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ADDENDUM TO MEDICARE MANAGED CARE CONTRACT PURSUANT TO
SECTIONS 1860D-1 THROUGH 1860D-42 OF THE SOCIAL SECURITY ACT
FOR THE OPERATION OF A VOLUNTARY MEDICARE PRESCRIPTION
DRUG PLAN
 AMERI Group Texas, Inc. H5817 (INSERT H OR R NUMBER)




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Article I
Medicare Voluntary Prescription Drug Benefit
 A.
    
    The MA-PD Sponsor agrees to operate one or more Medicare Voluntary
PrescriptionDrug Plans as described in its application and related materials, including
but notlimited to all the attestations contained therein and all supplemental guidance,
forMedicare approval and in compliance with the provisions of this addendum,
whichincorporates in its entirety the Solicitation For Applications from
Prescription DrugPlans released on January 21, 2005 (as revised on March 9, 2005)
[applicable toMedicare Part C contractors] or the Solicitation for Applications
from Cost PlanSponsors released on January 21, 2005 (as revised on March 9, 2005)
[applicable toMedicare cost plan contractors] (hereinafter collectively referred to as
theaddendum). The MA-PD Sponsor also agrees to operate in accordance with
theregulations at 42 CFR §423.1 through 42 CFR §423.910 (with the exception
ofSubparts Q, R, and S), sections 1860D-1 through 1860D-42 (with the exception
ofsections 1860D-22(a) and 1860D-31) of the Social Security Act, and the
applicablesolicitation identified above, as well as all other applicable Federal
statutes,regulations, and policies. This addendum is deemed to incorporate any changes
thatare required by statute to be implemented during the term of this addendum and
anyregulations or policies implementing or interpreting such statutory provisions.B.
    
    CMS agrees to perform its obligations to the MA-PD Sponsor consistent with
theregulations at 42 CFR §423.1 through 42 CFR §423.910 (with the exception
ofSubparts Q, R, and S), sections 1860D-1 through 1860D-42 (with the exception
ofsections 1860D-22(a) and 1860D-31) of the Social Security Act, and the
applicablesolicitation, as well as all other applicable Federal statutes, regulations,
and policies.C.
    
    CMS agrees that it will not implement, other than at the beginning of a calendar
year,regulations under 42 CFR Part 423 that impose new, significant
regulatoryrequirements on the MA-PD Sponsor. This provision does not apply to
newrequirements mandated by statute.D.
    
    This addendum is in no way intended to supersede or modify 42 CFR, Parts 417, 422or
423. Failure to reference a regulatory requirement in this addendum does notaffect the
applicability of such requirements to the MA-PD Sponsor and CMS.
 Article II
Functions to be Performed by the MA-PD Sponsor
 A.
    
    ENROLLMENT
 1.
    
    MA-PD Sponsor agrees to enroll in its MA-PD plan only Part D-eligible
beneficiaries as they are defined in 42 CFR §423.30(a) and who have elected to enroll in
MA-PD Sponsors Part C or Section 1876 benefit.
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2.
    
    If the MA-PD Sponsor is a cost plan sponsor, the MA-PD Sponsor acknowledges that its
Section 1876 plan enrollees are not required to elect enrollment in its Part D plan.
 B.
    
    PRESCRIPTION DRUG BENEFIT
 1.
    
    MA-PD Sponsor agrees to provide the required prescription drug coverage
asdefined under 42 CFR §423.100 and, to the extent applicable,
supplementalbenefits as defined in 42 CFR §423.100 and in accordance with Subpart C
of 42CFR Part 423. MA-PD Sponsor also agrees to provide Part D benefits
asdescribed in the MA-PD Sponsors Part D bid(s) approved each year by
CMS(and in the Attestation of Benefit Plan and Price, attached hereto).2.
    
    MA-PD Sponsor agrees to calculate and collect beneficiary Part D premiums
inaccordance with 42 CFR §§423.286 and 423.293.3.
    
    If the MA-PD Sponsors is a cost plans sponsor, it acknowledge that its Part
Dbenefit is offered as an optional supplemental service in accordance with 42
CFR§417.440(b)(2)(ii).
 C.
    
    DISSEMINATION OF PLAN INFORMATION
 1.
    
    MA-PD Sponsor agrees to provide the information required in 42 CFR §423.48.2.
    
    MA-PD Sponsor agrees to disclose information related to Part D benefits
tobeneficiaries in the manner and the form specified by CMS under 42
CFR§§423.128 and 423.50 and in the Marketing Materials Guidelines for
MedicareAdvantage-Prescription Drug Plans (MA-PDs) and Prescription Drug
Plans(PDPs).3.
    
