Contract with Eligible Medicare Advantage (MA) Organization Pursuant to Sections 1851 through 1859 of the Social Security Act for the Operation of a Medicare Advantage Coordinated Care Plan(s)

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                                                                   EXHIBIT 10.17

     Contract with Eligible Medicare Advantage (MA) Organization Pursuant to
     Sections 1851 through 1859 of the Social Security Act for the Operation
                of a Medicare Advantage Coordinated Care Plan(s)

                                CONTRACT (H4454)

                                     Between

    Centers for Medicare & Medicaid Services (hereinafter referred to as CMS)

                                       and

                               HEALTHSPRING, INC.
                (hereinafter referred to as the MA Organization)

CMS and the MA Organization, an entity which has been determined to be an
eligible Medicare Advantage Organization by the Administrator of the Centers for
Medicare & Medicaid Services under 42 CFR 422.503, agree to the following for
the purposes of sections 1851 through 1859 of the Social Security Act
(hereinafter referred to as the Act):

(NOTE: Citations indicated in brackets are placed in the text of this contract
to note the regulatory authority for certain contract provisions. All references
to Part 422 are to 42 CFR Part 422.)

YOU MUST CHECK OFF AND INITIAL EACH REQUIRED ADDENDUM TYPE TO REFLECT THE
COVERAGE OFFERED UNDER THE H (OR R) NUMBER ASSOCIATED WITH THIS CONTRACT

ADDENDUM TYPE                                                       INITIALS

[X] PART D ADDENDUM                                                     [ ]

[ ] EMPLOYER-ONLY MA-PD ADDENDUM (800 SERIES)                           [ ]

[X] EMPLOYER-ONLY MA ONLY ADDENDUM (800 SERIES)                         [ ]

[ ] VARIANCES/WAIVERS (PROVIDED DIRECTLY TO                             [ ]
    DEMONSTRATION ORGANIZATIONS BY CMS)

[ ] REGIONAL PREFERRED PROVIDER ORGANIZATION ADDENDUM
    (PROVIDED DIRECTLY TO RPPOS BY CMS)                                 [ ]

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                                    Article I

                                Term of Contract

The term of this contract shall be from the date of signature by CMS' authorized
representative through December 31, 2006, after which this contract may be
renewed for successive one-year periods in accordance with 42 CFR 422.505(c) and
as discussed in Paragraph A in Article VII below. [422.505]

This contract governs the respective rights and obligations of the parties as of
the effective date set forth above, and supersedes any prior agreements between
the MA Organization and CMS as of such date. MA organizations offering Part D
also must execute an Addendum to the Medicare Managed Care Contract Pursuant to
Sections 1860D-1 through 1860D-42 of the Social Security Act for the Operation
of a Voluntary Medicare Prescription Drug Plan (hereafter the "Part D
Addendum"). For MA Organizations offering MA-PD plans, the Part D Addendum
governs the rights and obligations of the parties relating to the provision of
Part D benefits, in accordance with its terms, as of its effective date.

                                   Article II

                             Coordinated Care Plan

A. The Medicare Advantage Organization agrees to operate one or more coordinated
care plans as defined in 42 CFR 422.4(a)(l)(iii)), including at least one MA-PD
plan as required under 42 CFR 422.4(c), as described in its final Plan Benefit
Package (PBP) bid submission (benefit and price bid) proposal as approved by CMS
and as attested to in the Medicare Advantage Attestation of Benefit Plan and
Price, and in compliance with the requirements of this contract and applicable
Federal statutes, regulations, and policies.

B. Except as provided in paragraph (C) of this Article, this contract is deemed
to incorporate any changes that are required by statute to be implemented during
the term of the contract and any regulations or policies implementing or
interpreting such statutory provisions.

C. CMS will not implement, other than at the beginning of a calendar year,
requirements under 42 CFR Part 422 that impose a new significant cost or burden
on MA organizations or plans, unless a different effective date is required by
statute. [422.521]

                                   Article III

          Functions To Be Performed By Medicare Advantage Organization

A. PROVISION OF BENEFITS

1. The MA Organization agrees to provide enrollees in each of its MA plans the
basic benefits as required under Section 422.101 and, to the extent applicable,
supplemental benefits under Section 422.102 and as established in the MA
Organization's final benefit and price bid proposal as approved by CMS and
listed in the MA Organization Plan Attestation of Benefit Plan and Price, which
is attached to this contract. The MA Organization agrees to provide access to
such benefits as required under subpart C in a manner consistent with
professionally recognized standards of health care and according to the access
standards stated in Section 422.112.

