S-1: General form of registration statement for all companies including face-amount certificate companies

Published on October 9, 2001


Exhibit 10.7

CONTRACT BETWEEN

THE OFFICE OF MEDICAID POLICY AND PLANNING,

THE OFFICE OF THE CHILDREN'S HEALTH INSURANCE PROGRAM

AND

COORDINATED CARE CORPORATION INDIANA, INC.



This Contract is made and entered into by and between the State of Indiana
(hereinafter "State" or "State of Indiana"), through the Office of Medicaid
Policy and Planning and the Office of Children's Health Insurance Program
(hereinafter "the Offices"), of the Indiana Family and Social Services
Administration, 402 West Washington Street, W382, Indianapolis, Indiana, and
Coordinated Care Corporation Indiana, Inc., doing business as Managed Health
Services, 950 North Meridian, Suite 200, Indianapolis, Indiana., (hereinafter
"Contractor").

WHEREAS, I.C. 12-15-30-1 and I.C. 12-l7.6 authorize the Offices to enter
into contracts to assist in the administration of the Indiana Medicaid and the
Indiana Children's Health Insurance Program (CHIP), respectively;

WHEREAS, the State of Indiana desires to contract for services to arrange
for and to administer a risk-based managed care program (RBMC) for certain
Hoosier Healthwise enrollees in Packages A, B and C as procured through BAA
01-28;

WHEREAS this Contract contains the payment rates under which the Contractor
shall be paid and that these rates have been determined to be actuarially sound
and not in excess of the fee-for-service upper payment limit (FFS-UPL) specified
for risk contracts in 42 CFR 447.361;

WHEREAS, the Contractor is willing and able to perform the desired services
for Hoosier Healthwise Packages A, B and C;

THEREFORE, the parties to this Contract agree that the terms and conditions
specified below will apply to services in connection with this contract, and
such terms and conditions are as follows

I. TERM AND RENEWAL OPTION

This Contract is effective from January 1, 2001 through December 31, 2002.
At the discretion of the Offices the term may be extended for up to two
additional years. In no event shall the term exceed December 31, 2004.


II. DEFINITIONS

For the purposes of this contract, terms not defined herein shall be
defined as they are in the documents incorporated in and attached to this
document, subject to the order of precedence spelled out in Section V of this
document.

"Contract" means this document and all documents or standards incorporated
herein, expressly including but not limited to the following documents appended
hereto and listed in chronological order and to be given precedence as described
in Section V of this document, entitled "Order of Precedence":

Attachment 1 - BAA 01-28, released July 31, 2000;

Attachment 2 - Contractor's response to BAA 0l-28, submitted September
25, 2000, excluding the following sections:
Section 5.3.8
Sections 5.4.3A; 5.4.3D; 5.4.3E; 5.4.3F; 5.4.3G; 5.4.3H;
5.4.3I
Sections 5.4.4-C; 5.4.4D; 5.4.4H; 5.4.4M; 5.4.4X
Sections 5.4.6D; 5.4.6I
Sections 5.4.8U; 5.4.8V

and,

Any other documents, standards, laws, rules or regulations incorporated by
reference in the above materials, all of which are hereby incorporated by
reference.

"Covered Services" means all services required to be arranged, administered,
managed or provided by or on behalf of the Contractor under this contract.

"Effective Date of Enrollment" means:

. The first day of birth month of a newborn that is determined by the Offices
to be an enrolled member;

. The fifteenth day of the current month for a member who has, between the
twenty-sixth day of the previous month and the tenth day of the current
month, been determined by the Offices to be enrolled member; and,

. The first day of the following month for a member who has, between the
eleventh day and the twenty-fifth day of a month, been determined by the
Offices to be an enrolled member.

"Enrolled Member", or "Enrollee", means a Hoosier Healthwise-eligible member who
is listed by the Offices on the enrollment rosters to receive covered services
from the Contractor or its subcontractors, employees, agents, or providers, as
of the Effective Date of Enrollment, under this contract.

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"Provider" means a physician, hospital, home health agency or any other
institution, or health or other professional person or entity, which
participates in the provision of services to an enrolled member under BAA 01-28,
whether as an independent contractor, a subcontractor, employee, or agent of the
Contractor.

"Broad Agency Announcement", or "BAA", means BAA 01-28 for providers of
managed care services, released July 31, 200O.

III. DUTIES OF THE CONTRACTOR

A. The Contractor agrees to assume financial risk for developing and managing
a health care delivery system and for arranging or administering all
Hoosier Healthwise covered services except, as set out in section 3.4.3 of
------
the BAA, dental care, long-term institutional care, services provided as
part of an individualized education plan (IEP) pursuant to the Individuals
with Disabilities Education Act (IDEA) at 20 U.S.C. 1400 et seq.,
------
behavioral health, and hospice services, in exchange for a per-enrollee,
per-month fixed fee, to certain enrollees in Hoosier Healthwise Packages A,
B and C. Wards of the State, foster children and children receiving
adoption assistance may enroll on a voluntary basis and will not be subject
to auto-assignment into the Hoosier Healthwise program. The Contractor
must, at a minimum, furnish covered services up to the limits specified by
the Medicaid and CHIP programs. The Contractor may exceed these limits.
However, in no instance may any covered service's limitations be more
restrictive than those which exist in the Indiana Medicaid fee-for-service
program for Packages A and B, and the Children's Health Insurance Program
for Package C.

B. The Contractor agrees to perform all duties and arrange and administer the
provision of all services as set out herein and contained in the BAA as
attached and the Contractor's responses to the BAA as attached, all of
which are incorporated into this Contract by reference. In addition, the
Contractor shall comply with all policies and procedures defined in any
bulletin, manual, or handbook yet to be distributed by the State or its
agents insofar as those policies and procedures provide further
clarification and are no more restrictive than any policies and procedures
contained in the BAA and any amendments to the BAA. The Contractor agrees
to comply with all pertinent state and federal statutes and regulations in
effect throughout the duration of this Contract and as they may be amended
from time to time.

C. The Contractor agrees that it will not discriminate against individuals
eligible to be covered under this Contract on the basis of health status or
need for health services; and the Contractor may not terminate an
enrollee's enrollment, or act to encourage an enrollee to terminate his/her
enrollment, because of an adverse change in the enrollee's health. The
disenrollment function will be carried out by a State contractor who is
independent of the Contractor; therefore, any request to terminate an
enrollee's enrollment must be approved by the Offices.

