AND

EX 10.28a

STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

Whereas University Health Plans, Inc. has been granted a Certificate of
Authority from the New Jersey Department of Health and Senior Services and the
New Jersey Department of Banking and Insurance to operate a Health Maintenance
Organization (HMO) in the counties of Atlantic, Cumberland, Salem, Sussex and
Xxxxxx in the State of New Jersey, and

Whereas, the Department of Human Services, Division of Medical Assistance and
Health Services (DMAHS) is desirous of permitting University Health Plans, Inc.
to enroll Medicaid and NJ FamilyCare recipients in the counties of Atlantic,
Cumberland, Salem, Sussex and Xxxxxx, and

In accordance with Article 7 Section 7.11.2A of the Contract between University
Health Plans, Inc. and the State of New Jersey, Department of Human Services,
Division of Medical Assistance and Health Services (DMAHS), effective date .
October 1 , 2000, it is hereby agreed that the contract be amended as follows:

1) Article 5; Enrollee Services, section 5.1. B, Enrollment Area shall
include the counties of Atlantic, Cumberland, Salem, Sussex and Xxxxxx
(see attached Article 5, section 5. 1B.):

2) Appendices, section D.3, Contractor's Provider Network shall include
the contractor's provider network for the counties of Atlantic,
Cumberland, Salern, Sussex and Xxxxxx (see attached Appendix D.3);

3) Appendices, section D.4, Contractor's List of Subcontractors shall
include the contractor's subcontractor network for the counties of
Atlantic, Cumberland, Salem, Sussex and Xxxxxx (see attached Appendix
D.4).

All other terms and conditions of the initial contract and amendments remain
unchanged.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

BY:/s/ Xxxxxxxxx XxXxxx BY:/s/ Xxxxxxx X'xxxx
----------------------------------- -----------------------------------
XXXXXXX X. X'XXXX

TITLE: PRESIDENT AND CEO TITLE: ACTING DIRECTOR, DMAHS

DATE: 7/31/03 DATE: 8/13/03

STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.2B of the contract
between University Health Plans, Inc. and the State of New Jersey, Department of
Human Services, Division of Medical Assistance and Health Services (DMAHS),
effective date October 1, 2000, all parties agree that certain sections of the
contract shall be amended to take effect November 1, 2003, as follows:

1. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES, " Sections 4.1.5(C),
4.1.5(D), 4.1.6(A)3 and 4.1.7(C)13 shall be amended as reflected in
Article 4, Sections 4.1.5(C), 4,1.5(D), 4.1.6(A)3 and 4,1,7(C)13
attached hereto and incorporated herein.

2. ARTICLE 5, "ENROLLEE SERVICES," Sections 5.B.2(M) and 5.8.2(U) shall be
amended as reflected in Article 5, Sections 5.8.2(M) and 5,8.2(U)
attached hereto and incorporated herein.

3. ARTICLE 8, "FINANCIAL PROVISIONS," Section B.5.6 shall be amended as
reflected in Section 8.5.6 attached hereto and incorporated herein.

4. APPENDIX, SECTION B, "COST-SHARING REQUIREMENTS FOR NJ FAMILYCARE PLAN
C, PLAN D AND PLAN H BENEFICIARIES", B.5.2, Plan H co-pays shall be
amended as reflected in Section B, B.5.2 attached hereto and
incorporated herein.

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

BY:/s/ Xxxxxxxxx XxXxxx BY:/s/ Xxx Clemency Kohler
----------------------------------- -----------------------------------
XXX CLEMENCY KOHLER

TITLE: PRESIDENT AND CEO TITLE: DIRECTOR, DMAHS

DATE: 10/28/03 DATE: [ILLIGIBLE]

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: /s/ [ILLEGIBLE]
-----------------------------------
DEPUTY ATTORNEY GENERAL

DATE: 11/05/03

an enrollee's risk factors, 3) development of a plan of care, 4)
referrals and assistance to ensure timely access to providers, 5)
coordination of care actively linking the enrollee to providers,
medical services, residential, social, and other support services where
needed, 6) monitoring, 7) continuity of care, and 8) follow-up and
documentation.

CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS) - formerly the Health
Care Financing Administration (HCFA) within the U.S. Department of
Health and Human Services.

CERTIFICATE OF AUTHORITY--a license granted by the New Jersey
Department of Banking and Insurance and the New Jersey Department of
Health and Senior Services to operate an HMO in compliance with
N.J.S.A. 26;2J-1 et. seq.

CHILDREN'S HEALTH CARE COVERAGE PROGRAM--means the program established
by the "Children's Health Care Coverage Act", P.L. 1997, c.272 as a
health insurance program for targeted, low-income children.

CHILDREN WITH SPECIAL HEALTH CARE NEEDS--those children who have or are
at increased risk for chronic physical, developmental, behavioral, or
emotional conditions and who also require health and related services
of a type and amount beyond that required by children generally.

CHRONIC ILLNESS--a disease or condition of long duration (repeated
inpatient hospitalizations, out of work or school at least three months
within a twelve-month period, or the necessity for continuous health
care on an ongoing basis), sometimes involving very slow progression
and long continuance. Onset is often gradual and the process may
include periods of acute exacerbation alternating with periods of
remission.

CLINICAL PEER--a physician or other health care professional who holds
a non-restricted license in New Jersey and is in the same or similar
specialty as typically manages the medical condition, procedure, or
treatment under review.

CNM OR CERTIFIED NURSE MIDWIFE--a registered professional nurse who is
legally authorized under State law to practice as a nurse-midwife, and
has completed a program of study and clinical experience for
nurse-midwives or equivalent.

CNP OR CERTIFIED NURSE PRACTITIONER--a registered professional nurse
who is licensed by the New Jersey Board of Nursing and meets the
advanced educational and clinical practice requirements beyond the two
to four years of basic nursing education required of all registered
nurses.

CNS OR CLINICAL NURSE SPECIALIST--a person licensed to practice as a
registered professional nurse who is licensed by the New Jersey State
Board of Nursing or similarly licensed and certified by a comparable
agency of the state in which he/she practices.

COLD CALL MARKETING-any unsolicited personal contact with a potential
enrollee by an employee or agent of the contractor for the purpose of
influencing the individual to enroll

Amended as of November 1, 2003 I-4

C. Up to twelve (12) inpatient hospital days required for social
necessity in accordance with Medicaid regulations.

D. DDD/CCW waiver services; individual supports (which includes
personal care and training), habilitation, case management,
respite, and Personal Emergency Response Systems (PERS).

4.1.5 INSTITUTIONAL FEE-FOR-SERVICE BENEFITS - NO COORDINATION BY THE
CONTRACTOR

The following institutional services shall remain in the
fee-for-service program without requiring coordination by the
contractor. In addition, Medicaid beneficiaries participating in a
waiver (except the Division of Developmental Disabilities Community
Care Waiver) or demonstration program or admitted for long term care
treatment in one of the following shall be disenrolled from the
contractor's plan on the date of admission to institutionalized care.

A. Nursing Facility care (Exception: if the admission is only for
inpatient rehabilitation/postacute care services and is 30
days or less, the enrollee will not be disenrolled. The
contractor remains financially responsible for services in
this setting for 30 days. Thereafter, if the enrollee
continues to receive services in this setting, the enrollee
will be disenrolled, The contractor will no longer be
financially responsible.) Not covered for NJ FamilyCare Plans
B and C.

B. Inpatient psychiatric services (except for RTCs) for
individuals under age 21 and 65 and over - Services that are
provided:

1. Under the direction of a physician;

2. In a facility or program accredited by the Joint
Commission on Accreditation of Health Care
Organizations; and

3. Meet the federal and State requirements.

C. Intermediate Care Facility/Mental Retardation Services --
Items and services furnished in an intermediate care facility
for the mentally retarded. COVERED FOR NJ FAMILYCARE PLAN A
ONLY.

D. Waiver (except Division of Developmental Disabilities
Community Care Waiver) 1 and demonstration program services,
COVERED FOR NJ FAMILYCARE PLAN A ONLY.

4.1.6 BENEFIT PACKAGE FOR NJ FAMILYCARE PLAN D

A. Services Included In The Contractor's Benefits Package for NJ
FamilyCare Plan D, The following services shall be provided
and case managed by the contractor:

1. Primary Care

Amended as of November 1, 2003 IV-10

a. All physicians services, primary and specialty

b. In accordance with state, certification/licensure
requirements, standards, and practices, primary care
providers shall also include access to certified
nurse midwifes, certified nurse practitioners,
clinical nurse specialists, and physician assistants

c. Services rendered at independent clinics that provide
ambulatory services

d. Federally Qualified Health Center primary care
services

2. Emergency room services

3. Family Planning Services, including medical history and
physical examinations (including pelvic and breast),
diagnostic and laboratory teats, drugs and biologicals,
medical supplies and devices, counseling, continuing medical
supervision, continuity of care and genetic counseling

Services provided primarily for the diagnosis and treatment of
infertility, including sterilization reversals, and related
office (medical and clinic) visits, drugs, laboratory
services, radiological and diagnostic services and surgical
procedures are not covered by the NJ FamilyCare program,
Obtaining family planning services from providers outside the
contractor's provider network is not available to NJ
FamilyCare Plan D enrollees, EXCEPT FOR THOSE PLAN D ENROLLEES
WITH PROGRAM STATUS CODE 380.

4. Home Health Care Services -- Limited to skilled nursing for a
home bound beneficiary which is provided or supervised by a
registered nurse, and home health aide when the purpose of the
treatment is skilled care; and medical social services which
are necessary for the. treatment of the beneficiary's medical
condition

5. Hospice Services

6. Inpatient Hospital Services, including general hospitals,
special hospitals, and rehabilitation hospitals. The
contractor shall not be responsible when the primary admitting
diagnosis is mental health or substance abuse related.

7. Outpatient Hospital Services, including outpatient surgery

Amended as of November 1, 2003 IV-11

12. Durable Medical Equipment - excludes any equipment not listed
in Appendix, Section B.4,1, and not covered if not part of
inpatient hospital discharge plan

13. Early and Periodic Screening, Diagnosis and Treatment (EPSDT)
services.

14. Transportation Services, including non-emergency ambulance,
invalid coach, and lower mode transportation

15. Hearing Aid Services

16. Blood and Blood Plasma, except administration of blood,
processing of blood, processing fees and fees related to
autologous blood donations are covered.

17. Cosmetic Services

18. Custodial Care

19. Special Remedial and Educational Services

20. Experimental and Investigational Services

21. Medical Supplies (except diabetic supplies)

22. Infertility Services

23. Rehabilitative Services for Substance Abuse

24. Weight reduction programs or dietary supplements, except
operations, procedures or treatment of obesity when approved
by the contractor

25. Acupuncture and acupuncture therapy, except when performed as
a form of anesthesia in connection with covered surgery

26. Temporomandibular joint disorder treatment, including
treatment performed by prosthesis placed directly in the teeth

27. Recreational therapy

28. Sleep therapy

29. Court-ordered services

30. Thermograms and thermography

31. Biofeedback

32. Radial keratotomy

33. Respite Care

34. Inpatient hospital services for mental health

35. Inpatient and outpatient services for substance abuse

36. Partial hospitalization IV-17

Amended as of November 1, 2003 IV-17

H. An explanation of the process for accessing emergency services
and services which require or do not require referrals;

I. A definition of the terms "emergency medical condition" and
"post stabilization care services" and an explanation of the
procedure for obtaining emergency services, including the need
to contact the PCP for urgent care situations and prior to
accessing such services in the emergency room;

J. An explanation of the importance of contacting the PCP
immediately for an appointment and appointment procedures;

K. An explanation of where and how twenty-four (24) hour per day,
seven (7) day per week, emergency services are available,
including out-of-area coverage, and procedures for emergency
and urgent health care service, including the fact that the
enrollee has a right to use any hospital or other setting for
emergency care;

L. A list of the Medicaid .and/or NJ FamilyCare services not
covered by the contractor and an explanation of how to receive
services not covered by this contract including the fact that
such services may be obtained through the provider of their
choice according to regular Medicaid program regulations. The
contractor may also assist an enrollee or, where applicable,
an authorized person, in locating a referral provider;

M. A notification of the enrollee's right to obtain family
planning services from the contractor or from any appropriate
Medicaid participating family planning provider (42 C.F.R.
Section 431.51(b)); as well as an explanation that enrollees
covered under NJ FamilyCare Plan D (EXCEPT PSC 380) may only
obtain family planning services through the contractor's
provider network, and that family planning services outside
the contractor's provider network are not covered services.

N. A description, of the process for referral to specialty and
ancillary care providers and second opinions;

O. An explanation of the reasons for which an enrollee may
request a change of PCP, the process of effectuating that
change, and the circumstances under which such a request may
be denied;

P. The reasons and process by which a provider may request an
enrollee to change to a different PCP;

Q. An explanation of an enrollee's rights to disenroll or
transfer at any time for cause; disenroll or transfer in the
first 90 days after the latter of the date the individual
enrolled or the date they receive notice of enrollment and at
least every twelve (12) months thereafter without cause and
that the lock-in period does not apply to ABD, DDD or DYFS
individuals;

Amended as of November 1, 2003 V - 14

R. Complaints and Grievances/Appeals

1. Procedures for resolving complaints, as approved by
the DMAHS;

2. A description of the grievance/appeal procedures to
be used to resolve disputes between a contractor and
an enrollee, including; the name, title, or
department, address, and telephone number of the
person(s) responsible for assisting enrollees in
grievance/appeal resolutions; the time frames and
circumstances for expedited and standard grievances;
the right to appeal a grievance determination and the
procedures for filing such an appeal; the time frames
and circumstances for expedited and standard appeals;
the right to designate a representative; a notice
that all disputes involving clinical decisions will
be made by qualified clinical personnel; and that all
notices of determination will include information
about the basis of the decision and further appeal
rights, if any;

3. The contractor shall notify all enrollees in their
primary language of their rights to file grievances
and appeal grievance decisions by the contractor;

S. An explanation that o Medicaid/NJ FamilyCare Plan A enrollees,
and Plan D enrollees with a program status code of 380, have
the right to a Medicaid Fair Hearing with DMAHS and the appeal
process through the DHSS for Medicaid and NJ FamilyCare
enrollees, including instructions on the procedures involved
in making such a request;

T. Title, addresses, phone numbers and a brief description of the
contractor's plan for contractor management/service personnel;

U. The interpretive, linguistic, and cultural, services available
through the contractor's PLAN;

V. An explanation of the terms of enrollment in the contractor's
plan, continued enrollment, automatic re-enrollment,
disenrollment procedures, time frames for each procedure,
default procedures, enrollee' s rights and responsibilities
and causes for which an enrollee shall lose entitlement to
receive services under this contract, and what should be done
if this occurs;

W. A statement strongly encouraging the enrollee to obtain a
baseline physical and dental examination, and to attend
scheduled orientation sessions and other educational and
outreach activities;

X. A description of the EPSDT program, and language encouraging
enrollees to make regular use of preventive medical and dental
services;

Y. Provision of information to enrollees or, where applicable, an
authorized person, to assist THEM in the selection of a PCP;

Amended as of November 1, 2003 V - 15

KK. An explanation of the appropriate uses of the Medicaid/NJ
FamilyCare identification card and the contractor
identification card;

LL. A notification, whenever applicable, that some primary care
physicians may employ other health care practitioners, such as
nurse practitioners or physician assistants, who may
participate in the patient's care;

MM. The enrollee's or, where applicable, an authorized person's
signed authorization on the enrollment application allows
release of medical records;

NN. Notification that the enrollee's health status survey
(obtained only by the HBC) will be sent to the contractor by
the Health Benefits Coordinator;

OO. A notice that enrollment and disenrollment is subject to
verification and approval by DMAHS;

PP. An explanation of procedures to follow if enrollees receive
bills from providers of services, in or out of network;

QQ. An explanation of the enrollee's financial responsibility for
payment when services are provided by a health care provider
who is not part of the contractor's organization or when a
procedure, treatment or service is not a covered health care
benefit by the contractor and/or by Medicaid;

RR. A written explanation at the time of enrollment of the.
enrollee' s right to terminate enrollment, and any other
restrictions on the exercise of those rights, to conform to 42
U.S.C, Section 1396b(m)(2)(F)(ii), The initial enrollment
information and the contractor's member handbook shall be
adequate to convey this notice and shall have DMAHS approval
prior to distribution;

SS. An explanation that the contractor will contact or facilitate
contact with, and require its PCPs to use their best efforts
to contact, each new enrollee or, where applicable, an
authorized person, to schedule an appointment for a complete,
age/sex SPECIFIC baseline physical, and for enrollees with
special needs who have been identified through a Complex Needs
Assessment as having complex needs, the development of an
Individual Health Care Plan at a time mutually agreeable to
the contractor and the enrollee, but not later than ninety
(90) days after the effective date of enrollment for children
under twenty-one (21) years of age, and not later than one
hundred eighty (180) days after initial enrollment for adults;
for adult clients of DDD, no later than ninety (90) days after
the effective date of enrollment; and encourage enrollees to
contact the contractor and/or their PCP to schedule an
appointment;

TT. An explanation of the enrollee's rights and responsibilities
which should include, at a minimum, the following, as well as
the provisions found in Standard X in NJ modified QAJU/QISMC
in Section B.4.14 of the Appendices.

Amended as of November 1, 2003 V-17

Individuals eligible through NJ FamilyCare PLANS A, B, C, AND ONLY
THOSE PLAN D ENROLLEES with a program status code of 380 and all
children groups shall receive protease inhibitors and other
anti-retroviral agents under the contractor's plan. All other
individuals eligible through NJ FamilyCare with program status codes of
497498, 300-301, 700-701, and 763, AND ALL PLAN H INDIVIDUALS shall
receive protease inhibitors and other anti-retrovirals (First Data Bank
Specific Therapeutic Class Codes W5C, X0X, X00, X0X, X0X, X0X, X0X and
W5N).through Medicaid fee for service and/or the AIDS Drug Distribution
Program (ADDP).

8.5.7 EPSDT INCENTIVE PAYMENT

The contractor shall be paid separately, $10 for every documented
encounter record for a contractor-approved EPSDT screening examination.
The contractor shall be required to pass the $10 amount directly to the
screening provider.

The incentive payment shall be reimbursed for EPSDT encounter records
submitted in accordance with 1) procedure codes specified by DMAHS, and
2) EPSDT periodicity schedule.

8.5.8 ADMINISTRATIVE COSTS

The capitation rates, effective July 1, 2003,. recognize costs for
anticipated contractor administrative expenditures due to Balanced
Budget Act regulations.

8.5.9 NJ FAMILYCARE PLAN H ADULTS

The contractor shall be paid an administrative fee for NJ FamilyCare
Plan H adults without dependent .children, and restricted alien parents
excluding pregnant women, as defined in Article One.

8.6 HEALTH BASED PAYMENT SYSTEM (HBPS) FOR THE ABD POPULATION WITHOUT
MEDICARE

The DMAHS shall utilize a Health-Based Payment System (HBPS) for
reimbursements for the ABD population without Medicare to recognize
larger average health care costs and greater dispersion around the
average' than other DMAHS populations. The contractor shall be
reimbursed not only on the basis of the demographic cells into which
individuals fall, but also on the basis of individual health status.

The Chronic Disability Payment System (CDPS) (University of California,
San Diego) is. the HBPS or the system of Risk Adjustment that shall be
used in this contract, The methodology for CDPS specific to New Jersey
is provided in the Actuarial Certification Letter for Risk Adjustment
issued separately to the contractor. Two base capitation rates and a
DDD mental health/substance abuse add-on are developed for this
population. These are:

Amended as of November 1, 2003 VIII-9

COST-SHARING REQUIREMENTS FOR
NJ FAMILYCARE PLAN D AND PLAN H

COPAYMENTS FOR NJ FAMILYCARE - PLAN D

Copayments will be required of parents/caretakers solely eligible through NJ
FamilyCare Plan D whose family income is between 151(degree)/o and up to
including 200% of the federal poverty level. The same copayments will be
required of children solely eligible through NJ FamilyCare Plan D whose family
income is between 201% and up to and including 350% of the federal poverty
level, Exception - Both Eskimos and Native American Indians under the age of 19
are not required to pay copayments,

The total family limit (regardless of family size) on all cost-sharing may not
exceed 5% of the annual family income.

Below is listed the services requiring copayments and the amount of each
copayment. o

SERVICE AMOUNT OF COPAYMENT
------- -------------------

1. Outpatient Hospital Clinic Visits, $5 copayment for each outpatient clinic visit
including Diagnostic Testing that is not for preventive services

2. Hospital Outpatient Mental Health Visits $25 copayment for each visit

3 Outpatient Substance Abuse Services for $5 copayment for each visit Detoxification

4. Hospital Outpatient Emergency Services $35 copayment; no copayment is required if
Covered for Emergency Services' only the member was referred to the Emergency Room by
including service provided in an outpatient his/her primary care provider for service
hospital department or an urgent care facility that should have been rendered in the primary care
[Note:Triage and medical screening must be covered provider's office or if the members is admitted
in all situation. into hospital

5. Primary Care Provider Services provided $5 copayment for each visit (except for
during normal office hours well- child visits in accordance with the
recommended schedule of the American Academy
of Pediatrics; lead screening and treatment;
age-appropriate immunizations; prenatal
care; or preventive dental services). The $5
copayment shall only apply to the first
prenatal visit

Amended as of November 1, 2003

SERVICE AMOUNT OF COPAYMENT
------- -------------------

6. Primary Care Provider Services during $10 copayment for each visit
non-office hours and for home visits

7. Podiatrist Services $5 copayment for each visit

8. Optometrist Services $5 copayment for each visit,except for newborns
covered under fee-for-service.

9. Outpatient Rehabilitation Services, $5 copayment for each visit
including Physical Therapy, Occupational Therapy,
and Speech Therapy

10. Prescription Drugs $5 copayment, If greater than a 34-day supply of a
prescription drug is dispensed, a $10 copayment
applies,

11. Nurse Midwives $5 copayment for the first prenatal visit; $10 for
services' rendered during non-office hours and for
home visits. No copayment for preventive services
or newborns covered under fee-for-service.

12. Physician specialist office visits during $5 copayment per visit
normal office hours

13. Physician specialist office visits during $10 copayment per visit
normal office hours or home visit

14. Nurse Practitioners $5 copayment for each visit (except for preventive care services)
$10 copayment per non-office hour visits

15. Psychologist Services $5 copayment for each visit

16. Laboratory and X-ray Services $5 copayment for each visit that is not part of an office visit

COPAYMENTS FOR NJ FAMILYCARE - PLAN H
COPAYMENTS WILL BE REQUIRED OF INDIVIDUALS ELIGIBLE THROUGH NJ FAMILYCARE PLAN H
WHOSE FAMILY INCOME IS BETWEEN 151% AND UP TO INCLUDING 250% OF THE FEDERAL
POVERTY LEVEL.

THE TOTAL FAMILY LIMIT (REGARDLESS OF FAMILY SIZE) ON ALL COST-SHARING MAY NOT
EXCEED 5% OF THE ANNUAL FAMILY INCOME.

Amended as of November 1, 2003

Below is listed the services requiring copayments and the amount of each
copayment.

SERVICE AMOUNT OF COPAYMENT
------- -------------------

1. Outpatient Hospital Clinic Visits,including $5 copayment for each outpatient clinic visit that is not
Diagnostic Testing for preventive services

2. Independent Clinic Visits $5 copayment for each visit except for preventive services

3 Hospital outpatient Emergency Services covered $35 copayment; no copayment is required if the member
for the Emergency Services only including services was referred to the Room by his/her primary care
provided in an outpatient hospital department or provider for services that should have been rendered
an urgent care facility. [Note: Triage and medical in the primary care provider's office or if the
screenings must be covered in all situations.] member is admitted into the hospital

4. Primary Care Provider Services provided during $5 copayment for each visit
normal office hours

5. Primary Care Provider Services during non-office $10 copayment for each visit
hours and for home visits

6. Prescription Drugs $5 copayment. If greater than a 34-day
supply of a prescription drug is dispensed, a
$10 copayment applies.

7. Nurse Midwives, non-maternity 55 copayment except $5 copayment except for preventive services render
for preventive services; certified nurse during non-office hour and for home visit
practitioner, services;specialist non-office hours
and for home visits.

8. Physician specialist office visits during normal $5 copyment per visit
office hours

9. Physician specialist office visits during S10 copayment per
visit non-office hours or home visits

10. Laboratory and X-ray Services $5 copayment for each visit that is not part of an
office visit

Amended as of November 1, 2003

STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

NJ FamilyCare Extension - October 1, 2003

1. ARTICLE 1, "DEFINITIONS" section - for the following definition:

- NJ FamilyCare Plan H

shall be amended as reflected in the relevant pages of Article 1 attached hereto
and incorporated herein.

2. ARTICLE 8, "FINANCIAL PROVISIONS," Sections 8.5.1 and 8.7(F)4 shall be
amended as reflected in Article 8, Sections 8.5.1 and 8.7(F)4 attached
hereto and incorporated herein.

3. APPENDIX, SECTION C, "CAPITATION RATES," shall be revised as reflected
in SFY 2004 Capitation Rates attached hereto and incorporated herein.

NJ FamilyCare Extension -October 1, 2003

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

BY: /s/ Xxxxxxxxx XxXxxx BY: /s/ Xxxxxx X. X'Xxxx
-------------------------- -----------------------------
XXXXXX X. X'XXXX

TITLE: President & CEO TITLE: ACTING DIRECTOR, DMAHS

DATE: 9/5/03 DATE: 9/12/03

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: /s/ [ILLEGIBLE]
----------------------------

DEPUTY ATTORNEY GENERAL

DATE: 9.12.03

NJ FAMILYCARE PLAN D--means the State-operated program which provides
managed care coverage to uninsured:

- Parents/caretakers with children below the age of 19 who do
not qualify for AFDC Medicaid with family incomes up to and
including 200 percent of the federal poverty level; and

- Parents/caretakers with children below the age of 23 years and
children from the age of 19 through 22 years who are full time
students who do not qualify for AFDC Medicaid with family
incomes up to and including 250 percent of the federal poverty
level; and

- Children below the age of 19 with family incomes between 201
percent and up to and including 350 percent of the federal
poverty level.

Eligibles with incomes above 150 percent of the federal poverty level
are required to participate in cost sharing in the form of monthly
premiums and copayments for most services with the exception of both
Eskimos and Native American Indians under the age of 19 years. These
groups are identified by Program Status Codes (PSCs) or Race Code on
the eligibility system as indicated below. For clarity, the Program
Status Codes or Race Code, in the case of Eskimos and Native American
Indians under the age of 19 years, related to Plan D non-cost sharing
groups are also listed.

PSC PSC Race Code
Cost Sharing No Cost Sharing No Cost Sharing
--------------------------------------------------------------------------

301 300 3
493 380
494 497
495
498

In addition to covered managed care services, eligibles under these
programs may access certain services which are paid fee-for-service and
not covered under this contract.

NJ FAMILY CARE PLAN H--means the State-operated program which provides
managed care coverage to uninsured:

- Adults and couples without dependent children under the age of
19 with family incomes up to and including 100 percent of the
federal poverty level;

- Adults and couples without dependent children under the age of
23 years, who do not qualify for AFDC Medicaid, with family
incomes up to and including 250 percent of the federal poverty
level.

Eligibles with incomes above 150 percent of the federal poverty level
are required to participate in cost sharing in the form of monthly
premiums and copayments for most services. These groups are identified
by the program status code (PSC) indicated below. For clarity, the
program status codes related to Plan H non-cost sharing groups are also
listed.

Amended as of October 1, 2003 I-l9

C. For Cause. DMAHS shall have the right to terminate this contract,
without liability to the State, in whole or in part if the contractor:

1. Takes any action or fails to prevent an action that threatens
the health, safety or welfare of any enrollee, including
significant marketing abuses;

2. Takes any action that threatens the fiscal integrity of the
Medicaid program;

3. Has its certification suspended or revoked by DOBI, DHSS,
and/or any federal agency or is federally debarred or excluded
from federal procurement and non-procurement contracts;

4. Materially breaches mis contract or fails to comply with any
term or condition of this contract that is not cured within
twenty (20) working days of DMAHS' request for compliance;

5. Violates state or federal law;

6. Fails to carry out the substantive terms of this contract;

7. Becomes insolvent;

8. Fails to meet applicable requirements in sections 1932, 1903
(m) and 1905(t)of the SSA;or

9. Brings a proceeding voluntarily, or has a proceeding brought
against it involuntarily, under the Bankruptcy Act

D. Notice and Hearing. Except as provided in A and B above, DMAHS shall
give the contractor ninety (90) days advance, written notice of
termination of this contract, with an opportunity to protest said
termination and/or request an informal hearing. This notice shall
specify the applicable provisions of this contract and the effective
date of termination, which shall not be less than will permit an
orderly disenrollment of enrollees to the Medicaid fee-for-service
program or transfer to another managed care program.

E. Contractor's Right to Terminate for Material Breach. The contractor
shall have the right to terminate this contract in the event that DMAHS
materially breaches this contract or fails to comply with any material
term or condition of this contract that is not cured within twenty (20)
working days of the contractor's request for compliance. In such event,
the contractor shall give DMAHS written notice specifying the reason
for and the effective date of the termination, which shall not be less
than will permit an orderly disenrollment of enrollees to the Medicaid
fee-for-service program or transfer to another managed care program and
in no event

Amended as of November 1, 2003 VII-13

Rates for DYFS, NJ FamilyCare Plans B, C, D, AND PLAN H and the non
risk-adjusted rates for AIDS and clients of DDD are statewide. Rates for all
other premium groups are regional in each of the following regions;

- Region 1: Bergen, Hudson, Hunterdon, Xxxxxx, Passaic,
Somerset, Sussex, and Xxxxxx counties

- Region 2: Essex, Union, Middlesex, and Xxxxxx counties

- Region 3; Atlantic, Burlington, Camden, Cape May, Cumberland,
Gloucester, Monmouth, Ocean, and Salem counties

Contractors may contract for one or more regions but, except as
provided in Article 2, may not contract for part of a region.

8.5.2 MAJOR PREMIUM GROUPS

The following is a list of the major premium groups. The individual
rate groups (e.g. children under 2 years, etc.) with their respective
rates are presented in the rate tables in the appendix.

8.5.2.1 AFDC/TANF, NJC PREGNANT WOMEN, AND NJ FAMILYCARE PLAN A CHILDREN

This grouping includes capitation rates for Aid to Families with
Dependent Children (AFDC)/Temporary Assistance for Needy Families
(TANF), New Jersey Care Pregnant Women and Children, and NJ FamilyCare
Plan A children (includes individuals under 21 in PSC 380), but
excludes individuals who have AIDS or are clients of DDD.

8.5.2.2 NJ FAMILYCARE PLANS B & C

This grouping includes capitation rates for NJ FamilyCare Plans B and C
enrollees, excluding individuals with AIDS and/or DDD clients.

8.5.2.3 NJ FAMILYCARE PLAN D CHILDREN

This grouping includes capitation rates for NJ FamilyCare Plan D
children, excluding individuals with AIDS.

8.5.2.4 NJ FAMILYCARE PLAN D PARENTS/CARETAKERS

This grouping includes capitation rates for NJ FamilyCare Plan D
parents/caretakers, excluding individuals with AIDS, and include only
enrollees 19 years of age or older.

Amended as of October 1, 2003 VIII-6

8.5.4 SUPPLEMENTAL PAYMENT PER PREGNANCY OUTCOME

Because costs for pregnancy outcomes were not included in the
capitation rates, the contractor shall be paid supplemental payments
for pregnancy outcomes for all eligibility categories.

Payment for pregnancy outcome shall be a single, predetermined lump sum
payment. This amount shall supplement the existing capitation rate
paid. The Department will make a supplemental payment to contractors
following pregnancy outcome. For purposes of this Article, pregnancy
outcome shall mean each live birth, still birth or miscarriage
occurring at the thirteenth (13th) or greater week of gestation. This
supplemental payment shall reimburse the contractor for its inpatient
hospital, antepartum, and postpartum costs incurred in connection with
delivery. Costs for care of the baby for the first 60 days after the
birth plus through the end of the month in which the 60th day falls are
included (See Section 8.5.3). Regional payment shall be made by the
State to the contractor based on submission of appropriate encounter
data as specified by DMAHS.

8.5.5 PAYMENT FOR CERTAIN BLOOD CLOTTING FACTORS

The contractor shall be paid separately for factor VIII and IX blood
clotting factors. Payment will be made by DMAHS to the contractor based
on: 1) submission of appropriate encounter data; and 2) notification
from the contractor to DMAHS within 12 months of the date of service of
identification of individuals with factor VIII or IX hemophilia.
Payment for these products will be the lesser of: 1) Average Wholesale
Price (AWP) minus 12.5% and 2) rates paid by the contractor.

8.5.6 PAYMENT FOR HIV/AIDS DRUGS

The contractor shall be paid separately for protease inhibitors and
other anti-retroviral agents (First Data Bank Specific Therapeutic
Class Codes W5C, W5B, W5I, WSJ, W5K, W5L, W5M, W5N). Payment for
protease inhibitors shall be made by DMAHS to the contractor based on:
1) submission of appropriate encounter data; and 2) notification from
the contractor to DMAHS within 12 months of the date of service of
identification of individuals with HIV/AIDS. Payment for these products
will be the lesser of: 1) Average Wholesale Price (AWP) minus 12.5% and
2) rates paid by the contractor.

Individuals eligible through NJ FamilyCare with a program status code
of 380 and all children groups shall receive protease inhibitors and
other anti-retroviral agents under the contractor's plan. All other
individuals eligible through NJ FamilyCare with program status codes of
497-498, 300-301, 700-701, and 763 shall receive protease inhibitors
and other anti-retrovirals (First Data Bank Specific Therapeutic Class
Codes W5C, W5B, W5I, W5J, W5K, W5L, W5M and W5N) through Medicaid fee
for service and/or the AIDS Drug Distribution Program (ADDP).

8.5.7 EPSDT INCENTIVE PAYMENT

Amended as of October 1, 2003 VIII-8

b. The claim is for prenatal care for a
pregnant woman or for preventive pediatric
services (including EPSDT services) that are
covered by the Medicaid program.

c. The claim is for labor, delivery, and
post-partum care and does not involve
hospital costs associated with the inpatient
hospital stay.

d. The claim is for a child who is in a DYFS
supported out of home placement.

e. The claim involves coverage or services
mentioned in 1.a, 1.b, 1.c, or 1.d, above
in combination with another service.

2. If the contractor knows that the third party will
neither pay for nor provide the covered service, and
the service is medically necessary, the contractor
shall neither deny payment for the service nor
require a written denial from the third party.

3. If the contractor does not know whether a particular
service is covered by the third party, and the
service is medically necessary, the contractor shall
contact the third party and determine whether or not
such service is covered rather than requiring the
enrollee to do so. Further, the contractor shall
require the provider or subcontractor to xxxx the
third party if coverage is available.

4. IN CERTAIN CIRCUMSTANCES, AND WITH THE PRIOR APPROVAL
OF THE DMAHS, THE CONTRACTOR SHALL RETAIN THE ABILITY
TO INITIATE TPL RECOVERY ACTIONS AGAINST HEALTH
INSURANCE, AS DEFINED IN SECTION 8.7.D.1. THESE
CIRCUMSTANCES INCLUDE, BUT ARE NOT LIMITED TO,
INFORMATION SYSTEM FAILURES, CLAIMS SETTLEMENTS, AND
APPEAL RESOLUTIONS. IN THESE CASES, ALL RECOVERED
FUNDS SHALL BE RETAINED BY THE CONTRACTOR; A SUMMARY
LEVEL OF THE RECOVERY EXPERIENCE, NET OF ANY VENDOR
FEES DIRECTLY RELATED TO THE SPECIFIC RECOVERY
ACTIVITY, WILL BE REPORTED TO THE STATE ON A
QUARTERLY BASIS; AND THE RECOVERIES WILL BE REFLECTED
IN CLAIMS ADJUSTMENTS THAT ARE SUBMITTED TO THE STATE
WITH THE MONTHLY CLAIMS FILES, REFERENCED IN SECTION
8.7.D.1.A. THE STATE WILL TAKE INTO ACCOUNT THESE NET
RECOVERIES IN SETTING CAPITATION RATES AND
DETERMINING THE PAYMENT AMOUNTS.

G. Sharing of TPL Information by the State.

1. By the fifteenth (15th) day after the close of the
month during which the State learns of such
information, the State may provide the contractor
with a list of all known health insurance coverage
information for the purpose of updating the
contractor's files. This information will be in the
format of the State's TPL Resource File.

Amended as of October 1, 0000 XXXX-00

XXXXX XX XXX XXXXXX

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.2B of the contract
between University Health Plans, Inc. and the State of New Jersey, Department of
Human Services, Division of Medical Assistance and Health Services (DMAHS),
effective date October 1, 2000, all parties agree that certain sections of the
contract amendment which were to be effective October 1, 2003 shall be amended
to take effect November 1, 2003, as follows:

Managed Care Service Administrator - November 1, 2003

1. PREFACE section shall be changed to include risk, non-risk and managed
care service administrator language;

2. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES," Sections 4.1.7(A)11
(NEW) and 4.1.7(C)12 shall be amended as reflected in Article 4,
Sections 4.1.7(A)11 and 4.1.7(C)12 attached hereto and incorporated
herein.

3. ARTICLE 7, "TERMS AND CONDITIONS," Section 7.13(A) shall be amended as
reflected in Article 7, Section 7.13(A) attached hereto and
incorporated herein.

4. ARTICLE 8, "FINANCIAL PROVISIONS," Section 8.8(P) shall be amended as
reflected in Section 8.8(P) attached hereto and incorporated herein.

5. APPENDIX, SECTION B, "PROVISION OF HEALTH CARE SERVICES," B.4.1, Plan H
Covered Durable Medical Equipment (new) shall be amended as reflected
in Section B, B.4.1 attached hereto and incorporated herein.

6. APPENDIX, SECTION E, "MANAGED CARE SERVICE ADMINISTRATOR," shall be
revised as reflected in SFY 2004 Managed Care Service Administrator
administrative fees attached hereto and incorporated herein.

Managed Care Service Administrator - November 1, 2003

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

BY: /s/ Xxxxxxxxx XxXxxx BY: Xxxxxx X. X'Xxxx
---------------------- ------------------------
XXXXXXX X. X'Xxxx

TITLE: President & CEO TITLE: ACTING DIRECTOR, DMAHS

DATE: 9/5/03 DATE: 9/17/03

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: /s/ [ILLEGIBLE]
-----------------------
DEPUTY ATTORNEY GENERAL

DATE: 9/16/03

STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES
AND

CONTRACT TO PROVIDE SERVICES

This comprehensive RISK AND NON-RISK contract is entered into
this____________day of ___________, and is effective on the__________day
of________between the Department of Human Services, which is in the executive
branch of state government, the state agency designated to administer the
Medicaid program under Title XIX of the Social Security Act, 42 U.S.C. 1396 et
seq. pursuant to the New Jersey Medical Assistance Act, N.J.S.A. 30:4D-1 et seq.
and the State Child Health Insurance Program under Title XXI of the Social
Security Act, 42 U.S.C. 1397aa et seq., pursuant to the Children's Health Care
Coverage Act, PL 1997, c,272 (also known as "NJ KidCare"), pursuant to Family
Care Health Coverage Act, P.L. 2000, c,71 (also known as "NJ FamilyCare") whose
principal office is located at X.X. Xxx 000, in the City of Trenton, New Jersey
hereinafter referred to as the "Department" and______________________________, a
federally qualified/ state defined health maintenance organization (HMO) which
is a New Jersey, profit/non-profit corporation, certified to operate as an HMO
by the State of New Jersey Department of Banking and Insurance and the State of
New Jersey Department of Health and Senior Services, and whose principal
corporate office is located at ___________________

________________ in the City of _____________________, County of_________ , New
Jersey, hereinafter referred to as the "contractor".