2. The MA Organization agrees to provide post-hospital extended care services,
should an MA

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enrollee elect such coverage, through a skilled nursing home facility according
to the requirements of section 1852(1) of the Act and Section 422.133. A skilled
nursing home facility is a facility in which an MA enrollee resided at the time
of admission to the hospital, a facility that provides services through a
continuing care retirement community, a facility in which the spouse of the
enrollee is residing at the time of the enrollee's discharge from the hospital,
or hospital, or wherever the enrollee resides immediately before admission for
extended care services.

[ ] [422.133; 422.504(a)(3)]

[ ] B. ENROLLMENT REQUIREMENTS

1  The MA Organization agrees to accept new enrollments, make enrollments
effective, process voluntary disenrollments, and limit involuntary
disenrollments, as provided in subpart B of part 422.

2  The MA Organization shall comply with the provisions of Section 422,110
concerning prohibitions against discrimination in beneficiary enrollment, other
than in enrolling eligible beneficiaries in a CMA-approved special needs plan
that exclusively enrolls special needs individuals as consistent with
Sections 422.2, 422.4(a)(1)(iv) and 422.52.

[422.504(a)(2)]

C. BENEFICIARY PROTECTIONS

1  The MA Organization agrees to comply with all requirements in subpart M of
part 422, governing coverage determinations, grievances, and appeals.
[422.504(a)(7)]

2  The MA Organization agrees to comply with the confidentiality and enrollee
record accuracy requirements in Section 422.118.

3  Beneficiary Financial Protections. The MA Organization agrees to comply with
the following requirements:

[ ] (a) Each MA Organization must adopt and maintain arrangements satisfactory
to CMS to protect its enrollees from incurring liability for payment of any fees
that are the legal obligation of the MA Organization. To meet this requirement
the MA Organization must --

[ ] (i) Ensure that all contractual or other written arrangements with providers
prohibit the Organization's providers from holding any beneficiary enrollee
liable for payment of any fees that are the legal obligation of the MA
Organization; and

[ ] (ii) Indemnify the beneficiary enrollee for payment of any fees that are the
legal obligation of the MA Organization for services furnished by providers that
do not contract, or that have not otherwise entered into an agreement with the
MA Organization, to provide services to the organization's beneficiary
enrollees. [422.504(g)(1)]

[ ] (b) The MA Organization must provide for continuation of enrollee health
care benefits-

[ ] (i) For all enrollees, for the duration of the contract period for which CMS
payments have been made; and

[ ] (ii) For enrollees who are hospitalized on the date its contract with CMS
terminates, or, in the event of the MA Organization's insolvency, through the
date of discharge. [422.504(g)(2)]

[ ] (c) In meeting the requirements of this section (C), other than the provider
contract requirements specified in paragraph (C)(3)(a) of this Article, the MA
Organization may use --

[ ] (i) Contractual arrangements; D

[ ] (ii) Insurance acceptable to CMS;

[ ] (iii) Financial reserves acceptable to CMS; or

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[ ] (iv) Any other arrangement acceptable to CMS. [422.504(g)(3)]

[ ] D. PROVIDER PROTECTIONS

1   The MA Organization agrees to comply with all applicable provider
requirements in 42 CFR Part 422 Subpart E, including provider certification
requirements, anti-discrimination requirements, provider participation and
consultation requirements, the prohibition on interference with provider advice,
limits on provider indemnification, rules governing payments to providers, and
limits on physician incentive plans. [422.504(a)(6)]

2   Prompt Payment.

[ ] (a) The MA Organization must pay 95 percent of "clean claims" within 30 days
of receipt if they are claims for covered services that are not furnished under
a written agreement between the organization and the provider.

[ ] (i) The MA Organization must pay interest on clean claims that are not paid
within 30 days in accordance with sections 1816(c)(2) and 1842(c)(2) of the Act.

