IPA MEDICARE SHARED RISK SERVICES AGREEMENT BETWEEN PACIFICARE OF CALIFORNIA AND SANTA ANA TUSTIN PHYSICIANS GROUP, INC. TABLE OF CONTENTS

"ALL SECTIONS MARKED WITH TWO ASTERISKS ("**") REFLECT PORTIONS WHICH HAVE
BEEN REDACTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION BY PROSPECT MEDICAL HOLDINGS, INC. AS PART OF A REQUEST FOR
CONFIDENTIAL TREATMENT."

IPA MEDICARE SHARED RISK SERVICES AGREEMENT BETWEEN

PACIFICARE OF CALIFORNIA

AND

SANTA ▇▇▇ ▇▇▇▇▇▇ PHYSICIANS GROUP, INC.

TABLE OF CONTENTS

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1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Capitation Payments. . . . . . . . . . . . . . . . . . . . 2
1.03 Catastrophic Case. . . . . . . . . . . . . . . . . . . . . 2
1.04 Conformance Request. . . . . . . . . . . . . . . . . . . . 2
1.05 Copayments . . . . . . . . . . . . . . . . . . . . . . . . 2
1.06 Cost of Care . . . . . . . . . . . . . . . . . . . . . . . 2
1.07 Eligibility List . . . . . . . . . . . . . . . . . . . . . 2
1.08 Emergency Services . . . . . . . . . . . . . . . . . . . . 2
1.09 HCFA . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Hospital . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Hospital Day . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 Hospital Services. . . . . . . . . . . . . . . . . . . . . 2
1.13 IPA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 IPA Facilities . . . . . . . . . . . . . . . . . . . . . . 3
1.15 IPA Service Area . . . . . . . . . . . . . . . . . . . . . 3
1.16 Medical Services . . . . . . . . . . . . . . . . . . . . . 3
1.17 Medically Necessary Services . . . . . . . . . . . . . . . 3
1.18 Member Physicians. . . . . . . . . . . . . . . . . . . . . 3
1.19 Monthly HFCA Payment . . . . . . . . . . . . . . . . . . . 3
1.20 Outside Providers. . . . . . . . . . . . . . . . . . . . . 3
1.21 Participating Medical Group. . . . . . . . . . . . . . . . 3
1.22 Pro Program. . . . . . . . . . . . . . . . . . . . . . . . 3
1.23 Quality Assurance Committee. . . . . . . . . . . . . . . . 3
1.24 Risk Reimbursement Plan. . . . . . . . . . . . . . . . . . 4
1.25 Secure Horizons Medical and Hospital Plan. . . . . . . . . 4
1.26 Specialist Physicians. . . . . . . . . . . . . . . . . . . 4
1.27 Subscriber . . . . . . . . . . . . . . . . . . . . . . . . 4
1.28 Subscriber Premiums. . . . . . . . . . . . . . . . . . . . 4
1.29 Surcharges . . . . . . . . . . . . . . . . . . . . . . . . 4
1.30 Urgently Needed Services . . . . . . . . . . . . . . . . . 4
1.31 Utilization Review Committee . . . . . . . . . . . . . . . 4

2. RELATIONSHIP OF PARTIES . . . . . . . . . . . . . . . . . . . . . 5
2.01 IPA Participation. . . . . . . . . . . . . . . . . . . . . 5
2.02 Liability for Obligations. . . . . . . . . . . . . . . . . 5
2.03 Independent Contractor . . . . . . . . . . . . . . . . . . 5
2.04 Duty to Defend and Indemnity . . . . . . . . . . . . . . . 5

3. DUTIES OF IPA. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.01 IPA Responsibilities . . . . . . . . . . . . . . . . . . . 6
3.02 Standards. . . . . . . . . . . . . . . . . . . . . . . . . 6
3.03 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . 7
3.04 Referrals. . . . . . . . . . . . . . . . . . . . . . . . . 7
3.05 Hospital Admissions. . . . . . . . . . . . . . . . . . . . 7

TABLE OF CONTENTS

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3.06 Eligibility List . . . . . . . . . . . . . . . . . . . . . 8
3.07 Collection of Charges from Subscribers . . . . . . . . . . 8
3.08 Collection of Charges from Third Parties When Medicare
Not the Primary Payor. . . . . . . . . . . . . . . . . . 8
3.09 Duties of IPA Upon Termination During Phase-Out Period . . 9
3.10 Continuing Care Responsibilities . . . . . . . . . . . . . 10
3.11 Staff Privileges . . . . . . . . . . . . . . . . . . . . . 10
3.12 Administrative Guidelines. . . . . . . . . . . . . . . . . 11
3.13 Utilization Review . . . . . . . . . . . . . . . . . . . . 11
3.14 Quality of Health Care . . . . . . . . . . . . . . . . . . 11
3.15 Quality Assurance and Remedial Procedures. . . . . . . . . 11
3.16 Compliance with Civil Rights Laws. . . . . . . . . . . . . 12
3.17 Reciprocity Agreements . . . . . . . . . . . . . . . . . . 12
3.18 Individual Stop-Loss Program . . . . . . . . . . . . . . . 12
3.19 Other Contractual Commitments. . . . . . . . . . . . . . . 12
3.20 Dissemination of Information . . . . . . . . . . . . . . . 12
3.21 Written Agreements . . . . . . . . . . . . . . . . . . . . 12
3.22 Medical Care Criteria. . . . . . . . . . . . . . . . . . . 13
3.23 Nondiscrimination. . . . . . . . . . . . . . . . . . . . . 13
3.24 Accounts Payable System. . . . . . . . . . . . . . . . . . 13
3.25 Catastrophic Case Management . . . . . . . . . . . . . . . 13
3.26 Capacity Reporting . . . . . . . . . . . . . . . . . . . . 13
3.27 Representation of IPA Member Physicians. . . . . . . . . . 13
3.28 Performance of Member Physicians . . . . . . . . . . . . . 14
3.29 Withdrawal Of An IPA Facility. . . . . . . . . . . . . . . 14

4. DUTIES OF PACIFICARE . . . . . . . . . . . . . . . . . . . . . . . 14
4.01 Administration . . . . . . . . . . . . . . . . . . . . . . 14
4.02 Benefit Information. . . . . . . . . . . . . . . . . . . . 14
4.03 Assist IPA . . . . . . . . . . . . . . . . . . . . . . . . 14
4.04 Administration of Payments . . . . . . . . . . . . . . . . 14
4.05 Statistical Information and Provision of Data. . . . . . . 14
4.06 Services Rendered to Ineligible Subscribers. . . . . . . . 14
4.07 Dissemination of Information . . . . . . . . . . . . . . . 15

5. COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.01 Capitation Payments. . . . . . . . . . . . . . . . . . . . 15
5.02 Medical Services Reserve . . . . . . . . . . . . . . . . . 15
5.03 Additional Payments. . . . . . . . . . . . . . . . . . . . 15
5.04 Adequacy of Compensation . . . . . . . . . . . . . . . . . 15

6. TERM OF AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 16
6.01 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

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7. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.01 Termination of Agreement with Material Cause . . . . . . . 16
7.01.01 Cause for Termination of Agreement by IPA . . . . 16
a. Non-Payment. . . . . . . . . . . . . . . . . 16
b. Revocation of Certification or License . . . 16
c. Breach of Material Term and Failure to
Cure . . . . . . . . . . . . . . . . . . . 16
7.01.02 Cause for Termination of Agreement by
PacifiCare. . . . . . . . . . . . . . . . . . . 17
a. Financial Failure of IPA . . . . . . . . . . 17
b. Failure to Provide Quality Medical
Services . . . . . . . . . . . . . . . . . 17
c. Failure to Provide Services. . . . . . . . . 17
d. Breach of Material and Failure to Cure . . . 17
7.02 Curing Period and Termination Date . . . . . . . . . . . . 17
7.03 Repayment Upon Termination . . . . . . . . . . . . . . . . 17
7.04 Termination Not An Exclusive Remedy. . . . . . . . . . . . 18
7.05 Return of Proprietary Information and Patient Files Upon
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 18

8. RECORDS, DATA COLLECTION, CITATIONS AND RIGHT TO INSPECT
RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.01 Records. . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.02 Confidentiality of Records . . . . . . . . . . . . . . . . 18
8.03 Data Collection. . . . . . . . . . . . . . . . . . . . . . 19
8.04 Right to Inspect . . . . . . . . . . . . . . . . . . . . . 19
8.05 Citations. . . . . . . . . . . . . . . . . . . . . . . . . 19
8.06 Financial Statements . . . . . . . . . . . . . . . . . . . 19

9. EXCLUSIVITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.01 Utilization by PacifiCare of IPA . . . . . . . . . . . . . 19

10. GOVERNING LAW AND DISPUTE RESOLUTION. . . . . . . . . . . . . . . 19
10.01 Governing Law. . . . . . . . . . . . . . . . . . . . . . . 19
10.02 Disputes Between IPA and Subscriber Not Governed by
Agreement. . . . . . . . . . . . . . . . . . . . . . . . 20
10.03 Payment Disputes Involving IPA . . . . . . . . . . . . . . 20

11. NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.01 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 21

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12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
12.01 Protection of Subscriber . . . . . . . . . . . . . . . . . 21
12.02 Other Agreements . . . . . . . . . . . . . . . . . . . . . 21
12.03 Refusal by Physician . . . . . . . . . . . . . . . . . . . 21
12.04 Confidential and Proprietary Information . . . . . . . . . 22
12.04.01 Information Confidential and Proprietary to
PacifiCare. . . . . . . . . . . . . . . . . . . 22
12.04.02 Information Confidential and Proprietary to
IPA . . . . . . . . . . . . . . . . . . . . . . 22
12.04.03 Solicitation of PacifiCare Subscribers or
Employer Groups . . . . . . . . . . . . . . . . 22
12.05 Confidentiality of This Agreement. . . . . . . . . . . . . 23
12.06 Assignment . . . . . . . . . . . . . . . . . . . . . . . . 23
12.07 Invalidity of Sections of Agreement. . . . . . . . . . . . 23
12.08 Withdrawal of Subscribers by PacifiCare. . . . . . . . . . 23
12.09 Transfer of Subscribers. . . . . . . . . . . . . . . . . . 23
12.10 Captions . . . . . . . . . . . . . . . . . . . . . . . . . 23
12.11 Amendment. . . . . . . . . . . . . . . . . . . . . . . . . 23
12.12 Modifications of This Agreement and/or PacifiCare
Provider Policies and Procedures Manual and/or
PacifiCare Health Plan . . . . . . . . . . . . . . . . . 24
12.13 Terms; Sections. . . . . . . . . . . . . . . . . . . . . . 24
12.14 IPA's Authorized Representative. . . . . . . . . . . . . . 24
12.15 Attorneys' Fees and Costs. . . . . . . . . . . . . . . . . 24

SCHEDULE OF ATTACHMENTS. . . . . . . . . . . . . . . . . . . . . . . . 25
A1. Hospital Services. . . . . . . . . . . . . . . . . . . . . 26
A2. Medical Services . . . . . . . . . . . . . . . . . . . . . 29
A3. Individual Stop Loss Program . . . . . . . . . . . . . . . 31
A4. Cost of Care . . . . . . . . . . . . . . . . . . . . . . . 32
A5. Hospital Incentive Program . . . . . . . . . . . . . . . . 33
B. Secure Horizons Medical and Hospital Subscriber
Agreement. . . . . . . . . . . . . . . . . . . . . . . . 37
C. Capitation Payment Rates . . . . . . . . . . . . . . . . . 38
D. PacifiCare Provider Policies and Procedures Manual . . . . 40
E. Pharmacy Control Program . . . . . . . . . . . . . . . . . 41
F. IPA Facilities . . . . . . . . . . . . . . . . . . . . . . 42
G. Division of Financial Responsibility . . . . . . . . . . . 43
H. Medical Services Reserve Fund. . . . . . . . . . . . . . . 44

PACIFICARE
IPA MEDICARE SHARED RISK SERVICES AGREEMENT

THIS IPA MEDICARE SHARED RISK SERVICES AGREEMENT is made and entered into
this first day of September, 1989, by and between PACIFICARE OF CALIFORNIA
("PacifiCare"), a California corporation, and Santa ▇▇▇ ▇▇▇▇▇▇ Physicians Group,
Inc. ("IPA"), a California Medical Professional Corporation, with reference to
the following facts:

A. PacifiCare operates a prepaid health service plan which arranges for
certain Medical Services to be provided to persons eligible to receive benefits
who are enrolled as Subscribers in the Secure Horizons Medical and Hospital Plan
in a manner consistent with the laws of the United States and the State of
California.

B. PacifiCare desires to provide a quality direct service prepaid health
delivery system which maximizes the utilization of innovative methods to promote
the efficient, economical delivery of health care, and to develop and implement
programs of health education and health maintenance for its Subscriber.

C. PacifiCare has a contract with the Health Care Financing
Administration ("HCFA") of the United States Government to provide Medicare
benefits to eligible persons.

D. IPA has as its primary objective the delivery of health services
through agreements and active participation with medical groups and/or clinics
and their physicians, and other related health professionals and technicians,
all of which are licensed in the State of California.

E. IPA and its Member Physicians desire to participate in the Secure
Horizons Medical and Hospital Plan by arranging for or providing Medical
Services in coordination with PacifiCare, its Subscribers and Hospitals on a
prepaid basis.

