EXHIBIT 10.4

                          WAIVER AND FIFTH AMENDMENT TO

                                CREDIT AGREEMENT

         THIS WAIVER AND FIFTH  AMENDMENT TO CREDIT  AGREEMENT is made and dated
as of September 15, 2000 (the "Fifth  Amendment")  among SIERRA HEALTH SERVICES,
INC. (the "Company"), the Banks party to the Credit Agreement referred to below,
and BANK OF AMERICA,  N.A., a national banking  association,  as  Administrative
Agent (the  "Agent"),  and amends  that  certain  Credit  Agreement  dated as of
October  30,  1998,  as  amended by that  certain  First  Amendment  dated as of
November 23, 1998, that certain Second Amendment to Credit Agreement dated as of
January 15, 1999, that certain Third  Amendment to Credit  Agreement dated as of
December  14,  1999 and that  certain  Waiver  and  Fourth  Amendment  to Credit
Agreement  dated as of August 14, 2000 (as further amended or modified from time
to time, the "Credit Agreement").

                                    RECITALS

         WHEREAS,  the Company has requested  that the Agent and the Banks waive
certain  financial  covenants and amend  certain other  provisions of the Credit
Agreement,  and the Agent and the Banks are  willing  to do so, on the terms and
conditions specified herein;

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
adequacy of which are hereby acknowledged, the parties hereby agree as follows:

     1.  Terms.  All terms used  herein  shall have the same  meanings as in the
Credit Agreement unless otherwise defined herein.

2. Waiver. By their execution  hereof,  the Banks hereby waive compliance by the
Company with Section  8.14(a) to (c)  inclusive of the Credit  Agreement for the
period from June 30, 2000 through  5:00 p.m.,  Eastern  Time,  October 11, 2000.
This waiver  shall be limited  precisely as provided for herein and shall not be
deemed to be a waiver or  modification  of any other  term or  provision  of the
Credit  Agreement or to be a consent to any other  transaction or further action
on the part of the Company or any of its  Subsidiaries  which would  require the
consent of the Banks under the Credit Agreement.

     3. Amendments. The Credit Agreement is hereby amended as follows:


     3.1 Amendment to Section 1.01.-

(a) The definition of the term "Applicable Margin" in Section 1.01 of the Credit
Agreement is hereby  amended by deleting the following  clause  therefrom:  "and
from  August 15,  2000  until  September  15,  2000 or such later date as may be
determined by Majority  Banks,  the Applicable  LIBOR Rate Margin shall be 3.25%
and the  Applicable  Base Rate Margin shall be 2.25%" and  replacing it with the
following:  "; from  August 15,  2000 until  otherwise  determined  by  Majority
Lenders, the Applicable LIBOR Rate Margin shall be 3.25% and the Applicable Base
Rate Margin shall be 2.25%."

         3.2      Amendment to Section 2.04.
                  -------------------------


     (a)  Section  2.04 of the Credit  Agreement  shall be amended by adding the
following sentence immediately prior to the end thereof:

"Notwithstanding the foregoing,  unless otherwise agreed by Majority Banks, from
and after  September  15,  2000 no new LIBOR Rate Loan  shall  have an  Interest
Period longer than one month."

     3.3 Amendment to Section 2.07(c).


     (a)  Section  2.07(c) is hereby  amended by adding the  following  sentence
immediately prior to the end thereof:

"Notwithstanding  the foregoing,  unless otherwise agreed by the Company and the
Majority Banks, from and after September 15, 2000 all Net Cash Proceeds shall be
delivered to the Agent to the extent provided in Section 8.02 hereof."