WHEREAS, the contractor is engaged in the business of providing prepaid,
capitated comprehensive health care services pursuant to N.J.S.A. 26;2J-1 et
seq. as well as non-risk administrative services for certain beneficiary groups;
and

WHEREAS, the Department, as the state agency designated to administer a program
of medical assistance for eligible persons under Title XIX of the Social
Security Act (42 U.S.C. Sec. 1396, et seq., also known as "Medicaid"), for
eligible persons under the Family Care Health Coverage Act (P.L. 2000, c.71) and
for children under Title XXI of the Social Security Act (42 U.S.C. Sec. 1397aa,
et seq., also known as "State Child Health Insurance Program"), is authorized
pursuant to the federal regulations at 42 C.F.R. 434 to provide such a program
through an HMO and is desirous of obtaining the contractor's services for the
benefit of persons eligible for Medicaid/NJ FamilyCare; and

WHEREAS, the Division of Medical Assistance and Health Services (DMAHS), is the
Division within the Department designated to administer the medical assistance
program, and the Department's functions as regards all Medicaid/NJ FamilyCare
program benefits

Improvement Act (CLIA) certificate of waiver or a
certificate of registration along with a CLIA
identification number. Those providers with
certificates of waiver shall provide only the types
of tests permitted under the terms of their waiver.
Laboratories with certificates of registration may
perform a full range of laboratory services.

7. Radiology Services -- Diagnostic and therapeutic

8. Prescription drugs, excluding over-the-counter drugs
Exception: See Article 8 regarding Protease
Inhibitors and other antiretrovirals.

9. Transportation Services -- Limited to ambulance for
medical emergency only

10. Diabetic supplies and equipment

11. DME - limited benefit, only covered when medically
necessary part of inpatient hospital discharge plan -
(see appendix, Section B.4.1 for list of covered
items)

B. Services Available To NJ FamilyCare Plan H Under
Fee-For-Service. The following services are available to NJ
FamilyCare Plan H enrollees under fee-for-service:

1. Outpatient mental health services, limited to 60 days
per calendar year.

2. Abortion services

C. Exclusions. The following services not covered for NJ
FamilyCare Plan H participants either by the contractor or the
Department include, but are not limited to:

1. Non-medically necessary services.

2. Intermediate Care Facilities/Mental Retardation

3. Private duty nursing

4. Personal Care Assistant Services

5. Medical Day Care Services

6. Chiropractic Services

7. Dental services

8. Orthotic devices

9. Targeted Case Management for the chronically ill

10. Residential treatment center psychiatric programs

11. Religious non-medical institutions care and services

Amended as of November 1, 2003 IV-16

12. Durable Medical Equipment - excludes any equipment
not listed in Appendix, Section B.4.1, and not
covered if not part of inpatient hospital discharge
plan

13. Early and Periodic Screening, Diagnosis and Treatment
(EPSDT) services (except for well child care,
including immunizations and lead screening and
treatments)

14. Transportation Services, including non-emergency
ambulance, invalid coach, and lower mode
transportation

15. Hearing Aid Services

16. Blood and Blood Plasma, except administration of
blood, processing of blood, processing fees and fees
related to autologous blood donations are covered.

17. Cosmetic Services

18. Custodial Care

19. Special Remedial and Educational Services

20. Experimental and Investigational Services

21. Medical Supplies (except diabetic supplies)

22. Infertility Services

23. Rehabilitative Services for Substance Abuse

24. Weight reduction programs or dietary supplements,
except operations, procedures or treatment of obesity
when approved by the contractor

25. Acupuncture and acupuncture therapy, except when
performed as a form of anesthesia in connection with
covered surgery

26. Temporomandibular joint disorder treatment, including
treatment performed by prosthesis placed directly in
the teeth

27. Recreational therapy

28. Sleep therapy

29. Court-ordered services

30. Thermograms and thermography

31. Biofeedback

32. Radial keratotomy

33. Respite Care

34. Inpatient hospital services for mental health

35. Inpatient and outpatient services for substance abuse

36. Partial hospitalization

Amended as of November 1, 2003 IV-17

C. For Cause. DMAHS shall have the right to terminate this
contract, without liability to the State, in whole or in part
if the contractor:

1. Takes any action or fails to prevent an action that
threatens the health, safety or welfare of any
enrollee, including significant marketing abuses;

2. Takes any action that threatens the fiscal integrity
of the Medicaid program;

3. Has its certification suspended or revoked by DOBI,
DHSS, and/or any federal agency or is federally
debarred or excluded from federal procurement and
non-procurement contracts;

4. Materially breaches this contract or fails to comply
with any term or condition of this contract that is
not cured within twenty (20) working days of DMAHS'
request for compliance;

5. Violates state or federal law;

6. Fails to carry out the substantive terms of this
contract;

7. Becomes insolvent;

8. Fails to meet applicable requirements in sections
1932, 1903 (m) and 1905(t) of the SSA; or

9. Brings a proceeding voluntarily, or has a proceeding
brought against it involuntarily, under the
Bankruptcy Act

D. Notice and Hearing. Except as provided in A and B above, DMAHS
shall give the contractor ninety (90) days advance, written
notice of termination of this contract, with an opportunity to
protest said termination and/or request an informal hearing.
This notice shall specify the applicable provisions of this
contract and the effective date of termination, which shall
not be less than will permit an orderly disenrollment of
enrollees to the Medicaid fee-for-service program or transfer
to another managed care program.

E. Contractor's Right to Terminate for Material Breach. The
contractor shall have the right to terminate this contract in
the event that DMAHS materially breaches this contract or
fails to comply with any material term or condition of this
contract that is not cured within twenty (20) working days of
the contractor's request for compliance. In such event, the
contractor shall give DMAHS written notice specifying the
reason for and the effective date of the termination, which
shall not be less than will permit an orderly disenrollment of
enrollees to the Medicaid fee-for-service program or transfer
to another managed care program and in no event

Amended as of November 1, 2003 VII-13

I. It is hereby understood and agreed by both parties that this
contract shall be effective and payments by DMAHS made to the
contractor subject to the availability of State and federal
funds. It is further agreed by both parties that this contract
can be renegotiated or terminated, without liability to the
State in order to comply with state and federal requirements
for the purpose of maximizing federal financial participation.

J. Upon termination of this contract, the contractor shall comply
with the closeout procedures in Article 7.13.

K. Rights and Remedies. The rights and remedies of the Department
provided in this Article shall not be exclusive and are in
addition to all other rights and remedies provided by law or
under this contract.

7.13 CLOSEOUT REQUIREMENTS

A. A closeout period shall begin one hundred-twenty (120) days
prior to the last day the contractor is responsible for
coverage of specific beneficiary groups or operating under
this contract. During the closeout period, the contractor
shall work cooperatively with, and supply program information
to, any subsequent contractor and DMAHS. Both the program
information and the working relationships between the two
contractors shall be defined by DMAHS.

B. The contractor shall be responsible for the provision of
necessary information and records, whether a part of the MCMIS
or compiled and/or stored elsewhere, to the new contractor
and/or DMAHS during the closeout period to ensure a smooth
transition of responsibility. The new contractor and/or DMAHS
shall define the information required during this period and
the time frames for submission. Information that shall be
required includes but is not limited to:

1. Numbers and status of complaints and grievances in
process;

2. Numbers and status of hospital authorizations in
process, listed by hospital;

3. Daily hospital logs;

4. Prior authorizations approved and disapproved;

5. Program exceptions approved;

6. Medical cost ratio data;

7. Payment of all outstanding obligations for medical
care rendered to enrollees;

Amended as of November 1, 2003 VII-15

payment that is proportionate to the part of the month during
which the contractor provides coverage. Payments are
calculated and made to the last day of a calendar month except
as noted in this Article.

J. Risk Assumption. The capitation rates shall not include any
amount for recoupment of any losses suffered by the contractor
for risks assumed under this contract or any prior contract
with the Department.

K. Hospitalizations. For any eligible person who applies for
participation in the contractor's plan, but who is
hospitalized prior to the time coverage under the plan becomes
effective, such coverage shall not commence until the date
after such person is discharged from the hospital and DMAHS
shall be liable for payment for the hospitalization, including
any charges for readmission within forty-eight (48) hours of
discharge for the same diagnosis. If an enrollee's
disenrollment or termination becomes effective during a
hospitalization, the contractor shall be liable for
hospitalization until the date such person is discharged from
the hospital, including any charges for readmission within
forty-eight (48) hours of discharge for the same diagnosis.
The contractor must notify DMAHS of these occurrences to
facilitate payment to appropriate providers.

L. Continuation of Benefits. The contractor shall continue
benefits for all enrollees for the duration of the contract
period for which capitation payments have been made, including
enrollees in an inpatient facility until discharge. The
contractor shall notify DMAHS of these occurrences.

M. Drug Carve-Out Report. The DMAHS will provide the contractor
with a monthly electronic file of paid drug claims data for
non-dually eligible, ABD enrollees.

N. MCSA Administrative Fee. The Contractor shall receive a
monthly administrative fee, PMPM, for its MCSA enrollees, by
the fifteenth (15th) day of any month during which health care
services will be available to an enrollee.

O. Reimbursement for MCSA Enrollee Paid Claims. The contractor
shall submit to DMAHS a financial summary report of claims
paid on behalf of MCSA enrollees on a weekly basis. The report
shall be summarized by category of service corresponding to
the MCSA benefits and payment dates, accompanied by an
electronic file of all individual claim numbers for which the
State is being billed.

P. MCSA Claims Payment Audits. The contractor shall monitor and
audit claims payments to providers to identify payment errors,
including duplicate payments, overpayments, underpayments, and
excessive payments. For such payment errors (excluding
underpayments), the contractor shall refund DMAHS the overpaid
amounts. The contractor shall report the dollar amount of
claims with payment errors on a monthly basis, which is
subject to verification by the State. The contractor is
responsible for collecting funds due to the State from
providers, either through cash payments or through offsets to
payments due the providers.

Amended as of November 1, 2003 VIII-18

PLAN H COVERED
DURABLE MEDICAL EQUIPMENT

Alternating Pressure Pada

Bed Pans

Bladder Irrigation Supplies

Blood Glucose Monitors and Supplies

Canes

Commodes

NOTE: BATHROOM DEVICES PERMANENTLY ATTACHED ARE NOT COVERED

Crutches and Related Attachments

Fracture Frames

Gastrostomy Supplies

Hospital Beds (Manual, Semi-Electric, Full Electric) and Related Equipment

Ileostomy Supplies

Infusion Pumps

Intermittent Positive Pressure Breathing (IPPB) Treatments and Related
Supplies

IV Poles

Jejunostomy Supplies

Lancets and Related Devices

Loop Heals/Loop Toe Devices

Lymphedema Pumps

Manual Wheelchairs and Related Equipment

NOTE: MOTORIZED WHEELCHAIRS ARE NOT COVERED

NOTE: TYPES OF COVERED WHEELCHAIRS INCLUDE FULL-RECLINING; HEMI; HIGH-STRENGTH
LIGHTWEIGHT; HIGH-STRENGTH LIGHTWEIGHT; HEAVY DUTY; AND SEMI-RECLINING.

Mattrass Overlays

Note: LOW AIR LOSS AND AIR FLUIDIZED BED SYSTEMS NOT COVERED

Nasogastric Tubing

Nebulizers and Related Supplies

Needles

Ostomy Supplies

Over-Bed Tables

Oxygen and Related Equipment and Supplies

NOTE: LIQUID AND GAS SYSTEMS AND OXYGEN CONCENTRATORS ARE COVERED

NOTE: VENTILATION SYSTEMS ARE NOT COVERED

Pacemaker Monitors

Parenteral Nutrition

Patient Lifts

Pneumatic Appliances

Sitz Bath

Suction Machines and Related Supplies

Syringes

Tracheostomy Supplies

Traction/Trapeze Apparatus

Urinals

Urinary Pouches and Related Supplies

Urine Glucose Tests

Walkers and Related Attachments

Wheelchair Seating/Support Systems

with the contractor. Marketing by an employee of the contractor is
considered direct; marketing by an agent is considered indirect.

COMMISSIONER -- the Commissioner of the New Jersey Department of Human
Services or a duly authorized representative.

COMPLAINT -- a protest by an enrollee as to the conduct by the
contractor or any agent of the contractor, or an act or failure to act
by the contractor or any agent of the contractor, or any other matter
in which an enrollee feels aggrieved by the contractor, that is
communicated to the contractor and that could be resolved by the
contractor within three (3) business days.

COMPLAINT RESOLUTION -- completed actions taken to fully settle a
complaint to the DMAHS' satisfaction.

COMPREHENSIVE RISK CONTRACT -- a risk contract that covers
comprehensive services, that is, inpatient hospital services and any of
the following services, or any three or more of the following services:

1. Outpatient hospital services.

2. Rural health clinic services.

3. FQHC services.

4. Other laboratory and X-ray services.

5. Nursing facility (NF) services.

6. Early and periodic screening, diagnosis and treatment (EPSDT)
services.

7. Family planning services.

8. Physician services.

9. Home health services.

CONDITION--a disease, illness, injury, disorder, or biological or
psychological condition or status for which treatment is indicated.

CONTESTED CLAIM -- a claim that is denied because the claim is an
ineligible claim, the claim submission is incomplete, the coding or
other required information to be submitted is incorrect, the amount
claimed is in dispute, or the claim requires special treatment.

CONTINUITY OF CARE -- the plan of care for a particular enrollee that
should assure progress without unreasonable interruption.

CONTRACT -- the written agreement between the State and the contractor,
and comprises the contract, any addenda, appendices, attachments, or
amendments thereto.

CONTRACTING OFFICER -- the individual empowered to act and respond for
the State throughout the life of any contract entered into with the
State.

CONTRACTOR -- the Health Maintenance Organization with a valid
Certificate of Authority in New Jersey that contracts hereunder with
the State for the provision of comprehensive health care services to
enrollees on a prepaid, capitated basis, or for the provision of

Amended as of October 1, 2003 I-5

administrative services for a specified benefits package to specified
enrollees on a non-risk, reimbursement basis.

CONTRACTOR'S PLAN--all services and responsibilities undertaken by the
contractor pursuant to this contract.

CONTRACTOR'S REPRESENTATIVE -- the individual legally empowered to bind
the contractor, using his/her signature block, including his/her title.
This individual will be considered the Contractor's Representative
during the life of any contract entered into with the State unless
amended in writing pursuant to Article 7.

COPAYMENT -- the part of the cost-sharing requirement for NJ FamilyCare
Plan D AND H enrollees in which a fixed monetary amount is paid for
certain services/items received from the contractor's providers.

COST AVOIDANCE-a method of paying claims in which the provider is not
reimbursed until the provider has demonstrated that all available
health insurance has been exhausted.

COST NEUTRAL-the mechanism used to smooth data, share risk, or adjust
for risk that will recognize both higher and lower expected costs and
is not intended to create a net aggregate gain or loss across all
payments.

COVERED SERVICES--see "BENEFITS PACKAGE"

CREDENTIALING--the contractor's determination as to the qualifications
and ascribed privileges of a specific provider to render specific
health care services.

CULTURAL COMPETENCY--a set of interpersonal skills that allow
individuals to increase their understanding, appreciation, acceptance
of and respect for cultural differences and similarities within, among
and between groups and the sensitivity to how these differences
influence relationships with enrollees. This requires a willingness and
ability to draw on community-based values, traditions and customs, to
devise strategies to better meet culturally diverse enrollee needs, and
to work with knowledgeable persons of and from the community in
developing focused interactions, communications, and other supports.

CWA OR COUNTY WELFARE AGENCY ALSO KNOWN AS COUNTY BOARD OF SOCIAL
SERVICES--the agency within the county government that makes
determination of eligibility for Medicaid and financial assistance
programs.

DAYS--calendar days unless otherwise specified.

DBI--the New Jersey Department of Banking and Insurance in the
executive branch of New Jersey State government.

DEFAULT--see "AUTOMATIC ASSIGNMENT"

Amended as of October 1, 2003 I-6

IPN OR INDEPENDENT PRACTITIONER NETWORK -- one type of HMO operation
where member services are normally provided in the individual offices
of the contracting physicians.

LIMITED-ENGLISH-PROFICIENT POPULATIONS-individuals with a primary
language other than English who must communicate in that language if
the individual is to have an equal opportunity to participate
effectively in and benefit from any aid, service or benefit provided by
the health provider.

MAINTENANCE SERVICES -- include physical services provided to allow
people to maintain their current level of functioning. Does not include
habilitative and rehabilitative services.

MANAGED CARE -- a comprehensive approach to the provision of health
care which combines clinical preventive, restorative, and emergency
services and administrative procedures within an integrated,
coordinated system to provide timely access to primary care and other
medically necessary health care services in a cost effective manner.

MANAGED CARE ENTITY-a managed care organization described in Section
1903(m)(l)(A) of the Social Security Act, including Health Maintenance
Organizations (HMOs), organizations with Section 1876 or
Medicare+Choice contracts, provider sponsored organizations, or any
other public or private organization meeting the requirements of
Section 1902(w) of the Social Security Act, which has a risk
comprehensive contract and meets the other requirements of that
Section.

MANAGED CARE ORGANIZATION (MCO)--an entity that has, or is seeking to
qualify for, a comprehensive risk contract, and that is -

1. A Federally qualified HMO that meets the advance directives
requirements of 42 CFR 489 subpart I; or

2. Any public or private entity that meets the advance directives
requirements and is determined to also meet the following
conditions:

(i) Makes the services it provides to its Medicaid
enrollees as accessible (in terms of timeliness,
amount, duration, and scope) as those services are to
other Medicaid recipients within the area served by
the entity; and

(ii) Meets the solvency standards of 42 CFR 438.116.

MANAGED CARE SERVICE ADMINISTRATOR (MCSA) - AN ENTITY IN A NON-RISK
BASED FINANCIAL ARRANGEMENT THAT CONTRACTS TO PROVIDE A DESIGNATED SET
OF SERVICES FOR AN ADMINISTRATIVE fee. Services PROVIDED MAY INCLUDE,
BUT ARE NOT LIMITED TO: MEDICAL MANAGEMENT, CLAIMS PROCESSING, PROVIDER
NETWORK MAINTENANCE.

MANDATORY-the requirement that certain DMAHS beneficiaries, delineated
in Article 5, must select, or be assigned to a contractor in order to
receive Medicaid services.

Amended as of October 1,2003 I-14

NJ FAMILYCARE PLAN D--means the State-operated program which provides
managed care coverage to uninsured:

- Parents/caretakers with children below the age of 19 who do
not qualify for AFDC Medicaid with family incomes up to and
including 200-133 percent of the federal poverty level; and

- Children below the age of 19 with family incomes between 201
percent and up to and including 350 percent of the federal
poverty level.

PSC PSC Race Code
Cost Sharing No Cost Sharing No Cost Sharing
------------------ ------------------- ------------------

301 300 3
493 380
494 497
495
498

In addition to covered managed care services, eligibles under these
programs may access certain services which are paid fee-for-service and
not covered under this contract.

nj familycare plan h--means the State-operated program which provides
managed care administrative services coverage to uninsured:

- Adults and couples without dependent children under the age of
19 with family incomes up to and including 100 percent of the
federal poverty level;

- Adults and couples without dependent children under the age of
23 years, who do not qualify for AFDC Medicaid, with family
incomes up to and including 250 percent of the federal poverty
level.

- Restricted alien parents not including pregnant women.

Plan h eligibles will be identified by a Capitation code. Capitation
codes drive the service package. the Program Status Code drives the
cost-sharing requirements.

Any of the Program status codes listed below can include restricted
alien parents. therefore, it is necessary to rely on the capitation
code to identify Plan h eligibles.

Amended as of October 1, 0000 X-00

Xxxxxxxxx with incomes above 150 percent of the federal poverty level
are required to participate in cost sharing in the form of monthly
premiums and copayments for most services, These groups are identified
by the program status code (PSC) indicated below. For clarity, the
program status codes related to Plan H non-cost sharing groups are also
listed.

PSC PSC
COST SHARING NO COST SHARING
------------ ----------------

498 (W/CORRESPONDING 380, 310, 320, 330,410, 420,
CAP CODE) 430,470,497 (with
701 CORRESPONDING CAP CODES)
700
763

NJ FAMILYCARE PLAN I -means the State-operated program mat provides
certain benefits on a fee-for-service basis through the DMAHS for Plan
D parents/caretakers with a program status code of 380.

N.J.S.A. -- New Jersey Statutes Annotated,

NON-COVERED CONTRACTOR SERVICES--services that are not covered in the
contractor's benefits package included under the terms of this
contract.

NON-COVERED MEDICAID SERVICES--all services that are not covered by the
New Jersey Medicaid State Plan.

NON-PARTICIPATING PROVIDER-a provider of service that does not have a
contract with the contractor.

NON-RISK CONTRACT- a contract under which the contractor 1) is not at
financial risk for changes in utilization or for costs incurred under
the contract; and 2) may be reimbursed by the State on the basis of the
incurred costs.

OIT--the New Jersey Office of Information Technology,

OTHER HEALTH COVERAGE-private non-Medicaid individual or group
health/dental insurance. It may be referred to as Third Party Liability
(TPL) or includes Medicare.

OUT OF AREA SERVICES-all services covered under the contractor's
benefits package included under the terms of the Medicaid contract
which are provided to enrollees outside the defined basic service area.

OUTCOMES--the results of the health care process, involving either the
enrollee or provider of care, and may be measured at any specified
point in time, Outcomes can be medical, dental, behavioral, economic,
or societal in nature.

Amended as of October 1, 2003 I-20

REFERRAL SERVICE -- those..health care services provided by a health
professional other than the primary care practitioner and which are
ordered and approved by the primary care practitioner or the
contractor.

Exception A: An enrollee shall not be required to obtain a
referral or be otherwise restricted in the choice of the
family planning provider from whom the enrollee may receive
family planning services.

Exception B: An enrollee may access services at a Federally
Qualified Health Center (FQHC) in a specific enrollment area
without the need for a referral when neither the contractor
nor any other contractor has a contract with the Federally
Qualified Health Center in that enrollment area and the cost
of such services will be paid by the Medicaid fee-for-service
program.

REINSURANCE--an agreement whereby the reinsurer., for a consideration,
agrees to indemnify the contractor, or other provider, against all or
part of the loss which the latter may sustain under the enrollee
contracts which it has issued.

restricted alien -An individual who would qualify for Medicaid or nj
FamilyCare, but for immigration status.

RISK CONTRACT -- A contract under which the contractor assumes risk for
the cost of the services covered under the contract, and may incur a
loss if the cost of providing services exceeds the payments made by the
Department to the contractor for services covered under the contract.

RISK POOL - an account(s) funded with revenue from which medical claims
of risk pool members are paid. If the claims paid exceed the revenues
funded to the account, the participating providers shall fund part or
all of the shortfall. If the funding exceeds paid claims, part or all
of the excess is distributed to the participating providers.

RISK THRESHOLD -- THE maximum liability, if the liability is based on
referral services, to which a physician or physician group may be
exposed under a physician incentive plan without being at substantial
financial risk.

ROUTINE CARE--treatment of a condition which would have no adverse
effects if not treated within 24 hours or could be treated in a less
acute setting (e.g., physician's office) or by the patient.

SAFETY-NET PROVIDERS OR ESSENTIAL COMMUNITY PROVIDERS--public-funded or
government-sponsored clinics and health centers which provide
specialty/specialized services which serve any individual in need of
health care whether or not covered by health insurance and may include
medical/dental education institutions, hospital-based programs,
clinics, and health centers.

SAP--Statutory Accounting Principles.

Amended as of October 1, 2003 I-24

authorization checks, checks for service limitations, checks
for service inconsistencies, medical review, and utilization
management. Pharmacy claim edits shall include prospective
drug utilization review (ProDUR) checks.

The contractor shall comply with New Jersey law and
regulations to process records in error. (Note: Uncontested
payments to providers and uncontested portions of contested
claims should not be withheld pending final adjudication.)

C. Benefit and Reference Files. The system shall provide
file-driven processing for benefit determination, validation
of code values, pricing (multiple methods and schedules), and
other functions as appropriate. Files should include code
descriptions, edit criteria, and effective dates. The system
shall support the State's procedure and diagnosis coding
schemes and other codes that shall be submitted on the
hardcopy and electronic reports and files.

The system shall provide for an automated update to the
National Drug Code file including all product, packaging,
prescription, and pricing information.

The system shall provide online access to reference file
information. The system should maintain a history of the
pricing schedules and other significant reference data.

D. Claims/Encounter History Files. The contractor shall maintain
two (2) years active history of adjudicated claims and
encounter data for verifying duplicates, checking service
limitations, and supporting historical reporting. For drug
claims, the contractor may maintain nine (9) months of active
history of adjudicated claims/encounter data if it has the
ability to restore such information back to two (2) years and
provide for permanent archiving in accordance with Article
3.1.2F. Provisions should be made to maintain permanent
history by service date for those services identified as
"once-in-a-lifetime" (e.g., hysterectomy), The system should
readily provide access to all types of claims and encounters
(hospital, medical, dental, pharmacy, etc.) for combined
reporting of claims and encounters. Archive requirements are
described in Article 3.1.2F.

3.4.2 COORDINATION OF BENEFITS

The contractor shall exhaust all other sources of payment prior to
remitting payment for a Medicaid/NJ FamilyCare enrollee.

A. Other Coverage Information, The contractor shall maintain
other coverage information for each enrollee. The contractor
shall verify the other coverage information provided by the
State pursuant to Article 8.7 and develop a system to include
additional other coverage information when it becomes
available. The contractor shall provide a periodic file of
updates to other coverage back to the State as specified in
Article 8.7.

Amended as of October 1, 2003 III-10

ARTICLE FOUR: PROVISION OF HEALTH CARE SERVICES

4.1 COVERED SERVICES

A. For enrollees who are eligible through Title V, Title XIX or
the NJ FamilyCare program the contractor shall provide or
arrange to have provided comprehensive, preventive, and
diagnostic and therapeutic, health care services to enrollees
that include all services that Medicaid/NJ FamilyCare
beneficiaries are entitled to receive under Medicaid/NJ
FamilyCare, subject to any limitations and/or excluded
services as specified in this Article. Provision of these
services shall be equal in amount, duration, and scope as
established by the Medicaid/NJ FamilyCare program, in
accordance with medical necessity and without any
predetermined limits, unless specifically stated; and as set
forth in 42 C.F.R, Part 440; 42 C.F.R. Part 434; Part 438 the
Medicaid State Plan; the Medicaid Provider Manuals: The New
Jersey Administrative Code, Title 10, Department of Human
Services Division of Medical Assistance and Health Services;
Medicaid/NJ FamilyCare Alerts; Medicaid/NJ FamilyCare
Newsletters; and all applicable federal, and State statutes,
rules, and regulations.

B. All provisions of this article shall apply to enrollees of the
contractor's comprehensive risk contract as well as to
beneficiaries under the managed care service administrator
arrangement unless specifically stated otherwise.

4.1.1 GENERAL PROVISIONS AND CONTRACTOR RESPONSIBILITIES

A. With the exception of certain emergency services described in
Article 4.2.1 of this contract, all care covered by the
contractor pursuant to the benefits package must be provided,
arranged, or authorized by the contractor or a participating
provider,

B. The contractor and its providers shall furnish, all covered
services required to maintain or improve health in a manner
that maximizes coordination and integration of services, and
in accordance with professionally recognized standards of
quality and shall ensure that the care is appropriately
documented to encompass all health care services for which
payment is made.

C. For beneficiaries eligible solely through the NJ FamilyCare
Plan A the contractor shall provide the same managed care
services and products provided to enrollees who are eligible
through Title XIX. For beneficiaries eligible solely through
the NJ FamilyCare Plans B and C the contractor shall provide
the same managed care services and products provided to
enrollees who are eligible through Title XIX with the
exception of limitations on EPSDT coverage as indicated in
Articles 4.1.2A.3 and 4.2.6A.2. NJ FamilyCare Plan D and other
plans have a different service package specified in Articles
4,1,6 and 4.1.7,

D. Out-of-Area Coverage. The contractor shall provide or arrange
for out-of-area coverage of contracted benefits in emergency
situations and non-emergency

Amended as of October 1, 2003 IV-1

situations when travel back to the service area is not
possible, is impractical, or when medically necessary services
could only be provided elsewhere. Except for full-time
students, the contractor shall not be responsible for
out-of-state coverage for care if the enrollee resides
out-of-state for more than 30 days. In this instance, the
individual will be disenrolled. This does not apply to
situations when the enrollee is out of State for care
provided/authorized by the contractor, for example, prolonged
hospital care for transplants. For full time students
attending school and residing out of the country, the
contractor-shall not be responsible for health care benefits
while the individual is in school,

E. Existing Plans of Care. The contractor shall honor and pay for
plans of care for new enrollees, including prescriptions,
durable medical equipment, medical supplies, prosthetic and
orthotic appliances, and any other on-going services initiated
prior to enrollment with the contractor. Services shall be
continued until the enrollee is evaluated by his/her primary
care physician and a new plan of care is established with the
contractor.

The contractor shall use its best efforts to contact the new
enrollee or, where applicable, authorized person and/or
contractor care manager. However, if after documented,
reasonable outreach (i.e., mailers, certified mail, use of
MEDM system provided by the State, contact with the Medical
Assistance Customer Center (MACC), DDD, or DYFS to confirm
addresses and/or to request assistance in locating the
enrollee) the enrollee fails to respond within 20 working days
of certified mail, the contractor may cease paying for the
pre-existing service until the enrollee or, where applicable,
authorized person, contacts the contractor for re-evaluation.

For mcsa Enrollees,the contractor shall case manage these
services.

F. Routine Physicals, The contractor shall provide for routine
physical examinations required for employment, school; camp or
other entities/programs that require such examinations as a
condition of employment or participation. '

G. Non-Participating Providers.

1. The contractor shall pay for services furnished by
non-participating providers to whom an enrollee was
referred, even if erroneously referred, by his/her
PCP or network specialist. Under no circumstances
shall the enrollee bear the cost of such services
when referral errors by the contractor or its
providers occur. It is the sole responsibility of the
contractor to provide regular updates on complete
network information to all its providers as well as
appropriate policies and procedures for provider
referrals.

Amended as of October 1, 2003 IV-2

2. Dental services

3. DME

4. Hearing aids

5. Medical supplies

6. Orthotics

7. TMJ treatment

4,1.7 BENEFIT PACKAGE FOR NJ FAMILYCARE PLAN H

A. SERVICES INCLUDED IN THE CONTRACTOR'S BENEFITS PACKAGE FOR NJ
FAMILYCARE PLAN H. THE FOLLOWING SERVICES SHALL BE PROVIDED
AND CASE MANAGED BY THE CONTRACTOR:

1. PRIMARY CARE

a. ALL PHYSICIANS SERVICES, PRIMARY AND
SPECIALTY

b. IN ACCORDANCE WITH state
CERTIFICATION/LICENSURE REQUIREMENTS,
STANDARDS, AND, PRACTICES, PRIMARY CARE
PROVIDERS SHALL ALSO INCLUDE ACCESS TO
CERTIFIED NURSE MIDWIVES - NON-MATERNITY,
CERTIFIED NURSE PRACTITIONERS, CLINICAL
NURSE SPECIALISTS, AND PHYSICIAN ASSISTANTS

c. SERVICES RENDERED AT INDEPENDENT CLINICS
THAT PROVIDE AMBULATORY SERVICES

d. FEDERALLY QUALIFIED HEALTH CENTER PRIMARY
CARE SERVICES

2. EMERGENCY ROOM SERVICES

3. HOME HEALTH CARE SERVICES--LIMITED TO SKILLED NURSING
FOR A HOME BOUND BENEFICIARY WHICH IS PROVIDED OR
SUPERVISED BY A

Amended as of October 1, 2003 IV-15

REGISTERED NURSE, AND HOME HEALTH AIDE WHEN THE
PURPOSE OF THE TREATMENT IS SKILLED CARE; AND MEDICAL
SOCIAL SERVICES WHICH ARE NECESSARY FOR THE TREATMENT
OF THE BENEFICIARY'S MEDICAL CONDITION.

4. INPATIENT HOSPITAL SERVICES, INCLUDING GENERAL
HOSPITALS, SPECIA HOSPITALS, AND REHABILITATION
HOSPITALS. THE CONTRACTOR SHALL NOT BE RESPONSIBLE
WHEN THE PRIMARY ADMITTING DIAGNOSIS IS MENTAL HEALTH
OR SUBSTANCE ABUSE RELATED.

5. OUTPATIENT HOSPITAL SERVICES, INCLUDING OUTPATIENT
SURGERY

6. LABORATORY SERVICES -- ALL LABORATORY TESTING SITES
PROVIDING SERVICES UNDER THIS CONTRACT MUST HAVE
EITHER A CLINICAL LABORATORY IMPROVEMENT ACT (CLIA)
CERTIFICATE OF WAIVER OR A CERTIFICATE OF
REGISTRATION ALONG WITH A CLIA IDENTIFICATION NUMBER.
THOSE PROVIDERS WITH CERTIFICATES OF WAIVER SHALL
PROVIDE ONLY THE TYPES OF TESTS PERMITTED UNDER THE
TERMS OF THEIR WAIVER, LABORATORIES WITH CERTIFICATES
OF REGISTRATION MAY PERFORM A FULL RANGE OF
LABORATORY SERVICES.

7. RADIOLOGY SERVICES - DIAGNOSTIC AND THERAPEUTIC

8. PRESCRIPTION DRUGS, EXCLUDING OVER-THE-COUNTER DRUGS
EXCEPTION: SEE ARTICLE 8 REGARDING PROTEASE
INHIBITORS AND OTHER ANTIRETROVIRALS.

Amended as of October 1, 2003 IV-16

9. TRANSPORTATION SERVICES - LIMITED TO AMBULANCE FOR
MEDICAL EMERGENCY ONLY

10. DIABETIC SUPPLIES AND EQUIPMENT

B. SERVICES AVAILABLE TO NJ FAMILYCARE PLAN H UNDER
FEE-FOR-SERVICE. THE FOLLOWING SERVICES ARE AVAILABLE TO NJ
FAMILYCARE PLAN H ENROLLEES UNDER FEE-FOR-SERVICE:

1. OUTPATIENT MENTAL HEALTH SERVICES, LIMITED TO 60
DAYS PER CALENDAR YEAR.

2. ABORTION SERVICES

C. Exclusions. The following services not covered for NJ
FamilyCare Plan H participants either by the contractor or the
Department include, but are not limited to;

1. Non-medically necessary services.

2. Intermediate Care Facilities/Mental Retardation

3. Private duty nursing

4. Personal Care Assistant Services

5. Medical Day Care Services

6. Chiropractic Services

7. Dental services

8. Orthotic devices

9. Targeted Case Management for the chronically ill

10. Residential treatment center psychiatric programs

11. Religious non-medical institutions care and services

12. Durable Medical Equipment

13. Early and Periodic Screening, Diagnosis and Treatment
(EPSDT) services (except for well child care,
including immunizations and lead screening and
treatments)

Amended as of October 1,2003 IV-17

14 Transportation Services, including non-emergency
ambulance, invalid coach, and lower mode
transportation

15. Hearing Aid Services

16. Blood and Blood Plasma, except administration of
blood, processing of blood, processing fees and fees
related to autologous blood donations are covered,

17. Cosmetic Services

18. Custodial Care

19. Special Remedial and Educational Services

20. Experimental and Investigational Services

21. Medical Supplies (except diabetic supplies)

22. Infertility Services

23. Rehabilitative Services for Substance Abuse

24. Weight reduction programs or dietary supplements,
except operations, procedures or treatment of obesity
when approved by the contractor

25. Acupuncture and acupuncture therapy, except when
performed as a form of anesthesia in connection with
covered surgery

26. Temporomandibular joint disorder treatment, including
treatment performed by prosthesis placed directly in
the teeth

27. Recreational therapy

28. Sleep therapy

29. Court-ordered services

30. Thermograms and thermography

31. Biofeedback

32. Radial keratotomy

33. Respite Care

34. Inpatient hospital services for mental health

35. Inpatient and outpatient services for substance
abuse

36. Partial hospitalization

37. Skilled nursing facility services

38. FAMILY PLANNING SERVICES

39. HOSPICE SERVICES

40. OPTOMETRIST SERVICES

41. OPTICAL APPLIANCES

42. ORGAN TRANSPLANT SERVICES

43. PODIATRIST SERVICES

44. PROSTHETIC APPLIANCES

45. OUTPATIENT REHABILITATION SERVICES

46. MATERNITY AND RELATED NEWBORN CARE

4.1.8 SUPPLEMENTAL BENEFITS

Any service, activity or product not covered under the State Plan may
be provided by the contractor only through written approval by the
Department and the cost of which shall be borne solely by the
contractor.

Amended as of October 1, 2003 IV-18

4.1.9 CONTRACTOR AND DMAHS SERVICE EXCLUSIONS

Neither the contractor nor DMAHS shall be responsible for the
following:

A. All services not medically necessary, provided, approved or
arranged by a contractor's physician or other provider (within
his/her scope of practice) except emergency services.

B. Cosmetic surgery except when medically necessary and approved,

C. Experimental organ transplants.

D. Services provided primarily for the diagnosis and treatment of
infertility, .including sterilization reversals, and related
office (medical or clinic), drugs, laboratory services,
radiological and diagnostic services and surgical procedures.

E. Respite Care

F. Rest cures, personal comfort and convenience items, services
and supplies not directly related to the care of the patient,
including but not limited to, guest meals and accommodations,
telephone charges, travel expenses other than those services
not in Article 4.1 of this contract, take home supplies and
similar cost, Costs incurred by an accompanying parent(s) for
an out-of-state medical intervention are covered under EPSDT
by the contractor.

G. Services involving the use of equipment in facilities, the
purchase, rental or construction of which has not been
approved by applicable laws of the State of New Jersey and
regulations issued pursuant thereto,

H. All claims arising directly from services provided by or in
institutions owned or operated by the federal government such
as Veterans Administration hospitals.

I. . Services provided in an inpatient psychiatric institution,
that is not an acute care hospital, to individuals under 65
years of age and over 21 years of age,

J. Services provided to all persons without charge. Services and
items provided without charge through programs of other public
or voluntary agencies (for example, New Jersey State
Department of Health and Senior Services, New Jersey Heart
Association, First Aid Rescue Squads, and so forth) shall be
utilized to the fullest extent possible,

K. Services or items furnished for any sickness or injury
occurring while the covered person is on active duty in the
military.

