Document:

<PAGE>

                                                                  Exhibit 10.7.1

                                STATE OF ILLINOIS
                            DEPARTMENT OF PUBLIC AID

                               AMENDMENT NO. 2 OF
                     CONTRACT FOR FURNISHING HEALTH SERVICES
                                      BY A
                         HEALTH MAINTENANCE ORGANIZATION
                                 2001-24-006-KA2

Whereas, the parties to Contract for Furnishing Health Services by a Health
Maintenance Organization ("CONTRACT"), the Illinois Department of Public Aid,
201 South Grand Avenue East, Springfield, Illinois 62763-0001 (herein referred
to as "Department"), acting by and through its Director, and AMERIGROUP
Illinois, Inc., formerly known as AMERICAID Illinois, Inc. d/b/a/ Americaid
Community Care, (hereinafter referred to as "Contractor"), desire to amend the
CONTRACT; and

     Whereas, pursuant to Article 9, Section 9.9 (a) of the CONTRACT, the
CONTRACT may be modified or amended by the mutual consent of the parties;

     Now Therefore, the CONTRACT shall be amended as follows:

     1.   First Amended Attachment I shall be deleted and replaced by the
          attached Second Amended Attachment I. Each reference to First Amended
          Attachment I in the CONTRACT shall be deemed to refer to Second
          Amended Attachment I.

     All other terms and conditions of the CONTRACT shall remain in full force
and effect.

     IN WITNESS WHEREOF, the parties have hereunto caused this agreement to
amend the CONTRACT to be executed by their duly authorized representatives,
effective January 1, 2002.

DEPARTMENT OF PUBLIC AID                    AMERIGROUP Illinois, Inc.

By: /s/ Jackie Garner                       By: /s/ Dwight E. Jones
    -------------------------------             --------------------------------
        Jackie Garner
                                            Printed Name: Dwight E. Jones
Title: Director                             Title: Pres. & CEO
Date: 4-8-02                                Date: 3/1/02
                                            FEIN:
                                                  ------------------------------

                                       -1-

<PAGE>

             [GRAPHIC]              Illinois Department of Public Aid

                                    201 South Grand Avenue East
                                    Springfield, Illinois 62763-0001

     George H. Ryan, Governor       Telephone: (217) 782-1200
     Jackie Garner, Director        TTY: (800) 526-5812

April 23, 2002

Dwight Jones, M.D.
President and CEO
AMERIGROUP Illinois, Inc.
211 West Wacker Drive, Suite 1350
Chicago, Illinois 60606

Dear Dr. Jones:

Enclosed for your files is one original signature copy of the amendment to the
Contract for Furnishing Health Services which reflects a 4.5% rate reduction to
each age and gender cell of Second Amended Attachment I - Rate Sheets. The
effective date of this amendment is January 1, 2002.

Sincerely,

/s/ Nelly Ryan
---------------------------------
Nelly Ryan, Deputy Administrator
Division of Medical Programs

Enclosure

E-Mail: dpawebmaster@state.il.us           Internet: http://www.state.il.us/dpa/

<PAGE>

                       [LETTERHEAD] Amerigroup CORPORATION

                                 FACSIMILE COVER

DATE:  May 13, 2002                           TIME: 12:29 PM (CST)

PHONE:                                        FAX:  1-757-222-2377
       ------------------------------

TO:    Kim Chope

FROM:  Ivonne Cedeno

PHONE: Ext. 2614                              FAX:  1-312-214-0451

SUBJ:
       -------------------------------------------------------------------------

CC:
       -------------------------------------------------------------------------

NUMBER OF PAGES (including cover skeet): 09

If you do nor receive all the pages, please call the person above as soon as
possible.

MESSAGE:

I hope this is what you're talking about.

                                           ---------------
                                               RECEIVED
                                             MAY 13, 2002
                                           ---------------

<PAGE>

                           SECOND AMENDED ATTACHMENT I

                                  RATE SHEETS

(a)  Contractor Name: AMERIGROUP Illinois, Inc.

