EXHIBIT 10.2 HEALTH INSURANCE CONTRACT NORTH HEALTH REGION

EXHIBIT 10.2

HEALTH INSURANCE CONTRACT
NORTH HEALTH REGION

Between

THE PUERTO RICO HEALTH
INSURANCE ADMINISTRATION

and

TRIPLE S, INC.

July 1, 2002

CONTRACT

This Agreement entered into this 13th day of June, 2002 at San ▇▇▇▇,
Puerto Rico, by and between PUERTO RICO HEALTH INSURANCE ADMINISTRATION, a
public instrumentality of the Commonwealth of Puerto Rico, organized under Law
72 approved on September 7, 1993, hereinafter referred to as the
"ADMINISTRATION", represented by its Executive Director, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, and TRIPLE-S, Inc., a domestic corporation duly organized and doing
business under the laws of the Commonwealth of Puerto Rico, with employer social
security number ▇▇-▇▇▇▇▇▇▇, hereinafter referred to as the "INSURER",
represented by its President, ▇▇▇▇▇▇▇ ▇▇▇▇▇.

WITNESSETH

In consideration of the mutual covenants and agreements hereinafter set
forth, the parties, their personal representatives and successors, agree as
follows:

FIRST: The ADMINISTRATION has the responsibility to seek, negotiate,
and contract with public and private insurers, health care insurance programs
that eventually will be capable of providing all citizens that reside in the
island of Puerto Rico access to quality health care services, regardless of
their economic condition and capacity to pay.

SECOND: Law 72 of September 7, 1993 dictates the express policy that
empowers the ADMINISTRATION to seek, negotiate and contract health insurance
programs that will allow its beneficiaries access to quality health services, in
particular the medically indigent and the public employees of the Central
Government and pensioners.

THIRD: The ADMINISTRATION published a Request For Proposals for the
NORTH Health Area/Region, seeking to provide health insurance coverage to all
eligible beneficiaries in said health Area/Region, by contracting with private
insurers.

FOURTH: Pursuant to the terms of the aforementioned Request For
Proposals, published on April, 2002 different private health insurers submitted
to the ADMINISTRATION proposals to underwrite the health insurance for the
Health Area/Region.

FIFTH: The proposals submitted by the proposing insurers were
thoroughly evaluated by a Evaluation Committee, as well as an Administrative
Evaluation Committee within the ADMINISTRATION, as a result of which, a
recommendation was presented to the Board of Directors of the ADMINISTRATION.

SIXTH: The Board of Directors of the ADMINISTRATION, after a careful
and complete analysis of all technical and administrative elements of the
proposals, decided to award the INSURER the contract to underwrite and
administer the health insurance for the NORTH Health Area/Region, composed of
ARECIBO, BARCELONETA, CAMUY,

CIALES, FLORIDA, HATILLO, LARES, MANATI, MOROVIS, QUEBRADILLAS, UTUADO AND ▇▇▇▇
BAJA.

SEVENTH: The benefits to be provided under the plan offered bY the
INSURER are divided in three types of coverage: 1) the Basic Coverage that
includes preventive, medical, hospital, surgical, diagnostic tests, clinical
laboratory tests, x-rays, emergency room, ambulance, maternity and prescription
drug services; 2) Dental Coverage based on the free choice of participating
dentists from INSURER's network, and 3) the Special Coverage that includes
benefits for catastrophic conditions, expensive procedures and specialized
diagnostic tests. Benefits shall be provided by the INSURER in strict compliance
with Law Number 72 of September 7, 1993, as amended, which is made part of this
contract, the terms and conditions contained in Addenda I, II, III, and IV of
this contract, and subject to the following:

TERMS AND CONDITIONS

ARTICLE I
DEFINITIONS

ACCESS: Adequate availability of all necessary health care services included in
the plan being contracted to fulfill the needs of the beneficiaries of the
program.

ADMINISTRATION: Puerto Rico Health Insurance Administration.

ADVANCE DIRECTIVES: A written instruction such as a living will or durable power
of attorney for health care, recognized under the laws of the Commonwealth of
Puerto Rico (whether statutory or as recognized by the courts of the
Commonwealth), relating to the provision of health care when the individual is
incapacitated.

ANCILLARY SERVICES (Ancillary Charges): Supplemental services, including
laboratory, radiology, physical therapy, and inhalation therapy, which are
provided in conjunction with medical or hospital care.

ASSMCA - Mental Health and Substance Abuse Administration: Spanish acronym for
the Puerto Rico Mental Health and Substance Abuse Administration, the state
agency that has been delegated the responsibility for the planning,
establishment of mental and substance abuse policies and procedures, the
coordination, development and monitoring of all mental health and substance
abuse services rendered to beneficiaries under the Puerto Rico Health Insurance
Program.

BENEFICIARY: Any person that under Law 72 of September 7, 1993 is determined
eligible to receive services, is reported as such to the INSURER by the
ADMINISTRATION, and is enrolled in the plan.

CAPITATION: That portion of the premium paid to the INSURER which is disbursed
to the HCO in payment for all the benefits provided under the Basic Coverage to
the beneficiaries who have selected said HCO, as hereinafter defined.

CO-INSURANCE: Percentage based participation of the beneficiary on each loss or
portion of the cost of receiving a service.

CONTRACT: The present contractual relationship between the ADMINISTRATION and
the INSURER, and to which, 1) Law 72 of September 7, 1993, 2) the Request For
Proposal, 3) the INSURER's Proposal documents, 4) the representations and
assurances provided at the clarification meeting and 5) all other certifications
issued by the INSURER following said clarification meeting, are herein
incorporated by reference. All of the five (5) preceding set of documents are
integral parts of this contract.

CONTRACT TERM: The contract term is for three consecutive twelve (12) month
periods after the effective date of this contract. The contract may be
terminated at the conclusion of each twelve month period pursuant to Article
XXVIII (3) (4).

CMS: Acronym for the Centers for Medicare and Medicaid Services.

DEDUCTIBLE: A fixed amount that the beneficiary has to pay to the provider as
part of the cost of receiving a health care service, as provided in Addendum I
of this contract.

ELECTIVE SURGERY: A surgical procedure that, even though medically necessary and
prescribed by a physician, does not need to be performed immediately because no
imminent risk to life, permanent damage of a vital organ or permanent impairment
is present, and which therefore can be scheduled.

EMERGENCY MEDICAL CONDITION: (Prudent Layperson Standard) a medical condition
presenting symptoms of sufficient severity that a person with average knowledge
of health and medicine would reasonably expect the absence of immediate medical
attention to result in (i) placing their health or the health of an unborn child
in immediate jeopardy, (ii) serious impairment of bodily functions, or (iii)
serious dysfunction of any bodily organ or part.

ENCOUNTER: A contact between a patient and health professional during which a
service is provided. An encounter form records selected identifying, diagnostic
and related information describing an encounter.

FAMILY CONTRACT: The benefits provided to the following eligible beneficiaries;
1) principal subscriber; and 2) his or her spouse (legally married or common
law); and 3) his or her children (legally, adopted, ▇▇▇▇▇▇ or step children)
under 21 years old that depend on the principal subscriber for subsistence; and
4) individuals under 21 years of age who have no children and live in common law
with one of the eligible children in the same household; and 5) his or her
dependents, of any age, who are blind or permanently disabled and live in the
same household. Female beneficiaries (except

spouse) covered under family contract who become pregnant shall constitute a
separate subscriber under an individual contract as of the first day of the
month the pregnancy is diagnosed and reported to the INSURER.

HEALTH CARE ORGANIZATION / HCO: A health care entity supported by a network of
providers and which is based on a managed care system and accessed through a
primary care physician (PCP). Said entity has contracted with the insurer to
provide, in adequate facilities, the benefits provided for within the Basic
Coverage or the Basic and Special Coverage of the health insurance contract. For
the purpose of this contract the HCO will be identified by its descriptive name
such as Primary Care Center, Physician Hospital Organization (PHO), Independent
Practice Association (IPA), Primary Provider Group (PPG), or any other model.
The INSURER is responsible for the availability of all necessary providers to
cover both the basic and the special coverage.

HEALTH AREA/REGION: The NORTH Health Area/Region as defined by the
ADMINISTRATION, composed of ARECIBO, BARCELONETA, CAMUY, CIALES, FLORIDA,
HATILLO, LARES, MANATI, MOROVIS, QUEBRADILLAS, UTUADO AND ▇▇▇▇ BAJA.

HIPAA: The Health Insurance Portability and Accountability Act is federal
legislation (Public law 104-191) approved by Congress in August 21,1996
regulating the continuity and portability of health plans, mandating the
adoption and implementation of administrative simplification standards to
prevent, fraud, abuse, improve health plan overall operations and guarantee the
privacy and confidentiality of individually identifiable health information.

INDIVIDUAL CONTRACT: The benefits provided to eligible subscribers that are: 1)
children, adolescents and unmarried single adults without minor dependents; or
2) married adults whose spouse and/or dependents are not eligible for coverage
under this program; or 3) Female beneficiaries (except spouse) covered under
family contract who become pregnant as of the first day of the month the
pregnancy is diagnosed and reported to the INSURER.

INDIVIDUAL PRACTICE ASSOCIATION (IPA): A managed care delivery model in which
the INSURER contracts with a physician organization which, in turn, contracts
with individual physicians. The IPA physicians practice in their own offices and
continue to see their fee-for-service patients. This type of system combines
prepayment with the traditional means of delivering health care, a physician
office/private practice. For the purpose of this contract, an IPA will be
considered a Health Care Organization (HCO).

INSURER: TRIPLE-S, is a private entity which meets the definition of a managed
care organization (MCO), previously known as a state defined HMO, has a
comprehensive risk contract primarily for the purpose of providing health care
services, making the services it provides accessible (in terms of timeliness,
amount, duration and scope) as those services are to other non-Medicaid
recipients within the Area/Region served by the entity and meets the solvency
standards under the law as a state licensed risk-bearing entity.

MANAGED BEHAVIORAL HEALTH ORGANIZATION (MBHO): An entity constituted by Mental
Health Participating Providers and organized with the purpose of negotiating
contracts to provide mental health and substance abuse services.

MEDICARE: Federal health insurance program for people 65 or older, people of any
age with permanent kidney failure, and certain disabled people according to
Title XVIII of the Social Security Act. Medicare has two parts: Part A and Part
B. Part A is the hospital insurance that includes inpatient hospital care and
certain follow up care. Part B is medical insurance that includes doctor
services and many other medical services and items. A Medicare recipient is a
person who has either Part A or Part A and B insurance.

MEDICARE BENEFICIARY: Any person who is a Medicare recipient of Part A or Part A
and B and complies with the definition of beneficiary established in this
article.

MEDICALLY NECESSARY SERVICES: Shall mean services or supplies provided by an
institution, physician, or other providers that are required to identify or
treat a beneficiary's illness, disease, or injury and which are:

a. Consistent with the symptoms or diagnosis and treatment of the
enrollee's illness, disease, or injury; and

b. Appropriate with regard to standards of good medical practice;
and

c. Not solely for the convenience of an enrollee, physician,
institution or other provider; and

d. The most appropriate supply or level of services which can
safely be provided to the enrollee. When applied to the care
of an inpatient, it further means that services for the
enrollee's medical symptoms or condition require that the
services cannot be safely provided to the enrollee as an
outpatient; and

e. When applied to enrollees under 21 years of age, services
shall be provided in accordance with EPSDT requirements
including federal regulations as described in 42 CFR Part 441,
Subpart B, and the Omnibus Budget Reconciliation Act of 1989.

MENTAL HEALTH FACILITIES: Any premises (a) owned, leased, used or operated
directly or indirectly by or for the Managed Behavioral Health Organization
(MBHO) or its affiliates for purposes related to this Agreement; or (b)
maintained by a subcontractor or provider to provide mental health services on
behalf of the Managed Behavioral Health Organization.

MENTAL HEALTH CARVE-OUT: Specified psychiatric, behavioral, and substance abuse
services covered under the Puerto Rico Health Insurance Plan provided through a
contract with a separate entity.

NON-PARTICIPATING PROVIDER: All health care service providers that do not have a
contract in effect with the INSURER. Said provider is barred from providing
services under this contract.

PARTICIPATING PHYSICIAN: A doctor of medicine that is legally authorized to
practice medicine and surgery within the Commonwealth of Puerto Rico and has a
contract in effect with the INSURER.

PARTICIPATING PROVIDER: All health care service providers that have a contract
in effect with the INSURER.

PBM: Acronym for Pharmacy Benefits Manager.

PERSON WITH AN OWNERSHIP OR CONTROL INTEREST: A person or corporation that:
owns, directly or indirectly five percent (5%) or more of the insurer's capital
or stock or receives five percent (5%) or more of its profits; has an interest
in any mortgage, deed of trust, note, or other obligations secured in whole or
in part by the insurer or by its property or assets, and that interest is equal
to or exceeds five percent (5%) of the total property and assets of the insurer;
or is an officer or director of the INSURER.

PHARMACY BENEFITS MANAGER: The private entity contracted by the ADMINISTRATION
under the Health Reform Program to function as their pharmaceutical benefit
manager responsible, for claims processing, drug utilization review, disease
management, formulary control and beneficiary/customer information services for
pharmaceutical benefits provided by the basic, special and mental health
coverage of the Health Reform Program.

PHYSICIAN INCENTIVE PLAN: Any compensation arrangements between INSURER and
physician or physician groups that may directly or indirectly have the effect of
reducing or limiting services furnished to Medicaid recipients enrolled with the
insurer.

PRE-AUTHORIZATION: A written or electronic approval by the INSURER to the
beneficiary granting authorization for a benefit to be provided under the
Special Coverage of the program. The beneficiary is responsible for obtaining
the preauthorization for coverage in order to receive covered benefits that
require it. Failure to obtain pre-authorization precludes coverage.
Notwithstanding the aforementioned, the INSURER has the option of not requiring
pre-authorization for all services received within a particular HCO.

PREMIUM: The monthly amount that the ADMINISTRATION agrees to pay to the INSURER
as a result of having assumed the financial risk for providing the benefits to
the beneficiaries covered. Method of payment is referred to hereunder as per
member per month (PMPM).

PRIMARY CARE PHYSICIAN (PCP): A doctor of medicine legally authorized to
practice medicine and surgery within the Commonwealth of Puerto Rico, who
initially evaluates and provides treatment to beneficiaries. He/she is
responsible for determining the services required by the beneficiaries, provides
continuity of care, and refers the beneficiaries to specialized services if
deemed medically necessary. Primary physicians will be considered those
professionals accepted as such in the local and federal jurisdictions. The
following are considered primary care physicians: Pediatricians,
Obstetrician/Gynecologist, Family Physicians, Internists and General
Practitioners. Each female beneficiary with a pregnancy factor has to select an
obstetrician-gynecologist as her primary care physician. Once the pregnant woman
completes her maternity care period, she will be allowed to continue with her
primary care physician.

PROVIDER: An individual or entity that is authorized under the laws of the
Commonwealth of Puerto Rico to provide health care services.

PRICO: Acronym for the Puerto Rico Insurance Commissioner's Office, the state
agency responsible for regulating, monitoring, and licensing insurance business
in Puerto Rico.

SECOND MEDICAL OPINION: A consultation with a peer requested by the beneficiary,
the HCO, a Participating Physician or the INSURER to assess the appropriateness
of a previous recommendation for surgery or medical treatment.

SECONDARY or SPECIALTY PHYSICIAN: A physician such as a dermatologist, urologist
or cardiologist, who provides professional services on a referral from a Primary
Care Provider

SUBSCRIBER: The beneficiary covered under the individual coverage of the plan or
the principal beneficiary who grants eligibility to all those beneficiaries
included under the family coverage.

SUPPORT PARTICIPATING PROVIDERS: Health care service providers who are needed to
complement and provide support services to the Primary Care Physicians and who
have a contract with the INSURER to provide said services. A referral from the
Gatekeeper is necessary. The following will be considered support participating
providers, among others: Pharmacies, Hospitals, Health Related Professionals,
Clinical Laboratories, Radiological Facilities, Podiatrists, Optometrists, and
all those participating providers that may be needed to provide services under
the basic and special coverage considering the specific health problems of the
Area/Region.

SUPPORT PARTICIPATING PHYSICIANS: Doctors of Medicine legally authorized to
practice medicine and surgery within Puerto Rico who are needed to complement
and provide support services to the Primary Care Physicians and who have a
contract with the INSURER to provide said services. A referral from the PCP is
necessary.

QUALITY IMPROVEMENT (QI) The ongoing process of responding to data gathered
through quality monitoring efforts, in such a way as to improve the quality of
health care delivered to individuals. This process necessarily involves
follow-up studies of the measures taken to effect change in order to demonstrate
that the desired change has occurred.

UTILIZATION MANAGEMENT (UM): The process of evaluating necessity,
appropriateness and efficiency of healthcare services through the revision of
information about hospital, service or procedure from patients and/or providers
to determine whether it meets established guidelines and criteria approved by
the INSURER.

ORGANIZATION AND ADMINISTRATION

INSURER must maintain the organizational and administrative capacity
and capabilities to carry out all duties and responsibilities under this
contract.

INSURER must maintain assigned staff with the capacity and capability
to provide all services to all Beneficiaries under this contract.

INSURER must maintain an administrative office in the service area
(local office). The local office must comply with the American with Disabilities
Act (ADA) requirements for public buildings..

INSURER must provide training and development programs to all assigned
staff to ensure they know and understand the service requirements under this
contract including the reporting requirements, the policies and procedures,
cultural and linguistic requirements and the scope of services to be provided.
The training and development plan must be submitted to THE ADMINISTRATION.

INSURER must notify THE ADMINISTRATION immediately no later than 30
days after the effective date of this contract of any changes in its
organizational chart as previously submitted to THE ADMINISTRATION.

INSURER must notify THE ADMINISTRATION immediately (within fifteen (15)
working days) of any change in regional or office managers. This information
must be updated whenever there is a significant change in organizational
structure or personnel.

ARTICLE II
ELIGIBILITY AND ENROLLMENT

1. Eligibility shall be determined according to Article VI, Section 5 of
Law 72 of September 7, 1993 and the federal laws and regulations
governing eligibility requirements for the Medicaid Program.

2. The INSURER shall provide coverage for all the eligible beneficiaries
as provided in the prior section.

3. The INSURER shall inform beneficiaries, who are also Medicare
recipients with Part A or Part A and B, at the time of enrollment that
if they choose to become beneficiaries under the contracted health
insurance, the benefits provided under said contract will be accessed
exclusively through the primary care physician. In this situation:

a) bad debt reimbursement, as a result of non-payment of
deductibles and/or co-insurance, for covered Part A services
and Part B services provided in hospital setting, other than
physician services;
b) payment for covered Part A services;
c) payment for Part B outpatient services provided in a hospital
setting; and
d) all covered Part B services,

will continue to be recognized as a covered reimbursable Medicare
Program cost. Medicare beneficiaries with either Part A or Part A and B
can choose to access their Part A or Part B services from the
Medicare's providers list except that in this case the INSURER will not
cover the payment of any benefits provided through this contract.

4. The INSURER represents that neither the capitated amount paid to each
HCO nor the fee for service amount paid to all providers includes
payment for services covered under the Medicare Federal Program. The
primary care physicians, the participating providers or any other
physician contracted on a salary basis cannot receive duplicate
payments for those beneficiaries that have Medicare Part A or Part B
coverage. The INSURER further represents that it will audit and review
its billing data to avoid duplicate payment with the Medicare Program.
The INSURER shall report its findings to the ADMINISTRATION on a
quarterly basis. The ADMINISTRATION will audit and review Medicare
billing data for Part A or Part B payment for beneficiaries eligible to
said Federal Program.

5. Co-insurance and deductible for Part B services provided on an
outpatient basis to hospital clinics, other than physician services,
will be considered as a covered bad debt reimbursement item under the
Medicare program cost. In this instance, the INSURER will pay for
the co-insurance and deductibles related to the physician services
provided as a Part B service through the amount paid to the HCO, when
services are accessed through the primary care physician.

6. The INSURER guarantees to maintain adequate services for the Health
Area/Region for the prompt enrollment of all eligible beneficiaries on
a daily basis and in the order of their application. The INSURER shall
maintain sufficient facilities within the Area/Region as needed. The
subscriber shall be responsible for visiting the designated facility in
order to complete all requirements towards enrollment. The INSURER
shall enroll the beneficiary(ies) and issue the official identification
card(s) on the same day that the subscriber completes the

enrollment requirements. Initial orientation and enrollment will be
conducted pursuant to the Instructions to Insurers for Implementation
of Orientation and Subscription Process contained in Addendum II.

7. The INSURER shall be responsible to provide the subscriber with
specific information allowing for the prompt and reliable enrollment of
all eligible individuals. The ADMINISTRATION shall notify the INSURER
on a daily basis of all beneficiaries who have become eligible, as well
as those who have ceased to be eligible. The INSURER shall guarantee
the maintenance, functionality, and reliability of all necessary
systems to allow enrollment or disenrollment of subscribers.

8. The beneficiary becomes eligible for enrollment as of the date
specified in the ADMINISTRATION's notification to the INSURER.

9. The beneficiary ceases to be eligible as of the disenrollment date
specified in the ADMINISTRATION's notification to the INSURER. If the
ADMINISTRATION notifies the INSURER that the beneficiary ceased to be
eligible on or before the last working day of the month in which
eligibility ceases, the disenrollment will be effective on the first
day of the following month. Disenrollment will be effected exclusively
by a notification issued by the ADMINISTRATION.

10. If, following disenrollment, a beneficiary's contract is reinstated and
the beneficiary is re-enrolled on the same month of disenrollment, the
contract will be reinstated as of the date of re-enrollment.

11. The INSURER agrees to maintain active enrollment for those
beneficiaries reported eligible by the ADMINISTRATION. Notification of
eligible persons will be made through electronic transmissions or
machine readable media. The ADMINISTRATION will forward this data to
the INSURER in the format agreed to by both parties in accordance with
the Daily Update/Carrier Eligibility File Format as required in the
RFP.

12. Coverage under the plan shall begin the day that the enrollment process
has been completed. The INSURER will guarantee that it will be ready to
notify the ADMINISTRATION of all newly enrolled beneficiaries through
electronic or magnetic media on a daily basis upon the Administration's
request. This notification will include all new beneficiaries as of the
day before the notification is issued and will be sent to the
ADMINISTRATION no later than the following working day after the
enrollment process has been completed. Premiums shall be paid on a
pro-rata basis as of the date that the enrollment process was completed
and the official identification card has been issued, to the end of the
month, as specified in the INSURER's notification to the
ADMINISTRATION. Premium payments, if applicable, for newborn of
beneficiaries will accrue as of the date of birth of the child in the
event that the enrollment process of said new beneficiary is completed.
Premium payments shall be paid retroactively to the

INSURER upon enrollment of the newborn. The INSURER will be required to
pay the providers for the services rendered to an unenrolled newborn
during ninety (90) days from the date of birth.