D. The Contractor agrees that no services or duties owed by the Contractor
under this Contract will be performed or provided by any person or entity
other than the Contractor, except as

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contained in written subcontracts or other legally binding agreements.
Prior to entering into any such subcontract or other legally binding
agreement, the Contractor shall, in each case, submit the proposed
subcontract or other legally binding agreement to the Offices for prior
review and approval. Prior review and approval of a subcontract or legally
binding agreement shall not be unreasonably delayed by the Offices. The
Offices shall, in appropriate cases and as requested by the Contractor,
expedite the review and approval process. Under no circumstances shall the
Contractor be deemed to have breached its obligations under this Contract
if such breach was a result of the Offices' failure to review and approve
timely any proposed subcontract or other legally binding agreement. If the
Offices disapprove any proposed subcontract or other legally binding
agreement, the Offices shall state with reasonable particularity the basis
for such disapproval. No subcontract into which the Contractor enters with
respect to performance under this Contract shall in any way relieve the
Contractor of any responsibility for the performance of duties under this
Contract. All subcontracts and amendments thereto executed by the
Contractor under this Contract must meet the following requirements; any
existing subcontracts or legally binding agreements which fail to meet the
following requirements shall be revised to include the requirements within
ninety (90) days from the effective date of this Contract:

1. Be in writing and specify the functions of the subcontractor.

2. Be legally binding agreements.

3. Specify the amount, duration and scope of services to be provided
by the subcontractor.

4. Provide that the Offices may evaluate, through inspection or
other means, the quality, appropriateness, and timeliness of
services performed.

5. Provide for inspections of any records pertinent to the contract
by the Offices.

6. Require an adequate record system to be maintained for recording
services, charges, dates and all other commonly accepted
information elements for services rendered to recipients under
the contract.

7. Provide for the participation of the Contractor and subcontractor
in any internal and external quality assurance, utilization
review, peer review, and grievance procedures established by the
Contractor, in conjunction with the Offices.

8. Provide that the subcontractor indemnify and hold harmless the
State of Indiana, its officers, and employees from all claims and
suits, including court costs, attorney's fees, and other
expenses, brought because of injuries or damage received or
sustained by any person, persons, or property that is caused by
any act or omission of the Contractor and/or the subcontractors.
The State shall not provide such indemnification to the
subcontractor.

Page 4 of 24


9. Identify and incorporate the applicable terms of this Contract
and any incorporated documents. The subcontract shall provide
that the subcontractor agrees to perform duties under the
subcontract, as those duties pertain to enrollees, in accordance
with the applicable terms and conditions set out in this
Contract, any incorporated documents, and all applicable state
and federal laws, as amended.

E. The Contractor agrees that, during the term of this Contract, it shall
maintain, with any in-network provider rendering health care services under
the BAA, provider service agreements which meet the following requirements;
any existing provider service agreements which fail to meet the following
requirements shall be revised to include the requirements within ninety
(90) days from the effective date of this Contract. The provider service
agreements shall:

1. Identify and incorporate the applicable terms of this Contract and any
incorporated documents. Under the terms of the provider services
agreement, the provider shall agree that the applicable terms and
conditions set out in this Contract, any incorporated documents, and
all applicable state and federal laws, as amended, govern the duties
and responsibilities of the provider with regard to the provision of
services to enrollees.

2. Reference a written provider claim resolution procedure as set out in
section III.Q. below.

F. The Contractor agrees that all laboratory testing sites providing services
under this Contract must have a valid Clinical Laboratory Improvement
Amendments (CLIA) certificate and comply with the CLIA regulations at 42
C.F.R. Part 493.

G. The Contractor agrees that it shall:

1. Retain, at all times during the period of this Contract, a valid
Certificate of Authority under applicable State laws issued by the
State of Indiana Department of Insurance:

2. Ensure that, during the term of this Contract, each provider rendering
health care services under the BAA is authorized to do so in
accordance with the following:

a. The provider must maintain a current Indiana Health Coverage
Programs (IHCP) provider agreement and must be duly licensed in
accordance with the appropriate state licensing board and shall
remain in good standing with said board.

b. If a provider is not authorized to provide such services under a
current IHCP provider agreement or is no longer licensed by said
board, the Contractor is obligated to terminate its contractual
relationship authorizing or requiring such to provide services
under the BAA. The Contractor must

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terminate its contractual relationship with the provider as soon
as the Contractor has knowledge of the termination of the
provider's license or the IHCP provider agreement.

3. Comply with the specific requirements for Health Maintenance
Organizations (HMOs) eligible to receive Federal Financial
Participation (FFP) under Medicaid, as listed in the State Organization
and General Administration Chapter of the Health Care Financing
Administration (HCFA) Medicaid Manual. These requirements include, but
are not limited to the following:

a. The Contractor shall meet the definition of HMO as specified in
the Indiana State Medicaid Plan.

b. Throughout the duration of this Contract, the Contractor shall
satisfy the Chicago Regional Office of the Health Care Financing
Authority (hereinafter called HCFA) that the Contractor is
compliant with the Federal requirements for protection against
insolvency pursuant to 42 CFR 434.20(c)(3) and 434.50(a), the
requirement that the Contractor shall continue to provide
services to Contractor enrollees until the end of the month in
which insolvency has occurred, and the requirement that the
Contractor shall continue to provide inpatient services until the
date of discharge for an enrollee who is institutionalized when
insolvency occurs. The Contractor shall meet this requirement by
posting a performance bond pursuant to Section VII, paragraph C,
of this Contract, and satisfying the statutory reserve
requirements of the Indiana DepLartment of Insurance.

c. The Contractor shall comply with, and shall exclude from
participation as either a provider or subcontractor of the
Contractor, any entity or person that has been excluded under the
authority of Sections 1124A, 1128 or 1128A of the Social Security
Act or does not comply with the requirements of Section 1128(b)
of the Social Security Act.

d. In the event that the HCFA determines that the Contractor has
violated any of the provisions of 42 CFR 434.67(a), HCFA may deny
payment of FFP for new enrollees of the HMO under 42 USC
1396b(m)(5)(B)(ii). The Offices shall automatically deny State
payment for new enrollees whenever, and for so long as, Federal
payment for such enrollees has been denied.

H. The Contractor shall submit proof, satisfactory to the Offices, of
indemnification of the Contractor by the Contractor's parent corporation,
if applicable, and by all of its subcontractors.

I. The Contractor shall submit proof, satisfactory to the Offices, that all
subcontractors will hold the State harmless from liability under the
subcontract. This assurance in no way relieves the Contractor of any
responsibilities under the BAA or this Contract.

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J. The Contractor agrees that, prior to initially enrolling any Hoosier
Healthwise Package A, B or C enrollees, it shall go through and
satisfactorily complete the readiness review as described in the BAA. The
required readiness review shall begin before the contract between the
Contractor and the State is finalized and executed. Within ninety (90) days
from the effective date of this Contract, the Contractor shall make a good
faith effort to resolve, to the satisfaction of the Offices, any
outstanding issues brought to the Contractor's attention by the Offices as
a result of the readiness review.