         3.4      Amendment to Section 2.10.
                  -------------------------

     (a)  Section  2.10 is hereby  amended  by adding the  following  subsection
immediately prior to the end thereof:

         "(c)  Utilization  Fee.  The  Company  shall  pay to the  Agent for the
         account of each Bank a fee in an amount equal to 2.00% per annum on the
         aggregate amount of the utilization under this Agreement, computed on a
         daily basis in arrears.  For purposes of calculating  utilization under
         this subsection,  the Commitments shall be deemed used to the extent of
         the  Effective  Amount of  Revolving  Loans then  outstanding  plus the
         Effective Amount of L/C Obligations then  outstanding.  The utilization
         fee shall accrue from September 15, 2000 until otherwise  determined by
         the Majority  Banks and shall be due and payable  monthly in arrears on
         the last day of each calendar month, commencing September 30, 2000."

         3.5      Amendment to Section 7.18.
                  -------------------------

     (a) There  shall be added to Section  7.18 a new clause (c)  reading in its
entirety as follows:

         "(c) On or before  October 11,  2000,  the Company and Agent shall have
         prepared  final  versions of the mortgages and deeds of trust,  in form
         and  substance   reasonably   acceptable  to  Agent,   with  all  legal
         descriptions  attached thereto, for all parcels of real estate owned by
         the Company and each Non-Restricted Subsidiary."

         3.6      Amendment to Section 7.19.
                  -------------------------

     (a) There shall be added to the Credit Agreement a new Section 7.19 reading
in its entirety as
follows:

         "7.19    Additional Undertakings.
                  -----------------------

     (a) The  Company  shall make a  presentation  to the Banks  concerning  the
financial  performance of the Company and its  Subsidiaries  and setting forth a
proposed  financial  restructuring  of the Company and its  Subsidiaries and the
Obligations at a meeting arranged by Company on or before October 5, 2000. On or
before October 3, 2000,  the Company and its financial  advisor shall deliver to
the Banks a written summary of the Company's  proposed  financial  restructuring
and the restructuring of the Obligations.

     (b) Without the prior  approval of Majority  Banks,  the Company  shall not
sell its  corporate  jet unless the Net Cash  Proceeds from such sale will be at
least $9,000,000 minus the amount of any Indebtedness secured by Liens permitted
pursuant to Section 8.01(n).

         3.7      Amendment to Section 8.01.
                  -------------------------

         (a) Section 8.01 of the Credit  Agreement is hereby amended by deleting
the period at the end  thereof and  replacing  it with "; and" and by adding the
following clause immediately prior to the end thereof:

         "(n)  Liens  on the  Company's  jet and  replacement  parts  therefore;
         provided  that (i) such Lien  attaches  solely to the Company's jet and
         such replacement  parts,  (ii) the principal amount of the Indebtedness
         secured thereby does not exceed  $5,000,000 and (iii) the  Indebtedness
         secured thereby is nonrecourse to the Company and its  Subsidiaries and
         their assets, except as expressly provided herein."

         3.8      Amendments to Section 8.02.
                  --------------------------

     (a) Section 8.02 of the Credit  Agreement  is hereby  amended by adding the
following sentences
immediately prior to the end thereof:

         "Notwithstanding  the foregoing,  if the Company or any  Non-Restricted
         Subsidiary shall complete any transaction permitted by clauses (b), (d)
         or (e) above (other than a sale of its  corporate  jet permitted by the
         following  sentence and other than sales of up to $250,000 of equipment
         from and after  September  15,  2000  otherwise  permitted  pursuant to
         subsection  (b)  above),   all  Net  Cash  Proceeds   therefrom   shall
         immediately  be delivered to the Agent and held as collateral  security
         until a mutually acceptable sharing arrangement between the Company and
         the  Majority  Banks  has  been  arranged;   provided,  that  upon  the
         occurrence of an Event of Default any distribution of such proceeds may
         be made at the  discretion  of  Majority  Banks.  To the extent that no
         Event of  Default  then  exists  and the sale of the  Company's  jet is
         otherwise  permitted pursuant to Section 7.19(b),  then the Company may
         retain  the Net  Cash  Proceeds  from  such  sale  notwithstanding  the
         foregoing."