     Address:         211 W. Wacker Drive, Suite #1350
                      Chicago, IL 60606

(b)  Contracting Area(s) Covered by the Contractor and Enrollment Limit:

--------------------------------------------------------------------------------
          Contracting Area                 Enrollment Limit
--------------------------------------------------------------------------------
              Region IV                         100,000
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

(c)  Total Enrollment Limit for all Contracting Areas: 100,000

(d)  Threshold Review Levels: 80,000

                                     Att.I-1

<PAGE>

(e) Standard Capitation Rates for MAG Beneficiaries for each Region for April 1,
2000 through June 30, 2000:

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    0-2 F     $214.19     $149.47      $206.08     $254.29     $181.15
-----------------------------------------------------------------------
    0-2 M     $242.48     $183.18      $263.92     $300.07     $183.68
-----------------------------------------------------------------------
   3-13 F     $ 39.63     $ 41.98      $ 47.02     $ 40.55     $ 32.21
-----------------------------------------------------------------------
   3-13 M     $ 47.40     $ 52.61      $ 55.95     $ 49.60     $ 40.28
-----------------------------------------------------------------------
  14-20 F     $209.65     $181.58      $204.84     $169.14     $167.32
-----------------------------------------------------------------------
  14-20 M     $ 74.37     $ 70.44      $ 75.51     $ 63.46     $ 46.99
-----------------------------------------------------------------------
  21-44 F     $201.77     $186.87      $206.99     $203.22     $181.66
-----------------------------------------------------------------------
  21-44 M     $100.41     $111.11      $132.34     $148.11     $102.05
-----------------------------------------------------------------------
    45+ F     $324.75     $292.50      $269.83     $245.81     $236.39
-----------------------------------------------------------------------
    45+ M     $195.92     $304.26      $291.83     $221.72     $177.78
-----------------------------------------------------------------------

Certified Local Health Department add-on: To be determined.

Standard Capitation Rates for MAG Beneficiaries for each Region for July 1, 2000
through December 31, 2001

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    0-2 F     $218.47     $152.46      $210.20     $259.38     $184.77
-----------------------------------------------------------------------
    0-2 M     $247.33     $186.84      $269.20     $306.07     $187.35
-----------------------------------------------------------------------
   3-13 F     $ 40.42     $ 42.82      $ 47.96     $ 41.36     $ 32.85
-----------------------------------------------------------------------
   3-13 M     $ 48.35     $ 53.66      $ 57.07     $ 50.59     $ 41.09
-----------------------------------------------------------------------
  14-20 F     $213.84     $185.21      $208.94     $172.52     $170.67
-----------------------------------------------------------------------
  14-20 M     $ 75.86     $ 71.85      $ 77.02     $ 64.73     $ 47.93
-----------------------------------------------------------------------
  21-44 F     $205.81     $190.61      $211.13     $207.28     $185.29
-----------------------------------------------------------------------
  21-44 M     $102.42     $113.33      $134.99     $151.07     $104.09
-----------------------------------------------------------------------
    45+ F     $331.25     $298.35      $275.23     $250.73     $241.12
-----------------------------------------------------------------------
    45+ M     $199.84     $310.35      $297.67     $226.15     $181.34
-----------------------------------------------------------------------

Certified Local Health Department add-on: To be determined.

                                     Att.I-2

<PAGE>

Standard Capitation Rates for MAG Beneficiaries for each Region beginning
January 1, 2002.

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    0-2 F     $208.64     $145.60      $200.74     $247.71     $176.46
-----------------------------------------------------------------------
    0-2 M     $236.20     $178.43      $257.09     $292.30     $178.92
-----------------------------------------------------------------------
   3-13 F     $ 38.60     $ 40.89      $ 45.80     $ 39.50     $ 31.37
-----------------------------------------------------------------------
   3-13 M     $ 46.17     $ 51.25      $ 54.50     $ 48.31     $ 39.24
-----------------------------------------------------------------------
  14-20 F     $204.22     $176.88      $199.54     $164.76     $162.99
-----------------------------------------------------------------------
  14-20 M     $ 72.45     $ 68.62      $ 73.55     $ 61.82     $ 45.77
-----------------------------------------------------------------------
  21-44 F     $196.55     $182.03      $201.63     $197.95     $176.95
-----------------------------------------------------------------------
  21-44 M     $ 97.81     $108.23      $128.92     $144.27     $ 99.41
-----------------------------------------------------------------------
    45+ F     $316.34     $284.92      $262.84     $239.45     $230.27
-----------------------------------------------------------------------
    45+ M     $190.85     $296.38      $284.27     $215.97     $173.18
-----------------------------------------------------------------------

Certified Local Health Department add-on: To be determined.