[ ] (ii) All other claims from non-contracted providers must be paid or denied
within 60 calendar days from the date of the request. [422.520(a)]

[ ] (b) Contracts or other written agreements between the MA Organization and
its providers must contain a prompt payment provision, the terms of which are
developed and agreed to by both the MA Organization and the relevant provider.
[422.520(b)]

    (c) If CMS determines, after giving notice and opportunity for hearing,
that the MA Organization has failed to make payments in accordance with
subparagraph (2)(a) of this section, CMS may provide--

    (i) For direct payment of the sums owed to providers; and

[ ] (ii) For appropriate reduction in the amounts that would otherwise be paid
to the MA Organization, to reflect the amounts of the direct payments and the
cost of making those payments. [422.520(c)]

[ ] E. QUALITY IMPROVEMENT PROGRAM

1 The MA Organization agrees to operate, for each plan that it offers, an
ongoing quality improvement program as stated in accordance with Section 1852(e)
of the Social Security Act and 42 CFR 422.152.

2 Chronic Care Improvement Program

[ ] (a) Each MA organization (other than MA private-fee-for-service plans) must
have a chronic care improvement program and must establish criteria for
participation in the program. The CCIP must have a method for identifying
enrollees with multiple or sufficiently severe chronic conditions who meet the
criteria for participation in the program and a mechanism for monitoring
enrollees' participation in the program.

[ ] (b) Plans have flexibility to choose the design of their program; however,
in addition to meeting the requirements specified above, the CCIP selected must
be relevant to the plan's MA population. MA organizations are required to submit
annual reports on their CCIP program to CMS.

1   Performance Measurement and Reporting: The MA Organization shall measure
performance under its MA plans using standard measures required by CMS, and
report (at the organization level) its performance to CMS. The standard measures
required by CMS during the term of this contract will be uniform data collection
and reporting instruments, to include the Health Plan and Employer Data

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Information Set (HEDIS), Consumer Assessment of Health Plan Satisfaction (CAHPS)
survey, and Health Outcomes Survey (HOS). These measures will address clinical
areas, including effectiveness of care, enrollee perception of care and use of
services; and non-clinical areas including access to and availability of
services, appeals and grievances, and organizational characteristics.
[422.152(b)(1), (e)]

2  Utilization Review:

[ ] (a) An MA Organization for an MA coordinated care plan must use written
protocols for utilization review and policies and procedures must reflect
current standards of medical practice in processing requests for initial or
continued authorization of services and have in effect mechanisms to detect both
underutilization and over utilization of services. [422.152(b)]

[ ] (b) For MA regional preferred provider organizations (RPPOs) and MA local
preferred provider organizations (PPOs) that are offered by an organization that
is not licensed or organized under State law as an HMOs, if the MA Organization
uses written protocols for utilization review, those policies and procedures
must reflect current standards of medical practice in processing requests for
initial or continued authorization of services and include mechanisms to
evaluate utilization of services and to inform enrollees and providers of
services of the results of the evaluation. [422.152(e)]

5. Information Systems:

(a) The MA Organization must:

[ ] (i) Maintain a health information system that collects, analyzes and
integrates the data necessary to implement its quality improvement program;

[ ] (ii) Ensure that the information entered into the system (particularly that
received from providers) is reliable and complete;

    (iii) Make all collected information available to CMS. [422.152(f)(1)]

6. External Review The MA Organization will comply with any requests by Quality
Improvement Organizations to review the MA Organization's medical records in
connection with appeals of discharges from hospitals, skilled nursing
facilities, and home health agencies.

F. COMPLIANCE PLAN The MA Organization agrees to implement a compliance plan in
accordance with the requirements of Section 422.503(b)(4)(vi).
[422.503(b)(4)(vi)]

G. COMPLIANCE DEEMED ON THE BASIS OF ACCREDITATION CMS may deem the MA
Organization to have met the quality improvement requirements of Section 1852(e)
of the Act and Section 422.152, the confidentiality and accuracy of enrollee
records requirements of Section 1852(h) of the Act and Section 422.118, the
anti-discrimination requirements of Section 1852(b) of the Act and Section
422.110, the access to services requirements of Section 1852(d) of the Act and
Section 422.112, and the advance directives requirements of Section 1852(i) of
the Act and Section 422.128, the provider participation requirements of Section
1852(j) of the Act and 42 CFR Part 422, Subpart F, and the applicable
requirements described in Section 423.165, if the MA Organization is fully
accredited (and periodically reaccredited) by a private, national accreditation
organization approved by CMS and the accreditation organization used the
standards approved by CMS for the purposes of assessing the MA Organization's
compliance with Medicare requirements. The provisions of Section 422.156 shall
govern the MA Organization's use of deemed status to meet MA program
requirements.