F. PacifiCare and IPA, on behalf of IPA and its Member Physicians, deem
it in their best interests to enter into a renewable Agreement, whereby IPA
agrees to provide or arrange for ("provide") Medical Services to PacifiCare
Subscribers enrolled in the Secure Horizons Medical and Hospital Plan in the IPA
Service Area.

NOW, THEREFORE, it is as agreed as follows:

1. DEFINITIONS.

Whenever used in this Agreement, the following terms shall have the
definitions contained in this Section 1:

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1.01 AGREEMENT - is this PacifiCare IPA Medicare Partial Risk
Services Agreement, dated as stated above, and all attachments, addendum and
amendments hereto.

1.02 CAPITATION PAYMENTS - are payments made to IPA by PacifiCare on
a prepaid basis for the Medical Services to be provided under this Agreement.

1.03 CATASTROPHIC CASE - is any single medical condition,
including complications arising from such medical condition, where the total
cost of Medical Services, regardless of payment source, is expected to exceed
[ ** ] per Year per Subscriber.

1.04 CONFORMANCE REQUEST - is a written request made by PacifiCare to
IPA to correct the performance of an IPA Member Physician or Specialist
Physician to conform to the provisions of this Agreement.

1.05 COPAYMENTS - are charges pursuant to the Secure Horizons Medical
and Hospital Plan which may be charged to the Subscriber by IPA at the time of
the provision of Medical Services which are in addition to the Capitation
Payments made to IPA by PacifiCare.

1.06 COST OF CARE - is the value of Medical Services as defined in
this Agreement and as calculated pursuant to the formula set forth in Attachment
A4, incorporated in full herein by reference.

1.07 ELIGIBILITY LIST - is a list of Subscribers to whom IPA shall
provide Medical Services.

1.08 EMERGENCY SERVICES - are those Medical Services that are
provided for the treatment of acute injury or illness requiring immediate
medical attention and which threaten life or limb, or which involve
uncontrollable bleeding, or loss of consciousness, or which cannot be delayed
without possible serious effects on the health of the Subscriber.

1.09 HCFA - is the Health Care Financing Administration, an
administrative agency of the United States Government.

1.10 HOSPITAL - is an acute care facility (or facilities), located in
the IPA Service Area, licensed as an acute care hospital under the laws of the
State of California and which has entered into a written agreement with
PacifiCare to provide Hospital Services to Subscribers.

1.11 HOSPITAL DAY - is any period up to twenty-four (24) hours
commencing at 12:00 a.m. or 12 p.m., whichever is used by Hospital, during which
a Subscriber is eligible to receive Hospital Services and actually receives
Hospital Services from Hospital.

1.12 HOSPITAL SERVICES - are the Medical Services described in
Attachment A1, incorporated in full herein by reference, which Hospital and
other providers shall provide to Subscribers pursuant to the Secure Horizons
Medical and Hospital Plan.

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1.13 IPA - is the medical group or independent practice association
identified in the first paragraph of this Agreement and its Member Physicians,
all of whom are licensed to practice medicine or osteopathy in the State of
California at the IPA Facilities.

1.14 IPA FACILITIES - are those facilities whose locations are listed
in Attachment F, attached hereto and incorporated in full herein by reference,
where Medical Services shall be available to Subscribers pursuant to this
Agreement.

1.15 IPA SERVICE AREA - is the geographical area within a thirty (30)
mile radius of each IPA Facility. The thirty (30) mile radius commences with the
address of an IPA Facility and extends for thirty (30) miles over the shortest
route using public streets and highways.

1.16 MEDICAL SERVICES - are all authorized health care services to
which Subscribers are entitled under the Secure Horizons Medical and Hospital
Plan, some of which are summarized in Attachment A2, incorporated in full herein
by reference.

1.17 MEDICALLY NECESSARY SERVICES - are Medical Services which are
required by Subscriber as determined by IPA in accordance with accepted medical
and surgical practices and standards in the community and the professional
standards recommended by PacifiCare's Quality Assurance Committee and
Utilization Review Committee.

1.18 MEMBER PHYSICIANS - are physicians, surgeons and osteopaths,
licensed to practice medicine in the State of California, who have an ownership
interest in, are employed by, or contract with, IPA.

1.19 MONTHLY HCFA PAYMENT - is the revenue received by PacifiCare
each month from HCFA, as determined by HCFA, for the Medical Services each
Subscriber is to be provided.

1.20 OUTSIDE PROVIDERS - are licensed physicians, surgeons,
osteopaths, paramedical personnel, hospitals and other health care facilities
which provide Medical Services to Subscribers eligible to receive benefits under
the Secure Horizons Medical and Hospital Plan but which do not have written
agreements with IPA and which are not Specialist Physicians.

1.21 PARTICIPATING MEDICAL GROUP - includes IPA and its Member
Physicians and is any group of duly-licensed doctors of medicine or osteopathy
which has entered into a written agreement with PacifiCare to provide Medical
Services to Subscribers in conjunction with the Secure Horizons Medical and
Hospital Plan.

1.22 PRO PROGRAM - is the provider utilization review program
developed by HCFA for providers of Medical Services.

1.23 QUALITY ASSURANCE COMMITTEES - are committees separately
established by IPA and PacifiCare which shall separately establish, maintain and
perform quality assurance review of Medical Services provided to

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Subscribers as reasonably required by PacifiCare, the State of California, the
Department of Corporations or Health and Human Services, HCFA, the Office of
Qualification and Compliance, or any other governmental agencies with regulatory
or enforcement jurisdiction over PacifiCare or this Agreement.

1.24 RISK REIMBURSEMENT PLAN - is PacifiCare's Medicare Medical and
Hospital Services Plan under which PacifiCare contracts with Medicare to be
reimbursed on a per capita basis for each class of Medicare beneficiary enrolled
in the plan.

1.25 SECURE HORIZONS MEDICAL AND HOSPITAL PLAN - is the prepaid
health services plan offered by PacifiCare as described in the Secure Horizons
medical and Hospital Subscriber Agreement, and attachments, addendum and
amendments thereto, a copy of which is attached hereto as Attachment B and
incorporated in full herein by reference.

1.26 SPECIALIST PHYSICIANS - are physicians who have written
agreements with IPA to provide Medical Services to Subscribers on a referral
basis and who do provide such Medical Services at offices or facilities which
are not IPA Facilities.

1.27 SUBSCRIBER - is an individual who is enrolled in the Secure
Horizons Medical and Hospital Plan, who meets all the eligibility requirements
for membership in such plan and for whom all applicable Subscriber Premiums have
been paid and received by PacifiCare.

1.28 SUBSCRIBER PREMIUMS - are charges pursuant to the Secure
Horizons Medical and Hospital Plan which, if applicable, are required to be paid
by Subscribers to PacifiCare on a monthly basis in order for Subscribers to
receive Medical Services.

1.29 SURCHARGES - are additional fees not disclosed to the Subscriber
for Medical Services and which are not allowable Copayment charges.

1.30 URGENTLY NEEDED SERVICES - are Medical Services which are
required without delay, in order to prevent serious deterioration of Subscribers
health as the result of an unforeseen illness or injury while the Subscriber is
temporarily absent from the IPA Service Area.

1.31 UTILIZATION REVIEW COMMITTEE - is an IPA committee of at least
three (3) Member Physicians which is established and maintained, in accordance
with the provisions of Section 3.13 herein, to develop a utilization control
program outlining procedures for the efficient use of resources, consistent with
state and federal law, for the rendition of Medical Services. The Utilization
Review Committee shall review elective Referrals and hospital admissions on a
concurrent and prospective basis and Emergency Services, Urgently Needed
Services and hospital admissions on a retrospective basis.

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2. RELATIONSHIP OF PARTIES

2.01 IPA PARTICIPATION - The execution of this Agreement shall
qualify IPA to participate in the rendition of Medical Services to Subscribers
pursuant to the terms of the Secure Horizons Medical and Hospital Plan, as
amended from time to time. Subject to Section 12.11 herein, PacifiCare shall
notify IPA of any material amendments to the Secure Horizons Medical and
Hospital Plan, which amendments shall become effective upon thirty (30) days
written notice by PacifiCare to IPA, and IPA has not objected to PacifiCare in
writing within the thirty (30) day period to be bound by such amendments. IPA
approval of such amendments shall not be unreasonably withheld. If IPA does
provide PacifiCare reasonable written objection to be bound by such amendments
within the thirty (30) day period, such amendments to the Secure Horizons
Medical and Hospital Plan shall have no force or effect on IPA.

2.02 LIABILITY FOR OBLIGATION - Notwithstanding any other section or
provision of this Agreement, nothing contained herein shall cause either party
to be liable or responsible for any debt, liability, or obligation of the other
party or any third party, unless such liability or responsibility is expressly
assumed by the party sought to be charged therewith. Each party shall be solely
responsible for and shall indemnify and hold the other party harmless against
any obligation for the payment of wages, salaries or other compensation
(including all state, federal and local taxes and mandatory employee benefits),
insurance and voluntary employment-related or other contractual or fringe
benefits as may be due or payable by the party to or on behalf of such party's
employees, agents and representatives.

2.03 INDEPENDENT CONTRACTOR - The relationship between PacifiCare and
IPA is an independent contractor relationship. Neither IPA nor members,
partners, employees or agents of IPA are employees or agents of PacifiCare and
neither PacifiCare nor any employee or agent of PacifiCare is a member, partner,
employee or agent of IPA. As such, all medical decisions are rendered solely by
IPA and not by PacifiCare. IPA is solely responsible for all Medical Services
arranged by IPA and provided to Subscribers. None of the provisions of this
Agreement shall be construed to create a relationship of agency, representation,
joint venture, ownership, control of employment between the parties other than
that of independent parties contracting solely for the purpose of effectuating
this Agreement.

2.04 DUTY TO DEFEND AND INDEMNIFY - To the extent not covered by
insurance maintained by PacifiCare, whether because of liability in excess of
the policy limits or because of the occurrence of a non-insured event, IPA shall
defend, indemnify and hold harmless PacifiCare from and against any claim, loss,
damage, cost, expense or liability arising out of or related to the performance
or nonperformance by IPA, its Specialist Physicians or employees of any Medical
Services to be performed or arranged by IPA under this Agreement. It is
understood and agreed by PacifiCare that the foregoing

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indemnification obligation is in no way whatsoever intended to reduce or
eliminate any insurance coverage maintained by IPA and that PacifiCare shall be
entitled to indemnification from IPA only for claims, losses, damages, costs,
expenses or liabilities in excess of the applicable insurance policy limits or
arising from uninsured events or occurrences.

To the extent not covered by insurance maintained by IPA, whether
because of liability in excess of the policy limits or because of the occurrence
of a non-insured event, PacifiCare shall defend, indemnify and hold harmless IPA
from and against any claims, loss damage, cost, expense or liability arising out
of or related to the performance or nonperformance of PacifiCare, its employees
or agents of any service to be performed or provided by PacifiCare under this
Agreement. It is understood and agreed by IPA that the foregoing indemnification
obligation is in no way whatsoever intended to reduce or eliminate any insurance
coverage maintained by PacifiCare and that IPA shall be entitled to
indemnification from PacifiCare only for claims, losses, damages, costs,
expenses or liabilities in excess of the applicable insurance policy limits or
arising from uninsured events or occurrences.

3. DUTIES OF IPA

3.01 IPA RESPONSIBILITIES - IPA agrees to arrange for or provide
Medical Services twenty-four (24) hours a day in coordination with PacifiCare
and with Hospital and other providers, as necessary, for each Subscriber who has
designated IPA as his or her Participating Medical Group. IPA shall be
financially responsible for all Medical Services specified in Attachment A2,
incorporated in full herein by reference, provided to Subscribers for whom IPA
is to receive a monthly Capitation Payment from PacifiCare based upon the
PacifiCare provided Eligibility List. IPA shall be responsible for determining
whether Subscribers are eligible for Medical Services on the basis of the most
current Eligibility List supplied to IPA by PacifiCare. Updated eligibility
information shall be available from PacifiCare as needed on the basis of the
most current information supplied PacifiCare by HCFA.

3.02 STANDARDS - All Medical Services for or provided by IPA and its
Member Physicians shall be provided by professional personnel and at physical
facilities according to generally-accepted standards of medical practice and
management in the community. IPA further agrees to provide or arrange for
referrals to consultants and Specialist Physicians as are necessary,
appropriate, and in accordance with generally-accepted standards of medical
practice in the community to maintain the quality of Medical Services provided
or arranged by IPA in accordance with standards developed by PacifiCare's
Quality Assurance Committee. IPA agrees to maintain and demonstrate to
PacifiCare upon request, throughout the term of this Agreement, compliance with
the following:

3.02.01 IPA shall assure that its Member Physicians and
Specialist Physicians maintain licensure under the laws of the State of
California. IPA shall immediately notify PacifiCare in writing should IPA learn
of the loss or suspension of licensure of any of its Member Physicians.

- 6 -

3.02.02 IPA agrees to provide continuing education programs for
its Member Physicians and Specialist Physicians in accordance with the standards
established by the California Medical Association for continuing education. The
content and delivery of such continuing education programs shall be in the
discretion and judgement of IPA, in order to maintain high standards for the
delivery of Medical Services pursuant to this Agreement. IPA further agrees to
gather, correlate, and distribute to its Member Physicians, information
regarding professional medical activities and developments which IPA believes
may be of assistance in providing Medical Services pursuant to this Agreement.