         3.9      Amendment to Section 8.04.
                  -------------------------

     (a)  Subsection  (f) of  Section  8.04 of the  Credit  Agreement  is hereby
amended and restated to read in its entirety as follows:

                  "(f)  loans  or  advances  to  officers  and  employees  in an
         aggregate  amount  not to exceed  $2,500,000;  provided,  however  that
         unless  otherwise  agreed by Majority  Banks,  no  additional  loans or
         advances shall be made after September 15, 2000; and"

         3.10     Amendment to Section 8.05.
                  -------------------------

     (a)  Subsection  (d) of  Section  8.05 of the  Credit  Agreement  is hereby
amended and restated to read in its entirety as follows:

     "(d) Indebtedness secured by Liens permitted by subsections  8.01(g),  (h),
(i) and (n);"

     4.  Representations and Warranties.  The Company represents and warrants to
the Agent and the Banks that,  on and as of the date  hereof,  and after  giving
effect to this Fifth Amendment:

         4.1  Authorization.  The  execution,  delivery and  performance  by the
Company  of this  Fifth  Amendment  has been duly  authorized  by all  necessary
corporate action,  and this Fifth Amendment has been duly executed and delivered
by the Company.

         4.2 Binding  Obligation.  This Fifth  Amendment  constitutes the legal,
valid  and  binding  obligation  of  the  Company,  enforceable  against  it  in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy,  insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.

         4.3 No  Legal  Obstacle  to  Amendment.  The  execution,  delivery  and
performance of this Fifth  Amendment  will not (a)  contravene the  Organization
Documents  of the  Company;  (b)  constitute  a  breach  or  default  under  any
contractual  restriction  or  violate  or  contravene  any  law or  governmental
regulation  or court decree or order  binding on or affecting  the Company which
individually or in the aggregate does or could  reasonably be expected to have a
Material Adverse Effect; or (c) result in, or require the creation or imposition
of, any Lien on any of the Company's properties. No approval or authorization of
any  governmental  authority  is required to permit the  execution,  delivery or
performance  by  the  Company  of  this  Fifth  Amendment  or  the  transactions
contemplated hereby or thereby.

         4.4  Incorporation of Certain  Representations.  After giving effect to
the terms of this Fifth  Amendment,  the  representations  and warranties of the
Company set forth in Article VI of the Credit  Agreement are true and correct in
all  respects  on and as of the date hereof as though made on and as of the date
hereof,  except to the extent such  representations  relate solely to an earlier
specified date.

         4.5 Default.  After giving effect to the terms of this Fifth Amendment,
no Default or Event of Default  under the Credit  Agreement  has occurred and is
continuing.

     5.  Conditions,  Effectiveness.  The  effectiveness of this Fifth Amendment
shall be subject to the  compliance  by the Company with its  agreements  herein
contained,  and to the delivery of the  following to Agent in form and substance
satisfactory to Agent on or before September 15, 2000:

     5.1 Execution of Fifth Amendment.  The Company,  the Agent and the Majority
Banks shall have signed a copy hereof and the same shall have been  delivered to
the Agent.

     5.2 Financial  Advisor.  The Company shall have engaged a financial advisor
reasonably acceptable to the Majority Banks.

         5.3 Security Agreement and Guaranty Affirmations.  The Agent shall have
received  affirmation letters in respect of the Security Agreement and Guaranty,
substantially in the form of Exhibit A, from each party thereto.

         5.4  Fees  and  Expenses.   All  invoiced  fees  and  expenses  of  E&Y
Restructuring LLC and all Attorney Costs of Mayer, Brown & Platt shall have been
paid or provided for and, after giving effect  thereto,  E&Y  Restructuring  LLC
shall hold a retainer in the amount of $100,000  and Mayer,  Brown & Platt shall
hold a retainer  in the amount of  $100,000  for the  payment of future fees and
expenses.