                                     Att.I-3

<PAGE>

(f) Standard Capitation Rates for MANG Beneficiaries for each Region for April
1, 2000 through June 30, 2000:

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    0-2 F     $277.63     $270.73      $276.42     $221.95     $175.33
-----------------------------------------------------------------------
    0-2 M     $337.39     $320.77      $236.83     $259.94     $203.36
-----------------------------------------------------------------------
   3-13 F     $ 46.02     $ 44.62      $ 52.51     $ 43.55     $ 39.42
-----------------------------------------------------------------------
   3-13 M     $ 58.45     $ 63.44      $ 67.51     $ 55.10     $ 51.37
-----------------------------------------------------------------------
  14-20 F     $260.15     $234.40      $246.15     $238.15     $260.81
-----------------------------------------------------------------------
  14-20 M     $ 79.62     $119.09      $121.82     $ 82.31     $181.38
-----------------------------------------------------------------------
  21-44 F     $245.64     $245.87      $226.89     $266.25     $244.39
-----------------------------------------------------------------------
  21-44 M     $145.22     $107.80      $103.83     $ 98.85     $119.40
-----------------------------------------------------------------------
    45+ F     $279.44     $329.92      $300.30     $255.70     $270.54
-----------------------------------------------------------------------
    45+ M     $340.30     $205.30      $239.31     $247.28     $292.90
-----------------------------------------------------------------------

Certified Local Health Department add-on: To be determined.

Standard Capitation Rates for MANG Beneficiaries for each Region for July 1,
2000 through December 31, 2001.

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    0-2 F     $283.18     $276.14      $281.95     $226.39     $178.84
-----------------------------------------------------------------------
    0-2 M     $344.14     $327.19      $241.57     $265.14     $207.43
-----------------------------------------------------------------------
   3-13 F     $ 46.94     $ 45.51      $ 53.56     $ 44.42     $ 40.21
-----------------------------------------------------------------------
   3-13 M     $ 59.62     $ 64.71      $ 68.86     $ 56.20     $ 52.40
-----------------------------------------------------------------------
  14-20 F     $265.35     $239.09      $251.07     $242.91     $266.03
-----------------------------------------------------------------------
  14-20 M     $ 81.21     $121.47      $124.26     $ 83.96     $185.01
-----------------------------------------------------------------------
  21-44 F     $250.55     $250.79      $231.43     $271.58     $249.28
-----------------------------------------------------------------------
  21-44 M     $148.12     $109.96      $105.91     $100.83     $121.79
-----------------------------------------------------------------------
    45+ F     $285.03     $336.52      $306.31     $260.81     $275.95
-----------------------------------------------------------------------
    45+ M     $347.11     $209.41      $244.10     $252.23     $298.76
-----------------------------------------------------------------------

Certified Local Health Department add-on: To be determined.

                                     Att.I-4

<PAGE>

Standard Capitation Rates for MANG Beneficiaries for each Region beginning
January 1, 2002.

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    0-2 F     $270.44     $263.71      $269.26     $216.20     $170.79
-----------------------------------------------------------------------
    0-2 M     $328.65     $312.47      $230.70     $253.21     $198.10
-----------------------------------------------------------------------
   3-13 F     $ 44.83     $ 43.46      $ 51.15     $ 42.42     $ 38.40
-----------------------------------------------------------------------
   3-13 M     $ 56.94     $ 61.80      $ 65.76     $ 53.67     $ 50.04
-----------------------------------------------------------------------
  14-20 F     $253.41     $228.33      $239.77     $231.98     $254.06
-----------------------------------------------------------------------
  14-20 M     $ 77.56     $116.00      $118.67     $ 80.18     $176.68
-----------------------------------------------------------------------
  21-44 F     $239.28     $239.50      $221.02     $259.36     $238.06
-----------------------------------------------------------------------
  21-44 M     $141.45     $105.01      $101.14     $ 96.29     $116.31
-----------------------------------------------------------------------
    45+ F     $272.20     $321.38      $292.53     $249.07     $263.53
-----------------------------------------------------------------------
    45+ M     $331.49     $199.99      $233.12     $240.88     $285.32
-----------------------------------------------------------------------

Certified Local Health Department add-on: To be determined.