Amended as of October 1, 2003 IV-19

2. The contractor may not refuse to cover emergency
services based on the emergency room provider,
hospital, or fiscal agent not notifying the
contractor or the enrollee's PCP of the enrollee's
screening and treatment.

L. The contractor shall establish and maintain policies and
procedures for emergency dental services for all enrollees.

1. Within the contractor's Enrollment/Service Area, the
contractor will ensure that:

a. Enrollees shall have access to emergency
dental services on a twenty-four (24) hour,
seven (7) day a week basis.

b. The contractor shall bear full
responsibility for the provision of
emergency dental services, and shall assure
the availability of a back-up provider in
the event that an on-call provider is
unavailable.

2. Outside the contractor's Service Area, the contractor
shall ensure that;

a. Enrollees shall be able to seek emergency
dental services from any licensed dental
provider without the need for prior
authorization from the contractor while
outside the Service Area (including
out-of-state services covered by the
Medicaid program).

M. The contractor shall reimburse ambulance and MICU
transportation providers responding to "911" calls whether or
not the patient's condition is determined, retrospectively, to
be an emergency.

4.2.2 FAMILY PLANNING SERVICES AND SUPPLIES

A. General. Except where specified in Section 4.1, the
contractor's MCO enrollees are permitted to obtain family
planning services and supplies from either the contractor's
family planning provider network or from any other qualified
Medicaid family planning provider. The DMAHS shall reimburse
family planning services provided by non-participating
providers based on the Medicaid fee schedule.

B. Non-Participating Providers, The contractor shall cooperate
with non- participating family planning providers accessed at
the enrollee's option by establishing cooperative working
relationships with such providers for accepting referrals from
them for continued medical care and management of complex
health care needs and exchange of enrollee information, where
appropriate, to assure provision of needed care within the
scope of this contract. The contractor shall not deny coverage
of family planning services for a covered diagnostic,

Amended as of October 1, 2003 IV-24

iv. To accommodate exceptions to Medicaid drug
utilization review standards related to
proper maintenance drug therapy,

d. Except for the use of approved generic drug
substitution of brand drugs, under no circumstances
shall the contractor permit the therapeutic
substitution of a prescribed drug without a
prescriber's authorization.

e. The contractor shall not penalize the prescriber or
enrollee, financially or otherwise, for such requests
and approvals,

f. Determinations shall be made within twenty-four (24)
hours of receipt of all necessary information. The
contractor shall provide for a 72-hour supply of
medication while awaiting a prior authorization
determination.

g. Denials of off-formulary requests or offering of an
alternative medication shall be provided to the
prescriber and/or enrollee in writing. All denials
shall be reported to the DMAHS quarterly.

6. Submission and Publication of the Formulary.

a. The contractor shall publish and distribute
hard copy or on-line, at least annually, its
current formulary (if the contractor uses a
, formulary) to all prescribing providers
and pharmacists. Updates to the formulary
shall be distributed in all formats within
sixty (60) days of the changes.

b. The contractor shall submit its formulary to
DMAHS quarterly.

c. It is strongly encouraged that the
contractor publish the formularyon its
internet website.

7. If the formulary includes generic equivalents, the
contractor shall provide for a brand name exception
process for prescribers to use when medically
necessary. FOR MCSA ENROLLEES, THE CONTRACTOR SHOULD
IMPLEMENT A MANDATORY GENERIC DRUG SUBSTITUTION
PROGRAM CONSISTENT WITH MEDICAID PROGRAM
REQUIREMENTS.

8. The contractor shall establish and maintain a
procedure, approved by DMAHS, for internal review and
resolution of complaints, such as timely access and
coverage issues, drug utilization review, and claim
management based on standards of drug utilization
review.

C. Pharmacy Lock-In Program. The contractor may implement FOR MCO
ENROLLEES AND MUST IMPLEMENT FOR MCSA ENROLLEES a pharmacy
lock-in program including policies, procedures and criteria
for establishing the need for the lock-in

Amended as of October 1, 2003 IV-27

5.2 AID CATEGORIES ELIGIBLE FOR CONTRACTOR ENROLLMENT

A. Except as specified in Article 5.3, all persons who are not
institutionalized, belong to one of the following eligibility
categories, and reside in any of the enrollment areas, as
identified in Article 5.1, are in mandatory aid categories and
shall be eligible for enrollment in the contractor's plan .in
the manner prescribed by this contract.

1. Aid to Families with Dependent Children
(AFDC)/Temporary Assistance for Needy Families
(TANF);

2. AFDC/TANF-Related? New Jersey Care...Special Medicaid
Program for Pregnant Women and Children;

3. SSI-Aged, Blind, Disabled, and Essential Spouses;

4. New Jersey Care...Special Medicaid programs for Aged,
Blind, and Disabled;

5. Division of Developmental Disabilities Clients
including the Division of Developmental.Disabilities
Community Care Waiver;

6. Medicaid only or SSI-related Aged, Blind, and
Disabled;

7. Uninsured parents/caretakers and children who are
covered under NJ FamilyCare;

8. UNINSURED ADULTS AND COUPLES WITHOUT DEPENDENT
CHILDREN UNDER THE AGE OF 23 WHO ARE COVERED UNDER NJ
FAMILYCARE.

9. RESTRICTED ALIEN PARENTS, EXCLUDING PREGNANT WOMEN.

B. The contractor shall enroll the entire Medicaid case, i.e.,
all individuals included under the ten digit Medicaid
identification number.

C. DYPS. Individuals who are eligible through the Division of
Youth and Family Services may enroll voluntarily. All
individuals eligible through DYFS shall be considered a unique
Medicaid case and shall be issued an individual 12 digit
Medicaid identification number, and may be enrolled in his/her
own contractor.

D. The contractor shall be responsible for keeping its network of
providers informed of the enrollment status of each enrollee.

E. Dual eligibles (Medicaid-Medicare) may voluntarily enroll,

5.3 EXCLUSIONS AND EXEMPTIONS

Persons who belong to one of the eligible populations (defined in 5.2A)
shall not be subject to mandatory enrollment if they meet one or more
criteria defined in this Article. Persons who fall into an "excluded"
category (Article 5.3.1 A) shall not be eligible to enroll in the
contractor's plan. Persons falling into the categories under Article
5.3. IB are eligible to enroll on a voluntary basis. Persons falling
into a category under Article 5.3.2 may be eligible for enrollment
exemption, subject to the Department's review.

Amended as of October 1, 2003 V-2

1. Individuals whose Medicaid eligibility will terminate
within three (3) months or less after the projected
date of effective enrollment,

2. Individuals in mandatory eligibility categories who
live in a county where mandatory enrollment is not
yet required based on a phase-in schedule determined
by DMAHS,

3. Individuals enrolled in or covered by either a
Medicare or commercial HMO will not be enrolled in
New Jersey Care 2000+ contractor unless the New
Jersey Care 2000+ contractor and the
Medicare/commercial HMO are the same.

4. Individuals in the Pharmacy Lock-in or Provider
Warning or Hospice programs.

5. Individuals in eligibility categories other than
AFDC/TANF, AFDC/TANF-related New Jersey Care,
SSI-Aged, Blind and Disabled populations, the
Division of Developmental Disabilities Community Care
Waiver population, New Jersey Care -- Aged, Blind and
Disabled, or NJ FamilyCare Plan A.

6. Children awaiting adoption through a private agency.

7. Individuals identified as having more than one active
eligible Medicaid number.

8. DYFS Population,

C. The following individuals shall be excluded from the Automatic
Assignment process:

1. Individuals included under the same Medicaid Case
Number where one or more household member(s) are
exempt.

2. Individuals participating in NJ FamilyCare Plans B,
C, D, AND H [Managed Care is the only program option
available for these individuals],

5.3.2 ENROLLMENT EXEMPTIONS

The contractor, its subcontractors, providers or agents shall
not coerce individuals to disenroll because of their health
care needs which may meet an exemption reason, especially when
the enrollees want to remain enrolled. Exemptions do not apply
to NJ FamilyCare Plan B, Plan C, Plan D (EXCEPT
PARENTS/CARETAKERS WITH PSC 380), AND PLAN H individuals or to
individuals who have been enrolled in any of the contracted
plans for greater than one hundred and eighty (180) days, All
exemption requests are reviewed by DMAHS on a case by case
basis.

Amended as of October 1, 2003 V-4

may also enroll and directly market to individuals eligible
for Aged, Blind, and Disabled (ABD) benefits. The contractor
shall not enroll any other Medicaid-eligible beneficiary
except as described in Article 5.16.1.(A),2. Except as
provided in 5.16, the contractor shall not directly market to
or assist managed care eligibles in completing enrollment
forms. The duties of the HBC will include, but are not limited
to, education, enrollment, disenrollment, transfers,
assistance through the contractor's grievance/appeal process
and other problem resolutions with the contractor, and
communications. The duties of the contractor, when enrolling
ABD beneficiaries will include education and enrollment, as
well as other activities required within this contract. The
contractor shall cooperate with the HBC in developing
information about its plan for dissemination to Medicaid/NJ
FamilyCare beneficiaries.

B. Individuals eligible under NJ FamilyCare may request an
application via a toll-free number operated under contract for
the State, through an outreach source, or from the contractor.
The applications, including ABD applications taken by the
contractor, may be mailed back to a State vendor. Individuals
eligible under Plan A also have the option of completing the
application either via a mail-in process or on site at the
county welfare agency. Individuals eligible under Plan B, Plan
C, Plan D, AND PLAN H have the option of requesting assistance
from the State vendor, the contractor or one of the registered
servicing centers in the community. Assistance will also be
made available at State field offices (e.g. the Medical
ASSISTANCE CUSTOMER CENTERS) and county offices (e.g. Offices
on Aging for grandparent caretakers).

C. Automatic Assignment. Medicaid eligible persons who reside in
enrollment areas that have been designated for mandatory
enrollment, who qualify for AFDC/TANF, ABD, New Jersey
Care...Special Medicaid programs eligibility categories, NJ
FamilyCare Plan A, and SSI populations, who do not meet the
exemption criteria, and who do not voluntarily choose
enrollment in the contractor's plan, shall be assigned
automatically by DMAHS to a contractor.

5.5 ENROLLMENT AND COVERAGE REQUIREMENTS

A. General. The contractor shall comply with DMAHS enrollment
procedures. The contractor shall accept for enrollment any
individual who selects or is assigned to the contractor's
plan, whether or not they are subject to mandatory enrollment,
without regard to race, ethnicity, gender, sexual or
affectional preference or orientation, age, religion, creed,
color, national origin, ancestry, disability, health status or
need for health services and will not use any policy or
practice that has the effect of discrimination on the basis of
race, color, or national origin.

B. Coverage commencement. Coverage of enrollees shall commence at
12:00 a.m., Eastern Time, on the first day of the calendar
month as specified by the DMAHS

Amended as of October 1, 2003 V - 6

(other than "liveborn infant"). The
contractor shall be responsible for
notifying DMAHS when a newborn who has been
hospitilized and has not been accreted to
its enrollment roster after twelve (12)
weeks from the date of birth.

ii. DYFS. Newborns who are placed under the
jurisdiction of the Division of Youth and
Family Services are the responsibility of
the MCE that covered the mother on the date
of birth for medically necessary newborn
care. Such children shall become FFS upon
their placement in a DYFS-approved
out-of-home placement.

iii. NJ FamilyCare. Newborn infants born to NJ
FamilyCare Plans B, C, and D mothers shall
be the responsibility of the MCE that
covered the mother on the date of birth for
a minimum of 60 days. after the birth
through the period ending at the end of the
month ill which the 60th day falls unless
the child is determined eligible beyond this
time period. The contractor shall notify
DMAHS of the birth immediately in order to
assure payment for this period.

d. Enrollee no longer in contract area. If an enrollee
moves out of the contractor's enrollment area and
would otherwise still be eligible to be enrolled in
the contractor's plan, the contractor shall continue
to provide or arrange benefits to the enrollee until
the DMAHS can disenroll him/her. The contractor shall
ask DMAHS' to disenroll the enrollee due to the
change of residence as soon as it becomes aware of
the enrollee's relocation. This provision does not
apply to persons with disabilities, who may elect to
remain with the contractor, or to NJ FamilyCare Plans
B, C, D, AND H enrollees, who remain enrolled until
the end of the month in which the 60th day after the
request falls.

H. Enrollment Roster. The enrollment roster and weekly
transaction register generated by DMAHS shall serve as the
official contractor enrollment list. However, enrollment
changes can occur between the time when the monthly roster is
produced and capitation payment is made. The contractor shall
only be responsible for the provision and cost of care for an
enrollee during the months on which the enrollee's name
appears on the roster, except as indicated in Article 8.8.
DMAHS shall make available data on eligibility determinations
to the contractor to resolve discrepancies that may arise
between the roster and contractor enrollment files. If DMAHS
notifies the contractor in writing of changes in the roster,
the contractor shall rely upon that written notification in
the same manner as the roster. Corrective action shall be
limited to one (1) year from the date that the change was
effective.

Amended as of October 1, 2003 V - 9

1. Provision for "Advance Directives," pursuant to 42
C.F.R. Part 422 and Part 489, Subpart 1; must also
include a description of State law and any changes in
State law. Such changes must be made and issued no
later than 90 days after the effective date of the
change;

2. Participation in decision-making regarding their
health care;

3. Provision for the opportunity for enrollees or, where
applicable, an authorized person to offer suggestions
for changes in policies and procedures; and

4. A policy on the treatment of minors.

UU. Notification that prior authorization for emergency services,
either in-network or out-of-network, is not required;

VV. Notification that the costs of emergency screening
examinations will be covered by the contractor when the
condition appeared to be an emergency medical condition to a
prudent layperson;

WW. For beneficiaries subject to cost-sharing (i.e., those
eligible through NJ FamilyCare Plan C, D, AND H; See Section
B.5.2 of the Appendices), information that specifically
explains:

1. The limitation on cost-sharing;

2. The dollar limit that applies to the family based on
the reported income;

3. The need for the family to keep track of the
cost-sharing amounts paid; and

4. Instructions on what to do if the cost-sharing
requirements are exceeded,
XX. An explanation on how to access WIC services;

YY. Any other information essential to the proper use of the
contractor's plan as may be required by the Division;

ZZ. Inform enrollees of the availability of care management
services;

AAA. Enrollee right to adequate and timely information related to
physician incentives;

Amended as of October 1, 2003 V - 18

BBB. An explanation that Medicaid benefits received after age 55
may be reimbursable to the State of New jersey from the
enrollee's estate. The recovery may include premium payments
made on behalf of the beneficiary to the managed care
organization in which the beneficiary enrolls; and

CCC. Information on how to obtain continued services during a
transition, i.e., from the Medicaid FFS program to the
contractor's plan, from one MCO to another MCO, from the
contractor's plan to Medicaid FFS, when applicable.

5.8.3 ANNUAL INFORMATION TO ENROLLEES

The contractor shall distribute an updated handbook which will
include the information specified in Article 5.8.2 to each enrollee
or enrollee's family unit and to all providers at least once every
twelve (12) months,

5.8.4 NOTIFICATION OF CHANGES IN SERVICES

The contractor shall revise and distribute the information specified
in Article 5.8 at least thirty (30) calendar days prior to any
changes that the contractor makes in services provided or in the
locations at which services may be obtained, or other changes of a
program nature or in administration, to each enrollee and all
providers affected by that change.

5.8.5 ID CARD

A. Except as set forth in Section 5.9.1C. the contractor shall
deliver to each new enrollee prior to the effective enrollment
date but no later than seven (7) days after the enrollee's
effective date of enrollment a contractor Identification Card
for those enrollees who have selected a PCP. The
Identification Card shall have at least the following
information:

1. Name of enrollee

2. Issue Date for use in automated card replacement
process

3. Primary Care Provider Name (may be affixed by
sticker)

4. Primary Care Provider Phone Number (may be affixed by
sticker)

5. What to do in case of an emergency and that no prior
authorization is required

6. Relevant copayments/Personal Contributions to Care

7. Contractor 800 number - emergency message

Any additional information shall be approved by DMAHS prior to
use on the ID card.

B. For children and individuals eligible solely through the NJ
FamilyCare Program,' the identification card must clearly
indicate "NJ FamilyCare"; for children and individuals who are
participating in NJ FamilyCare Plans C, D, AND H the

Amended as of October 1, 2003 V - 19

in this contract. The contractor shall make provision for
continuing all management and administrative services until
the transition of enrollees is completed and all other
requirements of this contract are satisfied. The contractor
shall be responsible for the following:

1. Identification and transition of chronically ill,
high risk and hospitalized enrollees, and enrollees
in their last four weeks of pregnancy.

2. Transfer of requested medical records.

5.10.2 DISENROLLMENT FROM THE CONTRACTOR'S PLAN AT THE ENROLLEE'S REQUEST

A. An individual enrolled in a contractor's plan may be subject
to the enrollment Lock-In period provided for in this Article.
The enrollment Lock-In provision does not apply to SSI and New
Jersey Care ABD individuals, clients of DDD or to individuals
eligible to participate through the Division of Youth and
Family Services.

1. An enrollee subject to the enrollment Lock-In period
may initiate disenrollment or transfer for any reason
during the first ninety (90) days after the latter of
the date the individual is enrolled or the date they
receive notice of enrollment with a new contractor
and at least every twelve (12) months thereafter
without cause. NJ FamilyCare Plans B, C, D, AND H
enrollees will be subject to a twelve (12)-month
Lock-In period.

a. The period during which an individual has
the right to disenroll from the contractor's
plan without cause applies to an
individual's initial period of enrollment
with the contractor. If that individual
chooses to re-enroll with the contractor,
his/her initial date of enrollment with the
contractor will apply.

b. Upon automatic re-enrollment of an
individual who is disenrolled solely because
he or she loses Medicaid eligibility for a
period of 2 months or less, if the temporary
loss of Medicaid eligibility has caused the
individual to miss the annual disenrollment
opportunity.

2. An enrollee subject to the Lock-In period may
initiate disenrollment for good cause at any time.

a. Good cause reasons for disenrollment or
transfer shall include, unless otherwise
defined by DMAHS:

i. Failure of the contractor to
provide services including physical
access to the enrollee in
accordance with the terms of this
contract;

Amended as of October 1, 2003 V - 24

through NJ FamilyCare Plans B, C, D, (except for individuals
with a program status code of 380), AND H do not have the
right to a Medicaid Fair Hearing.

B. Complaints. The contractor shall have procedures for
receiving, responding to, and documenting resolution of
enrollee complaints that are received orally and are of a less
serious or formal nature. Complaints that are resolved to the
enrollee's satisfaction within three (3) business days of
receipt do not require a formal written response or
notification- The contractor shall call back an enrollee
within twenty-four hours of the initial contact if the
contractor is unavailable for any reason or the matter cannot
be readily resolved during the initial contact. Any complaint
that is not resolved within three business days shall be
treated as a grievance/appeal, in accordance with requirements
defined in Article 5,15.3.

C. HBC Coordination. The contractor shall coordinate its efforts
with the health benefits coordinator including referring the
enrollee to the HBC for assistance as needed in the management
of the complaint/grievance/appeal procedures.

D. DMAHS Intervention. DMAHS shall have the right to intercede on
an enrollee's behalf at any time during the contractor's
complaint/grievance/appeal process whenever there is an
indication from the enrollee, or, where applicable, authorized
person, or the HBC that a serious quality of care issue is not
being addressed timely or appropriately. Additionally, the
enrollee may be accompanied by a representative of the
enrollee's choice to any proceedings and grievances/appeals.

E. Legal Rights. Nothing in this Article shall be construed as
removing any legal rights of enrollees under State or federal
law, including the right to file judicial actions to enforce
rights.

5.15.2 NOTIFICATION TO ENROLLEES OF GRIEVANCE/APPEAL PROCEDURE

A. The contractor shall provide all enrollees or, where
applicable, an authorized person, upon enrollment in the
contractor's plan, and annually thereafter, pursuant to this
contract, with a concise statement of the contractor's
grievance/appeal procedure and the enrollees' rights to a
hearing by the Independent Utilization Review Organization
(IUKO) per NJAC 8:38-8.7 as well as their right to pursue the
Medicaid Fair Hearing process described in N.J.A.C. 10:49-10.1
et seq. The information shall be provided through an annual
mailing, a member handbook, or any other method approved by
DMAHS. The contractor shall prepare the information orally and
in writing in English, Spanish, and other bilingual
translations and a format accessible to the visually impaired,
such as Braille, large print, or audio tapes.

B. Written information to enrollees regarding the
grievance/appeal process shall include at a minimum:

Amended as of October 1, 2003 V - 36

The contractor shall have the right to request an informal heading
regarding disputes under this contract by the Director, or the designee
thereof. This shall not in any way limit the contractor's or State's
right to any remedy pursuant to New Jersey law.

7.25 MEDICARE RISK CONTRACTOR

To maximize coordination of care for dual eligibles while promoting the
efficient use of public funds, the contractor:

A. Is recommended to be a Medicare+Choice contractor,

B. Shall serve all eligible populations.

7.26 TRACKING AND REPORTING

As a condition of acceptance of a, managed care contract, the
contractor shall be held to the following reporting requirements:

A. The contractor shall develop, implement, and maintain a system
of records and reports which include those described below and
shall make available to DMAHS for inspection and audit any
reports, financial or otherwise, of the contractor and require
its providers or subcontractors to do the same relating to
their capacity to bear the risk of potential financial losses
in accordance with 42 C.F.R.Section 434.38. Except where
otherwise specified, the contractor shall provide reports on
hard copy, computer diskette or via electronic media using a
format and commonly- available software as specified by DMAHS
for each report,

B. The contractor shall maintain a uniform accounting system that
adheres to generally accepted accounting principles for
charging and allocating to all funding resources the
contractor's costs incurred hereunder including, but not
limited to, the American Institute of Certified Public
Accountants (AICPA) Statement of Position 89-5 "Financial
Accounting and Reporting by Providers of Prepaid Health Care
Services".

C. The contractor shall submit financial reports including, among
others,'rate cell grouping costs, in accordance with the
timeframes and formats contained in Section A of the
Appendices. THE CONTRACTOR SHALL SUBMIT SEPARATE FINANCIAL
REPORTS FOR MCSA ENROLLEES IN ACCORDANCE WITH THE RATE CELL
GROUPING FOR THIS POPULATION.

D. The contractor shall provide its primary care practitioners
with quarterly utilization data within forty-five (45) days of
the end of the program quarter comparing the average medical
care utilization data of their enrollees to the average
medical care utilization data of other managed care enrollees.
These data

Amended as of October 1, 2003 VII-37

H. The contractor shall annually and at the time changes are made
report its staffing positions including the names of
supervisory personnel (Director level and above and the QM/UR
personnel), organizational chart, and any position vacancies
in these major areas.

I. DMAHS shall have the right to create additional reporting
requirements at any time as required by applicable federal or
State laws and regulations, as they exist or may hereafter be
amended and incorporated into this contract.

J. Reports that shall be submitted on an annual or semi-annual
basis, as specified in this contract, shall be due within
sixty (60) days of the close of the reporting period, unless
specified otherwise.

K. MCSA PAID CLAIMS RECONCILIATION. ON A QUARTERLY BASIS, THE
CONTRACTOR SHALL PROVIDE PAID CLAIMS DATA, VIA AN ENCOUNTER
DATA FILE OR SEPARATE PAID CLAIMS FILE, THAT MEET THE HIPAA
FORMAT REQUIREMENTS FOR AUDIT AND RECONCILIATION PURPOSES. THE
CONTRACTOR SHALL PROVIDE DOCUMENTATION THAT DEMONSTRATES A
100% RECONCILIATION OF THE AMOUNTS PAID TO THE AMOUNTS BILLED
TO THE DMAHS. THE PAID CLAIMS DATA SHALL INCLUDE AT A MINIMUM,
CLAIM TYPE, PROVIDER TYPE, CATEGORY OF SERVICE, DIAGNOSIS CODE
(5 DIGITS), PROCEDURE/REVENUE CODE, INTERNAL CONTROL NUMBER OR
PATIENT ACCOUNT NUMBER UNDER HIPAA, PROVIDER ID, DATES OF
SERVICES, THAT WILL ALLOW THE DMAHS TO PRICE CLAIMS IN
COMPARISON TO MEDICAID FEE SCHEDULES FOR EVALUATION PURPOSES.

7.27 FINANCIAL STATEMENTS

7.27.1 AUDITED FINANCIAL STATEMENTS (SAP BASIS)

A. Annual Audit. The contractor shall submit its audited annual
financial statements prepared in accordance with Statutory
Accounting Principles (SAP) certified by an independent public
accountant no later than June 1 of each year, for the
immediately preceding calendar year as well as for any company
that is a financial guarantor for the contractor in accordance
with N.J.S.A. 8:38-11.6.

B. Audit of Rate Cell Grouping Costs

The contractor shall submit, quarterly, reports found in
Appendix, Section A in accordance with the "HMO Financial
Guide for Reporting Medicaid/NJ Family Care Rate Cell Grouping
Costs" (Appendix, Section 337.3). These reports shall be
reviewed by an independent public accountant in accordance
with the standard "Agreed Upon Procedures" (Appendix, Section
B).

The contractor shall require its independent public accountant
to prepare a letter and report of findings which shall be
submitted to DMAHS by June 1 of each

Amended as of October 1, 2003 VII-39

8.5.1 REGIONS

CAPITATION Rates for DYFS, NJ FamilyCare Plans B, C, and D and the non
risk-adjusted rates for AIDS and clients of DDD are statewide. Rates for all
other premium groups are regional in each of the following regions:

- Region 1: Bergen, Hudson, Hunterdon, Xxxxxx, Passaic,
Somerset, Sussex, and Xxxxxx counties

- Region 2; Essex, Union, Middlesex, and Xxxxxx counties

- Region 3: Atlantic, Burlington, Camden, Cape May, Cumberland,
Gloucester, Monmouth, Ocean, and Salem counties

Contractors may contract for one or more regions but, except as
provided in Article 2, may not contract for part of a region,

8.5.2 MAJOR PREMIUM GROUPS

The following is a list of the major premium groups. The individual
rate groups (e.g. children under 2 years, etc.) with their respective
rates are presented in the rate tables in the appendix.

8.5.2.1 AFDC/TANF, NJC PREGNANT WOMEN, AND NJ FAMILYCARE PLAN A CHILDREN

8.5.2.2 NJ FAMILYCARE PLANS B & C

This grouping includes capitation rates for NJ FamilyCare Plans B and C
enrollees, excluding individuals with AIDS and/or DDD clients.

8.5.2.3 NJ FAMILYCARE PLAN D CHILDREN

This grouping includes capitation rates for NJ FamilyCare Plan D
children, excluding individuals with AIDS.

8.5.2.4 NJ FAMILYCARE PLAN D PARENTS/CARETAKERS

This grouping includes capitation rates for NJ FamilyCare Plan D
parents/caretakers, excluding individuals with AIDS, and include only
enrollees 19 years of age or older.

Amended as of October 1, 2003 VIII-6

8.5.4 SUPPLEMENTAL PAYMENT PER PREGNANCY OUTCOME

Because costs for pregnancy outcomes were not included in the
capitation rates, the contractor shall be paid supplemental payments
for pregnancy outcomes for all eligibility categories.

8.5.5 PAYMENT FOR CERTAIN BLOOD CLOTTING FACTORS

The contractor shall be paid separately for factor VIII and DC blood
clotting factors. Payment will be made by DMAHS to the contractor based
on: 1) submission of appropriate encounter data; and 2) notification
from the contractor to DMAHS within 12 months of the date of service of
identification of individuals with factor VIII or IX hemophilia.
Payment for these products will be the lesser of: 1) Average Wholesale
Price (AWP) minus 12,5% and 2) rates paid by the contractor.

8.5.6 PAYMENT FOR HIV/AIDS DRUGS

The contractor shall be paid separately for protease inhibitors and
other anti-retroviral agents (First Data Bank Specific Therapeutic
Class Codes W5C, W5B, W5I, W5J, W5K, X0X, X0X, X0X). Payment for
protease inhibitors shall be made by DMAHS to the contractor based on:
1) submission of appropriate encounter data; and 2) notification from
the contractor to DMAHS within 12 months of the date of service of
identification of individuals with HIV/AIDS. Payment for these products
will be the lesser of; 1) Average Wholesale Price (AWP) minus 12.5% and
2) rates paid by the contractor.

Individuals eligible through NJ FamilyCare with a program status code
of 380 and all children groups shall receive protease inhibitors arid
other anti-retroviral agents under the contractor's plan. All other
individuals eligible through NJ FamilyCare with program status codes of
497-498, 300-301, 700-701, and 763 shall receive protease inhibitors
and other anti-retrovirals (First Data Bank Specific Therapeutic Class
Codes W5C, X0X, X00, X0X, X0X, X0X, X0X and W5N) through Medicaid fee
for service and/or the AIDS Drug Distribution Program (ADDP).

8.5.7 EPSDT INCENTIVE PAYMENT

Amended as of October 1, 2003 VIII-8

The incentive payment shall be reimbursed for EPSDT encounter records
submitted in accordance with 1) procedure codes specified by DMAHS, and
2) EPSDT periodicity schedule.

8.5.8 ADMINISTRATIVE COSTS

The capitation rates, effective July 1, 2003, recognize costs for
anticipated contractor administrative expenditures due to Balanced
Budget Act regulations,

8.5.9 NJ FAMILYCARE PLAN H ADULTS

THE CONTRACTOR SHALL BE PAID AN ADMINISTRATIVE FEE FOR NJ FAMILYCARE
PLAN H ADULTS WITHOUT DEPENDENT CHILDREN, AND RESTRICTED ALIEN PARENTS
EXCLUDING PREGNANT WOMEN, AS DEFINED IN ARTICLE ONE.

8.6 HEALTH BASED PAYMENT SYSTEM (HBPS) FOR THE ABD POPULATION WITHOUT
MEDICARE

The DMAHS shall utilize a Health-Based Payment System (HBPS) for
reimbursements for the ABD population without Medicare to recognize
larger average health care costs and greater dispersion around the
average than other DMAHS populations. The contractor shall be
reimbursed not only on the basis of the demographic cells into which
individuals fall, but also on the basis of individual health status,

The Chronic Disability Payment System (CDPS) (University of California,
San Diego) is the HBPS or the system of Risk Adjustment that shall be
used in this contract. The methodology for CDPS specific to New Jersey
is provided in the Actuarial Certification Letter for Risk Adjustment
issued separately to the contractor. Two base capitation rates and a
DDD mental health/substance abuse add-on are developed for this
population. These are:

- ABD without Medicare, non-DDD

- ABD DDD without Medicare, physical health component

- ABD - DDD without Medicare, Mental Health/Substance Abuse
add-on-component

The Risk adjustment process has four major components.

- Development of base rates for the risk adjusted populations.

- Development of algebraic expressions that relate demographic
and clinical characteristics of beneficiaries to their
expected, prospective covered health care

Amended as of October 1, 2003 VIII-9

liable for hospitalization until the date such person is
discharged from the hospital, including any charges for
readmission within forty-eight (48) hours of discharge for the
same diagnosis. The contractor must notify DMAHS of these
occurrences to facilitate payment to appropriate providers.

L. Continuation of Benefits. The contractor shall continue
benefits for all-enrollees for the duration of the contract
period for which capitation payments have been made, including
enrollees in an inpatient facility until discharge. The
contractor shall notify DMAHS of these occurrences.

M. Drug Carve-Out Report. The DMAHS will provide the contractor
with a monthly electronic file of paid drug claims data for
non-dually eligible, ABD enrollees,

P. Claims Payment Audits. The contractor shall monitor and audit
claims payments to providers to identify payment errors,
including duplicate payments, overpayments, underpayments, and
excessive payments. for such payment errors (excluding
underpayments), the contractor shall refund DMAHS the overpaid
amounts. The contractor shall report the dollar amount of
claims with payment errors on a monthly basis, which is
subject to verification by the state. The contractor is
responsible for collecting funds due to the state from
providers, either through cash payments or through offsets to
payments due the providers.

8.9 CONTRACTOR ADVANCED PAYMENTS AND PIPS TO PROVIDERS

A. The contractor shall make advance payments to its providers,
capitation, FFS, or other financial reimbursement arrangement,
based on a provider's historical billing or utilization of
services if the contractor's claims processing systems become
inoperational or experience any difficulty in making timely
payments. Under no circumstances shall the contractor default
on the claims payment timeliness provisions of this contract.
Advance payments shall also be made when compliance with
claims payment timeliness is less than ninety (90) percent for
two (2) quarters. Such advance, payments will continue until
the contractor is in full compliance with timely payment
provisions for two (2) successive quarters.

Amended as of October 1, 0000 XXXX-00

XXXXX XX XXX XXXXXX

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.2B of the contract
between University Health Plans, inc. and the State of New Jersey, Department of
Human Services, Division of Medical Assistance and Health Services (DMAHS),
effective date October 1,2000, all parties agree that the contract shall be
amended, effective October 1,2003, as follows:

Managed Care Service Administrator - October 1, 2003

1. ARTICLE 1, "DEFINITIONS" section - for the following definitions:

- Contractor;

- Copayment;

- Managed Care Service Administrator (NEW);

- NJ FamilyCare Plan D;

- NJ FamilyCare Plan H;

- Non-Risk Contract (NEW);

- Restricted Alien (NEW)

shall be amended as reflected in the relevant pages of Article 1
attached hereto and incorporated herein.

2. ARTICLE 3, "MANAGED CARE MANAGEMENT INFORMATION SYSTEM" Section 3.4.2
shall be amended as reflected in Article 3, Section 3.4.2 attached
hereto and incorporated herein.

3. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES," Sections 4.1(B) (NEW);
4.1.1(E); 4.1.7; renumbered remaining sections; 4.2.2(A); 4.2.4(B)7;
4.2.4(C) shall be amended as reflected in Article 4, Sections 4.1(B)
(NEW); 4.1.1(E); 4.1.7; renumbered remaining sections; 4.2.2(A);
4.2.4(B)7; 4.2.4(C) attached hereto and incorporated herein.

4. ARTICLE 5, "ENROLLEE SERVICES," Sections 5.2(A)8 (RESTORED); 5.2(A)9
(NEW); 5.3.1(C)2; 5.3.2; 5.4(B); 5.4(C); 5.5.(G)1(d); 5.8.2(WW);
5.8.5(B); 5.10.2(A)1; 5.15.1 (A) shall be amended as reflected in
Article 5, 5.2(A)8 (RESTORED); 5.2(A)9 (NEW); 5.3.1(C)2; 5.3.2; 5.4(B);
5.4(C); 5.5.(G)1(d); 5.8.2(WW); 5.8.5(B); 5.10.2(A)1; 5.15.1 (A)
attached hereto and Incorporated herein.

Managed Care Service Administrator - October 1, 2003

5. ARTICLE 7, "TERMS AND CONDITIONS," Sections 7.26(C) and 7.26(K) (NEW)
shall be amended as reflected in Article 7, Sections 7.26(C) and
7.26(K) (NEW) attached hereto and incorporated herein.

6. ARTICLE 8, "FINANCIAL PROVISIONS," Sections 8.5.1; 8.5.6; 8.5.9 (NEW);
8.8(N) (NEW); 8,8(O) (NEW); 8.8(P) (NEW) shall be amended as reflected
in Sections 8.5.1; 8.5.6; 8.5.9 (NEW); 8.8(N) (NEW); 8.8(O) (NEW);
8.8(P) (NEW) attached hereto and incorporated herein.

7. APPENDIX, SECTION E, "MANAGED CARE SERVICE ADMINISTRATOR," (NEW) shall
be revised as reflected in SFY 2004 Managed Care Service Administrator
administrative fees attached hereto and incorporated herein.

Managed Care Service Administrator - October 1, 2003

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

BY: /s/ Xxxxxxxxx XxXxxx BY: /s/ XXXXXXX X. X'XXXX
------------------------- -----------------------
XXXXXXX X. X'XXXX

TITLE: PRESIDENT & CEO TITLE: ACTING DIRECTOR, DMAHS

DATE: 8/9/03 DATE: 9/17/03

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: /s/ [ILLEGIBLE]
------------------------
DEPUTY ATTORNEY GENERAL

DATE: 9/16/03

STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

NJ FamilyCare Extension - September 1, 2003

1. Article 1, "Definitions" section - for the following definitions:

- Copayment;

- NJ Family Care Plan D;

- NJ FamilyCare Plan H (RESTORED)

shall be amended as reflected in the relevant pages of Article 1
attached hereto and incorporated herein.

2. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES," Sections 4.1.2(A)9;
4.1.3(A)10 and 4.1.7 (RESTORED); renumber remaining sections, shall
be amended as reflected in Article 4, Sections 4.1.2(A)9, 4.1.3(A)10,
and 4.1,7 (RESTORED) attached hereto and incorporated herein.

3. ARTICLE 5, "ENROLLEE SERVICES," Section 5.2(A)8 (RESTORED);
5.3.1(C)2; 5.3.2; 5.4(B); 5.4(C); 5.5(G)1(d); 5.8.2(WW); 5.8.5(B);
5,10.2(A)1 and 5.15.1(A) shall be amended as reflected in Article 5,
Section 5.2(A)8, 5.3.1(C)2, 5.3.2, 5.4(B), 5.4(C), 5.5(G)1(d),
5.8.2(WW), 5.8.5(B), 5.10.2(A)1 and 5.15.1(A) attached hereto and
incorporated herein.

4. ARTICLE 6, "PROVIDER INFORMATION," Section 6.5(B)1 shall be amended
as reflected in Article 6, Section 6.5 (B)1, attached hereto and
incorporated herein.

5. ARTICLE 8, "FINANCIAL PROVISIONS," SECTIONS 8.5.6; 8.7(A)1; 8.7(A)2
(NEW); 8.7(B); 8.7(C); 8.7(D)1; 8.7(D)1 (a); 8.7(D)2; 8.7(D)2(a);
8.7(E)1; 8.7(E)3 (NEW); 8.7(F)4 (DELETED); 8.7(G)1; 8.7(G)2; 8.7(H)1
and 8.8(M) shall be amended as reflected in Article 8, Sections
8.5,6, 8.7(A)1, 8.7(A)2, 8.7(B), 8.7(C), 8.7(D)1, 8.7(D)1 (a),
8.7(D)2, 8.7(D)2(a), 8.7(E)1, 8.7(E)3, 8.7(F)4, 8.7(G)1, 8.7(G)2,
8.7(H)1 and 8.8(M), attached hereto and incorporated herein.

6. APPENDIX, SECTION A, "THIRD PARTY LIABILITY"

A.8.2; A.8.3 (NEW) shall be amended as reflected in Appendix
A, A.8.2 and A.8.3 attached hereto and incorporated herein.

NJ FamilyCare Extension - September 1, 2003

7. APPENDIX, SECTION B, "REFERENCE MATERIALS"

B.5.2 - Cost-Sharing Requirements for NJ FamilyCare Plan D and Plan H
Beneficiaries; Plan H (RESTORED); shall be amended as reflected in
Appendix, Section B, B.5.2, attached hereto and incorporated herein.

8. APPENDIX, SECTION C, "CAPITATION RATES," shall be revised as reflected
in SFY 2004 Capitation Rates attached hereto and incorporated herein.