H. PROGRAM INTEGRITY

1   The MA Organization agrees to provide notice based on best knowledge,
information, and belief

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to CMS of any integrity items related to payments from governmental entities,
both federal and state, for healthcare or prescription drug services. These
items include any investigations, legal actions or matters subject to
arbitration brought involving the MA Organization (or MA Organization's firm if
applicable) and its subcontractors (excluding contracted network providers),
including any key management or executive staff, or any major shareholders (5%
or more), by a government agency (state or federal) on matters relating to
payments from governmental entities, both federal and state, for healthcare
and/or prescription drug services. In providing the notice, the sponsor shall
keep the government informed of when the integrity item is initiated and when it
is closed. Notice should be provided of the details concerning any resolution
and monetary payments as well as any settlement agreements or corporate
integrity agreements.

2   The MA Organization agrees to provide notice based on best knowledge,
information, and belief to CMS in the event the MA Organization or any of its
subcontractors is criminally convicted or has a civil judgment entered against
it for fraudulent activities or is sanctioned under any Federal program
involving the provision of health care or prescription drug services.

I. MARKETING

1   The MA Organization may not distribute any marketing materials, as defined
in 42 CFR 422.80(b) and in the Marketing Materials Guidelines for Medicare
Advantage-Prescription Drug Plans and Prescription Drug Plans (Medicare
Marketing Guidelines), unless they have been filed with and not disapproved by
CMS in accordance with Section 422.80. The file and use process set out at
Section 422.80(a)(2) must be used, unless the MA organization notifies CMS that
it will not use this process.

2   CMS and the MA Organization shall agree upon language setting forth the
benefits, exclusions and other language of the Plan. The MA Organization bears
full responsibility for the accuracy of its marketing materials. CMS, in its
sole discretion, may order the MA Organization to print and distribute the
agreed upon marketing materials, in a format approved by CMS. The MA
Organization must disclose the information to each enrollee electing a plan as
outlined in 42 CFR 422.111.

3   The MA Organization agrees that any advertising material, including that
labeled promotional material, marketing materials, or supplemental literature,
shall be truthful and not misleading. All marketing materials must include the
Contract number. All membership identification cards must include the Contract
number on the front of the card.

4   The MA Organization must comply with the Medicare Marketing Guidelines, as
well as all applicable statutes and regulations, including and without
limitation Section 1851(h) of the Act and 42 CFR Sections 422.80, 422.111 and
423.50. Failure to comply may result in sanctions as provided in 42 CFR Part 422
Subpart O.

                                   Article IV

                         CMS Payment to MA Organization

A. The MA Organization agrees to develop its annual benefit and price bid
proposal and submit to CMS all required information on premiums, benefits, and
cost sharing, as required under 42 CFR Part 422 Subpart F. [422.504(a)(10)]

B. Methodology. CMS agrees to pay the MA Organization under this contract in
accordance with the provisions of section 1853 of the Act and 42 CFR Part 422
Subpart G. [422.504(a)(9)]

C. Attestation of payment data (Attachments A, B, and C). As a condition for
receiving a monthly

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payment under paragraph B of this article, and 42 CFR Part 422 Subpart G, the MA
Organization agrees that its chief executive officer (CEO), chief financial
officer (CFO), or an individual delegated with the authority to sign on behalf
of one of these officers, and who reports directly to such officer, must request
payment under the contract on the forms attached hereto as Attachment A
(enrollment attestation) and Attachment B (risk adjustment data) which attest to
(based on best knowledge, information and belief, as of the date specified on
the attestation form) the accuracy, completeness, and truthfulness of the data
identified on these attachments. The Medicare Advantage Plan Attestation of
Benefit Plan and Price must be signed and attached to the executed version of
this contract.