    MA-PD Sponsor certifies that all materials it submits to CMS under the File
andUse Certification authority described in the Marketing Materials Guidelines
areaccurate, truthful, not misleading, and consistent with CMS marketing
guidelines.
 D.
    
    QUALITY ASSURANCE/UTILIZATION MANAGEMENTMA-PD Sponsor agrees to operate quality assurance, cost, and utilization management,
medication therapy management programs, and support electronic prescribing in accordance
with Subpart D of 42 CFR Part 423.E.
    
    APPEALS AND GRIEVANCESMA-PD Sponsor agrees to comply with all requirements in Subpart M of 42 CFR Part 423 governing
coverage determinations, grievances and appeals, and formulary exceptions. MA-PD Sponsor
acknowledges that these requirements are separate and distinct from the appeals and grievances
requirements applicable to the MA-PD Sponsor through the operation of its Part C or cost plan
benefits.
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F.
    
    PAYMENT TO MA-PD SPONSOR
 1.
    
    MA-PD Sponsor and CMS agree that payment paid for Part D services under
theaddendum will be governed by the rules in Subpart G of 42 CFR Part 423.2.
    
    If the MA-PD Sponsor is participating in the Part D Reinsurance
PaymentDemonstration, described in 70 FR 9360 (Feb. 25, 2005), it affirms that it
will notseek payment under the demonstration for services provided to employer
groupenrollees.
 G.
    
    BID SUBMISSION AND REVIEWIf the MA-PD Sponsor intends to participate in the Part D program for the future year, MA-PD
Sponsor agrees to submit a future years Part D bid, including all required information on
premiums, benefits, and cost-sharing, by the applicable due date, as provided in Subpart F of
42 CFR Part 423 so that CMS and the MA-PD Sponsor may conduct negotiations regarding the terms
and conditions of the proposed bid and benefit plan renewal. MA-PD Sponsor acknowledges that
failure to submit a timely bid under this section may affect the sponsors ability to offer a
Part C plan, pursuant to the provisions of 42 CFR §422.4(c).H.
    
    COORDINATION WITH OTHER PRESCRIPTION DRUG COVERAGE
 1.
    
    MA-PD Sponsor agrees to comply with the coordination requirements with
StatePharmacy Assistance Programs (SPAPs) and plans that provide other
prescriptiondrug coverage as described in Subpart J of 42 CFR Part 423.2.
    
    MA-PD Sponsor agrees to comply with Medicare Secondary Payer procedures
asstated in 42 CFR §423.462.
 I.
    
    SERVICE AREA AND PHARMACY ACCESS
 1.
    
    The MA-PD Sponsor agrees to provide Part D benefits in the service area
forwhich it has been approved by CMS to offer Part C or cost plan benefits
utilizinga pharmacy network and formulary approved by CMS that meet the
requirementsof 42 CFR §423.120.2.
    
    The MA-PD Sponsor agrees to ensure adequate access to Part D-covered drugs
atout-of-network pharmacies according to 42 CFR §423.124.3.
    
    MA-PD Sponsor agrees to provide benefits by means of point-of-service
systemsto adjudicate prescription drug claims in a timely and efficient manner
incompliance with CMS standards, except when necessary to provide access
inunderserved areas, I/T/U pharmacies (as defined in 42 CFR §423.100), and
long-term care pharmacies (as defined in 42 CFR §423.100).
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4.
    
    MA-PD Sponsor agrees to contract with any pharmacy that meets the
MA-PDSponsors reasonable and relevant standard terms and conditions. If
MA-PDSponsor has demonstrated that it historically fills 98% or more of its
enrolleesprescriptions at pharmacies owned and operated by the MA-PD Sponsor
(orpresents compelling circumstances that prevent the sponsor from meeting the
98%standard or demonstrates that its Part D plan design will enable the sponsor
tomeet the 98% standard during the contract year), this provision does not apply
toMA-PD Sponsors plan.5.
    
    The provisions of 42 CFR §423.120(a) concerning the TRICARE retail
pharmacyaccess standard do not apply to MA-PD Sponsor if the Sponsor has
demonstratedto CMS that it historically fills more than 50% of its enrollees
prescriptions atpharmacies owned and operated by the MA-PD Sponsor. MA-PD
Sponsorsexcused from meeting the TRICARE standard are required to demonstrate
retailpharmacy access that meets the requirements of 42 CFR §422.112 for a Part
Ccontractor and 42 CFR §417.416(e) for a cost plan contractor.
 J.
    
    COMPLIANCE PLAN/PROGRAM INTEGRITYMA-PD Sponsor agrees that it will develop and implement a compliance plan that applies to its
Part D-related operations, consistent with 42 CFR §423.504(b)(4)(vi).K.
    