NJ FamilyCare Extension - September 1, 2003

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

BY : Xxxxxxxxx XxXxxx BY: [ILLEGIBLE]
_________________________ _________________________
XXXXXXX X. X'XXXX

TITLE: President & CEO TITLE: ACTING DIRECTOR, DMAHS

DATE: 8/4/03 DATE: 8/27/03

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: [ILLEGIBLE]
_________________________
DEPUTY ATTORNEY GENERAL

DATE: 8.20.03

CONTRACTOR'S PLAN-all services and responsibilities undertaken
by the contractor pursuant to this contract.

CONTRACTOR'S REPRESENTATIVE -- the individual legally
empowered to bind the contractor, using his/her signature
block, including his/her title. This individual will be
considered the Contractor's Representative during the life of
any contract entered into with the State unless amended in
writing pursuant to Article 7.

COPAYMENT-- the part of the cost-sharing requirement for NJ
FamilyCare Plan D AND H enrollees in which a fixed monetary
amount is paid for certain services/items received from the
contractor's providers.

COST AVOIDANCE--a method of paying claims in which the
provider is not reimbursed until the provider has demonstrated
that all available health insurance has been exhausted.

COST NEUTRAL--the mechanism used to smooth data, share risk,
or adjust for risk that will recognize both higher and lower
expected costs and is not intended to create a net aggregate
gain or loss across all payments.

COVERED SERVICES--see "BENEFITS PACKAGE"

CREDENTIALING--the contractor's determination as to the
qualifications and ascribed privileges of a specific provider
to render specific health care services.

CULTURAL COMPETENCY--a set of interpersonal skills that allow
individuals to increase their understanding, appreciation,
acceptance of and respect for cultural differences and
similarities within, among and between groups and the
sensitivity to how these differences influence relationships
with enrollees. This requires a willingness and ability to
draw on community-based values, traditions and customs, to
devise strategies to better meet culturally diverse enrollee
needs, and to work with knowledgeable persons of and from the
community in developing focused interactions, communications,
and other supports.

CWA OR COUNTY WELFARE AGENCY ALSO KNOWN AS COUNTY BOARD OF
SOCIAL SERVICES--the agency within the county government that
makes determination of eligibility for Medicaid and financial
assistance programs.

DAYS-calendar days unless otherwise specified.

DBI-the New Jersey Department of Banking and Insurance in the
executive branch of New Jersey State government.

DEFAULT -- see "AUTOMATIC ASSIGNMENT"

DELIVERABLE--a document/report/manual to be submitted to the
Department by the contractor pursuant to this contract.

Amended as of September 1, 2003 I-6

NJ FAMILYCARE PLAN D-means the State-operated program which
provides managed care coverage to uninsured:

- Parents/caretakers with children below the age of 19
who do not qualify for AFDC Medicaid with family
incomes up to and including 200 percent of the
federal poverty level; and

- PARENTS/CARETAKERS WITH CHILDREN BELOW THE AGE OF 23
YEARS AND CHILDREN FROM THE AGE OF 19 THROUGH 22
YEARS WHO ARE FULL TIME STUDENTS WHO DO NOT QUALIFY
FOR AFDC MEDICAID WITH FAMILY INCOMES UP TO AND
INCLUDING 250 PERCENT OF THE FEDERAL POVERTY LEVEL;
AND

- Children below the age of 19 with family incomes
between 201 percent and up to and including 350
percent of the federal poverty level.

Eligibles with incomes above 150 percent of the federal
poverty level are required to participate in cost sharing in
the form of monthly premiums and copayments for most services
with the exception of both Eskimos and Native American Indians
under the age of 19 years, These groups are identified by
Program Status Codes (PSCs) or Race Code on the eligibility
system as indicated below, For clarity, the Program Status
Codes or Race Code, in the case of Eskimos and Native American
Indians under the age of 19 years, related to Plan D non-cost
sharing groups are also listed.

PSC Cost Sharing PSC No Cost Sharing Race Code No Cost Sharing
---------------- ------------------- -------------------------

301 300 3
493 380
494 497
495
498

In addition to covered managed care services, eligibles under
these programs may access certain services which are paid
fee-for-service and not covered under this contract.

NJ FAMILYCARE PLAN H--MEANS THE STATE-OPERATED PROGRAM WHICH
PROVIDES MANAGED CARE ADMINISTRATIVE SERVICES COVERAGE TO
UNINSURED:

- ADULTS AND COUPLES WITHOUT DEPENDENT CHILDREN UNDER
THE AGE OF 19 WITH FAMILY INCOMES UP TO AND INCLUDING
100 PERCENT OF THE FEDERAL POVERTY LEVEL;

- ADULTS AND COUPLES WITHOUT DEPENDENT CHILDREN UNDER
THE AGE OF 23 YEARS, WHO DO NOT QUALIFY FOR AFDC
MEDICAID, WITH FAMILY INCOMES UP TO AND INCLUDING 250
PERCENT OF THE FEDERAL POVERTY LEVEL.

Eligibles with incomes above 150 percent of the federal
poverty level are required to participate in cost sharing in
the form of monthly premiums and copayments for most services.
These groups are identified by the program status code (PSC)
indicated below. For clarity, the program status codes related
to Plan H non-cost sharing groups are also listed.

Amended as of September 1, 2003 I-19

PSC PSC
COST SHARING NO COST SHARING
------------ ---------------

701 763
700

NJ FAMILYCARE PLAN I -- means the State-operated program that
provides certain benefits on a fee-for-service basis through
the DMAHS for Plan D parents/caretakers with a program status
code of 380.

N.J.S.A.--New Jersey Statutes Annotated.

NON-COVERED CONTRACTOR SERVICES--services that are not covered
in the contractor's benefits package included under the terms
of this contract.

NON-COVERED MEDICAID SERVICES--all services that are not
covered by the New Jersey Medicaid State Plan.

NON-PARTICIPATING PROVIDER--a provider of service that does
not have a contract with the contractor.

OIT -- the New Jersey Office of Information Technology.

OTHER HEALTH COVERAGE--private non-Medicaid individual or
group health/dental insurance, It may be referred to as Third
Party Liability (TPL) or includes Medicare.

OUT OF AREA SERVICES-all services covered under the
contractor's benefits package included under the terms of the
Medicaid contract which are provided to enrollees outside the
defined basic service area.

OUTCOMES -- the results of the health care process, involving
either the enrollee or provider of care, and may be measured
at any specified point in time. Outcomes can be medical,
dental, behavioral, economic, or societal in nature.

OUTPATIENT CARE--treatment provided to an enrollee who is not
admitted to an inpatient hospital or health care facility.

P FACTOR (P7) -- the grade of service for the telephone
system. The digit following the P (e.g., 7) indicates the
number of calls per hundred that are or can be blocked from
the system. In this sample, P7 means seven (7) calls in a
hundred may be blocked, so the system is designed to meet this
criterion. Typically, the grade of service is designed to meet
the peak busy hour, the busiest hour of the busiest day of the
year.

PARTICIPATING PROVIDER--a provider that has entered into a
provider contract with the contractor to provide services.

PARTIES--the DMAHS, on behalf of the DHS, and the contractor.

Amended as of September 1, 2003 I-20

either a physician specialist or oral surgeon may perform the
procedure and when, where, and how authorization, if needed,
shall be promptly obtained.

P. Out-of-Network Services. If the contractor is unable to
provide in-network necessary services, covered under the
contract to a particular enrollee, the contractor must
adequately and timely cover those services out-of-nerwork for
the enrollee, for as long as the contractor, is unable to
provide them in-network.

4.1.2 BENEFIT PACKAGE

A. The following categories of services shall be provided by the
contractor for all Medicaid and NJ FamilyCare Plans A, B, and
C enrollees, except where indicated, See Section B.4.1 of the
Appendices for complete definitions of the covered services.

1. Primary and Specialty Care by physicians and, within
the scope of practice and in accordance with State
certification/licensure requirements, standards and
practices, by Certified Nurse Midwives, Certified
Nurse Practitioners, Clinical Nurse Specialists, and
Physician Assistants

2. Preventive Health Care and Counseling and Health
Promotion

3. Early and Periodic Screening, Diagnosis, and
Treatment (EPSDT) Program Services

For NJ FamilyCare Plans B and C participants,
coverage includes early and periodic screening and
diagnosis medical examinations, dental, vision,
hearing, and lead screening services. It includes
only those treatment services identified through the
examination that are available under the contractor's
benefit package or specified services under the FFS
program.

4. Emergency Medical Care

5. Inpatient Hospital Services including acute care
hospitals, rehabilitation hospitals, and special
hospitals.

6. Outpatient Hospital Services

7. Laboratory Services [Except routine testing related
to administration of Clozapine and the other
psychotropic drugs listed in Article 4.1.4B for
non-DDD clients.]

8. Radiology Services - diagnostic and therapeutic

9. Prescription Drugs (legend and non-legend covered by
the Medicaid program) - For payment method for
Protease Inhibitors, certain other anti-

Amended as OF SEPTEMBER 1, 2003 IV-4

retrovirals, blood clotting factors VIII and IX, and
coverage of protease inhibitors and certain other
anti-retrovirals under NJ FamilyCare, see Article 8.
EXCEPTION: NOT A CONTRACTOR-COVERED BENEFIT FOR THE
NON-DUALLY ELIGIBLE ABD POPULATION.

10. Family Planning Services and Supplies

11. Audiology

12. Inpatient Rehabilitation Services

13. Podiatrist Services

14. Chiropractor Services

15. Optometrist Services

16. Optical Appliances

17. Hearing Aid Services

18. Home Health Agency Services - Not a
contractor-covered benefit for the non-dually
eligible ABD population. All other services provided
to any enrollee in the home, including but not
limited to pharmacy and DME services, are the
contractor's fiscal and medical management
responsibility.

19. Hospice Services -- are covered in the community as
well as in institutional settings. Room and board
services are included only when services are
delivered in an institutional (non-private residence)
setting.

20. Durable Medical Equipment (DME)/Assistive Technology
Devices in accordance with existing Medicaid
regulations.

21. Medical Supplies

22. Prosthetics and Orthotics including certified shoe
provider.

23. Dental Services

24. Organ Transplants - includes donor and recipient
costs, Exception: The contractor will not be
responsible for transplant-related donor and
recipient inpatient hospital costs for an individual
placed on a transplant list while in the Medicaid FFS
program prior to enrollment into the contractor's
plan.

Amended as of SEPTEMBER 1, 2003 IV-5

7. Services Provided by New Jersey MH/SA and DYFS
Residential Treatment Facilities or Group Homes. For
enrollees living in residential facilities or group
homes where ongoing care is provided, contractor
shall cooperate with the medical, nursing, or
administrative staff person designated by the
facility to ensure that the enrollees have timely and
appropriate access to contractor providers as needed
and to coordinate care between those providers and
the facility's employed or contracted providers of
health services. Medical care required by these
residents remains the contractor's responsibility
providing the contractor's provider network and
facilities are utilized.

8. Family Planning Services and Supplies when furnished
by a non-participating provider.

9. Home health agency services for the non-dually
eligible ABD population.

10. PRESCRIPTION DRUGS (LEGEND AND NON-LEGEND COVERED BY
THE MEDICAID PROGRAM) FOR NON-DUALLY ELIGIBLE ABD
POPULATION.

B. Dental Services. For those dental services specified below
that are initiated by a Medicaid non-New Jersey Care 2000+
provider prior to first time New Jersey Care 2000+ enrollment,
an exemption from contractor-covered services based on the
initial managed care enrollment date will be provided and the
services paid by Medicaid FFS, The exemption shall only apply
to those beneficiaries who have initially received these
services during the 60 or 120 day period immediately prior to
the initial New Jersey Care 2000+ enrollment date.

1. Procedure Codes to be paid by Medicaid FFS up to 60
days after first time New Jersey Care 2000+
enrollment:

02710 02792 03430
02720 02950 05110
02721 02952 05120
02722 02954 05211
02750 03310 05211-52
02751 03320 05212
02752 03330 05212-52
02790 03410-22 05213
02791 03411 05214

2. Procedure Codes to be paid by Medicaid FFS up to 120
days from date of last preliminary extractions after
patient enrolls in New Jersey Care 2000+ (applies to
tooth codes 5 -- 12 and 21 -- 28 only);

05130

Amended as of SEPTEMBER 1, 2003 IV-8

4.1.7 BENEFIT PACKAGE FOR NJ FAMILYCARE PLAN H

A. SERVICES INCLUDED IN THE CONTRACTOR'S BENEFITS PACKAGE FOR NJ
FAMILYCARE PLAN H. THE FOLLOWING SERVICES SHALL BE PROVIDED
AND CASE MANAGED BY THE CONTRACTOR:

1. PRIMARY CARE

A. AH PHYSICIANS SERVICES, PRIMARY AND
SPECIALTY

B. IN ACCORDANCE WITH STATE
CERTIFICATION/LICENSURE REQUIREMENTS,
STANDARDS, AND PRACTICES, PRIMARY CARE
PROVIDERS SHALL ALSO INCLUDE ACCESS TO
CERTIFIED NURSE MIDWIVES - NON-MATERNITY,
CERTIFIED NURSE PRACTITIONERS, CLINICAL
NURSE SPECIALISTS, AND PHYSICIAN ASSISTANTS

C. SERVICES RENDERED AT INDEPENDENT CLINICS
THAT PROVIDE AMBULATORY SERVICES

D. FEDERALLY QUALIFIED HEALTH CENTER PRIMARY
CARE SERVICES

2. EMERGENCY ROOM SERVICES

3. FAMILY PLANNING SERVICES, INCLUDING MEDICAL HISTORY
AND PHYSICAL EXAMINATIONS (INCLUDING PELVIC AND
BREAST), DIAGNOSTIC AND LABORATORY TESTS, DRUGS AND
BIOLOGICALS, MEDICAL SUPPLIES AND DEVICES,
COUNSELING, CONTINUING MEDICAL SUPERVISION,
CONTINUITY OF CARE AND GENETIC COUNSELING.

SERVICES PROVIDED PRIMARILY FOR THE DIAGNOSIS AND
TREATMENT OF INFERTILITY, INCLUDING STERILIZATION
REVERSALS, AND RELATED OFFICE (MEDICAL AND CLINIC)
VISITS, DRUGS, LABORATORY SERVICES, RADIOLOGICAL AND
DIAGNOSTIC SERVICES AND SURGICAL PROCEDURES ARE NOT
COVERED BY THE NJ FAMILYCARE PROGRAM, OBTAINING
FAMILY PLANNING SERVICES FROM PROVIDERS OUTSIDE THE
CONTRACTOR'S PROVIDER NETWORK IS NOT AVAILABLE TO NJ
FAMILYCARE PLAN H ENROLLEES.

4. HOME HEALTH CARE SERVICES - LIMITED TO SKILLED
NURSING FOR A HOME BOUND BENEFICIARY WHICH IS
PROVIDED OR SUPERVISED BY A REGISTERED NURSE, AND
HOME HEALTH AIDE WHEN THE PURPOSE OF THE TREATMENT IS
SKILLED CARE; AND MEDICAL SOCIAL SERVICES WHICH ARE
NECESSARY FOR THE TREATMENT OF THE BENEFICIARY'S
MEDICAL CONDITION

5. HOSPICE SERVICES

Amended as of SEPTEMBER 1, 2003 IV-15

6. INPATIENT HOSPITAL SERVICES, INCLUDING GENERAL
HOSPITALS, SPECIAL HOSPITALS, AMI REHABILITATION
HOSPITALS. THE CONTRACTOR SHALL NOT BE RESPONSIBLE
WHEN THE PRIMARY ADMITTING DIAGNOSIS IS MENTAL HEALTH
OR SUBSTANCE ABUSE RELATED.

7. OUTPATIENT HOSPITAL SERVICES, INCLUDING OUTPATIENT
SURGERY

8. LABORATORY SERVICES - ALL LABORATORY TESTING SITES
PROVIDING SERVICES UNDER THIS CONTRACT MUST HAVE
EITHER A CLINICAL LABORATORY IMPROVEMENT ACT (CLIA)
CERTIFICATE OF WAIVER OR A CERTIFICATE OF
REGISTRATION ALONG WITH A CLIA IDENTIFICATION NUMBER.
THOSE PROVIDERS WITH CERTIFICATES OF WAIVER SHALL
PROVIDE ONLY THE TYPES OF TESTS PERMITTED UNDER THE
TERMS OF THEIR WAIVER. LABORATORIES WITH CERTIFICATES
OF REGISTRATION MAY PERFORM A FULL RANGE OF
LABORATORY SERVICES.

9. RADIOLOGY SERVICES - DIAGNOSTIC AND THERAPEUTIC

10. OPTOMETRIST SERVICES, INCLUDING ONE ROUTINE EYE
EXAMINATION PER YEAR

11. OPTICAL APPLIANCES -- LIMITED TO ONE PAIR OF GLASSES
(OR CONTACT LENSES) PER 24 MONTH PERIOD OR AS
MEDICALLY NECESSARY

12. ORGAN TRANSPLANT SERVICES WHICH ARE NON-EXPERIMENTAL
OR NON-INVESTIGATIONAL

13. PRESCRIPTION DRUGS, EXCLUDING OVER-THE-COUNTER DRUGS
EXCEPTION; . SEE ARTICLE 8 REGARDING PROTEASE
INHIBITORS AND OTHER ANTIRETROVIRALS.

14. PODIATRIST SERVICES -- EXCLUDES ROUTINE HYGIENIC CARE
OF THE FEET, INCLUDING THE TREATMENT OF CORNS AND
CALLUSES, THE TRIMMING OF NAILS, AND OTHER HYGIENIC
CARE SUCH AS CLEANING OR SOAKING FEET, IN THE ABSENCE
OF A PATHOLOGICAL CONDITION

15. PROSTHETIC APPLIANCES -- LIMITED TO THE INITIAL
PROVISION OF A PROSTHETIC DEVICE THAT TEMPORARILY OR
PERMANENTLY REPLACES ALL OR PART OF AN EXTERNAL BODY
PART LOST OR IMPAIRED AS A RESULT OF DISEASE, INJURY,
OR CONGENITAL DEFECT. REPAIR AND REPLACEMENT SERVICES
ARE COVERED WHEN DUE TO CONGENITAL GROWTH.

16. PRIVATE DUTY NURSING - ONLY WHEN AUTHORIZED BY THE
CONTRACTOR.

17. TRANSPORTATION SERVICES - LIMITED TO AMBULANCE FOR
MEDICAL EMERGENCY ONLY.

Amended as of SEPTEMBER 1, 2003 IV-16

18. MATERNITY AND RELATED NEWBORN CARE.

19. DIABETIC SUPPLIES AND EQUIPMENT

B. SERVICES AVAILABLE TO NJ FAMILYCARE PLAN H UNDER
FEE-FOR-SERVICE. THE FOLLOWING SERVICES ARE AVAILABLE TO NJ
FAMILYCARE PLAN H ENROLLEES UNDER FEE-FOR-SERVICE:

1. OUTPATIENT MENTAL HEALTH SERVICES, LIMITED TO 60 DAYS
PER CALENDAR YEAR.

2. ABORTION SERVICES.

3. OUTPATIENT REHABILITATION SERVICES PHYSICAL THERAPY,
OCCUPATIONAL THERAPY, AND SPEECH THERAPY FOR
NON-CHRONIC CONDITIONS AND ACUTE ILLNESSES AND
INJURIES. LIMITED TO TREATMENT FOR A 60-DAY (THAT IS,
60 BUSINESS DAYS) CONSECUTIVE PERIOD PER INCIDENT OF
ILLNESS OF INJURY, BEGINNING WITH THE FIRST DAY OF
TREATMENT PER CONTRACT YEAR. SPEECH THERAPY SERVICES
RENDERED FOR TREATMENT DELAYS IN SPEECH DEVELOPMENT,
UNLESS RESULTING FROM DISEASE, INJURY, OR CONGENITAL
DEFECTS ARE NOT COVERED.

C. Exclusions. The following services not covered for NJ
FamilyCare Plan H participants either by the contractor or the
Department include, but are not limited to:

1. Non-medically necessary services.

2. Intermediate Care Facilities/Mental Retardation

3. Private duty nursing UNLESS AUTHORIZED BY THE
CONTRACTOR

4. Personal Care Assistant Services

5. Medical Day Care Services

6. Chiropractic Services

7. Dental services

8. Orthotic devices

9. Targeted Case Management for the chronically ill

10. Residential treatment center psychiatric programs

11. Religious non-medical institutions care and services

12. Durable Medical Equipment

13. Early and Periodic Screening, Diagnosis and Treatment
(EPSDT) services (except for well child care,
including immunizations and lead screening and
treatments)

14. Transportation Services, including non-emergency
ambulance, invalid coach, and lower mode
transportation

15. Hearing Aid Services

16. Blood and Blood Plasma, except administration of
blood, processing of blood, processing fees and fees
related to autologous blood donations are covered.

Amended as of SEPTEMBER 1, 2003 IV-17

17. Cosmetic Services

18. Custodial Care

19. Special Remedial and Educational Services

20. Experimental and Investigational Services

21. Medical Supplies (except diabetic supplies)

22. Infertility Services

23. Rehabilitative Services for Substance Abuse

24. Weight reduction programs or dietary supplements,
except operations, procedures or treatment of obesity
when approved by the contractor

25. Acupuncture and acupuncture therapy, except when
performed as a form of anesthesia in connection with
covered surgery

26. Temporomandibular joint disorder treatment, including
treatment performed by prosthesis placed directly in
the teeth

27. Recreational therapy

28. Sleep therapy

29. Court-ordered services

30. Thermograms and thermography

31. Biofeedback

32. Radial keratotomy

33. Respite Care

34. Inpatient hospital services for mental health

35. Inpatient and outpatient services for substance abuse

36. Partial hospitalization

37. Skilled nursing facility services

4.1.8 SUPPLEMENTAL BENEFITS

4.1.9 CONTRACTOR AND DMAHS SERVICE EXCLUSIONS

Neither the contractor nor DMAHS shall be responsible for the
following:

A. All services not medically necessary, provided, approved or
arranged by a contractor's physician or other provider (within
his/her scope of practice) except emergency services.

B. Cosmetic surgery except when medically necessary and approved.

C. Experimental organ transplants.

Amended as of SEPTEMBER 1, 2003 IV-18

5.2 AID CATEGORIES ELIGIBLE FOR CONTRACTOR ENROLLMENT

1. Aid to Families with Dependent Children
(AFDC/Temporary Assistance for Needy Families (TANF);

2. AFDC/TANF-Related, New Jersey Care...Special Medicaid
Program for Pregnant Women and Children;

3. SSI-Aged, Blind, Disabled, and Essential Spouses;

4. New Jersey Care...Special Medicaid programs for Aged,
Blind, and Disabled;

5. Division of Developmental Disabilities Clients
including the Division of Developmental Disabilities
Community Care Waiver;

6. Medicaid only or SSI-related Aged, Blind, and
Disabled;

7. Uninsured parents/caretakers and children who are
covered under NJ FamilyCare;

8. UNINSURED ADULTS AND COUPLES WITHOUT DEPENDENT
CHILDREN UNDER THE AGE OF 23 WHO ARE COVERED UNDER NJ
FAMILYCARE.

B. The contractor shall enroll the entire Medicaid case, i.e.,
all individuals included under the ten digit Medicaid
identification number.

C. DYFS. Individuals who are eligible through the Division of
Youth and Family Services may enroll voluntarily. All
individuals eligible through DYFS shall be considered a unique
Medicaid case and shall be issued an individual 12 digit
Medicaid identification number, and may be enrolled in his/her
own contractor.

D. The contractor shall be responsible for keeping its network of
providers informed of the enrollment status of each enrollee.

E. Dual eligibles (Medicaid-Medicare) may voluntarily enroll.

5.3 EXCLUSIONS AND EXEMPTIONS

Persons who belong to one of the eligible populations (defined in 5.2A)
shall not be subject to mandatory enrollment if they meet one or more
criteria defined in this Article. Persons who fall into an "excluded"
category (Article 5.3.1A) shall not be eligible to enroll in the
contractor's plan. Persons falling into the categories under Article
5.3.1B are eligible to enroll on a voluntary basis. Persons falling
into a category under Article 5.3.2 may be eligible for enrollment
exemption, subject to the Department's review.

Amended as of SEPTEMBER 1, 2003 V-2

1. Individuals whose Medicaid eligibility will terminate
within three (3) months or less after the projected
date of effective enrollment.

2. Individuals in mandatory eligibility categories who
live in a county where mandatory enrollment is not
yet required based on a phase-in schedule determined
by DMAHS.

4. Individuals in the Pharmacy Lock-in or Provider
Warning or Hospice programs.

5. Individuals in eligibility categories other than
AFDC/TANF, AFDC/TANF-related New Jersey Care,
SSI-Aged, Blind and Disabled populations, the
Division of Developmental Disabilities Community Care
Waiver population, New Jersey Care - Aged, Blind and
Disabled, or NJ FamilyCare Plan A.

6. Children awaiting adoption through a private agency.

7. Individuals identified as having more than one active
eligible Medicaid number.

8. DYFS Population.

C. The following individuals shall be excluded from the Automatic
Assignment process;

1. Individuals included under the same Medicaid Case
Number where one or more household member(s) are
exempt.

2. Individuals participating in NJ FamilyCare Plans B,
C, D, AND H [Managed Care is the only program option
available for these individuals].

5.3.2 ENROLLMENT EXEMPTIONS

The contractor, its subcontractors, providers or agents shall
not coerce individuals to disenroll because of their health
care needs which may meet an exemption reason, especially when
the enrollees want to remain enrolled. Exemptions do not apply
to NJ FamilyCare Plan B, Plan C, Plan D (EXCEPT
PARENTS/CARETAKERS WITH PSC 380), AND PLAN H individuals or to
individuals who have been enrolled in any of the contracted
plans for greater than one hundred and eighty (180) days. All
exemption requests are reviewed by DMAHS on a case by case
basis.

Amended as of SEPTEMBER 1, 2003 V - 4

may also enroll and directly market to individuals eligible
for Aged, Blind, and Disabled (ABD) benefits. The contractor
shall not enroll any other Medicaid-eligible beneficiary
except as described in Article 5.16.1.(A).2. Except as
provided in 5.16, the contractor shall not directly market to
or assist managed care eligibles in completing enrollment
forms. The duties of the HBC will include, but are not limited
to, education, enrollment, disenrollment, transfers,
assistance through the contractor's grievance/appeal process
and other problem resolutions with the contractor, and
communications. The duties of the contractor, when enrolling
ABD beneficiaries will include education and enrollment, as
well as other activities required within this contract. The
contractor shall cooperate with the HBC in developing
information about its plan for dissemination to Medicaid/NJ
FamilyCare beneficiaries.

B. Individuals eligible under NJ FamilyCare may request an
application via a toll-tree number operated under contract for
the State, through an outreach source, or from the contractor.
The applications, including ABD applications taken by the
contractor, may be mailed back to a State vendor. Individuals
eligible under Plan A also have the option of completing the
application either via a mail-in process or on site at the
county welfare agency. Individuals eligible under Plan B, Plan
C, Plan D, AND PLAN H have the option of requesting assistance
from the State vendor, the contractor or one of the registered
servicing centers in the community. Assistance will also be
made available at State field offices (e.g. the MEDICAL
ASSISTANCE CUSTOMER CENTERS) and county offices (e.g. Offices
on Aging for grandparent caretakers).

C. Automatic Assignment, Medicaid eligible persons who reside in
enrollment areas that have been designated for mandatory
enrollment, who qualify for AFDC/TANF, ABD, New Jersey
Care...Special Medicaid programs eligibility categories, NJ
FamilyCare Plan A, and SSI populations, who do not meet the
exemption criteria, and who do not voluntarily choose
enrollment in the contractor's plan, shall be assigned
automatically by DMAHS to a contractor.

5.5 ENROLLMENT AND COVERAGE REQUIREMENTS

A. General, The contractor shall comply with DMAHS enrollment
procedures. The contractor shall accept for enrollment any
individual who selects or is assigned to the contractor's
plan, whether or not they are subject to mandatory enrollment,
without regard to race, ethnicity, gender, sexual or
affectional preference or orientation, age, religion, creed,
color, national origin, ancestry, disability, health status or
need for health services and will not use any policy or
practice that has the effect of discrimination on the basis of
race, color, or national origin.

B. Coverage commencement, Coverage of enrollees shall commence at
12:00 a.m., Eastern Time, on the first day of the calendar
month as specified by the DMAHS

Amended as of SEPTEMBER 1, 2003 V - 6

(other than "liveborn infant"). The
contractor shall be responsible for
notifying DMAHS when a newborn who
has been hospitilized and has not
been accreted to its enrollment
roster after twelve (12) weeks from
the date of birth.

ii. DYFS. Newborns who are placed under
the jurisdiction of the Division of
Youth and Family Services are the
responsibility of the MCE that
covered the mother on the date of
birth for medically necessary
newborn care. Such children shall
become FFS upon their placement in
a DYFS-approved out-of-home
placement.

iii. NJ FamilyCare. Newborn infants born
to NJ FamilyCare Plans B, C, and D
mothers shall be the responsibility
of the MCE that covered the mother
on the date of birth for a minimum
of 60 days after the birth through
the period ending at the end of the
month in which the 60th day falls
unless the child is determined
eligible beyond this time period.
The contractor shall notify DMAHS
of the birth immediately in order
to assure payment for this period.

d. Enrollee no longer in contract area. If an
enrollee moves out of the contractor's
enrollment area and would otherwise still be
eligible to be enrolled in the contractor's
plan, the contractor shall continue to
provide or arrange benefits to the enrollee
until the DMAHS can disenroll him/her. The
contractor shall ask DMAHS to disenroll the
enrollee due to the change of residence as
soon as it becomes aware of the enrollee's
relocation. This provision does not apply to
persons with disabilities, who may elect to
remain with the contractor, or to NJ
FamilyCare Plans B, C, D, AND H enrollees,
who remain enrolled until the end of the
month in which the 60th day after the
request falls.

H. Enrollment Roster. The enrollment roster and weekly
transaction register generated by DMAHS shall serve as the
official contractor enrollment list, However, enrollment
changes can occur between the time when the monthly roster is
produced and capitation payment is made. The contractor shall
only be responsible for the provision and cost of care for an
enrollee during the months on which the enrollee's name
appears on the roster, except as indicated in Article 8,8.
DMAHS Shall make available data on eligibility determinations
to the contractor to resolve discrepancies that may arise
between the roster and contractor enrollment files. If DMAHS
notifies the contractor in writing of changes in the roster,
the contractor shall rely upon that written notification in
the same manner as the roster. Corrective action shall be
limited to one (1) year from the date that the change was
effective.

Amended as of SEPTEMBER 1, 2003 V - 9

1. Provision for "Advance Directives," pursuant to 42
C.F.R. Part 422 and Part 489, Subpart I; must also
include a description of State law and any changes in
State law. Such changes must be made and issued no
later than 90 days after the effective date of the
change;

2. Participation in decision-making regarding their
health care;

3. Provision for the opportunity for enrollees or, where
applicable, an authorized person to offer suggestions
for changes in policies and procedures; and

4. A policy on the treatment of minors,

UU. Notification that prior authorization for emergency services,
either in-network or out-of-network, is not required;

VV. Notification that the costs of emergency screening
examinations will be covered by the contractor when the
condition appeared to be an emergency medical condition to a
prudent layperson;

WW. For beneficiaries subject to cost-sharing (i.e., those
eligible through NJ FamilyCare Plan C, D, and H; See Section
B.5.2 of the Appendices), information that specifically
explains:

1. The limitation on cost-sharing;

2. The dollar limit that applies to the family based on
the reported income;

3. The need for the family to keep track of the
cost-sharing amounts paid; and

4. Instructions on what to do if the cost-sharing
requirements are exceeded.

XX. An explanation on how to access WIC services;

YY. Any other information essential to the proper use of the
contractor's plan as may be required by the Division;

ZZ. Inform enrollees of the availability of care management
services;

AAA. Enrollee right to adequate and timely information related to
physician incentives;

Amended as of September 1, 2003 V - 18

BBB. An explanation that Medicaid benefits received after age 55
may be reimbursable, to the State of New Jersey from the
enrollee's estate, The recovery may include premium payments
made on behalf of the beneficiary to the managed care.
organization in which the beneficiary enrolls; and

5.8.3 ANNUAL INFORMATION TO ENROLLEES

The contractor shall distribute an updated handbook which will include
the information specified in Article 5.8.2 to each enrollee or
enrollee's family unit and to all providers at least once every twelve
(12) months.

5.8.4 NOTIFICATION OF CHANGES IN SERVICES

The contractor shall revise and distribute the information specified in
Article 5.8 at least thirty (30) calendar days prior to any changes
that the contractor makes in services provided or in the locations at
which services may be obtained, or other changes of a program nature or
in administration, to each enrollee and all providers affected by that
change.

5.8.5 ID CARD

1. Name of enrollee

2. Issue Date for use in automated card replacement
process

3. Primary Care Provider Name (may be affixed by
sticker)

4. Primary Care Provider Phone Number (may be affixed by
sticker)

5. What to do in case of an emergency and that no prior
authorization is required

6. Relevant copayments/Personal Contributions to Care

7. Contractor 800 number - emergency message

Any additional information shall be approved by DMAHS prior to
use on the ED card.

B. For children and individuals eligible solely through the NJ
FamilyCare Program, the identification card must clearly
indicate "NJ FamilyCare"; for children and individuals who are
participating in NJ FamilyCare Plans C, D, and H the

Amended as of September 1, 2003 V -19

1. Identification and transition of chronically ill,
high risk and hospitalized enrollees, and enrollees
in their last four weeks of pregnancy.

2. Transfer of requested medical records.

5.10.2 DISENROLLMENT FROM THE CONTRACTOR'S PLAN AT THE ENROLLEE'S REQUEST

A. An individual enrolled in a contractor's plan may be subject
to the enrollment Lock-In period provided for in this Article,
The enrollment Lock-In provision does not apply to SSI and New
Jersey Care ABD individuals, clients of DDD or to individuals
eligible to participate through the Division of Youth and
Family Services.

1. An enrollee subject to the enrollment Lock-In period
may initiate disenrollment or transfer for any reason
during the first ninety (90) days after the latter of
the date the individual is enrolled or the date they
receive notice of enrollment with a new contractor
and at least every twelve (12) months thereafter
without cause. NJ FamilyCare Plans B, C, D, and H
enrollees will be subject to a twelve (12)-month
Lock-In period.

2. An enrollee subject to the Lock-In period may
initiate disenrollment for good cause at any time,

a. Good cause reasons for disenrollment or
transfer shall include, unless otherwise
defined by DMAHS:

i. Failure of the contractor to
provide services including physical
access to the enrollee in
accordance with the terms of this
contract;

Amended as of September 1,2003 V-24

through NJ FamilyCare Plans B, C, D (except for individuals
with a program status code of 380), and H do not have the
right to a Medicaid Fair Hearing.

B. Complaints. The contractor shall have procedures for
receiving, responding to, and documenting resolution of
enrollee complaints that are received orally and are of a less
serious or formal nature. Complaints that are resolved to the
enrollee's satisfaction within three (3) business days of
receipt do not require a formal written response or
notification, The contractor shall call back an enrollee
within twenty-four hours of the initial contact if the
contractor is unavailable for any reason or the matter cannot
be readily resolved during the initial contact. Any complaint
that is not resolved within three business days shall be
treated as a grievance/appeal, in accordance with requirements
defined in Article 5.15.3.

C. HBC Coordination. The contractor shall coordinate its efforts
with the health -benefits coordinator including referring the
enrollee to the HBC for assistance as needed in the management
of me complaint/grievance/appeal procedures.

D. DMAHS Intervention, DMAHS shall have the right to intercede on
an enrollee's behalf at any time during the contractor's
complaint/grievance/appeal process whenever there is an
indication from the enrollee, or, where applicable, authorized
person, or the HBC that a serious quality of care issue is not
being addressed timely or appropriately. Additionally, the
enrollee may be accompanied by a representative of the
enrollee's choice to any proceedings and grievances/appeals.

E. Legal Rights, Nothing in this Article shall be construed as
removing any legal rights of enrollees under State or federal
law, including the right to file judicial actions to enforce
rights,

5.15.2 NOTIFICATION TO ENROLLEES OF GRIEVANCE/APPEAL PROCEDURE

A. The contractor shall provide all enrollees or, where
applicable, an authorized person, upon enrollment in the
contractor's plan, and annually thereafter, pursuant to this
contract, with a concise statement of the contractor's
grievance/appeal procedure and the enrollees rights to a
hearing by the Independent Utilization Review Organization
(IURO) per NJAC 8:38-8.7 as well as their right to pursue the
Medicaid Fair Hearing process described in N.J.A.C. 10:49-10.1
et seq. The information shall be provided through an annual
mailing, a member handbook, or any other method approved by
DMAHS. The contractor shall prepare the information orally and
in writing in English, Spanish, and other bilingual
translations and a format accessible to the visually impaired,
such as Braille, large print, or audio tapes.

B. Written information to enrollees regarding the
grievance/appeal process shall include at a minimum:

Amended as of September 1, 2003 V - 36

B. Response time. The contractor shall respond to after hours
telephone calls regarding medical care within the following
timeframes: fifteen (15) minutes for crisis situations;
forty-five (45) minutes for non-emergent, symptomatic issues;
same day for non-symptomatic concerns.

C. At no time shall providers wait more than five (5) minutes on
hold.

6.5 PROVIDER GRIEVANCES/APPEALS

A. Payment Disputes. The contractor shall establish and utilize a
procedure to resolve billing, payment, and other
administrative disputes between health care providers and the
contractor for any reason including, but not limited to: lost
or incomplete claim forms or electronic submissions; requests
for additional explanation as to services or treatment
rendered by a health care provider; inappropriate or
unapproved referrals initiated by the providers; or any other
reason for billing disputes. The procedure shall include an
appeal process and require direct communication between the
provider and the contractor and shall not require any action
by the enrollee.

B. Complaints, Grievances/Appeals. The contractor shall establish
and maintain provider complaint, grievance/appeal procedures
for any provider who is not satisfied with the contractor's
policies and procedures, or with a decision made by the
contractor, or disagrees with the contractor as to whether a
service, supply, or procedure is a covered benefit, is
medically necessary, or is performed in the appropriate
setting. The contractor procedure shall satisfy the following
minimum standards:

1. The contractor shall have in place an informal
complaint process which network providers can use to
make verbal complaints, to ask questions, and get
problems resolved without going through the formal,
written grievance/appeal process.

2. The contractor shall have in place a formal
grievance/appeal process which network providers and
non-participating providers can use to complain in
writing. The contractor shall issue a written
response to a grievance within 30 days. With respect
to appeals, the contractor shall also issue a written
response within 30 days.

3. Such procedures shall not be applicable to any
disputes that may arise between the contractor and
any provider regarding the terms, conditions, or
termination or any other matter arising under
contract between the provider and contractor.

Amended as of September 1,2003 VI-4

8.5.4 SUPPLEMENTAL PAYMENT PER PREGNANCY OUTCOME

Because costs for pregnancy outcomes were not included in the
capitation rates, the contractor shall be paid supplemental payments
for pregnancy outcomes for all eligibility categories.