1  Attachment A requires that the CEO, CFO, or an individual delegated with the
authority to sign on behalf of one of these officers, and who reports directly
to such officer, must attest based on best knowledge, information, and belief
that each enrollee for whom the MA Organization is requesting payment is validly
enrolled, or was validly enrolled during the period for which payment is
requested, in an MA plan offered by the MA Organization, The MA Organization
shall submit completed enrollment attestation forms to CMS, or its contractor,
on a monthly basis. (NOTE: The forms included as attachments to this contract
are for reference only, CMS will provide instructions for the completion and
submission of the forms in separate documents. MA Organizations should not take
any action on the forms until appropriate CMS instructions become available.)

2  Attachment B requires that the CEO, CFO, or an individual delegated with the
authority to sign on behalf of one of these officers, and who reports directly
to such officer, must attest to (based on best knowledge, information and
belief, as of the date specified on the attestation form) that the risk
adjustment data it submits to CMS under Section 422.310 are accurate, complete,
and truthful. The MA Organization shall make annual attestations to this effect
for risk adjustment data on Attachment B and according to a schedule to be
published by CMS. If such risk adjustment data are generated by a related
entity, contractor, or subcontractor of an MA Organization, such entity,
contractor, or subcontractor must similarly attest to (based on best knowledge,
information, and belief, as of the date specified on the attestation form) the
accuracy, completeness, and truthfulness of the data. [422.504(1)]

3  The Medicare Advantage Plan Attestation of Benefit Plan and Price (which is
attached hereto_ requires that the CEO, CFO, or an individual delegated with the
authority to sign on behalf of one of these officers, and who reports directly
to such officer, must attest (based on best knowledge, information and belief,
as of the date specified on the attestation form) that the information and
documentation comprising the bid submission proposal is accurate, complete, and
truthful and fully conforms to the Bid Form and Plan Benefit Package
requirements; and that the benefits described in the CMS-approved proposal bid
submission agree with the benefit package the MA Organization will offer during
the period covered by the proposal bid submission. This document is being sent
separately to the MA Organization and must be signed and attached to the
executed version of this contract, and is incorporated herein by reference.
[422.502(1)]

                                   Article V

      MA Organization Relationship with Related Entities, Contractors, and
Subcontractors

A. Notwithstanding any relationship(s) that the MA Organization may have with
related entities, contractors, or subcontractors, the MA Organization maintains
full responsibility for adhering to and otherwise fully complying with all terms
and conditions of its contract with CMS.
[422.504(i)(1)]

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B. The MA Organization agrees to require all related entities, contractors, or
subcontractors to agree that--

       (1) HHS, the Comptroller General, or their designees have the right to
inspect, evaluate, and audit any pertinent contracts, books, documents, papers,
and records of the related entity(s), contractor(s), or subcontractor(s)
involving transactions related to this contract; and

       (2) HHS, the Comptroller General, or their designees have the right to
inspect, evaluate, and audit any pertinent information for any particular
contract period for 10 years from the final date of the contract period or from
the date of completion of any audit, whichever is later. [422.504(i)(2)]

       C. The MA Organization agrees that all contracts or written arrangements
into which the MA Organization enters with providers, related entities,
contractors, or subcontractors (first tier and downstream entities) shall
contain the following elements:

       (1) Enrollee protection provisions that provide--

       (a) Consistent with Article III(C), arrangements that prohibit providers
from holding an enrollee liable for payment of any fees that are the legal
obligation of the MA Organization; and

       (b) Consistent with Article III(C), provision for the continuation of
benefits.

[ ]    (2) Accountability provisions feat indicate that the MA Organization may
only delegate activities or functions to a provider, related entity, contractor,
or subcontractor in a manner consistent with requirements set forth at paragraph
D of this article.

       (3) A provision requiring that any services or other activity performed
by a related entity, contractor or subcontractor in accordance with a contract
or written agreement between the related entity, contractor, or subcontractor
and the MA Organization will be consistent and comply with the MA Organization's
contractual obligations to CMS. [422.504(i)(3)]

D. If any of the MA Organization's activities or responsibilities under this
contract with CMS is delegated to other parties, the following requirements
apply to any related entity, contractor, subcontractor, or provider:

       (1) Written arrangements must specify delegated activities and
 reporting responsibilities.