The INSURER, PCP or HCO will provide orientation to the beneficiary as
soon as a baby is born to go to the INSURER's office with the necessary
documentation to receive a manual certification from the INSURER for
the newborn.

The INSURER, PCP or HCO will make every effort to make the beneficiary
go to the Department of Health Medicaid Office to register the newborn
within the ninety (90) days of his/her date of birth. It should be
emphasized to the beneficiary that failure to register the newborn
within that period will cause the newborn to loose coverage. After the
90 days period, the INSURER will not be paid premiums if the newborn is
not enrolled.

In the case in which a newborn dies before being registered at the
Medicaid Office, the INSURER must provide ASES with proof of the birth
and of the death of the newborn. ASES will then pay premiums for the
period from the birth of the newborn until his death.

In the case in which the family unit ceases to be eligible before the
newborn is registered at the Medicaid Office, the INSURER must provide
ASES with proof of the birth of the newborn. ASES will then pay
premiums from the date of birth of the newborn until the termination of
eligibility of the family.

13. In case that an individual has been certified as eligible by the
Department of Health but has not completed the enrollment process, and
he/she or his/her dependents need emergency services, the
ADMINISTRATION shall verify the eligibility status of the individual.
If the individual is eligible as a beneficiary, emergency services will
be provided as if the individual is a beneficiary and arrangements for
the issuance of the identification card will be made immediately after
the notification of eligibility is made by the ADMINISTRATION to the
INSURER. The premium in this instance will be paid to the INSURER on a
prorata basis from the moment the emergency services needed are
provided or the identification card is issued, whichever is first. For
the purpose of this situation, the enrollment process is the process
that commences at the time that the ADMINISTRATION gives notice to the
INSURER of the beneficiaries eligibility status, and results in a
letter to said beneficiary establishing the date and location for the
completion of the enrollment documents and selection of the HCO. Said
process ends when the beneficiary has selected an HCO from those
available in the Health Area/Region and has received an identification
card.

Nothing provided in this section is intended to affect a provider's
obligation to screen and stabilize an individual arriving at its
facilities for emergency treatment as defined by EMTALA and the
applicable Commonwealth laws.

14. Coverage shall end effective on the date of disenrollment. Premiums
will be paid until the effective date of disenrollment. In the event of
disenrollment while the beneficiary is an inpatient of a hospital on
the last day of the month of coverage, and continues to be an inpatient
of a hospital during the month following his disenrollment, the
ADMINISTRATION will cover the payment of the premium for that following
month. If the beneficiary remains hospitalized in subsequent months,
the conversion clause will apply for the months after the one being
paid by the ADMINISTRATION it being the INSURER's responsibility to
assure that premiums are paid. Disenrollment will be effected
exclusively by a notification issued by the ADMINISTRATION.

15. In the event that a female beneficiary, included as a dependent in a
family group, other than as the spouse, becomes pregnant, that
beneficiary will be transferred to a new family and become the head of
household of the new family. The effective date of the new family will
be the date of the first diagnosis of the pregnancy.

Such beneficiary has the right to all the services under maternity
coverage.

At the time of being diagnosed as pregnant, the physicians, the HCO
and/or the INSURER are required to provide orientation to the
beneficiary towards certifying with the Department of Health Medicaid
Office and to present herself at the INSURER to have a membership card
issued.

16. The INSURER shall not in any way discriminate nor terminate coverage of
any beneficiary(ies) for reasons due to adverse change in recipient's
health, or based on expectations that an enrollee will require high
cost care, or need of health services, or any reason whatsoever, except
for non-payment of premiums or fraudulent use of benefits or
participation of fraudulent acts, after prior notification and
consultation with the ADMINISTRATION.

17. The INSURER agrees to maintain an Enrollment Data Base which:

a) includes each subscriber and all beneficiaries;
b) contains for each subscriber and beneficiary the information
technically defined in the (Carrier Billing File/Carrier
Eligibility File) formats contained in RFP.

18. The INSURER will secure on the date of enrollment a signed statement
from the subscriber authorizing the Federal Government, the INSURER,
the ADMINISTRATION and/or their designees to review the medical record
of the subscriber and other beneficiaries, in order to determine
quality, appropriateness, timeliness and cost of services performed
under this contract. The terms, content and specifications of said
authorization shall be consistent with the standards set forth in 45CFR
164.508 et seq., part of the regulations of the Health Insurance
Portability and Accountability Act(HIPAA).

19. All individually identified information of services related to
beneficiaries which is obtained by the INSURER shall be confidential
and shall be used or disclosed by the INSURER, the HCO and/or its
participating providers only for purposes directly connected with
performance of all obligations contained in this contract. Medical
records and management information data concerning any beneficiary
enrolled pursuant to this contract shall be confidential and shall be
disclosed within the INSURER's organization or to other persons, as
authorized by the ADMINISTRATION, only as necessary to provide medical
care and quality, peer or grievance review of such medical care under
the terms of this contract and in coordination with the mental health
carve-out contract subscribed by ASSMCA and the ADMINISTRATION. The
confidentiality provisions herein contained shall survive the
termination of this contract and shall bind the INSURER, ITS HCO'S and
the INSURER's participating providers as long as they maintain any
individually identifiable information relating to beneficiaries as
provided in the implementation of the HIPAA regulation schedule to be
set forth by the Federal Government, 45 CFR 164.102 et. seq. Any
request for information which is made by third parties not related
to this contract will be forwarded to the ADMINISTRATION for
consideration, review and decision as to the pertinence of the
request and the authorization for disclosure.

Nothing in this section shall limit or affect the ADMINISTRATION's, the
INSURER and /or providers obligations regarding protected individually
identifiable health information as provided in 45 CFR 164.102 et seq.
(HIPAA) regulations.

Disclosure of individually identifiable health information to any
business associate as defined in 45 CFR 164.504(e) of the HIPAA
regulations by the INSURER shall entail the legal obligations set forth
therein.

20. The INSURER agrees to notify the ADMINISTRATION immediately of any
change in the place of residence of the subscriber, insofar as the
subscriber makes the change known to the INSURER. Address changes will
be forwarded through electronic and/or machine-readable media as
referred in paragraph sixteen.

21. The INSURER agrees to implement a program whereby eligible
beneficiaries are properly advised of the date of termination of their
eligibility so as to assure that they complete the recertification
process prior to said date. Said program should provide for an
initial notice of the termination date at least ninety (90) days prior
to the effective date of the eligibility termination.

22. The INSURER hereby commits to comply with the electronic transactions,
security and privacy requirements of the HIPAA regulations as provided
in 45CFR 160 and 142 et seg. within the implementation dates set forth
therein or by subsequent regulations schedule.

23. DISENROLLMENT

The INSURER has a limited right to request a beneficiary be disenrolled
from INSURER without the beneficiary's consent. THE ADMINISTRATION must
approve any INSURER request for disenrolling a beneficiary for cause.

Disenrollment of a beneficiary may be permitted under the following
circumstances:

(a) Beneficiary misuses or loans his/her membership card to
another person to obtain services.

(b) Beneficiary is disruptive, unruly, threatening or
uncooperative to the extent that beneficiary's membership
seriously impairs INSURER's or provider's ability to provide
services to beneficiaries or to obtain new beneficiaries, and
beneficiary's behavior is not caused by a physical or other
mental health condition.

The INSURER must take reasonable measures to improve a beneficiary's
behavior prior to requesting disenrollment and must notify beneficiary
of its intent to disenroll. Reasonable measure may include providing
education and counseling regarding the offensive acts or behavior.

INSURER must notify the beneficiary of the INSURER's decision to
disenroll after reasonable measures have failed to remedy the problem.

If the beneficiary disagrees with the decision to disenroll the
beneficiary from INSURER, the beneficiary must be notified of the
availability of the Complaints and Grievances Procedure and the
ADMINISTRATION's fair hearing process, as provided by Law 72 of
September 7, 1993, as amended.

ARTICLE III
RIGHT TO CHOOSE

1. Each principal subscriber shall have the right to select an HCO from
those available in the health Area/Region which at no time will be less
than two (2) HCO's at each municipality, one of which has to be a
privatized or non-privatized government or municipal facility if
available, and subject to compliance with INSURER's requirements for
HCO's. The selection of the HCO and primary care physician will be made
by the beneficiaries at the INSURER's local or regional offices.

The right of beneficiaries to transfer or change from an HCO shall be
made at any time without cause during the first 90 days following the
date of the

beneficiary's initial enrollment or the date of enrollment notice is
sent, whichever is later, and at most once every twelve (12) months
thereafter. The following examples are considered causes for
disenrollment: (1) the beneficiary moves out of the area of service of
the HCO and is not within a reasonable distance from the area of the
service of the HCO; (2) the HCO does not cover the service because of
moral and religious objections; (3) the beneficiary needs related
services to be performed at the same time; not all related services are
available within the network; and the beneficiary's primary care
provider or another provider determines that receipt of services
separately would subject the beneficiary to unnecessary risk; and, (4)
other reasons, including but not limited to, poor quality of care, lack
of access to services and lack of access to experienced providers
dealing with the beneficiary's health care needs. The beneficiary shall
receive proper written notification at least 60 days prior to the end
of each 12 month enrollment period from the INSURER.

2. Each HCO will have available at least one of each specialist considered
a primary care physician and shall meet the specification of the ratio
specified in Article VI, and will have a sufficient number of primary
care physicians to provide health care services to all beneficiaries
according to the ratio specified in Article VI. Furthermore, the
INSURER will provide to each HCO a network with a sufficient number of
participating providers to render all services included under the
basic, special and dental coverage to beneficiaries pursuant to the
ratio specified in Article VI.

3. The beneficiary shall have the right to choose his or her primary care
physician from those available within the HCO selected by the principal
subscriber. Said right also encompasses the change of the selected
primary physician at any time by making the proper administrative
arrangements within the HCO in conformity with the HCO's established
policy. The selected primary care physician or the substitute on-duty
primary care physician within the HCO must be available on a 24 hour
basis for emergencies and/or telephone consultations. Each HCO must
have available all of the primary care physicians (family physicians,
internists, general practitioners, pediatricians and
obstetrician-gynecologist) subject to waivers in case of unavailability
of a specific provider.

4. A primary care physician can only act as such in only one (1)
municipality within the Health Area/Region subject of this contract and
must be available to attend the health care needs of the beneficiary on
a twenty four (24) hour basis, seven (7) days a week.

5. A primary care physician can only act as such in only one (1) HCO
within the Health Area/Region subject of this contract and must be
available to attend the health care needs of the beneficiary on a
twenty four (24) hour basis, seven (7) days a week.

6. Each female beneficiary may select (i) primary care physician, or (ii)
primary care i physician and obstetrician-gynecologist as her primary
care physician. If the female is pregnant, the
obstetrician-gynecologist automatically will become the primary care
physician; if one is not previously selected, she will then have to
choose an obstetrician-gynecologist as her primary care physician. Once
the pregnant woman completes her maternity care period, she will be
allowed to continue with her original primary care physician.

7. Any subscriber may change the selected HCO subject to the provisions of
Section I, above. If the request for a change of HCO is filed with the
INSURER on or before the fifth day of a month, the change of HCO will
become effective on the first day of the following month. If the change
is filed after the fifth day of the month, the change of HCO will be
effective on the first day of the second succeeding month. Selection
guidelines are contemplated in Article VI, paragraph 3 of this
contract.

8. The beneficiary shall have the right to choose the provider to be
referred to from those participating providers within the HCO's
network that are under contract with the INSURER's for benefits covered
under the Basic and Special Coverage.

9. Dental services will be provided through the INSURER's network of
dentists for the health insurance services contracted. Each subscriber
will have the right to select a dentist within the INSURER's network to
receive dental services. The accepted dentist/beneficiary ratio is one
(1) dentist for each one thousand three hundred fifty (1,350)
beneficiaries.

10. In the event that HCO's under 330 Projects of the Rural Health
Initiative have contracts with specialists, support participating
providers, or support participating physicians, either on a
fee-for-service basis or on a salary basis, the INSURER will be
responsible for gathering and reporting all required data including the
payment of services described in Article VII, Section five (5), Article
XV, sections four (4) and eight (8), and the Claim File Layout formats
as required in the RFP.

11. The INSURER will provide to each principal, subscriber a complete list
of all participating physicians and participating providers, with
addresses and specialties or health related services offered, in order
to allow the beneficiary to choose among them.

12. The beneficiary shall also have the right to choose the pharmacy
according to applicable PBM guidelines established by the
ADMINISTRATION and any other participating providers among those
contracted by the ADMINISTRATION for basic and/or special coverage
services, said guidelines to become effective sixty (60) days after
notice to INSURER. The ADMINISTRATION will determine the acceptable
pharmacy/beneficiary ratio in order to assure access to the pharmacy
benefits. The right to choose requires the availability of sufficient
number of pharmacies in each municipality of residence of the
beneficiaries.

13. The INSURER will develop and effectively disseminate an education and
orientation program in order to insure that all eligible beneficiaries
are aware of their rights under this contract, including their right to
choose physicians and providers. The ADMINISTRATION reserves the right
to make changes, modifications and recommendations to said program in
coordination and agreement with the INSURER. This program shall be
subject to approval by the ADMINISTRATION prior to its implementation
and in compliance with the marketing guidelines and prohibitions
established in Article IX.

14. Notwithstanding the foregoing, the ADMINISTRATION shall preserve the
right in coordination with INSURER, to expand, limit or otherwise amend
the provision of services as provided for herein and/or to negotiate in
coordination with the INSURER, cost saving and efficiency improvement
measures. In those cases in which the ADMINISTRATION acts on its own,
changes to the provision of services shall be notified to the INSURER
no later than 30 days prior to implementation. Said modifications will
take place after consultation and cost negotiation with the INSURER and
prior approval by CMS.

ARTICLE IV
SECONDARY PAYOR

1. The INSURER shall be a secondary payor to any other party liable in any
claim for services to a beneficiary, including but not limited to: the
INSURER itself, Medicare, other insurers or managed care organizations,
health maintenance organizations, non-profit INSURER's operating under
law 152 approved May 9, 1942 as amended, "Asociacion de Maestros de
Puerto Rico", medical plans sponsored by employee organizations, labor
unions, and any other entity that results liable for the benefits
claimed against the INSURER for coverage to beneficiaries.

2. It shall be the responsibility of the INSURER to ascertain that the
aforementioned provisions of Law 72 of September 7, 1993 are enforced
and that the INSURER acts as secondary payor to any other medical
insurance.

3. The ADMINISTRATION and the INSURER will cooperate in the exchange of
third parties health insurance benefits information. To this effect the
INSURER will comply fully with the "Carta Normativa Numero N-E-5-95-98"
issued by the Office of the Insurance Commissioner of Puerto Rico and
the HIPAA regulations provisions cited elsewhere in this contract.

4. The INSURER will make the most diligent best efforts to determine if
beneficiaries have third party coverage and will attempt to utilize
such coverage when applicable.

The INSURER will be permitted to retain 100% of the collections from
subrogation. The plan's experience will be credited with the
amount collected from said primary payor, once payment is made and the
INSURER recovers payments according to the corresponding transaction
process established. If the provider detect that a beneficiary have
other health plan coverage not identified in the beneficiary card, the
provider will ▇▇▇▇ the primary payor and will provide the information
to the INSURER.

5. The INSURER must report quarterly to the ADMINISTRATION the amounts
collected from third parties for health services provided. Said reports
must provide a detailed description of the beneficiary's name,
contract number, third party payor name and address, date of service,
diagnosis and provider's name and address and identification number.

6. The INSURER must report quarterly to the ADMINISTRATION the amounts
collected from third parties for health services provided according
with standard format to be adopted by the ADMINISTRATION. Said reports
must provide a detailed description of the beneficiary's name,
contract number, third party payor name and address, date of service,
diagnosis and provider's name and address and identification number.

7. The INSURER shall develop specific procedures for the exchange of
information, collections and reporting of other primary payor sources
and is required to verify its own eligibility files for information on
whether or not the beneficiary has private health insurance within the
INSURER.

8. The INSURER must implement and execute an effective and diligent
mechanism in order to assure the collection from primary payors of all
benefits covered under this contract. Said program, mechanisms and
method of implementation shall be reported to the ADMINISTRATION as of
the first date of the effectiveness of this contract.

9. Failure of the INSURER to comply with this Article may, at the
discretion of the ADMINISTRATION, be cause for the application of the
provisions under Article XXXIII.

ARTICLE V
EMERGENCIES

1. In cases of emergency or immediate need of medical care within the
Commonwealth of Puerto Rico, the INSURER will be responsible for the
payment of emergency service provided to beneficiaries when the
emergency or

immediate need of medical care occurs within its network or outside of
its network or the geographical Area/Region of the selected HCO's
emergency care facility. Such services must be paid by the INSURER
regardless of whether the entity that furnishes the service has
contracted with the INSURER and no prior authorization shall be
required by the INSURER for the provision of emergency services. The
INSURER will assume the payment of the medical screening examinations
or other medically necessary emergency services, whether or not the
patients meets the prudent layperson standard, in the event that the
beneficiary's PCP or any INSURER representative or provider instructs
them to seek emergency care within or out of its network area/region.

Such services shall consist of whatever is necessary to stabilize the
patient's condition, unless the expected medical benefits of a transfer
outweigh the risk of not undertaking the transfer, and the transfer
conforms with all applicable requirements. The stabilization services
includes all treatment that may be necessary to assure within
reasonable medical probability, that no material deterioration of the
patients condition is likely to result from or occur during discharge
of the patient or transfer of patient to another facility.

In the event of a disagreement with the provider concerning whether a
patient is stable enough in order to be discharged or transferred or
whether the medical benefits outweigh the risk, the judgement of the
attending physician caring for the enrollee will prevail and oblige the
INSURER. Such services shall be provided in such a manner as to allow
the subscriber to be stable for discharge or transfer as defined by
EMTALA, in order to safely return the subscriber to the corresponding
HCO, or to an appropriate participating provider for continuation of
treatment.

2. Since emergency care is of utmost concern to the ADMINISTRATION, the
INSURER shall require that adequate ambulance transportation and
emergency medical care are available. Each municipality shall have
access to an emergency care system composed of ground, air and maritime
ambulance transportation as necessary, and emergency medical care.

3. Ambulance transportation and emergency care will be subject to periodic
reviews by applicable governmental agencies to ensure the highest
quality of services.

4. All participating providers shall provide immediate emergency care
services to beneficiaries when requested.

5. Emergency care services as well as ambulance transportation services
shall exist in each municipality comprising the health area/region,
24hours a day, and 365 days yearly, operated by an HCO, or by other
participating providers.

6. The INSURER and each HCO is required to provide access to emergency
care and ambulance transportation services within their own facilities,
through their contracted, participating providers or through contract
with third parties that

guarantee said emergency care and ambulance transportation twenty four
(24) hours a day, seven (7) days a week.

7. The INSURER will assure that each HCO makes the necessary arrangements
to have readily available ambulance services in good mechanical
condition and properly equipped, in order to assure a prompt and
effective ambulance transportation service.

8. The INSURER or the HCO will establish Urgent Care Centers within the
Health Area/Region. These include physician offices and clinics with
extended hours. These Urgent Care Centers may complement emergency care
services but at no time will they substitute the requirement to have
emergency care services and ambulance transportation available at each
municipality 24 hours a day, 7 days a week and 365 days yearly.

9. The INSURER will provide beneficiaries access to a 24-hour-a-day
toll-free hotline with licensed qualified professionals to help
beneficiaries with questions about particular medical conditions and to
guide them to appropriate facilities (emergency rooms, urgent care
centers, among others). Notwithstanding, the aforementioned statement,
the beneficiary will have the right to choose to attend an emergency
room if he believes his condition is an emergency medical condition, as
defined in this contract, without prior need of authorization or
certification.

ARTICLE VI
ACCESS TO BENEFITS

1. The INSURER will contract all available private providers that meet its
credentialing process and agree to its contractual terms, in order to
assure sufficient participating providers, to satisfy the demand of
covered services by the beneficiaries enrolled in the program.
Considering the expected mix between private patients and beneficiaries
the accepted physician/beneficiary ratio will be 1:1,700 for primary
care physicians; 1:2,200 for specialists and 1:1,600 for all
physicians. In the event that the HCO's provides services only to
beneficiaries under this contract, the physician/beneficiary ratio will
be the same to that applicable when there is a mix between private
patients and beneficiaries. The INSURER will assure compliance with
said physician/beneficiary ratio.

2. The INSURER shall be responsible to contract all the necessary health
care services and participating providers to insure that all the
benefits covered under the Basic, Dental and Special Coverage of the
plan are rendered, through the INSURER's participating providers with
the timeliness, amount, duration and scope as those services are
rendered to non-Medicaid recipients within the area/region served.

3. Every subscriber shall be able to select from at least two (2) HCO's
with sufficient enrollment capacity in his or her municipality, one of
which will be a privatized government facility, if available and
subject to compliance with INSURER's requirements for HCO's. Each
subscriber shall also be able to choose the HCO outside his or her
municipality of domicile as provided for in Article III, paragraph 1 of
this contract.

5. Contracts between the INSURER and HCO's and between the INSURER and its
participating providers shall be independent contracts specifically
designed to cover all terms and conditions contained in this contract.
Coverage afforded to beneficiaries under this contract constitutes a
direct obligation on the part of the INSURER's participating providers
to comply with all terms and conditions contained herein.

6. HCO enrollment shall be conditioned on the availability of adequate
health care services. It shall be the INSURER's responsibility to
maintain a constant assessment of the enrollment capacity of each HCO.
Adequate health care services will be those determined acceptable under
the ADMINISTRATION's Compliance Evaluation Program as outlined in
Article XVII of this contract.

7. That INSURER shall be responsible for communicating to its
participating providers the public policy that prohibits provider
inquiries with the purpose of determining if the beneficiary is subject
to the benefits provided under Law 72 of September 7, 1993.

8. The INSURER is responsible for the implementation, development and
maintenance of an adequate system for referrals of health services
under this contract. The referral system must be approved by the
ADMINISTRATION and must be audited periodically by the INSURER and the
ADMINISTRATION. In no way the INSURER, the HCO's or any participating
provider or health organization will submit for approval, specialists
referrals to any internal or external committee or will interfere,
prohibit, or restrict any health care professional's advice within
their scope of practice.