                                     Att.I-5

<PAGE>

(g) Standard Capitation Rates for KidCare Participants for each Region for April
1, 2000 through June 30, 2000:

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    1-2 F      $66.34      $67.54      $73.13       $74.63      $60.58
-----------------------------------------------------------------------
    1-2 M      $92.26      $75.87      $96.90       $86.82      $73.08
-----------------------------------------------------------------------
   3-13 F      $39.25      $41.38      $46.47       $40.71      $32.31
-----------------------------------------------------------------------
   3-13 M      $47.00      $51.79      $55.68       $49.87      $40.63
-----------------------------------------------------------------------
  14-18 F      $87.57      $85.98      $99.19       $77.53      $73.22
-----------------------------------------------------------------------
  14-18 M      $73.14      $69.51      $75.56       $63.48      $46.69
-----------------------------------------------------------------------

Certified Local Health Department add-on: To be determined.

Standard Capitation Rates for KidCare Participants for each Region for July 1,
2000 through December 31, 2001.

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    1-2 F     $67.67       $68.89      $ 74.59      $76.12      $61.79
-----------------------------------------------------------------------
    1-2 M     $94.11       $77.39      $ 98.84      $88.56      $74.54
-----------------------------------------------------------------------
   3-13 F     $40.04       $42.21      $ 47.40      $41.52      $32.96
-----------------------------------------------------------------------
   3-13 M     $47.94       $52.83      $ 56.79      $50.87      $41.44
-----------------------------------------------------------------------
  14-18 F     $89.32       $87.70      $101.17      $79.08      $74.68
-----------------------------------------------------------------------
  14-18 M     $74.60       $70.90      $ 77.07      $64.75      $47.62
-----------------------------------------------------------------------

Certified Local Health Department add-on: To be determined.

Standard Capitation Rates for KidCare Participants for each Region beginning
January 1, 2002.

-----------------------------------------------------------------------
             Region I    Region II   Region III   Region IV    Region V
               (N.W.      (Central    (Southern     (Cook      (Collar
             Illinois)   Illinois)    Illinois)    County)    Counties)
Age/Gender     PMPM        PMPM         PMPM         PMPM        PMPM
-----------------------------------------------------------------------
    1-2 F      $64.62      $65.79      $71.23       $72.69      $59.01
-----------------------------------------------------------------------
    1-2 M      $89.88      $73.91      $94.39       $84.57      $71.19
-----------------------------------------------------------------------
   3-13 F      $38.24      $40.31      $45.27       $39.65      $31.48
-----------------------------------------------------------------------
   3-13 M      $45.78      $50.45      $54.23       $48.58      $39.58
-----------------------------------------------------------------------
  14-18 F      $85.30      $83.75      $96.62       $75.52      $71.32
-----------------------------------------------------------------------
  14-18 M      $71.24      $67.71      $73.60       $61.84      $45.48
-----------------------------------------------------------------------

                                     Att.I-6<PAGE>
                                                                  EXHIBIT 10.7.2

                                STATE OF ILLINOIS

                                 AMENDMENT NO. 3
                                     to the
                    CONTRACT FOR FURNISHING HEALTH SERVICES
                                      BY A
                         HEALTH MAINTENANCE ORGANIZATION
                                 2001-24-006-KA3

WHEREAS, the Illinois Department of Public Aid, ("Department") and AMERIGROUP
Illinois, Inc., formerly known as Americaid Illinois, Inc. ("Contractor")
entered into a Contract for Furnishing Health Services by a Health Maintenance
Organization, effective April 1, 2000; and

WHEREAS, the parties to the Contract have previously amended the Contract
pursuant to Article 9, Section 9.9 (a), and desire to further amend the
Contract;

Now THEREFORE, the Contract between the parties as previously amended, is hereby
further amended as follows, effective March 1, 2002:

1.       Section 7.1, Payment Rates, is amended by deleting the language of
         subsection (a) in its entirety, and replacing it with the following:

         7.1     Payment Rates

                 (a)     Except as stated in 7.1(a)(1) and 7.1(a)(2), the
                         Department will pay the Contractor on a Capitation
                         basis, based on the eligibility classification, age and
                         gender categories of the Beneficiary as shown on the
                         applicable tables in Attachment I, a sum equal to the
                         product of the approved Capitation rate and the number
                         of Beneficiaries enrolled in that category as of the
                         first day of that month.