Payment for pregnancy outcome shall be a single, predetermined lump sum
payment. This amount shall supplement the existing capitation rate
paid. The Department will make a supplemental payment to contractors
following pregnancy outcome. For purposes of this Article, pregnancy
outcome shall mean each live birth, still birth or miscarriage
occurring at the thirteenth (13th) or greater week of gestation. This
supplemental payment shall reimburse the contractor for its inpatient
hospital, antepartum, and postpartum costs incurred in connection with
delivery. Costs for care of the baby for the first 60 days after the
birth plus through the end of the month in which the 60th day falls are
Included (See Section 8.5.3). Regional payment shall be made by the
State to the contractor based on submission of appropriate encounter
data as specified by DMAHS,

8.5.5 PAYMENT FOR CERTAIN BLOOD CLOTTING FACTORS

The contractor shall be paid separately for factor VIII and DC blood
clotting factors. Payment will be made by DMAHS to the contractor based
on: 1) submission of appropriate encounter data; and 2) notification
from the contractor to DMAHS within 12 months of the date of service of
identification of individuals with factor VIII or IX hemophilia.
Payment for these products will be the lesser of: 1) Average Wholesale
Price (AW?) minus 12.5% and 2) rates paid by the contractor.

8.5.6 PAYMENT FOR HIV/AIDS DRUGS

The contractor shall be paid separately for protease inhibitors and
other anti-retroviral agents (First Data Bank Specific Therapeutic
Class Codes W5C, W5B, W5I, W5J, W5K, W5L, W5M, W5N) for all eligibility
groups, Payment for protease inhibitors shall be made by DMAHS to the
contractor based on: 1) submission of appropriate encounter data; and
2) notification from the contractor to DMAHS within 12 months of the
date of service of identification of individuals with HIV/AIDS. Payment
for these products will be the lesser of: 1) Average Wholesale Price
(AWP) minus 12.5% and 2) rates paid by the contractor.

Individuals eligible through NJ FamilyCare with a program status code
of 380 and all children groups shall receive protease inhibitors and
other anti-retroviral agents under the contractor's plan. All other
individuals eligible through NJ FamilyCare with program status codes of
497-498, 300-301, 700-701, and 763 shall receive protease inhibitors
and other anti-retrovirals (First Data Bank Specific Therapeutic Class
Codes W5C, X0X, X00, X0X, X0X, X0X, X0X and W5N) through Medicaid fee
for service and/or the AIDS Drug Distribution Program (ADDP).

8.5.7 EPSDT INCENTIVE PAYMENT

Amended as of September 1, 2003 VIII-8

- Compilation of case scores for each beneficiary for whom
requisite data are available and establishment of criteria to
assign case scores to those without claims and eligibility
data.

- Based on the monthly enrollment, calculation of an average
case mix for each participating contractor. This average case
mix is normalized and used in conjunction with the base
capitation rate to determine the actual reimbursement to the
contractor for the risk-adjusted population, contemporaneous
with the monthly remittance.

8.7 THIRD PARTY LIABILITY

A. General. The contractor, and by extension its providers and
subcontractors, hereby agree to:

1. Utilize, WITHIN SIXTY (60) DAYS OF LEARNING OF SUCH
SOURCES, FOR CLAIMS COST AVOIDANCE PURPOSES other
AVAILABLE public or private sources of payment for
services rendered to enrollees in the contractor's
plan. "Third party", for the purposes of this
Article, shall mean any person or entity who is or
may be liable to pay for the care and services
rendered to a Medicaid beneficiary (See N.J.S.A,
30;4D-3m). Examples of a third party include a
beneficiary's health insurer, casualty insurer, a
managed care organization, Medicare, or an employer
administered ERISA plan. Federal and State law
requires that Medicaid payments be last dollar
coverage and should be utilized only after all other
sources of third party liability (TPL) are exhausted,
subject to the exceptions in Section F below.

2. REPORT SUCH INFORMATION TO THE STATE BY NO LATER THAN
THE FIFTEENTH (15th) DAY AFTER THE CLOSE OF THE MONTH
DURING WHICH THE CONTRACTOR LEARNS OF SUCH
INFORMATION USING THE TPL-1 FORM (FOUND IN THE
APPENDIX, SECTION A.8.1) BARD COPY OR DISKETTE USING
STANDARD SOFTWARE (I.E. MICROSOFT EXCEL OR ACCESS) OR
A DELIMITED TEXT FILE.

B. Third Party Coverage Unknown. If coverage through health or
casualty insurance is not known or is unavailable at the time
the claim is filed, then the claim must be paid BY THE
CONTRACTOR and postpayment recovery WILL be initiated by the
State.

C. Capitation Rates. The State WILL NOT TAKE into account
historical and/or anticipated cost avoidance and recovery due
to the existence of liable third parties in setting capitation
rates. ADDITIONALLY, these factors do not include any
reductions due to tort recoveries, or to recoveries made by
the State from the estates of deceased Medicaid beneficiaries.
State ALL WILL TPL RECOVERIES, AND RETAIN ALL MONIES DERIVED
THEREFROM FOR CLAIMS NOT COST-AVOIDED BY THE CONTRACTOR.

Amended as of September 1, 2003 VIII-10

D. Categories. Third party resources are categorized as 1) health
insurance, 2) casualty insurance, 3) legal causes of action
for damages, and 4) estate recoveries.

1. Health Insurance. The STATE shall pursue and collect
payments from health insurers when health insurance
coverage is available. "Health insurance" shall
include, but not be limited to, coverage by any
health care insurer, HMO, Medicare, or an
employer-administered ERISA plan. Funds so collected
shall be retained SOLELY by the THE CONTRACTOR SHALL
COOPERATE WITH THE STATE IN ALL COLLECTION EFFORTS,
AND SHALL ALSO DIRECT ITS PROVIDERS AND
SUBCONTRACTORS TO DO SO. STATE COLLECTIONS RESULTING
FROM SUCH RECOVERY ACTIONS WILL BE RETAINED BY THE
STATE.

a. THE CONTRACTOR SHALL SUBMIT, ON A ONE-TIME
BASIS, AN ELECTRONIC FILE OF ALL PAID,
PENDED, AND DENIED CLAIMS FOR THE PREVIOUS
TWO (2) YEARS, INCLUDING THOSE OF ITS
SUBCONTRACTORS TO THE STATE, OR ITS
DESIGNEE, BY NO LATER THAN THE THIRTIETH
(30TH) DAY AFTER THE EFFECTIVE DATE OF THIS
AMENDMENT THEREAFTER, THE CONTRACTOR SHALL
SUBMIT, AN ELECTRONIC FILE OF ALL PAID,
PENDED, AND DENIED CLAIMS FOR THE MONTH,
INCLUDING THOSE OF ITS SUBCONTRACTORS, TO
TBE I STATE, OR ITS DESIGNEE, BY NO LATER
THAN THE FIFTEENTH (15TH) DAY AFTER THE
CLOSE OF THE MOUTH DURING WHICH TBE
CONTRACTOR PAYS, PENDS, OR DENIES THE
CLAIMS. IF THE CONTRACTOR FAILS TO PROVIDE
THE DATA, THE CONTRACTOR SHALL PAY AN
ASSESSMENT EQUAL TO ONE HUNDRED PERCENT
(100%) OF THE COST OF THE SERVICES PROVIDED
FOR WHICH COST AVOIDANCE COULD HAVE BEEN
EFFECTED.

2. Casualty Insurance. The STATE shall pursue and
collect payment from casualty insurance available to
the enrollee. "Casualty insurance" shall include,
but not be limited to, no fault auto insurance
benefits, worker's compensation benefits, and medical
payments coverage through a homeowner's insurance
policy. Funds so collected shall be retained SOLELY
by the STATE. THE CONTRACTOR SHALL COOPERATE WITH

Amended as of September 1, 2003 VIII-11

THE STATE IN ALL COLLECTION EFFORTS, AND SHALL ALSO
DIRECT ITS PROVIDERS AND SUBCONTRACTORS TO DO SO.
STATE COLLECTIONS RESULTING FROM SUCH RECOVERY ACTION
WILL BE RETAINED BY THE STATE.

a. THE CONTRACTOR SHALL SUBMIT, ON A ONE-TIME
BASIS, AN ELECTRONIC FILE OF ALL PAID,
PENDED, AND DENIED CLAIMS FOR THE PREVIOUS
TWO (2) YEARS, INCLUDING THOSE OF ITS
SUBCONTRACTORS TO THE STATE, OR ITS
DESIGNEE, BY NO LATER THAN THE THIRTIETH
(30TH) DAY AFTER THE EFFECTIVE DATE OF THIS
AMENDMENT THEREAFTER, THE CONTRACTOR SHALL
SUBMIT, AN ELECTRONIC FILE OF ALL PAID,
PENDED, AND DENIED CLAIMS FOR THE MONTH,
INCLUDING THOSE OF ITS SUBCONTRACTORS, TO
THE STATE, OR ITS DESIGNEE, BY NO LATER THAN
THE FIFTEENTH (15TH) DAY AFTER THE CLOSE OF
THE MONTH DURING WHICH THE CONTRACTOR PAYS,
PENDS, OR DENIES THE CLAIMS. IF THE
CONTRACTOR FAILS TO PROVIDE THE DATA, THE
CONTRACTOR SHALL PAY AN ASSESSMENT EQUAL TO
ONE HUNDRED PERCENT (100%) OF THE COST OF
THE SERVICES PROVIDED FOR WHICH COST
AVOIDANCE COULD HAVE BEEN EFFECTED.

3. Legal Causes of Action for Damages. The State shall
have the sole and exclusive right to pursue and
collect payments made by the contractor when a legal
cause of action for damages is instituted on behalf
of a Medicaid enrollee against a third party or When
the State receives notice that legal counsel has been
retained by or on behalf of any enrollee. The
contractor shall cooperate with the State in all
collection efforts, and shall also direct.its
providers to do so, State collections identified as
contract or related resulting from such legal actions
will be retained by the State.

4. Estate Recoveries. The State shall have the sole and
exclusive right to pursue and recover correctly paid
benefits from the estate of a deceased Medicaid
enrollee in accordance with federal and State law.
Such recoveries will be retained by the State.

E. Cost Avoidance.

1. When the contractor is aware of health or casualty
insurance coverage prior to paying for a health care
service, it shall avoid payment by rejecting a
provider's claim and directing that the claim be
submitted first to the appropriate third party, or by
directing its SUBCONTRACTOR to withhold payments to a
PROVIDER FOR THE SAME PURPOSE,

Amended as of September 1, 2003 VIII-12

2. If insurance coverage -is not available, or if one of
the exceptions to the cost avoidance rule discussed
below applies, then payment must be made and a claim
made against the third party, if it is determined
that the third party is or may be liable.

3. IF THE CONTRACTOR FAILS TO COST AVOID CLAIMS SUBJECT
TO TPL ACCORDING TO THE PROVISIONS OF 8,7-E & 8.7.F
AND TIME FRAMES IN 8.7.A OR FAILS TO NOTIFY THE STATE
OF TPL WITHIN THE TIME FRAMES STATED IN 8.7.A AND THE
STATE MUST RECOVER-THE COST OF THE CLAIM THROUGH ITS
TPL AGENT, THE STATE SHALL LEVY THE AMOUNT OF THE
COLLECTION FEE ASSESSED BY THE AGENT FOR SUCH
RECOVERY, IN ADDITION TO THE COST OF THE CLAIM AS
DESCRIBED IN 8.7.D.

F. Exceptions to the Cost Avoidance Rule.

1. In the following situations, the contractor must
first pay its providers and then coordinate with the
liable third party, unless prior approval to take
other action is obtained from the State,

a. The coverage is derived from a parent whose
obligation to pay support is being enforced
by the Department of Human Services.

b. The claim is for prenatal care for a
pregnant woman or for preventive pediatric
services (including EPSDT services) that are
covered by the Medicaid program.

c. The claim is for labor, delivery, and
post-partum care and does not involve
hospital costs associated with the inpatient
hospital stay.

d. The claim is for a child who is in a DYFS
supported out of home placement.

e. The claim involves coverage or services
mentioned in 1.a, 1 .b, 1.c, or x.x, above
in combination with another service.

Amended as of September 1, 0000 XXXX-00

X. Sharing of TPL Information by the State.

1. By the fifteenth (15th) day AFTER THE CLOSE OF THE
month DURING WHICH THE STATE LEARNS OF SUCH
INFORMATION, the State may provide the contractor
with a list of all known health insurance coverage
information for the purpose of updating the
contractor's files. THIS INFORMATION WILL BE IN THE
FORMAT OF THE STATE'S TPL RESOURCE FILE.

2. Additionally, BY THE FIFTEENTH (15TH) DAY ALTER THE
CLOSE OF THE CALENDAR QUARTER the State may provide a
COPY OF THE STATE'S health insurer file to the
contractor that will contain all of the health
insurers that the State has on file AS OF THE CLOSE
OF THE PREVIOUS CALENDAR QUARTER AND related
information that is needed in order to file TPL
claims.

H. Sharing of TPL Information by the Contractor.

1. The contractor shall notify the State BY THE
FIFTEENTH (15TH) DAY AFTER THE CLOSE OF THE MONTH
DURING WHICH THE CONTRACTOR learns that an enrollee
has health insurance coverage not reflected in the
State's health insurance coverage file, or casualty
insurance coverage, or of any change in an enrollee's
health insurance coverage USING THE FORMAT OF THE
TPL-1 FORM, HARD COPY OR DISKETTE. (See Section A.8.1
of the Appendices.) The contractor shall impose a,
corresponding requirement upon its SUBCONTRACTORS AND
servicing providers to notify it of any newly
discovered coverage, or of any changes in an
enrollee's health insurance coverage.

2. When the contractor becomes aware that an enrollee
has retained counsel, who either may institute or has
instituted a legal cause of action for damages
against a third party, the contractor shall notify
the State in writing, including the enrollee's name
and Medicaid identification number, date of
accident/incident, nature of injury, name and address
of enrollee's legal representative, copies of
pleadings, and any other documents related to the
action in the contractor's possession or control.

Amended as of September 1, 2003 VIII-14

G. Payments to Providers. Payments shall not be made on behalf of
an enrollee to providers of health care services other than
the contractor for the benefits covered in Article Four and
rendered during the term of this contract.

H. Time Period for Capitation Payment per Enrollee. The monthly
capitation payment per enrollee. is due to the contractor from
the effective date of an enrollee's enrollment until the
effective date of termination of enrollment or termination of
this contract, whichever occurs first.

I. Payment If Enrollment Begins after First Day of Month. When
DMAHS' capitation payment obligation is computed, if an
enrollee's coverage begins after the first day of a month,
DMAHS will pay the contractor a fractional capitation payment
that is proportionate to the part of the month during which
the contractor provides coverage. Payments are calculated and
made to the last day of a - calendar month except as noted in
this Article.

K. Hospitalizations. For any eligible person who applies for
participation in the contractor's plan, but who is
hospitalized prior to the time coverage under the plan becomes
effective, such coverage shall not commence until the date
after such person is discharged from the hospital and DMAHS
shall be liable for payment for the hospitalization, including
any charges for readmission within forty-eight (48) hours of
discharge for the same diagnosis. If an enrollee's
disenrollment or termination becomes effective during a
hospitalization, the contractor shall be liable for
hospitalization until the date such person is discharged from
the hospital, including any charges for readmission within
forty-eight (48) hours of discharge for the same diagnosis,
The contractor must notify DMAHS of these occurrences to
facilitate payment to appropriate providers.

L. Continuation of Benefits. The contractor shall continue
benefits for all enrollees for the duration of the contract
period for which capitation payments have been made, including
enrollees in an inpatient facility until discharge, The
contractor shall notify DMAHS of these occurrences.

M. DRUG CARVE-OUT REPORT THE DMAHS WILL PROVIDE THE CONTRACTOR
WITH A MONTHLY ELECTRONIC FILE OF PAID DRUG CLAIMS DATA FOR
NON-DUALLY ELIGIBLE, ABD ENROLLEES.

8.9 CONTRACTOR ADVANCED PAYMENTS AND PIPS TO PROVIDERS

Amended as of September 1, 0000 XXXX-00

XXXXX XX XXX XXXXXX
DEPARTMENT OF HUMAN SERVICES
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

TORT - ACCIDENT REFERRAL FORM
PLEASE USE OTHER SIDE IF NECESSARY

HMO_______________________ HMO#_______________________ PHONE____________________

PART A: IDENTIFICATION

CLIENT'S NAME_______________________________ HSP#___________________________

SOCIAL SECURITY #___________________________________________________________

DATE OF ACCIDENT/INCIDENT __________________________________________________

NATURE OF INJURY __________________________________________________

TYPE OF ACCIDENT __________________________________________________
(auto - fall - med. malpractice, etc.)

ATTORNEY FOR CLIENT __________________________________________________
(NAME-ADDRESS-PHONE) __________________________________________________
__________________________________________________

Please attach: (1) Any copies of pleadings or any other documents in your
possession including subpoenas or request for medical information from an
attorney, insurance company or client; (2) HMO CLAIM/PAYMENT INFORMATION FROM
DATE OF ACCIDENT TO PRESENT.

PART B: SERVICES

DIAGNOSIS PROCEDURE
SERVICE PROVIDER CODE & CODE & PROVIDER HMO
DATE(S) NAME DESCRIP DESCRIP CHARGES PAYMENT
------- ---- ------- ------- ------- -------

_______________________________________
NAME OF PERSON COMPLETING FORM - DATE

A-93

STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES
DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

ESTATE REFERRAL FORM

HMO NOTIFICATION OF DECEASED MEMBERS AGE 55 AND OLDER QUARTER ENDING___________

HMO________________________________ HMO ID#_____________________________________

THIS WILL SERVE AS NOTIFICATION THAT THE FOLLOWING MEMBERS OF OUR HEALTH CARE
PLAN AGE 55 OR OLDER HAVE DIED.

MEMBER NAME DOB SS# DATE OF DEATH MEDICAID ID#

_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________
_______________ ____________ ___________ _______________ _______________

A-105

COST-SHARING REQUIREMENT FOR
NJ FAMILYCARE PLAN D AND PLAN H

COPAYMENTS FOR NJ FAMILYCARE - PLAN D AND PLAN H

Copayments will be required of parents/caretakers solely eligible through NJ
FamilyCare Plan D whose family income is between 151% and up to including 200%
of me federal poverty level., The same copayments will be required of children
solely eligible through NJ FamilyCare Plan D whose family income is between 201%
and up to and including 350% of the federal poverty level. Exception - Both
Eskimos and Native American Indians under the age of 19 are not required to pay
copayments.

The total family limit (regardless of family size) on all cost-sharing may not
exceed 5% of the annual family income.

Below is listed the, services requiring copayments and the amount of each
copayment.

SERVICE AMOUNT OF COPAYMENT
------- -------------------

1. Outpatient Hospital Clinic Visits, clinic $5 .copayment for each outpatient that is
visit including Diagnostic Testing not for preventive services

2. Hospital Outpatient Mental Health Visits $25 copayment for each visit

3. Outpatient Substance Abuse Services for $5 copayment for each visit
Detoxification

4. Hospital Outpatient Emergency Services $35 copayment; no copayment is required if the
Covered for Emergency Services only, member was referred to the Emergency Room by
including services provided in an his/her primary care provider for services
outpatient hospital department or an urgent that should have been rendered in the primary care
care facility. [Note: Triage and medical provider's office or if the member is admitted into
screenings must be covered in all the hospital, situations.]

5. Primary Care Provider Services provided $5 copayment for each visit (except for well-
during normal office hours child visits in accordance with the recommended
schedule of the American Academy of Pediatrics;
lead screening and treatment; age-appropriate
immunizations; prenatal care; or preventive
dental services). The $5 copayment shall only apply
to the first prenatal visit.

Amended as of July 1, 0000

XXXXX XX XXX XXXXXX

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.28 of the contract
between University Health Plans, Inc. and the State of New Jersey, Department of
Human Services, Division of Medical Assistance and Health Services (DMAHS),
effective date October 1, 2000, all parties agree that the contract shall be
amended, effective August 1,2003, as follows:

Dental/Chiropractic Extension - August 1, 2003

1. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES," Sections 4.1; 4.1.1(G)3;
4.1.2(A)14; 4.1.2(A)23; 4.1.4(B); 4.1.9(S); 4.1.9(T); 4.2.1(B)3; 4.5.4(D);
4.6.2(P); 4.6.5(D); 4.8.8(I) and 4.8.8(M)2 shall be amended as reflected in
Article 4, Sections 4.1; 4.1,1(G)3; 4.1.2(A)14; 4.1.2(A)23; 4.1.4(B);
4.1.9(S); 4.1.9(T); 4.2,1(B)3; 4.5.4(D); 4.6.2(P); 4.6,5(D); 4.8.8(I) and
4.8.8(M)2 attached hereto and incorporated herein.

2. ARTICLE. 5, "ENROLLEE SERVICES," Sections 5.10.2(A)2(a)vi, vii (new);
5.15.2(B)6; 5.15.2(6)7 and 5.16.1(K) shall be amended as reflected in Article
5, Sections 5.10.2(A)2(a)vi, vii; 5.15.2(B)6; B.15.2(8)7 and 5.16.1(K)
attached hereto and incorporated herein.

3. ARTICLE 6, "PROVIDER INFORMATION," Section 6.5(B)1 shall be amended as
reflected in Article 6, Section 6.5(B)1 attached hereto and incorporated
herein.

4. ARTICLE 7, "TERMS AND CONDITIONS," Sections 7.16.8.1(E) and 7,38 shall be
amended as reflected in Article 7, Sections 7.18.8.1(E) and 7.38 attached
hereto and incorporated herein.

5. ARTICLE 8, "FINANCIAL PROVISIONS," Sections 8.5.1; 8.5.2.1; 8.5.2.2; 8.5.2.4;
8.5.2.6; 8.5.2.8; 8.5.2.9; 8.5.2.10(deleted); 6.5.4; 8.5.5 and 8.5.6 shall be
amended as reflected in Sections 8.5.1; 8.5.2.1; 8.5.2.2; 8.5.2.4; 8.5.2,6;
8,5.2.8; 8.5.2.9; 8.5.2.10; 8.5.4; 8.5.5 and 8,5.6 attached hereto and
incorporated herein.

6. APPENDIX, SECTION A, "REPORTS"

A.4.1 - Provider Network File Electronic Media Provider Files, Attachment A,
Attachment B and Attachment D, shall be amended as reflected in Appendix,
Section A, A.4.1, Attachments A, B and D attached hereto and incorporated
herein.

7. APPENDIX, SECTION C, "CAPITATION RATES," shall be revised as reflected in SFY
2004 Capitation Rates attached hereto and incorporated herein

Dental/Chiropractic Extension - August 1, 2003

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

By: Xxxxxxxxx XxXxxx BY: /s/ Xxxxx X. Xxxxx
-------------------------- -------------------------------
XXXXX X. XXXXX

TITLE: PRESIDENT & CEO TITLE: ACTING DIRECTOR, DMAHS

DATE: 7/18/03 DATE: 7/18/03

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: [ILLEGIBLE]
--------------------------

DEPUTY ATTORNEY GENERAL

DATE: 7/25/03

ARTICLE FOUR: PROVISION OF HEALTH CARE SERVICES

4.1 COVERED SERVICES

For enrollees who are eligible through Title V, Title XIX or the NJ
FamilyCare program the contractor shall provide or arrange to have
provided comprehensive, preventive, and diagnostic and therapeutic,
health care services to enrollees that include all services that
Medicaid/NJ FamilyCare beneficiaries are entitled to receive under
Medicaid/NJ FarnilyCare, subject to any limitations and/or excluded
services as specified in this Article. Provision of these services
shall be equal in amount, duration, and scope as established by the
Medicaid/NJ FamilyCare program, in accordance with medical necessity
and without any predetermined limits, unless specifically stated, and
as set forth in 42 C.F.R. Part 440; 42 C.F.R. Part 434; PART 438 the
Medicaid State Plan; the Medicaid Provider Manuals; The New Jersey
Administrative Code, Title 10, Department of Human Services Division of
Medical Assistance and Health Services; Medicaid/NJ FamilyCare Alerts;
Medicaid/NJ FamilyCare Newsletters; and all applicable federal and
State statutes, rules, and regulations.

4.1.1 GENERAL PROVISIONS AND CONTRACTOR RESPONSIBILITIES

B. The contractor and its providers shall furnish all covered
services required to maintain or improve health in a manner
that maximizes coordination and integration of services, and
in accordance with professionally recognized standards of
quality and shall ensure that the care is appropriately
documented to encompass all health care services for which
payment is made.

D. Out-of-Area Coverage. The contractor shall provide or arrange
for out-of-area coverage of contracted benefits in emergency
situations and non-emergency situations when travel back to
the service area is not possible, is impractical, or when
medically necessary services could only be provided elsewhere.
Except for full-time students, the contractor shall not be
responsible for out-of-state coverage for care if the enrollee
resides out-of-state for more than 30 days. In this instance,
the individual will be disenrolled. This does not apply to
situations when the

Amended as of August 1, 2003 IV-I

enrollee is out of State for care provided/authorized by the
contractor, for example, prolonged hospital care for
transplants. For full time students attending school and
residing out of the country, the contractor shall not be
responsible for health care benefits while the individual is
in school.

F. Routine Physicals. The contractor shall provide for routine
physical examinations required for employment, school, camp or
other entities/programs that require such examinations as a
condition of employment or participation.

G. Non-Participating Providers.

1. The contractor shall pay for services furnished by
non-participating providers to whom an enrollee was
referred, even if erroneously referred, by his/her
PCP or network specialist. Under no circumstances
shall the eurollee bear the cost of such services
when referral errors by the contractor or its
providers occur. It is the sole responsibility of the
contractor to provide regular updates on complete
network information to all its providers as well as
appropriate policies and procedures for provider
referrals.

2. The contractor may pay an out-of-network hospital
provider, located outside the State of New Jersey,
the New Jersey Medicaid fee-for-service rate for the
applicable services rendered.

3. Whenever the contractor authorizes services by
out-of-network providers, the contractor shall
require those out-of-network providers to coordinate
with the contractor with respect to payment Further,
the contractor shall ensure that the cost to the
enrollee is no greater than it would be if the
services were furnished within the network.

Amended as of August 1, 2003 IV-2

retrovirals, blood clotting factors VIII and IX, and
coverage of protease inhibitors and certain other
anti-retrovirals under NJ FamilyCare, see Article 8.

10. Family Planning Services and Supplies

11. Audiology

12. Inpatient Rehabilitation Services

13. Podiatrist Services

14. Chiropractor Services

15. Optometrist Services

16. Optical Appliances

17. Hearing Aid Services

19. Hospice Services--are covered in the community as
well as in institutional settings. Room and board
services are included only when services are
delivered in an institutional (non-private residence)
setting.

20. Durable Medical Equipment (DME)/Assistive Technology
Devices in accordance with existing Medicaid
regulations.

21. Medical Supplies

22. Prosthetics and Orthotics including certified shoe
provider.

23. Dental Services

24. Organ Transplants - includes donor and recipient
costs. Exception: The contractor will not be
responsible for transplant-related donor and
recipient inpatient hospital costs for an individual
placed on a transplant list while in the Medicaid FFS
program prior to enrollment into the contractor's
plan.

Amended as of August 1, 2003 IV-5`

05130
05130-22
05140
05140-22

3. Extraction Procedure Codes to be paid by Medicaid FFS
up to 120 days from last date of preliminary
extractions after first time New Jersey Care 2000+
enrollment in conjunction with the following codes
(05130, 05130-22,05140,05140-22):

07110
07130
07210

4.1.4 MEDICAID COVERED SERVICES NOT PROVIDED BY CONTRACTOR

A. Mental Health/Substance Abuse. The following mental
health/substance abuse services (except for the conditions
listed in 4.1.2.B) will be managed by the State or its agent
for non-DDD enrollees, including all NJ FamilyCare enrollees.
(The contractor will retain responsibility for furnishing
mental health/substance abuse services, excluding the cost of
the drugs listed below, to Medicaid enrollees who are clients
of the Division of Developmental Disabilities).

- Substance Abuse Services--diagnosis, treatment, and
detoxification

- Costs for Methadone and its administration

- Mental Health Services

B. Drugs. The following drugs will be paid fee-for-service by
the Medicaid program for all DMAHS enrollees:

- ATYPICAL ANTIPSYCHOTIC DRUGS WITHIN THE SPECIFIC
THERAPEUTIC DRUG CLASSES H7T AND H7X

- Methadone - cost and its administration. Except as
provided in Article 4.4, the contractor will remain
responsible for the medical care of enrollees
requiring substance abuse treatment

- Generically-equivalent drug products of the drugs
listed in this section.

C. Up to twelve (12) inpatient hospital days required for social
necessity in accordance with Medicaid regulations.

Amended as of August 1, 2003 IV-9

M. Services or items furnished for any condition or accidental
injury arising out of and in the course of employment for
which any benefits are available under the provisions of any
workers' compensation law, temporary disability benefits law,
occupational disease law, or similar legislation, whether or
not the Medicaid beneficiary claims or receives benefits
thereunder, and whether or not any recovery is obtained from a
third-party for resulting damages.

N. That part of any benefit which is covered or payable under any
health, accident, or other insurance policy (including any
benefits payable under the New Jersey no-fault automobile
insurance laws), any other private or governmental health
benefit system, or through any similar third-party liability,
which also includes the provision of the Unsatisfied Claim and
Judgment Fund.

O. Any services or items furnished for which the provider does
not normally charge.

P. Services furnished by an immediate relative or member of the
Medicaid beneficiary's household.

Q. Services billed for which the corresponding health care
records do not adequately and legibly reflect the requirements
of the procedure described or procedure code utilized by the
billing provider.

R. Services or items reimbursed based upon submission of a cost
study when there are no acceptable records or other evidence
to substantiate either the costs allegedly incurred or
beneficiary income available to offset those costs. In the
absence of financial records, a provider may substantiate
costs or available income by means of other evidence
acceptable to the Division.

4.2 SPECIAL PROGRAM REQUIREMENTS

4.2.1 EMERGENCY SERVICES

A. For purposes of this contract, "emergency" means an onset of a
medical or behavioral condition, the onset of which is sudden,
that manifests itself by symptoms of sufficient severity,
including severe pain, that a prudent layperson, who possesses
an average knowledge of medicine and health, could reasonably
expect the absence of immediate medical attention to result
in:

1. Placing the health of the person or others in
serious jeopardy;

2. Serious impairment to such person's bodily functions;

Amended as of August 1, 2003 IV-20

3. Serious dysfunction of any bodily organ or part of
such person; or

4. Serious disfigurement of such person.

With respect to a pregnant woman who is having contractions,
an emergency exists where there is inadequate time to effect a
safe transfer to another hospital before delivery or the
transfer may pose a threat to the health or safety of the
woman or the unborn child.

B. The contractor shall be responsible for emergency services,
both within and outside the contractor's enrollment area, as
required by an enrollee in the case of an emergency. Emergency
services shall also include:

1. Medical examination at an Emergency Room which is
required by N.J.A.C. 10:122D-2.5(b) when a xxxxxx
home placement of a child occurs after business
hours.

2. Examinations at an Emergency Room for suspected
physical/child abuse and/or neglect.

3. Post-Stabilization of Care. The contractor shall
comply with 42 C.F.R. Section 422.113(c). The
contractor must cover post-stabilization services
without requiring authorization and regardless of
whether the enrollee obtains the services within or
outside the contractor's network if:

a. The services were pre-approved by the
contractor or its providers; or

b. The services were not pre-approved by the
contractor because the contractor did not
respond to the provider of
post-stabilization care services, request
for pre-approval within one (1) hour after
being requested to approve such care; or

c. The contractor could not be contacted for
pre-approval.

C. Access Standards. The contractor shall ensure that all covered
services, that are required on an emergency basis are
available to all its enrollees, twenty-four (24) hours per
day, seven (7) days per week, either in the contractor's own
provider network or through arrangements approved by DMAHS.
The contractor shall maintain twenty-four (24) hours per day,
seven (7) days per week on-call telephone coverage, including
Telecommunication Device for the Deaf (TDD)/Tech Telephone
(TT) systems, to advise enrollees of procedures for emergency
and urgent care and explain procedures for obtaining non-
emergent/non-urgent care during regular business hours within
the enrollment area as well as outside the enrollment area.

D. Non-Participating Providers.

Amended as of August 1, 2003 IV-21

frequency of interaction with the enrollee and other members of the
treatment team will also be greater. The care manager shall contact
the enrollee bi-weekly or as needed.

1. At a minimum, the care manager for this level of care
management shall include, but is not limited to, individuals
who hold current RN licenses with at least three (3) years
experience serving enrollees with special needs or a graduate
degree in social work with at least two (2) years experience
serving enrollees with special needs.

2. The contractor shall ensure that the care manager's caseload
is adjusted, as needed, to accommodate the work and level of
effort needed to meet the needs of the entire case mix of
assigned enrollees including those. determined to be high
risk.

3. The contractor should include care managers with experience
working with pediatric as well as adult enrollees with special
needs.

D. IHCPs. The contractor through its care manager shall ensure that an
Individual Health Care Plan (IHCP) is developed and implemented as soon
as possible, according to the circumstances of the enrollee. The
contractor shall ensure the full participation and consent of the
enrollee or, where applicable, authorized person and participation of
the enrollee's PCP, CONSULTATION WITH ANY SPECIALISTS CARING FOR THE
ENROLLEE, and other case managers identified through the Complex Needs
Assessment (e.g. DDD case manager) in the development of the plan.

E. The contractor shall provide written notification to the enrollee, or
authorized person, of the name of the care manager as soon as the IHCP
is completed. The contractor shall have a mechanism to allow for
changing levels of care management as needs change.

F. Offering of Service. The contractor shall offer and document the
enrollee's response for this higher level care management to enrollees
(or, where applicable, authorized persons) who, upon completion of a
Complex Needs Assessment, are determined to have complex needs which
merit development of an IHCP and comprehensive service coordination by
a care manager. Enrollees shall have the right to decline coordination
of care services; however, such refusal does not preclude the
contractor from case managing the enrollee's care,

4.5.5 CHILDREN WITH SPECIAL HEALTH CARE NEEDS

A. The contractor shall provide services to children with special
health care needs, who may have or are suspected of having
serious or chronic physical, developmental, behavioral, or
emotional conditions (short-term, intermittent, persistent, or
terminal), who manifest some degree of delay or disability in
one or more of the following areas; communication, cognition,
mobility, self-direction,

Amended as of August 1, 2003 IV-55

L. Emergency Care. The contractor shall have methods to track
emergency care utilization and to take follow-up action,
including individual counseling, to improve appropriate use of
urgent and emergency care settings.

M. New Medical Technology. The contractor shall have policies and
procedures for criteria which are based on scientific
etvidence for the evaluation of the appropriate use of new
medical technologies or new applications of established
technologies including medical procedures, drugs, devices,
assistive technology devices, and DME.

N. Informed Consent. The contractor is required and shall require
all participating providers to comply with the informed
consent forms and procedures for hysterectomy and
sterilization as specified in 42 C.F.R. Part 441, Sub-part B,
and shall include the annual audit for such compliance in its
quality assurance reviews of participating providers. Copies
of the forms are included in Section B.4.15 of the Appendices.

O. Continuity of Care. The contractor's Quality Management Plan
shall include a continuity of care system including a
mechanism for tracking issues over time with an emphasis on
improving health outcomes, as well as preventive services and
maintenance of function for enrollees with special needs.

P. HEDIS. The contractor shall submit annually, on a date
specified by the State, HEDIS 3.0 data or more updated
version, aggregate population data as well as, if available,
the contractor's commercial and Medicare enrollment HEDIS data
for its aggregate, enrolled commercial and Medicare population
in the State or region (if these data are collected and
reported to DHSS, a copy of the report should be submitted
also to DMAHS) the following clinical indicator measures:

HEDIS Report Period
Reporting Set Measures by Contract Year
---------------------- ----------------

Childhood Immunization Status annually
Adolescent Immunization Status annually
Well-Child Visits in first 15 months of life annually
Well-Child Visits in the 3rd, 4th, 5th and 6th year of life annually
Adolescent Well-Care Visits annually
Prenatal and Postpartum Care annually
Frequency of Ongoing Prenatal Care annually
Breast Cancer Screening annually

CHILDHOOD & ADOLESCENT IMMUNIZATION HEDIS DATA FOR NJ
FAMILYCARE ENROLLEES UP TO THE AGE OF 19 YEARS MUST BE
REPORTED SEPARATELY.

Q. Quality Improvement Projects (QIPs). The contractor shall
participate in QIPs defined annually by the State with input
from the contractor. The State will, with

Amended as of August 1, 2003 IV-64

g. Determination of willingness and capacity of
family members or, where applicable,
authorized persons and others to provide
informal support

h. Condition and proximity to services of
current housing, and access to appropriate
transportation

i. Identification of current or potential long
term service needs

j. Need for medical supplies and DME

2. When any of the following conditions are met, the
contractor shall ensure that a Complex Needs
Assessment is conducted, or an existing assessment is
reviewed, within a time frame that meets the needs of
the enrollee but within no more than forty-five (45)
days:

a. Special needs are identified at the time of
enrollment or any time thereafter;

b. An enrollee or authorized person requests an
assessment;

c. The enrollee's PCP requests an assessment;

d. A State agency involved with an enrollee
requests an assessment; or

e. An enrollee's status otherwise indicates.

D. Plan of Care. The contractor, through its care manager, shall
ensure that a plan of care is developed and implementation has
begun within thirty (30) business days of the date of a needs
assessment, or sooner, according to the circumstances of the
enrollee. The contractor shall ensure the full participation
and consent of the enrollee or, where applicable, authorized
person and participation of the enrollee's PCP, CONSULTATION
WITH ANY SPECIALISTS CARING FOR THE ENROLLEE, and other case
managers identified through the Complex Needs Assessment
(e.g., DDD case manager) in the development of the plan. The
plan shall specify treatment goals, identify medical service
needs, relevant social and support services, appropriate
linkages and timeframe as well as provide an ongoing accurate
record of the individual's clinical history. The care manager
shall be responsible for implementing the linkages identified
in the plan and monitoring the provision of services
identified in the plan. This includes making referrals,
coordinating care, promoting communication, ensuring
continuity of care, and conducting follow-up. The care manager
shall also be responsible for ensuring that the plan is
updated as needed, but at least annually. This includes early
identification of changes in the enrollee's needs.

E. Referrals. The contractor shall have policies and procedures
to process and respond within ten (10) business days to care
management referrals from network providers, state agencies,
private agencies under contract with DDD, self-referrals, or,
where applicable, referrals from an authorized person.