9. All referral systems must comply with timeframes established in
paragraph (23). If the system developed by the INSURER is by electronic
means, it must be installed at all primary care offices. It is
unacceptable to force the beneficiary to move to another facility to
obtain referrals.

10. The INSURER assures the ADMINISTRATION that no HCO'S or participating
providers will impose limit quotas or restrain services to
subcontracted providers

for the services medically needed (e.g. laboratory, pharmacies, or
other services).

11. The INSURER shall expedite access to benefits of beneficiaries
diagnosed with conditions under the Special Coverage. The
identification of these beneficiaries will allow rapid access of the
medical services covered under our Special Coverage.

12. Any denial, unreasonable delay or rationing of services to the
beneficiaries is expressly prohibited. The INSURER shall require strict
compliance with this prohibition by its participating providers or any
other entity related to the rendering of medical care services to the
beneficiaries. Any action in violation of this prohibition shall be
subject to the provisions of Article VI, Section 6 of Law 72 of
September 7, 1993. Furthermore, the INSURER shall be responsible for
posting information at every HCO, addressed to the beneficiaries,
stating the policy that prohibits denying, unreasonably delaying or
rationing services by participating providers or any other entity
related to the rendering of medical care services to the beneficiaries,
and providing information on procedures for filing a grievance on the
subject. The INSURER shall notify the HCO's and participating providers
that they must comply with the policy that prohibits the denial, the
unreasonable delay or the rationing of services by participating
providers or any other entity rendering medical services to
beneficiaries, and further that they must provide information on
procedures for filing a grievance. The INSURER shall comply with the
performance measures established and scheduled by the ADMINISTRATION.

13. The INSURER will ensure that HCO's and participating providers have a
mix of patients distributed between private and eligible beneficiaries
so as to avoid any possibility of discrimination by reason of medical
indigence, whenever feasible.

14. No participating provider, or its agents, may deny a beneficiary access
to medically necessary health care services, except for the reasons
specified in Article VI, section 6 of Law 72 of September 7, 1993.

15. The INSURER is responsible for having an adequate number of
participating physicians and providers to supply all the benefits
offered in the Basic, Dental and the Special Coverage of the contracted
health insurance. The benefits under the Basic, Special and Dental
coverage will be provided to the beneficiaries at the location of the
participating providers.

16. The INSURER is responsible to have available all participating
providers needed in order to render all the medically necessary
services required to provide the beneficiaries with the benefits
included in the Basic, Dental and Special Coverage of the contracted
health insurance as specified in Addendum I of this contract.

17. The INSURER agrees to require compliance by all participating
physicians and providers with all provisions contained in this
contract.

18. The INSURER has a continuous legal responsibility toward the
ADMINISTRATION to assure that all activities under this contract are
carried out. INSURER will use its best efforts to prevent unauthorized
actions by HCO's or participating providers. INSURER will take
appropriate measures to ensure that all activities under this Contract
are carried out. Failure to properly discharge the obligation to
assure, by all means necessary and appropriate, full compliance with
said activities, shall result in the termination of this contract as
provided in Article XXXIII hereof.

19. Pursuant to the Health Reform Concept of 1993, the INSURER shall
contract as participating providers those Commonwealth owned facilities
that have been privatized in the Health Area/Region by virtue of Laws
103 of July 12, 1985, and 190 of September 5, 1996, the 330 and 339
Projects of the Rural Health Initiatives, those State owned facilities
not privatized, as well as the privatized or non privatized municipally
owned facilities in the different areas/regions and regions which will
complement access to covered medical services, subject to its
credentialing requirements and contractual terms.

20. The INSURER assures the ADMINISTRATION that physician and providers of
services under this contract will provide the full range of medical
counseling that is appropriate for beneficiary's condition. In no way
the INSURER or any of its contractors may interfere, prohibit, or
restrict any health care professional's advice within their scope of
practice, regardless of whether a care or treatment is covered under
the contract.

21. The INSURER assures the ADMINISTRATION that its Physician Incentive
Plan does not in any way compensate directly or indirectly physicians,
individual physicians, group of physicians or subcontractors as an
inducement to reduce or limit medically necessary services furnished to
individual enrollees and that it meets or exceeds the stop-loss
protection and enrollee survey and disclosure requirements under the
Social Security Act. The INSURER shall ensure that at the intermediate
level all physician providers groups are afforded with adequate
stop-loss protection within the required thresholds under the Medicaid
Program regulations.

22. The INSURER assures that it will provide an adequate stop-loss
insurance set at no more than ten thousand ($10,000) dollars to protect
physicians from loss and comply with to the risk thresholds established
under sections 42CFR 422.208. In the event, INSURER places physicians
at substantial risk it shall conduct enrollee/disenrollee surveys not
later than one year after the effective date of the contract and at
least annually thereafter.

23. Timeframes for Access Requirements. INSURER must have sufficient
network of providers and must establish procedures to ensure
beneficiaries have access to routine, urgent, and emergency services;
telephone appointments; advice and Beneficiaries service lines. These
services must be accessible to beneficiaries within the following
timeframes:

- Urgent Care within 24 hours of request;

- Routine care within 2 weeks of request;

- Physical/Wellness Exams for adults must be provided within 8
to 10 weeks of the request;

- Referrals: Appointments of referrals must be delivered and
notified to beneficiaries within five (5) days from the date
prescribed by the provider. THE SERVICES REQUIRED MUST BE
DELIVERED OR RENDERED WITHIN A REASONABLE PERIOD AS MEDICALLY
NEEDED BY THE BENEFICIARY, IN A TIME FRAME WHICH MAY NOT
EXCEED THIRTY (30) DAYS FROM THE TIME OF THE APPOINTMENT,
EXCEPT IN CASES WERE THE PARTICULAR NATURE OF SPECIALIST
SERVICES REQUIRE ADDITIONAL WAITING TIME BECAUSE OF
UNAVAILABILITY OF A SPECIALTY SERVICE.

24. INSURER must establish policies and procedures to ensure access to
EPSDT Checkups be provided within ninety (90) days of new enrollment,
except that newborn beneficiaries should be seen within two (2) weeks
of enrollment, and that in all cases, and for all beneficiaries such
policies and procedures be consistent with the American Academy of
Pediatrics and EPSDT periodicity schedule which is based on the
American Academy of Pediatrics schedule and the guidelines established
by the ADMINISTRATION. The INSURER must advice the beneficiary of his
right to have a checkup.

ARTICLE VII
CONTRACTS WITH HCO's AND ALL PARTICIPATING PROVIDERS

1. All services necessary to provide beneficiaries the benefits of the
Basic, Special and Dental Coverage shall be contracted in writing with
all participating providers. The INSURER will ensure that all
provisions and requirements contained in this contract are properly
included in the contracts with the HCO's and with all participating
providers and that they are carried out by said HCO's and participating
providers. Such provisions and requirements made part of these
contracts will be properly notified to the ADMINISTRATION. Coverage
afforded to beneficiaries under this contract constitutes a direct
obligation on the part of the INSURER's participating providers to
comply with all terms and conditions contained herein.

2. The INSURER may not discriminate with respect to participation,
reimbursement or indemnification as to any provider who is acting
within the scope of the provider's license or certification under
applicable Commonwealth Law.

3. The INSURER agrees to draft, execute and enforce a specific contract
between the INSURER and the HCO and between the INSURER and its
participating providers that will include all applicable provisions
contained in this contract. The INSURER will insure that said
applicable provisions are properly complied with by the HCO's and its
network of participating providers.

To this effect, the Insurer also agrees to certify or attest that none
of his contractors, subcontractors or providers of services: (1)
consults, employs or procures services from any individual that has
been debarred or suspended from any federal agency; or (2) has a
director, partner or employee with a beneficial ownership of more than
a 5% on their organization's equity who has been debarred or suspended
by any federal agency, or (3) procures self-referral of services to any
provider in which it may have directly or indirectly any economic or
proprietary interest.

The INSURER will certify and attest that it has provided all HCO's,
complete written instructions describing procedures to be used for the
compliance with all duties and obligations arising under this contract.
These instructions will include the following information: provider
selection by beneficiaries, covered services, reporting requirements,
record- keeping requirements, grievance procedures, deductibles and
co-payment amounts, confidentiality, and prohibitions against denial or
rationing of services. Copy of these instructions will be submitted to
the ADMINISTRATION, who reserves the right to request modifications or
amendments to said instructions following consultation with the
INSURER.

4. The INSURER agrees to incorporate in its contracts with HCO's and in
those between the INSURER and its participating providers, the
following provisions, among others, contained in this contract:

a. A payment time schedule to pay the HCO's for services rendered
and for payment for services rendered by the participating
providers to the HCO's, the schedules will not exceed the time
limitation standards required by the Administration under
this contract to assure prompt payments of sums due to
providers.
b. A warranty by the HCO insuring that the method and system used
to pay for the services rendered by the HCO's network of
participating providers are reasonable and that the negotiated
terms do not jeopardize or infringe upon the quality of the
services provided.
c. A procedure that establishes how the HCO's network of
participating providers can recover from the INSURER monies
owed for services

rendered and not paid by the HCO, after the HCO's
participating provider has demanded payment from the HCO.

d. That payments received for services rendered under the health
insurance plan shall constitute full and complete payment
except for: (i) the deductibles contained in Addendum I of
this contract, and (ii) that the benefits or services rendered
are not covered. The INSURER will insure compliance with
Article XVIII, paragraphs (6) and (7) of this contract.

e. A release clause authorizing access by the ADMINISTRATION to
the participating providers' Medicare billing data for
beneficiaries covered by this contract who are also Part A and
Part A and B Medicare beneficiaries, provided that such access
is authorized by CMS and other related statutory or regulatory
provisions thereof. Access by the ADMINISTRATION shall be at
all times subject to all HIPAA regulations requirements
mentioned elsewhere in this contract.

f. That INSURER will cover the payment of Medicare Part B
deductibles and co-insurance for services received by a
beneficiary under Medicare Part B, accessed through the HCO's
primary care provider, with primary care physician's
authorization, their network of participating providers and
the participating providers of the INSURER for the basic
and/or special coverage.

g. Co-insurance and deductible for Part B services provided on an
outpatient basis to hospital clinics and other institutional
care providers, other than physician services, will be
considered as a covered bad debt reimbursement item under the
Medicare program cost. In this instance, the INSURER will pay
for the co-insurance and deductibles related to the physician
services provided as a Part B service.

h. That the only Part A deductible and co-insurance, and Part B
deductible and co-insurance for outpatient services provided
in a hospital clinic and other institutional care providers,
other that physician services, will be the one billed to
Medicare as bad debt. No other amount will be charged to these
beneficiaries. The INSURER will neither cover the payment of
Medicare Part A deductibles and co-insurance for services
received by a beneficiary under Medicare Part A nor the Part B
deductible and co insurance for services provided in hospital
clinics, other than physician services. The INSURER will cover
the deductibles and co-insurances of all Part B services
including Part B deductibles and co-insurance for physician
services provided in an outpatient basis to hospital clinics.

i. That coverage afforded to beneficiaries under this contract
constitutes a direct obligation on the part of the INSURER's
participating providers to comply with all terms and
conditions contained herein.

j. The INSURER will establish directives for allowing providers
to write prescriptions for psychotropic drugs in accordance
with the applicable agreement with the ADMINISTRATION's
Pharmacy Benefit Manager (PBM). The ADMINISTRATION's terms and
conditions for pharmacy benefit management have been agreed by
the parties and WILL BE

complied and implemented according to Addendum XIV, to the
Request for Proposal and the Benefits Coverage included
herein.

k. All performance, timeframes, administrative standards and
requirements as established under this contract.

5. The INSURER agrees to provide to the ADMINISTRATION a detailed
description of the payment methodology used to pay for services
rendered by the HCO's, HCO's network of providers (primary care
physicians and other providers), and other participating providers.
Said description of the payment methodology will also address the
methodology used by the HCO's in the distribution within their own
group of the capitation payments, fee for services or other basis for
payment of services to providers servicing said HCO's. The INSURER will
submit to the ADMINISTRATION a monthly report detailing all payments
made to the HCO, HCO's network of participating providers and to the
INSURER's participating providers classified by specialty.

6. The INSURER represents that neither the premium or the capitated
payments or capitated payments with a fee-for-service component for
services, made to HCO's, to HCO's network of participating providers,
as well as to the INSURER's participating providers, include payment of
services covered under the Medicare Federal Program.

7. As part of the terms and conditions contained in the contracts with
participating providers, the INSURER will include in those with
privatized government facilities (to include those under management
contract, that have been sold or are under lease), a provision that
will authorize the INSURER upon the written request of the Department
of Health, to withhold a determined amount from the monthly payments to
said participating providers for services rendered under this contract.
Said amount will be determined by the Department of Health on the basis
of the payments contractually agreed to between the Department of
Health of the Commonwealth of Puerto Rico and said participating
providers on account of the management fee, sale price or lease fee, as
well as 50% of the employees' payroll which the participating providers
are required to reimburse the Department of Health. The INSURER will
remit said withheld amounts directly to the Department of Health.

8. The INSURER shall provide all reasonable means necessary to ensure that
the contracting practices between its participating HCO and providers
are in compliance with federal anti-fraud provisions and particularly,
in conformity with the limitations and prohibitions of the False Claims
Act, the Anti-kickback statute and regulations and ▇▇▇▇▇ II Law and
regulations prohibiting self-referral to designated medical services by
participating medical providers.

9. To the extent feasible within INSURER'S existing claims processing
systems, INSURER should have a single or central address to which
providers must

submit claims. If a central processing center is not possible within
INSURER's existing claims processing system, INSURER must provide each
network provider a complete list of all entities to whom the providers
must submit claims for processing and/or adjudication. The list must
include the name of the entity, the address to which claims must be
sent, explanation for determination of the correct claims payer based
on services rendered, and a phone number the provider may call to make
claims inquiries. INSURER must notify providers in writing of any
changes in the claims filing list at least 30 days prior to effective
date of change. If INSURER is unable to provide 30 days notice,
providers must be given a 30-day extension on their claims filing
deadline to ensure claims are routed to correct processing center.

10. The Administration and the Department of Health Medicaid Fraud Control
Unit must be allowed to conduct private interviews of providers and the
providers' employees, contractors, and patients. Requests for
information must be complied with, in the form and language requested.
Providers and their employees and contractors must cooperate fully in
making themselves available in person for interviews, consultation,
grand jury proceedings, pre-trial conference, hearings, trial and in
any other process, including investigations.

11. PROVIDER MANUAL AND PROVIDER TRAINING

INSURER must prepare and issue a Provider Manual(s), including any
necessary specialty manuals to the providers in the INSURER network and
to newly contracted providers in the INSURER network within five (5)
working days from inclusion of the provider into the network. The
Provider Manual must contain sections relating to special requirements.

INSURER must provide training to all network providers and their staff
regarding the requirements of THE ADMINISTRATION/INSURER contract and
special needs of beneficiaries under this contract.

INSURER training for all providers must be completed no later than 30
days after placing a newly contracted provider on active status.
INSURER must provide ongoing training to new and existing providers as
required by INSURER or THE ADMINISTRATION to comply with this contract.

INSURER must maintain and make available upon request enrollment or
attendance rosters dated and signed by each attendee or other written
evidence of training of each network provider and their staff.

12. PROVIDER QUALIFICATIONS - GENERAL

The providers in INSURER network must meet the following qualifications:

--------------------------------------------------------------------------------
FQHC A Federally Qualified Health Center is an entity that
provides outpatient health services pursuant to 42 U.S.C.
201 et. seq. and meets the standards and regulations
established by the federal law and is an eligible provider
enrolled in the Medicaid Program.
--------------------------------------------------------------------------------
Physician An individual who is licensed to practice medicine as an M.D.
or a D.O. in Puerto Rico either as a primary care provider or
in the area of specialization under which they will
provide medical services under contract with INSURER; who is
a provider enrolled in the Medicaid program; and who has a
valid Drug Enforcement Agency registration number and a
Puerto Rico Controlled Substance Certificate, if either is
required in their practice.
--------------------------------------------------------------------------------
Hospital An institution licensed as a general or special hospital by
the Puerto Rico Health Department under Chapter 241 of the
Health and Safety Code and Private Psychiatric Hospitals
under Chapter 577 of the Health and Safety Code (or is a
provider which is a component part of a State or local
government entity which does not require a license under the
laws of the Commonwealth of Puerto Rico), which is enrolled
as a provider in the Puerto Rico Medicaid Program.
--------------------------------------------------------------------------------
Non-Physician An individual holding a license issued by the applicable
Practitioner licensing agency of the Commonwealth of Puerto Rico who is
Provider enrolled in the Puerto Rico Medicaid Program or an individual
properly trained to provide health support services who
practices under the direct supervision of an appropriately
licensed professional.
--------------------------------------------------------------------------------
Clinical An entity having a current certificate issued under the
Laboratory Federal Clinical Laboratory Improvement Act (CLIA) and has a
license issued by the Commonwealth's licensing agency the
Puerto Rico Department of Health.
--------------------------------------------------------------------------------
Rural Health A health facility that has been determined by the Secretary
Clinic (RHC) to meet the requirements of section 1861(aa)(2) of the Act and
part 491; of this chapter; and has filed an agreement with
the Secretary to provide RHC services under Medicare and
pursuant to 42 CFR 405.2402.
--------------------------------------------------------------------------------
Local Health A local health department established pursuant to Health and
Department Safety Code, Title 2, Local Public Health Reorganization Act
ss. 121.031ff.
--------------------------------------------------------------------------------
Non-Hospital A provider of health care services which is licensed and
Facility credentialed to provide services, and enrolled in our program.
Provider
--------------------------------------------------------------------------------
School Based Clinics located at school campuses that provide on-site
Health Clinic primary and preventive care to children and adolescents.
(SBHC)

ARTICLE VIII
SUBSCRIPTION PROCESS AND IDENTIFICATION CARDS

1. The INSURER agrees to comply and implement in full all instructions
and guidelines contained in the Administration's Instructions to
Insurers for Implementation of Orientation and Subscription Process.
(Addendum II)

2. The INSURER shall issue to each beneficiary a card of durable plastic
material that provides proper identification to access the benefits
covered under this contract.

3. This card shall be similar to those the INSURER issues to the rest of
their subscribers and shall not contain information that may identify
the cardholder as medically indigent.

4. The INSURER shall be responsible to assure delivery of the cards at a
location accessible to the beneficiaries in each municipality.

5. The INSURER shall deliver the card on the same day that the beneficiary
completes the enrollment process.

6. The identification cards shall contain the following information:

a) Name of Beneficiary

b) INSURER's Group Number

c) Subscriber's Social Security Number

d) Relationship of beneficiary with subscriber (if applicable)

e) HCO name and number

f) Issue Date

g) Type of Contract (individual or family)

h) Coverage effective date

i) Other Insurance code

j) Medicare Part A and/or Part A and B deductible code.

7. The INSURER will replace lost, stolen, mutilated cards and will have
the right to charge in beneficiaries one dollar ($1.00) for each card
replaced. This charge will not be applicable to Medicaid Beneficiaries,
which are categorized within the established indigence level 0
(0%-50%).

8. The INSURER will replace free of charge the identification card
whenever a change of HCO is made.

9. Identification cards are the property of the INSURER and they shall be
returned by the beneficiary upon losing eligibility to the plan or when
a change of HCO is made.

10. The INSURER shall be responsible for notifying each beneficiary that
the identification card is for the personal identification of the
beneficiary to whom it has been issued, and that lending, transferring
or in any other way consenting to the use of the card by any other
person constitutes a fraudulent act.

11. Identification Card contents and layout are subject to the prior
approval of the ADMINISTRATION to be in accordance with Law 72 of
September 7, 1993.

12. INSURER will comply with all changes requested by the ADMINISTRATION
resulting from the implementation of the "Smart Card". Monetary
implications as a result of such changes, will be negotiated with the
INSURER.

ARTICLE IX
SUMMARY PLAN DESCRIPTION BOOKLET AND ORIENTATION PROGRAMS
MARKETING PROVISIONS

1. The INSURER shall be responsible for the preparation, printing and
distribution, at its own cost, of booklets, in the Spanish language,
that describe the plan and the benefits covered therein. The Insurer
agrees to submit before the effective date of the contract a translated
copy of the beneficiaries' booklet in the English language by the
proper revision of federal authorities. These booklets will be
delivered to each subscriber upon enrollment, along with the required
identification card(s).

2. The booklets shall serve as guarantee of the benefits to be provided
and shall contain the following information:

a) Schedule of benefits covered, all services and items that are
available and that are covered either directly or through
methods of referral and/or prior authorization, a written
description of how and where the services that have been
available through the plan services may be obtained.

b) Benefit's exclusions and limitations. For benefits that
enrollees are entitled to but are not available through the
MCO, a written description on how and where to obtain
benefits; description of procedures for requesting
disenrollments/changes.

c) Beneficiary's rights and responsibilities, in accordance with
specific rights and requirements to be afforded in accordance
with Medicaid Program regulations as amended, the Puerto Rico
Patient ▇▇▇▇ of Rights Law 194 of August 25, 2000, the Puerto
Rico Mental Health Code, of October 2, 2000, as amended and
implemented by their regulations, and Law 11 creating the
Office of Patients Solicitor General of April 11, 2001.

d) Instructions on how to access benefits, including a list of
(1) available HCO's and its participating providers, PCP or
Specialists (its locations and qualifications), (2) providers
from which to obtain benefits under the Special Coverage. Said
list can be provided in a separate booklet.

e) Official grievances and appeal filing procedures.

f) In the event a Physician Incentive Plan affects the use of
referral services and/or places physicians at substantial
risk, the INSURER shall provide the following information upon
beneficiaries' requests: the type of incentive arrangements,
whether stop-loss insurance is provided and the survey results
of any enrollee/disenrollee surveys that will have to be
conducted by INSURER.

g) Unless otherwise specified, subscription materials must be
written at the 4th-6th grade reading comprehension level.

h) Explanations of instances under which a beneficiary's
disenrollment may be requested without his/her consent by a
provider.

i) Explanations of right of beneficiary to transfer from HCO at
any time for cause and to transfer or change within first
ninety (90) days of the date of enrollment or the later date
of receipt of notice of enrollment, and at least every (12)
months thereafter without cause.

3. The booklets shall be approved by the ADMINISTRATION prior to printing,
distribution, and dissemination in compliance with provisions of
Article IX.