                         1.       An individual who is a MAG Beneficiary of an
                                  MCO under contract with the Department at any
                                  time on or after June 1, 2001, who remains
                                  continuously eligible for Medical Assistance,
                                  and whose eligibility classification is
                                  changed by the Department but who remains an
                                  Eligible Enrollee, shall continue to be
                                  considered a MAG Beneficiary for the purposes
                                  of Capitation.

                         2.       If an individual in a Case is considered a MAG
                                  Beneficiary for purpose of Capitation under
                                  any MCO under contract with the Department,
                                  any other Beneficiary in the Case shall be
                                  considered a MAG Beneficiary for purpose of
                                  Capitation.

<PAGE>

All other terms and conditions of the Contract, as previously amended, shall
remain in full force and effect, unchanged except as amended hereby.

IN WITNESS WHEREOF, the Department and Contractor hereby duly execute and
deliver this Amendment Number 3, effective March 1, 2002.

Illinois Department of Public Aid                AMERIGROUP Illinois, Inc.

By: /s/ Jackie Garner                            By: /s/ Dwight E. Jones
    ------------------------                         ---------------------------
                                                         Dwight E. Jones
                                                     ---------------------------
                                                          Printed Name

Title:  Director                                 Title:     Pres./CEO
      -----------------                                 ------------------------

Date:    5/6/02                                  Date:   4/01/02
      ----------------------                            ------------------------

                                                 FEIN:  ------------------------

<PAGE>

[Logo]                                         Illinois Department of Public Aid

                                               201 South Grand Avenue East
                                               Springfield, Illinois 62763-0001

George H. Ryan, Governor                       Telephone: (217) 782-1200
 Jackie Garner, Director                       TTY: (800) 526-5812

May 15, 2002

Dwight Jones, M.D.
President and CEO
AMERIGROUP Illinois, Inc.
211 West Wacker Drive, Suite 1350
Chicago, Illinois 60606

Dear Dr. Jones:

Enclosed for your files is one original signature copy of the amendment to the
Contract for Furnishing Health Services which permits the State to continue
paying the capitation for the MAG category of assistance when a participant
switches to the MANG category of Assistance. The effective date of this
amendment is March 1, 2002.

Sincerely,

/s/ Nelly Ryan

Nelly Ryan, Deputy Administrator
Division of Medical Programs

Enclosure

E-Mail: dpawebmaster@state.il.us           Internet: http://www.state.il.us/dpa/

<PAGE>

                                REGULATORY ALERT

                                   AMERIGROUP
                                   CORPORATION

                                   MEMORANDUM

<TABLE>
<CAPTION>
<S>     <C>

A M E R I C A I D  o  A M E R I K I D S  o  A M E R I F A M  o  A M E R I P L U S
--------------------------------------------------------------------------------
AMERIGROUP CORPORMON o 4425 CORPORATION LANE o VIRGINIA BEACH, VIRGINIA 23462 o 757 490 6900 o WWW.AMERIGROUPCORP.COM
</TABLE>

TO:             Distribution

FROM:           Kimberly Chope, Regulatory Compliance

DATE:           March 27, 2002

SUBJECT:        ILLINOIS CONTRACT AMENDMENT

Attached please find a new contract amendment from the Illinois Department of
Public Aid (IDPA). Please review the overall summary below and the attached
contract amendment to determine the impact to AMERIGROUP and/or our vendors.

OVERALL SUMMARY:

Due to a new policy and systems change at IDPA, some members who were previously
considered MAG were transferred to the MANG category code. MCOs were
subsequently paid the MANG capitation rate for these members. In order to
reverse the inadvertent impact of the change, the attached amendment allows IDPA
to continue to pay the MAG cap rate for those members who were transferred.

It is estimated that 2,300 AMERIGROUP members were affected.

