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                                                                    EXHIBIT 10.9

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of this 25th day of January, 1999, by and between HEALTHCARE RECOVERIES, INC., a
Delaware corporation (the "Company") and KEVIN M. O'DONNELL, a resident of the
State of Wisconsin (the "Employee").

                     I. STATEMENT OF BACKGROUND INFORMATION

         The Company provides subrogation and related recovery services for
healthcare payors, a full range of cost management services to third party
payors and providers in recovering the cost or reasonable value of healthcare
benefits provided to insureds who are injured under circumstances where a third
party is ultimately responsible for such healthcare benefits and cost management
services to third party payors and other parties within the healthcare industry,
including, but not limited to hospital bill audit, credit balance recovery, cost
management and other consulting services (the "Business");

         Subro-Audit, Inc., a Wisconsin corporation ("SAI") and O'Donnell
Leasing Co., LLP, a Wisconsin limited liability Partnership ("ODL"), (SAI and
ODL shall collectively be referred to as "SAI Division") operate a subrogation
and related recovery services business which provides, among other things,
subrogation and related recovery services for healthcare payors (the "Sellers'
Business");

         The Company is a party to an Asset Purchase Agreement, dated as of
January 3, 1999 (the "Asset Purchase Agreement"), by and among the Company, SAI,
ODL, Employee and Leah Lampone ("Lampone" and together with Employee,
hereinafter referred to as "Shareholders"), pursuant to which the Sellers (as
defined in the Asset Purchase Agreement) propose to sell to the Company and the
Company proposes to purchase from Sellers substantially all of the assets of the
Sellers' Business for the Purchase Price (as defined in the Asset Purchase
Agreement) and assume certain obligations of the Sellers' Business (the
"Transaction");

         Upon the Closing Date (as defined in the Asset Purchase Agreement) of
the Transaction, the Company desires to employ Employee upon the terms and
conditions set forth in this Agreement and Employee desires to accept such
employment;

         Employee's execution and delivery of this Agreement (including, without
limitation, the covenants set forth in Sections 6, 7, and 8) is a material
inducement to the Company to effect the Transaction, and a condition precedent
to the Company's obligations to consummate the Transaction.

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                           II. STATEMENT OF AGREEMENT

         In consideration of the mutual covenants, promises and conditions set
forth in this Agreement, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

1.       Employment. The Company hereby employs Employee and Employee hereby
         accepts such employment to serve as Executive Vice President of the
         Company and President of the SAI Division of the Company, upon the
         terms and conditions set forth in this Agreement. Employee shall report
         directly to the Chairman and Chief Executive Officer of the Company.
         For purposes of Sections 6, 7 and 8 of this Agreement, "employment"
         shall mean any period of time during the term hereof which the Company
         is paying the Employee compensation described herein, whether or not
         the Employee is currently performing services for the Company at the
         time of such payment. Notwithstanding anything in this Agreement to the
         contrary, in the event the Company is paying the Employee compensation
         described herein after termination of Employee's employment with the
         Company, such payments will cease immediately if Employee obtains any
         other employment in any capacity.

2.       Duties of Employee.

         (a) Sales and Marketing. Employee agrees to use Employee's reasonable
         best efforts to acquire new customers and expand the relationships with
         SAI Division's existing customers under terms and conditions similar to
         those normally negotiated by the Company. Employee also agrees to use
         Employee's reasonable best efforts to obtain executed service contracts
         with each of SAI Division's existing customers containing as many of
         the Company's usual terms and conditions as are feasible under the
         circumstances. Employee shall collaborate with the Company's Senior
         Vice President of Sales and Marketing to design a program (the
         "Conversion") to convert SAI Division's customers over to new fee
         schedules so as to materially increase historical levels of recoveries.
         With respect to Provident and Blue Cross/Blue Shield of Georgia,
         Employee will have sole discretion to determine how, when and if the
         Conversion will be introduced. Employee and the Chief Executive Officer
         of the Company will work together to determine how, when and if the
         Conversion will be introduced to SAI Division's other customers.
         Employee agrees to use Employee's reasonable best efforts to introduce
         any claims recovery products developed by the Company to SAI Division's
         customers. Such products may include, but are not limited to: COB
         recoveries, fraud and abuse direction and recoveries, recoveries for
         overpayments arising from a variety of circumstances and claim auditing
         services.