K. The Contractor shall establish and maintain a quality improvement program
that meets the requirements of 42 CFR 434.34, as well as other specific
requirements set forth in the BAA. The Offices and the HCFA may evaluate,
through inspection or other means, including but not limited to, the review
of the quality assurance reports required under this Contract, and the
quality, appropriateness, and timeliness of services performed under this
Contract. The Contractor agrees to participate and cooperate, as directed
by the Offices, in the annual external quality review of the services
furnished by the Contractor.

L. In accordance with 42 CFR 434.28, the Contractor agrees that it and any of
its subcontractors shall comply with the requirements, if applicable, of
42 CFR 489, Subpart I, relating to maintaining and distributing written
policies and procedures respecting advance directives. The Contractor shall
distribute policies and procedures to adult individuals during the enrollee
enrollment process and whenever there are revisions to these policies and
procedures. The Contractor shall make available for inspection, upon
reasonable notice and request by the Offices, documentation concerning its
written policies, procedures and distribution of such written procedures to
enrollees.

M. Pursuant to 42 C.F.R. 417.479(a), the Contractor agrees that no specific
payment can be made directly or indirectly under a physician incentive plan
to a physician or physician group as an inducement to reduce or limit
medically necessary services furnished to an individual enrollee. The
Contractor must disclose to the State the information on provider incentive
plans listed in 42 C.F.R. 4 17.479(h)(l) and 4 17.479(i) at the times
indicated at 42 C.F.R. 434.70(a)(3), in order to determine whether the
incentive plan meets the requirements of 42 C.F.R. 417(d)-(g). The
Contractor must provide the capitation data required under paragraph
(h)(l)(vi) for the previous calendar year to the State by
application/contract renewal of each year. The Contractor will provide the
information on its physician incentive plan(s) listed in 42 C.F.R.
417.479(h)(3) to any enrollee upon request.

N. The Contractor must not prohibit or restrict a health care professional
from advising an enrollee about his/her health status, medical care, or
treatment, regardless of whether benefits for such care are provided under
this Contract, if the professional is acting within the lawful scope of
practice. However, this provision does not require the Contractor to
provide coverage of a counseling or referral service if the Contractor
objects to the service on moral or religious grounds and makes available
information on its policies to potential enrollees and enrollees within
ninety (90) days after the date the Contractor adopts a change in policy
regarding such counseling or referral service.

Page 7 of 24




0. In accordance with 42 U.S.C. (S) 1396u-2(b)(6), the Contractor agrees that
an enrollee may not be held liable for the following:

1. Debts of the Contractor, or its subcontractors, in the event of any
organization's insolvency;

2. Services provided to the enrollee in the event the Contractor fails to
receive payment from the Offices for such services or in the event a
provider fails to receive payment from the Contractor or Offices; or

3. Payments made to a provider in excess of the amount that would be owed
by the enrollee if the Contractor had directly provided the services.

P. The Offices may from time to time request and the Contractor, and all of
its subcontractors, agree that the Contractor, or its subcontractors, shall
prepare and submit additional compilations and reports as requested by the
Offices. Such requests will be limited to situations in which the desired
data is considered essential and cannot be obtained through existing
Contractor reports. The Contractor, and all of its subcontractors, agree
that a response to the request shall be submitted within thirty (30) days
from the date of the request, or by the Offices' requested completion date,
whichever is earliest. The response shall include the additional
compilations and reports as requested, or the status of the requested
information and an expected completion date. When such requests pertain to
legislative inquiries or expedited inquiries from the Office of the
Governor, the additional compilations and reports shall be submitted by the
Offices' requested completion date. Failure by the Contractor, or its
subcontractors, to comply with response time frames shall be considered
grounds for the Offices to pursue the provisions outlined in Section 3.16.5
of the BAA. In the event that delays in submissions are a consequence of a
delay by the Offices or the Medicaid Fiscal Agent, the time frame for
submission shall be extended by the length of time of the delay.

Q. The Contractor shall establish a written claim resolution procedure
applicable to both in-network and out-of-network providers which shall be
distributed to all in-network providers and shall be available to
out-of-network providers upon request. The Contractor shall negotiate the
terms of a written claim resolution procedure with in-network providers;
but if the Contractor and an in-network provider are unable to reach
agreement on the terms of such procedure, the out-of-network provider
claims resolution procedure approved by the Offices under this section
shall govern the resolution of such in-network provider's claims with the
Contractor. The written claim resolution procedure for out-of-network
providers (and in-network providers in the absence of an agreement) must be
submitted to the Offices for approval within thirty (30) days from the
effective date of this Contract and must include, at a minimum, the
following elements:

I. A statement noting that providers objecting to determinations
involving their claims will be provided procedural due
process through the Contractor's claim resolution procedure.

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2. A description of both the informal and formal claim resolution
procedures that will be available to resolve a provider's objection to
a determination involving the provider's claim.

3. An informal claim resolution procedure which:

a. shall be available for the resolution of claims submitted to the
Contractor by the provider within the allowable claims submission
time limits under federal and state law.

b. shall precede the formal claim resolution procedure;

c. shall be used to resolve a provider's objection to a determination
by the Contractor involving the provider's claim, including a
provider's objection to:

(1) any determination by the Contractor regarding payment for a
claim submitted by the provider, including the amount of such
payment; and

(2) the Contractor's determination that a claim submitted by the
provider lacks sufficient supporting information, records, or
other materials;

d. may, at the election of a provider, be utilized to determine the
payment due for a claim in the event the Contractor fails,
within thirty (30) days after the provider submits the claim, to
notify the provider of:

(1) its determination regarding payment for the provider's
claim; or

(2) its determination that the provider's claim lacked
sufficient supporting information, records, or other materials;

e. shall be commenced by a provider submitting to the Contractor:

(1) within sixty (60) days after the provider's receipt of
written notification of the Contractor's determination regarding
the provider's claim, the provider's written objection to the
Contractor's determination and an explanation of the objection; or

(2) within sixty (60) days after the Contractor fails to make
a determination as described in subparagraph (d), a written notice
of the provider's election to utilize the informal claims
resolution procedure under subparagraph (d) above;


f. shall allow providers and the Contractor to make verbal inquiries
and to otherwise informally undertake to resolve the matter
submitted for resolution by the provider pursuant to Paragraph
3.e.