[ ]    (2) Written arrangements must either provide for revocation of the
delegation activities and reporting requirements or specify other remedies in
instances where CMS or the MA Organization determine that such parties have not
performed satisfactorily.

       (3) Written arrangements must specify that the performance of the parties
is monitored by the MA Organization on an ongoing basis.

       (4) Written arrangements must specify that either --

[ ]    (a) The credentials of medical professionals affiliated with the party
or parties will be either reviewed by the MA Organization; or

[ ]    (b) The credentialing process will be reviewed and approved by the MA
Organization and the MA Organization must audit the credentialing process on an
ongoing basis.

[ ]    (5) All contracts or written arrangements must specify that the related
entity, contractor, or subcontractor must comply with all applicable Medicare
laws, regulations, and CMS instructions.

[422.504(i)(4)]

E. If the MA Organization delegates selection of the providers, contractors, or
subcontractors to another organization, the MA Organization's written
arrangements with that organization must state that the MA Organization retains
the right to approve, suspend, or terminate any such arrangement.
[422.504(i)(5)]

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F. As of the date of this contract and throughout its term, the MA Organization

[ ]    (1) Agrees that any physician incentive plan it operates meets the
requirements of Section 422.208, and

[ ]    (2) Has assured that all physicians and
physician groups that the MA Organization's physician incentive plan places at
substantial financial risk have adequate stop-loss protection in accordance with
Section 422.208(f). [422.208]

                                   Article VI

                              Records Requirements

A. MAINTENANCE OF RECORDS

1. The MA Organization agrees to maintain for 10 years books, records,
documents, and other evidence of accounting procedures and practices that --

       (a) Are sufficient to do the following:

[ ]    (i) Accommodate periodic auditing of the financial records(including data
related to Medicare utilization, costs, and computation of the benefit and price
bid) of the MA Organization.

[ ]    (ii) Enable CMS to inspect or otherwise evaluate the quality,
appropriateness and timeliness of services performed under the contract, and the
facilities of the MA Organization.

       (iii) Enable CMS to audit and inspect any books and records of the MA
Organization that pertain to the ability of the organization to bear the risk of
potential financial losses, or to services performed or determinations of
amounts payable under the contract.

[ ]    (iv) Properly reflect all direct and indirect costs claimed to have been
incurred and used in the preparation of the benefit and price bid proposal.

[ ]    (v) Establish component rates of the benefit and price bid for
determining additional and supplementary benefits.

       (vi) Determine the rates utilized in setting premiums for State insurance
agency purposes and for other government and private purchasers; and

       (b) Include at least records of the following:

[ ]    (i) Ownership and operation of the MA Organization's financial,
medical, and other record keeping systems.

       (ii) Financial statements for the current contract period and six prior
periods.

       (iii) Federal income tax or informational returns for the current
contract period and six prior periods.

[ ]    (iv) Asset acquisition, lease, sale, or other action.

[ ]    (v) Agreements, contracts (including, but not limited to, with
related or unrelated prescription drug benefit managers) and subcontracts.

[ ]    (vi) Franchise, marketing, and management agreements.

       (vii) Schedules of charges for the MA Organization's fee-for-service
patients.

       (viii) Matters pertaining to costs of operations.

[ ]    (ix) Amounts of income received, by source and payment.

[ ]    (x) Cash flow statements.

[ ]    (xi) Any financial reports filed with other Federal programs or State
authorities.

       [422.504(d)]

<PAGE>

2. Access to facilities and records. The MA Organization agrees to the
following:

[ ] (a) The Department of Health and Human Services (HHS), the Comptroller
General, or their designee may evaluate, through inspection or other means--

[ ] (i) The quality, appropriateness, and timeliness of services furnished to
Medicare enrollees under the contract;

    (ii) The facilities of the MA Organization; and

    (iii) The enrollment and disenrollment records for the current contract
period and ten prior periods.

    (b) HHS, the Comptroller General, or their designees may audit, evaluate, or
inspect any books, contracts, medical records, documents, papers, patient care
documentation, and other records of the MA Organization, related entity,
contractor, subcontractor, or its transferee that pertain to any aspect of
services performed, reconciliation of benefit liabilities, and determination of
amounts payable under the contract, or as the Secretary may deem necessary to
enforce the contract.