F. Continuity of Care

Amended as of August 1, 2003 IV-85

I. Provider Network Access Standards and Ratios

A -Miles per 2 B- Miles per 1 Min. No Per County Capacity Limit
Specialty Urban Non-Urban Urban Non-urban Except Where Noted Per Provider
------------------------------------------------------------------------------------------------------------

PCP Children GP 6 15 2 10 2 1: 1,500
------------------------------------------------------------------------------------------------------------
FP 6 I5 2 10 2 1: 1500
------------------------------------------------------------------------------------------------------------
Peds 6 15 2 10 2 1: 1,500
------------------------------------------------------------------------------------------------------------
Adults GP 6 15 2 10 2 1: 1,500
------------------------------------------------------------------------------------------------------------
FP 6 15 2 10 2 1: 1.500
------------------------------------------------------------------------------------------------------------
IM 6 15 2 10 2 1: 1.500
------------------------------------------------------------------------------------------------------------
CNP/CNS 6 15 2 10 2 1: 1.000
------------------------------------------------------------------------------------------------------------
CNM 12 25 6 15 2 1: 1,500
------------------------------------------------------------------------------------------------------------
Dentist, Pruniry Care 6 15 2 10 2 1: 1.500
------------------------------------------------------------------------------------------------------------
Allergy 15 25 10 15 2 1: 75,000
------------------------------------------------------------------------------------------------------------
Anesthesiology 15 25 10 15 2 1: 17,250
------------------------------------------------------------------------------------------------------------
Cardiology 15 25 10 15 2 1: 100,000
------------------------------------------------------------------------------------------------------------
Cardiovascular surgery 15 25 10 IS 2 1: 166,000
------------------------------------------------------------------------------------------------------------
Chiropractor 15 25 10 15 1 1: 20,000
------------------------------------------------------------------------------------------------------------
Colorectal surgery 15 25 10 15 2 1: 30,000
------------------------------------------------------------------------------------------------------------
Dermatology 15 25 10 15 2 1: 75,000
------------------------------------------------------------------------------------------------------------
Emergency Medicine 15 25 10 15 2 1: 19,000
------------------------------------------------------------------------------------------------------------
Endocrinology 15 25 10 15 2 1: 143.000
------------------------------------------------------------------------------------------------------------
Endodonria 15 25 10 15 1 (where available) 1: 30,000
------------------------------------------------------------------------------------------------------------
Gastroenterology 15 25 10 15 2 1: 100,000
------------------------------------------------------------------------------------------------------------
General Surgery 15 25 10 15 2 1: 30,000
------------------------------------------------------------------------------------------------------------
Genatric Medicine 15 25 10 15 1 1: 10,000
------------------------------------------------------------------------------------------------------------
Hermatology 15 25 10 15 2 1: 100,000
------------------------------------------------------------------------------------------------------------
Infections Disease 15 25 10 15 2 1: 125,000
------------------------------------------------------------------------------------------------------------
Neonarology 15 25 10 15 2 1: 100,000
------------------------------------------------------------------------------------------------------------
Nephralogy 15 25 10 15 2 1: 125,000
------------------------------------------------------------------------------------------------------------
Neurology 15 25 10 15 2 1: 100,000
------------------------------------------------------------------------------------------------------------
Neurological Surgery 15 25 10 15 2 1: 166.000
------------------------------------------------------------------------------------------------------------
Obstetrics Gynecology 15 25 10 15 2 1: 7,100
------------------------------------------------------------------------------------------------------------
Oncology 15 25 10 15 2 1: 100.000
------------------------------------------------------------------------------------------------------------
Ophthalmology 15 25 10 15 2 1: 60,000
------------------------------------------------------------------------------------------------------------
ELIGIBLE 15 25 10 15 2 l: 8,000
------------------------------------------------------------------------------------------------------------
Oral Surgery I5 25 10 15 2 1: 20,000
------------------------------------------------------------------------------------------------------------
Orthodontia 15 25 10 15 1 1: 20,000
------------------------------------------------------------------------------------------------------------
Orthopedic Surgery 15 25 10 15 2 1: 28.000
------------------------------------------------------------------------------------------------------------
OTOLARYNGOLOGY (ENT) 15 25 10 15 2 1: 53,000
------------------------------------------------------------------------------------------------------------
Periodontia 15 25 10 15 1 (where available) 1: 30,000
------------------------------------------------------------------------------------------------------------
Physical Medicine 15 25 10 15 3 (where applicable) 1: 75,000
------------------------------------------------------------------------------------------------------------
Plastic Surgery 15 25 10 15 2 1: 2,50,000
------------------------------------------------------------------------------------------------------------
Podiatrist 15 25 10 15 2 1: 20,000
------------------------------------------------------------------------------------------------------------
Prosthodontia 15 25 10 15 1 (where available) 1: 30,000
------------------------------------------------------------------------------------------------------------
Psychiatrist 15 25 10 15 2 1: 30,000
------------------------------------------------------------------------------------------------------------
Psychologist 15 25 10 15 1: 30.000
------------------------------------------------------------------------------------------------------------
Pulmonary Disease 15 25 10 15 2 1: 100,000
------------------------------------------------------------------------------------------------------------
Radiation Oncology 15 25 10 15 2 1: 100,000
------------------------------------------------------------------------------------------------------------
Radiology 15 25 10 15 2 1: 25,000
------------------------------------------------------------------------------------------------------------
Rheumatology 15 25 10 15 1 1: 150,000
------------------------------------------------------------------------------------------------------------
Audiology 12 25 6 15 2 1: 100,000
------------------------------------------------------------------------------------------------------------
Thoracic Surgery 15 25 10 15 2 1: 150,000
------------------------------------------------------------------------------------------------------------
Urology 15 25 10 15 2 1: 60,000
------------------------------------------------------------------------------------------------------------
Fed Qual Health Cn 1 I/country
available
------------------------------------------------------------------------------------------------------------
Hospital 20 35 10 15 2 2 per county
(where applicable)
------------------------------------------------------------------------------------------------------------
Pharmacies 10 15 5 12 1: 1,000
------------------------------------------------------------------------------------------------------------
Laboratory N/A N/A 7 12
------------------------------------------------------------------------------------------------------------
DME/Med Supplies 12 25 6 15 1 1: 50,000
------------------------------------------------------------------------------------------------------------
Hewing Aid 12 25 6 15 1 1: 50,000
------------------------------------------------------------------------------------------------------------
Optical Appliance 12 25 6 15 2 1: 50,000
------------------------------------------------------------------------------------------------------------

Amended as of August 1, 2003 IV-107

12. The Department will make the final decision on the
appropriateness of increasing the ratio limits and what the
limit will be.

M. Regional/Statewide Networks

1. The contractor shall pay for organ transplants in accordance
with Article 4.1.2 and shall contract with or refer to organ
transplant providers/centers. The contractor shall provide the
name and address of a transplant center for each type of organ
transplant required under this contract.

2. The providers/specialists listed below may be included in the
contractor's provider network on a regional or statewide
basis. The contractor shall indicate for each group whether
the services by each provider are provided statewide or by
region, specifying the counties in the region. The contractor
shall provide documentation (license/certification) and
certify that the providresers are willing, capable, and
authorized (through licensure or certification) to serve
multiple counties or statewide.

a. Medical Toxicology

b. Developmental & Behavioral Pediatrics

c. Medical Genetics

d. Specialty Centers (Centers of Excellence)

e. Other Specialty Centers/Providers

f. DME providers

g. Medical suppliers

h. Prosthetists, orthotists, pedorthists

i. Hearing aid suppliers

j. Transportation providers

3. Specialists. The contractor shall submit specific provider
information with the i monthly network file with a
certification of the unavailability of the American Board of
Medical Specialists (ABMS) diplomates in the county, the
provider who shall provide the service and documentation that
the provider is able, willing, and authorized to provide the
service. The contractor shall notify the DMAHS if the
alternate provider terminates, The contractor shall assure
that the specialist or alternate provider has privileges in a
network hospital or shall authorize and pay for services
provided by the specialist or alternate provider at an out of
network hospital provider, Where there is neither a certified
specialist or acceptable alternative provider for a particular
specialty service, the contractor may refer an enrollee out of
county. For the physician specialist types listed below, where
there is documentation of limited access or unavailability in
a county of a specific type of specialist, the contractor may
indicate the name of a contracted provides as an alternative
for the following:

a) Colon & Rectal surgeon - A general surgeon with
privileges to perform this surgery may be substituted
for a certified subspecialist in this field

Amended as of August 1, 2003 IV-112

ii. Enrollee has filed a
grievance/appeal with the
contractor pursuant to the
applicable grievance/appeal
procedure and has not received a
response within the specified time
period stated therein, or in a
shorter time period required by
federal law;

iii. Documented grievance/appeal, by the
enrollee against the contractor's
plan without satisfaction.

iv. Enrollee is subject to enrollment
exemption as set forth in Article
5.3.2. If an exemption situation
exists within the contractor's plan
but another contractor can
accommodate the individual's needs,
a transfer may be granted,

v. Enrollee has substantially more
convenient access to a primary care
physician who participates in
another MCE in the same enrollment
area,

VI. POOR QUALITY OF CARE.

VII. OTHER FOR CAUSE REASONS PURSUANT TO
42 CFR 438.56

B. Voluntary Disenrolhnsnt. The contractor shall assure that enrollees who
disenroll voluntarily are provided with an opportunity to identify, in
writing, their reasons for disenrolhnent. The contractor shall further:

1. Require the return, or invalidate the use of the contractor's
identification card; and

2. Forward a copy of the disenrollment request or refer the
beneficiary to DMAHS/HBC by the eighth (8th) day of the month
prior to the month in which disenrollrnent is to become
effective.

C. HBC Role. All enrollee requests to disenroll must be made through the
Health Benefits Coordinator, The contractor may not induce, discuss or
accept disenrollments. Any enrollee seeking to disenroll should be
directed to contact the HBC. This applies to both mandatory and
voluntary enrollees. Disenrollment shall be completed by the HBC at
facilities and in a manner so designated by DMAHS.

D. Effective Date. The effective date of disenrollment or transfer shall
be no later than the first day of the month immediately following the
full calendar month the disenrollment is initiated by DMAHS.
Notwithstanding anything herein to the contrary, the remittance tape,
along with any changes reflected in the weekly register or agreed upon
by DMAHS and the contractor in writing, shall serve as official notice
to the contractor of disenrollment of an enrollee.

Amended as of August 1, 2003 V - 25

1. Information to enrollees on how to file
complaints/grievances/appeals

2. Identification of who is responsible for processing
and reviewing grievances/appeals

3. Local or toll-free telephone number for filing of
complaints/grievances/appeals

4. Information on obtaining grievance/appeal forms and
copies of grievance/appeal procedures for each
primary medical/dental care site

5. Expected timefirames for acknowledgment of receipt of
grievances/appeals

6. Expected timeframes for disposition of
grievances/appeals in accordance with N.J.A.C. 8:38
et seq. and 42 CFR 438.408

7. Extensions of the grievance/appeal process if needed
and time frames in accordance with N.J.A.C. 8:38 et
seq. and 432 CFR.408

8. Fair hearing procedures including the Medicaid
enrollee's right to access the Medicaid Fair Hearing
process at any time to request resolution of a
grievance/appeal

9. DHSS process for use of Independent Utilization
Review Organization (IURO)

C. A description of the process under which an enrollee may file
an appeal shall include at a minimum:

1. Title of person responsible for processing appeal

2. Title of person(s) responsible for resolution of
appeal

3. Time deadlines for notifying enrollee of appeal
resolution

4. The right to request a Medicaid Fair Hearing/DHSS
IURO processes where applicable to specific enrollee
eligibility categories

5.15.3 GRIEVANCE/APPEAL PROCEDURES

A. Availability. The contractor's grievance/appeal procedure
shall be available to all enrollees or, where applicable, an
authorized person, or permit a provider acting on behalf of an
enrollee and with the enrollee's consent. The procedure shall
assure that grievances/appeals may be filed verbally directly
with the contractor.

Amended as of August 1, 2003 V - 37

of this contract, N.J.A.C. 11:17, 11:2-11, 11:4-17, 8:38-13.2,
N.J.S.A. 17:22 A-l, 26:2J-16, and the marketing standards
described in Article 5.16.

K. The contractor shall ensure that marketing representatives are
versed in and adhere to Medicaid policy regarding beneficiary
enrollment and disenrollment as stated in 42 C.F.R. Section
438.56. This policy includes, but is, not limited to,
requirements that enrollees do not experience unreasonable
barriers to disenroll, and that the contractor shall not act
to discriminate on the basis of adverse health status or
greater use need for health care services.

L. Door-to-door canvassing, telephone, telemarketing, or "cold
call" marketing of enrollment activities, by the contractor
itself or an agent or independent contractor thereof, shall
not be permitted. For NJ FamilyCare (Plans B, C, D),
telemarketing shall be permitted after review and prior
approval by DMAHS of the contractor's marketing plan, scripts
and methods to use this approach.

M. Contractor employees or agents shall not present themselves
unannounced at an enrollee's home for marketing or
"educational" purposes. This shall not limit such visits for
medical emergencies, urgent medical care, clinical outreach,
and health promotion for known enrollees.

N. Under no conditions shall a contractor use DMAHS'
client/enrollee data base or a provider's patient/customer
database to identify and market its plan to Medicaid or NJ
FamilyCare beneficiaries. No lists of Medicaid/NJ FamilyCare
beneficiary names, addresses, telephone numbers, or
Medicaid/NJ FamilyCare numbers of potential Medicaid/NJ
FamilyCare enrollees shall be obtained by a contractor under
any circumstances. Neither shall the contractor violate
confidentiality by sharing or selling enrollee lists or
enrollee/beneficiary data with other persons or organizations
for any purpose other than performance of the contractor's
obligations pursuant to this contract. For NJ FamilyCare and
ABD marketing only, general population lists such as census
tracts are permissible for marketing outreach after review and
prior approval by DMAHS.

O. The contractor shall allow unannounced, on-site monitoring by
DMAHS of its enrollment presentations to prospective
enrollees, as well as to attend scheduled, periodic meetings
between DMAHS and contractor marketing staff to review and
discuss presentation content, procedures, and technical
issues.

P. The contractor shall explain that all health care benefits as
specified in Article 4.1 must be obtained through a PCP.

Q. The contractor shall periodically review and assess the
knowledge and performance of its marketing representatives.

Amended as of August 1, 2003 V - 43

C. At no time shall providers wait more than five (5) minutes on
hold.

6.5 PROVIDER GRIEVANCES/APPEALS

1. The contractor shall have in place an informal
complaint process which network providers can use to
make verbal complaints, to ask questions, TO REQUEST
MEDICAL NECESSITY REVIEWS FOR ADMINISTRATIVE DENIALS,
and get problems resolved without going through the
formal, written grievance/appeal process.

2. The contractor shall have in place a formal
grievance/appeal process which network providers and
non-participating providers can use to complain in
writing, The contractor shall issue a written
response to a grievance within 30 days, With respect
to appeals, the contractor shall also issue a written
response within 30 days.

Amended as of July 1, 2003 VI - 4

7.16.8.1 FEDERAL STATUTES

Pursuant to 42 U.S.C. Section 1396b(m)(5)(A), the Secretary of the
Department 'of Health and Human Services may impose substantial
monetary and/or criminal penalties on the contractor when the
contractor;

A. Fails to substantially provide an enrollee with required
medically necessary items and services, required under law or
under contract to be provided to an enrolled beneficiary, and
the failure has adversely affected the enrollee or has
substantial likelihood of adversely affecting the enrollees.

B. Imposes premiums or charges on enrollees in violation of this
contract, which provides that no premiums, deductibles,
co-payments or fees of any kind may be charged to Medicaid
enrollees.

C. Engages in any practice that discriminates among enrollees on
the basis of their health status or requirements for health
care services by expulsion or refusal to re- enroll an
individual or engaging in any practice that would reasonably
be expected to have the effect of denying or discouraging
enrollment by eligible persons whose medical condition or
history indicates a need for substantial future medical
services.

D. Misrepresents or falsifies information that is furnished to 1)
the Secretary, 2) the State, or 3) to any person or entity.

E. Fails to comply with the requirements for physician incentive
plans found in 42 U.S.C. Section 1876(i)(8), Section B.7.1 of
the Appendices, and at 42 C.F.R. Section 417,479, or fails to
submit to the Division its physician incentive plans as
required or requested in 42 C.F.R. Section 38.6(h), 422.208,
and 422.210.

F. Violates the prohibition of restricting provider-enrollee
communications.

G. Distributes directly or indirectly through any agent or
independent contracted entity, marketing materials that have
not been approved by DHS or that contain false or materially
misleading information.

H. Violates any of the requirements of sections 1903(m) or 1932
of the Social Security Act, and any implementing regulations,

7.16.8.2 FEDERAL PENALTIES

A. The Secretary may provide, in addition to any other remedies
available under the law, for any of the following remedies;

1. Civil money penalties of not more than 325,000 for
each determination above; or,

Amended as of August 1. 2003 VII-31

7.38 FRAUD AND ABUSE

THE CONTRACTOR SHALL HAVE ARRANGEMENTS AND PROCEDURES THAT
COMPLY WITH ALL STATE AND FEDERAL STATUTES AND REGULATIONS,
INCLUDING 42 CFR 438,608, GOVERNING FRAUD AND ABUSE
REQUIREMENTS.

7.38.1 ENROLLEES

A. Policies and Procedures. The contractor shall establish
written policies and procedures for identifying potential
enrollee fraud and abuse. Proven cases are to be referred to
the Department for screening for advice and/or assistance on
follow-up actions to be taken. Referrals are to be accompanied
by all supporting case documentation.

B. Typical Cases. The most typical cases of fraud or abuse
include but are not limited to; the alteration of an
identification card for possible expansion of benefits; the
loaning of an identification card to others; use of forged or
altered prescriptions; and mis-utilization of services.

7.38.2 PROVIDERS

A. Policies and Procedures. The contractor shall establish
written policies and procedures for identifying,
investigating, and taking appropriate corrective action
against fraud and abuse (as defined in 42 C.F.R. Section
455,2) in the provision of health care services. The policies
and procedures will include, at a minimum:

1. Written notification to DMAHS within five (5)
business days of intent to conduct an investigation
or to recover funds, and approval from DMAHS prior to
conducting the investigation or attempting to recover
funds, Details of potential investigations shall be
provided to DMAHS and include the data elements in
Section A.7.2.B of the Appendices. Representatives of
the contractor may be required to present the case to
DMAHS. DMAHS, in consultation with the contractor,
will then determine the appropriate course of action
to be taken.

2. Incorporation of the use of claims and encounter data
for detecting potential fraud and abuse of services.

3. A means to verify services were actually provided.

4. Reporting investigation results within twenty (20)
business days to DMAHS.

5. Specifications of, and reports generated by, the
contractor's prepayment and postpayment surveillance
and utilization review systems, including prepayment
and postpayment edits.

Amended as of August 1, 2003 VII-47

Rates for DYFS, NJ FamilyCare Plans B, C, D, AND H and the non risk-adjusted
rates for AIDS and clients of DDD are statewide. Rates for ALL OTHER premium
groups ARE REGIONAL in each of the following regions:

- Region 1: Bergen, Hudson, Hunterdon, Xxxxxx, Passaic,
Somerset, Sussex, and Xxxxxx counties

- Region 2: Essex, Union, Middlesex, and Xxxxxx counties

- Region 3: Atlantic, Burlington, Camden, Cape May, Cumberland,
Gloucester, Monmouth, Ocean, and Salem counties

Contractors may contract for one or more regions but, except as
provided in Article 2, may not contract for part of a region.

8.5.2 MAJOR PREMIUM GROUPS

The following is a list of the major premium groups. The individual
rate groups (e.g. , children under 2 years, etc.) with their respective
rates are presented in the rate tables in the appendix.

8.5.2.1 AFDC/TANF, NJC PREGNANT WOMEN, AND NJ FAMILYCARE PLAN A CHILDREN

This grouping includes capitation rates for Aid to Families with
Dependent Children (AFDC/Temporary Assistance for Needy Families
(TANF), New Jersey Care Pregnant Women and Children, and NJ FamilyCare
Plan A children INCLUDES INDIVIDUALS UNDER 21 IN PSC 380), but excludes
individuals who have AIDS or are clients of DDD.

8.5.2.2 NJ FAMILYCARE PLANS B & C

This grouping includes capitation rates for NJ FamilyCare Plans B and C
enrollees, excluding individuals with AIDS AND/OR DDD CLIENTS.

8.5.2.3 NJ FAMILYCARE PLAN D CHILDREN

This grouping includes capitation rates for NJ FamilyCare Plan D
children, excluding individuals with AIDS.

8.5.2.4 NJ FAMILYCARE PLAN D PARENTS/CARETAKERS

This grouping includes capitation rates for NJ FamilyCare Plan D
parents/caretakers, excluding individuals with AIDS, AND INCLUDE ONLY
ENROLLEES 19 YEARS OF AGE OR OLDER,:

Amended as of August 1, 2003 VIII-6

8.5.2.5 DYFS AND AGING OUT XXXXXX CHILDREN

This grouping includes capitation rates for Division of Youth and
Family Services, excluding individuals with AIDS and clients of DDD.

8.5.2.6 ABD WITHOUT MEDICARE

Compensation to the contractor for the ABD individuals without Medicare
will be risk-adjusted using the Health Based Payments System (HBPS),
which is described in Article 8.6. HBPS adjusts for the diagnosis of
AIDS; therefore, separate AIDS rates are not necessary for this
population. Finally, the HBPS adjusts for age and sex so separate rates
for age and sex within this population are not necessary.

8.5.2.7 ABD WITH MEDICARE

This grouping includes capitation rates for the ABD with Medicare
population, excluding individuals with AIDS and clients of DDD.

8.5.2.8 CLIENTS OF DDD

THIS GROUPING INCLUDES ALL ENROLLEES EXCEPT ABD INDIVIDUALS WITHOUT
MEDICARE. THE contractor shall be paid separate, statewide rates for
subgroups of the DDD population, excluding individuals with ADDS, These
rates include MH/SA services.

8.5.2.9 ENROLLEES WITH AIDS

THIS GROUPING INCLUDES ALL ENROLLEES EXCEPT ABD INDIVIDUALS WITHOUT
MEDICARE.

A. The contractor shall be paid special statewide capitation
rates for enrollees with AIDS:

B. The contractor will be reimbursed double the AIDS rate, once
in a member lifetime, in the first month of payment for a
recorded diagnosis of AIDS, prospective and newly diagnosed.
This is a one-time-only-per~mernber payment, regardless of
MCE.

8.5.2.10 RESERVED

Amended as of August 1, 2003 VIII-7

8.5.3 NEWBORN INFANTS

The contractor shall be reimbursed for newborns from the date of birth
through the first 60 days after the birth through the period ending at
the end of the month in which the 60th day falls by a supplemental
payment as part of the supplemental maternity payment. Thereafter,
capitation payments will be made prospectively, i.e., only when the
baby's name and ID number are accreted to the Medicaid eligibility file
and formally enrolled in the contractor's plan.

8.5.4 SUPPLEMENTAL PAYMENT PER PREGNANCY OUTCOME

Because costs for pregnancy outcomes were not included in the
capitation rates, the contractor shall be paid supplemental payments
for pregnancy outcomes for all eligibility categories.

Payment for pregnancy outcome shall be a single, predetermined lump sum
payment. This amount shall supplement the existing capitation rate
paid. The Department will make a supplemental payment to contractors
following pregnancy outcome. For purposes of this Article, pregnancy
outcome shall mean each live birth, still birth or miscarriage
occurring at the thirteenth (13th) or greater week of gestation. This
supplemental payment shall reimburse the contractor for its inpatient
hospital, antepartum, and postpartum costs incurred in connection with
delivery. Costs for care of the baby for the first 60 days after the
birth plus through the end of the month in which the 60th day falls
are included (See Section 8.5.3). REGIONAL PAYMENT shall be made by the
State to the contractor based on submission of appropriate encounter
data as specified by DMAHS.

8.5.5 PAYMENT FOR CERTAIN BLOOD CLOTTING FACTORS

The contractor shall be paid separately for factor VII and IX blood
clotting factors. Payment will be made by DMAHS to the contractor based
on: 1) submission of appropriate encounter data; and 2) notification
from the contractor to DMAHS within 12 months of the date of service of
identification of individuals with factor VIII or IX hemophilia.
Payment for these products will be the lesser of: 1) Average Wholesale
Price (AWP) minus 12.5% and 2) rates paid by the contractor.

8.5.6 PAYMENT FOR HIV/AIDS DRUGS

The contractor shall be paid separately for protease inhibitors and
other anti-retroviral agents (First Data Bank Specific Therapeutic
Class Codes W5C, W5B, W5I, W5J, W5K, W5L, W5M, W5N) for all eligibility
groups. Payment for protease inhibitors shall be made by DMAHS to the
contractor based on: 1) submission of appropriate encounter data; and
2) notification from the contractor to DMAHS within 12 months of the
date of service of identification of individuals with HIV/AIDS. Payment
for these products will be the lesser of: 1) Average Wholesale Price
(AWP) minus 12.5% and 2) rates paid by the contractor.

Amended as of August 1, 2003 VIII-8

ATTACHMENT A

New Jersey Department of Human Services, Division of Medical Assistance, Office
of Managed Health Care
HMO Non-Institutional Provider Network File Specifications

When
Field Field Name Size Required Definition Example
-----------------------------------------------------------------------------------------------------------------------------

1 Last Name 22 A Individual Provider's Surname; may include Jr. or III Xxxxx, Xx.
-----------------------------------------------------------------------------------------------------------------------------
2 First Name 15 A Provider's First Name; should include middle initial Xxx X.
-----------------------------------------------------------------------------------------------------------------------------
3 SSN 9 A Provider's Social Security Number 000000000
-----------------------------------------------------------------------------------------------------------------------------
4 Tax ID 9 B Provider's Tax ID Number 000000000
-----------------------------------------------------------------------------------------------------------------------------
5 Degree 5 A MD, DO, etc. Do not use periods. DO
-----------------------------------------------------------------------------------------------------------------------------
6 Primary 1 A Is this a primary care provider? (Y or Y
N) Do not indicate Y for
dental providers.
-----------------------------------------------------------------------------------------------------------------------------
7 Practice Name 45 B Name of Practice if different than provider's last name Xxxxx Family Practice
-----------------------------------------------------------------------------------------------------------------------------
8 Address 1 60 A Place where services are rendered. Always start with street 000 Xxxx Xx.
number if one is contained in the actual address of the
practice.
-----------------------------------------------------------------------------------------------------------------------------
9 Address 2 30 B Building Name, XX Xxx xxx. Xxxxx 0
-----------------------------------------------------------------------------------------------------------------------------
10 City 22 A Proper Name for Municipality in which practice office South Orange
is located. No abbreviations.
-----------------------------------------------------------------------------------------------------------------------------
11 State 2 A Two Character State Abbreviation, NJ or other with rare NJ
exceptions
-----------------------------------------------------------------------------------------------------------------------------
12 Zip 5 A 5 Digit Zip Code 08888
-----------------------------------------------------------------------------------------------------------------------------
13 Phone 15 A Include Area Code, Prefix & Number. No spaces or dashes. 6095882705
-----------------------------------------------------------------------------------------------------------------------------
14 County 2 A Two digit code for county in which office is actually located 07
-----------------------------------------------------------------------------------------------------------------------------
15 Office Hours 60 A List days and hours when patienis can be seen at this site. X0-0, X0-0, Th1-7,
-----------------------------------------------------------------------------------------------------------------------------
16 Specialty Code 30 A See list List all that apply. Include one for each Record 123
Type "s" per provider. No Spaces, Commas, Slashes, etc.
-----------------------------------------------------------------------------------------------------------------------------
17 Age 40 B 4 spaces per specialty in sequence with specialty code in 234
Restrictions suing field 16, 1st 2= min, age, 2nd 2 = max. age, 0000 if
none for a specialty. Omit if no specialty is limited.
-----------------------------------------------------------------------------------------------------------------------------
18 Hosp Aff11 35 B Hospital where provider has admitting privileges. Newark- Xxxx Israel
Required for PhysiciansPodiatrists & Oral Surgeons.
-----------------------------------------------------------------------------------------------------------------------------
19 Hosp Aff12 35 B If more than One
-----------------------------------------------------------------------------------------------------------------------------
20 HospAff13 35 B If more than Two
-----------------------------------------------------------------------------------------------------------------------------
21 HospAff14 35 B If more than Three
-----------------------------------------------------------------------------------------------------------------------------
22 Hosp Aff15 35 B If more than Four
-----------------------------------------------------------------------------------------------------------------------------
23 Languages A Must be at least one even if English; Sec code list. EFG9
10 No Spaces/Commas/Slashes/Hyphens, etc.
-----------------------------------------------------------------------------------------------------------------------------
24 Plan Code 3 A Three Digit Plan Code 099
-----------------------------------------------------------------------------------------------------------------------------
25 Panel Status 1 A O - Open, F - Frozen (no new patients) O
-----------------------------------------------------------------------------------------------------------------------------
26 Specialty Name 30 A Show one narrative specialty name per record. Family Practice
-----------------------------------------------------------------------------------------------------------------------------
27 Panel Capacity 4 B Potential Number of Members: PCPs & General Dentists 1500
-----------------------------------------------------------------------------------------------------------------------------
28 Members 4 B Actual Number of Members Assigned: PCPs & Dentists 900
Assigned
-----------------------------------------------------------------------------------------------------------------------------
29 Record Type 3 B a = addition of record to file (excludes d) s a
d = deletion of record from file (excludes a & c)
s = multiple listing of provider, unique specialty
l = multiple listing of provider, unique location
Use all that apply, No commas. Spaces
allowed.
-----------------------------------------------------------------------------------------------------------------------------
30 Date 10 A Fill with date Network Update File or Application Network 06/01/2000
File was submitted to OMHC mm/dd/yyyy.
-----------------------------------------------------------------------------------------------------------------------------
31 2 B If other man actual county; include a record for each
Servicing county served. Out-of-county physicians may not be
County considered in applications except in rural counties
-----------------------------------------------------------------------------------------------------------------------------
32 Total Hours 2 A Total number of hours for record. Round down. 20
-----------------------------------------------------------------------------------------------------------------------------
33 Medicaid ID 7 B Provider's Xxxxxxxx XX 0000000
-----------------------------------------------------------------------------------------------------------------------------
34 Special Needs 5 A Indicates provider has expertise serving specific
Indicator populations. Use all OMHC special needs codes that apply to
provider.

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

A-15

ATTACHMENT B

New Jersey Department of Human. Services, Division of Medical Assistance,
Office of Managed Health Care
HMO Institutional Provider Network File Specifications

When
Field Field Name Size Required Definition Example
-------------------------------------------------------------------------------------------------------------

1 Provider Name 45 A Doc's Drugs
-------------------------------------------------------------------------------------------------------------
2 Provider Type 30 A Pharmacy
-------------------------------------------------------------------------------------------------------------
3 Provider Tax ID 9 A Provider's Tax ED Number 000000000
-------------------------------------------------------------------------------------------------------------
4 Address 1 60 A Always start with street number if one is contained 00 Xxxx Xx.
in the actual address of the practice.
-------------------------------------------------------------------------------------------------------------
5 Address 2 30 B Building Name, XX Xxx xxx, Xxxxx 0
-------------------------------------------------------------------------------------------------------------
6 City 22 A Proper Name for Municipality in which practice South Orange
office is located, Use no abbreviations
-------------------------------------------------------------------------------------------------------------
7 State 2 A Two Character State Abbreviation, NJ with rare NJ
exceptions.
-------------------------------------------------------------------------------------------------------------
8 Zip 5 A 5 Digit Zip Codes 08888
-------------------------------------------------------------------------------------------------------------
9 Phone 15 A Include Area Code, Prefix & Number. Don't include 6095882705
spaces or dashes.
-------------------------------------------------------------------------------------------------------------
10 County 2 A Two digit code for county in which office is 07
actually located.
-------------------------------------------------------------------------------------------------------------
11 Plan Code 3 A Three Digit Plan Code. 099
-------------------------------------------------------------------------------------------------------------
12 Specialty Code 3 A See code list Use one. 500
-------------------------------------------------------------------------------------------------------------
13 Servicing 2 B If other than actual county; include a record for
County each county served.
-------------------------------------------------------------------------------------------------------------
14 Date 10 A Fill with date Network Update File or Application 06/01/2000
Network File was submitted to OMHC mm/dd/yyyy
-------------------------------------------------------------------------------------------------------------
15 Record Type 1 B a = addition of record to file (excludes d) a
d = deletion of record from file (excludes a)
-------------------------------------------------------------------------------------------------------------
16 Medicaid ID . 7 B Provider's Xxxxxxxx XX 0000000
-------------------------------------------------------------------------------------------------------------
17 Hospital Code 35 B Unique Hospital Code 99999
-------------------------------------------------------------------------------------------------------------

A = Always Required
B = Required When Applicable

A-17

ATTACHMENT D

NJDHS, DMAHS, OMHC
Provider Network File Codes

Language Codes County Codes

A Arabic 01 Atlantic
B Hebrew 02 Bergen
C Chinese 03 Burlington
D Greek 04 Camden
E English 05 Cape May
F French 06 Cumberland
G German 07 Essex
H Hindi 08 Gloucesrer
I Italian 09 Xxxxxx
J Hungarian 10 Hunterdon
K Korean 11 Xxxxxx
L Polish 12 Middlesex
M Tagalog 13 Monmouth
N Japanese 14 Xxxxxx
O Pakistani 15 Ocean
P Portuguese 16 Passaic
Q Indian 17 Salem
R Filipino 18 Somerset
S Persian 19 Sussex
T Russian 20 Union
U Danish 21 Xxxxxx
V Spanish/No English 99 OUT OF STATE
W Turkish
X Vietnamese
Y Yugoslavian
Z Other
0 American Sign Language
1 Swedish
2 Spanish/Understands English
3 Ukraman
4 Dutch
5 Urdu
6 Romanian
7 Mandann
8 Iranian
9 Thai

A-21

STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.2B of the contract
between University Health Plans, Inc. and the State of New Jersey, Department of
Human Services, Division of Medical Assistance and Health Services (DMAHS),
effective date October 1, 2000, all parties agree that the contract shall be
amended, effective October 1,2003, as follows:

Managed Care Service Administrator - October 1, 2003

1. ARTICLE 1, "DEFINITIONS" section - for the following definitions:

- Contractor;

- Copayment;

- Managed Care Service Administrator (NEW);

- NJ FamilyCare Plan D;

- NJ FamilyCare Plan H;

- Non-Risk Contract (NEW);

- Restricted Alien (NEW)

shall be amended as reflected in the relevant pages of Article 1 attached
hereto and incorporated herein.

2. ARTICLE 3, "MANAGED CARE MANAGEMENT INFORMATION SYSTEM" Section 3.4.2 shall
be amended as reflected in Article 3, Section 3.4.2 attached hereto and
incorporated herein.

3. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES," Sections 4.1(B) (NEW);
4.1.1(E); 4.1.7; renumbered remaining sections; 4.2.2(A); 4.2.4(B)7;
4.2.4(C) shall be amended as reflected in Article 4, Sections 4.1(B) (NEW);
4.1.1(E); 4.1.7; renumbered remaining sections; 4.2.2(A); 4.2.4(B)7;
4.2.4(C) attached hereto and incorporated herein.

4. ARTICLE 5, "ENROLLEE SERVICES," Sections 5.2(A)8 (RESTORED); 5.2(A)9 (NEW);
5.3.1(C)2; 5.3.2; 5.4(B); 5.4(C); 5.5.(G)1(d); 5.8.2(WW); 5.8.5(B);
5.10.2(A)1; 5.15.1(A) shall be amended as reflected in Article 5, 5.2(A)8
(RESTORED); 5.2(A)9 (NEW); 5.3.1(C)2; 5.3.2; 5.4(B); 5.4(C); 5.5.(G)1(d);
5.8.2(WW); 5.8.5(B); 5.10.2(A)1; 5.15.1(A) attached hereto and
incorporated herein.

Managed Care Service Administrator - October 1, 2003

5. ARTICLE 7, "TERMS AND CONDITIONS," Sections 7.26(C) and 7.26(K) (NEW) shall
be amended as reflected in Article 7, Sections 7.26(C) and 7.26(K) (NEW)
attached hereto and incorporated herein.

6. ARTICLE 8, "FINANCIAL PROVISIONS," Sections 8.5.1; 8.5.6; 8.5.9 (NEW);
8.8(N)(NEW); 8.8(O)(NEW); 8.8(P)(NEW) shall be amended as reflected in
Sections 8.5.1; 8.5.6; 8.5.9 (NEW); 8.8(N) (NEW); 8.8(O)(NEW); 8.8(P)
(NEW) attached hereto and incorporated herein.

7. APPENDIX, SECTION E, "MANAGED CARE SERVICE ADMINISTRATOR," (NEW) shall be
revised as reflected in SFY 2004 Managed Care Service Administrator
administrative fees attached hereto and incorporated herein.

Managed Care Service Administrator - October 1, 2003

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

BY: /s/ Xxxxxxxxx XxXxxx BY: /s/ [ILLEGIBLE]
-------------------- -------------------------
XXXXXXX X. X'XXXX

TITLE: PRESIDENT & CEO TITLE: ACTING DIRECTOR, DMAHS
---------------

DATE: [ILLEGIBLE] DATE:_______________________
---------------

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: /s/ [ILLEGIBLE]
---------------

DEPUTY ATTORNEY GENERAL

DATE:___________________

with the contractor. Marketing by an employee of the contractor is considered
direct; marketing by an agent is considered indirect.

COMMISSIONER--the Commissioner of the New Jersey Department of Human Services
or a duly authorized representative.

COMPLAINT--a protest by an enrollee as to the conduct by the contractor or any
agent of the contractor, or an act or failure to act by the contractor or any
agent of the contractor, or any other, matter in which an enrollee feels
aggrieved by the contractor, that is communicated to the contractor and that
could be resolved by the contractor within three (3) business days.

COMPLAINT RESOLUTION--completed actions taken to fully settle a complaint to
the DMAHS' satisfaction.

COMPREHENSIVE RISK CONTRACT--a risk contract that covers comprehensive
services, that is, inpatient hospital services and any of the following
services, or any three or more of the following services:

1. Outpatient hospital services.

2. Rural health clinic services.

3. FQHC services.

4. Other laboratory and X-ray services.

5. Nursing facility (NF) services.

6. Early and periodic screening, diagnosis and treatment (EPSDT) services.

7. Family planning services.

8. Physician services.

9. Home health services.

CONDITION--a disease, illness, injury, disorder, or biological or
psychological condition or status for which treatment is indicated.

CONTESTED CLAIM--a claim that is denied because the claim is an ineligible
claim, the claim submission is incomplete, the coding or other required
information to be submitted is incorrect, the amount claimed is in dispute, or
the claim requires special treatment.

CONTINUITY OF CARE--the plan of care for a particular enrollee that should
assure progress without unreasonable interruption.

CONTRACT--the written agreement between the State and the contractor, and
comprises the contract, any addenda, appendices, attachments, or amendments
thereto.

CONTRACTING OFFICER--the individual empowered to act and respond for the State
throughout the life of any contract entered into with the State.

CONTRACTOR--the Health Maintenance Organization with a valid Certificate of
Authority in New Jersey that contracts hereunder with the State for the
provision of comprehensive health care services to enrollees on a prepaid,
capitated basis, or for the provision of

Amended as of October 1, 2003 I-5

administrative services for a specified benefits package to specified enrollees
on a non-risk, reimbursement basis.

CONTRACTOR'S PLAN--all services and responsibilities undertaken by the
contractor pursuant to this contract.

CONTRACTOR'S REPRESENTATIVE--the individual legally empowered to bind the
contractor, using his/her signature block, including his/her title. This
individual will be considered the Contractor's Representative during the life of
any contract entered into with the State unless amended in writing pursuant to
Article 7.

COPAYMENT--the part of the cost-sharing requirement for NJ FamilyCare Plan D and
H enrollees in which a fixed monetary amount is paid for certain services/items
received from the contractor's providers.