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4. In the event the matter submitted for informal resolution is not
resolved to the provider's satisfaction within thirty (30) days after
the provider commenced the informal claim resolution procedure, the
provider shall have sixty (60) days from that point to submit to the
Contractor written notification of the provider's election to submit
the matter to the formal claim resolution procedure. The provider's
notice must specify the basis of the provider's dispute with the
Contractor. The Contractor's receipt of the provider's written notice
shall commence the formal claim resolution procedure.

5. The formal claim resolution procedure shall be conducted by a panel of
one (1) or more individuals selected by the Contractor. Each panel must
be knowledgeable about the policy, legal, and clinical issues involved
in the matter that is the subject of the formal claim resolution
procedure. An individual who has been involved in any previous
consideration of the matter by the Contractor may not serve on the
panel. The Contractor's medical director, or another licensed physician
designated by the medical director, shall serve as a consultant to the
panel in the event the matter involves a question of medical necessity
or medical appropriateness.

6. The panel shall consider all information and material submitted to it
by the provider that bears directly upon an issue involved in the
matter that is the subject of the formal claim resolution procedure.
The panel shall allow the provider an opportunity to appear in person
before the panel, or to communicate with the panel through appropriate
other means if the provider is unable to appear in person, and question
the panel in regard to issues involved in the matter. The provider
shall not be required to be represented by an attorney for purposes of
the formal claim review procedure.

7. Within forty-five (45) days after the commencement of the formal claim
resolution procedure, the panel shall deliver to the provider the
panel's written determination of the matter before it. Such
determination shall be the Contractor's final position in regard to the
matter. The written determination shall include, as applicable, a
detailed explanation of the factual, legal, policy and clinical basis
of the panel's determination.

8. In the event the panel fails to deliver to the provider the panel's
written determination within forty-five (45) days after the after the
commencement of the formal claim resolution procedure, such failure on
the part of the panel shall have the effect of a denial by the panel of
the provider's claim.

9. The panel's written determination shall include notice to the provider
of the provider's right, within sixty (60) days after the provider's
receipt of the panel's written determination, to submit to binding
arbitration the matter that was the subject of the formal claim
resolution procedure. The provider shall also have the right to
submit the matter to binding arbitration if the panel has failed
to deliver its written determination to the provider within
the required forty-five (45) day period.

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10. Any procedure involving binding arbitration must be conducted in accordance
with the rules and regulations of the American Health Lawyers Association
(AHLA), pursuant to the Uniform Arbitration Act as adopted in the State of
Indiana at I.C. 34-57-2, unless the provider and Contractor mutually agree
to some other binding resolution procedure. However, any Contractor and
provider that are subject to statutorily imposed arbitration procedures for
the resolution of these claims shall be required to follow the statutorily
imposed arbitration procedures, but only to the extent those procedures
differ from, or are irreconcilable with, the rules and regulations of the
American Health Lawyers Association (AHLA), pursuant to the Uniform
Arbitration Act as adopted in the State of Indiana at I.C. 34-57-2. It is
the intent of the Offices that the fees and expenses of arbitration be
borne by the non-prevailing party.

11. The provider and Contractor may agree, within the requisite sixty (60) day
time period, to include in a single arbitration proceeding matters from
multiple formal claim resolution procedures involving the Contractor and
the provider. If the provider and Contractor are not able to agree, the
arbitrator, as selected in Paragraph 10 above, shall have the discretion to
include in a single arbitration proceeding matters from multiple fomlal
claim resolution procedures involving the Contractor and the provider.

12. For claims disputed under Paragraph 3. c. (2) above:

a. a claim that is finally determined through the Contractor's claim
resolution procedure (including arbitration) not to lack sufficient
supporting documentation shall be processed by the Contractor within
thirty (30) days after such final determination. The processing of the
claim and the Contractor's determination involving the claim shall be
subject to Paragraph 3.c. and Paragraph 3. d. and the Contractor's
formal claim resolution procedure and binding arbitration.

b. a claim that is finally determined through the Contractor's claim
resolution procedure (including arbitration) to lack sufficient
supporting documentation shall be processed by the Contractor within
thirty (30) days after the provider submits to the Contractor the
requisite supporting documentation. The provider shall have thirty
(30) days after written notice of the final determination establishing
that the claim lacked sufficient supporting documentation is received
by the provider to submit the requisite supporting documentation. The
processing of the claim and the Contractor's determination involving
the claim shall be subject to Paragraph 3. c. and Paragraph 3. d. and
the Contractor's formal claim resolution procedure and binding
arbitration.

13. A contractor may not include in its claim resolution procedures for out-of-
network providers (and in-network providers in the absence of an agreement)
elements that restrict or diminish the claim review procedures, time
periods or subject matter provided for in paragraphs 1 through 12 above.


Page 11 of 24

14. A Contractor shall maintain a log of all informally and formally filed
provider objections to determinations involving claims. The logged
information shall include the provider's name, date of objection,
nature of the objection, and disposition. The Contractor shall submit
quarterly reports to the Offices regarding the number and type of
provider objections.

IV. PAYMENT

A. In consideration of the services to be performed by the Contractor,
the Offices agree to pay the Contractor the following amounts per month per
enrolled member as contained in the Offices' capitation payment listing
based upon the capitation rates by category as listed below:

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CAPITATION RATES
---------------------------------------------------------------------
Category Packages A and B Package C
---------------------------------------------------------------------
Newborns $334.98 $129.81
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Preschool $ 71.62 $ 83.20
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Children $ 58.95 $ 70.32
---------------------------------------------------------------------
Adolescents $ 89.75 $101.66
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Adult Males $247.73
---------------------------------------------------------------------
Adult Females $193.81
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Deliveries $3,281.95/delivery $3,281.95/delivery
---------------------------------------------------------------------


These capitation rates will be adjusted by the medical component of the
Consumer Price Index. The initial adjustment will occur in January 2002,
with subsequent adjustments to occur annually thereafter. In the event that
the Offices adjust the fee-for-service (FFS) rates, the Offices may, in its
sole discretion, further adjust the capitation rates in accordance with the
FFS adjustment, based on the same methodology or percentage change used for
the FFS adjustment. If the Offices make such an adjustment, it shall apply
only to the specific service component of the capitation rate that
corresponds to the FFS adjustment. Any capitation rates adjusted due to a
change in the FFS program may be further adjusted to ensure actuarial
soundness. All adjustments are subject to federal regulations that this
Contract may not exceed the FFS Upper Payment Limit (UPL).

B. All payment obligations of the Offices are subject to the encumbrance of
monies and shall be paid to the Contractor on the first Wednesday after the
fifteenth of the month.

C. The capitation payment will be prospective, based upon the number of
enrollees assigned to the Contractor as of the first of the month.
The Offices will establish an administrative procedure to allow retroactive
or other payment adjustments as necessary to implement this contract.