4. The INSURER shall also be responsible for the preparation, printing and
distribution, at its own cost, of an Informative Bulletin, in the
Spanish language, that describes the plan, services and benefits
covered therein as well as the managed care concept. This Informative
Bulletin will be distributed among the HCO's, HCO's network of
participating providers and the INSURER's participating providers.

5. The INSURER shall be responsible to conduct and assure the
participation of all providers under this contract to diverse seminars
to be held throughout the Health Area/Region in order to properly
orient and familiarize said providers with all aspects and requirements
related to the Preventive Medicine Program, Benefits and Coverage under
this contract, and the Managed Care concept. Said seminars will be
organized, scheduled, conducted and offered at the expense of the
INSURER. The curriculum for said seminars will be coordinated with and
approved by the ADMINISTRATION Healthcare Coordinators.

6. All participating providers are mandated required to receive yearly
during the contract term at least fifteen (15) hours of orientation,
education and familiarization with different aspects related to this
contract on/or before the expiration of the first four and a half
(4 1/2) months of the contract term. Failure to comply with this
requirement will be sufficient grounds to exclude from the Health
Insurance Program the participating provider. If, at the expiration of
the first four and half (4 1/2 months) of the contract term, the
participating provider has not fully complied with this requirement, it
will be excluded as participating provider for subsequent periods of
the contract or the contract term. At the discretion of the
ADMINISTRATION, and for good cause the excluded provider may be
authorized to be contracted as a participating provider if it
subsequently complies with the requirement.

7. The ADMINISTRATION will monitor and evaluate all marketing activities
by the INSURER, its contractor, sub-contractors or any provider of
services under this contract.

8. Any marketing material addressed to enrollees can not contain false or
misleading information. All oral, written or audiovisual information
addressed to enrollees should be accurate and sufficient for
beneficiaries to make an informed consent decision as to whether or not
to enroll and will have to be pre-approved by the ADMINISTRATION.

9. The INSURER, contractor or subcontractor or any providers of services
must distribute the material to its entire service area/region. In the
event the INSURER or any of its contractors develop new and revised
materials they shall submit them to the ADMINISTRATION for prior
approval.

10. The ADMINISTRATION will appoint an Advisory Committee, with
representation of at least: a board certified physician, a beneficiary
of a consumer advocate organization that includes Medicaid recipients a
health related professional related with the medical needs of
low-income population and a Director of a Welfare Department that does
not head a Medicaid agency.

11. The Advisory Committee will assist the ADMINISTRATION in the evaluation
and the review of any marketing or informational material addressed to
assist Medicaid recipients in the provision of health services under
this contract.

All the marketing activities and the information which shall be allowed
will be limited to the following:

a) Clear description of health care benefits coverage
and exclusions to enrollees;

b) Explain how, when, where benefits are available to
enrollees;

c) Explain how to access emergency, family-planning
services, and services that do or do not require
referrals and authorizations;

d) Explain any benefits enrollees are entitled to, that
are not available through the INSURER and how to
obtain them;

e) Enrollees rights and responsibilities;

f) Grievance and appeal procedures.

12. The INSURER, its agents, any contractor or sub-contractor party under
this contract shall not engage in cold call marketing that is,
unsolicited personal contact with potential enrollees for the purpose
of influencing them to enroll with any of its contractors. Also
telephone, door-to-door or telemarketing for the same purposes is
hereby prohibited.

13. Neither the INSURER, its contractor, subcontractor or any provider may
put into effect a plan under which compensation, reward, gift or
opportunity are offered to enrollees as an inducement to enroll other
than to offer health care benefits. The INSURER its contractor,
subcontractor or provider is prohibited from influencing an individual
enrollment with the sale of any other insurance.

14. In the event of a final determination reached by the ADMINISTRATION
that the INSURER, its agents, any of its contractor or subcontractors,
has failed to comply with any of the provisions set forth on this
article, the ADMINISTRATION in compliance with due process guarantees
and remedies available under its regulations; Law 72 of September 7,
1993; the Social Security and Balance Budget Act, will proceed to
enforce the compliance of these provisions by pursuing within its
empowered authority the sanctions established in Article XXXVI.

ARTICLE X
GRIEVANCE PROCEDURE

1. The INSURER represents that it has established an effective procedure
that assures the filing, receipt, and prompt handling and resolution of
all grievances and complaints made by the beneficiaries and the
participating providers. The INSURER will prepare a grievance form that
must be approved by the ADMINISTRATION. The approved grievance form
shall be made available to all beneficiaries, HCO's, HCO's network of
participating providers and the INSURER's participating providers. The
parties will make whatever adjustments are necessary to reconcile their
grievance procedure with provisions of Law 194 of August 25, 2000
(known as "Patient ▇▇▇▇ of Rights") or those contained in Law 11 of
April 11, 2001 (known as "Law Creating the Office of Patient's
Solicitor General") as implemented by regulations.

2. Any written or telephone communication from a beneficiary or
participating provider, which expresses dissatisfaction with an action
or decision arising under the health insurance contracted, shall be
promptly and properly handled and

resolved through a routine complaint procedure to be implemented by the
INSURER, after prior approval from the ADMINISTRATION. The INSURER
shall be responsible for documenting in writing all aspects and details
of said complaints.

3. The routine complaint procedure which must be implemented by the
INSURER must provide for (i) the availability of complaint forms to
document oral complaints; (ii) for the proper handling of the
complaints; and (iii) for the disposition by notice to the complainant
of the action taken. This notice shall advise the complainant of the
INSURER's official Grievance Procedure. The INSURER will submit to the
ADMINISTRATION, on a monthly basis a written report detailing all
grievances and routine complaints received, solved and pending solution
and/or copies of the complaint forms with the notation of the action
taken. All grievance files and complaint forms must be made available
to the ADMINISTRATION for auditing. All grievance documents and related
information shall be considered as containing individually identifiable
health information, and shall be treated in accordance with the HIPAA
regulations cited elsewhere.

4. The Grievance Procedure shall assure the participation of persons with
authority to require corrective action.

5. The INSURER's Grievance Procedure shall contain all the necessary
provisions that assure the affected parties right to due process of
law. In the event that changes are made to the existing Grievance
Procedure, a copy of the proposed changes will be made available to the
ADMINISTRATION for approval prior to its implementation. A copy of the
INSURER's Grievance Procedure is attached hereto as Addendum III and
incorporated as part of this contract. The INSURER acknowledges that
the arbitration process contemplated in the Grievance Procedure shall
not be applicable to disputes between the ADMINISTRATION and the
INSURER.

6. Pursuant to Law 72 of September 7, 1993, any decision issued by the
INSURER is subject to appeal before the ADMINISTRATION. Such appeal
shall be regulated by the ADMINISTRATION's regulations and the Uniform
Administrative Procedure Act, Law 170 of August 12, 1988, as amended
and as applicable, provided however, that subscribers' grievances shall
be expeditiously solved and that INSURER shall therefore fully
cooperate with the prompt solutions of any such grievance.

7. The decision issued by the ADMINISTRATION is subject to review before
the Circuit Court of Appeals of the San ▇▇▇▇ Panel of the Commonwealth
of Puerto Rico.

8. INSURER must have written policies and procedures for receiving,
tracking, reviewing, and reporting and resolving of beneficiaries
complaints. The

procedures must be reviewed and approved in writing by THE
ADMINISTRATION. Any changes or modifications to the procedures must be
submitted to THE ADMINISTRATION for approval thirty (30) days prior to
the effective date of the amendment.

9. INSURER must designate an officer of INSURER who has primary
responsibility for ensuring that complaints are resolved in compliance
with written policy and within the time required. An "officer" of
INSURER means a president, vice president, secretary, treasurer, or
chairperson of the Board of Directors of a corporation, the sole
proprietor, the managing general partner of a partnership, or a person
having similar executive authority in the organization.

10. INSURER must have a routine process to detect patterns of complaints
and disenrollments and involve management and supervisory staff to
develop policy and procedural improvements to address the complaints.
INSURER must cooperate with the ADMINISTRATION in beneficiaries'
complaints relating to enrollment and disenrollment. INSURER's
complaints procedures must be provided to beneficiaries in writing and
in alternative communication formats. A written description of
INSURER's complaints procedures must be in appropriate languages and
easy for beneficiaries to understand. INSURER must include a written
description in the beneficiaries Handbook. INSURER must maintain at
least one local and one toll-free telephone number for making
complaints.

11. INSURER's process must require that every complaint received in person,
by telephone or in writing, is recorded in a written record and is
logged with the following details: date; identification of the
individual filing the complaint; identification of the individual
recording the complaint; nature of the complaint; disposition of the
complaint; corrective action required; and date resolved.

12. The INSURER Grievance Procedures must comply with the reasonable
standards and timeframes for prompt resolution of grievances to be
established under the Puerto Rico Patients ▇▇▇▇ of Rights Act, Law 194
approved October 2, 2000 and the Mental Health Code, Law 408, approved
in August 25, 2000. The State established standards, shall comply
with Medicaid Regulations to ensure that in the case of standard
resolution of grievances, the standard time frames for prompt
resolution, do not exceed 30 days after an insurer receives grievances.
And in the case of grievances concerning the particular enrollees'
health condition, which requires expedited resolution, they shall, be
resolved, within a time frame that shall not exceed, 72 hours after a
grievance is received.

ARTICLE XI
HEALTH CARE ORGANIZATIONS

1. All Health Care Organizations (HCO's) shall have a sufficient number of
primary care physicians as specified in Article VI to attend to the
medical needs of the

beneficiaries. All specialties specified in this section have to be
available at each HCO. The following are considered primary care
physicians (PCP):

a) General Practitioners

b) Internists

c) Family Physicians

d) Pediatricians

e) Obstetricians and Gynecologists

2. The INSURER shall have available and under contract a sufficient number
of the following types of support participating providers to render
services to all beneficiaries:

a) Optometrists

b) Podiatrists

c) Clinical laboratories - (The INSURER shall insure that all
laboratory testing sites providing services under this
contract have either a clinical laboratory improvement
amendment (CLIA) certificate with the registration and (CLIA)
identification number or a waiver certification).

d) Radiological facilities

e) Health Related Professionals

f) Hospitals

g) Pharmacies

h) All those participating providers that may be needed to
provide services under the basic, special and dental coverage
considering the specific health problems of an area/region.

The INSURER may not discriminate with respect to participation,
reimbursement or indemnification as to any provider who is acting
within the scope of the provider's license or certification under
applicable state law.

3. The INSURER shall enter into adequate arrangements to provide its
beneficiaries with the services provided for under the dental and
pharmacy coverage, as contractually agreed to between the dentists and
pharmacies and the INSURER. These arrangements will provide for an
adequate number of dentists and pharmacies that guarantee the right to
choose of the beneficiaries.

4. The INSURER shall have available and under contract a sufficient number
of the following types of support participating physicians to provide
services to all beneficiaries:

a) Ophthalmologists

b) Radiologists

c) All those physicians that may be necessary and are available
considering the morbidity and mortality rates of the specific
health area/region, and those needed to provide all the
benefits contained in the Basic Coverage of the plan.

5. Considering the expected mix between private patients and beneficiaries
the accepted physician/beneficiary ratio will be 1:1,700 for primary
care physicians; 1:2,200 for specialists and 1:1,600 for all
physicians. In the event that the HCO's provides services only to
beneficiaries under this contract, the physician/beneficiary ratio will
be the same to that applicable when there is a mix between private
patients and beneficiaries. The INSURER will assure compliance with
said physician/beneficiary ratio.

6. The INSURER shall not have, directly or indirectly, any conflict of
interest through economic participation in any HCO, participating
provider, its subsidiaries, or affiliates.

7. The INSURER shall enforce upon each HCO strict quality assurance and
utilization review programs as described in this contract, the Request
for Proposals, the INSURER's proposal and its Operations Manual.

8. The INSURER shall contract and have available all the participating
providers required to provide to the beneficiaries, in a prompt and
efficient manner, the benefits included in the Basic, Special and
Dental Coverage as specified in Addendum I of this contract.

9. The INSURER agrees to enforce and assure compliance by the HCO's with
all provisions contained in this contract.

10. The INSURER will prepare and provide to all HCO's complete written
instructions describing procedures to be used for the compliance with
all duties and obligations arising under this contract. These
instructions will cover at least the following topics: provider
selection by beneficiaries, covered services, instructions and
coordination of access to mental health services through the mental
carve-out contractors, reporting requirements, record keeping
requirements, grievance procedures, deductibles and co-payment amounts,
confidentiality, and the prohibition against denial or rationing of
services. A copy of these instructions will be submitted to the
ADMINISTRATION, who reserves the right to request modifications or
amendments to said instructions following consultation with the
INSURER.

ARTICLE XII
GUARANTEE OF PAYMENT

1. The INSURER expressly guarantees payment for all medically necessary
services rendered to beneficiaries by any and all participating
providers.

2. The insolvency, liquidation, bankruptcy or breach of contract of an
HCO, or of a contracted participating provider does not release the
INSURER from its obligation and guarantee to pay for all services
rendered as authorized under this health insurance contract.

The nature of INSURER's obligations to guarantee payment to all HCO's,
providers or subcontractors for services rendered under this health
insurance contract is solidary, subject to complying with whatever
established claim proceedings require. As such, the INSURER will
respond directly to the ADMINISTRATION as principal obligor to comply
in its entirety with all the contract terms.

3. In accordance with the payments rights guaranteed under paragraph (4)
and (5), the provider shall claim direct payments due by a
HCO/Contractor, to the INSURER. The INSURER shall deduct any amount
payable directly to a provider from the capitation payments owed to an
HCO or other contractor.

In case the INSURER owes money to the HCO's or any provider, following
due process, the Administration may retain the amounts owed to the
providers.

4. The INSURER agrees to pay all monies due to the HCO's and/or
participating providers according to the agreed payment schedule in the
contracts with said parties. The INSURER represents as of the date of
this contract that payment to HCO's, HCO's network of participating
providers and INSURER's participating providers will be made no later
than thirty (30) days or as provided by legislation from the date that
a full, complete and ready to process claim is received at the INSURER,
when received within sixty (60) days of date of service. The INSURER
expressly commits to implement all internal systems necessary to
promptly pay its HCO's and providers all full, complete and ready to
process claims within the term provided in this section, and to avoid
unjustifiable delay in payment by submitting said claims to audits and
evaluation of contested claims; said practice is expressly prohibited,
and may result in the remedies set forth at Article XXXVI or
termination as provided in Article XXXIII. A complete and ready to
process claim (clean claim) is a claim received by the INSURER for
adjudication, and which requires no further information, adjustment, or
alteration by the provider of the services in order to be processed and
paid by the INSURER.

5. In the event that, following the receipt of the claim, the same is
totally or partially contested by the INSURER or HCO, the participating
provider shall be notified in writing within thirty (30) days that the
claim is contested with the contested portion identified and provided
the reasons thereof. Upon receipt of a new or supplemented claim, the
INSURER or the HCO, shall pay or deny the contested claim or portion of
the contested claim within thirty (30) days. Upon expiration of any of
the aforementioned periods of time, the overdue payments shall bear
interest at the prevailing rate for personal loans as determined by the
Financial Board of the Office of the Commissioner of Financial
Institutions.

6. Checks for capitated payments to HCO's, HCO's network of participating
providers and INSURER's participating providers are to be regularly
issued by the INSURER on the 15th day of each month. The INSURER
further represents that it has contracted with the HCO the payment of
the corresponding capitation no later than the last day of the month to
which said capitation corresponds.

7. The INSURER agrees and warrants that it will be the central payor for
all valid claims that will be generated throughout their contracted
participating provider network for the health insurance contract for
the Health Region/Area.

8. All payments distribution within the capitated services will be made by
the INSURER accordingly within sound actuarial methods and in
compliance with the ADMINISTRATION's commitments and efforts to assure
a more uniform and equitable distribution of risk among providers
throughout all the island health regions. In the event that
participating providers in their arrangements with the HCO's consent to
the disbursement of the payment checks directly to the HCO's, the
INSURER will assure and require the HCO's to provide on a monthly basis
a schedule of the amount of the payments made to said participating
providers. In any event, the INSURER will provide the ADMINISTRATION
with a detailed monthly report listing by providers the monthly payment
distribution. The claims for services rendered will be generated and
forwarded by the participating providers directly to the INSURER. The
claims submitted by the participating providers will comply with the
requirements contained in Article XV, Sections four (4) and eight (8).

9. The INSURER agrees and warrants that the method and system used to pay
for the services rendered to and by the HCO's and all participating
providers is reasonable and that the amount paid does not jeopardize or
infringe upon the quality of the services provided.

10. The guarantee of payment contained in this article will be reinforced
through the establishment of different alternatives in order to insure
that HCO's, HCO's participating providers and INSURER's participating
providers are paid in full for contracted services in accordance with
established budgets. Said alternatives will be submitted to the
ADMINISTRATION for approval prior to its implementation.

11. Inasmuch as the INSURER will be the central payor for all payments for
valid claims for services rendered by the HCO's, HCO's network of
participating providers and INSURER's participating providers the
INSURER agrees to incorporate in the contracts with the HCO's, and to
require the HCO's to incorporate in their arrangements with their
participating providers a provision whereby the INSURER is authorized
to adjudicate and determine the validity of any claim or dispute
between the HCO and its participating providers regarding a controversy
surrounding the validity of the claims of services submitted by said
participating provider. Said provision will assure that the payment to
the HCO's network of participating providers for a valid claim for
services is not improperly withheld and that in no event payment in
this situation is made more than sixty (60) days from the date that the
claim or dispute is received by the INSURER. It will be the INSURER's
responsibility to verify the terms of the arrangements between the HCO
and its network of participating providers, the rendering of the
services, the reasonableness of the claim and that payment has not been
made.

12. The guarantee of payment and the representations as to the payment
schedule to HCO's and participating providers will be enforceable and
not set aside or altered in the event that the INSURER is notified of
the expiration of the term of this contract or of its termination.

13. The INSURER agrees to provide the ADMINISTRATION, on a monthly basis,
and through electronic or magnetic media format, a detailed report
containing all payments made to HCO's, to HCO's network of
participating providers, and to the INSURER's participating providers
during the month immediately preceding the report. Said report will
also include a list of all claims received on account of those payments
during the preceding month by the INSURER from the HCO's, the HCO's
network of participating providers as well as a detail as to all claims
received but not paid by reason of accounting or administrative
objections. The INSURER further agrees to make available to the
ADMINISTRATION for auditing purposes any and all records or financial
data related to claims submitted but not paid by reason of accounting
or administrative objections. The intention of this clause is for the
ADMINISTRATION to be able to determine on a monthly basis the amount of
money paid to each participating provider, the amount billed by and not
paid to each participating provider and the reasons for non-payment in
order to keep track of the regularity of payments of the Insurer and
the HCO's and their compliance with this contract.

14. The INSURER also agrees to provide to HCO's, on a monthly basis, and
through electronic or machine readable media format, a detailed report
classified by beneficiaries, by providers, by diagnosis, by procedure,
by date of service and by its real cost of all payments made by the
INSURER which entails a deduction from the gross monthly payment to
said HCO's. Copy of said report will be made available to the
ADMINISTRATION each month.

15. Each HCO must report each encounter to the INSURER on a monthly basis
classified by each participating provider within the HCO, as well as
the real cost of the services of each encounter of service. The INSURER
must submit to the ADMINISTRATION the distribution of the capitation
within each HCO as established on the Actuarial Reports formats
required in the RFP.

16. The INSURER will abide with the ADMINISTRATION efforts to implement
cost reduction measures and future implementation of payment methods
based on fee schedules or diagnosis related group that may be
established. In no way a beneficiary will be discriminated nor will
health services be rationed based on diagnosis or illness or an
expectation that the beneficiary may require high cost care.

ARTICLE XIII
UTILIZATION REVIEW AND QUALITY ASSURANCE

1. The INSURER will establish a Quality of Care Program with the following
guidelines:

a) PHYSICIAN-CREDENTIALING: The INSURER shall follow strict
provider screening procedures before contracting. In order
to assure quality health services for the medically indigent,
the INSURER will follow stringent physician selection and
credentialing process for this plan as per the INSURER's
Proposal. The ADMINISTRATION may review participating
providers' credentials at any time and submit its findings to
the INSURER for consideration by the INSURER if necessary. The
INSURER shall notify the ADMINISTRATION quarterly of all
accepted and non-accepted providers.

b) PROVIDER CONTRACTING: The INSURER will assure that all
hospitals facilities, doctors, dentists, and all health care
providers are appropriately licensed and in good standing with
all their governing bodies and accrediting agencies and meet
all practice requirements established by law, the Department
of Health, the ADMINISTRATION and other governing agencies, as
described in the INSURER's Proposal. The ADMINISTRATION may
review participating provider credentials at any time and
submit its findings to the INSURER for consideration by the
INSURER if necessary. The INSURER shall notify the
ADMINISTRATION quarterly of all accepted and non-accepted
providers.

c) INSPECTION OF ALL FACILITIES: The INSURER will insure that all
providers' physical facilities are safe, sanitary and follow
sound operating procedures, as described in the INSURER's
Proposal and that all laboratory testing site providing
services under this contract have their duly CLIA
certification along with their identification number or waiver
certificate. The ADMINISTRATION may review participating
provider

facilities at any time and submit its findings to the INSURER
for consideration by the INSURER if necessary. The INSURER
shall notify the ADMINISTRATION quarterly of all inspections
done.

d) MEDICAL RECORD REVIEW: The INSURER will establish a program to
monitor the appropriateness of care being provided, the
adequacy and consistency of record keeping, and completeness
of records, as described in the INSURER's Proposal. The
INSURER shall notify the ADMINISTRATION on a quarterly basis
of all findings in the Medical Record Review Program. The
ADMINISTRATION may review and/or audit Program records and
reports at any time.

e) CLINICAL DATABASE SYSTEM: The HCO's will provide the INSURER
with statistical records of utilization of medical services by
beneficiaries, as described in the INSURER's Proposal. The
INSURER shall notify the ADMINISTRATION on a quarterly basis
of all findings in the Clinical Database System. The
ADMINISTRATION may review and/or audit the Clinical Database
System records and reports at any time.

f) RETROSPECTIVE REVIEW: The INSURER will establish a
Retrospective review Program that will address quality and
utilization problems that may arise, as described in the
INSURER's Proposal. The INSURER shall notify the
ADMINISTRATION on a quarterly basis of all findings in the
Retrospective Review Program. The ADMINISTRATION may review
and/or audit the program findings at any time.

g) OUTCOME REVIEW: The INSURER will establish an Outcome Review
Program to assess the quality of inpatient and ambulatory care
management provided by the primary health care providers, as
described in the INSURER's Proposal. The INSURER shall notify
the ADMINISTRATION on a quarterly basis of all findings in the
Outcome Review Program. The ADMINISTRATION may review and/or
audit the program findings at any time.

h) QUALITY OF CARE COMMITTEE: The INSURER will establish a
Quality of Care Committee to insure provider's compliance with
the INSURER's quality of care program, as described in the
INSURER's Proposal. The INSURER shall submit a report to the
ADMINISTRATION on a quarterly basis of all findings in the
Quality of Care Committee. The ADMINISTRATION may review
and/or audit the program findings and reports at any time.