COST AVOIDANCE--a method of paying claims in which the provider is not
reimbursed until the provider has demonstrated that all available health
insurance has been exhausted.

COST NEUTRAL--the mechanism used to smooth data, share risk, or adjust for
risk that will recognize both higher and lower expected costs and is not
intended to create a net aggregate gain or loss across all payments.

COVERED SERVICES--see "BENEFITS PACKAGE"

CREDENTIALING--the contractor's determination as to the qualifications and
ascribed privileges of a specific provider to render specific health care
services.

CULTURAL COMPETENCY--a set of interpersonal skills that allow individuals to
increase their understanding, appreciation, acceptance of and respect for
cultural differences and similarities within, among and between groups and the
sensitivity to how these differences influence relationships with enrollees.
This requires a willingness and ability to draw on community-based values,
traditions and customs, to devise strategies to better meet culturally diverse
enrollee needs, and to work with knowledgeable persons of and from the community
in developing focused interactions, communications, and other supports.

CWA OR COUNTY WELFARE AGENCY ALSO KNOWN AS COUNTY BOARD OF SOCIAL SERVICES--
the agency within the county government that makes determination of eligibility
for Medicaid and financial assistance programs.

DAYS--calendar days unless otherwise specified.

DBI--the New Jersey Department of Banking and Insurance in the executive branch
of New Jersey State government.

DEFAULT--see "AUTOMATIC ASSIGNMENT"

Amended as of October 1, 2003 I-6

IPN OR INDEPENDENT PRACTITIONER NETWORK--one type of HMO operation where
member services are normally provided in the individual offices of the
contracting physicians.

LIMITED-ENGLISH-PROFICIENT POPULATIONS--individuals with a primary language
other than English who must communicate in that language if the individual is to
have an equal opportunity to participate effectively in and benefit from any
aid, service or benefit provided by the health provider.

MAINTENANCE SERVICES--include physical services provided to allow people to
maintain their current level of functioning. Does not include habilitative and
rehabilitative services.

MANAGED CARE--a comprehensive approach to the provision of health care which
combines clinical preventive, restorative, and emergency services and
administrative procedures within an integrated, coordinated system to provide
timely access to primary care and other medically necessary health care services
in a cost effective manner.

MANAGED CARE ENTITY--a managed care organization described in Section
1903(m)(1)(A) of the Social Security Act, including Health Maintenance
Organizations (HMOs), organizations with Section 1876 or Medicare+Choice
contracts, provider sponsored organizations, or any other public or private
organization meeting the requirements of Section 1902(w) of the Social Security
Act, which has a risk comprehensive contract and meets the other requirements of
that Section.

MANAGED CARE ORGANIZATION (MCO)--an entity that has, or is seeking to qualify
for, a comprehensive risk contract, and that is -

1. A Federally qualified HMO that meets the advance directives requirements of
42 CFR 489 subpart I; or

2. Any public or private entity that meets the advance directives requirements
and is determined to also meet the following conditions:

(i) Makes the services it provides to its Medicaid enrollees as accessible
(in terms of timeliness, amount, duration, and scope) as those
services are to other Medicaid recipients within the area served by
the entity; and

(ii) Meets the solvency standards of 42 CFR 438.116.

MANAGED CARE SERVICE ADMINISTRATOR (MCSA) - an entity in a non-risk based
financial arrangement that contracts to provide a designated set of services for
an administrative fee. Services provided may include, but are not limited to:
medical management, claims processing, provider network maintenance.

MANDATORY--the requirement that certain DMAHS beneficiaries, delineated in
Article 5, must select, or be assigned to a contractor in order to receive
Medicaid services.

Amended as of October 1, 0000 X-00

XX FAMILYCARE PLAN D--means the State-operated program which provides
managed care coverage to uninsured:

- Parents/caretakers with children below the age of 19 who do not
qualify for AFDC Medicaid with family incomes up to and including
200 percent of the federal poverty level; and

- PARENTS/CARETAKERS WITH CHILDREN BELOW THE AGE OF 23 YEARS AND
CHILDREN FROM THE AGE OF 19 THROUGH 22 YEARS WHO ARE FULL TIME
STUDENTS WHO DO NOT QUALIFY FOR AFDC MEDICAID WITH FAMILY INCOMES
UP TO AND INCLUDING 250 PERCENT OF THE FEDERAL POVERTY LEVEL; AND

- Children below the age of 19 with family incomes between 201
percent and up to and including 350 percent of the federal poverty
level.

Eligibles with incomes above 150 percent of the federal poverty level
are required to participate in cost sharing in the form of monthly
premiums and copayments for most services with the exception of both
Eskimos and Native American Indians under the age of 19 years. These
groups are identified by Program Status Codes (PSCs) or Race Code on
the eligibility system as indicated below, For clarity, the Program
Status Codes or Race Code, in the case of Eskimos and Native American
Indians under the age of 19 years, related to Plan D non-cost sharing
groups are also listed.

PSC PSC Race Code
Cost Sharing No Cost Sharing No Cost Sharing
------------ --------------- ---------------

301 300 3
493 380
494 497
495
498

In addition to covered managed care services, eligibles under these
programs may access certain services which are paid fee-for-service and
not covered under this contract.

NJ FAMILYCARE PLAN H--MEANS THE STATE-OPERATED PROGRAM WHICH PROVIDES
MANAGED CARE ADMINISTRATIVE SERVICES COVERAGE TO UNINSURED:

- ADULTS AND COUPLES WITHOUT DEPENDENT CHILDREN UNDER THE AGE OF 19
WITH FAMILY INCOMES UP TO AND INCLUDING 100 PERCENT OF THE FEDERAL
POVERTY LEVEL;

- ADULTS AND COUPLES WITHOUT DEPENDENT CHILDREN UNDER THE AGE OF 23
YEARS, WHO DO NOT QUALIFY FOR AFDC MEDICAID, WITH FAMILY INCOMES
UP TO AND INCLUDING 250 PERCENT OF THE FEDERAL POVERTY LEVEL.

- RESTRICTED ALIEN PARENTS NOT INCLUDING PREGNANT WOMEN.

PLAN H ELIGIBLES WILL BE IDENTIFIED BY A CAPITATION CODE. CAPITATION
CODES DRIVE THE SERVICE PACKAGE. THE PROGRAM STATUS CODE DRIVES THE
COST-SHARING REQUIREMENTS.

ANY OF THE PROGRAM STATUS CODES LISTED BELOW CAN INCLUDE RESTRICTED
ALIEN PARENTS. THEREFORE, IT IS NECESSARY TO RELY ON THE CAPITATION
CODE TO IDENTIFY PLAN H ELIGIBLES.

Amended as of October 1, 0000 X-00

Xxxxxxxxx with incomes above 150 percent of the federal poverty level
are required to participate in cost sharing in the form of monthly
premiums and copayments for most services. These groups are identified
by the program status code (PSC) indicated below. For clarity, the
program status codes related to Plan H non-cost sharing groups are also
listed.

PSC PSC
COST SHARING NO COST SHARING
------------ ---------------

498 (w/CORRESPONDING 380, 310, 320, 330, 410, 420,
CAP CODE) 430, 470, 497 (WITH
701 CORRESPONDING CAP CODES)
700
763

NJ FAMILYCARE PLAN I - means the State-operated program that provides
certain benefits on a fee-for-service basis through the DMAHS for Plan
D parents/caretakers with a program status code of 380.

N.J.S.A.--New Jersey Statutes Annotated.

NON-COVERED CONTRACTOR SERVICES--services that are not covered in the
contractor's benefits package included under the terms of this
contract.

NON-COVERED MEDICAID SERVICES--all services that are not covered by the
New Jersey Medicaid State Plan.

NON-PARTICIPATING PROVIDER--a provider of service that does not have a
contract with the contractor.

NON-RISK CONTRACT - A CONTRACT UNDER WHICH THE CONTRACTOR 1) IS NOT AT
FINANCIAL RISK FOR CHANGES IN UTILIZATION OR FOR COSTS INCURRED UNDER
THE CONTRACT; AND 2) MAY BE REIMBURSED BY THE STATE ON THE BASIS OF THE
INCURRED COSTS.

OIT--the New Jersey Office of Information Technology.

OTHER HEALTH COVERAGE--private non-Medicaid individual or group
health/dental insurance. It may be referred to as Third Party Liability
(TPL) or includes Medicare.

OUT OF AREA SERVICES--all services covered under the contractor's
benefits package included under the terms of the Medicaid contract
which are provided to enrollees outside the defined basic service area.

Amended as of October 1, 2003 I-20

REFERRAL SERVICES--those health care services provided by a health professional
other than the primary care practitioner and which are ordered and approved by
the primary care practitioner or the contractor.

Exception A: An enrollee shall not be required to obtain a referral or
be otherwise restricted in the choice of the family planning provider
from whom the enrollee may receive family planning services.

Exception B: An enrollee may access services at a Federally Qualified
Health Center (FQHC) in a specific enrollment area without the need for
a referral when neither the contractor nor any other contractor has a
contract with the Federally Qualified Health Center in that enrollment
area and the cost of such services will be paid by the Medicaid
fee-for-service program.

REINSURANCE--an agreement whereby the reinsurer, for a consideration, agrees to
indemnify the contractor, or other provider, against all or part of the loss
which the latter may sustain under the enrollee contracts which it has issued.

RESTRICTED ALIEN--An individual who would qualify for Medicaid or NJ
FamilyCare, but for immigration status.

RISK CONTRACT--a contract under which the contractor assumes risk for the cost
of the services covered under the contract, and may incur a loss if the cost of
providing services exceeds the payments made by the Department to the
contractor for services covered under the contract.

RISK POOL--an account(s) funded with revenue from which medical claims of risk
pool members are paid. If the claims paid exceed the revenues funded to the
account, the participating providers shall fund part or all of the shortfall. If
the funding exceeds paid claims, part or all of the excess is distributed to the
participating providers.

RISK THRESHOLD--the maximum liability, if the liability is based on referral
services, to which a physician or physician group may be exposed under a
physician incentive plan without being at substantial financial risk.

ROUTINE CARE--treatment of a condition which would have no adverse effects if
not treated within 24 hours or could be treated in a less acute setting (e.g.,
physician's office) or by the patient.

SAFETY-NET PROVIDERS OR ESSENTIAL COMMUNITY PROVIDERS--public-funded or
government-sponsored clinics and health centers which provide
specialty/specialized services which serve any individual in need of health care
whether or not covered by health insurance and may include medical/dental
education institutions, hospital-based programs, clinics, and health centers.

SAP--Statutory Accounting Principles.

Amended as of October 1,2003 I-24

authorization checks, checks for service limitations, checks for
service inconsistencies, medical review, and utilization management.
Pharmacy claim edits shall include prospective drug utilization review
(ProDUR) checks.

The contractor shall comply with New Jersey law and regulations to
process records in error. (Note: Uncontested payments to providers and
uncontested portions of contested claims should not be withheld pending
final adjudication.)

C. Benefit and Reference Files. The system shall provide file-driven
processing for benefit determination, validation of code values,
pricing (multiple methods and schedules), and other functions as
appropriate. Files should include code descriptions, edit criteria, and
effective dates. The system shall support the State's procedure and
diagnosis coding schemes and other codes that shall be submitted on the
hardcopy and electronic reports and files.

The system shall provide for an automated update to the National Drug
Code file including all product, packaging, prescription, and pricing
information.

The system shall provide online access to reference file information.
The system should maintain a history of the pricing schedules and other
significant reference data.

D. Claims/Encounter History Files. The contractor shall maintain two (2)
years active history of adjudicated claims and encounter,data for
verifying duplicates, checking service limitations, and supporting
historical reporting. For drug claims, the contractor may maintain nine
(9) months of active history of adjudicated claims/encounter data if it
has the ability to restore such information back to two (2) years and
provide for permanent archiving in accordance with Article 3.1.2F.
Provisions should be made to maintain permanent history by service date
for those services identified as "once-in-a-lifetime" (e.g.,
hysterectomy). The system should readily provide access to, all types
of claims and encounters (hospital, medical, dental, pharmacy, etc.)
for combined reporting of claims and encounters. Archive requirements
are described in Article 3.1.2F.

3.4.2 COORDINATION OF BENEFITS

The contractor shall exhaust all other sources of payment prior to
remitting payment for a Medicaid/NJ FAMILYCARE enrollee.

A. Other Coverage Information. The contractor shall maintain other
coverage information for each enrollee. The contractor shall verify the
other coverage information provided by the State pursuant to Article
8.7 and develop a system to include additional other coverage
information when it becomes available. The contractor shall provide a
periodic file of updates to other coverage back to the State as
specified in Article 8.7.

Amended as of October 1, 2003 III-10

ARTICLE FOUR: PROVISION OF HEALTH CARE SERVICES

4.1 COVERED SERVICES

A. For enrollees who are eligible through Title V, Title XIX or the NJ
FamilyCare program the contractor shall provide or arrange to have
provided comprehensive, preventive, and diagnostic and therapeutic,
health care services to enrollees that include all services that
Medicaid/NJ FamilyCare beneficiaries are entitled to receive under
Medicaid/NJ FamilyCare, subject to any limitations and/or excluded
services as specified in this Article, Provision of these services
shall be equal in amount, duration, and.scope as established by the
Medicaid/NJ FamilyCare program, in accordance with medical necessity
and without any predetermined limits, unless specifically stated, and
as set forth in 42 C.F.R. Part 440; 42 C.F.R. Part 434; Part 438 the
Medicaid State Plan; the Medicaid Provider Manuals: -The New Jersey
Administrative Code, Title 10, Department of Human Services Division of
Medical Assistance and Health Services; Medicaid/NJ FamilyCare Alerts;
Medicaid/NJ FamilyCare Newsletters; and all applicable federal and
State statutes, rules, and regulations.

B. All provisions of this article shall apply to enrollees of the
contractor's comprehensive risk contract as well as to beneficiaries
under the managed care service administrator arrangement unless
specifically stated otherwise.

4.1.1 GENERAL PROVISIONS AND CONTRACTOR RESPONSIBILITIES

A. With the exception of certain emergency services described in Article
4.2.1 of this contract, all care covered by the contractor pursuant to
the benefits package must be provided, arranged, or authorized by the
contractor or a participating provider.

B. The contractor and its providers shall furnish all covered services
required to maintain or improve health in a manner that maximizes,
coordination and.- integration of services, and in accordance with
professionally recognized standards of quality and shall ensure that
the care is appropriately documented to encompass all health care
services for which payment is made.

C. For beneficiaries eligible solely through the NJ FamilyCare Plan A the
contractor shall-provide the same managed care services and products
provided to enrollees who are eligible through Title XIX, For
beneficiaries eligible solely through the NJ FamilyCare Plans B and C
the contractor shall provide the same managed care services and
products provided to enrollees who are eligible through Title XIX with
the exception of limitations on EPSDT coverage as indicated in Articles
4.1.2A.3 and 4.2.6A.2. NJ FamilyCare Plan D and other plans have a
different service package specified in Articles 4.1.6 and 4.1.7.

D. Out-of-Area Coverage. The contractor shall provide or arrange for
out-of-area coverage of contracted benefits in emergency situations and
non-emergency

Amended as of October 1, 2003 IV-1

situations when travel back to the service area is not possible, is impractical,
or when medically necessary services could only be provided elsewhere. Except
for full-time students, the contractor shall not be responsible for out-of-state
coverage for care if the enrollee resides out-of-state for more than 30 days. In
this instance, the individual will be disenrolled. This does not apply to
situations when the enrollee is out of State for care provided/authorized by
the contractor, for example, prolonged hospital care for transplants. For full
time students attending school and residing out of the country, the
contractor-shall not be responsible for health care benefits while the
individual is in school.

E. Existing Plans of Care. The contractor shall honor and pay for plans of
care for new enrollees, including prescriptions, durable medical
equipment, medical supplies, prosthetic and orthotic appliances, and
any other on-going services initiated prior to enrollment with the
contractor. Services shall be continued until the enrollee is evaluated
by his/her primary care physician and a new plan of care is established
with the contractor.

The contractor shall use its best efforts to contact the new enrollee
or, where applicable, authorized person and/or contractor care manager.
However, if after documented, reasonable outreach (i.e., mailers,
certified mail, use of MEDM system provided by the State, contact with
the Medical Assistance Customer Center (MACC), DDD, or DYFS to confirm
addresses and/or to request assistance in locating the enrollee) the
enrollee fails to respond within 20 working days of certified mail, the
contractor may cease paying for the pre-existing service until the
enrollee or, where applicable, authorized person, contacts the
contractor for re-evaluation.

For MCSA enrollees, the contractor Shall case manage these services,

F. Routine Physicals. The contractor shall provide for routine physical
examinations required for employment, school, camp or other
entities/programs that require such examinations as a condition of
employment or participation.

G. Non-Participating Providers.

1. The contractor shall pay for services furnished by
non-participating providers to whom an enrollee was referred,
even if erroneously referred, by his/her PCP or network
specialist. Under no circumstances shall the enrollee bear the
cost of such services when referral errors by the contractor
or its providers occur. It is the sole responsibility of the
contractor to provide regular updates on complete network
information to all its providers as well as appropriate
policies and procedures for provider referrals.

Amended as of October 1, 2003 IV-2

2. Dental services

3. DME

4. Hearing aids

5. Medical supplies

6. Orthotics

7. TMJ treatment

4.1.7 BENEFIT PACKAGE FOR NJ FAMILYCARE PLAN H

A. Services Included In The Contractor's Benefits Package for NJ
FamilyCare Plan H. The following services shall be provided
and case managed by the contractor:

1. Primary Care

a. All physicians services, primary and
specialty

b. In accordance with state
certification/licensure requirements,
standards, and practices, primary care
providers shall also include access to
certified nurse midwives - non-maternity,
certified nurse practitioners, clinical
nurse specialists, and physician assistants

c. Services rendered at independent clinics
that provide ambulatory services

d. Federally Qualified Health Center primary
care services

2. Emergency room services

3. Home Health Care Services -- Limited to skilled
nursing for a home bound beneficiary which is
provided or supervised by a

Amended as of October 1, 2003 IV-15

registered nurse, and borne health aide when the purpose of the
treatment is skilled care; and medical social services which are
necessary for the treatment of the beneficiary's medical condition.

4. Inpatient Hospital Services, including general hospitals,
special hospitals, and rehabilitation hospitals. The
contractor shall not be responsible when the primary admitting
diagnosis is mental health or substance abuse related.

5. Outpatient Hospital Services, including outpatient surgery

6. LABORATORY SERVICES -- All laboratory testing sites providing
services under this contract must have either a Clinical
Laboratory Improvement Act (CLIA) certificate of waiver or a
certificate of registration along with a CLIA identification
number. Those providers with certificates of waiver shall
provide only the types of tests permitted under the terms of
their waiver, Laboratories with certificates of registration
may perform a full range of laboratory services.

7. RADIOLOGY SERVICES -- Diagnostic and therapeutic

8. Prescription drugs, excluding over-the-counter drugs
Exception: See Article 8 regarding Protease Inhibitors and
other antiretrovirals.

Amended as of October 1, 2003 IV-16

9. TRANSPORTATION SERVICES - Limited to ambulance for medical
emergency only

10. Diabetic supplies and equipment

B. Services Available To NJ FamilyCare Plan H Under Fee-For-Service. The
following services are available to NJ FamilyCare Plan H enrollees
under fee-for-service:

1. Outpatient mental health services, limited to 60 days per
calendar year.

2. Abortion services

C. Exclusions. The following services not covered for NJ FamilyCare Plan H
participants either by the contractor or the Department include, but
are not limited to:

1. Non-medically necessary services.

2. Intermediate Care Facilities/Mental Retardation

3. Private duty nursing

4. Personal Care Assistant Services

5. Medical Day Care Services

6. Chiropractic Services

7. Dental services

8. Orthotic devices

9. Targeted Case Management for the chronically ill

10. .Residential treatment center psychiatric programs

11. Religious non-medical institutions care and services

12. Durable Medical Equipment

13. Early and Periodic Screening, Diagnosis and Treatment (EPSDT)
services (except for well child care, including immunizations
and lead screening and treatments)

Amended as of October 1, 2003 IV-17

14. Transportation Services, including non-emergency ambulance,
invalid coach, and lower mode transportation

15. Hearing Aid Services

16. Blood and Blood Plasma, except administration of blood,
processing of blood, processing fees and fees related to
autologous blood donations are covered.

17. Cosmetic Services ,

18. Custodial Care

19. Special Remedial and Educational Services

20. Experimental and Investigational Services

21. Medical Supplies (except diabetic supplies)

22. Infertility Services .

23. Rehabilitative Services for Substance Abuse

24. Weight reduction programs or dietary supplements, except
operations, procedures or treatment of obesity when approved
by the contractor

25. Acupuncture and acupuncture therapy, except when performed as
a form of anesthesia in connection with covered surgery

26. Temporomandibular joint disorder treatment, including
treatment performed by prosthesis placed directly in the teeth

27. Recreational therapy

28. Sleep therapy

29. Court-ordered services

30 Thermograms and thermography

31. Bio feedback

32. Radial keratotomy

33. Respite Care

34. Inpatient hospital services for mental health

35. Inpatient and outpatient services for substance abuse

36. Partial hospitalization

37. Skilled nursing facility services

38. Family Planning Services

39. Hospice Services

40. Optometrist Services

41. Optical Appliances

42. Organ Transplant Services

43. Podiatrist Services

44. Prosthetic Appliances

45. Outpatient Rehabilitation Services

46. Maternity and related newborn care

4.1.78 SUPPLEMENTAL BENEFITS

Any service, activity or product not covered under the State Plan
may be provided by the contractor only through written approval by
the Department and the cost of which shall be borne solely by the
contractor.

Amended as of October 1, 2003 IV-18

4.1.89 CONTRACTOR AND DMAHS SERVICE EXCLUSIONS

Neither the contractor nor DMAHS shall be responsible for the
following:

A. All services not medically necessary, provided, approved or
arranged by a contractor's physician or other provider (within
his/her scope of practice) except emergency services.

B. Cosmetic surgery except when medically necessary and approved.

C. Experimental organ transplants.

D. Services provided primarily for the diagnosis and treatment of
infertility, including sterilization reversals, and related
office (medical or clinic), drugs, laboratory services,
radiological and diagnostic services and surgical procedures.

E. Respite Care

F. Rest cures, personal comfort and convenience items, services
and supplies not directly related to the care of the patient,
including but not limited to, guest meals, and accommodations,
telephone charges, travel expenses other than those services
not in Article 4.1 of this contract, take home supplies and
similar cost, Costs incurred by an accompanying parent(s) for
an out-of-state medical intervention are covered under EPSDT
by the contractor.

H. All claims arising directly from services provided by or in
institutions owned or operated by the federal government such
as Veterans Administration hospitals,

I. Services provided in an inpatient psychiatric institution,
that is not an acute care hospital, to individuals under 65
years of age and over 21 years of age.

K. Services or items furnished for any sickness or injury
occurring while the covered person is on active duty in the
military,

Amended as of October 1, 2003 IV-19

2. The contractor may not refuse to cover emergency services
based on the emergency room provider, hospital, or fiscal
agent not notifying the contractor or the enrollee's PCP of
the enrpllee's screening and treatment.

L. The contractor shall establish and maintain policies and
procedures for emergency dental services for all enrollees.

1. Within the contractor's Enrollment/Service Area, the
contractor will ensure that:

a. Enrollees shall have access to emergency dental
services on a twenty-four (24) hour, seven (7) day a
week basis.

b. The contractor shall bear full responsibility for the
provision of emergency 'dental services, and shall
assure the availability of a back-up provider in the
event that an on-call provider is unavailable.

2. Outside the contractor's Service Area, the contractor shall
ensure that:

a. Enrollees shall be able to seek emergency dental
services from any licensed dental provider without
the need for prior authorization from the contractor
while outside the Service Area (including
out-of-state services covered by the Medicaid
program).

M. The contractor shall reimburse ambulance and MICU
transportation providers responding to "911" calls whether or
not the patient's condition is determined, retrospectively, to
be an emergency.

4.2.2 FAMILY PLANNING SERVICES AND SUPPLIES

A. General. Except where specified in Section 4.1, the
contractor's MCO enrollees are permitted to obtain family
planning services and supplies from either the contractor's
family planning provider network or from any other qualified
Medicaid family planning provider, The DMAHS shall reimburse
family planning services provided by non-participating
providers based on the Medicaid fee schedule.

B. Non-Participating Providers. The contractor shall cooperate
with non- participating family planning providers accessed at
the o enrollee's option by establishing cooperative working
relationships with such providers for accepting referrals from
them for continued medical care and management of complex
health care needs and exchange of enrollee information, where
appropriate, to assure provision of needed care within the
scope of this contract. The contractor shall not deny coverage
of family planning services for a covered diagnostic.

Amended as of October 1, 2003 IV-24

iv. To accommodate exceptions to Medicaid drug
utilization review standards related to
proper maintenance drug therapy.

e. The contractor shall not penalize the prescriber or
enrollee, financially or otherwise, for such requests
and approvals.

g. Denials of off-formulary requests or offering of an
alternative medication shall be provided to the
prescriber and/or enrollee in writing. All denials
shall be reported to the DMAHS quarterly.

6. Submission and Publication of the Formulary.

a. The contractor shall publish and distribute hard copy
or on-line, at least annually, its current formulary
(if the contractor uses a formulary) to all
prescribing providers and pharmacists. Updates to the
formulary shall be distributed in all formats within
sixty (60) days of the changes.

b. The contractor shall submit its formulary to DMAHS
quarterly.

c. It is strongly encouraged that the contractor publish
the formulary on its internet website.

7. If the formulary includes generic equivalents, the contractor
shall provide for a brand name exception process for
prescribes to use when medically necessary. For MCSA
enrollees, the contractor should implement a mandatory generic
drug substitution program consistent with Medicaid program
requirements.

8. The contractor shall establish and maintain a procedure,
approved by DMAHS, for internal review and resolution of
complaints, such as timely access and coverage issues, drug
utilization review, and claim management based on standards of
drug utilization review.

C. Pharmacy Lock-In Program. The contractor may implement for MCO
enrollees and must implement for MCSA enrollees a pharmacy lock-in
program including policies, procedures and criteria for establishing
the need for the lock-in

Amended as of October 1,2003 IV-27

5.2 AID CATEGORIES ELIGIBLE FOR CONTRACTOR ENROLLMENT

A. . Except as specified in Article 5.3, all persons who are not
institutionalized, belong to one of the following eligibility
categories, and reside in any of the enrollment areas, as identified
in'Article 5.1, are in mandatory aid categories and shall be eligible
for enrollment in the contractor's plan in the manner prescribed by
this contract.

1. Aid to Families with. Dependent Children (AFDC)/Temporary
Assistance for Needy Families (TANF);

2. AFDC/TANF-Related, New Jersey Care.. .Special Medicaid Program
for Pregnant Women and Children;

3. SSI-Aged, Blind, Disabled, and Essential Spouses;

4. New Jersey Care..,Special Medicaid programs for Aged, Blind,
and Disabled;

5. Division of Developmental Disabilities Clients including the
Division of Developmental. Disabilities Community Care Waiver;

6. Medicaid only or SSI-related Aged, Blind, and Disabled;

7. Uninsured parents/caretakers and children who are covered
under NJ FamilyCare;

8. Uninsured adults and couples without dependent children under
the age of 23 who are covered under NJ FamilyCare.

9. Restricted alien parents, excluding pregnant women.

B. The contractor shall enroll the entire Medicaid case, i.e;, all
individuals included under the ten digit Medicaid identification
number.

C. DYFS. Individuals who are eligible through the Division of Youth and
Family Services may enroll voluntarily. All individuals eligible
through DYPS shall be considered a unique Medicaid case and shall be
issued an individual 12 digit Medicaid identification number, and may
be enrolled in his/her own contractor.

D. The contractor shall be responsible for keeping its network of
providers informed of the enrollment status of each eniollee.

E. Dual eligibles (Medicaid-Medicare) may voluntarily enroll. 5.3

EXCLUSIONS AND EXEMPTIONS

Persons who belong to one of-the eligible populations. (defined in 5,2A) shall
not be subject to mandatory enrollment if they meet one or more criteria defined
in this Article. Persons who fall into an "excluded" category (Article 5.3.1 A)
shall not be eligible to enroll in the contractor's plan. Persons falling into
the categories unde\r Article 5.3.IB are eligible to enroll on a voluntary
basis. Persons falling into a category under Article 5.3.2 maybe eligible for
enrollment exemption, subject to the Department's review.

Amended as of October 1,2003 V-2

1. Individuals whose. Medicaid eligibility will terminate within
three (3) months or less after the projected date of effective
enrollment.

2. Individuals in mandatory eligibility categories who live in a
county where mandatory enrollment is-not yet required based on
a phase-in schedule determined by DMAHS.

3. Individuals enrolled in or covered by either a Medicare or
commercial HMO will not be enrolled in New Jersey Care 2000+
contractor unless the New Jersey Cafe 2000+ contractor and the
Medicare/commercial HMO are the same.

4. Individuals in the Pharmacy Lock-in or Provider Warning or
Hospice programs.

5. Individuals in -eligibility categories other than AFDC/TANF,
AFDC/TANF-related New Jersey Care, SSI-Aged, Blind and
Disabled populations, the Division of Developmental
Disabilities Community Care Waiver population. New Jersey Care
-- Aged, Blind and Disabled, or NJ FamilyCare Plan A.

6. Children awaiting adoption through a private agency, 7.
Individuals identified, as having more than one active
eligible Medicaid number. 8. DYFS Population.

C. The following individuals shall be excluded from the Automatic
Assignment process:

1. Individuals included..under the same Medicaid Case Number
where one or more household meinber(s) are exempt.

2. Individuals participating in NJ FamilyCare Plans B, C, D, and
H [Managed Care is the only program option available for these
individuals].

5.3.2 ENROLLMENT EXEMPTIONS

The contractor,,its subcontractors, providers or agents shall not
coerce individuals to disenroll because of their health care needs
which may meet an exemption reason, especially when the enrollees want
to remain enrolled. Exemptions do not apply to NJ FamilyCare Plan B,
Plan C, Plan D (except Parents/Caretakers -with PSC 380), and Plan H
individuals or to individuals who have been enrolled in any of the
contracted plans for greater than one hundred and eighty (180) days.
All exemption requests are reviewed by DMAHS on a case by case basis.

Amended as of October 1, 2003 V-4

may also enroll and directly market to individuals eligible for Aged,
Blind, and Disabled (ABD) benefits. The contractor shall not enroll any
other Medicaid-eligible beneficiary except as described in Article
5,16.1.(A),2. Except as provided in 5 . 1 6, the contractor, shall not
directly market to or assist managed care eligibles in completing
enrollment forms. The duties of the BBC will include, but are not
limited to, education, enrollment, disenrollment, transfers, assistance
through the contractor's grievance/appeal process and other problem
resolutions with the contractor, and communications. The duties of
the contractor, when enrolling ABD beneficiaries will include education
and enrollment, as well as other activities required within this
contract. The contractor shall cooperate with the HBC in developing
information about its plan for dissemination to Medicaid/NJ FamilyCare
beneficiaries.

B. Individuals eligible under NJ FamilyCare may request an application via
a toll-free number operated under contract for the State, through an
outreach source, or from the contractor. The applications, including
ABD applications taken by the contractor, may be mailed back to a State
vendor. Individuals eligible under Plan A also have the option of
completing the application either via. a mail-in process or on site at
the county welfare agency. Individuals eligible under Plan B, Plan C,
Plan D, and Plan H have the option of requesting assistance from the
State vendor, the contractor or one of the registered servicing centers
in the community. Assistance will also be made available at State field
offices (e.g. the Medical Assistance Customer Ceuters) and county
'offices (e.g. Offices on Aging for grandparent caretakers).

C. Automatic Assignment. Medicaid eligible persons who reside in
enrollment areas that have been designated for mandatory enrollment,
who qualify for AFDC/TANF, ABD,, New Jersey Care. Special Medicaid
programs eligibility categories, NJ FamilyCare Plan A, and SSI
populations, who do not meet the exemption criteria, and who do not
voluntarily choose enrollment in the , contractor's plan, shall be
assigned automatically by DMAHS to a contractor.

5.5 ENROLLMENT AND COVERAGE REQUIREMENTS

A. General. The contractor shall comply with DMAHS enrollment
procedures, The contractor shall accept for enrollment any
individual who selects or is assigned to the contractor's
plan, whether or not they are subject to mandatory enrollment,
without regard to race, ethnicity, gender, sexual or
affectional preference or orientation, age, religion, creed,
color, national origin, ancestry, disability, health status or
need for health services and will not use any policy or
practice that has the effect of discrimination on the basis of
race, color, or national origin.

B. Coverage commencement. Coverage of enrollees shall commence at
12:00 a.m., Eastern Time, on the first day of the calendar
month as specified by the DMAHS

Amended as of October 1, 2003 V-6

ii. DYFS. Newborns who are placed under the
jurisdiction of the .Division- of Youth and
Family Services axe the responsibility of
the MCE that covered the mother on the date
of birth for medically necessary newborn
care. Such children shall become 'FFS upon
their placement in a DYFS-approved
out-of-home placement.

iii. NJ FamilyCare. Newborn infants bom to NJ
Family Care Plans B, C, and D. mothers shall
be the responsibility of the MCE that
covered the mother on the date of birth for
a minimum of 60 days. after "the birth
through the period ending at the end of the
month in which the 60th day falls unless the
child is determined eligible beyond this
time period. The contractor shall notify
DMAHS of the birth immediately in order to
assure payment for this period.

d. Enrollee no longer in contract area. If an enrollee
moves out of the contractor's enrollment area and
would otherwise still be eligible to be enrolled in
the contractor's plan, the contractor shall continue
to provide or arrange benefits to.the enrollee until
the DMAHS can disenroll him/her. The contractor shall
ask DMAHS to disenroll the enrollee due to the change
of residence as soon as it becomes aware of the
enrollee's relocation.. This provision does not apply
to persons with disabilities, who may elect to remain
with the contractor, or to NJ FamilyCare Plans B, C,
D, and H 1 enrollees, who remain enrolled, until the
end of the month in which the 60th day after the
request falls.

H. Enrollment Roster. The enrollment roster and weekly
transaction register generated by DMAHS shall serve as the
official contractor enrollment list. However, enrollment
changes can occur between the time when the monthly roster is
produced and capitation payment is made. The contractor shall
only be responsible for the provision and cost of care for an
enrollee during the months on which the enrollee's name
appears on the roster, except as indicated in Article 8,8.
DMAHS shall make available data on eligibility determinations
to the contractor to resolve discrepancies that may arise
between the roster and contractor enrollment files, If DMAHS
notifies the contractor in writing of changes in the roster,
the contractor shall rely upon that written notification in
the same manner as the roster. Corrective action shall be
limited to one (1) year from the date that the change was
effective.

Amended as of October 1, 2003 V - 9

TT. An explanation of the enrollee's rights and responsibilities which
should include, at a minimum, the follo wing, as well as the provisions
found in Standard X in NJ modified QARI/QISMC in Section B.4.14 of the
Appendices.

1. Provision for "Advance Directives," pursuant to 42 C.F.R.
Part 422 and Part 489, Subpart.I; must also include a
description of State law and any changes in State law. Such
changes must be made and issued no later than 90 days after
the effective date of the change;

2. P articipation in decision-making regarding their health care;

3. Provision for the opportunity for enrollees or, where
applicable, an authorized person to offer suggestions for
changes in policies and procedures; and

4. A policy on the treatment of minors.

UU. Notification that prior authorization for emergency services, either
in-network or out-of-network, is not required;

VV. Notification that the costs of emergency screening examinations will be
covered by the contractor when the condition appeared to be an
emergency medical condition to a prudent layperson;

WW. For beneficiaries subject to cost-sharing (i.e., those eligible through
NJ FamilyCare Plan C, D and H; See Section B.5.2 of the
Appendices), information that specifically explains:

1. The limitation on cost-sharing;

2. The dollar limit that applies to the family based on the
reported income;

3. The need for the family to keep track of the cost-sharing
amounts paid; and

4. Instructions on what to do if the cost-sharing requirements
are exceeded .

XX. An explanation on how to access WIC services;

YY. Any other information essential to the proper use of the
contractor's plan as may be required by the Division;

ZZ. Inform enrollees of the availability of care management
services;

AAA. Enrollee right to adequate and timely information related to
physician incentives;

Amended as of October 1, 2003 V-18

BBB. An explanation that Medicaid benefits received after age 55
may be'reimbursable to the State of New Jersey from the
enrollee's estate. The recovery may include premium payments
made on behalf of the beneficiary to the managed care
organization in which the beneficiary enrolls; and

5.8.3 ANNUAL INFORMATION TO ENROLLEES

The contractor shall distribute an updated handbook which will include
the information specified in Article 5.8.2 to each enrollee or
enrollee's family unit and to all providers at least once every twelve
(12) months.

5.8.4 NOTIFICATION OF CHANGES IN SERVICES

The contractor shall revise and distribute the information specified in
Article 5.8 at least thirty (30) calendar days prior to any changes
that me contractor makes in services provided or in the locations at
which services may be obtained, or other changes of a program nature or
in administration, to each enrollee and all providers affected by that
change.

5.8.5 ID CARD

A. Except as set forth in Section 5.9.1C. the contractor shall
deliver to each, new enrollee prior to the effective
enrollment date but no later than seven (7) days after the
enrollee's effective date of enrollment a contractor
Identification Card for those enrollees who have selected a
PGP. The Identification Card shall have at least the following
information:

1. name of enrollee

2. Issue Date for use in automated card replacement
process

3. Primary Care Provider Name (may be affixed by
sticker)

4. Primary Care Provider Phone Number (may be affixed by
sticker)

5. What to do in case of an emergency and that no prior
authorization is required

6. Relevant copayments/Personal Contributions to Care

7. Contractor 800 number - emergency message

Any additional information shall be approved by DMAHS
prior to use on the ID card,

Amended as of October 1, 2003 V-19

in this contract. The contractor shall make provision for continuing
all management and administrative services until the transition of
enrollees is completed and all other requirements of this contract are
satisfied. The contractor shall be responsible for the following:

1. Identification and transition of chronically ill, high risk and
hospitalized enrollees, and enrollees in their last four weeks of
pregnancy.

2. Transfer of requested medical records. . . .

5.10.2 DISENROLLMENT FROM THE CONTRACTOR'S PLAN AT THE ENROLLEE'S REQUEST

1. An enrollee subject to the enrollment Lock-In period
may initiate disenrollment or transfer 'for any
reason dunng the first ninety (90) days after the
latter of the date the individual is enrolled or the
date they receive notice of enrollment with a new
contractor and at least every twelve (12) months
thereafter without cause. NJ FamilyCare Plans B, C,
D, and H enrollees will be subject to a twelve
(12)-month Lock-In period,

b. Upon automatic re-enrollment of an
individual who is disenrolled solely
because he or she loses Medicaid
eligibility for a period of 2 months or
less, if the temporary loss of Medicaid
eligibility has caused the individual to
miss the annual disenrollment opportunity.