D The Contractor will be provided a capitation payment listing which includes
a detailed listing of all enrollees for which the Contractor is receiving a
capitatiom payment.


Page 12 of 24


E. The parties agree that the Offices have the option of renegotiating
actuarially sound capitation rates annually. Rates revised under this
provision shall be implemented only after a contract amendment is executed
and approved. Contractor may submit information for the Offices' review and
consideration.

F. It is understood and agreed upon by the parties that all obligations of the
State of Indiana are contingent upon the availability and continued
appropriation of State and Federal funds, and in no event shall the State
---------------------------
of Indiana be liable for any payments in excess of available appropriated
-------------------------------------------------------------------------
funds.
-----

G. When the Director of the State Budget Agency makes a written determination
that funds are not appropriated or otherwise available to support
continuation of performance of this Contract, the Contract shall be
cancelled. A determination by the State Budget Director that funds are not
appropriated or otherwise available to support continuation of performance
shall be final and conclusive.

V. ORDER OF PRECEDENCE

Any inconsistency or ambiguity in this Contract shall be resolved by giving
precedence in the following order:

1) The express terms of this document;

2) Attachment 1 - BAA 0l-28, released July 31, 2000;

3) Attachment 2 - the Contractor's response to the BAA;

4) Any other documents, standards, laws, rules or regulations
incorporated by reference in the above materials, all of which are
hereby incorporated by reference.

VI. NOTICE

A. Whenever notice is required to be given to the other party, it shall be
made in writing and delivered to that party. Delivery shall be deemed to
have occurred if a signed receipt is obtained when delivered by hand or
according to the date on the return receipt if sent by certified mail,
return receipt requested. Notices shall be addressed as follows:



In case of notice to the Contractor: In case of notice to the Offices:

Dr. Michael McKinney, President Sharon Steadman, Managed Care Director
Managed Health Services Office of Medicaid Policy and Planning
950 North Meridian, Suite 200 Family and Social Services Administration
Indianapolis, Indiana 46204 402 W. Washington St. IGCS W382, MS07
Indianapolis, Indiana 46204



Page 13 of 24

B. Said notices shall become effective on the date of delivery or the date
specified within the notice, whichever comes later. Either party may change
its address for notification purposes by mailing a notice stating the
change and setting forth the new address.

VII. MISCELLANEOUS PROVISIONS

A. Entire Agreement. This Contract constitutes the entire agreement between
----------------
the parties with respect to the subject matter; all prior agreements,
representations, statements, negotiations, and undertakings are superseded
hereby.

B. Changes. Any changes to this Contract shall be by formal amendment of this
-------
Contract signed by all parties required by Indiana law.

C. Performance Bond. The Contractor agrees that a performance bond in the
----------------
amount of five hundred thousand dollars ($500,000.00) will be delivered to
the Indiana Department of Administration (IDOA) within ten (10) calendar
days of the execution of this contract. Said bond will be in the form of a
cashier's check, a certified check, or a surety bond executed by a surety
company authorized to do business in the State of Indiana as approved by
the Insurance Department of State of Indiana. No other check or surety will
be accepted. The performance bond shall be made payable to the IDOA and
shall be effective for the duration of the contract and any extensions
thereof. The State reserves the right to increase the performance bond
amount if enrollment levels indicate the need for higher liquidated
damages.

D. Access To Records. The Contractor and any subcontractor shall maintain all
-----------------
books, documents, papers and records which are directly pertinent to this
Contract and shall make such materials available at all reasonable times
during the contract period and for three (3) years from the date of final
payment under the Contract or until all pending matters are closed,
whichever date is later, for inspection by the Office, or any other duly
authorized representative of the State of Indiana or the Federal
government. Copies thereof shall be furnished at no cost to the State if
requested.

E. Assignment. The Contractor shall not assign or subcontract the whole or any
----------
part of this Contract without the State's prior written consent. The
Contractor may assign its right to receive payments to such third parties
as the Contractor may desire without the prior written consent of the
State, provided that the Contractor gives written notice (including
evidence of such assignment) to the State thirty (30) days in advance of
any payment so assigned. The assignment shall cover all unpaid amounts
under this Contract and shall not be made to more than one party.

F. Authority to Bind Contractor. Notwithstanding anything in this Contract to
----------------------------
the contrary, the signatory for the Contractor represents that he/she has
been duly authorized to execute contracts on behalf of the Contractor
designed above, has filed proof of such authority with the Indiana
Department of Administration, 402 West Washington Street, W469.


Page 14 of 24

Indianapolis, Indiana 46204, and has obtained all necessary or
applicable approval from the home office of the Contractor to make this
Contract fully binding upon the Contractor when his/her signature is
affixed and is not subject to home office acceptance hereto and accepted
by the State of Indiana.

G. Compliance with Laws. The Contractor agrees to comply with all applicable
--------------------
Federal, State, and local laws, rules, regulations, or ordinances, and all
provisions required thereby to be included herein are hereby incorporated
by reference. The enactment of any state or federal statute or the
promulgation of regulations thereunder after execution of this Contract
shall be reviewed by the State and the Contractor to determine whether the
provisions of this Contract require formal modification.

H. Compliance with Civil Rights Laws. The Contractor and its subcontractors
---------------------------------
hereby assure that they will comply with all Federal and Indiana Civil
Rights Laws, including, but not limited to, I.C. 22-9-1-10 and the Civil
Rights Act of 1964, to the end that they shall not discriminate against any
employee or applicant for employment, to be employed in the performance of
this Contract, with respect to his/her hire, tenure, terms, conditions or
privileges of employment or any matter directly or indirectly related to
employment, because of his/her race, color, religion, sex, disability,
national origin, ancestry or status as a veteran. The Contractor
understands that the State of Indiana is a recipient of federal funds.
Pursuant to that understanding, the Contractor, and its subcontractors, if
any, agree that if the Contractor employs 50 or more employees and does at
least $50,000 worth of business with the State of Indiana and is not
exempt, the Contractor wiIl comply with the reporting requirements of
41 CFR 60-1.7, if applicable. Breach of this covenant may be regarded as
a material breach of the Contract. The State of Indiana shall comply with
Section 202 of Executive Order 11246, as amended, and 41 CFR 60-741, as
amended, which are incorporated herein by specific reference.