         (b) General Duties. It is understood between the Company and Employee
         that Employee shall not receive a salary for his services and,
         accordingly, Employee shall not be required to follow a fixed schedule
         or to work a certain number of hours per week.


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         Employee shall devote that amount of professional and business time,
         skill and attention which he deems necessary to maximize the amount of
         the First Earn-Out Payment and Second Earn-Out Payment specified in the
         Asset Purchase Agreement. Nothing in this Agreement shall prevent
         Employee from engaging in other business or professional activities so
         long as they do not violate any of the covenants set forth in Sections
         6, 7 and 8 of this Agreement. Consistent with the foregoing, Employee
         shall manage the SAI Division's human resources dedicated to customer
         relations and shall comply with all of the Company's policies,
         standards and regulations and shall follow the reasonable instructions
         and directives of Employee's superiors within the Company, as
         promulgated by the officers of the Company. This Section will not be
         construed to prevent Employee from (a) investing personal assets in
         businesses which do not compete with the Company in such form or manner
         that will not require any services on the part of the Employee in the
         operation or the affairs of the companies in which such investments are
         made and in which Employee's participation is solely that of an
         investor, (b) purchasing securities in any corporation whose securities
         are listed on a national securities exchange or regularly traded in the
         over-the-counter market, provided that Employee at no time owns,
         directly or indirectly, in excess of two and one half percent (2 1/2%)
         of the outstanding stock of any class of any such corporation engaged
         in a business competitive with that of the Company, or (c) engaging in
         the practice of law on Employee's own time provided such practice of
         law does not interfere or conflict with Employee's performance of the
         duties contained in this Agreement or violate any of the covenants set
         forth in Sections 6, 7, and 8 of this Agreement.

3.       Term. The term of this Agreement will commence on the date hereof and
         expire on the Second Additional Closing Date, as defined in the Asset
         Purchase Agreement, subject to earlier termination as provided for in
         Section 4.

4.       Termination.

         (a)      Termination by Company for Cause. Notwithstanding anything
                  contained in Section 3 to the contrary, the Company may
                  terminate this Agreement and all of its obligations hereunder
                  immediately if any of the following events occur:

                  (i)      Employee materially breaches any of the terms or
                           conditions set forth in this Agreement and fails to
                           cure such breach within thirty (30) days after
                           Employee's receipt from the Company of written notice
                           of such breach, which notice shall describe in
                           reasonable detail the Company's belief that Employee
                           is in breach hereof (notwithstanding the foregoing,
                           no cure period shall be applicable to breaches by
                           Employee of Sections 6, 7 or 8 of this Agreement);

                  (ii)     Employee commits any other act materially detrimental
                           to the business or reputation of the Company;

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                  (iii)    Employee intentionally engages in dishonest or
                           illegal activities or commits or is convicted of any
                           crime involving fraud, deceit or moral turpitude; or

                  (iv)     Employee dies or becomes mentally or physically
                           incapacitated or disabled so as to be unable to
                           perform the essential functions of Employee's job
                           even with reasonable accommodation. Without limiting
                           the generality of the foregoing, Employee's inability
                           to perform the essential functions of Employee's job
                           even with reasonable accommodation for a period of
                           one hundred twenty (120) consecutive days will be
                           conclusive evidence of such mental or physical
                           incapacity or disability, unless such inability
                           adequately to perform services under this Agreement
                           is pursuant to a mental or physical incapacity or
                           disability covered by the Family Medical Leave Act,
                           in which case such one hundred twenty (120)-day
                           period shall be extended to a one hundred and fifty
                           (150)-day period.

