EXHIBIT 10.3

                         WAIVER AND FOURTH AMENDMENT TO
                                CREDIT AGREEMENT

         THIS WAIVER AND FOURTH  AMENDMENT TO CREDIT AGREEMENT is made and dated
as of August 14, 2000 (the "Fourth  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 and that certain Third  Amendment to Credit  Agreement dated as
of  December  14, 1999 (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 and including  September 15, 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               Amendments to Section 1.01.
                  --------------------------

(a)               There shall be added to Section 1.01 of the Credit Agreement,
 in appropriate alphabetical sequence, the following definitions:

         "Non-Restricted Subsidiary" means any Subsidiary of the Company that is
not a Restricted Subsidiary.

         "Restricted  Subsidiary"  means (i) each HMO  Subsidiary  and any other
        Subsidiary  of the  Company  that  is  regulated  by the  department  of
        insurance or similar  agency of any State,  (ii) any  Subsidiary  of any
        Person  described in the preceding  clause (iii) 2314  Partnership,  and
        (iv) any  Subsidiary  of the  Company  which  has  assets  of less  than
        $25,000, provided, however, the aggregate of amount for all Subsidiaries
        under this clause (iv) shall not exceed $500,000.

(b) 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 December 10, 1999 until the delivery of the Compliance  Certificate for the
fiscal quarter ending  September 30, 2000, the Applicable  Margin shall be Level
6" and replacing it with the  following:  ", from December 10, 1999 until August
14, 2000, the Applicable  Margin shall be Level 6 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%."

3.2               Amendment to Section 2.01.
                  -------------------------

(a)               Section 2.01 of the Credit Agreement is hereby amended by
adding the following sentence  immediately prior to the end
thereof:

        "Notwithstanding  anything  to the  contrary  herein,  unless  otherwise
        agreed by the Majority Banks,  from and after August 1, 2000, the sum of
        the  Effective  Amount  of  all  outstanding  Revolving  Loans  and  the
        Effective Amount of all L/C Obligations shall not exceed $185,000,000."

3.3               Amendment to Section 7.17.
                  -------------------------

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

        "7.17 Delivery of security documents by each Non-Restricted  Subsidiary.
        The Company shall cause each of the Non-Restricted  Subsidiaries to duly
        execute and deliver to Agent:

                (a) Resolutions and Incumbency Certificates. On or before August
                18,  2000, a copy of board  resolutions  of the Company and each
                Non-Restricted Subsidiary, in form and substance satisfactory to
                the Agent,  authorizing the execution,  delivery and performance
                of the Waiver and Fourth Amendment to Credit Agreement, dated as
                of  August  14,  2000  (the  "Fourth  Amendment"),  and the Loan
                Documents  contemplated  thereby,  certified by the Secretary or
                Assistant Secretary of such Person,  together with an incumbency
                certificate  for each of the  Company  and  each  Non-Restricted
                Subsidiary  that has  executed  a Loan  Document  in  connection
                herewith.

                  (b) Guaranty. On or before August 23, 2000, a guaranty in form
                and substance  reasonably  acceptable to Agent, duly executed by
                each of the Non-Restricted Subsidiaries.

                  (c)      Security  Agreement.  On or before August 23, 2000,
a security  agreement in form and  substance  reasonably

                acceptable to Agent, duly executed by the Company and each
Non-Restricted  Subsidiary,  covering all of the property of
                such Person described therein, together with

                         (i)        all promissory notes held by the Company
and each Non-Restricted Subsidiary;

                         (ii) the certificates, evidencing all of the issued and
                         outstanding   shares  of  capital  stock,   partnership
                         interests and membership  interests pledged pursuant to
                         the Security  Agreement,  which  certificates  shall in
                         each case be  accompanied  by undated stock powers duly
                         executed  in  blank,  or,  if  any  securities  pledged
                         pursuant to the Security  Agreement are  uncertificated
                         securities,  confirmation and evidence  satisfactory to
                         the  Agent   that  the   security   interest   in  such
                         uncertificated  securities has been  transferred to and
                         perfected  by the Agent for the benefit of the Banks in
                         accordance  with Section 9-115 and Section 8-106 of the
                         Uniform Commercial Code;

                         (iii)  acknowledgment  copies of properly filed Uniform
                         Commercial Code financing  statements (Form UCC-1),  or
                         such other  evidence of filing as may be  acceptable to
                         the Agent,  naming the Company and each  Non-Restricted
                         Subsidiary  as the debtors and the Agent as the secured
                         party, or other similar instruments or documents, filed
                         under the Uniform  Commercial Code of all jurisdictions
                         as may be  necessary  or, in the  opinion of the Agent,
                         desirable to perfect the security interest of the Agent
                         pursuant to the Security Agreement;

                         (iv) executed copies of proper Uniform  Commercial Code
                         Form UCC-3 termination statements, if any, necessary to
                         release all Liens and other rights of any Person in any
                         collateral   described   in  the   Security   Agreement
                         previously  granted by any Person (other than Permitted
                         Liens); and

                         (v) on or before August 31, 2000,  certified  copies of
                         Uniform  Commercial  Code Requests for  Information  or
                         Copies  (Form  UCC-11),  or  a  similar  search  report
                         certified by a party  acceptable to the Agent,  dated a
                         date  reasonably  near  August  15,  2000  listing  all
                         effective  financing  statements which name the Company
                         and  its  Non-Restricted   Subsidiaries   (under  their
                         present names and any previous names) as the debtor and
                         which are filed in the  jurisdictions  in which filings
                         were made  pursuant to clause (c) above,  together with
                         copies of such financing statements.