    LOW-INCOME SUBSIDYMA-PD Sponsor agrees that it will participate in the administration of subsidies for low-income
individuals according to Subpart P of 42 CFR Part 423.L.
    
    BENEFICIARY FINANCIAL PROTECTIONSThe MA-PD Sponsor agrees to afford its enrollees protection from liability for payment of fees
that are the obligation of the MA-PD Sponsor in accordance with 42 CFR §423.505(g).M.
    
    RELATIONSHIP WITH RELATED ENTITIES, CONTRACTORS, AND SUBCONTRACTORS
 1.
    
    The MA-PD Sponsor agrees that it maintains ultimate responsibility for
adheringto and otherwise fully complying with all terms and conditions of this
addendum.2.
    
    The MA-PD Sponsor shall ensure that any contracts or agreements
withsubcontractors or agents performing functions on the MA-PD Sponsors
behalfrelated to the operation of the Part D benefit are in compliance with 42
CFR§423.505(i).
 N.
    
    CERTIFICATION OF DATA THAT DETERMINE PAYMENT
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Article III
Record Retention and Reporting Requirements
 A.
    
    MAINTENANCE OF RECORDSMA-PD Sponsor agrees to maintain records and provide access in accordance with 42 CFR
§§423.504(d) and 505(d) and (e).B.
    
    GENERAL REPORTING REQUIREMENTSThe MA-PD Sponsor agrees to submit to information to CMS according to 42 CFR §§423.505(f),
423.514, and the Final Medicare Part D Reporting Requirements, a document issued by CMS
and subject to modification each program year.C.
    
    CMS License For Use of Plan FormularyPDF Sponsor agrees to submit to CMS each plans formulary information, including any
changes to its formularies, and hereby grants to the Government[, and any person or entity
who might receive the formulary from the Government,] a non-exclusive license to use all or
any portion of the formulary for any purpose related to the administration of the Part D
program, including without limitation publicly distributing, displaying, publishing or
reconfiguration of the information in any medium, including www.medicare.gov, and by any
electronic, print or other means of distribution.
 Article IV
HIPAA Transactions/Privacy/Security
 A.
    
    MA-PD Sponsor agrees to comply with the confidentiality and enrollee
recordaccuracy requirements specified in 42 CFR §423.136.B.
    
    MA-PD Sponsor agrees to enter into a business associate agreement with the entitywith
which CMS has contracted to track Medicare beneficiaries true out-of-pocketcosts.
 Article V
Addendum Term and Renewal
 A.
    
    TERM OF ADDENDUM
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This addendum is effective from the date of CMS authorized representatives signature
through December 31, 2006. This addendum shall be renewable for successive one-year periods
thereafter according to 42 CFR §423.506. MA-PD Sponsor shall not conduct Part D-related
marketing activities prior to October 1, 2005 and shall not process enrollment applications
prior to November 15, 2005. MA-PD Sponsor shall begin delivering Part D benefit services on
January 1, 2006.B.
    
    QUALIFICATION TO RENEW ADDENDUM
 1.
    
    In accordance with 42 CFR §423.507, the MA-PD Sponsor will be
determinedqualified to renew this addendum annually only if
 (a)
    
    CMS informs the MA-PD Sponsor that it is qualified to renew
itsaddendum; and(b)
    
    The MA-PD Sponsor has not provided CMS with a notice of
intentionnot to renew in accordance with Article VII of this addendum.
 2.
    
    Although MA-PD Sponsor may be determined qualified to renew its addendum
under this Article, if the MA-PD Sponsor and CMS cannot reach agreement on the Part D bid
under Subpart F of 42 CFR Part 423, no renewal takes place, and the failure to reach
agreement is not subject to the appeals provisions in Subpart N of 42 CFR Parts 422 or 423.
(Refer to Article XI for consequences of non-renewal on the Part C contract and the ability
to enter into a Part C contract.)
 Article VI
Nonrenewal of Addendum
 A.
    
    NONRENEWAL BY THE MA-PD SPONSOR
 1.
    
    MA-PD Sponsor may non-renew this addendum in accordance with
42CFR423.507(a).2.
    
    If the MA-PD Sponsor non-renews this addendum under this Article, CMS
cannotenter into a Part D addendum with the organization for 2 years unless there
arespecial circumstances that warrant special consideration, as determined by CMS.
 B.
    
    NONRENEWAL BY CMSCMS may non-renew this addendum under the rules of 42 CFR 423.507(b). (Refer to Article X for
consequences of non-renewal on the Part C contract and the ability to enter into a Part C
contract.)
 Article VII
Modification or Termination of Addendum by Mutual Consent
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Article VIII
Termination of Addendum by CMS
  Article IX
Termination of Addendum by the MA-PD Sponsor
 A.
    