5.       Compensation and Benefits.

         (a)      Sales Commission. The Company will pay Employee a sales
                  commission (the "Commission") of one dollar ($ 1.00) for New
                  Lives, as defined in the Asset Purchase Agreement, in excess
                  of 2,000,000 ("Additional New Lives"). For the purposes of
                  calculating the sales commission under this section, the
                  number of Additional New Lives shall not include any New Lives
                  used in calculating the First Year New Lives Amount (as
                  defined in the Asset Purchase Agreement) or the Second Year
                  New Lives Amount (as defined in the Asset Purchase Agreement).
                  Any Commission shall be payable within forty-five (45) days
                  after the end of the quarter in which it is earned.

         (b)      Stock Option Awards. Employee shall be granted options to
                  purchase fifty thousand (50,000) shares of the Company's
                  common stock under the Healthcare Recoveries, Inc. 1997 Stock
                  Option Plan for Eligible Participants, a copy of which is
                  attached hereto as Exhibit A. The terms and conditions of the
                  option will be as set forth in Exhibit B attached hereto.
                  During the term of this Agreement, Employee will be subject to
                  Employer's standing policies for employees and outside
                  directors regarding transactions in Employer's stock
                  (including the exercise of stock options), a copy of which is
                  attached hereto as Exhibit C. To the extent Employee is in
                  possession of material nonpublic information regarding
                  Employer at the time this Agreement is terminated, he shall
                  continue to be subject to Employer's policies until such
                  information has been made public.


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         (c)      Other Benefits. Employee will be entitled to such fringe
                  benefits as may be provided from time-to-time by the Company
                  to its employees, including, but not limited to, group health
                  insurance, retirement and any other fringe benefits now or
                  hereafter provided by the Company to its employees, if and
                  when Employee meets the eligibility requirements for any such
                  benefit. The Company reserves the right to change or
                  discontinue any employee benefit plans or programs now being
                  offered to its employees; provided, however, that all
                  benefits provided for employees of the same position and
                  status as Employee will be provided to Employee on an equal
                  basis.

         (d)      Business Expenses. Employee will be reimbursed for all
                  expenses incurred in the discharge of Employee's duties under
                  this Agreement pursuant to the Company's standard
                  reimbursement policies.

         (e)      Withholding. The Company will deduct and withhold from the
                  payments made to Employee under this Agreement, state and
                  federal income taxes, FICA and other amounts normally withheld
                  from compensation due employees.

6.       Non-Disclosure of Proprietary Information. Employee recognizes and
         acknowledges that any trade secrets or confidential information of the
         Company and its affiliates and all physical embodiments of same (as
         they may exist from time-to-time, collectively, the "Proprietary
         Information"), are valuable, special and unique assets of the Business.
         Employee further acknowledges that access to such Proprietary
         Information relating to the business of the Company and its affiliates'
         businesses is essential to the performance of Employee's duties under
         this Agreement. Therefore, in order to obtain access to such
         Proprietary Information, Employee agrees that Employee will not, in
         whole or in part, disclose such Proprietary Information to any person,
         firm, corporation, association or any other entity for any reason or
         purpose whatsoever, nor will Employee make use of any such information
         for Employee's own purposes or for the benefit of any person, firm,
         corporation, association or other entity (except the Company or its
         affiliates). For purposes of this Agreement, the term "trade secrets"
         means the whole or any portion of any scientific or technical or other
         information, design, process, procedure, formula, computer software
         product, documentation or improvement relating to the Business which
         (1) derives economic value, actual or potential, from not being
         generally known to other persons who can obtain economic value from its
         disclosure or use; and (2) is the subject of efforts that are
         reasonable under the circumstances to maintain its secrecy or
         confidentiality. The term "confidential information" means any and all
         data and information relating to the Business, other than trade secrets
         which (1) have value to the Company or its affiliates; (2) are not
         generally known by their competitors or the public; and (3) are treated
         as confidential by the Company or its affiliates. Provided there is no
         uncured breach by the Company of this Agreement, the provisions of this
         Section 6 will apply during Employee's employment by the Company and
         thereafter for a two (2) year period with respect to confidential