3.02.03 Reasonable evidence that all nurses and other ancillary
and paramedical personnel who are employed by and contract with IPA are properly
credentialed to practice in the State of California.

3.03 INSURANCE - IPA shall maintain professional liability insurance
and general liability insurance in the minimum amounts of one million dollars
($1,000,000) per person, three million dollars ($3,000,000) per occurrence
coverage, and three million dollars ($3,000,000) combined single limits
coverage, for its agents and employees, as applicable. In the event IPA procures
a claims made policy as distinguished from an occurrence policy, IPA shall
procure and maintain prior to termination of such insurance continuing "tail"
coverage, unless successor policy coverage provides such "tail" protection.
IPA shall provide PacifiCare with evidence of such insurance coverage upon
PacifiCare's request. IPA shall immediately notify PacifiCare of any material
changes in insurance coverage and shall provide a certificate of such insurance
coverage to PacifiCare upon PacifiCare's reasonable request. In the event IPA
contracts with independent contractor physicians to provide Medical Services
under this Agreement, IPA will require such independent contractor physicians
and their agents to maintain professional liability insurance and general
liability insurance in the minimum amounts as is usual and customary in the
community.

3.04 REFERRALS - IPA shall refer Subscribers in need of specialty care
services only with the approval of the IPA Utilization Review Committee.
However, in the event that Emergency Services are required, IPA shall comply
with Section 3.05 below.

3.05 HOSPITAL ADMISSIONS - Whenever IPA determines that a Subscriber
on IPA's eligibility list requires Hospital Services which are not Emergency
Services, IPA shall arrange for such Hospital admissions and outpatient
surgeries through the IPA's Utilization Review Committee and its developed
utilization review program. IPA and its Member Physicians shall not serve as
admitting physicians for any Subscriber without such prior approval except in
the event that Emergency Services are required. If IPA or a Member Physician
admits a Subscriber to a Hospital for Emergency Services, IPA shall notify
PacifiCare of such admission within the time frames as required in the
PacifiCare Provider Policies and Procedures Manual, attached hereto as
Attachment D and incorporated in full herein by reference. Admissions for
Emergency Services or Urgently Needed Services shall be made to hospitals
contracting with PacifiCare, if possible.

- 7 -

3.06 ELIGIBILITY LIST - IPA shall accept as patients those Subscribers
who are on IPA's eligibility list provided by PacifiCare to IPA. Member
Physicians and IPA shall be entitled to rely on the most current provided list
until a new list has been provided to IPA. IPA understands that in order to
update the eligibility list, PacifiCare is dependent on the receipt of
information from HCPA.

3.07 COLLECTION OF CHARGES FROM SUBSCRIBERS - IPA shall collect
applicable Copayments from Subscribers upon the rendition of Medical Services to
Subscribers pursuant to the Secure Horizons Medical and Hospital Plan. With the
exception of Copayments and charges for non-covered services delivered on a
fee-for-service basis to Subscribers, IPA shall in no event, including, without
limitation, to non-payment by PacifiCare, insolvency of PacifiCare, or breach of
the Agreement, ▇▇▇▇, charge, collect and deposit, or attempt to ▇▇▇▇, charge,
collect or receive any form of payment, from any Subscriber for Medical Services
provided pursuant to this Agreement and for which Subscriber is entitled under
the Secure Horizons Medical and Hospital Plan in effect for such Subscriber.

IPA shall not maintain any action at law or equity against a
Subscriber to collect sums owed by PacifiCare to IPA. Upon notice of any such
charge, PacifiCare may terminate this Agreement consistent with the provisions
contained in Section 7.01.02 and take all other appropriate action consistent
with the terms of this Agreement to eliminate such charges, including, without
limitation, requiring IPA and Specialist Physicians to return all sums collected
as Surcharges from Subscribers or their representatives. Nothing in this
Agreement, however, shall be construed to prevent IPA from providing non-covered
Medical Services on a usual and customary fee-for-service basis to Subscribers.

IPA'S obligations regarding the collection of charges from Subscribers
shall survive the termination of this Agreement with respect to Medical Services
provided during the term of the Agreement without regard to the cause of
termination of this Agreement.

3.08 COLLECTION OF CHARGES FROM THIRD PARTIES WHEN MEDICARE NOT THE
PRIMARY PAYOR - IPA and Member Physicians accept payment from PacifiCare (plus
applicable Copayments) for Medical Services as provided herein as full payment
for such Medical Services from PacifiCare except as provided herein; provided
however, when Medicare is not the primary payor for Medical Services, such as
when the Subscriber is entitled to payment from another third party or for
payment for a Workers' Compensation claim, or from other primary insurance
coverage maintained by Subscriber, IPA and Member Physicians shall make no
demand upon PacifiCare for reimbursement under the Individual Subscriber Stop
Loss Program as specified in Attachment A3 hereto until all primary sources of
payment have been pursued and it is determined that full payment cannot be
obtained within the (10) months from the date of the provision of Medical
Services.

- 8 -

For purposes of accomplishing the intent of this Section 3.08,
PacifiCare hereby assigns to IPA for collection, any claims or demands against
third parties for amounts due for Medical Services provided by IPA pursuant to
this Agreement, subject to the following conditions:

3.08.01 IPA shall not commence any legal or equitable action
against a third party without obtaining the prior written consent of PacifiCare.
It is agreed that collection or demand letters consistent with the PacifiCare
Provider Policies and Procedures Manual shall not constitute the commencement of
legal or equitable action.

3.08.02 IPA shall defend, indemnify and hold PacifiCare harmless
for all actions by IPA which relate to collections of an account pursuant to
this Section 3.08.

3.08.03 IPA shall perform such collection activities consistent
with the procedures set forth in the PacifiCare Provider Policies and Procedures
Manual.

3.08.04 PacifiCare may immediately rescind such assignment on a
claim-by-claim basis for any reason by providing written notice of recision to
IPA.

In the event IPA receives payment from a third party after
receipt of payment from PacifiCare, IPA shall reimburse PacifiCare to the extent
that the combined amounts received from all payors exceeds one hundred percent
(100%) of IPA's usual and customary fee-for-service charges.

3.09 DUTIES OF IPA UPON TERMINATION DURING PHASE-OUT PERIOD - Should
this Agreement be terminated by IPA pursuant to Section 7.01.01(a) or Section
7.01.01(b), IPA shall be released of its obligation to continue to provide or
arrange for Medical Services to Subscribers during the phase-out period as
stated in this Section 3.09. If this Agreement is terminated for any other
reason by either party or if this Agreement terminates at the end of the Initial
Term or any renewal term, IPA shall not be released of its obligation to
continue to provide or arrange for Medical Services to Subscribers during the
phase-out period, which phase-out period shall end on the earlier of:

3.09.01 Three (3) months from the effective date of termination
of this Agreement, or

3.09.02 The date PacifiCare has secured the transfer of
Subscribers to another medical group, individual practice association, or
physician for further treatment, and has notified IPA of such transfer in
writing.

Compensation during the phase-out period shall be at the
Capitation Rates set forth in Attachment C hereto.

- 9 -

3.10 CONTINUING CARE RESPONSIBILITIES - IPA and Member Physicians
shall provide or arrange for Medical Services to Subscribers for the term of
this Agreement in accordance with Section 3.01 hereof. In the event of
termination of this Agreement and the expiration of IPA's duty to provide or
arrange for Medical Services during the phase-out period pursuant to Section
3.09, if applicable, IPA and Member Physicians shall continue to provide or
arrange for Medical Services to Subscribers until the effective date of
transfer of such Subscribers to another Participating Medical Group for
further treatment and written notice of such transfer has been provided by
PacifiCare to IPA. If a Subscriber's care cannot be transferred for the
reason of hospitalization of Subscriber, continuity of care, or other legally
required medical treatment reasons, IPA shall continue to provide or arrange
for Medical Services for such Subscriber until PacifiCare, through
consultation with the Subscriber's attending participating physician, has
made provision for the transfer of such Subscriber to another participating
provider for further Medical Services and has notified IPA of such transfer
in writing. The payment provisions for any continued Medical Services after
expiration of the phase-out period shall be the lesser of [ ** ] of the
usual and customary fees of the Member Physician or Specialist Physician or
the Cost of Care as set forth in Attachment A4.

Notwithstanding the above or any other provisions of this Agreement to
the contrary, IPA agrees that in the event PacifiCare ceases operations for any
reason, including insolvency, IPA shall provide Medical Services and shall not
▇▇▇▇, charge, collect or receive any form of payment from any Subscriber or have
any recourse against a Subscriber for Medical Services provided after PacifiCare
ceases operation. This continuation of Medical Services obligation shall be for
the period for which Subscriber Premiums have been paid, but shall not exceed a
period of thirty (30) days, except for those Subscribers who are hospitalized on
an inpatient basis as provided below.

In the event PacifiCare ceases operations or IPA terminates this
Agreement on the basis of PacifiCare's failure to make timely Capitation
Payments, IPA shall continue to arrange for Medical Services to those
Subscribers who are hospitalized on an inpatient basis at the time PacifiCare
ceases operations or IPA terminates the Agreement until such Subscribers are
discharged from the hospital. IPA may file a claim with PacifiCare for such
Medical Services at [ ** ] of IPA's usual and customary fee for service
charges then in effect.

IPA agrees that the provisions of this Section 3.10 and IPA's
obligations herein shall survive the termination of this Agreement without
regard to the cause of termination of the Agreement, and shall be construed to
be for the benefit of the Subscribers.

3.11 STAFF PRIVILEGES - IPA agrees to have its Member Physicians seek
and obtain (and provide evidence of) staff privileges or other appropriate
access to Hospital.

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3.12 ADMINISTRATIVE GUIDELINES - IPA agrees to perform its duties
under this Agreement in a manner consistent with the reasonable administrative
guidelines provided by PacifiCare, in its Provider Policies and Procedures
Manual, attached hereto as Attachment D and incorporated in full herein by
reference. Subject to Section 12.11 herein, PacifiCare shall notify IPA of any
material amendments to the administrative guidelines, which amendments shall
become effective upon thirty (30) days written notice by PacifiCare to IPA if
IPA has not objected to PacifiCare in writing within the thirty (30) day period
to be bound by such amendments. IPA approval of such amendments shall not be
unreasonably withheld. If IPA does provide PacifiCare reasonable written
objection to be bound by such amendments within the thirty (30) day period, such
amendments to the PacifiCare Health Plan shall have no force or effect on IPA.

3.13 UTILIZATION REVIEW - IPA agrees to participate with PacifiCare in
an ongoing utilization review program to promote efficient use of resources.
The IPA's Utilization Review Committee shall meet as frequently as necessary but
at least weekly. The Utilization Review Committee shall keep minutes of the
committee meetings, a copy of which shall be made available to PacifiCare upon
ten (10) days written notice by PacifiCare to IPA. IPA and PacifiCare shall
jointly implement a utilization review system whereby IPA shall notify
PacifiCare of any hospital or skilled nursing facility admissions. A member of
the PacifiCare medical services staff may participate in IPA's Utilization
Review Committee meetings.

3.14 QUALITY OF HEALTH CARE - IPA agrees to assure quality of Medical
Services by:

3.14.01 Assigning PacifiCare Subscribers only to Member
Physicians or Outside Providers meeting quality health care standards;

3.14.02 Inspecting the premises and facilities of its Member
Physicians on a regular basis and allowing PacifiCare to participate in such
inspections upon ten (10) days written notice.

3.15 QUALITY ASSURANCE AND REMEDIAL PROCEDURES - IPA shall cooperate
with PacifiCare in the operation of PacifiCare's quality assurance program and
IPA shall perform quality assurance review of Medical Services as brought before
IPA internally or from PacifiCare's Quality Assurance Committee, the Department
of Corporations, the Department of Health and Human Services, HCFA and any other
governmental agencies with regulatory or enforcement jurisdiction over this
Agreement. IPA shall establish and maintain a Quality Assurance Committee which
shall meet at least quarterly. A member of the PacifiCare medical services staff
may participate in IPA's Quality Assurance Committee meetings. The IPA Quality
Assurance Committee shall keep minutes of the committee meetings, a copy of
which shall be made available to PacifiCare upon ten (10) days written notice by
PacifiCare to IPA. The task of the Quality Assurance Committee may be assumed by
the Utilization Review Committee described in Section 3.13; however, in such
event, the Utilization Review and Quality Assurance Committees must hold
separately convened meetings and the minutes of each meeting must be separately
maintained.

- 11 -

IPA shall, at the written request of PacifiCare, make available one
(1) Member Physician from IPA to attend the PacifiCare Quality Assurance
Committee meetings. The intent of this Section is to have at least one Member
Physician from IPA serve for six (6) months on the PacifiCare Quality Assurance
Committee during a three (3) year period. IPA shall develop written procedures
for remedial action whenever it is determined by PacifiCare's Quality Assurance
Committee that inappropriate or substandard Medical Services have been furnished
or Medical Services that should have been furnished have not been furnished.
Upon request, PacifiCare shall assist IPA in the formulation of such remedial
procedures.