         6.       Miscellaneous.
                  -------------

         6.1  Effectiveness  of the Credit  Agreement  and the Notes.  Except as
hereby expressly amended, the Credit Agreement, the Loan Documents and the Notes
shall  each  remain in full  force  and  effect,  and are  hereby  ratified  and
confirmed in all respects on and as of the date hereof.

         6.2  Waivers.  This Fifth  Amendment  is limited  solely to the matters
expressly  set forth  herein and is  specific in time and in intent and does not
constitute,  nor should it be  construed  as, a waiver or amendment of any other
term or condition, right, power or privilege under the Credit Agreement or under
any agreement,  contract,  indenture,  document or instrument mentioned therein;
nor  does it  preclude  or  prejudice  any  rights  of the  Agent  or the  Banks
thereunder, or any exercise thereof or the exercise of any other right, power or
privilege,  nor shall it require the  Majority  Banks to agree to an  amendment,
waiver or consent for a similar  transaction or on a future occasion,  nor shall
any future waiver of any right, power, privilege or default hereunder,  or under
any  agreement,  contract,  indenture,  document or instrument  mentioned in the
Credit Agreement,  constitute a waiver of any other right,  power,  privilege or
default of the same or of any other term or provision.

         6.3 Counterparts. This Fifth Amendment may be executed in any number of
counterparts,  and all of such  counterparts  taken  together shall be deemed to
constitute one and the same instrument.

     6.4 Governing Law. This Fifth  Amendment shall be governed by and construed
in accordance with the laws of the State of California.




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<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to be duly executed and delivered as of the date first written above.

                                SIERRA HEALTH SERVICES, INC.


                                By:     /s/ Erin MacDonald
                                Name:     Erin MacDonald
                                Title:      President


<PAGE>


                                BANK OF AMERICA, N.A., as Administrative Agent


                                By:      /s/ Clara Yang Strand
                                Name:      Clara Yang Strand
                                Title:         Managing Director

                                BANK OF AMERICA, N.A., as a Bank


                                By:   /s/ Clara Yang Strand
                                Name:    Clara Yang Strand
                                Title:       Managing Director

                                FIRST UNION NATIONAL BANK, as a Bank


                                By:     /s/ J. Matt Maclver, Jr.

                                Name:     J. Matt Maclver, Jr.
                                Title:       Vice President



                                CREDIT LYONNAIS NEW YORK BRANCH, as
                                a Bank

                                By:   /s/   Charles H. Heidsieck
                                Name:      Charles H. Heidsieck
                                Title:        Sr. Vice President



                                BANK ONE, NA, as a Bank


                                By:     /s/  Bonnie D. Wilson
                                Name:      Bonnie D. Wilson
                                Title:        First Vice President


<PAGE>



                                WELLS FARGO BANK, N.A., as a Bank


                                By:
                                Name:
                                Title:


                                UNION BANK OF CALIFORNIA, N.A., as a Bank


                                By:
                                Name:
                                Title:


                                DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN
                                ISLANDS BRANCHES, as a Bank

                                By:     /s/ Ryan Zanin
                                Name:      Ryan Zanin
                                Title:        Managing Director

                                By:    /s/ David Mayhew
                                Name:     David Mayhew
                                Title:       Vice President


<PAGE>


                                                           EXHIBIT A to
                                                           Fifth Amendment
                                                           to Credit Agreement

                               September 15, 2000

Sierra Health-Care Options, Inc.
Nevada Administrators, Inc.
Behavioral Healthcare Options, Inc.
Sierra Home Medical Products, Inc.
Family Healthcare Services
Family Home Hospice, Inc.
Sierra Medical Management, Inc.
Sierra Health Holdings, Inc.
Southwest Medical Associates, Inc.
Northern Nevada Health Network, Inc.
Intermed, Inc.
Mohave Valley Hospital, Inc.
Tolemac, Inc.
M.E.G.A., Inc.
CII Financial, Inc.
Southwest Realty, Inc.
Prime Holdings, Inc.
c/o Sierra Health Services, Inc.
2724 North Tenaya Way
Las Vegas, Nevada 89128

        Re:     Sierra Health Services, Inc.