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         information, and during Employee's employment by the Company and for a
         ten (10) year period thereafter with respect to trade secrets. These
         restrictions will not apply to any Proprietary Information which: (i)
         is in the public domain, provided that Employee was not responsible,
         directly or indirectly, for such Proprietary Information entering the
         public domain without the Company's consent; (ii) becomes known to
         Employee, during the term of this Agreement, from a third party not
         known to Employee to be under a confidential relationship with the
         Company or its affiliates; or (iii) is required by law or governmental
         tribunal to be disclosed; provided, however, that if Employee is
         legally compelled to disclose any Proprietary Information, Employee
         will provide the Company with prompt written notice of such legal
         compulsion so that the Company may seek a protective order or other
         available remedy.

7.       Restrictive Covenants.

         (a)      Non-Competition Covenant. During Employee's employment by the
                  Company and for a period of two (2) years following any
                  termination of Employee's employment for whatever reason,
                  Employee will not, directly or indirectly, on Employee's own
                  behalf or in the service of or on behalf of any other
                  individual or entity, compete with the Company or its
                  affiliates in the Business within the Geographical Area (as
                  hereinafter defined). The term "compete" means to engage,
                  directly or indirectly, on Employee's own behalf or in the
                  service of or on behalf of any other individual or entity,
                  either as a proprietor, employee, agent, independent
                  contractor, consultant, director, officer, partner or
                  stockholder (other than a stockholder of a corporation listed
                  on a national securities exchange or whose stock is regularly
                  traded in the over-the-counter market, provided that Employee
                  at no time owns, directly or indirectly, in excess of two and
                  one half percent (2 1/2%) of the outstanding stock of any
                  class of any such corporation) in providing or marketing
                  Business products or services. In addition, the term "compete"
                  shall mean to (i) conduct lectures, seminars or publish
                  material relating to the methods or legal theories utilized to
                  defeat subrogation claims; or (ii) serve as an expert witness
                  in litigation or a contested matter on behalf of a party or
                  parties seeking to defeat subrogation claims; or (iii) own,
                  operate, or be employed by or consult with a law firm, law
                  department, or law practice which specializes in or for which
                  the principal focus of the practice is the analysis, selection
                  and processing of subrogation claims; provided however,
                  nothing herein shall preclude Employee from conducting the
                  practice of law so long as such practice of law does not
                  specialize in or focus principally upon the analysis,
                  selection and/or processing of subrogation claims as a
                  business or the sale or marketing of such subrogation services
                  as a business. For purposes of this Agreement, the term
                  "Geographical Area" means the territory located within a fifty
                  mile radius around: (i) each client of the Sellers' Business
                  as of the date of this Agreement; (ii) each client of the
                  Business during Employee's employment with the Company with
                  whom Employee had contact during Employee's employment with
                  the Company; and (iii) the offices of the Business.


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         (b)      Non-Interference. During Employee's employment by the Company
                  and for a period of two (2) years following any termination of
                  Employee's employment for whatever reason, Employee will not,
                  directly or indirectly, on Employee's own behalf or in the
                  service of or on behalf of any other individual or entity,
                  interfere with, disrupt, or attempt to disrupt the past,
                  present or prospective relationships, contractual or
                  otherwise, between the Company or its affiliates and any
                  supplier, consultant client or vendor of or to the Company or
                  its affiliates with whom Employee had material contact during
                  Employee's employment by the Company under this Agreement. The
                  term "prospective relationship" is defined as any relationship
                  where the Company or its affiliates have actively sought an
                  individual or entity as a prospective supplier, consultant,
                  client or vendor.

