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Exhibit 10.5.1 STATE OF TEXAS
    
    HHSC CONTRACT NO. 529-00-139-K
 COUNTY OF TRAVIS AMENDMENT 11
TO THE AGREEMENT BETWEEN THE
HEALTH & HUMAN SERVICES COMMISSION
AND
AMERIGROUP TEXAS, INC.
FOR HEALTH PLAN SERVICES
TO THE
CHILDRENS HEALTH INSURANCE PROGRAM THIS CONTRACT AMENDMENT (the
Amendment) is entered into between the
HEALTH & HUMAN SERVICES COMMISSION (HHSC), an administrative agency within
the executive department of the State of Texas, and AMERIGROUP Texas, Inc.
(CONTRACTOR), a health maintenance organization organized under the laws of
the State of Texas, possessing a certificate of authority issued by the Texas
Department of Insurance to operate as a health maintenance organization, and
having its principal office at 1200 E. Copeland Rd., Suite 200, Arlington,
Texas 76011. HHSC and CONTRACTOR may be referred to in this Amendment
individually as a Party and collectively as the Parties. The Parties hereby agree to amend their
original contract, HHSC contract
number 529-00-148 (the Agreement), as set forth in Article 2 of this
Amendment. ARTICLE 1. PURPOSE. Section 1.01Authorization. This Amendment is executed by the Parties
in accordance with
Article 8 of the Agreement. Section 1.02Effective Date of changes Except as provided below, this Amendment
is effective September1, 2003,
and terminates on the Expiration Date of the Agreement, unless extended or
terminated sooner by HHSC in accordance with the Agreement. ARTICLE 2. AMENDMENT TO THE OBLIGATIONS OF THE PARTIES. Section 2.01Modification to Section 4.10,
Assignment Section 4.10 of the Agreement is
modified as follows: Section 4.10 Assignment This Agreement was
awarded to CONTRACTOR based on
CONTRACTORs qualifications to perform the services described in
the RFP. CONTRACTOR cannot assign this Agreement without the
written consent of HHSC. This provision does not prevent
CONTRACTOR from subcontracting duties and responsibilities to
qualified Subcontractors. If HHSC consents to an
assignment of this Agreement, a transition period of 90 days will
run from the date the assignment is approved and so
that Members services are not interrupted. The
assigning CONTRACTOR must also submit a transition plan, as
set out in section 20.18(d), subject to HHSCs approval. Section 2.02Modification to Article7,Service Levels and Performance Measurement Section 7.01(f) is deleted in its entirety and replaced with the
following language: Page 1 of 8




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Section 7.01Performance Measurement (f) CONTRACTOR must
comply with the performance
objectives set forth in Exhibit A to Amendment 11 of
HHSC contract number 529-00-139, entitled Performance
Objectives. Section 2.03Modification to Article 9, Audit
and Financial Compliance Article 9 of the Agreement is
modified by adding new Section 9.04, State
Auditors Office, as follows: Section 9.04State Auditors Office CONTRACTOR understands
that acceptance of funds under this
contract acts as acceptance of the authority of the State
Auditors Office, or any successor agency, to conduct an audit
or investigation in connection with those funds. CONTRACTOR
further agrees to cooperate fully with the State Auditors
Office or its successor in the conduct of the audit or
investigation, including providing all records requested.
CONTRACTOR will ensure that this clause concerning the
authority to audit funds received indirectly by subcontractors
through CONTRACTOR and the requirement to cooperate is included
in any subcontract it awards. Section 2.04Modifications to Article 10, Terms
and Conditions of Payment  (a)
    
    Section 10.02 of the Agreement is modified by adding new
subsection (e) as follows: Section 10.02Time and Manner of Premium
Payment (e) For the period
beginning February 1, 2004
and ending August 31, 2004, CONTRACTOR will be
entitled to a payment in accordance with this
subsection (e). CONTRACTOR will be paid based on per
member/per month premiums and new and current
enrollment figures, (including disenrollment
adjustments to previous monthly enrollment totals).
The Administrative Services Contractor will convey
premiums payable information to CONTRACTOR for data
reconciliation and to the Management Services
Contractor. CONTRACTOR must reconcile the data and
report any errors to the Management Services
Contractor by the cut-off date of the next month.
The Management Services Contractor will pay
CONTRACTOR by the first business day following the
14th day of each month. CONTRACTOR must accept
payment for premiums by direct deposit into
CONTRACTORs account. For the period beginning
February 1, 2004 and ending August 31. 2004, the
premium rates are: CSA #
    