Gentlemen:

        Please refer to (1) the Credit Agreement,  dated as of October 30, 1998,
as amended by that certain First  Amendment  dated as of November 23, 1998, that
certain  Second  Amendment  dated as of January 15,  1999,  that  certain  Third
Amendment  to Credit  Agreement  dated as of December  14, 1999 and that certain
Waiver and Fourth  Amendment to Credit Agreement dated as of August 14, 2000 (as
so amended, the "Credit Agreement"),  by and among Sierra Health Services, Inc.,
as  the   borrower,   the   commercial   lending   institutions   party  thereto
(collectively,  the "Lenders") and Bank of America,  N.A., as agent (herein,  in
such capacity,  called the "Agent"), (2) the Security Agreement dated August 23,
2000 from each of the  addressees  in favor of the  Lenders  and the Agent  (the
"Security  Agreement")  and (3) the Guaranty  dated August 23, 2000 from each of
the addressees in favor of the Lenders and the Agent (the "Guaranty").  Pursuant
to a waiver  and  amendment  dated  of even  date  herewith,  a copy of which is
attached hereto,  certain terms of the Credit Agreement were amended.  We hereby
request  that you (i)  acknowledge  and  reaffirm  all of your  obligations  and
undertakings  under the Security Agreement and Guaranty and (ii) acknowledge and
agree that the Security Agreement and Guaranty is and shall remain in full force
and effect in accordance with the terms thereof.

        Please  indicate your agreement to the foregoing by signing in the space
provided below, and returning the executed copy to the undersigned.

                                         BANK OF AMERICA, N.A., as Agent


                                         By:      /s/ Clara Yang Strand
                                         Title:      Managing Director

Acknowledged and Agreed to
as of the date hereof

SIERRA HEALTH-CARE OPTIONS, INC.


By:     /s/ Wayne R. Nippe
   Its:       Secretary

NEVADA ADMINISTRATORS, INC.


By:    /s/  D. Sonenstein
   Its:       Secretary

BEHAVIORAL HEALTHCARE OPTIONS, INC.


By:     /s/  Steve Shoop
   Its:     Secretary

SIERRA HOME MEDICAL PRODUCTS, INC.


By:    /s/  Lynn Rosenbach
   Its:       Secretary

FAMILY HEALTHCARE SERVICES


By:     /s/ D. Sivertsen
   Its:       Secretary

FAMILY HOME HOSPICE, INC.


By:    /s/ D. Sivertsen
   Its:      Secretary

SIERRA MEDICAL MANAGEMENT, INC.


By:    /s/  Paul H. Palmer
   Its:       Secretary

SIERRA HEALTH HOLDINGS, INC.


By:     /s/  Erin MacDonald
   Its:      Secretary

SOUTHWEST MEDICAL ASSOCIATES, INC.


By:     /s/  James Marcotte
   Its:        Treasurer


<PAGE>


NORTHERN NEVADA HEALTH NETWORK, INC.


By:     /s/  David M. Marlon
   Its:       Secretary

INTERMED, INC.


By:    /s/  D. Sivertsen
   Its:      Secretary

MOHAVE VALLEY HOSPITAL, INC.


By:     /s/  David M. Marlon
   Its:        Secretary

TOLEMAC, INC.


By:    /s/  David M. Marlon
   Its:      Secretary

M.E.G.A., INC.


By:    /s/  Frank Collins
   Its:     Secretary

CII FINANCIAL, INC.


By:     /s/  D. Sonenstein
   Its:       Secretary


<PAGE>


SOUTHWEST REALTY, INC.


By:   /s/  Frank Collins
   Its:      Secretary

PRIME HOLDINGS, INC.


By:     /s/  Frank Collins
   Its:        Secretary