2. The INSURER will establish cost containment and utilization review
programs as follows:

a) HOSPITAL ADMISSION AND STAY REVIEW: The INSURER will establish
programs to reduce unnecessary hospital use and to review
hospital admissions through the following programs, as
described in the INSURER's Proposal:

(1) CONCURRENT REVIEW: The INSURER will establish a
program to review hospital admissions to guarantee
adequacy and duration of stay.

(2) RETROSPECTIVE REVIEW: The INSURER will establish a
program to determine medical necessity and service
adequacy after the service has been rendered or paid
to providers or physicians.

(3) PROSPECTIVE REVIEW: The INSURER will establish a
program to determine appropriate lengths of stay at
the hospital prior to admission for elective or
non-emergency hospitalizations.

b) UTILIZATION REVIEW PROGRAM: The INSURER will establish a
program to identify patterns of medical practice and their
effect in the care being provided, as described in the
INSURER's Proposal, and through the following:

(1) PRE-PAYMENT REVIEW: The INSURER will establish a
program to prevent inappropriate billing of services
prior to claims payment and to evaluate questionable
practices, problematic coding, inappropriate level of
care, excessive tests and services.

(2) POST PAYMENT REVIEW: The INSURER will establish a
program to review service claims for purposes of
creating a provider profiling system.

The INSURER shall submit a report to the ADMINISTRATION on a
quarterly basis of all findings under the Utilization Review
Programs. The ADMINISTRATION may review and/or audit the
programs' findings and reports at any time.

c) SECOND SURGICAL OPINION: The INSURER will establish a program
to allow beneficiaries to obtain a second surgical opinion for
elective surgical procedures on a voluntary basis, as
described in the INSURER's Proposal.

d) INDIVIDUAL CASE MANAGEMENT PROGRAM: The INSURER will establish
a program to identify and manage cases that involve high
health care costs, as described in the INSURER's Proposal. The
INSURER shall submit a report to the ADMINISTRATION on a
quarterly basis of all

findings in the Individual Case Management Program. The
ADMINISTRATION may review and/or audit the program findings
and reports at any time.

e) FRAUD AND ABUSE: The INSURER will establish a program to
assure reasonable levels of utilization and quality of care,
as described in the INSURER's Proposal. The INSURER shall
submit a report to the ADMINISTRATION on a quarterly basis of
all findings in the Fraud and Abuse Program. The Fraud and
Abuse Reports must include:

(1) the number of complaints of fraud and abuse made to
the Commonwealth that warrant a preliminary
investigation, and,

(2) for each case of suspected fraud and abuse warranting
a full investigation, the INSURER must report the
following information:

(i) the provider's name and number;

(ii) the source of the complaint;

(iii) the type of provider;

(iv) the nature of the complaint;

(v) the approximate range of dollars
involved,

(vi) the legal and administrative
disposition or status of the case.

f) COORDINATION OF BENEFITS PROGRAM: The INSURER will establish a
program to identify beneficiaries with other insurance in
order to coordinate health insurance benefits from other
carriers, as described in the INSURER's Proposal. The INSURER
shall submit a report to the ADMINISTRATION on a quarterly
basis of all findings in the Coordination of Benefits Program.
The ADMINISTRATION may review and/or audit the program
findings and reports at any time.

3. DENTAL SERVICES UTILIZATION REVIEW PROGRAM: The INSURER agrees to
maintain a program to determine that the services provided to
beneficiaries are in accordance to established quality parameters by
the dental community as provided for in the INSURER's Proposal. The
INSURER shall notify the ADMINISTRATION quarterly of all findings of
said review program. The ADMINISTRATION may review and/or audit the
program findings at any time.

4. EPSDT AND MIGRANT SERVICES PROGRAM: The INSURER will implement a
program that addresses EPSDT screening and Migrant services indicators
for preventive diagnostic tests according to age in all areas/regions
and shall notify the ADMINISTRATION on a monthly basis all findings of
said program. INSURER assures the compliance with Section 1905(r) of
the Social Security Act and the applicable protocols adopted by the
Department of Health for the implementation of these Programs.

5. The INSURER shall continue to submit the ADMINISTRATION on a monthly
basis a report that includes all services rendered by diagnosis and
procedures identified by all specialties, by place of service including
those under dental coverage, and procedures in laboratories and X-rays.
It will be reported beginning with the most common diagnosis and
procedures until reaching the least common.

6. All services rendered shall be identified by Current Procedure
Terminology, International Classification of Diseases, Clinical
Modifications Diagnostic Statistic Manual and American Dental
Association's Current Dental Terminology, as applicable.

7. The ADMINISTRATION and the INSURER will agree on the required format in
order to comply with the reporting requirements in this section and
which will be accomplished through electronic or magnetic media.

8. All the required programs, processes and reports heretofore referred
to, will also be an obligation on the part of the INSURER's
participating providers, HCO's and HCO's participating providers. The
INSURER will assure compliance therewith on the part of said INSURER's
participating providers, HCO's and HCO's participating providers.

9. The ADMINISTRATION reserves the right to require the INSURER to
implement additional specific cost and utilization controls, subject to
prior consultation and cost negotiation with the INSURER if necessary.

ARTICLE XIV
COMPLIANCE AND AGREEMENT
FOR INSPECTION OF RECORDS

1. Since funds from the Commonwealth Plan under Title XIX and Title XXI of
the Social Security Act Medical Assistance Programs (Medicaid) and
SCHIPS as well as from Title V of the Social Security Act and Mental
Health Block Grants are used to finance this project in part the
INSURER shall agree to comply with the requirements and conditions of
the Centers for Medicare and Medicaid Services (CMS), the Comptroller
General of the United States, the Comptroller of Puerto Rico and this
ADMINISTRATION, as to the maintenance of records related to this
contract and audit rights thereof, as well as all other legal
obligations attendant thereto, including, but not limited to,
non-discrimination, coverage benefit eligibility as provided by the
Puerto Rico State Plan and Law 72 of 1993, anti-fraud and anti-kickback
laws, and those terms and provisions of the SSA as applicable. All
disclosure obligations and access requirements set forth in this
Article or any other Article shall be subject at all times and to the
extent

mandated by law and regulation, to the HIPAA regulations described
elsewhere in this agreement.

2. The INSURER shall require from the HCO's and all participating
providers that they maintain an appropriate record system for services
rendered to beneficiaries, including separate medical files and records
for each beneficiary as is necessary to record all clinical information
pertaining to said beneficiaries, including notations of personal
contacts, primary care visits, diagnostic studies and all other
services. The INSURER shall also maintain records to document fiscal
activities and expenditures relating to compliance under this
agreement. The INSURER and all participating providers shall preserve,
and retain in readily accessible form, the records mentioned herein
during the term of this contract and for the period of six (6) years
thereafter.

3. At all times during the term of this contract and for a period of six
(6) years thereafter, the INSURER and all participating providers will
provide the ADMINISTRATION, CMS, the Comptroller of Puerto Rico, the
Comptroller General of the United States of America and/or their
authorized representatives, access to all records relating to the
INSURER's compliance under this contract for the purpose of
examination, audit or copying of such records. The audits of such
records include examination and review of the sources and applications
of funds under this contract. The INSURER shall also furnish access to
and permit inspection and audit by the ADMINISTRATION, CMS, the
Comptroller of Puerto Rico, the Comptroller General of the United
States of America and/or their authorized representatives to any
financial records relating to the capacity of the INSURER or its HCO's,
if relevant, to bear the risk of potential financial losses.

4. The INSURER shall ensure that the HCO's and all participating providers
and their subcontractors furnish to the Peer Review Organization (PRO)
or to the ADMINISTRATION on-site access to, or copies of patient care
records as needed to evaluate quality of care.

5. The ADMINISTRATION and CMS shall have the right to inspect, evaluate,
copy and audit any pertinent books, documents, papers and records of
the INSURER related to this contract and those of any HCO or
participating provider in order to evaluate the services performed,
determination of amounts payable, reconciliation of benefits,
liabilities and compliance with this contract.

6. The INSURER shall provide for the review of services (including both
in-patient and out-patient services) covered by the plan for the
purpose of determining whether such services meet professional
recognized standards of health care, including whether appropriate
services have not been provided or have been provided in inappropriate
settings. It shall also provide for review, by random sampling, by the
ADMINISTRATION, of written complaints, and the results thereof, filed
by beneficiaries or their representatives as to the quality of services
provided.

7. The INSURER agrees that the ADMINISTRATION and CMS may conduct
inspections and evaluations, at all reasonable times, through on-site
audits, systems tests, assessments, performance review and regular
reports to assure the quality, appropriateness, timeliness and cost of
services furnished to the beneficiaries.

8. The ADMINISTRATION and CMS shall have the right to inspect all of the
INSURER's financial records related to this contract that may be
necessary to assure that the ADMINISTRATION pays no more than its fair
share of general overhead costs as contracted. The ADMINISTRATION and
CMS shall have the right to inspect all the HCO's financial records
related to this contract.

9. The INSURER agrees that the ADMINISTRATION may evaluate, through
inspection or other means, the facilities of the INSURER's
participating providers, HCO's and its participating providers. All
facilities shall comply with the applicable licensing and certification
requirements as established by regulations of the Department of Health
of Puerto Rico. It shall be the INSURER's responsibility to take all
necessary measures to ascertain that all facilities contracting with
INSURER comply with the required licensing and certification
regulations of the Puerto Rico Health Department, and to terminate the
contract of any facility not in compliance with said provisions.

Failure to adequately monitor the licensing and certification of the
facilities may result in the termination of this contract as provided
in Article XXXIII.

10. The INSURER agrees and also will require all HCO's and participating
providers to agree that the ADMINISTRATION's right to inspect,
evaluate, copy and audit, will survive the termination of this contract
for a period of six (6) years from said termination date unless:

a) The ADMINISTRATION determines there is a special need to
retain a particular record or group of records for a longer
period and notifies the INSURER at least thirty (30) days
before the normal disposition date;

b) There has been a termination, dispute, fraud, or similar fault
by the INSURER, in which case the retention may be extended to
three (3) years from the date of any resulting final
settlement; or

c) The ADMINISTRATION determines that there is a reasonable
possibility of fraud, in which case it may reopen a final
settlement at any time;

d) There has been an audit intervention by CMS, the office of the
Comptroller of Puerto Rico, the Comptroller General of the
United States or the ADMINISTRATION, in which case the
retention may be extended until the conclusion of the audit
and publication of the final report.

11. The INSURER agrees to require all HCO's and participating providers to
permit the ADMINISTRATION to review and audit all aspects related to
quality,

appropriateness, timeliness and cost of services rendered, and to
demonstrate that the services for which payment was made were actually
provided.

ARTICLE XV
INFORMATION SYSTEMS AND
REPORTING REQUIREMENTS

1. The INSURER agrees to comply with the reporting and information systems
requirements as provided for in the Request for Proposals and the
Proposal submitted by the INSURER. Accordingly the INSURER must submit
to the ADMINISTRATION a detailed Systems Requirements Inventory Report
which details the following:

a) Plan's compliance with each information system requirement;

b) Action plan of INSURER's response to the requirements;

c) Actual date that each system requirement will be completely
operational, not to exceed the effective date of coverage
under this contract.

2. The INSURER agrees to submit to the ADMINISTRATION the System Inventory
Report for final approval not later than the date of the signing of
this contract.

3. All Management Information Systems Requirements included in the Request
for Proposal and those included in the INSURER's Proposal must commence
implementation as of the date of the signing of this contract and shall
be fully operational as of the first day of coverage under this
contract. Material non compliance with this requirement shall be enough
reason to cancel the contract herein, with prior written notification
by the ADMINISTRATION to the INSURER according to the time set in
Article XXXIII.

4. The INSURER shall be responsible for the data collection and other
statistics of all services provided including, but not limited, to
encounter and real cost of each one, claims services and any other
pertinent data from all HCO's, participating providers or any other
entity which provide services to beneficiaries under the program, said
data to be classified by provider, by beneficiary, by diagnosis, by
procedure and by the date the service is rendered. The data collected
must then be forwarded to the ADMINISTRATION on a monthly basis in an
electronic or on machine readable media format. The data fields and
specific data elements required to be transmitted are contained in the
RFP's Claim File Layout format. The ADMINISTRATION reserves the right
to modify, expand or delete the requirements contained therein or issue
new requirements, subject to consultation with the INSURER and cost
negotiation, if necessary. Failure to comply with the requirements
contained herein will be sufficient cause for the imposition against
the INSURER of the penalty provided for in Article XXXVI of this
contract.

5. The INSURER agrees that all required data and information needs to be
collected and reported through electronic or machine readable media
commencing with the effective date of coverage of this contract.

6. The information systems of all HCO's shall be compatible with the
systems in use by the INSURER.

7. The INSURER shall supply the HCO's and, upon request, all participating
providers with eligibility information on a daily basis. Said
information shall be secured through on-line access with the INSURER.

8. The INSURER agrees to submit to the ADMINISTRATION in such form and
detail as indicated in the Claim File Layout format and any other
formats the ADMINISTRATION requires in the RFP, the following
information:

a) Within fifteen (15) days of the end of each month:

1) Data pertaining to health insurance claims, and
encounters for all services provided to
beneficiaries.

2) Enrollment data

b) Within twenty-five (25) days of the end of each month:

1) Statistical data on providers, medical services and
any other services;

2) Any and all data and information as required in the
Request for Proposals and in the Proposal submitted;

3) Any other reports or data that the ADMINISTRATION may
require after consultation with the INSURER and cost
negotiation, if necessary.

Failure to comply with the requirements contained herein will be
sufficient cause for the imposition against the INSURER of the penalty
provided for in Article XXXVI of this contract.

9. The INSURER agrees to provide to the ADMINISTRATION, on a regular basis
as needed, any and all data, information, reports, and documentation
that will permit Governmental Agencies, to compile statistical data to
substantiate the need for, and the appropriate use of federal funds for
federally financed health programs.

10. The INSURER agrees to report to the ADMINISTRATION on a daily basis all
information pertaining to enrollment, disenrollment, and other
subscriber or beneficiary transactions as required by the
ADMINISTRATION. All records shall be transmitted: 1) through approved
ADMINISTRATION systems contractor; or 2) over data transmission lines
directly to the ADMINISTRATION; or 3) on machine readable media. All
machine readable media or electronic transmissions shall be consistent
with the relevant ADMINISTRATION's record layouts and specifications.

11. The INSURER will submit to the ADMINISTRATION on a monthly basis
reports and data generated electronically that allows the
ADMINISTRATION:

a. Evaluation of the effectiveness of the delivery of services by
providers and the adequacy of these services.

b. Monitoring and evaluation of the efficiency and propriety of
the services that are being received by the beneficiaries and
their dependents.

c. Comparison of experience with that of other providers.

d. Comparison of the utilization of health care and the cost
tendencies within the community and the group that renders
service.

e. Demonstration of how the quality of care is being improved for
the insured and their dependents.

f. Comparison of the administrative measures taken by the INSURER
with reference points to be able to evaluate the progress
towards constant improvement.

g. Compliance with the information requirements and reports of
the Federal Programs such as: Title II of the Health Insurance
Portability and Accountability Act; Title IV-B Part 1 and 2,
Title IV-E, Title V, Title XIX, and Title XXI of the Social
Security Act; the applicable state laws as (the Child Abuse
Act, "Ley de Maltrato de Menores" Public Law 75 of May 28,
1980; the Protection and Assistance to Victims and Witness
Act, "Ley de Proteccion y Asistencia a Victimas de Delitos y
Testigos", Public Law 77 of July 9, 1986), and any other
information requirements which in the future are mandated by
federal and state programs.

h. Evaluation of each service provided with separate
identification by beneficiary, by provider, by diagnosis, by
diagnostic code, by procedure code and by date and place of
service. The provider must be identified by his/her provider's
identification number or his/her social security account
number.

12. The INSURER will provide the ADMINISTRATION with a uniform system for
data collection.

13. The INSURER'S Information Systems must provide a continuous flow of
information to measure the quality of services rendered to the
beneficiaries and their dependents. The purpose of these systems must
be to help the ADMINISTRATION and the INSURER in the process of
achieving continuous improvement in the quality of services rendered to
beneficiaries and their dependents within a cost effective system.

14. The INSURER will prepare the necessary reports requested herein for the
administration of the health insurance contract. Daily reports are due
by the end of the following business day. Weekly reports are due on the
first business day of the following week. Monthly reports are due
twenty-five (25) days after the

end of each month. Quarterly reports are due thirty (30) days after the
end of each quarter.

15. The INSURER must inform the Administration on a monthly basis all
cancellation and disenrollment of providers.

16. The INSURER must provide the ADMINISTRATION on a monthly basis an
updated version of its Providers Directory.

17. The INSURER will coordinate the enrollment of beneficiaries.

18. The INSURER will assure adequate and efficient functioning for the term
of the contract that includes an insurance against economic loss due to
system failure or data loss.

19. As an additional measure to guarantee quality and adequacy of the
medical health services, the INSURER will conduct periodical statistics
analysis of the medical services rendered to the beneficiaries and will
compare them with the primary physician practice profile of their
regular health insurance plan. Quarterly reports as to the analysis and
comparison statistics will be submitted to the ADMINISTRATION.

20. In order to insure that all subscriber encounters are registered and
recorded, the INSURER will conduct audits of statistical samples and
unannounced personal audits of the HCO's and participating provider's
facilities to assure that the medical records reconcile with the
encounter reported, and corrective measures will be taken in case of
any violation of the INSURER's regulations regarding the registration
and reporting of encounters. The INSURER will provide quarterly reports
to the ADMINISTRATION covering all the findings and corrective
measures, if any, taken regarding any violation of said regulations.

21. The INSURER, as a minimum must guarantee the following:

a. The security and integrity of the information and
communication systems through:

1. Regular Backups on a daily basis

2. Controlled Access to the physical plant

3. Control logical access to information systems

4. Verification of the accuracy of the data and
information

b. The continuity of services through:

1. Regular maintenance of the systems, programs and
equipment

2. A staff of duly trained personnel

3. An established and proven system of Disaster Recovery

4. Cost Effective systems.

c. Identification of the beneficiary via the use of plastic
cards.

d. Automated system of communication with statistics of the
management of calls (Occurrence of busy lines, etc.)

e. A comprehensive health insurance claim processing system to
handle receiving, processing and payment of claims and
encounters.

f. Analysis/Control of utilization (The INSURER must provide
said analysis to the ADMINISTRATION on a monthly basis in the
format outlined by the ADMINISTRATION):

1. by patient/family

2. by region, area/region town, (zip code)

3. by provider (provider's identification number or
social security account numbers)

4. by diagnosis

5. by procedure or service

6. by date of service

g. Financial and Actuarial reports

h. System of Control for claims payment that includes payment
history.

i. Computerized pharmacy system that permits its integration to
the payment procedures to the providers.

j. Outcome Analysis

k. Electronic creation of data files related to mortality,
morbidity, and vital statistics.

l. Integration to central systems

1. Procedures and communications protocol compatibility;

2. Ability to transmit reports, and or files via
electronic means.

m. Electronic Handling of:

1. The process of Admission to hospitals and ambulatory
services

2. Verification of eligibility and subscription to the
plan.

3. Verification of benefits

4. Verification of Financial information (Deductibles,
Co-payments, etc.)

5. Verification of individual demographic data

6. Coordination of Benefits.

n. Computerized applications for general accounting.

o. As to HCO's and all Participating Providers the information
system shall provide for:

1. On line access to service history for each
beneficiary.

2. Register of diagnosis and procedures for each service
rendered.

3. Complete demography on line, including the aspect of
coverage and financial responsibility of the patient.

4. Individual and family transactions

5. Annotations on line (General notes such as allergies,
reminders or other clinical aspects (free form)

6. Analysis of activity by:

a. department

b. provider

c. diagnosis

d. procedures

e. age

f. sex

g. origin

h. others, as mutually agreed upon.

7. Diagnosis history by patient with multiple codes per
service.

8. AD Hoc Reports

9. Referrals Control

10. Electronic Billing

11. Pharmacy system

12. Dental system

13. Ability to handle requirements of the Medicare
programs such as RBRVS (Relative Base Relative Value
System).

14. Ability to collect data as to the quarter in which
the pregnant female beneficiary commences her ob-gyn
treatment. The format for the collection of this data
shall be approved by the ADMINISTRATION prior to its
implementation.

Failure to comply with the requirements contained herein will be
sufficient cause for the imposition against the INSURER of the penalty
provided for in Article XXXVI of this contract.

22. The INSURER agrees to report all procedure and diagnostic information
using the current versions of Current Procedural Terminology,
International Classification of Diseases, Clinical Modification,
Diagnostic Statistic Manual and American Dental Association's Current
Dental Terminology, respectively. This does not prevent the adoption by
INSURER of the ANSI X-12 ELECTRONIC transactions for standards set
forth in the HIPAA regulations; which shall be implemented on or before
October 2002, unless modified by DHHS.

23. Non compliance with any of the Information Systems and Reporting
Requirements; with any requirements related to the electronic standards
transactions to be implemented within the schedule set forth by the
HIPAA regulations, or with other requirements contained herein, shall
be subject to the provisions of Articles XXXIII and XXXVI of this
contract, as well as to Article IV, Section 2(n) of Law 72 of
September 7, 1993, which provides the right of the

ADMINISTRATION to enforce compliance through the Circuit Court of
Appeals of Puerto Rico, Part of San ▇▇▇▇.

24. The INSURER shall provide the ADMINISTRATION with one or more telephone
numbers of dial-in data lines, and a minimum of three user's ID's and
passwords that will allow the ADMINISTRATION's authorized personnel
access to the INSURER's on-line computer applications, Such access will
allow the ADMINISTRATION use of the same systems and access to the same
information as used by the INSURER and enable the inquiry on
beneficiaries, providers, and statistics files related to this
contract.