    Under Age 1
    
    Ages 1-5
    
    Ages 6-14
    
    Ages 15-18CSA #2
    
    $
    328.47
    
    
    $
    68.21
    
    
    $
    45.26
    
    
    $
    88.35CSA #6
    
    $
    333.84
    
    
    $
    69.30
    
    
    $
    46.00
    
    
    $
    90.52
 CONTRACTOR does not bill
HHSC, the
Administrative Services, Contractor, other state
agencies, or institutions for the monthly premium
payment. Page 2 of 8




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(b) Section 10.06 of the Agreement is modified by deleting the
phrase population-based health initiatives and any references
to such phrase wherever it appears. Section 10.06 is modified as
follows: 10.6 CONTRACTOR
must pay to HHSC an experience
rebate for each Experience Rebate Period. CONTRACTOR
will calculate the experience rebate in accordance
with the tiered rebate formula listed below based on
Net Income Before Taxes (excess of allowable
revenues over allowable expenses) as set forth in
Appendix D. The CONTRACTORs calculations are
subject to HHSCs approval, and HHSC reserves the
right to have an independent audit performed to
verify the information provided by CONTRACTOR. Graduated Rebate Formula Net Income Before Taxesas a Percentage of Total
    
    CONTRACTORRevenues
    
    Share
    
    HHSC Share0% - 3%
    
    
    100
    %
    
    
    0
    %Over 3% - 7%
    
    
    75
    %
    
    
    25
    %Over 7% - 10%
    
    
    50
    %
    
    
    50
    %Over 10% - 15%
    
    
    25
    %
    
    
    75
    %Over 15%
    
    
    0
    %
    
    
    100
    %
 Losses incurred in the
1st Experience Rebate
Period may be carried forward to the 2nd and/or 3rd
Experience Rate Periods for the same service area as
an offset to Net Income Before Taxes in order to
reduce any Experience Rebate to HHSC. Losses incurred in
the 2nd Experience Rebate
Period may be carried forward to the 3d Experience
Rate Period for the same service area as an offset
to Net Income Before Taxes. Losses incurred in the
Experience Rebate
Periods subsequent to the 2nd Experience Rebate
Period can only be carried forward as an offset to
Net Income Before Taxes in the next Experience
Rebate Period. The CONTRACTOR shall
calculate the experience
rebate for each period by applying the experience
rebate formula as follows: For the 1st
and 2nd Experience Rebate Periods,
to the Net Income Before Taxes for each CHIP service
area contracted between HHSC and CONTRACTOR.
CONTRACTOR losses in one CHIP service area cannot be
used to offset Net Income Before Taxes in another
CHIP service area. For the 3rd
and 4th Experience Rebate Periods,
to the sum of the Net Income Before Taxes for all
CHIP, STAR Medicaid, and STAR+PLUS Medicaid service
areas contracted between HHSC and CONTRACTOR. Experience rebate will be
based on a pre-tax
basis. Expenses for value-added services are
excluded from the determination of Net Page 3 of 8




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Income Before Taxes
reported in the Annual CFS
Report; however, CONTRACTOR may subtract from Net
Income Before Taxes the expenses incurred for value
added services for the experience rebate
calculations. There will be two
settlements for payment(s) of
the experience rebate for each Experience Rebate
Period. Settlement payments are payable to HHSC. The
first settlement shall equal 100% of the experience
rebate as derived from, Net Income Before Taxes, for
All Groups Combined reduced by any value added
services expenses in the Annual CFS Report and shall
be paid on the same day that the first Annual CFS
Report is submitted to HHSC. The second settlement
shall be an adjustment to the first settlement and
shall be paid on the same day that the second Annual
CFS Report is submitted to HHSC if the adjustment is
a payment from CONTRACTOR to HHSC. If the adjustment
is a payment from HHSC to CONTRACTOR, HHSC shall pay
such adjustment to CONTRACTOR within thirty (30)
days of receipt of the second Annual CFS Report.
HHSC or its agent may audit the CFS Reports. If HHSC
determines that corrections to the CFS Reports are
required based on an audit of other documentation
acceptable to HHSC, to determine an adjustment to
the amount of the second settlement, then final
adjustment shall be made within three (3) years from
the date that CONTRACTOR submits the second Annual
CFS Report. CONTRACTOR must pay the first and second
settlements on the due dates for the first and
second Annual CFS Reports, respectively, as
identified in section 17.02. HHSC may adjust the
experience rebate if HHSC determines that CONTRACTOR
has paid (an) affiliate(s) amounts for goods or
services that are higher than the fair market value
of the goods and services in the service area. Fair
market value may be based on the amount CONTRACTOR
pays (a) non-affiliate(s) or the amount another
health maintenance organization pays for the same or
similar goods and services in the service area. HHSC
has final authority in auditing and determining the
amount of the experience rebate. (c) Article 10 of the Agreement is modified by adding new Section
10.12, Mental Health, Substance Abuse, Chemical Dependency
Benefits-Transition Period, as follows: Section 10.12Mental Health, Substance Abuse,
Chemical Dependency Benefits-Transition Period (a) For covered Mental
Health, Substance Abuse
and Chemical Dependency (MH/SA/CD) claims incurred by
Members between September 1, 2003 and January 31,
2004 (Transition Period). CONTRACTOR shall comply
with Exhibit B of Amendment 11 to HHSC contract
number 529-00-139, entitled Conditions of Payment,
which is incorporated by reference into the
Agreement. (b) HHSC will pay
CONTRACTOR $0.06 per member
per month retroactive to September 1, 2003, to
process Mental Health, Substance Abuse and Chemical
Dependency claims incurred during the Transition
Period. This payment does not apply to the actual
claims costs for such Page 4 of 8