         (c)      Non-Solicitation of Clients Covenant. Employee agrees that
                  during Employee's employment by the Company under this
                  Agreement and for a period of two (2) years following any
                  termination of Employee's employment for whatever reason,
                  Employee will not, directly or indirectly, on Employee's own
                  behalf or in the service of or on behalf of any other
                  individual or entity, divert, solicit or attempt to solicit
                  for the purpose of providing Business services for any
                  individual or entity (i) who is client of the Company or its
                  affiliates at any time during the six (6)-month period prior
                  to Employee's termination with the Company, or was actively
                  sought by the Company or its affiliates as a prospective
                  client during such period, and (ii) with whom Employee had
                  material contact while employed by the Company. Employee
                  further agrees that during Employee's employment by the
                  Company and for a period of two (2) years following the
                  termination of Employee's employment for whatever reason,
                  Employee will not, directly or indirectly, as an employee,
                  independent contractor, agent or in any other capacity, be
                  employed by any client:

                  (i)      which received Business products or services from
                           Employee, or with which Employee otherwise had
                           material contact while employed by the Company; or

                  (ii)     which received Business products or services from any
                           office or employee of the Company or its affiliates
                           over which Employee had direct management
                           responsibility;

                  in either case to provide, directly or indirectly, Business
                  products or services.

         (d)      Construction. In the event that any provision of either such
                  Section is determined not to be specifically enforceable, the
                  Company shall nevertheless be entitled to bring an action to
                  seek to recover monetary damages as a result of the breach of
                  such provision by Employee.


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8.       Non-Solicitation of Employees Covenant. Employee further agrees and
         represents that during Employee's employment by the Company and for a
         period of two (2) years following any termination of Employee's
         employment for whatever reason, Employee will not, directly or
         indirectly, on Employee's own behalf or in the service of, or on behalf
         of any other individual or entity, divert or solicit, or attempt to
         divert or solicit, to or for any individual or entity which is engaged
         in providing Business services, any person employed by the Company or
         its affiliates, whether or not such employee is a full-time employee or
         temporary employee of the Company or its affiliates, whether or not
         such employee is employed pursuant to written Agreement and whether or
         not such employee is employed for a determined period or at-will,
         except as agreed to by the Company.

9.       Existing Restrictive Covenants. Employee represents and warrants that
         Employee's employment with the Company does not and will not breach any
         agreement which Employee has with any individual or entity to keep in
         confidence confidential information or not to compete with any such
         individual or entity. Employee will not disclose to the Company or its
         affiliates or use on either of their behalf any confidential
         information of any other party required to be kept confidential by
         Employee.

10.      Return of Confidential Information. Employee acknowledges that as a
         result of Employee's employment with the Company, Employee may come
         into the possession and control of Proprietary Information, such as
         proprietary documents, drawings, specifications, manuals, notes,
         computer programs, or other proprietary material. Employee
         acknowledges, warrants and agrees that Employee will return to the
         Company all such items and any copies or excerpts thereof, and any
         other properties, client lists, client contracts, files or documents
         related to the Business obtained as a result of Employee's employment
         with the Company, immediately upon the termination of Employee's
         employment with the Company.

11.      Proprietary Rights. During the course of Employee's employment with the
         Company under this Agreement, Employee may make, develop or conceive of
         useful processes, machines, compositions of matter, computer software,
         algorithms, works of authorship expressing such algorithm, or any other
         discovery, idea, concept, document or improvement which substantially
         related to or is useful to the Business (the "Inventions"), whether or
         not subject to copyright or patent protection, and which may or may not
         be considered Proprietary Information. Employee acknowledges that all
         such Inventions will be "works made for hire" under United States
         copyright law and will remain the sole and exclusive property of the
         Company. Employee also hereby assigns and agrees to assign to the
         Company, in perpetuity, all right, title and interest Employee may have
         in and to such Inventions, including without limitation, all
         copyrights, and the right to apply for any form of patent, utility
         model, industrial design or similar proprietary right recognized by any
         state, country or jurisdiction. Employee further agrees, at the
         Company's request and expense, to do all things and sign all documents
         or instruments necessary, in the opinion of the Company, to eliminate
         any ambiguity as to the ownership


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         of, and rights of the Company to, such Inventions, including filing
         copyright and patent registrations and defending and enforcing in
         litigation or otherwise all such rights.