25. As per the INSURER's proposal, INSURER shall provide to each HCO's, HCO
s network of participating providers and INSURER's participating
providers in the Health Area/Region, as well as to those outside of the
area/region who provide services to beneficiaries from within the
area/region, the necessary hardware and software to maintain on-line
communication with the INSURER's Information System to document all
encounters and services rendered to beneficiaries. Said hardware and
software will be provided at a reasonable cost for the implementation
and servicing.

26. The INSURER agrees to submit to the ADMINISTRATION reports as to the
data and information gathered through the use of the Health Plan
Employer Data and Information Set (HEDIS) and the work plan required in
the RFP formats, as per Article XVII, Section VII.

27. The INSURER must disclose to the ADMINISTRATION the following
information on provider incentive plans in sufficient detail to
determine whether their incentive plan complies with the regulatory
requirements set forth on 42 CFR 434.70(a) and 422.10:

a) Whether services not furnished by the physician or physician
group are covered by the incentive plan. If only the services
furnished by the physician or physician group are covered by
the incentive plan, disclosure of other aspects of the plan
need not be made.
b) The type of incentive arrangement (i.e., withhold, bonus,
capitation).
c) A determination on the percent of payment under the contract
that is based on the use of referral services. If the
incentive plan involves a withholding or bonus, the percent of
the withholding of bonus. If the calculated amount is 25% or
less, disclosure of the remaining elements in this list is not
required and there is no substantial risk.
d) Proof that the physician or physician group has adequate
stop-loss protection, including the amount and type of
stop-loss protection.
e) The panel size and, if patients are pooled, the method used.
f) In the case of those prepaid plans that are required to
conduct beneficiary surveys, the survey's results.

The information items (a) through (e) above, must be disclosed to the
ADMINISTRATION: (1) prior to approval of its initial contracts or
agreements, upon the contract or agreements anniversary or renewal
effective date or upon request by the Administration or CMS. The
disclosure item (f) is due 3 months after the end of the contract year
or upon request by CMS.

If the contract with the INSURER is an initial Medicaid contract, but
the INSURER has operated previously in the commercial or Medicare
markets, information on physician incentive plans for the year
preceding the initial contract period must be disclosed. If the
contract is an initial contract with INSURER, but the INSURER has not
operated previously in the commercial or Medicare markets, the INSURER
should provide assurance that the provider agreements that they sign
will meet CMS and Commonwealth requirements (i.e. there is no Physician
Incentive Plan (PIP); there is a PIP but no Substantial Financial Risk
(SFR); there is a PIP and SFR so stop-loss and survey requirements will
be met). For contracts being renewed or extended, the INSURER must
provide PIP disclosure information for the prior contracting period's
contracts.

The INSURER must update PIP disclosures annually and must disclose to
administration whether PIP arrangements have changed from the previous
year. Where arrangements have not changed, a written assurance that
there has not been a change is sufficient. This also applies when
INSURER analyze the PIP arrangements in their direct and downstream
contracts to determine which disclosure items are due from their
contractors. INSURER is expected to maintain the current written
assurances and the prior periods' documentation so that the materials
are available during on-site reviews.

28. INSURER TELEPHONE ACCESS REQUIREMENTS

INSURER must have adequately-staffed telephone lines available.
Telephone personnel must receive customer service telephone training.
INSURER must ensure that telephone staffing is adequate to fulfill the
standards of promptness and quality listed below:

1. 80% of all telephone calls must be answered within an average
of 30 seconds;
2. The lost (abandonment) rate must not exceed 5%;
3. INSURER cannot impose maximum call duration limits but must
allow calls to be of sufficient length to ensure adequate
information is provided to the Beneficiaries or Provider.
4. The INSURER shall abide with the present Information Systems
and Reporting Requirements established in this agreement and
shall cooperate with the ADMINISTRATION in the development and
implementation of any future systems.

ARTICLE XVI
FINANCIAL REQUIREMENTS

1. The INSURER shall notify the ADMINISTRATION of any loans and other
special financial arrangements which are made between the INSURER and
any HCO or participating provider or related parties. Any such loans
shall strictly conform to the legal requirements of the anti-fraud and
anti-kickback laws and regulations.

2. The INSURER shall provide to the ADMINISTRATION copies of audited
financial statements following Generally Accepted Accounting Principles
(GAAP) and of the report to the Insurance Commissioner in the format
agreed to by the National ASSOCIATION of Insurance Commissioners
(NAIC), for the year ending on December 31, 2001, and subsequently
thereafter for the contract term not later than March 15 of each
subsequent year. Unaudited GAAP financial statements for each quarter
during the contract term shall be presented to the ADMINISTRATION not
later than forty five (45) days after the closing of each quarter.

3. The INSURER will maintain adequate procedures and controls to insure
that any payments pursuant to this contract are properly made. In
establishing and maintaining such procedures the INSURER will provide
for separation of the functions of certification and disbursement.

4. The INSURER is required to establish a cash reserve, in accordance with
the Insurance Code of Puerto Rico, to insure that outstanding claims
can be satisfied in the event of insolvency.

5. The INSURER's Incurred But Not Reported (IBNR) reserve will be
reconciled and reevaluated every ninety (90) days and in no way the
IBNR reserve shall exceed 10% of the total monthly capitation payments
made to HCO's. The ADMINISTRATION reserves the right to retain for
custody purposes such IBNR reserve if becomes necessary.

6. The INSURER will ensure that the administrative costs and expenses
incurred on an annual basis do not exceed 7.5% of the total premium
payments made by the ADMINISTRATION. The INSURER's net earnings in
excess of 2.5% premium payments in any given year will be shared with
the ADMINISTRATION. The ADMINISTRATION share apportionment of the
earnings shall be 75% and the INSURER shall be 25%.

7. The INSURER agrees to provide to the ADMINISTRATION, upon the
expiration of each period of twelve (12) consecutive months of the
contract year, and not later than ninety (90) days thereafter, audited
financial statements following Generally Accepted Accounting Principles
(GAAP) which exclusively present the

operational financial situation related to the execution of this
contract. The ADMINISTRATION reserves the right to request interim
audited financial statements not to exceed two (2) during the contract
term.

8. The INSURER agrees to provide and make available to the ADMINISTRATION
or any accounting firm contracted by the ADMINISTRATION any and all
working papers of its external auditors related to this contract.

ARTICLE XVII
PLAN COMPLIANCE EVALUATION PROGRAM

1. The ADMINISTRATION shall conduct periodical evaluations of the
INSURER's compliance with all terms and conditions of this contract
including, but not limited to, quality, appropriateness, timeliness and
reasonableness of cost and administrative expenses, said evaluation to
be defined as the Plan Compliance Evaluation Program.

2. Said program will evaluate compliance of the following aspects in each
areas/regions:

a) Eligibility and enrollment
b) Services to beneficiaries and participating providers
c) Coverage of benefits
d) Reporting
e) Financial requirements
f) Rules and Regulations
g) Plan initiatives
h) Quality, appropriateness, timeliness and cost of services
i) Utilization
j) Fraud and abuse
k) Accessibility
1) Grievances and Complaint handling
m) Information Systems
n) Electronic standards, security and privacy compliance as
provided by HIPAA to include review of timetables for
compliance and implementation plans
o) Such aspects which the ADMINISTRATION considers necessary in
order to evaluate full compliance with this contract.

3. The evaluation process will be performed throughout the contract year
using specific evaluating parameters. All parameters will be derived
exclusively from the Request for Proposals, the INSURER's Proposal and
this contract. Each area/region will contain several parameters with
each parameter having a specific numeric value adding up a subtotal per
area/region and a total for the aggregate of all area/regions of
evaluation. Results will be presented in a Plan Compliance Evaluation
Report. The evaluating parameters will be presented to the INSURER
prior to commencement of the evaluation process.

4. The INSURER shall comply with the penalties set for each parameter
within the range of values predetermined by the ADMINISTRATION.

5. Compliance with the Plan Compliance Evaluation Program is of essence to
this contract and will be a determining factor in the renewal of this
contract. Failure to comply with compliance requirements or parameters
may also result in the termination of the contract as provided in
Article XXXIII.

6. The ADMINISTRATION agrees to furnish the INSURER with the required Plan
Performance Evaluation Program prior to its implementation.

7. The INSURER, as an additional tool to assure the evaluation of the
insurance contract, agrees to abide, implement and develop the Health
Plan-Employer Data and Information Set (HEDIS), as revised and
recommended by NCQA and in accordance with the time schedule, work plan
and other requirements established in Addendum XI of the RFP referring
to HEDIS DATA.

8. DEFAULT AND REMEDIES under Plan Compliance Program.

REMEDIES AVAILABLE TO THE ADMINISTRATION UNDER THE PLAN COMPLIANCE
PROGRAM FOR INSURER'S DEFAULTS

All of the listed remedies below may be exercised by the ADMINISTRATION
and are in addition to all other remedies available to the
ADMINISTRATION under this contract, by law or in equity, are joint and
several, and may be exercised concurrently or consecutively. Exercise
of any remedy in whole or in part does not limit the ADMINISTRATION in
exercising all or part of any remaining remedies.

Any particular default listed under subparagraph (a) to (j) below
(which is not intended to be exhaustive) may be subject, when
applicable, to any one or more of the following remedies:

- Terminate the contract if the applicable conditions set forth
in Section 10.1 are met;
- Suspend payment to INSURER;
- Recommend to CMS that sanctions be taken against INSURER as
set out in Section 10.7;
- Remove the EPSDT's component from the capitation paid to
INSURER if the benchmarks(s) missed is for EPSDT's;
- Assess civil monetary penalties as set out in section 10.8;
and/or
- Withhold premium payment.

DEFAULTS BY INSURER

a. FAILURE TO PERFORM AN ADMINISTRATIVE FUNCTION

Failure of INSURER to perform an administrative function is a default
under this contract. Administrative functions are any requirements
under this contract that are not direct delivery of health care
services. Administrative functions include claims payment; encounter
data submission; filing any report when due; cooperating in good faith
with THE ADMINISTRATION, an entity acting on behalf of THE
ADMINISTRATION, or an agency authorized by statute or law to require
the cooperation of INSURER in carrying out an administrative,
investigative, or prosecutorial function of the program; providing or
producing records upon request; or entering into contracts or
implementing procedures necessary to carry out contract obligations.

b. ADVERSE ACTION AGAINST INSURER BY PRICO

Termination or suspension of INSURER's PRICO Certificate of Authority
or any adverse action taken by PRICO that THE ADMINISTRATION determines
will affect the ability of INSURER to provide health care services to
beneficiaries is a default under this contract.

c. INSOLVENCY

Failure of INSURER to comply with Commonwealth solvency standards or
incapacity of INSURER to meet its financial obligations as they come
due is a default under this contract.

d. FAILURE TO COMPLY WITH FEDERAL LAWS AND REGULATIONS

Failure of INSURER to comply with the federal requirements for
Medicaid, including, but not limited to, federal law regarding
misrepresentation, fraud, or abuse; and, by incorporation, Medicare
standards, requirements, or prohibitions, is a default under this
contract.

The following events are defaults under this contract pursuant to 42
U.S.C. 1396b(m)(5), 1396u-2(e)(1)(A):

INSURER's substantial failure to provide medically necessary items and
services that are required under this contract to be provided to
beneficiaries;

INSURER's imposition of premiums or charges on beneficiaries in excess
of the premiums or charge permitted by federal law;

INSURER's acting to discriminate among beneficiaries on the basis of
their health status or requirements for health care services, including
expulsion or refusal to enroll an individual, except as permitted by
federal law, or engaging in any practice that would reasonably be
expected to have the effect of denying or discouraging enrollment with
INSURER by eligible individuals whose medical condition or history
indicates a need for substantial future medical services;

INSURER's misrepresentation or falsification of information that is
furnished to CMS, THE ADMINISTRATION, a beneficiary, a potential
beneficiary, or a health care provider;

INSURER's failure to comply with physician incentive requirements
1876(1)(8), 1903(m)(2)(A)(v) of the Social Security Act and 42 Code of
Federal Regulations 417.479.

INSURER's distribution, either directly or through any agent or
independent contractor, of marketing materials that contain false or
misleading information, excluding materials previously approved by THE
ADMINISTRATION.

e. MISREPRESENTATION OR FRAUD

INSURER's misrepresentation or fraud with respect of any provision of
this contract is a default under this contract.

f. EXCLUSION FROM PARTICIPATION IN MEDICARE OR MEDICAID

Exclusion of INSURER or any of the managing employees or persons with
an ownership interest whose disclosure is required by Section 1124(a)
of the Social Security Act (the Act) from the Medicaid or Medicare
program under the provisions of Section 1128(a) and/or (b) of the Act
is a default under this contract.

Exclusion of any provider or subcontractor or any of the managing
employees or persons with an ownership interest of the provider or
subcontractor whose disclosure is required by Section 1124(a) of the
Social Security Act (the Act) from the Medicaid or Medicare program
under the provisions of Section 1128(a) and/or (b) of the Act is a
default under this contract if the exclusion will materially affect
INSURER's performance under this contract.

g. FAILURE TO MAKE PAYMENTS TO NETWORK PROVIDERS AND SUBCONTRACTORS

INSURER's failure to make timely and appropriate payments to network
providers and subcontractors is a default under this contract.

h. FAILURE TO MONITOR AND/OR SUPERVISE ACTIVITIES OF CONTRACTORS OR
NETWORK PROVIDERS

Failure of INSURER to audit, monitor, supervise, or enforce functions
delegated by contract to another entity that results in a default under
this contract or constitutes a violation of state or federal laws,
rules, or regulations is a default under this contract.

Failure of INSURER to properly credential its providers, conduct
reasonable utilization review, or conduct quality monitoring is a
default under this contract.

Failure of INSURER to require providers and contractors to provide
timely and accurate encounter, financial, statistical and utilization
data is default under this contract.

i. PLACING THE HEALTH AND SAFETY OF BENEFICIARIES IN
JEOPARDY

INSURER's placing the health and safety of the beneficiaries in
jeopardy is a default under this contract, and the ADMINISTRATION may
immediately terminate the agreement, providing the INSURER a due
process hearing to determine any monetary obligations.

j. FAILURE TO MEET ESTABLISHED BENCHMARK

Failure of INSURER to repeatedly meet any benchmark established by THE
ADMINISTRATION under this contract is a default under this contract.

9. NOTICE OF DEFAULT AND CURE OF DEFAULT WHEN APPLICABLE

THE ADMINISTRATION will provide INSURER with written notice of default
(Notice of Default) under this contract. The Notice of Default may be
given by any means that provides verification of receipt. The Notice of
Default must contain the following information:

i. A clear and concise statement of the circumstances or
conditions that constitute a default under this contract;

ii. The contract provision(s) under which default is being
declared;

iii. A clear and concise statement of how and/or whether the
default may be cured;

iv. A clear and concise statement of the time period during which
INSURER, when applicable, may cure the default;

v. The remedy or remedies THE ADMINISTRATION is electing to
pursue and when the remedy or remedies will take effect;

vi. If THE ADMINISTRATION is electing to impose civil monetary
penalties, the amount that THE ADMINISTRATION intends to
withhold or impose and the factual basis on which THE
ADMINISTRATION is imposing the chosen remedy or remedies;

vii. Whether any part of a civil monetary penalty, if THE
ADMINISTRATION elects to pursue these remedy, may be passed
through to an individual or entity who is or may be
responsible for the act or omission for which default is
declared;

viii. Whether failure to cure the default within the given time
period, if any, will result in THE ADMINISTRATION pursuing an
additional remedy or remedies, including, but not limited to,
additional sanctions, referral for investigation or action by
another agency, and/or termination of the contract.

10. EXPLANATION OF REMEDIES

10.1 TERMINATION

10.1.1 TERMINATION BY THE ADMINISTRATION
THE ADMINISTRATION may terminate this contract if:

10.1.1.1 INSURER substantially fails or refuses to provide payment for
or access to medically necessary services and items that are
required under this contract to be provided to beneficiaries
after notice and opportunity to cure;

10.1.1.2 INSURER substantially fails or refuses to perform
administrative functions under this contract after notice and
opportunity to cure;

10.1.1.3 INSURER materially defaults under any of the provisions of
Article XVI;

10.1.1.4 Federal or Commonwealth funds for the Medicaid program are no
longer available; or

10.1.1.5 THE ADMINISTRATION has a reasonable belief that INSURER has
placed the health or welfare of beneficiaries in jeopardy, as
established in Article XVII, (8) (i).

10.1.2 THE ADMINISTRATION must give INSURER 30 days written notice of
intent to terminate this contract if termination is the result
of INSURER's substantial failure or refusal to perform
administrative functions or a material default as established
in Article XXXIII, except as otherwise stated.

10.1.3 THE ADMINISTRATION may, when termination is due to INSURER's
substantial failure or refusal to provide payment for or
access to medically necessary services and items, notify
INSURER's beneficiaries of any hearing requested by INSURER.
Additionally, if THE ADMINISTRATION terminates for this
reason, THE ADMINISTRATION may enroll INSURER's beneficiaries
with another INSURER or permit INSURER's beneficiaries to
receive Medicaid-covered services other than from an INSURER.

10.1.4 INSURER must continue to perform services under the transition
plan described in Section 10.2.1 if the termination is for any
reason other than THE ADMINISTRATION's reasonable belief that
INSURER is placing the health and safety of the beneficiaries
in jeopardy. If termination is due to this reason, THE
ADMINISTRATION may prohibit INSURER's further performance of
services under the contract.

10.1.5 If THE ADMINISTRATION terminates this contract, INSURER may
appeal the termination under Article VI Section 12 Law 72
September 7, 1993, as amended.

10.1.9 TERMINATION BY MUTUAL CONSENT

This contract may be terminated at any time by mutual consent
of both INSURER and THE ADMINISTRATION.

10.2 DUTIES OF CONTRACTING PARTIES UPON TERMINATION BY REASON OF
DEFAULT

When termination of the contract occurs by reason of default,
THE ADMINISTRATION and INSURER must meet the following
obligations:

10.2.1 THE ADMINISTRATION and INSURER must prepare a transition plan,
which is acceptable to and approved by THE ADMINISTRATION, to
ensure that beneficiaries are reassigned to other plans
without interruption of services. That transition plan will be
implemented during the 90-day period between receipt of notice
and the termination date unless

termination is the result of THE ADMINISTRATION's reasonable
belief that INSURER is placing the health or welfare of
beneficiaries in jeopardy.

10.2.2.2 INSURER is responsible for all expenses related to giving
notice to beneficiaries; and

10.2.2.3 INSURER is responsible for all expenses incurred by THE
ADMINISTRATION in implementing the transition plan.

10.2.2.4 If the contract is terminated by mutual consent:

10.2.3.1 THE INSURER is responsible for notifying all beneficiaries of
the date of termination and how beneficiaries can continue to
receive contract services and the provisions of Article XXXIV
shall apply.

10.7 RECOMMENDATION TO CMS THAT SANCTIONS BE TAKEN AGAINST INSURER

10.7.1 If CMS determines that INSURER has violated federal law or
regulations and that federal payments will be withheld, THE
ADMINISTRATION will deny and withhold payments for new
enrollees of INSURER.

10.7.2 INSURER must be given notice and opportunity to appeal a
decision of THE ADMINISTRATION and CMS pursuant to 42 CFR
434.67.

10.8 CIVIL MONETARY PENALTIES

10.8.1 The Administration may impose monetary penalties according to
Article XXXVI, Section 4.

10.10 REVIEW OF REMEDY OR REMEDIES TO BE IMPOSED

10.10.1 INSURER may dispute the notice by the ADMINISTRATION that
ADMINISTRATION intends to impose any sanction under this
contract. INSURER may notify THE ADMINISTRATION of its
objections by filing a written response to the Notice of
Default, clearly stating the reason INSURER disputes the
proposed sanction. With the written response, INSURER must
submit to THE ADMINISTRATION any documentation that supports
INSURER's position. INSURER must file the review within
fifteen (15) days from INSURER's receipt of the Notice of
Default as provided in Article XXXIII, subparagraph 2. Filing
a dispute in a written response to the Notice of Default
suspends imposition of the proposed sanction.

10.10.2 INSURER and THE ADMINISTRATION must attempt to informally
resolve the dispute. If INSURER and THE ADMINISTRATION are
unable to informally resolve the dispute THE ADMINISTRATION
will make the remedy final.

11. The ADMINISTRATION, in coordination with the INSURER, will
implement a comprehensive fraud, errors and irregularities
program. The INSURER will be required to ensure compliance
with this program. If after a reasonable period to be
determine by the parties, the ADMINISTRATION detected any
violation of the program; the ADMINISTRATION may withheld such
amount from the INSURER premium. The INSURER will have the
right to present its position with following XXXVII (5) (B).

ARTICLE XVIII
PAYMENT OF PREMIUMS

1. The payment for the first month of coverage under this contract will be
made upon the certification by the INSURER that it has complied with
all the terms and conditions contained in this contract to the
satisfaction of the ADMINISTRATION.

For subsequent months the ADMINISTRATION shall pay to the INSURER the
corresponding monthly premium within five (5) working days following
submission by the INSURER of an invoice containing the list of the
beneficiaries enrolled for the month of the invoice.

Calculations by ASES of premiums due will be based on the status of
beneficiaries eligible at the end of the prior month, following all
processing of updates and cancellations effective in that month.

The monthly premium calculation for beneficiaries not enrolled for the
full month shall be determined on a pro-rata basis by dividing the
corresponding monthly premium amount by the number of days in the month
and multiplying the result by the number of days the beneficiary was
actually enrolled.

3. The monthly premiums for the months comprised within the contract term
and covered by this contract are as follows:

a) For all beneficiaries including all those who are sixty-five
(65) years and older who are Medicare beneficiaries with Part
A or Parts A and B and those who are sixty-five years and
older who are not Medicare recipients:

1) Per member per month rate (PMPM) (Beneficiary) established at
FIFTY EIGHT WITH EIGHTY CENTS ($58.80).

4. The per member per month rate (PMPM) herein agreed provides for:

a) The billing by providers to Medicare for services rendered to
beneficiaries who are also Medicare recipients. The INSURER
will not cover deductibles or co-insurance of Part A, but will
cover deductibles and co-insurance of Part B of Medicare,
except for deductibles and co-insurance for outpatient
services provided in hospital setting, other than physician
services.
b) The recognition as a covered reimbursable Medicare Program
cost as bad debts by reason of non-payment of Part A
deductibles and/or coinsurance, and for deductibles and
co-insurance for outpatient services provided in hospital
setting under Medicare Part B, other than physician services.

c) Pharmacy coverage for beneficiaries who are also Part A and
Part A and B Medicare recipients, as long as the benefits are
accessed through the PCP, HCO's, HCO's network of
participating providers or the INSURER's participating
providers and the prescription is issued by a participating
provider of the INSURER.

d) Dental coverage for beneficiaries who are also Part A and Part
A and B Medicare recipients, the INSURER's participating
providers.

e) All benefits included in Addendum I that are not covered under
Medicare Part A or Part B.