3.16 COMPLIANCE WITH CIVIL RIGHTS LAWS - IPA shall comply with Title
VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of
1973 and the Age Discrimination Act of 1975.

3.17 RECIPROCITY AGREEMENTS - IPA agrees to develop and implement
agreements with PacifiCare's Participating Medical Groups to assure
reciprocity of health care for PacifiCare Subscribers. IPA shall accept
non-Emergency or specialty referrals from such other Participating Medical
Groups and such other Participating Medical Groups shall be required to
accept non-Emergency or specialty referrals from IPA. Payment for the
foregoing referrals shall be no greater than [ ** ] of IPA's usual and
customary fee-for-service rates then in effect as long as claims for
authorized Medical Services are paid within forty-five (45) days of the date
of initial billing.

3.18 INDIVIDUAL STOP-LOSS PROGRAM - IPA agrees to participate in and
assume the rights and responsibilities of the PacifiCare Stop-Loss Program as
defined in Attachment A3, attached hereto and incorporated in full herein by
reference.

3.19 OTHER CONTRACTUAL COMMITMENTS - IPA represents and assures
PacifiCare that contractual commitments with other HMOs, competitive medical
plans and health related entities do not restrict or impair IPA from performing
its duties under this Agreement.

3.20 DISSEMINATION OF INFORMATION - IPA agrees that PacifiCare may use
IPA's name, address, telephone number, and a listing of IPA's Member Physicians
in any informational material routinely distributed to Subscribers and for other
purposes related to the administration of the Secure Horizons Medical and
Hospital Plan as an indication of IPA's willingness to provide Medical Services
to Subscribers.

Prior to listing or otherwise referencing PacifiCare in any
promotional or advertising brochures, media announcements or other advertising
or marketing material, IPA shall first obtain the prior consent of PacifiCare,
such consent not to be unreasonably withheld.

3.21 WRITTEN AGREEMENTS - IPA shall secure written agreements,
consistent with the terms of this Agreement and in compliance with all state and
federal law, with all specialist Physicians regularly utilized as a part of
IPA's referral system.

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3.22 MEDICAL CARE CRITERIA - IPA shall utilize the criteria for
medical care that is established or approved by PacifiCare's Quality Assurance
Committee as a standard reference in determining appropriate lengths of stay for
hospitalized Subscribers or appropriate utilization patterns for referral to
specialty services.

3.23 NONDISCRIMINATION - IPA represents and assures that Medical
Services are rendered to Subscribers in the same manner as such services are
provided to IPA's other patients, except as required pursuant to this Agreement.
Subscribers shall not be subject to any discrimination whatsoever by IPA in
regards to access to Medical Services.

3.24 ACCOUNTS PAYABLE SYSTEM - IPA agrees to operate its accounts
payable system in a manner which assures that providers of authorized Medical
Services who are Member Physicians and non-Member Physicians receive payment for
Medical Services rendered to Subscribers within forty-five (45) working days of
IPA's receipt of an uncontested claim from such Member Physicians and non-Member
Physicians. IPA's accounts payable system shall be subject to the ongoing
approval of PacifiCare.

3.25 CATASTROPHIC CASE MANAGEMENT - IPA agrees that PacifiCare's
medical director may be involved in the management and coordination of
Catastrophic Cases. IPA will fully assist PacifiCare in providing information
that may be required in determining the need for a transfer of a Subscriber into
PacifiCare's regional centers for the care of Catastrophic Cases including, but
not limited to, prompt notification of known or suspected Catastrophic Cases.
Detailed procedures for Catastrophic Case management will be mutually agreed
upon by the parties based upon IPA's and PacifiCare's determination of the
Subscriber's transferability. Except in unusual circumstances, regional centers
for care of Catastrophic Cases shall be sought within the IPA Service Area and
surrounding area.

3.26 CAPACITY REPORTING - IPA will provide to PacifiCare, at the
earliest possible time, notice of any significant changes in the capacity of IPA
to provide or arrange for the Medical Services contemplated by this Agreement
(E.G., addition or deletion of Member Physicians or Specialist Physicians),
including a ninety (90) day written notice in the event IPA is unable to
properly service additional Subscribers. IPA shall still be obligated to provide
or arrange for Medical Services to Subscribers who are with employer groups whom
PacifiCare had agreed to enroll prior to ninety (90) days from the effective
date of the written notice. PacifiCare shall provide IPA, upon IPA's request,
current marketing information within a reasonable period for purposes of
determining IPA capacity.

3.27 REPRESENTATION OF IPA MEMBER PHYSICIANS - IPA agrees to represent
its Member Physicians in matters pertaining to the provision of Medical Services
under this Agreement, and that it has obtained written consent to such
representation from its Member Physicians.

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3.28 PERFORMANCE OF MEMBER PHYSICIANS - IPA agrees: (i) to develop
methods for discussion of performance with its Member Physicians, (ii) to assure
correction of performance of its Member Physicians consistent with the
provisions of this Agreement and state and federal law applicable to the Secure
Horizons Medical and Hospital Plan, and (iii) to resolve Conformance Requests.

3.29 WITHDRAWAL OF AN IPA FACILITY - In the event IPA seeks to
withdraw one or more of the IPA Facilities listed in Attachment F from providing
or arranging for Medical Services to Subscribers under this Agreement, IPA must
notify PacifiCare of such withdrawal in writing at least one hundred and eighty
(180) days prior to the effective withdrawal date; after the effective date of
withdrawal, IPA shall still be responsible to provide or arrange for Medical
Services to the affected Subscribers at the other IPA Facilities.

4. DUTIES OF PACIFICARE

4.01 ADMINISTRATION - PacifiCare agrees to perform all necessary
administrative, accounting, enrollment and other functions consistent with the
administration of the Secure Horizons Medical and Hospital Plan and this
Agreement.

4.02 BENEFIT INFORMATION - PacifiCare agrees to apprise all
Subscribers concerning the type, scope and duration of benefits and services to
which such person is entitled under the Secure Horizons Medical and Hospital
Plan.

4.03 ASSIST IPA - PacifiCare agrees to assist and cooperate with IPA
in the development and initial implementation of procedures necessary to carry
out the intent of this Agreement.

4.04 ADMINISTRATION OF PAYMENTS - PacifiCare agrees to transmit
Capitation Payments and other payments to IPA in accordance with the terms and
procedures set forth in this Agreement.

4.05 STATISTICAL INFORMATION AND PROVISION OF DATA -PacifiCare
agrees to provide IPA with management information and data reasonably
necessary to carry out the terms and conditions of this Agreement and for the
operation of the Secure Horizons Medical and Hospital Plan, including
semi-monthly Eligibility Lists and monthly capitation worksheets.
Furthermore, PacifiCare shall provide, upon request, quarterly reports
reflecting the utilization of Medical Services rendered by IPA.

4.06 SERVICES RENDERED TO INELIGIBLE SUBSCRIBERS - PacifiCare
agrees to reimburse IPA for those Medical Services set forth in Attachment A2
provided to an ineligible Subscriber if the Subscriber was listed as eligible
on the most current eligibility list provided to IPA by PacifiCare. If
PacifiCare is in receipt of a billing to such ineligible Subscriber from IPA
and proof of having sent the Subscriber or the Subscriber's legal guardian
two (2) bills no less than thirty (30) days apart, PacifiCare will reimburse
IPA [ ** ] of IPA's ordinary and customary fee-for-service

- 14 -

rates then in effect for those Medical Services rendered but no greater than
[ ** ] of the still uncollected balance. If subsequent to payment by
PacifiCare, IPA receives any payment from another source for the services,
then IPA shall reimburse PacifiCare up to the amount previously received from
PacifiCare. If a Subscriber becomes ineligible for benefits under the Secure
Horizons Medical and Hospital Plan after IPA or Member Physicians have begun
treatment of the Subscriber (provided the Subscriber is not hospitalized at
the time of becoming ineligible), IPA shall be entitled to make all
subsequent charges for its services directly to the Subscriber. If the
Subscriber is hospitalized at the time of becoming ineligible, IPA shall be
entitled to make charges directly to the Subscriber for future medical
services, only for services provided after the Subscriber is discharged from
such hospital treatment.

4.07 DISSEMINATION OF INFORMATION - Except as provided above in
Section 3.20, prior to listing or otherwise referencing IPA in any promotional
or advertising brochures, media announcements or other advertising or marketing
material, PacifiCare shall first obtain the prior consent of IPA, such consent
not to be unreasonably withheld.

5. COMPENSATION

5.01 CAPITATION PAYMENTS - PacifiCare shall make monthly Capitation
Payments to IPA as outlined in Attachment C, attached hereto and incorporated in
full herein by reference, due and payable on the tenth (10th) day of the month
for the current month's Medical Services.

5.02 MEDICAL SERVICES RESERVE - PacifiCare will establish a reserve
fund in the amount of [ ** ] for payment of Medical Services as specified
in Attachment H, attached hereto and incorporated in full herein by this
reference.

5.03 ADDITIONAL PAYMENTS - PacifiCare and IPA agree to provide
payments to each other, if applicable, in accordance with the terms of the
Hospital Incentive Program, Individual Stop-Loss Program and Pharmacy Control
program, as specified in Attachments A5, A3, and E, respectively, incorporated
in full herein by reference.

5.04 ADEQUACY OF COMPENSATION - Except as otherwise provided herein,
IPA shall accept the payments specified in this Agreement as payment in full for
all Medical Services provided Subscribers during each month for which such
payments are to be received by IPA from PacifiCare. In the event PacifiCare
fails to make any payments to IPA as provided herein, whether from PacifiCare's
insolvency or otherwise, Subscribers shall not be liable to IPA or its Member
Physicians under any circumstances for Medical Services. Surcharges for Medical
Services provided or arranged by IPA or Member Physicians are prohibited; upon
notice of the existence of any Surcharge, PacifiCare will take appropriate
action consistent with the terms of this Agreement to eliminate such Surcharges.

- 15 -

6. TERM OF AGREEMENT

6.01 TERM - The initial term of this Agreement shall be for twelve
(12) months ("Initial Term") and the Commencement Date shall be January 1, 1990.
A "Year" under this Agreement shall begin on January 1st and end on December
31st. The Term of this Agreement shall be automatically extended for one (1)
year on each successive January 1st thereafter unless either party provides the
other with written notice of such party's intention not to extend the term no
less than one hundred eighty (180) days prior to such anniversary or until this
Agreement is appropriately terminated by either party as provided in Section 7
herein. The parties acknowledge and understand that a one (1) year term will be
in effect on each anniversary of the Commencement Date unless either party
provides the other party with written notice of such party's intention not to
extend the term prior to such anniversary of the Commencement Date or until this
Agreement is appropriately terminated by either party as provided in Section 7
herein. Upon renewal of the Initial term and any subsequent term, the then
applicable rates of compensation specified in this Agreement shall apply unless
otherwise agreed upon by the parties in writing.

7. TERMINATION

7.01 TERMINATION OF AGREEMENT WITH MATERIAL CAUSE - Either party, as
appropriate, may terminate this Agreement for material cause as set forth in
Sections 7.01.01 or 7.01.02 hereof subject to the notice and cure periods set
out in Section 7.02 hereof, if applicable. In the event either party seeks to so
terminate this Agreement, the terminating party shall give written notice of
termination stating the actions of the other party constituting material cause
for termination.

7.01.01 CAUSE FOR TERMINATION OF AGREEMENT BY IPA - The
following shall constitute cause for termination of this Agreement by IPA:

a. NON-PAYMENT - Failure by PacifiCare to pay
Capitation Payments due to IPA hereunder within fifteen (15) days of the
Capitation Payment due date or failure by PacifiCare to make any other payments
due to IPA hereunder within forty-five (45) days of any such payment's due date.

b. REVOCATION OF CERTIFICATION OR LICENSE -
Revocation by the State of California or the United States Government of any
certification or license of PacifiCare necessary for the performance of this
Agreement.

c. BREACH OF MATERIAL TERM AND FAILURE TO CURE -
PacifiCare's breach of any material term, covenant, or condition and subsequent
failure to cure said breach as provided in Section 7.02 hereof. The written
notice of termination shall contain specific reference as to the breaches which
have caused such failure.

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7.01.02 CAUSE FOR TERMINATION OF AGREEMENT BY PACIFICARE - The
following shall constitute cause for termination of this Agreement by
PacifiCare:

a. FINANCIAL FAILURE OF IPA - PacifiCare's reasonable
determination of IPA's anticipated inability to provide or arrange for Medical
Services as described herein due to the likelihood of IPA's lack of financial
resources, other than due to PacifiCare's non-payment of amounts due IPA
hereunder. IPA shall have the opportunity to dispute such determination by
PacifiCare by providing reasonable evidence and assurances of financial
stability and capacity to perform under this Agreement.

b. FAILURE TO PROVIDE QUALITY MEDICAL SERVICES -
Failure to maintain the standards set forth in Section 3.02 of this Agreement
and such failure is not corrected consistent with the provisions of Section
7.02. The written notice of termination shall contain specific reference to the
breaches which have caused such failure. PacifiCare reserves the right to
withdraw from IPA all or part of its Subscribers if the Medical Services are not
being properly provided or arranged for pursuant to this Agreement and such
deficiencies are not corrected consistent with the provisions of Section 7.02 of
this Agreement.

c. FAILURE TO PROVIDE SERVICES - Failure to provide
Medical Services to Subscribers as provided herein. The written notice of
termination shall contain specific reference as to the breaches which have
caused such failure.

d. BREACH OF MATERIAL TERM AND FAILURE TO CURE -
IPA's breach of any material term, covenant or condition of the Agreement and
subsequent failure to cure said breach as provided in Section 7.02 of this
Agreement. The written notice of termination shall contain specific reference
to the breaches which have caused such failure.