I. Assurance of Compliance with Civil Rights Act of 1964. Section 504 of the
-------------------------------------------------------------------------
Rehabilitation Act of 1973 and the Age Discrimination Act of 1975, the
----------------------------------------------------------------------
Americans with Disabilities Act of 1990 and Title IX of the Education
---------------------------------------------------------------------
Amendments of 1972: The Contractor agrees that it, and all of its
------------------
subcontractors and providers, will comply with the following:

1. Title VI of the Civil Rights Act of 1964 (Pub. L. 88-352), as
amended, and all requirements imposed by or pursuant to the Regulation
of the Department of Health and Human Services (45 C.F.R. Part 80),
to the end that, in accordance with Title VI of that Act and the
Regulation, no person in the United States shall on the ground of
race, color, or national origin, be excluded from participation in, be
denied the benefits of, or be otherwise subjected to discrimination
under any program or activity for which the Contractor receives
Federal financial assistance under this Contract.

2. Section 504 of the Rehabilitation Act of 1973 (Pub. L. 93-112), as
amended, and all requirements imposed by or pursuant to the Regulation
of the Department of Health and Human Services (45 C.F.R. Part 84), to
the end that, in accordance with Section 504 of that Act and the
Regulation, no otherwise qualified handicapped individual in


Page 15 of 24


the United States shall, solely by reason of his/her handicap, be
excluded from participation in, be denied the benefits of, or be
subjected to discrimination under any program or activity for
which the Contractor receives Federal financial assistance under
this Contract.

3. The Age Discrimination Act of 1975 (Pub. L. 94-135) as amended,
and all requirements imposed by or pursuant to the Regulation of
the Department of Health and Human Services (45 C.F.R. Part 91),
to the end that, in accordance with the Act and the Regulation,
no person in the United States shall, on the basis of age, be
denied the benefits of, be excluded from participation in, or be
subjected to discrimination under any program or activity for
which the Contractor receives Federal financial assistance under
this Contract.

4. The Americans with Disabilities Act of 1990 (Pub. L. 10l-336), as
amended, and all requirements imposed by or pursuant to the
Regulation of the Department of Justice (28 C.F.R. 35.101 et
seq.), to the end that in accordance with the Act and Regulation,
no person in the United States with a disability shall, on the
basis of the disability, be excluded from participation in, be
denied the benefits of, or otherwise be subjected to
discrimination under any program or activity for which the
Contractor receives Federal financial assistance under this
Contract.

5. Title IX of the Education Amendments of 1972, as amended (20
U.S.C. (S)(S)1681-1683, and 1685-1686), and all requirements
imposed by or pursuant to regulation, to the end that, in
accordance with the Amendments, no person in the United States
shall, on the basis of sex, be excluded from participation in, be
denied the benefits of, or otherwise be subjected to
discrimination under any program or activity for which the
Contractor receives Federal financial assistance under this
Contract.

The Contractor agrees that compliance with this assurance constitutes a
condition of continued receipt of Federal financial assistance, and
that it is binding upon the Contractor, its successors, transferees and
assignees for the period during which such assistance is provided. The
Contractor further recognizes that the United States shall have the
right to seek judicial enforcement of this assurance.


J. Conflict of Interest
--------------------

1. As used in this section:

"Immediate family" means the spouse and the unemancipated
children of an individual.

"Interested party" means:

a. The individual executing this Contract;


Page 16 of 24




b. An individual who has an interest of three percent (3%) or
more of the Contractor if the Contractor is not an
individual; or

C. Any member of the immediate family of an individual
specified under subdivision a. or b.

"Department" means the Indiana Department of Administration.

"Commission" means the State Ethics Commission.

2. The Department may cancel this Contract without recourse by the
Contractor if any interested party is an employee of the State of
Indiana.

3. The Department wi11 not exercise its right of cancellation under
section 2 above if the Contractor gives the Department an opinion
by the Commission indicating that the existence of this Contract
and the employment by the State of Indiana of the interested
party does not violate any statute or code relating to ethical
conduct of state employees. The Department may take action,
including cancellation of this Contract consistent with an
opinion of the Commission obtained under this section.

4. The Contractor has an affirmative obligation under this Contract
to disclose to the Department when an interested party is or
becomes an employee of the State of Indiana. The obligation under
this section extends only to those facts which the Contractor
knows or reasonably could know.

K Confidentiality of Data, Property Rights in Products and Copyright
-------------------------------------------------------------------
Prohibition. The Contractor further agrees that all information, data,
-----------
findings, recommendations, proposals, etc., by whatever name
described and by whatever form therein, secured developed, written, or
produced by the Contractor in furtherance of this Contract, shall be
the property of the State of Indiana and that the Contractor shall
take such action as is necessary under law to preserve such property
rights in and of the State of Indiana while such property is within
the control and/or custody of the Contractor.

By this Contract the Contractor specifically waives and/or releases to
the State of Indiana any cognizable property right in the Contractor
to copyright or patent such information, data, findings,
recommendations, proposals, etc. that are developed exclusively in
furtherance of the Contract and not developed by the Contractor for
its other lines of business and incidentally applied to its Hoosier
Healthwise line of business.

L. Confidentiality of State of Indiana Information. The Contractor
-----------------------------------------------
understands and agrees that data, materials and information disclosed
to the Contractor may contain confidential and protected data;
therefore, the Contractor promises and assures that data, material,
and information gathered, based upon or disclosed to the Contractor
for the purpose of this Contract will not be disclosed to others or
discussed with other parties without the prior written consent
of the State of Indiana.


Page 17 of 24



M. Conveyance of Documents And Continuation of Existing Activity: Should the
-------------------------------------------------------------
Contract for whatever reason, (i.e. completion of a contract with no
renewal, or termination of service by either party), be discontinued and
the activities as provided for in the Contract for services cease, the
Contractor and any subcontractors employed by the terminating Contractor in
the performance of the duties of the Contract shall promptly convey to the
State of Indiana, copies of all vendor working papers, data collection
forms, reports, charts, programs, cost records and all other material
related to work performed on this Contract.

The Contractor and the Office shall convene immediately upon notification
of termination or non-renewal of the Contract to determine what work shall
be suspended, what work shall be completed, and the timeframe for
completion and conveyance. The Office will then provide the Contractor with
a written schedule of the completion and conveyance activities associated
with termination. Documents/materials associated with suspended activities
shall be conveyed by the Contractor to the State of Indiana upon five days'
notice from the State of Indiana. Upon completion of those remaining
activities noted on the written schedule, the Contractor shall also convey
all documents and materials to the State of Indiana upon five days' notice
from the State of Indiana.

N. Disputes. Should any disputes arise with respect to this Contract, the
--------
Contractor and the State of Indiana agree to act immediately to resolve any
such disputes. Time is of the essence in the resolution of disputes.