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claims, for which HHSC
will reimburse CONTRACTOR
according to the terms contained in Exhibit B of
Amendment 11 to HHSC contract number 529-00-139.
For the period between September 1, 2003.and
January 31, 2004, HHSCwill make a one-time
payment based on CONTRACTORs total CHIP member
months for the period multiplied by $0.06. HHSC
will issue this payment by February 28, 2004. (c) HHSC will reimburse
CONTRACTOR for
reasonable expenses associated with re-writing,
printing, and mailing new provider manual template
letters, identification cards, and member handbook
template letters that result from the implementation
of Mental Health, Substance Abuse, and Chemical
Dependency benefits. CONTRACTOR should submit
invoices for these services by July 1, 2004. HHSC
has 30 days from the date of receipt of invoices
submitted pursuant to this provision to pay
CONTRACTOR, unless HHSC determines that an audit is
necessary, in which case payment may be delayed
pending the outcome of the audit. CONTRACTOR must
incorporate new benefits and changes resulting from
implementation of Mental Health, Substance Abuse,
and Chemical Dependency benefits into CONTRACTORs
provider directory, member handbook, and provider
manual by May 31, 2004. (d) All payments made by
CONTRACTOR pursuant to
this Section are subject to audit by HHSC. HHSCs
reimbursement of any CONTRACTOR claims submitted
under this Section may be delayed pending an audit
or a review by the HHSC Office of Inspector General. (e) HHSCs and
CONTRACTORs liability for
payment under this Section terminates on August 31,
2004. Section 2.05Modification to Appendix C, CHIP
Scope of Benefits Appendix C, CHIP Scope of Benefits,
to the Request for Proposals for
Health Plan Services to the Childrens Health Insurance Program (June 1,
1999) is modified as shown in the copy of Appendix C that accompanies this
Amendment as Exhibit C, which is incorporated into the Agreement by
reference. Section 2.06Modifications to Article 12, Scope
of CHIP Covered Services (a) Section 12.05 of the Agreement is deleted in its entirety
and replaced with
the following: Section 12.05Case Management Services for Children
with
Special Health Care Needs (a) CONTRACTOR must
report to HHSC for approval
the method and data sources it uses to identify and
track CSHCN on an ongoing basis. (b) A child, a
childs family, a health care
provider, the CHIP Administrative Services
Contractor, or CONTRACTOR may identify a CSHCN with
a potential need for enhanced case management.
CONTRACTOR must contact the family of a child
identified as potentially needing enhanced case
management within 20 days. The purpose of the
contact is to initiate outreach to identify families
wanting enhanced case management and/or other
CONTRACTOR services as available (such as disease
management programs). Outreach methods can include
HHSC-approved surveys, needs assessments, or other
methods. CONTRACTOR can contact families through
telephone Page 5 of 8