7.02 CURING PERIOD AND TERMINATION DATE - The party receiving the
written notice of termination shall have thirty (30) days from the receipt of
said notice to cure or otherwise eliminate the circumstances constituting cause
for termination. If said party fails to cure or eliminate the circumstances
constituting cause for termination within a thirty (30) day period, this
Agreement shall terminate thirty (30) days from the date of expiration of the
curing period, said expiration date being sometimes called herein the "effective
date of termination."

7.03 REPAYMENT UPON TERMINATION - Within one hundred and eighty
(180) days of the effective date of termination of this Agreement as provided
herein, an accounting shall be made by PacifiCare of monies due and owing either
party and payment shall be forthcoming by the appropriate party to settle such
balance within thirty (30) days of such accounting. Either party may request an
independent audit of such PacifiCare accounting by a mutually acceptable
independent certified public accountant and such audit shall be equally paid for
by both parties. The parties agree to abide by the findings of such independent
audit and appropriate payment by the appropriate party, if any, shall be made
within thirty (30) days of such independent audit.

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7.04 TERMINATION NOT AN EXCLUSIVE REMEDY - Any termination by either
party pursuant to this Section 7 is not meant as an exclusive remedy and such
terminating party may seek whatever action in law or equity as may be necessary
to enforce its rights under this Agreement.

7.05. RETURN OF PROPRIETARY INFORMATION AND PATIENT FILES UPON
TERMINATION - Upon the effective date of termination of this Agreement and
upon the expiration of the phase-out period set forth in Section 3.09, if
applicable, IPA shall provide and return to PacifiCare all confidential and
proprietary information and trade secrets in its possession in a reasonable
manner to be specified by PacifiCare. Additionally, IPA shall copy all
active PacifiCare Subscriber patient medical files in IPA's possession and
forward such files to another provider of Medical Services designated by
PacifiCare, provided such copying and forwarding is not otherwise objected to
by Subscribers. The copies of such medical files may be in summary form. The
cost of copying the patient medical files shall be borne by IPA up to [ ** ].
Any copying costs in excess of [ ** ] shall be paid by PacifiCare. IPA
shall cooperate with PacifiCare in maintaining the confidentiality of such
confidential and proprietary information and trade secrets at all times.

8. RECORDS, DATA COLLECTION, CITATIONS AND RIGHT TO INSPECT RECORDS

8.01 RECORDS - IPA shall maintain and provide such records and
information as reasonably necessary for PacifiCare to properly administer the
Secure Horizons Medical and Hospital Plan and consistent with state and federal
law. Among the reports which IPA shall provide to PacifiCare are completed
reports within fifteen (15) days following the end of each month containing an
itemized list of all Medical Services, other than Hospital Services, provided to
or arranged for Subscribers during such month. This report shall be as described
in the PacifiCare Provider Policies and Procedures Manual. The duties imposed
by this Section 8.01 shall not terminate upon termination of this Agreement,
whether by rescission or otherwise, and shall be in effect until the completion
of the phase-out period pursuant to Section 3.09. The cost for preparation and
submission of this data shall be borne solely by IPA.

IPA shall maintain records and provide such information to PacifiCare
or the California Commissioner of Corporations as may be necessary for the
compliance by PacifiCare with the provisions of state and federal law and
regulations promulgated thereto, and such records shall be retained by IPA for
at least two (2) years following the provision of Medical Services. This
obligation is not terminated upon termination of this Agreement, whether by
rescission or otherwise.

8.02 CONFIDENTIALITY OF RECORDS - IPA shall safeguard the
confidentiality of Subscriber health records and treatment in accordance with
all state and federal laws, including, without limitation, the Privacy Act, as
implemented by 45 Code of Federal Regulations 5(b) and the regulations
promulgated thereunder.

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8.03 DATA COLLECTION - IPA shall maintain and provide to PacifiCare,
on a timely basis, the utilization data more particularly described in the
PacifiCare Provider Policies and Procedures Manual for the effective management
of PacifiCare's health care delivery system.

8.04 RIGHT TO INSPECT - IPA shall provide access at reasonable times
upon demand by PacifiCare, or any governmental regulatory agency responsible for
the administration of health care service plans, to inspect facilities,
equipment, books and records relating to the performance of this Agreement,
including, without limitation, Subscriber patient records, financial records
pertaining to the cost of operations and income received by IPA for Medical
Services rendered to Subscribers. Unless otherwise required by law, PacifiCare
shall provide IPA with a seventy-two (72) hour prior written notice of any such
inspection.

8.05 CITATIONS - IPA shall notify PacifiCare in writing of each and
every report of any governmental or quasi-governmental agency with jurisdiction
over IPA which contains any citation of IPA for failure to meet any governmental
or quasi-governmental standard on or after the Commencement Date of this
Agreement.

8.06 FINANCIAL STATEMENTS - IPA shall provide to PacifiCare within
forty five (45) days of the end of each calendar quarter copies of its quarterly
financial statements, which shall include a balance sheet, statement of income
and a statement of cash flow (the "financial statements") prepared in accordance
with generally-accepted accounting principles. Such quarterly statements shall
be certified by the chief financial officer of IPA as accurately reflecting the
financial condition of IPA for the period indicated. In addition, IPA shall
provide to PacifiCare, within forty five (45) days of the end of each calendar
year, copies of its audited annual financial statements.

9. EXCLUSIVITY

9.01 UTILIZATION OF IPA BY PACIFICARE - Nothing in this Agreement
shall be construed to require PacifiCare to assign any minimum or maximum number
of Subscribers to IPA, nor to require PacifiCare to utilize the Medical Services
of IPA for any or all Subscribers in the IPA Service Area.

10. GOVERNING LAW AND DISPUTE RESOLUTION

10.01 GOVERNING LAW - This Agreement and the rights and obligations of
the parties hereunder shall be construed, interpreted, and enforced in
accordance with, and governed by, the laws of the State of California, and the
United States and all regulations promulgated pursuant thereto.

Any provisions required to be in this Agreement by any of the above
Acts and regulations shall bind PacifiCare and IPA whether or not expressly
provided in this Agreement.

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10.02 DISPUTES BETWEEN IPA AND SUBSCRIBER NOT GOVERNED BY AGREEMENT -
Any controversies or claims between IPA and Subscriber arising out of IPA's
performance of this Agreement are not governed by this Agreement. IPA and
Subscriber may seek any appropriate legal action to resolve such controversy or
claim deemed necessary.

In the event of a dispute between IPA and a Subscriber and upon mutual
agreement between IPA and such Subscriber, PacifiCare agrees to make available
the Subscriber Grievance Resolution Process described in the Secure Horizons
Medical and Hospital Plan Agreement for resolution of such dispute. In such
instance, the decision of the PacifiCare Subscriber Satisfaction Committee and
Board of Directors shall not be binding upon the parties except upon agreement
between IPA and the Subscriber. Nor shall such grievance be subject to binding
arbitration except upon agreement between the parties. Should IPA and Subscriber
fail to resolve the grievance, IPA and Subscriber may seek any appropriate legal
action deemed necessary by such party.

10.03 PAYMENT DISPUTES INVOLVING IPA - In the event IPA fails to make
a payment to a Specialist Physician within sixty (60) days of the submission of
the ▇▇▇▇ by Specialist Physician to IPA and the validity and the amount of the
submitted ▇▇▇▇ are undisputed, PacifiCare may, in its sole and absolute
discretion, elect to pay the Specialist Physician on behalf of IPA and deduct
such payment from IPA's next monthly Capitation Payment.

Should a dispute concerning a claim for payment for Medical Services
rendered to Subscribers arise between IPA and a Specialist Physician who is a
Participating Medical Provider, IPA or the Specialist Physician may submit a
written complaint to PacifiCare. The complaint shall describe the disputed
claims and the basis for the amounts claimed and include the applicable written
agreement between IPA and the Specialist Physician. PacifiCare shall investigate
the complaint and make a determination of whether or not the claim is valid and
should be paid. In the event PacifiCare determines that IPA owes any amount to
Specialist Physician, IPA shall make such payment within thirty (30) days of
PacifiCare's termination. If IPA fails to pay the amount due within this thirty
(30) day period, PacifiCare may deduct the amount owed from IPA's next monthly
capitation payment. This amount will temporarily be placed in an account (the
"Claims Dispute Account") which shall be established by PacifiCare. If IPA or
Specialist Physician wishes to contest PacifiCare's determination, either may do
so by initiating an action for binding arbitration and notifying PacifiCare of
such initiation within thirty (30) days of PacifiCare's determination. If IPA or
Specialist Physician fails to request arbitration within thirty (30) days or if
the arbitration affirms PacifiCare's decision that amounts are owing from IPA to
Specialist Physician, PacifiCare shall release from the Claims Dispute Account
the amount owing to Specialist. If the arbitration results in a decision that no
money or a lesser amount than was determined by PacifiCare is owing to
Specialist Physician, PacifiCare shall release to IPA the amounts which were
erroneously withheld from IPA's Capitation Payment.

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In the event this Agreement has been terminated prior to PacifiCare's
investigation and written determination and PacifiCare's investigation results
in a determination that IPA owes money to Specialist Physician, PacifiCare may,
in its sole and absolute discretion, elect to pay Specialist Physician on behalf
of IPA and seek reimbursement from IPA.

11. NOTICE

11.01 NOTICE - Any notice required to be given hereunder shall be in
writing and either delivered personally or sent by registered or certified mail,
return receipt requested, to either PacifiCare or IPA at the addresses listed
below, or at such other addresses as either PacifiCare or IPA may hereafter
designate to the other:

TO: PacifiCare of California
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇

TO IPA: Santa ▇▇▇ ▇▇▇▇▇▇ Physicians Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Administrator

All notices shall be deemed given on the date of delivery if delivered
personally or on the day three (3) business days after such notice is deposited
in the United States mails, addressed and sent as provided above.

12. MISCELLANEOUS

12.01 PROTECTION OF SUBSCRIBER - IPA may not impose any limitations
on the acceptance of Subscribers for care or treatment that it does not impose
on other patients of the IPA. Neither PacifiCare, IPA nor Hospital may request,
demand, require or seek directly or indirectly the transfer, discharge, or
removal of any Subscriber for reasons of Subscriber's need for, or utilization
of, Medically Necessary Medical or Hospital Services, except in accordance with
the procedures established for such action. IPA shall not refuse or fail to
provide Medically Necessary Medical Services to any Subscriber. Procedures for
removal, discharge or transfer of Subscribers shall be mutually agreed upon
between IPA and PacifiCare consistent with the Secure Horizons Medical and
Hospital Plan.

12.02 OTHER AGREEMENTS - Nothing in this Agreement shall prevent
PacifiCare and IPA from contracting with each other for provision of services
not covered by this Agreement.

12.03 REFUSAL BY PHYSICIAN - If IPA or any of its Member Physicians
refuses Medical Services to a Subscribed assigned to IPA for any reason
whatsoever, it shall remain the responsibility of IPA to assure that such
Subscriber receives Medical Services consistent with the terms of this
Agreement.

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12.04 CONFIDENTIAL AND PROPRIETARY INFORMATION

12.04.01 INFORMATION CONFIDENTIAL AND PROPRIETARY TO
PACIFICARE - IPA acknowledges that all PacifiCare Subscribers participating in a
Secure Horizons Medical and Hospital Plan individually or through an employer
group and receiving Medical Services shall be Subscribers of PacifiCare.
Subscriber and employer group information shall include, without limitation, the
names, addresses and telephone number of all Subscribers; member, employer and
administrative service manuals and all forms related thereto; and records, files
(other than patient medical files) and lists contained in IPA and PacifiCare
files.

IPA acknowledges that all such information is confidential and
proprietary to PacifiCare and that such Subscriber and employer group
information contains valuable trade secrets of PacifiCare.

All PacifiCare Subscriber agreements and the information
contained therein regarding PacifiCare, IPA, employer groups, Subscribers or the
financial arrangements between a hospital, IPA and PacifiCare is confidential
and proprietary to PacifiCare.

IPA shall maintain all Subscriber information and other
PacifiCare trade secret information confidential. IPA shall not disclose or use
any confidential and proprietary information for its own benefit or gain either
during the term of this Agreement or after the date of termination of this
Agreement; provided, however, that IPA may use the name, address and telephone
number or other medical information of a PacifiCare Subscriber if Medically
Necessary for the proper treatment of such Subscriber or upon express prior
written permission of PacifiCare or the Subscriber.

12.04.02 INFORMATION CONFIDENTIAL AND PROPRIETARY TO IPA - IPA
shall provide PacifiCare with a written description of all information
proprietary to IPA which is confidential and contains trade secrets of IPA ("IPA
Information"). PacifiCare shall maintain IPA Information confidential.
PacifiCare shall not disclose or use any IPA Information for its own benefit
either during the term of this Agreement or after the effective date of
termination of this Agreement. Upon termination of this Agreement, PacifiCare
shall provide and return to IPA all IPA Information in its possession in a
manner to be specified by IPA. PacifiCare shall cooperate with IPA in
maintaining the confidentiality of IPA Information at all times.

