful.


-----------------------------
(INDICATE TITLE [CEO or CFO])


on behalf of

(INDICATE M+C ORGANIZATION)