The Contractor agrees that, the existence of a dispute notwithstanding, it
will continue without delay to carry out all its responsibilities under
this Contract which are not affected by the dispute. Should the Contractor
fail to continue without delay to perform its responsibilities under this
Contract in the accomplishment of all non-disputed work, any additional
costs incurred by the Contractor or the State of Indiana as a result of
such failure to proceed shall be borne by the Contractor, and the
Contractor shall make no claim against the State of Indiana for such costs.
If the Contractor and the State of Indiana cannot resolve a dispute within
ten (10) working days following notification in writing by either party of
the existence of said dispute, then the following procedure shall apply:

1. The parties agree to resolve such matters through submission of their
dispute to the Commissioner of the Indiana Department of
Administration who shall reduce her decision to writing and mail or
otherwise furnish a copy thereof to the Contractor and the State of
Indiana within ten (10) working days after presentation of such
dispute for her decision. Her decision shall be final and conclusive
unless the Contractor mails or otherwise furnishes to the Commissioner
of Administration, within ten (10) working days after receipt of the
Commissioner's decision, a written appeal. Within ten (10) working
days of receipt by the Commissioner, she may reconsider her decision.
If no reconsideration is provided within ten (10) working days the
Contractor may submit the dispute to an Indiana court of competent
jurisdiction.

2. The State of Indiana may withhold payments on disputed items pending
resolution of the dispute. The non-payment by the State of Indiana to
the


Page 18 of 24


Contractor of one or more invoices not in dispute shall not
constitute default, however, the Contractor may bring suit to
collect such monies without following the disputes procedure
contained herein.


O. Drug-Free Workplace
-------------------

1. The Contractor hereby covenants and agrees to make a good faith
effort to provide and maintain during the term of this Contract a
drug-free workplace. Contractor will give written notice to the
Office and the Indiana Department of Administration within ten
(10) days after receiving actual notice that an employee of the
Contractor has been convicted of a criminal drug violation
occurring in the Contractor's workplace.

2. In addition to subparagraph (l), if the total amount set forth in
this Contract is in excess of twenty-five thousand dollars
($25,000.00), the Contractor hereby further agrees that this
Contract is expressly subject to the terms, conditions, and
representations contained in the Drug-Free Workplace
Certification. The Certification is hereby executed by the
Contractor in conjunction with this Contract and set forth in
this Contract.

3. It is further expressly agreed that the failure of the Contractor
to in good faith comply with the terms of subparagraph (1) above,
or falsifying or otherwise violating the terms of the
certification referenced in subparagraph (2) above shall
constitute a material breach of this Contract, and shall entitle
the State of Indiana to impose sanctions against the Contractor
including, but not limited to, suspension of contract payment,
termination of this Contract and/or debarment of the Contractor
from doing further business with the State of Indiana for up to
three (3) years.

P. Drug-Free Workplace Certification
---------------------------------

This Certification is required by Executive Order No. 90-5, April 12,
1990, issued by the Governor of Indiana. Pursuant to its delegated
authority, the Indiana Department of Administration is requiring the
inclusion of this certification in all contracts with the State of
Indiana in excess of $25,000.00. No award of a contract shall be made,
and no contract, purchase order or agreement, the total amount of
which exceeds $25,000.00 shall be valid, unless and until this
certification has been fully executed by the Contractor and made a
part of the Contract as part of the Contract documents. False
certification or violation of the certification may result in
sanctions including, but not limited to, suspension of contract
payment, termination of the contract and/or debarment of contracting
opportunities with the Contractor for up to three (3) years.

The Contractor certifies and agrees that it will provide a drug-free
workplace by:

1. Publishing and providing to all of its employees a statement
notifying them that the unlawful manufacture, distribution,
dispensing, possession or use of a controlled


Page 19 of 24


substance is prohibited in the Contractor's workplace and specifying
the actions that will be taken against employees for violations of
such prohibition.

2. Establishing a drug-free awareness program to inform employees of (A)
the dangers of drug abuse in the workplace; (B) the Contractor's
policy of maintaining a drug-free workplace; (C) any available drug
counseling, rehabilitation, and employee assistance programs; and (4)
the penalties that may be imposed upon an employee for drug abuse
violations occurring in the workplace.

3. Notifying all employees in the statement required by subparagraph (1)
above that as a condition of continued employment the employee will
(A) abide by the terms of the statement; and (B) notify the Contractor
of any criminal drug statute conviction for a violation occurring in
the workplace no later than five (5) days after such conviction.

4. Notify the State in writing within ten (10) days after receiving
notice from an employee under subdivision (3)(B) above, or otherwise
receiving actual notice of such conviction.

5. Within thirty (30) days after receiving notice under subdivision
(3)(B) above of a conviction, imposing the following sanctions or
remedial measures on any employee who is convicted of drug abuse
violations occurring in the workplace: (A) take appropriate personnel
action against the employee, up to and including termination; or (B)
require such employee to satisfactorily participate in a drug abuse
assistance or rehabilitation program approved for such purposes by a
Federal, State, or local health, law enforcement, or other appropriate
agency.

6. Making a good faith effort to maintain a drug-free workplace through
the implementation of subparagraphs (1) through (5).

Q. Environmental Standards. If the contract amount set forth in this Contract
-----------------------
is in excess of $100,000, the Contractor shall comply with all applicable
standards, orders, or requirements issued under section 305 of the Clean
Air Act (42 USC 7606), section 508 of the Clean Air Act (33 USC 1368),
Executive Order 11738, and Environmental Protection Agency regulations (40
CFR Part 15), which prohibit the use under non-exempt Federal contracts of
facilities included on the EPA List of Violating Facilities. The Contractor
shall report any violations of this paragraph to the State of Indiana and
to the United States Environmental Protection Agency Assistant
Administrator for Enforcement.

R. Force Majeure; Suspension and Termination. In the event either party is
-----------------------------------------
unable to perform any of its obligations under this Contract or to enjoy
any of its benefits because of (or if failure to perform the service is
caused by) natural disaster, actions or decrees of governmental bodies, or
communication line failure not the fault of the affected party (hereinafter
referred to as a "Force Majeure Event"), the party who has been so affected
shall immediately give notice to the other-party and shall take reasonable
measures to resume performance. Upon receipt of such notice, all
obligations under this Contract shall


Page 20 of 24


be immediately suspended. If the period of non-performance exceeds thirty
(30) days from the receipt of notice of the Force Majeure Event, the party
whose ability to perform has not been so affected may, by giving written
notice, terminate this Contract.

S. Governing Laws. This Contract shall be construed in accordance with and
--------------
governed by the laws of the State of Indiana and suit, if any, must be
brought in the State of Indiana.