    (c) The MA Organization agrees to make available, for the purposes specified
in section

[ ] (A) of this article, its premises, physical facilities and equipment,
records relating to its Medicare enrollees, and any additional relevant
information that CMS may require, in a manner that meets CMS record maintenance
requirements.

[ ] (d) HHS, the Comptroller General, or their designee's right to inspect,
evaluate, and audit extends through 10 years from the final date of the contract
period or completion of audit, whichever is later unless-

[ ] (i) CMS determines there is a special need to retain a particular record or
group of records for a longer period and notifies the MA Organization at least
30 days before the normal disposition date;

[ ] (ii) There has been a termination, dispute, or fraud or similar fault by the
MA Organization, in which case the retention may be extended to 10 years from
the date of any resulting final resolution of the termination, dispute, or fraud
or similar fault; or

[ ] (iii) HHS, the Comptroller General, or their designee determines that there
is a reasonable possibility of fraud, in which case they may inspect, evaluate,
and audit the MA Organization at any time. [422.502(e)]

[ ]  B. REPORTING REQUIREMENTS

1  The MA Organization shall have an effective procedure to develop, compile,
evaluate, and report to CMS, to its enrollees, and to the general public, at the
times and in the manner that CMS requires, and while safeguarding the
confidentiality of the doctor-patient relationship, statistics and other
information as described in the remainder of this section (B). [422.516(a)]

2  The MA Organization agrees to submit to CMS certified financial information
that must include the following:

    (a) Such information as CMS may require demonstrating that the organization
has a fiscally sound operation, including:

    (i) The cost of its operations;

[ ] (ii) A description, submitted to CMS annually and within 120 days of the end
of the fiscal year, of significant business transactions (as defined in Section
422.500) between the MA Organization and a party in interest showing that the
costs of the transactions listed in paragraph (2)(a)(v) of this section do not
exceed the costs that would be incurred if these transactions were with someone
who is not a party in interest; or

<PAGE>

      (iii) If they do exceed, a justification that the higher costs are
consistent with prudent management and fiscal soundness requirements.

      (iv) A combined financial statement for the MA Organization and a party in
interest if either of the following conditions is met:

      (aa) Thirty-five percent or more of the costs of operation of the MA
Organization go to a party in interest.

      (bb) Thirty-five percent or more of the revenue of a party in interest is
from the MA Organization. [422.516(b)]

      (v) Requirements for combined financial statements.

      (aa) The combined financial statements required by paragraph (2)(a)(iv)
must display in separate columns the financial information for the MA
Organization and each of the parties in interest.

      (bb) Inter-entity transactions must be eliminated in the consolidated
column.

      (cc) The statements must have been examined by an independent auditor in
accordance with generally accepted accounting principles and must include
appropriate opinions and notes.

      (dd) Upon written request from the MA Organization showing good cause, CMS
may waive the requirement that the organization's combined financial statement
include the financial information required in paragraph (2)(a)(v) with respect
to a particular entity. [422.516(c)]

[ ]   (vi) A description of any loans or other special financial arrangements
the MA Organization makes with contractors, subcontractors, and related
entities.

[ ]   (b) Such information as CMS may require pertaining to the disclosure of
ownership and control of the MA Organization. [422.502(f)(1)(ii)]

      (c) Patterns of utilization of the MA Organization's services.

3. The MA Organization agrees to participate in surveys required by CMS and to
submit to CMS all information that is necessary for CMS to administer and
evaluate the program and to simultaneously establish and facilitate a process
for current and prospective beneficiaries to exercise choice in obtaining
Medicare services. This information includes, but is not limited to:

      (a) The benefits covered under the MA plan;

[ ]   (b) The MA monthly basic beneficiary premium and MA monthly supplemental
beneficiary premium, if any, for the plan.