    The MA-PD Sponsor may terminate this addendum only in accordance with 42 CFR423.510.B.
    
    CMS will not enter into a Part D addendum with an organization that has terminatedits
addendum within the preceding 2 years unless there are circumstances that
warrantspecial consideration, as determined by CMS.C.
    
    If the addendum is terminated under section A of this Article, the MA-PD Sponsormust
ensure the timely transfer of any data or files. (Refer to Article X forconsequences of
non-renewal on the Part C contract and the ability to enter into a PartC contract.)
 Article X
Relationship Between Addendum and Part C Contract or 1876 Cost Contract
 A.
    
    MA-PD Sponsor acknowledges that, if it is a Medicare Part C contractor, thetermination
or nonrenewal of this addendum by either party may require CMS toterminate or non-renew
the Sponsors Part C contract in the event that such non-renewal or termination
prevents the MA-PD Sponsor from meeting the requirementsof 42 CFR §422.4(c), in which
case the Sponsor must provide the notices specified inthis contract, as well as the
notices specified under Subpart K of 42 CFR Part 422.MA-PD Sponsor also acknowledges
that Article X.B. of this addendum may preventthe sponsor from entering into a Part C
contract for two years following an addendumtermination or non-renewal where such
non-renewal or termination prevents the MA-PD Sponsor from meeting the requirements of
42 CFR §422.4(c).B.
    
    The termination of this addendum by either party shall not, by itself, relieve
theparties from their obligations under the Part C or cost plan contracts to which
thisdocument is an addendum.
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C.
    
    In the event that the MA-PD Sponsors Part C or cost plan contract (as applicable) is
terminated or nonrenewed by either party, the provisions of this addendum shall also
terminate. In such an event, the MA-PD Sponsor and CMS shall provide notice to enrollees and
the public as described in this contract as well as 42 CFR Part 422, Subpart K or 42 CFR Part
417, Subpart K, as applicable.
 Article XI
Intermediate Sanctions
 The MA-PD Sponsor shall be subject to sanctions and civil monetary penalties, consistent
with Subpart O of 42 CFR Part 423.
 Article XII
Severability
 Severability of the addendum shall be in accordance with 42 CFR §423.504(e).
 Article XIII
Miscellaneous
 A.
    
    DEFINITIONS: Terms not otherwise defined in this addendum shall have themeaning given
such terms at 42 CFR Part 423 or, as applicable, 42 CFR Part 422 orPart 417.B.
    
    ALTERATION TO ORIGINAL ADDENDUM TERMS: The MA-PD Sponsoragrees that it has not altered
in any way the terms of the MA-PD addendum presentedfor signature by CMS. MA-PD Sponsor
agrees that any alterations to the original textthe MA-PD Sponsor may make to this
addendum shall not be binding on the parties.C.
    
    ADDITIONAL CONTRACT TERMS: The MA-PD Sponsor agree to include in thisaddendum other
terms and conditions in accordance with 42 CFR §423.505(j).D.
    
    CMS APPROVAL TO BEGIN MARKETING AND ENROLLMENT ACTIVITIES:The MA-PD Sponsor agrees
that it must complete CMS operational requirementsrelated to its Part D benefit prior
to receiving CMS approval to begin MA-PD planmarketing activities relating to its Part
D benefit. Such activities include, but are notlimited to, establishing and
successfully testing connectivity with CMS systems toprocess enrollment applications
(or contracting with an entity qualified to performsuch functions on MA-PD Sponsors
behalf) and successfully demonstrating thecapability to submit accurate and timely
price comparison data. To establish andsuccessfully test connectivity, the PDP Sponsor
must, 1) establish and test physicalconnectivity to the CMS data center, 2) acquire
user identifications and passwords, 3)receive, store, and maintain data necessary to
perform enrollments and send and receive transactions to and from CMS, and 4) check and receive transaction status
information.
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Aileen Mc Cormick
    
    COOPrinted Name
    
    Title/s/Aileen Mc Cormick
    
    9.7.05Signature
    
    DateAMERIGROUP
Texas, Inc.
    
    6700 West Loop South, Suite
200 Bellair, Tx 77401Organization
    
    Address
  Patricia Smith Date
    
    DateDirectorMedicare Advantage Group
Center for Beneficiary ChoicesRobert DonnellyDirectorMedicare Drug Benefit Group
Center for Beneficiary Choices
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PART C/D BENEFIT PLAN(S) DESCRIPTION
TO BE ATTACHED TO MA CONTRACT
 SECTION 1876/PART D OPTIONAL SUPPLEMENTAL BENEFIT PLAN
DESCRIPTION TO BE ATTACHED TO SECTION 1876 CONTRACT
 11