12.04.03 SOLICITATION OF PACIFICARE SUBSCRIBERS OR EMPLOYER
GROUPS - IPA shall not directly or indirectly engage in the practice of
solicitation or the patronage of PacifiCare's Subscribers or employer groups
without PacifiCare's prior written consent. Solicitation shall mean conduct by
an officer, agent, employee or Member Physician of IPA or its assignee or
successor during the Initial Term or any subsequent term of this Agreement and
continuing for a period of one (1) year after the effective date of termination
of this Agreement which may be reasonably interpreted as designed to persuade
PacifiCare Subscribers to discontinue their Subscriber agreements with
PacifiCare or to continue to receive health care from IPA on a fee-for-service
basis or to encourage PacifiCare Subscribers to participate

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in the prepaid health service plan offered by IPA, or any other prepaid health
service plan (the "Solicitation"). The breach of this Section 12.O4.03 during
any term of this Agreement shall be grounds for termination of this Agreement
pursuant to Section 7.01.02 of this Agreement.

12.05 CONFIDENTIALITY OF THIS AGREEMENT - To the extent reasonably
possible, each party agrees to maintain this Agreement as a confidential
document and not to disclose the Agreement or any of its terms without the
approval of the other party.

12.06 ASSIGNMENT - This Agreement and the rights, interests, and
benefits hereunder shall not be assigned, transferred, pledged, or hypothecated
in any way by IPA or PacifiCare and shall not be subject to execution,
attachment or similar process, nor shall the duties imposed herein be
subcontracted or delegated without the written consent of the other party.
Notwithstanding, PacifiCare may assign, transfer, pledge or hypothecate this
Agreement and its rights, interests and benefits hereunder to any entity which
has at least majority control of PacifiCare or to any entity of which PacifiCare
has at least majority control.

12.07 INVALIDITY OF SECTIONS OF AGREEMENT - The unenforceability or
invalidity of any paragraph or subparagraph of any section or subsection of this
Agreement shall not affect the enforceability and validity of the balance of
this Agreement.

12.08 WITHDRAWAL OF SUBSCRIBERS BY PACIFICARE - PacifiCare reserves
the right to withdraw from IPA all or part of the Subscribers from IPA whose
Medical Services are not being properly provided pursuant to this Agreement.
PacifiCare shall provide written notice to IPA of such withdrawal and the
reasons therefore. PacifiCare shall then allow IPA thirty (30) days from the
date of such notice to correct deficiencies. If such deficiencies are not
corrected to PacifiCare's satisfaction within said period, PacifiCare may
withdraw its Subscribers as provided in this Section 12.08 and remove IPA's name
from PacifiCare's marketing materials.

12.09 TRANSFER OF SUBSCRIBERS - PacifiCare and IPA shall exercise
reasonable efforts in discouraging Subscriber transfers except at reenrollment
periods, or when a Subscriber can show just cause for such transfer and
PacifiCare agrees to such transfer. Nevertheless, PacifiCare may require
transfer of Subscribers assigned to IPA for any reason; or, IPA may request
transfer of Subscribers assigned to it by PacifiCare to other IPAs for cause or
if the capacity of IPA is overburdened so that the provision of Medical Services
as required by this Agreement is affected; all such transfers shall be
consistent with the PacifiCare Provider Policies and Procedures Manual.

12.10 CAPTIONS - Captions in this Agreement are descriptive only and
do not affect the intent or interpretation of the Agreement.

12.11 AMENDMENT - This Agreement may be amended or modified only by
mutual written consent of the parties. Notwithstanding the foregoing sentence,
PacifiCare may amend this Agreement upon sixty (60) days written

- 23 -

notice to IPA in order to maintain compliance with applicable federal and state
laws; provided, however, any such amendment which affects a material duty or
responsibility of IPA and has a material adverse economic effect upon IPA as
reasonably demonstrated by IPA to PacifiCare, shall be subject to the provisions
of Section 12.12 below.

12.12 MODIFICATIONS OF THIS AGREEMENT AND/OR PACIFICARE PROVIDER
POLICIES AND PROCEDURES MANUAL AND/OR PACIFICARE HEALTH PLAN - Anything to the
contrary herein notwithstanding, in the event of any material modification of
this Agreement and/or the PacifiCare Provider Policies and Procedures Manual
and/or the Secure Horizons Medical and Hospital Plan that (i) affects a material
duty or responsibility of IPA, and (ii) causes a material adverse economic
effect to IPA, IPA and PacifiCare shall seek to agree to an amendment to this
Agreement which satisfactorily addresses the effect on IPA's material duty or
responsibility and reimburses the material economic detriment caused to IPA. In
the event such an agreement cannot be reached within sixty (60) days after the
date PacifiCare gives IPA written notice of such modification, such modification
shall not be effective.

12.13 TERMS; SECTIONS - Unless otherwise indicated, all terms in any
appropriate attachments, addendum and amendments hereto shall have the same
meaning attributed to such terms in the body of this Agreement and references to
section numbers are to the appropriate sections of this Agreement.

12.14 IPA'S AUTHORIZED REPRESENTATIVE - Unless otherwise indicated in
writing to PacifiCare, IPA warrants and authorizes its administrator to act as
its fully authorized representative to represent IPA and Member Physicians in
this Agreement and to receive any and all communications and notices hereunder.

12.15 ATTORNEYS' FEES AND COSTS - If any action at law or suit in
equity is brought to enforce or interpret the provisions of this Agreement or
to collect any monies due hereunder, the prevailing party shall be entitled
to reasonable attorneys' fees and reasonable costs, together with interest
thereon at the highest rate provided by law, in addition to any and all other
relief to which it may otherwise be entitled.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
Tustin, California, on December 18, 1989.

PACIFICARE OF CALIFORNIA

By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Title: President
----------------------------

SANTA ▇▇▇ ▇▇▇▇▇▇ PHYSICIANS GROUP, INC.

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: President
----------------------------
Tax ID #: ▇▇-▇▇▇▇▇▇▇
-------------------------

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PACIFICARE

SCHEDULE OF ATTACHMENTS

A. A1. Hospital Services

A2. Medical Services

A3. Individual Stop-Loss Program

A4. Cost of Care

A5. Hospital Incentive Program

B. Secure Horizons Medical and Hospital Subscriber Agreement

C. Capitation Payment Rates and Methodology

D. PacifiCare Provider Policies and Procedures Manual

E. Pharmacy Control Program

F. IPA Facilities

G. Division of Financial Responsibility

H. Medical Services Reserve Fund

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ATTACHMENT A1

HOSPITAL SERVICES

Hospital Services are the financial responsibility of Hospital. A summary of
most Hospital Services includes the following:

1. INPATIENT HOSPITAL CARE - Medically Necessary inpatient hospital care,
as defined by Medicare, but limited to a total of one hundred fifty
(150) days per Subscriber per Year. Unlimited days of inpatient
hospital care shall be provided to Subscribers, but PacifiCare shall
be financially responsible for days in excess of one hundred fifty
(150) days. Subscriber shall be assigned semi-private units, unless
medical necessity dictates private accommodations. Where the
Subscriber requests private accommodations, not required for medical
purposes, the incremental difference in fee-for-service rates shall be
the responsibility of the Subscriber. A summary of inpatient care
includes:

a. Medical/Surgical Care, Intensive Care, Cardiac Care and other
special care units (including Hospital Services associated with
non-experimental transplants as defined by Medicare);
b. Inpatient psychiatric;
c. Nursing Services, meals, drugs, medications (excluding
take-home medications), blood transfusions;
d. Medical and Surgical supplies and appliances;
e. Inpatient rehabilitation services, such as: inpatient physical,
occupational and speech therapy;
f. Inpatient alcohol and drug treatment and rehabilitation.

2. SKILLED NURSING - Medically Necessary Skilled Nursing Facility care,
as defined by Medicare, but limited to one hundred (100) days per
Subscriber per calendar year AND ALSO LIMITED TO SUBSCRIBER ADMISSIONS
IMMEDIATELY FOLLOWING THREE (3) OR MORE DAYS OF HOSPITALIZATION.
Subscribers are entitled to receive one hundred fifty (150) days of
Skilled Nursing Care per calendar year, but PacifiCare SHALL BE
FINANCIALLY RESPONSIBLE for days one hundred one (101) through one
hundred fifty (150). IN ADDITION, PACIFICARE SHALL BE FINANCIALLY
RESPONSIBLE FOR SKILLED NURSING FACILITY CARE FOR SUBSCRIBERS WHO ARE
ADMITTED DIRECTLY FROM HOME, FROM A HOSPITAL EMERGENCY ROOM OR FROM
THE HOSPITAL IF SUBSCRIBER WAS HOSPITALIZED FOR LESS THAN THREE (3)
DAYS. REFER TO POLICY AND PROCEDURES MANUAL FOR ADMIT NOTIFICATION
PROCEDURES. Patients shall be assigned semi-private units, unless
medical necessity dictates private accommodations. Where the
Subscriber requests private accommodations, not required for medical
purposes, the incremental difference in the fee-for-service rates
shall be the responsibility of the Subscriber. Skilled nursing
facilities must be Medicare licensed and approved.

- 26 -

3. HOSPITAL BASED PHYSICIAN SERVICE - All hospital based physician
services where the physician provides the professional component of an
inpatient hospital based service, the hospital outpatient surgery
center service, or a free-standing surgery center service. The charges
of an anesthesiologist are not included as a Hospital Service. (See
paragraph 8 below in this Attachment A1).

4. TRANSPORTATION EXPENSES - Medicare approved ambulance services
provided within the IPA Service Area for Subscribers. When a transfer
of Subscriber from one facility to another is authorized by IPA or
PacifiCare, the cost of such transfer shall be a Hospital service. The
method of transfer shall be determined by IPA, but IPA shall
coordinate all Subscriber transfers to or from Hospital with
designated Hospital personnel. Also included are paramedic services in
emergency cases in the IPA Service Area.

5. EMERGENCY SERVICES IN THE IPA SERVICE AREA - IPA Service Area
Emergency Services include emergency room charges and associated
emergency room physician and ancillary charges, inpatient medical and
other Medical Services which may not be delayed until facilities or
physicians of the Hospital or IPA (or alternatives authorized by IPA)
can be used without possible serious effects to the health of the
Subscriber. Such services must be Medically Necessary Emergency
Services.

6. HOME HEALTH CARE - As determined to be Medically Necessary, as defined
by Medicare and provided in lieu of hospitalization, as mutually
agreed to by IPA, Hospital and PacifiCare, including any required DME
and IV Therapy Services.

7. HOSPICE CARE - Should be coordinated with Medicare for special
reimbursement provisions.

8. OUTPATIENT SURGERY - Facility, supply charges and the professional
component of a hospital based physician service (as noted in paragraph
3 above) for outpatient surgery done either at Hospital or a
free-standing surgery center.

9. END STAGE RENAL DISEASE - Facility and professional charges for
inpatient and outpatient dialysis services for Subscribers who are
medically determined to have End Stage Renal Disease after enrollment
in one of PacifiCare's health plans.

10. OTHER HOSPITAL SERVICES

a. Devices surgically implanted during a hospital confinement or
during an outpatient surgery performed at the Hospital
outpatient surgery center or a free-standing surgery center.
b. Treatment programs for outpatient substance abuse as defined by
Medicare.

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c. Appealed Services - Hospital Services denied by IPA and
PacifiCare which are found on appeal or arbitration through the
Subscriber grievance resolution process to be Hospital Services
which the Subscriber was entitled to have furnished under the
PacifiCare Secure Horizons health care delivery system.

d. Chemotherapy Drugs (inpatient and outpatient).

11. HOSPITAL SERVICES EXCLUDE THE FOLLOWING:

a. Durable Medical Equipment, except as provided in paragraphs 6
and 10(a) above.
b. Medical Services in the IPA Service Area as defined by
Attachment A2 hereto.
c. Outpatient prescription drugs.
d. All out-of-IPA Service Area expenses, except those elective
referrals as authorized by IPA. PacifiCare, in conjunction with
IPA, shall make all decisions regarding the duration of a
Subscriber's care at the out-of-IPA Service Area facility and
transfer of the Subscriber to an IPA Service Area facility.
e. Vision materials (lenses and frames) except for those
surgically implanted during cataract surgery.
f. Anesthesiology services (inpatient and outpatient).
g. Experimental procedures, including any type of procedure not
generally recognized as of value by the medical community and
its societies, as determined by PacifiCare and IPA, in
conformance with state and federal law.
h. Cosmetic Surgery, except when performed to correct or repair
the physical functioning of a body part as a result of a
functional disorder or accidental injury.
i. Inpatient hospital care in excess of one hundred fifty (150)
days per Subscriber per Year.
j. Skilled nursing care in excess of one hundred (100) days per
Subscriber per Year.