5. The INSURER shall not, at any time, increase the rate agreed in the
contract nor reduce the benefits agreed to as defined in Addendum I of
this contract.

6. The INSURER guarantees the ADMINISTRATION that the rate and any
applicable deductibles or co-payments constitute full payment for the
benefits contracted under the plan, and that participating providers
cannot collect any additional amount from the beneficiaries. Balance
billing is expressly prohibited.

Upon a determination made by the ADMINISTRATION that the INSURER or its
agents that the INSURER has engaged in balance billing, the
ADMINISTRATION will proceed to enforce provisions as established in
Article XXXVI.

7. The INSURER understands that the payment of premium by the
ADMINISTRATION and the INSURER's payments to its HCO's, HCO's network
of participating providers and INSURER's participating providers, shall
be considered as full and complete payment for all services rendered
except for the deductibles established in Addendum I of the contract
herein.

8: For those Medicare beneficiaries with Part A, any recovery by the
provider for Part A deductibles and/or co-insurance will be made
exclusively through the Medicare Part A Program as bad debts. In this
instance, beneficiaries would neither pay any reimbursement for
rendered services to a participating provider nor pay the deductibles
included in Addendum I of this contract.

9. For those Medicare beneficiaries with Part B, any recovery by the
participating provider for Part B deductibles and/or co-insurance,
other than services provided I on an outpatient basis to hospital
clinics, will be made through the INSURER and/or the HCOs. In this
instance, beneficiaries would neither pay any reimbursement for
rendered services to a participating provider nor pay the deductibles
included in Addendum I of this contract.

10. Co-insurance and deductible for Part B services provided on an
outpatient basis to hospital clinics, other than physician services,
will be considered as a covered bad debt reimbursement item under the
Medicare program cost. In this instance, the INSURER will pay for the
co-insurance and deductibles related to the physician services provided
as a Part B service, through the capitation paid to the HCO.

11. Newborns shall be immediately covered by the INSURER if born to an
eligible individual and/or family unit as defined herein the Medicaid
Commonwealth Plan, the law and its regulations.

12. The INSURER understands that if the Federal Government submits an
alternative to the agreement hereof that is more cost effective and for
the benefit of the Government of the Commonwealth Puerto Rico, the
ADMINISTRATION along with the INSURER will attempt to renegotiate the
coverage for Medicare beneficiaries with Part A or Part A and B.

13. The INSURER certifies that the monthly billing submitted to the
ADMINISTRATION includes all beneficiaries, who have been issued an
identification card and for which payment of premiums are due either on
a monthly or pro-rated basis. The ADMINISTRATION will not accept any
new billing once the monthly billing is submitted by the INSURER to the
ADMINISTRATION, unless there is a justifiable reason for the omission.

14. If any differences arise in the ADMINISTRATION's payment of premiums to
the INSURER, the latter will proceed to analyze the differences between
the original billing submitted by the INSURER and the amount paid by
the ADMINISTRATION. The INSURER will proceed, after proper analysis, to
submit to the ADMINISTRATION a diskette as well as all relevant
documentation that supports and details the INSURER's claim not later
than thirty (30) working days after payment is made to the INSURER by
the ADMINISTRATION. Once this term has ended, the INSURER waives its
right to claim any amounts from differences arising from the monthly
payment made by the ADMINISTRATION

and releases the ADMINISTRATION from any and all obligation to pay any
additional premiums, including differences to billing by more than one
insurer. During the following one hundred and twenty (120) days the
ADMINISTRATION will confirm the validity of the claim and make payment
thereof.

ARTICLE XIX
ACTUARIAL REQUIREMENTS

1. For the purpose of determining future premiums, the loss experience of
this contract shall be based exclusively on the results of the cost of
health care services provided to the beneficiaries covered under this
contract. The INSURER shall maintain all the utilization and financial
data related to this contract duly segregated from its regular
accounting system including, but not limited to the General Ledger and
the necessary Accounting Registers classified by the Area/Region
subject to this contract.

2. Administrative expenses to be included in determining the experience of
the program are those directly related to this contract. Separate
allocations of expenses from the INSURER's regular business, INSURER's
related companies, INSURER's parent company or other entities will be
reflected or made a part of the financial and accounting records
described in the preceding section.

3. Any pooling of operating expenses with other of the INSURER's groups,
cost shifting, financial consolidation or the implementation of other
combined financial measures is expressly forbidden.

4. Amounts paid for claims or encounters resulting from services
determined to be medically unnecessary by the INSURER will not be
considered in the contract's experience.

5. The INSURER shall provide the ADMINISTRATION every month with a Premium
Disbursement Illustration. Said illustration shall present the
distribution of the capitation, claim expenses by coverage, reserves,
administrative expenses and premium distributions as referred and
contained in the RFP's Actuarial Reports formats. Failure to comply
with the requirements contained herein will be sufficient cause for the
imposition against the INSURER of the penalty provided for in Article I
of this contract.

6. The determination by the INSURER as to the payment of the capitation
fee and as to any other payments by virtue of this contract will be
computed on an actuarially sound basis.

7. The INSURER will provide to the ADMINISTRATION, on a monthly basis, the
actuarial data, premium distribution, and reports as contained in the
RFP's Actuarial Report formats. Failure to comply with the requirements
contained herein will be

sufficient cause for the imposition against the INSURER of the penalty
provided for in Article XXXVI of this contract.

ARTICLE XX
PREVENTIVE MEDICINE PROGRAM

1. The Department of Health will provide for and effectively implement a
preventive medicine program with primary emphasis on public health
education which will include, but will not be limited to, guidance on
lifestyles, AIDS, drug abuse, cancer and mother and child care. This is
typically referred to as Primary Prevention. The INSURER will
collaborate with the Department of Health and provide for a preventive
medicine program with primary emphasis on the provision of clinical
services in support of the Preventive Medicine Program, including but
not limited to, screening and education of individual patients, such as
PAP Smears, colorectal screening mammograms and cholesterol screening
as indicated by the best practices of medicine.

In cooperation with the INSURER, the Department of Health will develop
a surveillance methodology to identify compliance with this program.

2. The INSURER, through its secondary and tertiary Preventive Program,
will address, analyze and implement measures to provide effective
clinical and educational activities seeking to combat the specific
causes of morbidity and mortality in the Area/Region.

3. The INSURER will develop and effectively implement a case management
system in order to monitor high risk cases and attend to the covered
health care needs of the beneficiaries and dependents within said
category.

4. The INSURER represents that under its Preventive Program it will
contract, sufficient medical specialists and specialized teams in order
to combine the resources of the HCO's and the professional staff of the
HCO's, including but not limited to, health educators, nutritionists,
dieticians, nurses, other trained personnel and physicians who will act
as the team's educator, manager and coordinator.

5. The INSURER will be responsible to direct to a network of other
agencies and community resources serving each municipality within the
Area/Region so as to guarantee that participating providers and
beneficiaries are aware of and understand the available services in
their community and the process by which to access them.

6. The INSURER will assure that discharge of the mother and her baby from
the hospital is based upon sound clinical judgment determined by the
clinician. The coverage for hospital stay following a normal vaginal
delivery may not be limited

to less than 48 hours for both the mother and newborn child and in the
case of childbirth following cesarean section; the hospital stay may
not be limited to less than 96 hours for both mother and newborns.

7. The responsibilities of the INSURER in the Preventive Program will
include the following:

a) A disease management program developed by the INSURER in
collaboration with the Department of Health which shall
develop standardized processes to address major public health
programs such as ASTHMA, DIABETES, HYPERTENSION AND
CONGESTIVE HEART FAILURE. This program shall include
identification treatment protocols/guidelines and
surveillance/monitoring. In cooperation with the Department of
Health and the Centers for Disease Control (CDC) annual
reports will be published detailing the results.

b) A case management program which initially will be under the
responsibility of a nurse. Case management will not be limited
to the physician's offices or a determined center.
Coordination of the services provided is required within the
community and at the home of the beneficiary, if necessary.

c) An outreach program shall be developed in collaboration with
the Department of Health to target specific clinical issues as
identified by the Department of Health, for those
beneficiaries who cannot access those services. The clinical
standard shall conform to the published HEDIS measures. These
measures can be modified or supplemented by the Department of
Health.

d) The INSURER will assure that all pregnant women are screened
for alcohol use following the Department of Health Guidelines.

e) The INSURER will assure that all pregnant women will obtain
counseling for the HIV test. All pregnant women who accept the
HIV test will be referred to the HIV Prevention and Detection
Program of the Department of Health. The participant provider
shall coordinate all referrals with the Department of Health.
Pre-natal care and HIV testing will continue to be covered
benefits under this contract.

f) The INSURER will assure that all pregnant women, following
the administration of the HIV test that reports a positive
result, are allowed to be treated under the guidelines for the
utilization of ZDV in pregnant women and neonatal infants to
reduce the risk of mother-infant HIV transmission, published
by the Department of Health.

g) The INSURER will assure that all pregnant women are properly
educated about the WIC Program. Those eligible individuals
will be referred to the

WIC Program of the Department of Health. It will be the
immediate responsibility of the participating providers to
comply with all requirements in order to arrange the referral
to the WIC Program without any cost to the patient.

h) The INSURER will assure that all providers comply with the
EPSDT (Early Periodic Screening Diagnosis and Treatment)
Program and the Guidelines for Adolescent Preventive Services
(GAPS) from the American Medical Association. The itinerary of
services that have to be rendered by providers will comply
with the EPSDT Itinerary Services Formats.

i) The INSURER will be responsible to develop and demonstrate its
strategy to meet the appropriate prevention program guidelines
as required by the Department of Health.

j) The INSURER will provide the ADMINISTRATION monthly reports
detailing all services rendered to mother and child classified
by age groups and listing the numbers of pregnant women that
have: (i) received prenatal care on each month in the
reporting period; (ii) counseled as to HIV testing; (iii)
referred to the HIV Prevention and Detection Program of the
Department of Health; and (iv) referred to the WIC Program.

k) The INSURER agrees to comply and assure that all participating
providers will comply with the federal and local laws referred
in Article XV paragraph (11) (g) of this contract. The INSURER
will assure the submission by the participating provider of
all the protocols and formats requested by the Department of
Health, Department of the Family, Department of Education and
Department of Justice as contained in the RFP formats.

8. The INSURER will develop and effectively implement incentive-based
programs whereby the providers are motivated toward compliance with all
requirements of their Preventive Medicine Program such as EPSDT,
Immunizations, Prenatal care, reduction in cesarean sections, and
other related services.

9. The ADMINISTRATION shall evaluate these preventive programs through
HEDIS and other applicable performance standards.

10. The INSURER will provide the ADMINISTRATION quarterly reports needed by
the Department of Health detailing services rendered in the Preventive
Program described below.

11. The ADMINISTRATION shall have the right to audit the compliance with
these requirements as needed. Non-compliance shall be a determining
factor in nonrenewal of this contract or breach thereof as defined in
Article of XXXIII.

ARTICLE XXI
MENTAL HEALTH PROGRAM AND DEMONSTRATION PROJECT

1. The INSURER shall direct beneficiaries to access Mental Health and
Substance Abuse benefits in coordination with the Managed Behavioral
Healthcare Organization in the health region contracted by the
ADMINISTRATION and ASSMCA. The ASSMCA will monitor the Mental Health
and Substance Abuse Program provided through the MBHO contracted in the
Health Region/Area. This will be with sufficient specificity in order
to provide for all mental health and substance abuse needs for all
eligible beneficiaries residing within the municipalities forming part
of said area.

2. The INSURER will abide with the ADMINISTRATION and ASSMCA's guidelines
for expediting access of beneficiaries to the mental health and
substance abuse benefits covered under the Health Insurance Program.

3. The INSURER acknowledges that the ADMINISTRATION has been delegated by
the Department of Health, the implementation of a demonstration project
for contracting and ensuring the provision of health services through
direct contracts with health care organizations or other governmental
health care organizations. INSURER agrees to collaborate with the
ADMINISTRATION in the implementation of any demonstration project the
ADMINISTRATION intends to simultaneously or progressively develop the
contracted health region or another region or municipality during the
term of this contract.

ARTICLE XXII
PHARMACY BENEFITS MANAGEMENT (PBM)

1. The ADMINISTRATION will monitor the Physical Health Program provided
through the INSURER contracted in the Health Region/Area. This will be
with sufficient specificity in order to provide for all Physical Health
needs for all eligible beneficiaries residing within the municipalities
comprising said area.

2. The INSURER will abide with the ADMINISTRATION's guidelines for
expediting access of beneficiaries to the Physical health Program and
benefits covered under the Health Reform Program.

3. Concurrently with the terms of this contract, the INSURER agrees to
work with the ADMINISTRATION's Pharmacy Benefit Manager as selected by
the ADMINISTRATION. This will include cooperating with the selected PBM
to facilitate claims processing in a period specified, working with the
selected PBM

to specify, develop and implement the flow of information, utilization
review and customer service protocols, as well as, to cease billing and
collection of rebates from drug manufacturers, if applicable.

4. The ADMINISTRATION's PBM, will provide the INSURER the services set
forth in this Section and the services described in any attachment,
addendum or amendment hereto:

----------------------------------------------------------------------------------------------
ITEM DESCRIPTION
----------------------------------------------------------------------------------------------

Claims Processing - Contracting and administration of the pharmacy network. The
and Administrative PBM will create a network of Participating Pharmacies, which
Services will perform pharmacy services for Members at specified fees
and discounts
- Claims payments summary reports for each payment cycle
every two weeks
- Notify each INSURER of the payment process, systems involved
(NCPDP 2.0) and relevant time line.
- Processing and mailing of pharmacy checks and remittance
reports
- Reconciliation of zero balance accounts
- Generate list of participating pharmacies
- Coordination of Benefits
- On-line access to current eligibility and claims history
- Plan set-up
- Develop policies and procedures for denials and rejections
- Process reasonable denials
- Maintenance of plan
- Adjudication of electronic claims. The PBM will adjudicate
claims submitted by Participating Pharmacies to the PBM based
on the participating pharmacy's agreement with the PBM and
including online edits for preauthorization requirements and
other edits that may be deemed necessary for the accurate
payment of claims
- Approval and rejection of claims consistent with plan design
and concurrent Drug Utilization Review (DUR)
- Standard electronic eligibility
- Maintain call center
- Loading of INSURER providers in network and eligible members
- Develop remedies for addressing problems with pharmacies
- Pharmacy audits
----------------------------------------------------------------------------------------------
Concurrent Fraud - Develop process for INSURER to notify the PBM of fraud
Investigations and abuse complaints made by their beneficiaries.
- Track and Investigate fraud and abuse allegations
----------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------
Formulary - Incorporate INSURER related issues, such as providing guidance
Management into development of the Preferred Drug List (PDL), into the
Program existing ADMINISTRATION's Pharmacy and Therapeutic Committee.
- Administer the Central Administrative Committee (CAC), a cross
functional sub-committee tasked with rebate maximization. The
subcommittee will take recommendations on the PDL from the P&T
committee and will manage the PDL.
----------------------------------------------------------------------------------------------
Drug Utilization - Incorporate DUR reports and evaluation reviews into the tasks
Review/Drug of the Central Administrative Committee (CAC).
Utilization - Evaluate new therapeutic classes and determine if drugs
Evaluations need to be added or deleted from PDL.
- Therapeutic intervention and switching
----------------------------------------------------------------------------------------------
Reports - According to Agreements.
----------------------------------------------------------------------------------------------
Rebates and - Develop and maintain contracts with drug manufacturers for
Discounts rebates
- Utilize the Central Administrative Committee (CAC) to maximize
rebates
----------------------------------------------------------------------------------------------
Optional Services - Custom Management Reports
- Manual Claims Input
- Special Programming
----------------------------------------------------------------------------------------------

5. The INSURER will provide the following services set forth in this
Section and the services described in any attachment, addendum or
amendment hereto:

Claims Processing - Assume cost of implementing and maintaining on-line
and Administrative connections - The INSURER will be responsible for all of its
Services own costs of implementation, including but not limited to
payment processes, utilization review and approval processes,
connection and line charges, and other costs incurred to
implement the payment arrangements for pharmacy claims.
- Maintain or improve ratio of paid claims to processed
claims - Based on past performance, ADMINISTRATION will
develop an acceptable ratio of paid claims to processed claims
for which each INSURER will be responsible for maintaining or
improving.
- Review bi-monthly claim payments summary reports for each
payment cycle and approve transfer of funds
- Review denials and rejections
- Maintain call center - INSURER will operate a customer call
center to provide for preauthorization of drugs for drugs for
which the INSURER retains risk, according to its policies and
the approved formulary.
----------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------
- Electronically submit a list of all INSURER providers in
network and eligible members to PBM
----------------------------------------------------------------------------------------------
Concurrent Fraud - Develop tracking mechanisms for fraud and abuse issues
Investigations - Forward fraud and abuse complaints from members to PBM
----------------------------------------------------------------------------------------------
Formulary - Designate and maintain a representative to assist on the
Management P&T Committee in developing the official formulary.
Program - Submit candidates who are primary care physicians for the
Pharmacy and Therapeutic Committee.
- Select two (2) representatives of the INSURER to serve on the
Central Administrative Committee (CAC), a cross functional
committee tasked with rebate maximization. The subcommittee
will take recommendations on the PDL from the P&T committee and
will update and manage the PDL.
----------------------------------------------------------------------------------------------
Drug Utilization - Perform drug utilization review.
Review/Drug - Develop and distribute protocols, when necessary.
Utilization - Perform utilization management functions - The INSURER will
Evaluations perform utilization review that meets the minimum standards of
ADMINISTRATION or that may be required by the Medicaid program.
- Perform disease management functions - The INSURER will perform
disease management that meets the minimum standards of the
ADMINISTRATION or that may be required by the Medicaid program.
----------------------------------------------------------------------------------------------
Reports - Meet with PBM to determine the reports that should be the sole
responsibility of the PBM, those performed by the INSURER and
those that should be duplicated in order to cross check.
----------------------------------------------------------------------------------------------

6. The INSURER will abide and comply with following payment process hereby
established:

a) The INSURER will pay claims costs. Every two weeks, the PBM
will provide the INSURER with the proposed claims listing. The
INSURER will promptly review the payment listing.

b) Submit funds for claims payment to zero-balance account. The
INSURER will provide funds, wire transfers or otherwise submit
payment within two business days to a bank account established
for the payment of the claims applicable to each INSURER.

c) Payment failure by INSURER or the establishment of a Medicaid
Rebate Program. The following payment process will be
implemented if either the INSURER fails to make a timely or
correct payment to the established zero-balance account or if
the ADMINISTRATION enters into a Medicaid Rebate Program:

(i) The contract amounts paid to the INSURER will be
reduced by the estimated claims cost for the
succeeding month, any deficit in funds provided
versus the cash requirements for the zero-balance
account. Estimates will be made based on actual
claims experience. After a reasonable period of time,
adjustments will be made to the monthly withholds for
the actual experience of the prior month(s) versus
the estimated. A final settlement shall be made
within a specified period after the end of the
contract year.

d) Payment of PBM and Collection of Rebates and Discounts: The
ADMINISTRATION will collect rebates and provide for the
payment of reasonable PBM fees for defined services. The
ADMINISTRATION will pay the INSURER seventy five (75%) percent
of the net rebates collected; the INSURER will share such
rebates with the primary care providers according to their
risk.

e) Other Savings: The INSURER, the ADMINISTRATION, and the PBM
shall cooperate to identify additional savings opportunities,
including special purchasing opportunities, changes in network
fees, etc. Payment to the INSURER will be adjusted to provide
the ADMINISTRATION for its share of the incremental net
savings.

f) Fees per transaction and DUR and Formulary Management fees
will be paid by the INSURER.

ARTICLE XXIII
BENEFITS

1. The INSURER agrees to provide to the enrolled beneficiaries the
benefits included in Addendum I of this contract. The benefits to be
provided under the program are divided in three types of coverage: 1)
the Basic Coverage that includes preventive, medical, hospital,
surgical, diagnostic tests, clinical laboratory tests, x-rays,
emergency room, ambulance, maternity and prescription drug services, 2)
Dental Coverage based on the right to choose one of the participating
dentists from the INSURER's network and 3) the Special Coverage that
includes benefits for catastrophic conditions, expensive procedures and
specialized diagnostic tests.

2. The INSURER may not modify, change, limit, reduce, or otherwise alter
said benefits nor the agreed terms and conditions for their delivery
without the express written consent of the ADMINISTRATION.

3. The coverage for Medicare beneficiaries is established as follows:

(a) Beneficiaries with Part A of Medicare- the INSURER will pay
for all services not included in Part A of Medicare, and
included in the contract herein. The INSURER will not pay the
applicable Part A deductibles and coinsurance.

(b) Beneficiaries with Part A and Part B of Medicare- the
INSURER will pay for prescription drugs prescribed by PCP and
dental coverage. The INSURER will not cover the payment of the
applicable Part A deductibles and coinsurance, but will cover
the payment of the applicable Part B deductible and
co-insurance.

(c) Access to services contemplated herein will be through a
selected HCO. Beneficiaries with Part A can select from the
Medicare's providers list, in which case the benefits under
this contract would not be covered.

4. The Medicare beneficiary can select a Part A provider from the Medicare
Part A providers list, but has to select a HCO for Part B services for
beneficiaries with Part B services or Part B equivalent services for
beneficiaries without Part B of Medicare.

ARTICLE XXIV
CONVERSION CLAUSE

1. If during the term of this contract, the insurance coverage for a
beneficiary terminates because the beneficiary ceases to be eligible
and is disenrolled, such person has the right to receive a direct
payment policy from INSURER without submitting evidence of eligibility.
The direct payment policy will be issued by the INSURER without
taking into consideration pre-existing conditions or waiting periods.
The written request for a direct payment policy must be made, and the
first premium submitted to INSURER on or before thirty-one (31) days
after the date of disenrollment, bearing in mind that:

a) The direct payment policy should be an option of such person,
through any of the means which at that date INSURER has
currently made available according to the age and benefits
requested. It will be subject to the terms and conditions of
the direct payment policy.

b) The premium for the direct payment policy will be in
accordance with the rate then in effect at INSURER, applicable
to the form and benefits of the direct payment policy, in
accordance with the risk category the person falls in at the
moment, and the age reached on the effective date of the
direct payment policy. The health condition at the moment of
conversion will

have no bearing in the eligibility nor will it be an
acceptable base for the risk classification.

c) The direct payment policy should also provide for coverage to
any other individual, if these were considered eligible
beneficiaries at the termination date of the health insurance
under this contract. Under option by INSURER, a separate
direct payment policy may be issued to cover the other
individuals who formerly were eligible beneficiaries.

d) The direct payment policy will be effective upon termination
of coverage under the health insurance contracted.

e) INSURER will not be obligated to issue a direct payment policy
covering a person who has the right to receive similar
services provided by any insurance coverage or under the
Medicare Program of the Federal Social Security legislation,
as subsequently amended, if such benefits, jointly provided
under the direct payment policy, result in an excess of
coverage (over insurance), according to the standards of the
INSURER.