[ ]   (c) The service area and continuation area, if any, of each plan and the
enrollment capacity of each plan;

[ ]   (d) Plan quality and performance indicators for the benefits under the
plan including

[ ]   (i) Disenrollment rates for Medicare enrollees electing to receive
benefits through the plan for the previous 2 years;

[ ]   (ii) Information on Medicare enrollee satisfaction;

[ ]   (iii) The patterns of utilization of plan services;

[ ]   (iv) The availability, accessibility, and acceptability of the plan's
services;

[ ]   (v) Information on health outcomes and other performance measures required
by CMS;

[ ]   (vi) The recent record regarding compliance of the plan with requirements
of this part, as determined by CMS; and

      (vii) Other information determined by CMS to be necessary to assist
beneficiaries in making an informed choice among MA plans and traditional
Medicare;

      (e) Information about beneficiary appeals and their disposition;

[ ]   (f) Information regarding all formal actions, reviews, findings, or other
similar actions by States,
<PAGE>
other regulatory bodies, or any other certifying or accrediting organization;

[ ] (g) Any other information deemed necessary by CMS for the administration or
evaluation of the Medicare program. [422.502(f)(2)]

1  The MA Organization agrees to provide to its enrollees and upon request, to
any individual eligible to elect an MA plan, all informational requirements
under Section 422.64 and, upon an enrollee's, request, the financial disclosure
information required under Section 422.516. [422.502(f)(3)]

2  Reporting and disclosure under ERISA.

[ ] (a) For any employees' health benefits plan that includes an MA Organization
in its offerings, the MA Organization must furnish, upon request, the
information the plan needs to fulfill its reporting and disclosure obligations
(with respect to the MA Organization) under the Employee Retirement Income
Security Act of 1974 (ERISA).

[ ] (b) The MA Organization must furnish the information to the employer or the
employer's designee, or to the plan administrator, as the term "administrator"
is defined in ERISA.

[422.516(d)]

1  Electronic communication. The MA Organization must have the capacity to
communicate with CMS electronically. [422.504(b)]

2  Risk Adjustment data. The MA Organization agrees to comply with the
requirements in Section 422.310 for submitting risk adjustment data to CMS.
[422.504(a)(8)]

                                   Article VII

                           Renewal of the MA Contract

A. Renewal of contract: In accordance with Section 422.505, following the
initial contract period, this contract is renewable annually only if-

    (1) The MA Organization has not provided CMS with a notice of intention not
to renew; [422.506(a)]

[ ] (2) CMS and the MA Organization reach agreement on the bid under 42 CFR Part
422, Subpart F; and [422.505(d)]

[ ] (3) CMS informs the MA Organization that it authorizes a renewal.

[ ] B. Nonrenewal of contract

[ ] (1) Nonrenewal by the Organization.

[ ] (a) In accordance with Section 422.506, the MA Organization may elect not to
renew its contract with CMS as of the end of the term of the contract for any
reason, provided it meets the time frames for doing so set forth in
subparagraphs (b) and (c) of this paragraph.

[ ] (b) If the MA Organization does not intend to renew its contract, it must
notify --

[ ] (i) CMS, in writing, by the first Monday in June of the year in which the
contract would end, pursuant to Section 422.506

[ ] (ii) Each Medicare enrollee, at least 90 days before the date on which the
nonrenewal is effective. This notice must include a written description of all
alternatives available for obtaining Medicare services within the service area
including alternative MA plans, Medigap options, and original Medicare and
prescription drug plans and must receive CMS approval prior to issuance.

    (iii) The general public, at least 90 days before the end of the current
calendar year, by

<PAGE>

publishing a CMS-approved notice in one or more newspapers of general
circulation in each community located in the MA Organization's service area.

[ ] (c) CMS may accept a nonrenewal notice submitted after the applicable annual
non-renewal notice deadline if --

[ ] (i) The MA Organization notifies its Medicare enrollees and the public in
accordance with subparagraph (1)(b)(ii) and (1)(b)(iii) of this section; and

[ ] (ii) Acceptance is not inconsistent with the effective and efficient
administration of the Medicare program.

[ ] (d) If the MA Organization does not renew a contract under subparagraph (1),
CMS will not enter into a contract with the Organization for 2 years from the
date of contract separation unless there are special circumstances that warrant
special consideration, as determined by CMS.

[422.506(a)]

    (2) CMS decision not to renew.

[ ] (a) CMS may elect not to authorize renewal of a contract for any of the
following reasons:

[ ] (i) The MA Organization's level of enrollment, growth in enrollment, or
insufficient number