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ATTACHMENT A2

MEDICAL SERVICES

I. Medical Services, other than Hospital Services, provided in the IPA Service
Area are the financial responsibility of IPA. A summary of most Medical Services
includes the following:

1. PHYSICIAN SERVICES - Subscribers shall be entitled to Medically
Necessary covered inpatient and outpatient physician services included
in the PacifiCare's Secure Horizons Medical and Hospital Plan. A
summary of some physician services includes the following:

a. IPA Service Area inpatient services (including anesthesiology
services and physician services associated with
non-experimental transplants, as defined by Medicare) and
outpatient physician care.
b. Professional component of inpatient mental health.
c. Outside referrals to consultants including Emergency Room
consultants (not including emergency room charges).
d. Out-of-IPA Service Area physician services when such Medical
Services are rendered on an elective basis and upon approval of
IPA.

2. OUTPATIENT SERVICES - Such services include, among others:

a. Outpatient pathology and radiology.
b. Outpatient mental health (professional services only).
c. Short term, Medically Necessary rehabilitation (speech,
physical and occupational) therapy.
d. Health education and social services.
e. Immunizations when determined Medically Necessary by an IPA
Member Physician as recommended by the California Department of
Health Services Adult Immunization Recommendations.
f. Periodic health evaluations.
g. Hearing screening, including audiogram.
h. Allergy testing and treatment, including allergy serum.
i. Home health care, except when provided in lieu of
hospitalization.
j. Lenses and frames required after cataract surgery, except
lenses surgically implanted during an outpatient surgery
performed at Hospital or at a free-standing surgery center.
k. Anesthesiology services.
l. Mammography screening, as defined by state and federal law.

3. DURABLE MEDICAL EQUIPMENT, PROSTHETIC DEVICES AND MEDICAL SUPPLIES

a. Durable Medical Equipment ("DME") as defined by Medicare. IPA
agrees to provide such devices and aids on an outpatient basis,
determined Medically Necessary.

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b. Prosthetic devices, as defined by Medicare, except devices
surgically implanted during a Hospital confinement or
outpatient surgery performed at Hospital or free-standing
surgery center.
c. Medical Supplies - Supplies used in connection with treatment
or to aid in the recovery of a medical condition when
considered a covered expense by Medicare.

4. OTHER SERVICES - Medical Services denied by the Participating Medical
Group and PacifiCare which are found on appeal or arbitration through
the Subscriber grievance resolution process to be Medical Services
which Subscriber was entitled to have furnished through the Secure
Horizons Medical and Hospital Plan.

II. Medical Services exclude the following:

a. Professional components on all hospital based physicians for inpatient
procedures and outpatient surgeries, except anesthesiology as noted in
paragraphs I(1)(a) and I(2)(k) above.
b. Outpatient mental health visits in excess of twenty (20) visits per
Subscriber Year.
c. Outpatient prescription drugs.
d. Chemotherapy drugs.
e. Out-of-IPA Service Area expenses, except pursuant to paragraph I(1)(d)
above. PacifiCare, in consultation with IPA, shall make all decisions
regarding the duration of a Subscriber's care at the out-of-IPA
Service Area facility and transfer of the Subscriber to an IPA Service
Area facility consistent with state and federal law.
f. Vision materials (lenses and frames), except following cataract
surgery.
g. Immunizations for foreign travel and unexpected mass immunizations.
h. Experimental procedures, including any type of procedure not generally
recognized as of value by the medical community and its societies, as
determined by PacifiCare in accordance with state and federal law and
in connection with IPA.
i. Cosmetic Surgery, except when performed to correct or repair the
physical functioning of a body part as a result of a functional
disorder or an accidental injury.

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ATTACHMENT A3

INDIVIDUAL STOP-LOSS PROGRAM

1. The Individual Stop-Loss ("ISL") Program is designed to limit the IPA's
costs per Subscriber per Year to a specified amount (the "deductible").
PacifiCare will assume all financial responsibility for the Subscriber in
excess of the deductible by paying IPA, based on the payment procedure as
outlined below, [ ** ] in excess of the deductible of the Cost of Care, as
defined in Attachment A4, included in full herein by reference.

2. Deductible: [ ** ] per Subscriber per Year.

3. Payment Procedures:

a. IPA must submit a claim in accordance with the procedures specified in
the PacifiCare Provider Policies and Procedures Manual.
b. Costs incurred by IPA for Medical Services provided during the last
thirty-one (31) days of the Year for which no benefits were payable
under the ISL Program because such costs were applicable to the
deductible may be carried forward for inclusion in the ISL
calculations for the next succeeding Year.
c. Medical Services rendered in connection with Worker's Compensation
cases or where payments for Medical Services provided under Section
3.01 of this Agreement are receivable through the coordination of
benefits, third party liability, or any other source of income,
including copayments, shall not be included in the Cost of Care
provided in calculating stop-loss liability.
d. PacifiCare will determine and pay all ISL Program claims within sixty
(60) days of receipt of a complete claim.
e. For continuing ISL cases (i.e., cases where more than one payment is
made during the Year), PacifiCare will reimburse the IPA quarterly
based on the submittal of a continuing ISL claim.
f. If the Subscriber transfers in the middle of the Year to another
Participating Medical Group and then exceeds the ISL, the payment for
all Medical Services in excess of the ISL will be shared
proportionately among the Participating Medical Groups who provided
Medical Services to the Subscriber during the Year.

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ATTACHMENT A4

COST OF CARE

For purposes of this Agreement, the Cost of Care for Medical Services
rendered by IPA to Subscriber shall equal:

a) [ ** ] of the fees charged by IPA to IPA's fee-for-service patient
for the same or similar services, if the same or similar services are
rendered by IPA; or

b) [ ** ] of the fees actually paid, if the services are rendered by
providers other than IPA.

IPA shall provide PacifiCare with a copy of IPA's fee-for-service fee
schedule and shall notify PacifiCare thirty (30) days prior to the effective
date of any changes in such fee schedule. The amount of increase of IPA's
fees shall be limited to [ ** ] per Year for purposes of any calculations
pursuant to this Agreement, regardless of the actual percentage increase in
IPA's fees each Year.

IPA shall notify PacifiCare of the existence and payment or discount
provisions of any agreements between IPA and other providers who render Medical
Services to Subscribers.

General guidelines and special situations:

1. Services provided by IPA which are not a benefit, as specified in the
Subscriber's Secure Horizons Medical and Hospital Agreement, will not
be considered a part of the Cost of Care.

2. For Individual Stop-Loss Program use, the Cost of Care of Medical
Services rendered through an outside referral or reciprocity referral
shall be set at [ ** ], or the [ ** ], whichever is higher.

3. The Cost of Care of Anesthesia Professional Services rendered by IPA
shall be set at [ ** ] of usual and customary charges. The Cost of
Care for anesthesia Professional Services rendered through an outside
referral or reciprocity referral shall be set at the [ ** ] or
[ ** ] of usual and customary charges, whichever is higher.

4. Any Medical Services provided where payment is considered collectible
through the coordination of benefits, third-party liability, Worker's
Compensation, or any other source including Copayments, shall not be
included in the Cost of Care. If, at a later date, these claims are
not collectible, or only partially collectible, then these services
will be included in the relevant programs, based on the Cost of Care
calculation cited above.

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ATTACHMENT A5

HOSPITAL INCENTIVE PROGRAM

HOSPITAL INCENTIVE PROGRAM - As an incentive for the provision of Hospital
Services to Subscribers in a cost-effective manner, PacifiCare and IPA shall
establish a Hospital Incentive Program. The Incentive Program shall utilize a
Withhold Amount, as defined below, and shall be calculated by comparing the
Hospital Services Budget to the Hospital Services Expense, as such terms are
defined below. The amount of payments under the Hospital Incentive Program shall
be calculated pursuant to the provisions herein.

a. WITHHOLD AMOUNT - PacifiCare shall withhold from IPA's monthly
Capitation Payment an amount equal to [ ** ] of the amount received by
PacifiCare each month from HCFA for each Subscriber enrolled with IPA for
application to the Hospital Incentive Program. PacifiCare may adjust the
Withhold Amount on a quarterly basis based upon the results of the Hospital
Incentive Program calculation. If the Agreement is terminated pursuant to
Section 7 of the Agreement, PacifiCare may choose to adjust the Withhold
Amount at the time that the notice of termination is served.

b. HOSPITAL SERVICES BUDGET - The Hospital Services Budget shall equal
[ ** ] of the Monthly HCFA Payment for those Subscribers designating IPA as
their Participating Medical Group minus [ ** ] of such HCFA Payment in
consideration of the Reinsurance program as set forth in subsection (c)(4)
herein.

c. HOSPITAL SERVICES EXPENSE - Hospital Services Expense shall be valued
as the total of the following:

1. INPATIENT EXPENSE AT HOSPITAL - Inpatient costs for Hospital
Services rendered at Hospital valued at the amount paid to Hospital by
PacifiCare; PLUS

2. NON-INPATIENT EXPENSES AT HOSPITAL - Other Hospital Services
provided by Hospital other than inpatient services valued at the amount paid to
Hospital by PacifiCare; PLUS

3. HOSPITAL SERVICES NOT PROVIDED AT HOSPITAL - The actual amount paid
by PacifiCare for Hospital Services not provided by Hospital; MINUS

4. REINSURANCE LIMIT - Any amount of Hospital Services Expense, as
defined in subsection (c)(1)-(3) above, in excess of [ ** ] per Subscriber
per Year. The [ ** ] deductible shall be effective during the Initial
Term. If less than seven hundred fifty (750) Subscribers have designated IPA
as their Participating Medical Group as of the anniversary of the
Commencement Date, the deductible shall remain at [ ** ] for the succeeding
term. If greater than seven hundred fifty (750) Subscribers have designated
IPA as their Participating Medical Group as of the anniversary of the
Commencement Date, the IPA will be offered the standard reinsurance

- 33 -

package as is offered to the other Participating Medical Groups during that
particular contract term.

5. COORDINATION OF BENEFITS - Any amount received by PacifiCare
from third parties as described in Section 3.08 of this Agreement.

d. PAYMENTS TO IPA UNDER HOSPITAL INCENTIVE PROGRAM

1. HOSPITAL SERVICES BUDGET EXCEEDS HOSPITAL SERVICES EXPENSE -
In the event the annual Hospital Services Budget exceeds the annual Hospital
Services Expense, PacifiCare shall pay IPA the Withhold Amount, if any, plus
an amount equal to [ ** ] of the amount by which the annual Hospital
Services Budget exceeds the annual Hospital Services Expense, up to a limit
of [ ** ] of the annual Hospital Services Budget.

2. HOSPITAL SERVICES EXPENSE EXCEEDS HOSPITAL SERVICES BUDGET -
In the event that the annual Hospital Services Expense exceeds the annual
Hospital Services Budget, PacifiCare shall pay IPA the Withhold Amount, if
any, minus an amount equal to [ ** ] of the amount by which the Hospital
Services Expense exceeds the Hospital Services Budget, up to a limit of
[ ** ] of the annual Hospital Services Budget.

To the extent that the portion of the calculated deficit for which IPA
is responsible exceeds the Withhold Amount, IPA shall not be entitled to any of
the Withhold Amount. After the Withhold Amount has been exceeded, any remaining
portion of the deficit for which IPA is responsible shall be carried forward
into the succeeding term. An amount equal to this remaining portion of the
deficit will be withheld from IPA's monthly Capitation Payment, using a mutually
agreed upon payment schedule, not to exceed one (1) year.

Should this Agreement terminate leaving no successive term to carry
forward an existing deficit amount, such deficit amount shall be due and payable
by IPA to PacifiCare within one hundred fifty (150) days of the effective date
of termination of this Agreement.

e. SETTLEMENT OF HOSPITAL INCENTIVE PROGRAM PAYMENTS

PacifiCare shall make interim Hospital Incentive Program
calculations and payments, if any, on a [ ** ] within sixty (60) days after
the end of each [ ** ] from the Effective Date. The Hospital Services
Expense figure used in [ ** ] incentive program calculations shall also
include an "Incurred But Not Reported" factor in order to account for
outstanding Medical Services claims. PacifiCare shall make an annual Hospital
Incentive Program payment to IPA within one hundred and fifty (150) days of
the end of each Year.

f. MEDICAL SERVICES RESERVE FUND REPAYMENT

If the medical group borrows against the Medical Services Reserve Fund, the
monies borrowed will be subtracted from the final surplus of the Hospital
Incentive Program. If the Hospital Incentive Program results in a

- 34 -

deficit, the amount owed to PacifiCare from the Medical Services Reserve Fund
will be carried forward to the next year's Hospital Incentive Program in
addition to the deficit.

- 35 -

ATTACHMENT B

SECURE HORIZONS MEDICAL AND HOSPITAL SUBSCRIBER AGREEMENT

Provided to IPA by PacifiCare concurrent with the execution of this Agreement.

IPA

Received this day of , 1989
-------------------- ----------
By:
------------------------------------
Title:
---------------------------------

- 36 -

ATTACHMENT C

CAPITATION PAYMENT RATES

The monthly Capitation Payment which PacifiCare shall pay IPA shall equal:

[ ** ] of both the Monthly HCFA Payment and any applicable Subscriber
Premiums, less [ ** ] of the Monthly HCFA Payment as payment for the
premium for Individual Stop-Loss coverage specified in Attachment "A3"
hereto, and also less [ ** ] for the Pharmacy Control Program as
specified in Attachment E hereto. The payment per Subscriber per month by
PacifiCare to IPA shall be increased or decreased by PacifiCare to reflect
increases or decreases made by HCFA in the Monthly HCFA Payment. PacifiCare
shall make monthly retroactive adjustments in IPA's succeeding Capitation
Payment to reflect the retroactive adjustments made by HCFA in the HCFA
Payment, if any.