2. When coverage under this contract terminates due to the expiration of
its term, all persons formerly considered eligible beneficiaries, who
have been insured for a period of three (3) years prior to the
termination date, will be eligible for a INSURER direct payment policy,
subject to the conditions and limitations stipulated in clause 1 of
this section.

3. Subject to the conditions and limitations stipulated in clause 1 of
this section, the conversion privilege will be granted:

a) to all eligible beneficiaries whose coverage under the health
insurance contracted is terminated because they cease to be
eligible beneficiaries and are disenrolled.

b) to any eligible beneficiary whose coverage under the health
insurance contracted ceases because he no longer qualifies as
an eligible beneficiary, regardless of the fact that the
principal subscriber and/or any other eligible beneficiary
continues covered by said health insurance coverage under this
contract.

4. In case an eligible beneficiary under this contract suffers a loss
covered by the direct payment policy, described in clause 1 of this
section, during the period he/she would have qualified for a direct
payment policy and before the said direct payment policy is in effect,
the benefits which he/she would have a right to collect under such
direct payment policy will be paid as a claim under the direct payment
policy, subject to having requested the direct payment policy and the
payment of the first premium.

5. If any eligible beneficiary under this contract subsequently acquires
the right to obtain a direct payment policy, under the terms and
conditions of the INSURER's policies without providing evidence of
qualifications for such insurance, subject to the request and payment
of the first premium during the period specified in the policy; and if
this person is not notified of the existence of this right, at least
fifteen (15) days prior to the expiration of such period, such person
will be granted an additional period during which time he/she can claim
his/her right, none of the above implying the continuation of a policy
for a period longer than stipulated in said policy. The additional
period will expire fifteen (15) days after the person is notified, but
in no case will it be extended beyond sixty (60) days after the
expiration date of the policy. Written notification handed to the
person or mailed to the last known address of the person, as
acknowledged by the policy holder, will be considered as notification,
for the purposes of this paragraph. If an additional period is granted
for the right of conversion as hereby provided, and if the written
application for direct payment, enclosed with the first premium
payment, is made during the additional period, the effective date of
the direct payment policy will be the termination of the health
insurance coverage under this contract.

6. Subject to the other conditions expressed before, the eligible
beneficiaries will have the right to conversion, up to one of the
following dates:

a) date of termination of his/her eligibility under this
contract; or

b) termination date of this contract; or

c) date of amendment of this contract, if said amendment in any
way eliminates the beneficiaries' eligibility.

ARTICLE XXV
TRANSACTIONS WITH THE INSURER

1. All transactions between the ADMINISTRATION and the INSURER shall be
handled according to the terms and conditions set forth in this
contract.

2. The INSURER shall appoint a person that shall be responsible for all
transactions with the ADMINISTRATION.

3. All eligibility transactions shall be coordinated on a daily basis.

ARTICLE XXVI
NON-CANCELLATION CLAUSE

The INSURER may not cancel this contract, or make modifications to it for any
reason, or otherwise change, restrict or reduce the insurance or the benefits,
except for nonpayment of premiums.

ARTICLE XXVII
APPLICABLE LAW

The Request for Proposal that originated this contract, the Proposal submitted
by the INSURER, this contract and/or any other document or provision
incorporated to it by reference, shall be interpreted and construed according to
the laws of the Commonwealth of Puerto Rico. If any controversy may arise
regarding the interpretation or performance of this contract, the parties
voluntary submit for its resolution to the jurisdiction of the Superior Court of
the Commonwealth of Puerto Rico, San ▇▇▇▇ Part.

ARTICLE XXVIII
EFFECTIVE DATE AND TERM

1. This contract shall be in effect for (3) consecutive twelve months
periods, starting at 12:01 AM, Puerto Rico time on July 1, 2002, the
first day that coverage begins and payment of the premium is due.

2. This contract may not be assigned, transferred or pledged by the
INSURER without the express written consent of the ADMINISTRATION.

3. The second and third periods of the contract will require premium
payment renegotiation by the ADMINISTRATION and the INSURER taking into
consideration actual claims paid and incurred for The Health
Area/Region and an assessment of specific trends actuarially based for
both medical and prescription cost to reach the applicable premiums for
any subsequent period of time.

In the event an agreement can not be reached on the premium for the next period
after good faith negotiations by the ADMINISTRATION and the INSURER according to
the parameters set forth in (3) supra, the contract may be terminated if deemed
in the best interest of these beneficiaries, the ADMINISTRATION and the
Government of Puerto Rico.

ARTICLE XXIX
CONFLICT OF INTEREST

Any officer, director, employee or agent of the ADMINISTRATION, the Government
of the Commonwealth of Puerto Rico, its municipalities or corporations cannot be
part of this contract or derive any economic benefit that may arise from its
execution.

ARTICLE XXX
INCOME TAXES

The INSURER certifies and guarantees that at the time of execution of this
contract, 1) it is a corporation duly authorized to conduct business in Puerto
Rico and that has filed income tax returns for the previous five (5) years; 2)
that it complied with and paid unemployment insurance tax, disability insurance
tax (Law 139), social security for drivers ("seguro social choferil"), if
applicable); 3) filed State Department reports, during the five (5) years
preceding this contract and 4) that it does not owe any kind of taxes to the
Commonwealth of Puerto Rico.

ARTICLE XXXI
ADVANCE DIRECTIVES

The INSURER agrees to enforce and require compliance by all applicable
participating providers with 42 CFR 434, Part 489, Subpart I relating to
maintaining written policies and procedures respecting advance directives. This
requirement includes provisions to inform and distribute written information to
adult individuals concerning policies on advance directives, including a
description of applicable Commonwealth law.

ARTICLE XXXII
OWNERSHIP AND THIRD PARTY TRANSACTIONS

The INSURER shall report ownership, control interest, and related information to
the ADMINISTRATION, and upon request, to the Secretary of the Department of
Health and Human Services, the Inspector General of the Department of Health and
Human Services, and the Comptroller General of the United States, in accordance
with Sections 1124 and 1903(m)(4) of the Federal Social Security Act.

ARTICLE XXXIII
MODIFICATION OF CONTRACT

If the ADMINISTRATION finds that, because of amendments to Law 72 of
September 7, 1993, or by reason of budget reductions, or subsequent Federal or
local legislative changes that affect this contract, or because of any reasons
deemed by the ADMINISTRATION to be in the best interest of the Government of
Puerto Rico in carrying out the provisions of Law 72 of September 7, 1993, or in
order to perform experiments and demonstration projects pursuant to legislative
enactment, modification

of this contract is necessary, the ADMINISTRATION may modify any of the
requirements, terms and conditions, functions, part thereof or any other
services to be performed by the INSURER. Prior to any such modification, the
ADMINISTRATION shall afford the INSURER an opportunity to consult and
participate in planning for adjustments which might be necessary and thereafter
provide the INSURER written notice that the modification is to be made within
ninety (90) days after a date specified in the notice. Said modifications will
take place after consultation and cost negotiation with the INSURER.

ARTICLE XXXIV
TERMINATION OF AGREEMENT

1. If the ADMINISTRATION finds, after reasonable notice and opportunity
for a hearing to the INSURER the INSURER has failed substantially to
carry out the material terms and conditions of this contract, the
ADMINISTRATION may terminate this contract at any time, as provided in
Section 10.1, above.

2. In the event that there is non-compliance by the INSURER with any
specific clause of this contract, the ADMINISTRATION will notify the
INSURER in writing, indicating the area/region(s) of non-compliance.
The INSURER will be granted the opportunity to present and discuss its
position regarding the issue within fifteen (15) days from the date of
the notification. After considering the allegations presented by the
INSURER following adequate hearing and the opportunity to present all
necessary evidence in support of its position, and the ADMINISTRATION
formally determines that there is a non-compliance, at the discretion
of the ADMINISTRATION, this contract may be cancelled by giving thirty
(30) days prior written notice before the effective date of
cancellation.

In the event that the INSURER does not remedy, correct or cure the
material deficiencies noted in the Plan Compliance Evaluation Report,
as provided for in Article XVII of this contract, and following the
opportunity of an adequate hearing and the presentation of evidence in
support of its position, and the ADMINISTRATION confirms the
deficiency, then at the discretion of the ADMINISTRATION this contract
may be cancelled by giving thirty (30) days prior notice.

If the INSURER were to be declared insolvent, files for bankruptcy or
is placed under liquidation, the ADMINISTRATION shall have the option
to cancel and immediately terminate this contract. In the event of this
happening an enrollee will not be liable for payments under this
contract.

In the event that this contract is terminated, the INSURER shall
promptly provide the ADMINISTRATION all necessary information for the
reimbursement of any pending and outstanding Claims. The INSURER hereby
recognizes that in the event of termination under this Article it shall
be bound to provide reasonable

cooperation to the ADMINISTRATION beyond the date of termination in
order to properly effect the transition to the new INSURER taking over
the region covered by this Contract. This obligation to reasonably
cooperate shall survive the date of said effective termination
provided, at the ADMINISTRATION'S discretion.

The INSURER agrees and recognizes that in the event there are no
sufficient enough funds designated for the payment of premium, the
ADMINISTRATION reserves the right to terminate this contract, effective
ninety (90) days after prior written notification.

ARTICLE XXXV
PHASE-OUT CLAUSE

1. In the event that the contract is terminated, the INSURER will continue
to provide services for a reasonable term to guarantee the continuance
of services until the ADMINISTRATION has made adequate arrangements to
continue the rendering of health care benefits to beneficiaries in the
areas affected by the termination. The duration of such transition term
will not exceed sixty (60) days. Adjustments in the PMPM during the
transition term shall not be borne or agreed upon by ADMINISTRATION, in
the event of a termination based on default or breach of contract by
the INSURER.

2. Upon the expiration or termination of a contract, the INSURER will
provide the ADMINISTRATION with the historical/utilization data of
services rendered to beneficiaries in the area/region in formats
specified/agreed with the ADMINISTRATION, in order to prevent fraud and
double billing of services by the incoming INSURER.

3. Any INSURER phasing out of a Health Region will guarantee payment for
services rendered to beneficiaries under the previous contract. Failure
to do so, shall entail in accordance with the fair hearing process
established on Article XXXIII, the retention of a determined amount of
premium payment of INSURER's Health Region Contract. The amount to be
retained shall be sufficient to cover the amount owed.

4. The INSURER acknowledges that it will collaborate with the
ADMINISTRATION efforts in any health regions or geographic area in
transition processes.

5. If in the best interest of the beneficiaries or the Commonwealth of
Puerto Rico the ADMINISTRATION terminates any demonstration project,
the INSURER will assume responsibility for the geographic areas
(municipalities/regions) managed by any health organization in
accordance with the contracted premium.

6. If in the best interest of the beneficiaries or the Commonwealth of
Puerto Rico the ADMINISTRATION expands the direct contracting
demonstration project with

health care organization, the INSURER will assist in the transition
process after ninety (90) days of a written notification and payments
of premiums will be adjusted accordingly.

ARTICLE XXXVI
THIRD PARTY DISCLAIMER

None of the obligations, covenants, duties, and responsibilities incurred or
assumed under the present Contract, the Request For Proposal, Proposal, the
representations and assurances provided at the clarification meeting held on
June 11, 2001, by either: (i) the INSURER towards the ADMINISTRATION and any
governmental agencies, or (ii) the ADMINISTRATION towards the INSURER, shall be
deemed as the assumption by the INSURER or the ADMINISTRATION, as the case might
be, of any legal liability or responsibility towards a third party in the event
that a negligent or intentional injury, malpractice, damage or wrongdoing, or
any harm whatsoever is incurred by or caused by the HCO's, the HCO's network of
participating providers and/or the INSURER's participating providers.

ARTICLE XXXVII
PENALTIES AND SANCTIONS CLAUSES

1. In the event that the INSURER does not furnish the ADMINISTRATION with
any kind of monthly reports related to the gathering and reporting of
encounter information, the ADMINISTRATION may retain one monthly
premium for each month in default said retention to be effective for
the subsequent month after the default. Once the INSURER complies with
said requirement, the amount retained will be fully paid to the
INSURER, within five days after receiving the required reports for the
subsequent month.

2. In the event that the INSURER does not comply with its obligation
related to the monthly gathering and accurate reporting of encounter
information, according to Article XV of this contract, the
ADMINISTRATION may retain one monthly premium payable to the INSURER
for each month in default, provided:

a. the ADMINISTRATION gives, within ten (10) working days after
receipt of the monthly report, written notification by
certified mail, or personally hand delivers said notification
to the INSURER of the non-compliance and the reasons thereof;
and

b. the ADMINISTRATION grants ten (10) working days for the
INSURER to cure the default; and

c. the INSURER fails to correct it within said term.

Whenever the above events take place, the ADMINISTRATION may retain one
monthly premium payment for each month in default. Retention will be
effective ten (10) working days after the notice of non-compliance.
Once the INSURER

corrects the problem, at the satisfaction of the ADMINISTRATION and
according to Article XV of this contract, the amount retained will be
fully paid to the INSURER, within five days after receiving full and
complete reports for the subsequent month.

3. For the purpose of subparagraphs 1 and 2, above, default is defined as
the non-compliance by the INSURER of the reporting requirements
established for the gathering and reporting of encounter information as
established in Article XV of this contract, or when the INSURER does
not submit the reports within the established term set in this
contract.

If the INSURER owes money to the Administration as a result of the imposition of
penalties, excess premiums paid or any other reason, the Administration may
withhold such amount from any payments due related to the same contract or any
other contracts between the parties.

5. A. Civil Monetary Penalties: In the event that there is a
non-compliance with Article VI, XII, XVI, XVII and/or with any specific
clause of this contract or the INSURER engages in any of the following
practices:

(a) Fails to substantially provide medically necessary
services to enrollees under this contract;

(b) imposes on enrollees premiums and charges in excess
of the ones permitted under this contract;

(c) discriminates among enrollees on the basis of their
health status or requirements for health care (such
as terminating an enrollment or refusing to reenroll)
except as permitted under the Program or engages in
practices to discourage enrollment by recipients
whose medical condition or history indicates need for
substantial medical services;

(d) misrepresents or falsifies information that is
furnished to CMS, to the ADMINISTRATION, to an
enrollee, potential enrollee or provider of services;

(e) distributes, directly or indirectly through any
agent, independent contractor, marketing material not
approved by the ADMINISTRATION, or that contains
false or misleading information;

(f) Fails to comply with the requirements for physician
incentive plans in section 1876 (i) (8) of the Social
Security Act, and at 42 CFR 417.479, or fails to
submit to the ADMINISTRATION its physician incentive
plans as requested in 42 CFR 434.70

The ADMINISTRATION will notify the INSURER in writing, the findings of
the violation and the impending intention to impose intermediate
sanctions for each violation which could consist of: monetary penalties
at the discretion of the Administration may range from five hundred
dollars $500 to twenty five thousand

dollars $25,000; or the resolution of the contract and temporary
management; suspension, and/or with-holding of premium payments, which
may range from a percent amount, or more than one monthly premium
payments. The imposition of sanctions will depend on the extent and
severity of the actions.

At the sole discretion of the ADMINISTRATION and after affording the
INSURER due process to submit a corrective action as established in
paragraph (B), below, the ADMINISTRATION will deduct any amount it may
deem adequate from the premium payments or any other administrative
items of said payments.

The Office of the Inspector General may impose civil money penalties of
up to $25,000.00 in addition to, or in lieu of each determination by
the ADMINISTRATION, or CMS, for non-compliance conduct as set forth on
subparagraphs (a) through (f).

The Secretary of the Department of Health and Human Services may seek the
enforcement of felony charges, for violation regarding subparagraph (b), above.

B. The INSURER will have the right to present and discuss its
position regarding the ADMINISTRATION'S finding within
thirty (30) days from the receipt of the notification. After
such period expires the Administration will issue its decision
regarding the contemplated sanctions which could be (i) let
stand the initial determination, (ii) modify the sanction or
(iii) eliminate the sanction if the Insurer has taken
affirmative corrective actions. Upon notifying the INSURER of
the final decision, if in disagreement, the INSURER will have
(30) days to request a hearing before the Administration. Upon
the expiration of the thirty (30) days without invoking a
formal hearing, or after the celebration of a hearing and
after issuance of findings and recommendations of the hearing
examiner, the decision will then become final, subject to the
appeal process provided in section 12, Art. VI of Law 72,
September 7, 1993, as amended.

C. The ADMINISTRATION, shall appoint temporary management only if
it finds that the INSURER has egregiously or repeatedly
engaged in any of the stated practices on paragraph (A) of
this article; or places a substantial risk on the health of
enrollees; or there is a need to assure the health of an
organization's enrollees during an orderly termination,
reorganization of the Insurer or while improvements are being
made to correct violations. The temporary management may not
be removed until the INSURER assures the ADMINISTRATION that
the violations will not recur.

6. If a contractor is found to be in non-compliance with the provisions on
ARTICLE VII concerning affiliation with debarred or suspended
individuals, the ADMINISTRATION:

a) Shall notify the Secretary of non-compliance;

b) May continue the existing contract with the Insurer,
unless the Secretary (in consultation with the
Inspector General of the Department of Health
Services directs otherwise); and,

c) May not review or otherwise extend the duration of an
existing contract with the INSURER unless the
Secretary (in consultation with the Inspector General
of the DHHS) provides to the ADMINISTRATION and to
Congress a written statement describing compelling
reasons that exist for renewing or extending the
contract.

7. Notwithstanding the provisions set in this Article, the ADMINISTRATION
reserves the right to terminate this contract, as established in
Article XXXIII.

ARTICLE XXXVIII
HOLD HARMLESS CLAUSE

1. The INSURER warrants and agrees to indemnify and save harmless the
ADMINISTRATION from and against any loss or expense by reason of any
liability imposed by law upon the ADMINISTRATION and from and against
claims against the ADMINISTRATION for damages because of bodily
injuries, including death, at any time resulting therefrom, accidents
sustained by any person or persons on account of damage to property
arising out of or in consequence of the performance of this contract,
whether such injuries to persons or damage to property are due or
claimed to be due to any negligence of the INSURER, the INSURER's
participating providers, the HCO's, the HCO's network of participating
providers, their agents, servants, or employees or of any other person.

2. The INSURER warrants and agrees to purchase insurance coverage to
include Contractual Liability Coverage incorporating the obligations
herein assumed by the INSURER with limits of liability which shall not
be less than one (1) million dollars with said insurance coverage
providing for the INSURER's obligation and the insurance company of
INSURER to defend and appear on behalf of the ADMINISTRATION in any and
all claims or suits which may be brought against the ADMINISTRATION on
account of the obligations herein assumed by the INSURER.

ARTICLE XXXIX
CENTERS FOR MEDICARE AND MEDICAID SERVICES CONTRACT
REQUIREMENTS

The ADMINISTRATION and INSURER agree and recognize that guidance and directives
from the Centers for Medicare and Medicaid Services (CMS) are incorporated in
contracts subject to its approval, such as the present one, and that they
constitute binding obligations on the part of the INSURER.

ARTICLE XL
FORCE MAJEURE

Whenever a period of time is herein prescribed for action to be taken by the
INSURER, the INSURER shall not be liable or responsible for, and there shall be
excluded from the computation for any such period of time, any delays due to
strikes, acts of God, shortages of labor or materials, war, terrorism,
governmental laws, regulations or restrictions or any other causes of any kind
whatsoever which are beyond the control of the INSURER.

ARTICLE XLI
YEAR 2000 CLAUSE

The parties hereby assure that all hardware and software that it uses with
respect to this Agreement are Year 2000 Compliant in accordance to CMS's Year
Compliance definitions as stated in the RFP. The Parties acknowledge that this
provision is an essential condition to this Agreement.

ARTICLE XLII
FEDERAL GOVERNMENT APPROVAL

1. Inasmuch as it is a requirement that the Centers for Medicare and
Medicaid Services (CMS) approves this contract in order to authorize
the use of federal funds to finance the health insurance contracted,
the same may be subject to modifications in order to incorporate or
modify the terms and conditions of this contract.

2. Any provision of this contract which is in conflict with any Federal
Laws, Federal Medicaid Statutes, Health Insurance Portability and
Accountability Act, Federal Regulations, or CMS policy guidance, as
applicable, is hereby amended to conform to the provisions of those
laws, regulations, and Federal policy. Such amendment of the contract
will be effective on the effective date of the statutes or regulations
necessitating it, and will be binding on the parties even though such
amendment may not have been reduced to writing and formally agreed
upon and executed by the parties.

ARTICLE XLIII
ACKNOWLEDGMENT AS TO INSURER

1. All responsibilities, obligations, assurances and representations,
made, taken, and assumed by the INSURER under this contract will be
fully, solely, and entirely assumed by the INSURER. Notwithstanding,
the ADMINISTRATION acknowledges that Triple-C will carry out the
responsibilities as to the administration and operational management of
the Health Insurance subject of this contract and that its officers are
authorized to represent Triple-S, Inc. in matters related to be carried
out.

2. The ADMINISTRATION acknowledges that the INSURER is in a corporate
reorganizational process. The INSURER will notify the ADMINISTRATION
the date when the reorganizational process is completed. The INSURER
represents that the reorganizational process shall not constituted an
assignment of this Contract.

ARTICLE XLIV
ENTIRE AGREEMENT

The parties agree that they accept, consent and promise to abide by each and
every one of the clauses contained in this contract and that the contract
contains the entire agreement between the parties. In order to acknowledge so,
they initial the margin of each of the pages and affix below their respective
signatures, in San ▇▇▇▇, Puerto Rico, this 13 day of June 2002.

PUERTO RICO HEALTH INSURANCE TRIPLE-S
ADMINISTRATION

by by

/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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TRIPLE-C

/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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EXHIBIT 10.2 HEALTH INSURANCE CONTRACT NORTH HEALTH REGION

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