     (d) Legal  Opinions.  On or before August 23, 2000,  opinions of counsel to
the Company and the Non-Restricted  Subsidiaries,  addressed to
the Agent and the Banks,  in form and  substance  reasonablysatisfactory  to the
Agent.

                           (e) Other Evidence.  Such other evidence with respect
                to the  Company,  each  Non-Restricted  Subsidiary  or any other
                Person  as the  Agent  or any  Bank may  reasonably  request  to
                establish  the  consummation  of the  transactions  contemplated
                hereby,  the taking of all corporate  action in connection  with
                the Fourth Amendment and the Credit Agreement and the compliance
                with the conditions set forth herein.

3.4               Amendment to Section 7.18.
                  -------------------------

     (a) There shall be added to the Credit Agreement a new Section 7.18 reading
in its entirety as follows:

                  "7.18   Delivery  of  form  of  mortgage  and  real   property
preliminary title insurance reports.

                (a) On or before August 23, 2000, the Company shall finalize the
                form of mortgage or deed of trust,  as  applicable,  in form and
                substance   reasonably   acceptable  to  Agent,   that  will  be
                finanlized  by the  Company  or  Non-Restricted  Subsidiary,  as
                applicable, on or about September 15, 2000.

(b)             On or  before  September  15,  2000,  the  Company  shall  cause
                preliminary  title reports issued by a title  insurance  company
                reasonably  acceptable  to Agent,  to be  delivered to Agent for
                every  parcel  of real  property  owned  by the  Company  or any
                Non-Restricted Subsidiary."

3.5               Amendment to Section 9.01(c).
                  ----------------------------

     (a)  Section  9.01(c)  of the  Credit  Agreement  is hereby  amended in its
entirety to read as follows:

     "(c) Specific  Defaults.  The Company fails to perform or observe any term,
covenant or agreement  contained in any of Section 7.01,  7.02, 7.03, 7.09, 7.17
or 7.18 or in Article VIII; or"



<PAGE>



3.6               Amendment to Section 11.04.
                  --------------------------

     (a) Section 11.04 of the Credit  Agreement is hereby  amended by adding the
following paragraph immediately prior to the end thereof:

         "Without  limitation  of  the  foregoing,  the  Company  shall  pay  or
         reimburse  the  Agent  within 5  Business  Days  after  demand  for all
         reasonable  costs  and  expenses  incurred  by E&Y  Restructuring  LLC,
         consultants  retained by the Agent's  counsel,  in connection with this
         Agreement and all reasonable Attorney Costs incurred by or on behalf of
         the Agent in connection with this Agreement."

     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 Fourth Amendment:

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

         4.2 Binding  Obligation.  This Fourth 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 Fourth  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  Fourth  Amendment  or  the  transactions
contemplated hereby or thereby.

         4.4  Incorporation of Certain  Representations.  After giving effect to
the terms of this Fourth 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 Fourth Amendment,
no Default or Event of Default  under the Credit  Agreement  has occurred and is
continuing.

     5. Conditions,  Effectiveness.  The  effectiveness of this Fourth 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 August 14, 2000:

     5.1 Execution of Fourth 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  Pledge   Agreement   Affirmations.   The  Agent  shall  have  received
affirmation  letters in respect of the Pledge  Agreement,  substantially  in the
form of Exhibit A, from each Pledgor Subsidiary.

         5.3  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.

Upon satisfaction of the foregoing conditions,  the effectiveness of this Fourth
Amendment shall be retroactive to June 30, 2000.

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 Fourth  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 Fourth 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 Fourth 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 Fourth Amendment to
be duly executed and delivered as of the date first written above.

                                SIERRA HEALTH SERVICES, INC.


                                By:     /s/  Paul H. Palmer
                                Name:    Paul H. Palmer
                                Title:   V. P./CFO


<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/ John C. Oberle
                                Name:     John C. Oberle
                                Title:       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:    /s/ Timothy Kinsey
                                Name:     Timothy Kinsey
                                Title:       Vice President

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


                                By:    /s/ Patricia C. Rohling
                                Name:    Patricia C. Rohling
                                Title:      Senior Vice President

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


                                By:
                                Name:
                                Title:

                                By:
                                Name:
                                Title:


<PAGE>


                                                       EXHIBIT A to
                                                       Fourth Amendment
                                                       to Credit Agreement

                                                 August 14, 2000




Sierra Health Services, Inc.
Sierra Medical Management, 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 and that certain  Third
Amendment to Credit Agreement dated as of December 14, 1999 (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") and (2) the Pledge  Agreements  dated October 30, 1998 from each of the
addressees  in favor of the  Lenders  and the Agent (the  "Pledge  Agreements").
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 your Pledge  Agreement and (ii)  acknowledge  and agree that
your Pledge Agreement 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 SERVICES, INC.
SIERRA MEDICAL MANAGEMENT, INC.


By:    /s/ Paul H. Palmer

   Its:     V.P., CFO for Sierra Health Services, Inc.
            Secretary/Treasurer for Sierra Medical Managements, Inc.

PRIME HOLDINGS, INC.


By:       /s/ Frank Collins
   Its:   Secretary