FOLLOW UP REQUIRED:

             Response required back to Regulatory Manager by [date]
----------
    XX       Informational only. Response is not required
----------

If you have further questions or concerns regarding this request Please contact
Kim Chope, extension 2722.

Distribution
------------

Gerald Niewenhous
Ana Naranjo
Randy Ricker
Sue Armbruster
Michael Gray
Mary Johnson
Robin Brewington
Barbara Burgess
Karin Easterling
Lorena Stanley
Stan Baldwin
Ginger Dzick
Cherry Wittelsberger
Scott Pickens
Sherri Mearns
Denise Gallagher
Peggy King
Steve Meeker
Debbie Burke
Rob Westcott
Norm Lyster
Alice Dozier
Kathleen Lester
Rosemary Dawes

<PAGE>
  [LOGO}                                       Illinois Department of Public Aid

                                               201 South Grand Avenue East
                                               Springfield, Illinois 62763-0001

George H. Ryan, Governor                       Telephone: (217) 782-1200
 Jackie Garner, Director                       TTY: (800) 526-5812

March 11, 2002

Ted M. Willie, Jr.
Chief Operating Officer
AMERIGROUP Illinois, Inc.
4425 Corporation Lane, Suite 100
Virginia Beach, Virginia 23462-3103

Dear Mr. Willie,

The Department issued new policy to ensure Medicaid eligibility is de-linked
from TANF cash assistance. Two policy and system changes made as part of that
delinking had an inadvertent effect on managed care enrollment. These two
policies are:

o  Cases eligible due to continuous eligibility appear on the system as an
   active 94 or 96 case (MANG), instead of a canceled 04 or 06 case (MAG) with
   continuous eligibility; and

o  Cases eligible due to extended medical appear on the system as an active 94
   or 96 case (MANG), instead of a canceled 04 or 06 case (MAG) with extended
   medical.

The impact of this swap in category of assistance for the managed care program
is that a portion of beneficiaries who were previously considered MAG were
transferred to MANG, and the MCO was subsequently paid the MANG capitation rate.
[MCO capitation rates were calculated for the contract not assuming this policy
change and subsequent swap.] While the category of assistance may have changed
for these beneficiaries due to administrative changes by the Department, the
cost of providing services, the medical needs, and the medical utilization by
these Beneficiaries did not change.

The Department estimates the impact of the August 2001 swap to the MCOs to be
approximately 14,200 beneficiaries overall. AMERIGROUP's estimated impact of the
August swap is 2,300 beneficiaries. The exact number will not be known until the
adjustment is made.

E-mail: dpa_webmaster@state.il.us      Internet:http//www.state.il.us/dpa/

<PAGE>

Ted M. Willie, Jr.
AMERIGROUP Illinois, INC.
Page Two

In order to reverse this unanticipated impact the Department proposes the
attached contract amendment to continue to pay the capitation rate for
beneficiaries who are swapped from MAG to MANG at the MAG rate. Enclosed please
find four originals of an amendment to the Contract for Furnishing Health
Services between AMERIGROUP Illinois, Inc. and the Department. Please have all
four originals completed and signed, and return them to my attention as soon as
possible. If you have any questions, please feel free to contact me at (217)
524-7478.

Sincerely,

/s/ Nelly Ryan

Nelly Ryan, Deputy Administrator
Division of Medical Programs

Attachments

cc: Dwight Jones, M.D., President and CEO, AMERIGROUP Illinois, Inc.

E-mail: dpa_webmaster@state.il.us        Internet: http://www.state.il.us/dpa/

<PAGE>

DeWees, Celeste

From:                         Chope, Kim
Sent:                         Wednesday, March 06, 2002 9:50 AM
To:                           DeWees, Celeste
Subject:                      Alert

Celeste, would you please prepare this and send out? Please use the
standard distribution list (all people). I'll bring you the attachment. Thanks!