         Employee will not be obligated to assign to the Company any Invention
         made by Employee while in the Company's employ which does not relate to
         any business or activity in which the Company or its affiliates is or
         may become engaged during the Employee's employment with the Company,
         except that Employee is so obligated if the same relates to or is based
         on Proprietary Information to which Employee will have had access
         during and by virtue of Employee's employment or which arises out of
         work assigned to Employee by the Company. Employee will not be
         obligated to assign any Invention which may be wholly conceived by
         Employee after termination of this Agreement, except that Employee is
         so obligated if such Invention involves the utilization of Proprietary
         Information obtained while in the employ of the Company. Employee is
         not obligated to assign any Invention which relates to or would be
         useful in any business or activities in which the Company or its
         affiliates is engaged if such Invention was conceived and reduced to
         practice by Employee prior to Employee's employment with the Company,
         provided that all such Inventions are listed at the time of employment
         on the attached Exhibit D.

12.      Remedies. Employee agrees and acknowledges that the violation of any of
         the covenants or agreements contained in Sections 6, 7, 8, 9, 10 and 11
         of this Agreement would cause irreparable injury to the Company, that
         the remedy at law for any such violation or threatened violation
         thereof would be inadequate, and that the Company will be entitled, in
         addition to any other remedy, to temporary and permanent injunctive or
         other equitable relief without the necessity of proving actual damages.

13.      Notices. Any notice or communication under this Agreement will be in
         writing and sent by registered or certified mail addressed to the
         respective parties as follows:

         If to the Company:                      If to the Employee:

         Healthcare Recoveries, Inc.             Kevin M. O'Donnell
         1400 Watterson Tower                    9516 West Brookside Drive
         Louisville, Kentucky 40218              Greenfield, Wisconsin 53228

14.      Severability. Subject to the application of Section 7(d) to the
         interpretation of Sections 7 and 8, in case one or more of the
         provisions contained in this Agreement is for any reason held to be
         invalid, illegal or unenforceable in any respect, the same will not
         affect any other provision in this Agreement, and this Agreement will
         be construed as if such invalid or illegal or unenforceable provision
         had never been contained herein. It is the intent of the parties that
         this Agreement be enforced to the maximum extent permitted by law.


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15.      Entire Agreement. This Agreement embodies the entire agreement of the
         parties relating to the subject matter hereof and supersedes all prior
         agreements, oral or written, regarding such subject matter. No
         amendment or modification of this Agreement will be valid or binding
         upon the parties unless made in writing and signed by the parties.

16.      Binding Effect. This Agreement will be binding upon the parties and
         their respective heirs, representatives, successors, transferees and
         permitted assigns.

17.      Assignment. This Agreement is one for personal services and is not
         assignable by Employee. The Company may assign this Agreement to any of
         its affiliates; provided that the Company shall remain liable for the
         obligations of its affiliates under this Agreement.

18.      Governing Law. This Agreement is entered into and will be interpreted 
         and enforced pursuant to the laws of the State of Wisconsin. The 
         parties hereto hereby agree that the appropriate forum and venue for 
         any disputes between any of the parties hereto arising out of this
         Agreement shall be any federal court in the State of Wisconsin and each
         of the parties hereto hereby submits to the personal jurisdiction of
         any such court. The foregoing shall not limit the rights of any party
         to obtain execution of judgment in any other jurisdiction. The parties
         further agree, to the extent permitted by law, that a final and
         unappealable judgment against either of them in any action or
         proceeding contemplated above shall be conclusive and may be enforced
         in any other jurisdiction within or outside the United States by suit
         on the judgment, a certified or exemplified copy of which shall be
         conclusive evidence of the fact and amount of such judgment.


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         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

COMPANY:                                          EMPLOYEE:

HEALTHCARE RECOVERIES, INC.                       KEVIN M. O'DONNELL


By:  /s/                                          /s/ Kevin M. O'Donnell
   ---------------------------------              ---------------------------
Title: Chairman, Pres. & CEO                      Kevin M. O'Donnell
                            


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