PacifiCare shall provide IPA appropriate documentation in support of the
actual Capitation Payment made. Should IPA desire additional billing
information, PacifiCare shall make available for inspection other mutually
agreed upon documents, upon thirty (30) days prior written notice from IPA. IPA
shall have the right to reasonably audit PacifiCare's books and records directly
relating only to IPA's Capitation Payment determinations upon thirty (30) days
prior written notice at IPA's sole expense.

MAMMOGRAPHY SERVICES

IPA shall receive [ ** ] for each screening and diagnostic mammography
study performed above the 1987 PacifiCare wide baseline, specific to the
Secure Horizons Medical and Hospital Plan, for such studies. This baseline
equals two hundred sixty-seven (267) studies per one thousand (1,000) adult
females per Year. The amount due to IPA shall be calculated based upon
utilization data submitted by IPA and shall be paid within one hundred fifty
(150) days of the end of the Year.

INSTITUTION-TO-INSTITUTION TRANSFERS

IPA shall ▇▇▇▇ PacifiCare and PacifiCare shall pay for Medical Services
provided to Subscribers who designate IPA as their Participating Medical
Group through a transfer from another PacifiCare Participating Medical Group
and who are in a skilled nursing facility, acute care hospital, or are
receiving any other type of acute institutional care at time of designating
IPA as their Participating Medical Group. Medical Services provided by IPA to
such Subscribers shall be reimbursed under this special program, until the
Subscriber is discharged from such institution, at [ ** ] of IPA's ordinary
and customary fee-for-service rates then in effect but no greater than the
ISL deductible (as specified in Attachment A3) per Subscriber during the
Initial Term or any subsequent term of this Agreement.

- 37 -

IPA shall batch these bills together and identify the bills as
institution-to-institution prior to submitting bills to PacifiCare. Bills must
be submitted to PacifiCare no later than sixty (60) days from the provision of
Medical Services. Expenses for Medical Services identified as
institution-to-institution and rendered from January 1, 1990 through December
31, 1990 only will be included in the institution-to-institution program. A
final claim must be filed for such Medical Services by March 31, 1991 to be
reimbursed under this institution-to-institution program.

- 38 -

ATTACHMENT D

PACIFICARE PROVIDER POLICIES AND PROCEDURES MANUAL

Provided to IPA by PacifiCare concurrent with the execution of this Agreement.

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

Received this 18 day of Dec, 1989,

By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Pres.
---------------------------------

- 39 -

ATTACHMENT E

PHARMACY CONTROL PROGRAM

The purpose of the Pharmacy Control Program (PCP) is to provide an
incentive to the IPA to ▇▇▇▇▇▇ the efficient utilization of prescription
services. The PCP gives the IPA the ability to share in any savings when
comparing actual utilization against an established budget.

The budget will be set at ______________ ($ ) on a per Subscriber per
month (pmpm) basis and will be calculated based on the number of Subscribers who
have designated IPA as their Participating Medical Group and who are eligible to
receive the prescription benefit.

Debited against this budget will be the actual expenses paid by
PacifiCare for pharmacy services of those Subscribers who have designated IPA
as their Participating Medical Group for the applicable month. The IPA will
share [ ** ] of any savings in comparing the budget and actual expenses.
PacifiCare shall provide, on a quarterly basis, utilization reports
pertaining to the cost of prescriptions written on a physician specific
basis. A final calculation and final payment will be made within one hundred
fifty (150) days of the end of each Year.

IPA agrees to participate in a generic drug substitution program and
formulary program established by PacifiCare's Quality Assurance Committee.

- 40 -

ATTACHMENT F

IPA FACILITIES

Santa ▇▇▇ ▇▇▇▇▇▇ Physicians Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

- 41 -

ATTACHMENT G

DIVISION OF FINANCIAL RESPONSIBILITY

The attached template outlines the division of financial responsibility
between IPA, Hospital and PacifiCare, the intent being to clarify Medical
Services and Medical Service categories in order to provide for accurate
administration. As it is impossible to include every Medical Service available,
the template serves as a model under which broad Medical Service categories
suggest the appropriate financial responsibility for Medical Services or items
not specifically listed.

- 42 -

DIVISION OF FINANCIAL RESPONSIBILITY
CALIFORNIA
Secure Horizons Shared Risk Agreement
(IPA Capitated, Hospital Incentive Program w/PacifiCare)

IPA Hospital
----------------------------------- -----------------------------

Responsible Party
-------------------------------------------------------

List of Benefits - (In area) IPA PacifiCare PacifiCare
---------------------------- HIP 100%

AIDS - Professional Component
- Facility Component
Allergy
- Testing
- Serum
Ambulance, Air or Ground - In Area
- Out of Area
Amniocentesis
Anesthetics, Administration of
(Anesthesiology)
Artificial Insemination
Artificial Limbs (DME)
Biofeedback
Blood & Blood Products (Including
Professional Component)
- From Blood Bank [ ** ](1)
- Autologous Blood Donation
Chemical Dependency Rehabilitation
- Inpatient Facility Component
- Inpatient Professional Component
- Outpatient Professional Component
- Outpatient Facility Component
Chemotherapy
- Drugs
- Professional Component
Chiropractic (Medicare Approved Only)
Colostomy Supplies
- Outpatient
- Inpatient
Contact Lenses
- Intraocular lens (surgically
implanted)
- Incident to Cataract Surgery
(not surgically implanted)
Cosmetic Surgery (Medically Necessary)
- Facility Component
- Professional Component
Dental Services (for repair of
accident/injury only)
- Facility Component
- Professional Component
Detox
- Facility Component
- Professional Component
Durable Medical Equipment (DME)
(Medicare Approved Only)
- Surgically Implanted
- Inpatient or S.N.F.
- In Lieu of Hospitalization
- Outpatient
- Hearing Aids

(1) All references to division of responsibility have been deleted.

- 43 -

DIVISION OF FINANCIAL RESPONSIBILITY
CALIFORNIA
Secure Horizons Shared Risk Agreement
(IPA Capitated, Hospital Incentive Program w/PacifiCare)

IPA Hospital
----------------------------------- -----------------------------

Responsible Party
-------------------------------------------------------

List of Benefits - (In area) IPA PacifiCare PacifiCare
---------------------------- HIP 100%

Emergency Admissions
- In Area: - Facility Component
- Professional Component
- Out of Area: - Facility Component
- Professional
Component
Emergency Room Facility Component
- In Area
- Out of Area
Emergency Room Physicians - In Area
- Initial Treatment
- Consults
- Out of Area
Endoscopic Studies
- With Biopsy [ ** ](1)
- Without Biopsy
Experimental Procedures
Family Planning (Medicare Approved
Only) (e.g.: Amniocentesis)
- Professional Component
- Facility Component
Fetal Monitoring
- Outpatient
- Inpatient
Genetic Testing
Health Education
Health Evaluation (Physical)
Hearing Aids
Hearing Screening
Hemodialysis
- Inpatient
- Outpatient
Home Health Care
- In Lieu of Hospitalization
(includes IV or injectables)
- Other
Hospice Services (Special Medicare
Reimbursement Program)
- Inpatient
- Professional Component
Hospital Based Physicians (Inpatient)
- Anesthesiology
- Audiology
- Cardiology
- Emergency Room
- Diagnostic Services
- Neonatology
- Neurology
- Nephrology

(1) All references to division of responsibility have been deleted.

- 44 -

DIVISION OF FINANCIAL RESPONSIBILITY
CALIFORNIA
Secure Horizons Shared Risk Agreement
(IPA Capitated, Hospital Incentive Program w/PacifiCare)

IPA Hospital
----------------------------------- -----------------------------

Responsible Party
-------------------------------------------------------

List of Benefits - (In area) IPA PacifiCare PacifiCare
---------------------------- HIP 100%

Hospital Based Physicians (continued)
- Pathology
- Physical Medicine
- Pulmonary
- Radiology
- Radiation Oncology
- Surgeon
Hospitalization, Inpatient Services
Supplies, Testing
- In Area
- Out of Area
Immunization and Inoculations
- As Medically Indicated
- For Work/Travel
Infertility (Diagnosis and Treatment)
- Professional Component
- Facility Component [ ** ](1)
Injections and Injected Substances
(outpatient)
Insulin & Syringes
Laboratory Services
- Outpatient
- Inpatient
Lithotripsy
- Professional Component
- Facility Component
Mammography
Marriage Counseling
Medication -
- In Lieu of Hospitalization
(Intravenous)
- Inpatient
- Outpatient Covered Injectables
- Outpatient Non-injectables-if
member has benefit
Mental Health
- Inpatient Facility Component
- Inpatient Professional
Component
- Outpatient Professional
Component
Nuclear Medicine Diagnostics
Nuclear Medicine Treatment/Therapy
- Facility Component (Inpatient)
- Facility Component
(Outpatient)
- Professional Component
Nutritional/Dietetic Counseling
Office Visit Supplies, Splints,
Bandages, etc.
Organ Transplants (non-experimental)
- Facility component
- Professional component

(1) All references to division of responsibility have been deleted.

- 45 -

DIVISION OF FINANCIAL RESPONSIBILITY
CALIFORNIA
Secure Horizons Shared Risk Agreement
(IPA Capitated, Hospital Incentive Program w/PacifiCare)

IPA Hospital
----------------------------------- -----------------------------

Responsible Party
-------------------------------------------------------

List of Benefits - (In area) IPA PacifiCare PacifiCare
---------------------------- HIP 100%

O.P. Surgery
- Facility Component
- Professional Component
(Facility Based MDs)
- Professional Component - other
- Anesthesiology
Outpatient Surgery/Facility/
Based Physicians
- Anesthesiology
- Audiology
- Cardiology
- Emergency Room
- Diagnostic Services
- Neonatology [ ** ](1)
- Neurology
- Nephrology
- Pathology
- Physical Medicine
- Pulmonary
- Radiology
- Radiation Oncology
- Surgeon
Outpatient Diagnostic Services-
Facility and Professional
(including, but not limited to,
those listed below)
- Angiograms
- Cat Scan
- 2 D Echo
- EEG
- EKG
- EMG
- ENG
- MRI
- Treadmills
- Ultrasound
Physical Therapy
- Inpatient
- Outpatient
Physician Visits
- To Hospital
- To S.N.F.
- To Patients Home
Physician Office Visits/
Consultations
Podiatry Services (requires P.M.G.
referral)
Pregnancy
- Professional Component
- Facility Component
Prosthetic Devices
- Surgically Implanted
- Outpatient

(1) All references to division of responsibility have been deleted.

- 46 -

DIVISION OF FINANCIAL RESPONSIBILITY
CALIFORNIA
Secure Horizons Shared Risk Agreement
(IPA Capitated, Hospital Incentive Program w/PacifiCare)

IPA Hospital
----------------------------------- -----------------------------

Responsible Party
-------------------------------------------------------

List of Benefits - (In area) IPA PacifiCare PacifiCare
---------------------------- HIP 100%

Radiation Therapy
- Facility Component (Inpatient)
- Facility Component (Outpatient)
- Professional Component
Radiology Services
- Outpatient
- Inpatient
- O.P. Surgery
Reconstructive Surgery
- Facility Component
- Professional Component
- Prosthetics
Refractions
Rehabilitation (Short Term) (e.g.:
P.T., O.T., Speech, Cardiac Therapy)
- Inpatient Facility Component [ ** ](1)
- Inpatient Professional
Component
- Outpatient Facility Component
- Outpatient Professional
Component
Skilled Nursing Facility
Social Services - Medical
Specialist Consultations
Surgical Supplies
- Inpatient
- Outpatient Facility
- Outpatient IPA
TMJ
- Dental Treatment
- Diagnosis and Medically
Necessary Correction
- Inpatient Facility Component
Transfusions
- From Blood Bank
- Autologous Blood Donation
Tissue Plasminogen Activator (TPA)
Vision Screening
Vision Care
- Implanted Lenses (cataract
surgery)
- Lenses and Frames incident to
cataract surgery
- Non-cataract Related Lenses
and Frames
- Medically necessary care
- Refractions

(1) All references to division of responsibility have been deleted.

- 47 -

ATTACHMENT H

MEDICAL SERVICES RESERVE FUND

PacifiCare will establish a reserve fund in the amount of [ ** ].
This reserve is to be used to pay for medical services listed in Attachment
A2 and that are the financial responsibility of the Medical Group. The
reserve may only be borrowed against when the Medical Group's expenses exceed
the capitation paid to the Group.

The Group may borrow against the reserve by notifying PACIFICARE OF
CALIFORNIA CFO in writing. Upon notification, PacifiCare will issue a check in
the amount requested to the Group.

Monies borrowed from the reserve fund will be repaid to PacifiCare from any
surplus due the Medical Group at the final year end settlement of the Hospital
Incentive Program. If repayment of the reserve is due, and there is a deficit on
the Hospital Incentive Program, the reserve owed will be carried forward to be
repaid from the following year's Hospital Incentive Program.

- 48 -

IPA MEDICARE SHARED RISK SERVICES AGREEMENT BETWEEN PACIFICARE OF CALIFORNIA AND SANTA ANA TUSTIN PHYSICIANS GROUP, INC. TABLE OF CONTENTS

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