<PAGE>
                                REGULATORY ALERT

                                   AMERIGROUP
                              C O R P O R A T I O N

                               M E M O R A N D U M

<TABLE>
<CAPTION>
<S>                             <C>
A M E R I C A I D o A M E R I K I D S o A M E R I F A M o A M E R I P L U S
--------------------------------------------------------------------------------------------------------------------
AMERIGROUP CORPORATION o 4425 CORPORATION LANE o VIRGINIA BEACH,VIRGINIA 23462 o 757 490 6900 o WWW.AMERIGROUPCORP.COM
</TABLE>

TO:      Distribution

FROM:    Kimberly Chope, Regulatory Compliance

DATE:    March 6, 2002

SUBJECT: ILLINOIS CONTRACT AMENDMENT
--------------------------------------------------------------------------------

Attached please find a copy of an amendment to the contract between AMERIGROUP
Illinois, Inc. and the Illinois Department of Public Aid. Please review the
overall summary below and the attached amendment to determine the impact to
AMERIGROUP and/or our vendors.

OVERALL SUMMARY:

This amendment reflects a 4.5% rate reduction to each age and gender cell,
effective January 1, 2002. The rate sheets are attached.

FOLLOW UP REOUIRED:

_______  Response required back to Regulatory Manager by [date]

  XX     Informational only. Response is not required.
________

If you have further questions or concerns regarding this request, please contact
Kim Chope, extension 2722.

cc: Lori-Don Gregory

<PAGE>
                                REGULATORY ALERT

                                   AMERIGROUP
                              C O R P O R A T I O N

                               M E M O R A N D U M

<TABLE>
<CAPTION>
<S>                             <C>
A M E R I C A I D o A M E R I K I D S o A M E R I F A M o A M E R I P L U S
--------------------------------------------------------------------------------------------------------------------
AMERIGROUP CORPORATION o 4425 CORPORATION LANE o VIRGINIA BEACH,VIRGINIA 23462 o 757 490 6900 o WWW.AMERIGROUPCORP.COM
</TABLE>

TO:      Distribution

FROM:    Kimberly Chope, Regulatory Compliance

DATE:    March 6, 2002

SUBJECT: ILLINOIS CONTRACT AMENDMENT
--------------------------------------------------------------------------------

Attached please find a copy of an amendment to the contract between AMERIGROUP
Illinois, Inc. and the Illinois Department of Public Aid . Please review the
overall summary below and the attached amendment to determine the impact to
AMERIGROUP and/or our vendors.

OVERALL SUMMARY:

This amendment reflects a 4.5% rate reduction to each age and gender cell,
effective January 1, 2002. The rate sheets are attached.

FOLLOW UP REOUIRED:

_______  Response required back to Regulatory Manager by [date]

  XX
________ Informational only. Response is not required.

If you have further questions or concerns regarding this request, please contact
Kim Chope, extension 2722.

cc: Lori-Don Gregory

<PAGE>

Distribution
------------

Gerald Niewenhous
Ana Naranjo
Randy Ricker
Sue Armbruster
Michael Gray
Mary Johnson
Robin Brewington
Barbara Burgess
Karin Easterling
Lorena Stanley
Stan Baldwin
Ginger Dzick
Cherry Wittelsberger
Scott Pickens
Sherri Mearns
Denise Gallagher
Peggy King
Steve Meeker
Debbie Burke
Rob Westcott
Norm Lyster
Alice Dozier
Kathleen Lester
Rosemary Dawes

<PAGE>
[LOGO]                                         Illinois Department of Public Aid

                                               201 South Grand Avenue East
                                               Springfield, Illinois 62763-0001

George H. Ryan, Governor                       Telephone: (217) 782-1200
 Jackie Garner, Director                       TTY: (800) 526-5812

February 19, 2002

Dwight Jones, M.D.
President and CEO
AMERIGROUP Illinois, Inc.
211 W. Wacker Drive, Suite #1350
Chicago, IL 60606

Dear Dr. Jones,

Enclosed please find four originals of an amendment to the Contract for
Furnishing Health Services between AMERIGROUP Illinois, Inc. and the Department.
This amendment reflects a 4.5% rate reduction to each age and gender cell,
effective January 1, 2002.

Please have all four originals completed and signed, and return them to my
attention as soon as possible.

If you have any questions, please feel free to contact me at (217) 524-7478.

Sincerely,

/s/ Nelly Ryan

Nelly Ryan, Deputy Administrator
Division of Medical Programs

Attachments

E-mail: dpa_webmaster@state.il.us          Internet: http://www.state.il.us/dpa/

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00054-of-00352.parquet"}]]