T. Indemnification. The Contractor agrees to indemnify, defend, and hold
---------------
harmless the State of Indiana and its agents, officers, and employees from
all claims and suits including court costs, attorney's fees, and other
expenses caused by any act or omission of the Contractor and/or its
subcontractors, if any. The State shall not provide such indemnification
---
to the Contractor.

U. Independent Contractor. "The Office and the Contractor acknowledge and
----------------------
agree that in the performance of this contract, the Contractor is an
independent contractor and both parties will be acting in an individual
capacity and not an as agents, employees, partners, joint venturers,
officers, or associates of one another. The employees or agents of one
party shall not be deemed or construed to be the employees or agents of the
other party for any purposes whatsoever. Neither party will assume any
liability for any injury (including death) to any persons, or any property
arising out of the acts or omissions of the agents, employees or
subcontractors of the other party.

The Contractor shall be responsible for providing all necessary
unemployment and worker compensation insurance for the Contractor's
employees.

V. Lobbying Activities. Pursuant to 31 U.S.C. 1352, and any regulations
-------------------
promulgated thereunder, the Contractor hereby assures and certifies that no
federally appropriated funds have been paid. or will be paid, by or on
behalf of the Contractor, to any person for influencing or attempting to
influence an officer or employee of any agency, a member of Congress, an
officer or employee of Congress, or an employee of a member of Congress, in
connection with the awarding of any federal contract, the making of any
federal grant, the making of any federal loan, the entering into of any
cooperative contract, and the extension, continuation, renewal, amendment,
or modification of any federal contract, grant, loan or cooperative
contract. If any funds other than federally appropriated funds have been
paid or will be paid to any person for influencing or attempting to
influence an officer or employee of any agency, a member of Congress, an
officer or employee of Congress, or an employee of a member of Congress in
connection with this Contract, the Contractor shall complete and submit
Standard Form-LLL, "Disclosure Form to Report Lobbying", in accordance with
its instructions.

W. Ownership of Documents and Materials. All documents, records, programs,
------------------------------------
data, film, tape, articles, memoranda, and other materials developed under
this Contract will be the property of the State of Indiana. Use of these
materials other than related to contract performance by the Contractor
without the prior written consent of the State of Indiana is prohibited.
During the performance of the services specified herein, the Contractor
shall be responsible for any loss or damage to these materials developed
for or supplied by the State of Indiana and used


Page 21 of 24


to develop or assist in the services provided herein, while they are in the
possession of the Contractor, and any loss or damage thereto shall be
restored at the Contractor's expense. Full, immediate and unrestricted
access to the work product of the Contractor during the term of this
Contract shall be available to the State of Indiana. The Contractor will
give to the State of Indiana, or the State of Indiana's designee, all
records of other materials described in this section, after termination of
the Contract and upon five (5) days notice of a request from the State of
Indiana.

X. Penalties/Interest/Attorney's Fees. The State will in good faith perfom
----------------------------------
its required obligations hereunder and does not agree to pay any penalties,
liquidated damages, interest, or attorney's fees, except as required by
Indiana law, in part, I.C. 5-17-5-1 et seq, I.C. 34-54-8-2 et seq, and I.C.
------ ------
34-13-1-1 et seq.
------

Y. Severability. The invalidity in whole or in part of any provision of this
------------
Contract shall not void or affect the validity of any other provision.

Z. Successors and Assignees. The Contractor binds its successors, executors,
------------------------
assignees, and administrators, to all covenants of this Contract. Except as
set forth above, the Contractor shall not assign, sublet, or transfer the
Contractor's interest in this Contract without the prior written consent of
the Office.

AA. Termination. The Offices may, without cause, cancel and terminate this
-----------
Contract in whole or in part upon sixty (60) days' prior written notice.
The Contractor will be reimbursed for services performed prior to the date
of termination consistent with the terms of the Contract. The Offices will
not be liable for services performed after notice of termination, but
before the date of termination, without written authorization from the
Offices. In no event will the Offices be liable for services performed
after the termination date.

In the event that the Offices request that the Contractor perform any
additional services associated with the transition or turnover of this
Contract, the Offices agree to pay reasonable costs for those additional
services specifically requested by the Offices.

BB. Waiver of Breach. No waiver of breach of any provision of this Contract
----------------
shall constitute, a waiver of any other breach or of such provision.

Failure of the Office to enforce at any time any provision of this
Contract shall not be construed as a waiver thereof. The remedies herein
reserved shall be cumulative and additional to any other remedies in law
or equity.

CC. Work Standards. The Contractor agrees to execute its respective
--------------
responsibilities by following and applying at all times the highest
professional and technical guidelines and standards. If the State becomes
dissatisfied with the work product or the working relationship with those
individuals assigned to work on this Contract, the State may request in
writing the replacement of any or all such individuals.


Page 22 of 24


DD. Non-Collusion and Acceptance. The undersigned attests, subject to the,
----------------------------
penalties for perjury, that he is the contracting party, or that he is the
representative, agent, member or officer of the contracting party, that he
has not, nor has any other member employee, representative, agent or
officer of the firm, company, corporation or partnership represented by
him, directly or indirectly, to the best of his knowledge, entered into or
offered to enter into any combination, collusion or agreement to receive or
pay, and that he has not received or paid, any sum of money or other
consideration for the execution of this agreement other than that which
appears upon the face of the agreement.



/// The remainder of this page is left intentionally blank. ///


Page 23 of 24


In Witness Whereof, Coordinated Care Corporation Indiana, Inc. and the State of
Indiana have, through duly authorized representatives, entered into this
agreement. The parties having read and understand the foregoing terms of the
Contract do by their respective signatures dated below hereby agree to the terms
thereof.



For the Contractor: For the State of Indiana:

/s/ Dr. Michael McKinney /s/ Kathleen D. Gifford
----------------------------------- ---------------------------------
Dr. Michael McKinney, President Kathleen D. Gifford
Coordinated Care Corporation Indiana, Inc. Assistant Secretary
Office of Medicaid Policy & Planning

Date: 12/11/2000 Date: 12/11/2000
------------- ----------------


/s/ Nancy Cobb
---------------------------------
Nancy Cobb, Director
Children's Health Insurance Program

Date: 12/11/2000
----------------


APPROVED: APPROVED:

/s/ [ILLEGIBLE] /s/ Jay D. McQueen for
----------------------------------- ---------------------------------
Betty Cockrum, Director Glenn R. Lawrence, Commissioner
State Budget Agency Department of Administration

Date: 1/10/01 Date: Jan 4, 2001
------------- ----------------

APPROVED AS TO FORM AND LEGALITY

/s/ James F. Schmitt
-----------------------------------
Stephen Carter
Deputy of
Attorney General of Indiana

Date: 2/21/01
-------------



Page 24 of 24