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or mail, and must follow
up within 30 days with
families not responding to initial contact
Documentation on outreach activities must be available
to HHSC upon request. Documentation must include the
following: (1) Number and percent of
members contacted; (2) Number and percent
responding to contact; (3) Number and percent
completing outreach tool; (4) Number and percent
accepting case management; (5) Number and percent
referred to other health
plan programs (such as disease management). (c) CONTRACTOR must
provide the following enhanced
case management services, as appropriate, if the family
wants the services: (1) Outreach and
Informing CONTRACTOR must discuss
covered services, including
specialty services: the familys right to select a specialist as
a primary care provider (PCP); out-of-network services
applicable to the childs condition, if not available within
network: the availability of enhanced care coordination: and
community referrals. (2) Enhanced Care
Coordination CSHCN, their families, or
their health providers
may request enhanced care coordination from
CONTRACTOR. CONTRACTOR must furnish a care coordinator
when requested. CONTRACTOR may also recommend to the
CSHCNs family that a care coordinator be furnished if
CONTRACTOR determines that care coordination would
benefit the child. Care coordinators are responsible
for working with CSHCN, their families, and their
health care providers to develop a seamless package of
care in which primary, acute, and specialty service
needs are met through a single plan that is
understandable to the family. If the family agrees, a
written plan of care must be developed and updated at
least annually. The care coordinator will coordinate
all services with the PCP and, as necessary, with the
childs pediatric specialty care physician. The care
coordinator also makes referrals for other community
services. (3) Community
Referrals CONTRACTOR must make a
best effort to implement a
systematic process to enlist the involvement of
community organizations that may not be providing
CHIP-covered services but are otherwise important to
the health and well being of Members. CONTRACTOR also
must make a best effort to establish relationships
with these community organizations in order to make
referrals for CSHCN and other children who need
community services. These organizations may include,
but are not limited to: (A) Early Childhood
Intervention Program (512/424-6745); (B) Department of Mental
Health and Mental
Retardation (MHMR) (512/206-4830); (C) Texas Department of
Health (TDH) Title V
Program (512/458-7321); (D) Local School District
(Special Education); Page 6 of 8




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(E) Other state and local
agencies and programs
with jurisdiction over childrens services,
including the food stamp and Women, Infants, and
Children (WIC) programs; (F) Texas Information and
Referral Network; (G) Texas Commission for
the Blind (TCB); (H) Child-serving civic
and religious
organizations and consumer and advocacy groups, such
as United Cerebral Palsy, that also work on behalf
of the CSHCN population.  (b)
    
    Section 12.07, In-patient Psychiatric, is deleted in its entirety and
replaced as follows: Section 12.07Court-ordered Commitments (a) CONTRACTOR shall
provide inpatient and
outpatient psychiatric services to Members who have
been ordered to receive the services by a court of
competent jurisdiction under the provisions of
Chapter 573 and 574 of the Texas Health and Safety
Code, relating to court-ordered commitments to
psychiatric facilities, or placements as a Condition
of Probation as authorized by the Texas Family Code. (b) CONTRACTOR shall not
deny, reduce or
controvert the medical necessity of any
court-ordered inpatient or outpatient psychiatric
service. Any modification or termination of
services must be presented to the court with
jurisdiction over the matter for determination. Section 2.07Amendment to HUB Reporting
Requirements  (a)
    
    Appendix Ito the Request for Proposals for Health Plan Services
to the Childrens Health Insurance Program (June 1, 1999) is deleted
in its entirety.(b)
    
    Section 17.07 of the Agreement is modified to read as follows: Section 17.07 HUB Reports CONTRACTOR must submit
monthly
reports documenting CONTRACTORs Historically
Underutilized Business (HUB) program efforts and
accomplishments in the format prescribed by HHSC.
The HHSC project manager will supply CONTRACTOR
with information for accessing the reporting form.
CONTRACTOR must submit with its first
monthly report, retroactive monthly reports for
months covering the period beginning December 2003
up to the currently monthly report. Section 2.08Representations and Agreement of the
Parties The Parties contract and agree that the
terms of the Agreement will remain
in effect and continue to govern except to the extent modified in this
Amendment. By signing this Amendment, the Parties
expressly understand and agree that
this Amendment is hereby made a part of the Agreement as though it were set out
word for word in the Agreement. Page 7 of 8




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IN WITNESS HEREOF, HHSC and the
CONTRACTOR have each caused this Amendment
to be signed and delivered by its duly authorized representative. AMERIGROUP TEXAS, INC
    
    HEALTH AND HUMAN SERVICES
COMMISSIONBy:
    /s/ Eric M. Yoder, M.D.
    
    By:
    
    C E Bell, M.D forAlbert Hawkins Executive CommissionerName: Eric M. Yoder, M.D.Title: President, COODate: January 15, 2004
    
    Date:
    
    January 20, 2004
 Page 8 of 8