2. An enrollee subject to the Lock-In period may
initiate disenrollment for good cause at any time.

a. Good cause reasons for disenrollment or
transfer shall include, unless otherwise
defined by DMAHS:

i. Failure of the contractor to
provide services including
physical access to the enrollee
in accordance with the terms of
this contract;

Amended as of October 1, 2003 V-24

through. NJ FamilyCare Plans B, C, D, (except for individuals with a
program status code of 380), and H do not have the right to a Medicaid
Fair Hearing.

B. Complaints. The contractor shall have procedures for receiving,
responding to, and documenting resolution of enrollee complaints that
are received orally and are of a less serious or formal nature.
Complaints that are resolved to the enrollee's satisfaction within
three (3) business days of receipt do not require a formal written
response or notification. The contractor shall call back an enrollee
within twenty-four hours of the initial contact if the contractor is
unavailable for any reason or the matter cannot be readily resolved
during the initial contact. Any complaint that is not resolved within
three business days shall be treated as a grievance/appeal, in
accordance with requirements defined in Article 5.15.3.

C. HBC Coordination. The contractor, shall coordinate its efforts with the
health benefits coordinator including referring the enrollee to the HBC
for assistance as needed in the management of the
complaint/grievance/appeal procedures.

D. DMAHS Intervention. DMAHS shall have the right to intercede on an
enrollee's behalf at any time during the contractor's
complaint/grievance/appeal process whenever there is an indication from
the enrollee, or, where applicable, authorised person, or the HBC that
a serious quality of care issue is not being addressed timely or
appropriately. Additionally, the enrollee may be accompanied by a
representative of the enrollee's choice to any proceedings and
grievances/appeals.

E. Legal Rights. Nothing in this Article shall be construed as removing
any legal rights of enrollees under State or federal law, including the
right to file judicial actions to enforce rights. .

5.15.2 NOTIFICATION TO ENROLLEES OF GRIEVANCE/APPEAL PROCEDURE

A. The contractor shall provide all enrollees or, where applicable, an
authorized person, upon enrollment in the contractor's plan, and
annually thereafter, pursuant to this contract, with a concise
statement of the contractor's grievance/appeal procedure and the
enrollees' rights to a hearing by the Independent Utilization Review
Organization (IURO) per NJAC 8:38-8.7 as well as their right to pursue
the Medicaid Fair Hearing process described in N.J.A.C. 10:49-10.1 et
seq. The information shall be provided through an annual mailing, a
member handbook, or any other method approved by DMAHS. The contractor
shall prepare the information orally and in writing in English,
Spanish, and other bilingual translations and a format accessible to
the visually impaired, such as Braille, large print, or audio tapes.

B. Written information to enrollees regarding the grievance/appeal process
shall include at a minimum:

Amended as of October 1,2003 V-36

The contractor shall have the right to request an informal hearing
regarding disputes under this contract by the Director, or the
designee thereof. This shall not in any way limit the contractor's or
State's right to any remedy pursuant to New Jersey law.

7.25 MEDICARE RISK CONTRACTOR

To maximize coordination of care for dual eligibles while promoting the
efficient use of public funds, the contractor:

A. Is recommended to be a Medicares-Choice contractor.

B. Shall serve all eligible populations.

7.26 TRACKING AND REPORTING

As a condition of acceptance of a managed care contract, the
contractor shall be held to the following reporting requirements:

A. The contractor shall develop, implement, and maintain a system
of records and reports which include those described below and
shall make available to DMAHS for inspection and audit any
reports, financial or otherwise, of the contractor and require
its providers or subcontractors to do the same relating to
their capacity to bear the risk of potential financial, losses
in accordance with 42 C.F.R. Section 434,38. Except where
otherwise specified, the contractor shall provide reports on
hard copy, computer diskette or via electronic media using a
format and commonly- available software as specified by DMAHS
for each report.

B. The contractor shall maintain a uniform accounting system that
adheres to generally accepted accounting principles for
charging and allocating to all funding resources the
contractor's costs incurred hereunder including, but not
limited to, the American Institute of Certified Public
Accountants' (AICPA) Statement of Position 89-5 "Financial
Accounting and Reporting by Providers of Prepaid Health Care
Services".

C. The contractor shall submit financial reports including, among
others, rate cell grouping costs, in accordance with the
timeframes and formats contained in Section A of the
Appendices. The contractor shall submit separate financial
reports for MCSA enrollees in accordance with the rate cell
grouping for this population.

Amended as of October 1, 2003 VII-37

K. MCSA Paid Claims Reconciliation. On a quarterly basis, the
contractor shall provide paid claims data, via an encounter
data file or separate paid claims file, that meet the HIPAA
format requirements for audit and reconciliation purposes. The
contractor shall provide documentation that demonstrates a
100% reconciliation of the amounts paid to the amounts billed
to the DMAHS. The paid claims data shall include at a minimum,
claim type, provider type, category of service, diagnosis code
(5 digits), procedure/revenue code, Internal Control Number or
Patient Account Number under HIPAA, provider ID, dates of
services, that will allow the DMAHS to price claims in
comparison to Medicaid fee schedules for evaluation purposes.

7.27 FINANCIAL STATEMENTS

7.27.1 AUDITED FINANCIAL STATEMENTS (SAP BASIS)

A. Annual Audit. The contractor shall submit its audited annual
financial statements prepared in accordance with Statutory
Accounting Principles (SAP) certified by an independent public
accountant no later than June 1 of each year, for the
immediately preceding calendar year as well'as for any company
that is a financial guarantor for the contractor in accordance
with N.J.S.A. 8:38-11.6.

B. Audit of Rate Cell Grouping Costs

The contractor shall submit, quarterly, reports found in
Appendix, Section A in. accordance with the "HMO Financial
Guide for Reporting Medicaid/NJ Family Care Rate Cell Grouping
Costs" (Appendix, Section B7.3). These reports shall be
reviewed by an independent public accountant in accordance
with the standard "Agreed Upon Procedures" (Appendix, Section
B).

The contractor shall require its independent public accountant
to prepare a letter and report of findings which shall be
submitted to DMAHS by June 1 of each

Amended as of October 1, 2003 VII-39

8.5.1 REGIONS

Capitation Rates for DYFS, NJ FamilyCare Plans B, C, and D and the non
risk-adjusted rates for AIDS and clients of DDD are statewide. Rates for all
other premium groups are regional in each of the following regions:

- Region 1: Bergen, Hudson, Hunterdon, Xxxxxx, Passaic,
Somerset, Sussex, and Xxxxxx counties

- Region 2: Essex, Union, Middlesex, and Xxxxxx counties

- Region 3: Atlantic, Burlington, Camden, Cape May, Cumberland,
Gloucester, Monmouth, Ocean, and Salem counties

Contractors may-contract for one or more regions but, except as
provided in Article 2, may not contract for part of a region.

8.5.2 MAJOR PREMIUM GROUPS

The following is a list of the major premium groups. The individual
rate groups (e.g. children under 2 years, etc.) with their respective
rates are presented in the rate tables in the appendix.

8.5.2.1 AFDC/TANF, NJC PREGNANT WOMEN, AND NJ FAMILYCARE PLAN A CHILDREN

8.5.2.2 NJ FAMILYCARE PLANS B & C

This grouping includes capitation rates for NJ FamilyCare Plans B and C
enrollees, excluding individuals with AIDS and/or DDD clients.

8.5.2.3 NJ FAMILYCARE PLAN D CHILDREN

This grouping includes capitation rates for NJ FamilyCare Plan D
children, excluding individuals with AIDS.

8.5.2.4 NJ FAMILYCARE PLAN D PARENTS/CARETAKERS

This grouping includes capitation rates for NJ FamilyCare Plan D
parents/caretakers, excluding individuals with AIDS, and include only
enrollees 19 years of age or older,

Amended as of October 1, 2003 VIII-6

8.5.4 SUPPLEMENTAL PAYMENT PER PREGNANCY OUTCOME

Because costs for pregnancy outcomes were not included in the
capitation rates, the contractor shall be paid supplemental payments
for pregnancy outcomes for all eligibility categories.

Payment for pregnancy outcome shall be a single, predetermined lump
sum payment. This amount shall supplement the existing capitation rate
paid. The Department will make a supplemental payment to contractors
following pregnancy outcome. For purposes of this Article, pregnancy
outcome shall mean each live birth, still birth or miscarriage
occurring at the thirteenth (13th) or greater week of gestation. This
supplemental payment shall reimburse the contractor for its inpatient
hospital, antepartum, and postpartum costs incurred in connection with
delivery. Costs for care of the baby for the first 60 days after the
birth plus through the end of the month in which the 60th day falls are
included (See Section 8.5.3). Regional payment shall be made by the
State to the contractor based on submission of appropriate encounter
data as specified by DMAHS.

8.5.5 PAYMENT FOR CERTAIN BLOOD CLOTTING FACTORS

8.5.6 PAYMENT FOR HIV/AIDS DRUGS

The contractor shall be paid separately for protease inhibitors and
other anti-retroviral agents (First Data Bank Specific Therapeutic
Class Codes W5C, W5B, W5I, W5J, W5K, X0X, X0X, X0X). Payment for
protease inhibitors shall be made by DMAHS to the contractor based on;
1) submission of appropriate encounter data; and 2) notification from
the contractor to DMAHS within 12 months of the date of service of
identification of individuals with HIV/AIDS. Payment for these products
will be the lesser of; 1) Average Wholesale Price (AWP) minus 12.5% and
2) rates paid by the contractor.

Individuals eligible through NJ FamilyCare with a program status code
of 380 and all children groups shall receive protease inhibitors and
other anti-retroviral agents under the contractor's plan. All other
individuals eligible through NJ FamilyCare with program status codes of
497-498, 300-301, 700-701 and 763 shall receive protease inhibitors and
other anti-retrovirals (First Data Bank Specific Therapeutic Class
Codes W5C, X0X, X00, X0X, X0X, X0X, X0X and W5N) through Medicaid fee
for service and/or the AIDS Drug Distribution Program (ADDP).

8.5.7 EPSDT INCENTIVE PAYMENT

Amended as of October 1, 2003 VIII-8

The incentive payment shall be reimbursed for EPSDT encounter records
submitted in accordance with 1) procedure codes specified by DMAHS, and
2) EPSDT periodicity Schedule.

8.5.8 ADMINISTRATIVE COSTS

The capitation rates, effective July 1, 2003, recognize costs for
anticipated contractor administrative expenditures due to Balanced
Budget Act regulations.

8.5.9 NJ FAMILYCARE PLAN H ADULTS

The contractor shall be paid an administrative fee for NJ FamilyCare
Plan H adults without dependent children, and restricted alien parents
excluding pregnant women, as defined in Article One.

8.6 HEALTH BASED PAYMENT SYSTEM (HBPS) FOR THE ABD POPULATION WITHOUT
MEDICARE

The DMAHS shall utilize a Health-Based Payment System (HBPS) for
reimbursements for the ABD population without Medicare to recognize
larger average health care costs and greater dispersion around the
average than other DMAHS populations. The contractor shall be
reimbursed not only on the basis of the demographic cells into which
individuals fall, but also on the basis of individual health status.

- ABD without Medicare, non-DDD

- ABD DDD without Medicare, physical health component

- ABD - DDD without Medicare, Mental Health/Substance Abuse
add-on-component

The Risk adjustment process has four major components.

- Development of base rates for the risk adjusted populations.

- Development of algebraic expressions that relate demographic
and clinical characteristics of beneficiaries to their
expected, prospective covered health care

Amended as of October 1, 2003 VIII-9

M, Drug Carve-Out Report. The DMAHS will provide the contractor
with a monthly electronic file of paid drag claims data for
non-dually eligible, ABD enrollees.

N. MCSA ADMINISTRATIVE FEE. THE CONTRACTOR SHALL RECEIVE A
MONTHLY ADMINISTRATIVE FEE, PMPM, FOR ITS MCSA ENROLLEES, BY
THE FIFTEENTH (15TH) DAY OF ANY MONTH DURING WHICH HEALTH CARE
SERVICES WILL BE AVAILABLE TO AN ENROLLEE.

O. REIMBURSEMENT LOR MCSA ENROLLEE PAID CLAIMS. THE CONTRACTOR
SHALL SUBMIT TO DMAHS A FINANCIAL SUMMARY REPORT OF CLAIMS
PAID ON BEHALF OF MCSA ENROLLEES ON A WEEKLY BASIS. THE REPORT
SHALL BE SUMMARIZED BY CATEGORY OF SERVICE CORRESPONDING TO
THE MCSA BENEFITS AND PAYMENT DATES, ACCOMPANIED BY AN
ELECTRONIC FILE OF ALL INDIVIDUAL CLAIM NUMBERS FOR WHICH THE
STATE IS BEING BILLED.

P. CLAIMS PAYMENT AUDITS. THE CONTRACTOR SHALL MONITOR AND AUDIT
CLAIMS PAYMENTS TO PROVIDERS TO IDENTIFY PAYMENT ERRORS,
INCLUDING DUPLICATE PAYMENTS, OVERPAYMENTS, UNDERPAYMENTS, AND
EXCESSIVE PAYMENTS. FOR SUCH PAYMENT ERRORS (EXCLUDING
UNDERPAYMENTS), THE CONTRACTOR SHALL REFUND DMAHS THE OVERPAID
AMOUNTS. THE CONTRACTOR SHALL REPORT THE DOLLAR AMOUNT OF
CLAIMS WITH PAYMENT ERRORS ON A MONTHLY BASIS, WHICH IS
SUBJECT TO VERIFICATION BY THE STATE. THE CONTRACTOR IS
RESPONSIBLE FOR COLLECTING FUNDS DUE TO THE STATE FROM
PROVIDERS, EITHER THROUGH CASH PAYMENTS OR THROUGH OFFSETS TO
PAYMENTS DUE THE PROVIDERS.

8.9 CONTRACTOR ADVANCED PAYMENTS AND PIPS TO PROVIDERS

A. The contractor shall make advance payments to its providers,
capitation, FFS, or other financial reimbursement arrangement,
based on a provider's historical billing or utilization of
services if the contractor's claims processing systems become
inoperational or experience any difficulty in making timely
payments, Under no circumstances shall the contractor default
on the claims payment timeliness provisions of this contract.
Advance payments shall also be made when compliance with
claims payment timeliness is less than ninety (90) percent for
two (2) quarters. Such advance payments will continue until
the contractor is in full compliance with timely payment
provisions for two (2) successive quarters,

Amended as of October 1, 0000 XXXX-00

XXXXX XX XXX XXXXXX

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.2B of the contract
between University Health Plans, Inc. and the State of New Jersey, Department of
Human Services, Division of Medical Assistance and Health Services (DMAHS),
effective date October 1, 2000, all parties agree that certain sections of the
contract amendment, which were to be effective August 1, 2003 shall be amended
to take effect September 1, 2003, as set out below;

1. ARTICLE 1, "DEFINITIONS" section - for the following definitions;

- Copayment;

- NJ FamilyCare Plan D;

- NJ FamilyCare Plan H (DELETED)

shall be amended as reflected in the relevant pages of Article 1
attached hereto and incorporated herein.

(NJ FamilyCare Extension through 8/31/03)

2. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES" Section 4.1.7 (DELETED),
renumber remaining sections, shall be amended as reflected in Article
4, Section 4.1.7 attached hereto and incorporated herein.

3. ARTICLE 5, "ENROLLEE SERVICES" Section 5.2(A)8 (DELETED) shall be
amended as reflected in Article 5, Section 5.2(A)8 attached hereto and
incorporated herein.

4. ARTICLE 8, "FINANCIAL PROVISIONS" Sections 8.5.1; 8.5.4(deleted);
8.5.6; 8.5.8- Reserved (deleted) and 8.7(J)1 shall be amended as
reflected in Article 8, Sections 8.5.1, 8.5.4, 8.5.6, 8.5.8-Reserved
and 8.7(J)1 attached hereto and incorporated herein.

5. APPENDIX, SECTION B, "REFERENCE MATERIALS"

B.5.2 - Cost-Sharing Requirements for NJ FamilyCare Plan C and Plan D
Beneficiaries: Title; Plan H (DELETED); "No copayments shall be charged
for the following services" (DELETED) shall be amended as reflected in
Appendix, Section B, B.5.2 attached hereto and incorporated herein.

6. APPENDIX, SECTION C, "CAPITATION RATES" shall be revised as reflected
in SFY 2004 Capitation Rates attached hereto and incorporated herein.

(NJ FamilyCare Extension through 8/31/03)

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

BY: /s/ Xxxxxxxxx XxXxxx BY: /s/ Xxxxxxx X. Plant
----------------------- ----------------------------
XXXXXXX X. PLANT

TITLE: PRESIDENT & CEO TITLE: DIRECTOR, DMAHS

DATE: 6/20/03 DATE: 6/26/03

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: /s/ [ILLEGIBLE]
-------------------------
DEPUTY ATTORNEY GENERAL

DATE: 6/26/03

CONTRACTOR--the Health Maintenance Organization with a valid
Certificate of Authority in New Jersey that contracts hereunder with
the State for the provision of comprehensive health care services to
enrollees on a prepaid, capitated basis.

CONTRACTOR'S PLAN--all services and responsibilities undertaken by the
contractor pursuant to this contract.

CONTRACTOR'S REPRESENTATIVE--the individual legally empowered to bind
the contractor, using his/her signature block, including his/her title.
This individual will be considered the Contractor's Representative
during the life of any contract entered into with the State unless
amended in writing pursuant to Article 7.

COPAYMENT--the part of the cost-sharing requirement for NJ FamilyCare
Plan D enrollees in which a fixed monetary amount is paid for certain
services/items received from the contractor's providers.

COST AVOIDANCE--a method of paying claims in which the provider is not
reimbursed until the provider has demonstrated that all available
health insurance has been exhausted.

COST NEUTRAL--the mechanism used to smooth data, share risk, or adjust
for risk that will recognize both higher and lower expected costs and
is not intended to create a net aggregate gain or loss across all
payments.

COVERED SERVICES--see "BENEFITS PACKAGE"

CREDENTIALING--the contractor's determination as to the qualifications
and ascribed privileges of a specific provider to render specific
health care services.

CWA OR COUNTY WELFARE AGENCY ALSO KNOWN as COUNTY BOARD OF SOCIAL
SERVICES-the agency within the county government that makes
determination of eligibility for Medicaid and financial assistance
programs.

DAYS--calendar days unless otherwise specified.

DBI--the New Jersey Department of Banking and Insurance in the
executive branch of New Jersey State government.

DEFAULT--see "AUTOMATIC ASSIGNMENT"

Amended as of September 1, 2003 I-6

Jersey Care...Special Medicaid Programs, to uninsured children below
the age of 19 with family incomes above 150 percent and up to and
including 200 percent of the federal poverty level. Eligibles are
required to participate in cost-sharing in the form of monthly premiums
and a personal contribution to care for most services. Exception - Both
Eskimos and Native American Indians under the age of 19 years old,
identified by Race Code 3, shall not participate in cost sharing, and
shall not be required to pay a personal contribution to care. In
addition to covered managed care services, eligibles under this program
may access certain other services which are paid fee-for-service and
not covered under this contract.

NJ FAMILYCARE PLAN D--means the State-operated program which provides
managed care coverage to uninsured:

- Parents/caretakers -with children below the age of 19 who do
not qualify for AFDC Medicaid with family incomes up to and
including 133 percent of the federal poverty level; AND

- Children below the age of 19 with family incomes between 201
percent and up to and including 350 percent of the federal
poverty level.

PSC PSC Race Code
Cost Sharing No Cost Sharing No Cost Sharing
------------ --------------- ---------------

493 380 3
494
495

In addition to covered managed care services, eligibles under these
programs may access certain services which are paid fee-for-service and
not covered under this contract.

Amended as of September 1, 0000 X-00

XX FAMILYCARE PLAN I--means the State-operated program that provides
certain benefits on a fee-for-service basis through the DMAHS for Plan
D parents/caretakers with a program status code of 380.

N.J.S.A.--New Jersey Statutes Annotated,

NON-COVERED CONTRACTOR SERVICES--services that are not covered in the
contractor's benefits package included under the terms of this
contract.

NON-COVERED MEDICAID SERVICES--all services that are not covered by the
New Jersey Medicaid State Plan.

NON-PARTICIPATING PROVIDER--a provider of service that does not have a
contract with the contractor.

OIT--the New Jersey Office of Information Technology.

OTHER HEALTH COVERAGE--private non-Medicaid individual or group
health/dental insurance. It may be referred to as Third Party Liability
(TPL) or includes Medicare.

OUTCOMES--the results of the health care process, involving either the
enrollee or provider of care, and may be measured at any specified
point in time. Outcomes can be medical, dental, behavioral, economic,
or societal in nature.

OUTPATIENT CARE--treatment provided to an enrollee who is not admitted
to an inpatient hospital or health care facility.

Amended as of September 1, 2003 I-20

2. Dental services

3. DME

4. Hearing aids

5. Medical supplies

6. Orthotics

7. TMJ treatment

Amended as of September 1, 2003 IV-15

Amended as of September 1, 2003 IV-16

Amended as of September 1, 2003 IV-17

4.1.7 SUPPLEMENTAL BENEFITS

4.1.8 CONTRACTOR AND DMAHS SERVICE EXCLUSIONS

Neither the contractor nor DMAHS shall be responsible for the
following:

A. All services not medically necessary, provided, approved or
arranged by a contractor's physician or other provider (within
his/her scope of practice) except emergency services.

B. Cosmetic surgery except when medically necessary and approved.

C. Experimental organ transplants.

Amended as of September 1, 2003 IV-18

5.2 AID CATEGORIES ELIGIBLE FOR CONTRACTOR ENROLLMENT

A. Except as specified in Article 5.3, all persons who are not
institutionalized, belong to one of the following eligibility
categories, and reside in any of the enrollment areas, as
identified in Article 5.1, are in mandatory aid categories
and shall be eligible for enrollment in the contractor's plan
in the manner prescribed by this contract.

1. Aid to Families with Dependent Children
(AFDC)/Temporary Assistance for Needy Families
(TANF);

2. AFDC/TANF-Related, New Jersey Care...Special
Medicaid Program for Pregnant Women and Children;

3. SSI-Aged, Blind, Disabled, and Essential Spouses;

4. New Jersey Care...Special Medicaid programs for
Aged, Blind, and Disabled;

5. Division of Developmental Disabilities Clients
including the Division of Developmental Disabilities
Community Care Waiver;

6. Medicaid only or SSI-related Aged, Blind, and
Disabled;

7. Uninsured parents/caretakers and children who are
covered under NJ FamilyCare;

B. The contractor shall enroll the entire Medicaid case, i.e.,
all individuals included under the ten digit Medicaid
identification number.

D. The contractor shall be responsible for keeping its network of
providers informed of the enrollment status of each enrollee.

E. Dual eligibles (Medicaid-Medicare) may voluntarily enroll.

5.3 EXCLUSIONS AND EXEMPTIONS

Persons who belong to one of the eligible populations (defined in 5.2A)
shall not be subject to mandatory enrollment if they meet one or more
criteria defined in this Article. Persons who fall into an "excluded"
category (Article 5.3.1A) shall not be eligible to enroll in the
contractor's plan. Persons falling into the categories under Article
5.3.1B are eligible to enroll on a voluntary basis. Persons falling
into a category under Article 5.3.2 maybe eligible for enrollment
exemption, subject to the Department's review.

Amended as of September 1,2003 V-2

be considered direct medical expenditures. The contractor's
reporting shall be based only on the approved Medical Cost
Ratio -- Direct Medical Expenditures Plan (Report on Table
6c).

Calculation of MCR. The calculation of MCR will be made using
information submitted by each contractor on the quarterly reports -
Statement of Revenues and Expenses (Section A,7.8 of the Appendices
(Tables 6a, 6b and 6c)). The costs related to 8.4.1.A 1-3 are to be
reported on Table 6c and the allowable amount will be added to the
calculation of Medical and Hospital Expenses. The sum of all applicable
quarters for Total Medical and Hospital Expenses (line 28) less
Coordination of Benefits (COB) (line 6) and less reinsurance recoveries
(line 7) will be divided by the sum of all applicable quarters of
Medicaid/NJ FamilyCare premiums (line 4) to arrive at the ratio.

8.4.2 RESERVED

8.4.3 DAMAGES

The Department shall have the right to impose damages on a contractor that has
failed to maintain an appropriate MCR. The damages shall be assessed when MCR is
below 80% and an underexpenditure occurs. The formula for imposing damages
follows:

ACTUAL MCR 1ST OFFENSE 2ND OFFENSE
---------- ----------- -----------

80% or above NONE NONE

78.00-79.99% .15 times .15 times
underexpenditure underexpenditure

75.00-77.99% .50 times .50 times
underexpenditure underexpenditure

74.99 or below .90 times 1.00 times
underexpenditure underexpenditure

If the contractor fails to meet the MCR requirement and a penalty is applied, a
plan of corrective action shall be required.

8.5 REGIONS, PREMIUM GROUPS, AND SPECIAL PAYMENT PROVISIONS

8.5.1 REGIONS

Rates for DYFS, NJ FamilyCare Plans B, C, and D and the non risk-adjusted rates
for AIDS and clients of DDD are statewide. Rates have been set for each premium
group in each of the following regions:

Amended as of September 1, 2003 VIII-5

Amended as of September 1, 2003 VIII-7

Amended as of September 1, 2003 VIII-8

8.5.3 NEWBORN INFANTS

The contractor shall be reimbursed for newborns from the date of birth
through the first 60 days after the birth through the period ending at
the end of the month in which the 60th day falls by a supplemental
payment as part of the supplemental maternity payment. Thereafter,
capitation payments will be made prospectively, i.e. only when the
baby's name and ID number are accreted to the Medicaid eligibility file
and formally enrolled in the contractor's plan.

8.5.4 SUPPLEMENTAL PAYMENT PER PREGNANCY OUTCOME

Because costs for pregnancy outcomes were not included in the
capitation rates, the contractor shall be paid supplemental payments
for pregnancy outcomes for all eligibility categories.

Payment for pregnancy outcome shall be a single, predetermined lump sum
payment. This amount shall supplement the existing capitation rate
paid. The Department will make a supplemental payment to contractors
following pregnancy outcome. For purposes of this Article, pregnancy
outcome shall mean each live birth, still birth or miscarriage
occurring at the thirteenth (13th) or greater week of gestation. This
supplemental payment shall reimburse the contractor for its inpatient
hospital, antepartum, and postpartum costs incurred in connection with
delivery. Costs for care of the baby for the first 60 days after the
birth plus through the end of the month in which the 60th day falls are
included (See Section 8.5.3). Payment shall be made by the State to the
contractor based on submission of appropriate encounter data and use of
a special indicator on the claim as specified by DMAHS.

8.5.5 PAYMENT FOR CERTAIN BLOOD CLOTTING FACTORS

8.5.6 PAYMENT FOR HIV/AIDS DRUGS

Amended as of September 1, 2003 VIII- 11

notification from the contractor to DMAHS within 12 months of the date
of service of identification of individuals with HIV/AIDS. Payment for
these products will be the lesser of; 1) Average Wholesale Price (AWP)
minus 15% and 2) rates paid by the contractor.

8.5.7 EPSDT INCENTIVE PAYMENT

Amended as of September 1, 2003 VIII-12

7. Any references to Medicare coverage in this Article shall
apply to both Medicare/Medicaid duel eligibles and Qualified
Medicare Beneficiaries.

J. Other Protections for Medicaid Enrollees.

1. The contractor shall not impose, or allow Its participating
providers or sub contractors to impose,cost-sharing charge of
any kind upon Medicaid beneficiaries enrolled in the
contractor's plan pursuant to this contract. This Article does
note apply to individuals eligible solely through the NJ
FamilyCare Program Plan C, or D, for whom providers will be
required to collect cost-sharing for certain services.

2. The contractor's obligations under this Article shall not be
imposed upon the enrollees, although the contractor shall
require enrollees to cooperate in the identification of any
and all other potential sources of payment for services.
Instances of non-cooperation shall be referred to the State.

3. The contractor shall neither encourage nor require a Medicaid
enrollee to reduce or terminate TPL coverage.

4. Unless otherwise permitted or required by federal and State
law, health care services cannot be denied to a Medicaid
enrollee because of a third party's, potential liability to
pay for the services, and the contractor shall ensure that its
cost avoidance efforts do not prevent an enrollee from
receiving medically necessary services.

Amended as of September 1, 2003 VIII-20

B.5.2 COST-SHARING REQUIREMENTS FOR NJ FAMILY CARE PLAN C AND PLAN D
BENEFICIARIES

B-195

COST-SHARING REQUIREMENTS FOR
NJ FAMILYCARE PLAN D

COPAYMENTS FOR NJ FAMILY CARE - PLAN D

Copayments will be required of parents/caretakers solely eligible through NJ
FamilyCare Plan D whose family income is between 151% and up to including 200%
of the federal poverty level. The same copayments will be required of children
solely eligible through NJ Family Care Plan D whose family income is between
201% and up to and including 350% of the federal poverty level. Exception -
Both Eskimos and Native American Indians under the age of 19 are not required
to pay copayments.

The total family limit (regardless of family size) on all cost-sharing may not
exceed 5% of the annual family income.

Below is listed the services requiring copayments and the amount of each
copayment.

SERVICE AMOUNT OF COPAYMENT
------- -------------------

1. Outpatient Hospital Clinic Visits, $5 copayment for each outpatient clinic visit
including Diagnostic Testing that is not for preventive services

2. Hospital Outpatient Mental Health Visits $25 copayment for each visit

3 Outpatient Substance. Abuse Services for $5 copayment for each visit
Detoxification

4. Hospital Outpatient Emergency Services $35 copayment; no copayment is required if
Covered for Emergency Services only, the member was referred to the Emergency
including services provided in an Room by his/her primary care provider for
outpatient hospital department or an urgent services that should have been rendered in the
care facility. [Note: Triage and medical primary care provider's office or if the
screenings must be covered in all member is admitted into the hospital.
situations.]

5. Primary Care Provider Services provided $5 copayment for each visit (except for well-
during normal office hours child visits in accordance with the
recommended schedule of the American
Academy of Pediatrics; lead screening and
treatment; age-appropriate immunizations;
prenatal care; or preventive dental services).
The $5 copayment shall only apply to the first

B-198

STATE OF NEW JERSEY

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.2B of the contract
between University Health Plans, Inc. and the State of New Jersey, Department of
Human Services, Division of Medical Assistance and Health Services (DMAHS),
effective date October 1, 2000, all parties agree that certain sections of the
contract amendment, which were to be effective July 1, 2003 shall be amended to
take effect August 1, 2003, as set out below:

1. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES" Section 4.1.2(A)14;
4.1.2(A)23; 4.1.8(S) and 4.1.8(T) shall be amended as reflected in
Article 4, Section 4.1.2(A)14, 4.1.2(A)23, 4.1.8(S) and 4.1.8(T)
attached hereto and incorporated herein.

2. APPENDIX, SECTION C, "CAPITATION RATES" shall be revised as reflected
in SFY 2004 Capitation Rates attached hereto and incorporated herein.

Extension of Dental and Chiropractic Services - August 1, 2003

All other terms and conditions of the October 1, 2000 contract and subsequent
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH PLANS, INC. STATE OF NEW JERSEY
DEPARTMENT OF HUMAN SERVICES

BY: Xxxxxxxxx XxXxxx BY: /s/ Xxxxxxx X. Plant
----------------------------- ----------------------------
XXXXXXX X. PLANT

Title: PRESIDENT & CEO Title: DIRECTOR, DMAHS

DATE: 6/20/03 DATE: 6/26/03

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: [ILLEGIBLE]
-------------------------
DEPUTY ATTORNEY GENERAL

DATE: 6/26/03

9. Prescription Drugs (legend and non-legend covered by
the Medicaid program) - For payment method for
Protease Inhibitors, certain other anti-retrovirals,
blood clotting factors VIII and IX, and coverage of
protease inhibitors and certain other
anti-retrovirals under NJ FamilyCare, see Article 8.

10. Family Planning Services and Supplies

11. Audiology

12. Inpatient Rehabilitation Services

13. Podiatrist Services

14. Chiropractor Services FOR CHILDREN UNDER 21 YEARS OF
AGE AND PREGNANT WOMEN ONLY

15. Optometrist Services

16. Optical Appliances

17. Hearing Aid Services

20. Durable Medical Equipment. (DME)/Assistive Technology
Devices in accordance with existing Medicaid
regulations.

21. Medical Supplies

22. Prosthetics and Orthotics including certified shoe
provider.

23. Dental Services FOR CHILDREN UNDER 21 YEARS OF AGE
AND PREGNANT WOMEN ONLY.

24. Organ Transplants - includes donor and recipient
costs. Exception; The contractor will not be
responsible for transplant-related donor and
recipient inpatient hospital costs for an individual
placed on a transplant

Amended as of August 1, 2003 IV-5

system, or through any similar third-party liability, which
also includes the provision of the Unsatisfied Claim and
Judgment Fund.

O. Any services or items furnished for which the provider does
not normally charge.

P. Services furnished by an immediate relative or member of the
Medicaid beneficiary's household.

S. CHIROPRACTOR SERVICES FOR INDIVIDUALS 21 YEARS OF AGE OR OLDER
OTHER THAN PREGNANT WOMEN.

T. DENTAL SERVICES FOR INDIVIDUALS 21 YEARS OF AGE OR OLDER OTHER
THAN PREGNANT WOMEN.

4.2 SPECIAL PROGRAM REQUIREMENTS

4.2.1 EMERGENCY SERVICES

A. For purposes of this contract, "emergency" means an onset of a
medical or behavioral condition, the onset of which is
sudden, that manifests itself by symptoms of sufficient
severity, including severe pain,-that a prudent layperson, who
possesses an average knowledge of medicine and health, could
reasonably expect the absence of immediate medical attention
to result in:

1. Placing the health of the person or others in serious
jeopardy;

2. Serious impairment to such person's bodily functions;

3. Serious dysfunction of any bodily organ or part of
such person; or

4. Serious disfigurement of such person.

Amended as of August 1, 0000 XX-00

XXXXX XX XXX XXXXXX

DEPARTMENT OF HUMAN SERVICES

DIVISION OF MEDICAL ASSISTANCE AND HEALTH SERVICES

AND

UNIVERSITY HEALTH PLANS, INC.

AGREEMENT TO PROVIDE HMO SERVICES

In accordance with Article 7, section 7.11.2A and 7.11.2B of the contract
between University Health Plans, Inc. and the State of New Jersey, Department of
Human Services, Division of Medical Assistance and Health Services (DMAHS),
effective date October 1, 2000, all parties agree that the contract shall be
amended, effective July 1, 2003, as follows:

1. ARTICLE 1, "DEFINITIONS" section - for the following definitions:

- Actuarially Sound Capitation Rates (NEW DEFINITION);

- Adjustments to Smooth Data (NEW DEFINITION);

- Appeal (NEW DEFINITION);

- Complaint Resolution (NEW DEFINITION);

- Comprehensive Risk Contract (NEW DEFINITION);

- Copayment (DELETE REFERENCE TO PLAN H);

- Cost Neutral (NEW DEFINITION);

- Existing Provider-recipient relationship (NEW DEFINITION);

- Federally Qualified HMO;

- Grievance;

- Grievance System (NEW DEFINITION);

- Health Care Professional;

- HIPAA (NEW DEFINITION);

- Managed Care Organization (NEW DEFINITION);

- Marketing;

- Marketing Materials (NEW DEFINITION);

- NJ FamilyCare Plan A;

- NJ FamilyCare Plan D;

- NJ FamilyCare Plan H (DELETED);

- Poststabilization Care Services (NEW DEFINITION);

- Potential Enrollee (NEW DEFINITION);

- Prevalent Language (NEW DEFINITION);

- Primary Care (NEW DEFINITION);

- Risk Contract (NEW DEFINITION);

- Risk Comprehensive Contract (DELETED); and

- Service Authorization Request (NEW DEFINITION)

shall be amended as reflected in the relevant pages of Article 1 attached hereto
and incorporated herein.

2. ARTICLE 2, "CONDITIONS PRECEDENT," Sections A; D; H and L (NEW) shall
be amended as reflected in Article 2, Sections A, D, H and L attached
hereto and incorporated herein.

3. ARTICLE 3, "MANAGED CARE MANAGEMENT INFORMATION SYSTEM," Sections
3.1.4(B) (DELETED); 3.2(C); 3.2.1(A); 3.2.2(D)1; 3.3.1(A); 3.5.1(D)

Sections 3.9(A); 3.9(B) (NEW); 3.9(C) (NEW); 3.9.1(B);
3.9.1(C); 3.9.2(A); 3.9.2(B); 3.9.4(A) and 3.9.4(B)

shall be amended as reflected in Article 3, Sections 3.1.4(B),
3.2(C), 3.2.1(A), 3.2.2(D)1, 3.3.1(A), 3.5.1(D), 3.9(A), 3.9(B),
3.9(C), 3.9.1(B), 3.9.1 (C), 3.9.2(A), 3.9.2(B), 3.9.4(A) and 3.9.4(B)
attached hereto and incorporated herein.

4. ARTICLE 4, "PROVISION OF HEALTH CARE SERVICES," Sections 4.1; 4.1.1(G)3
(NEW); 4.1.1(P) (NEW); 4.1.2(A)14; 4.1.2(A)19; 4.1.2(A)23; 4.1.2(B)3
(NEW); 4.1.2(B)4 (NEW); 4.1.2(B)5 (NEW); 4.1.2(B)6 (NEW); 4.1.2(B)7
(NEW); 4.1.2(B)8 (NEW); 4.1.2(B)9 (NEW); 4.1.2(B)10; 4.1.2(B)11;
4.1.2(B)16; 4.1.2(B)17; 4.1.2.(B)18 (NEW); 4.1.2.(B)21 (NEW);
4.1.2(B)25 (NEW); 4.1.2.(B)26 (NEW); 4.1.2(B)27 (NEW); 4.1.2.(6)28
(NEW); 4.1.2(B)29 (NEW); 4.1.4(B); 4.1.4(C); 4.1.7 (DELETED); renumber
remaining sections; 4.1.8(S) (NEW);4.1.8(T) (NEW);

Sections 4.2.1(D)2 (NEW); 4.2.1(F); 4.2.1(G); 4.2.1(G)1
(DELETED AND MOVED TO 4.2.1(H)3); 4.2.1(H)1; 4.2.1(H)3; 4.2.1(I);
4.2.1(K)2 (NEW); 4.2.3 (title); 4.2.3(C) (NEW); 4.2.4(C)8 (NEW);
4.2.7(A);

Sections 4.6.1(B); 4.6.2(A); 4.6.2(J); 4.6.4(A)1; 4.6.4(B);
4.6.4(B)2; 4.6.4(B)4; 4.6.4(B)5; 4.6.4(B)6; 4.6.4(B)8; 4.6.4(B)8(a);
4.6.4(B)8(d);

4.6.4(B)8(i); 4.6.4(B)8(J) (NEW); 4.6.4(C)2; 4.6.4(C)2(h);
4.6.4(C)2(i) (NEW); 4.6.4(C)2(j) (NEW); 4.6.4(C)2(k) (NEW);
4.6.4(C)2(l) (NEW); 4.6.4(C)4; 4.6.4(C)6 (NEW); 4.6.4(C)7 (NEW);
4.6.4(C)8 (NEW); 4.6.4(C)9 (NEW);

Sections 4.8.1(B)1; 4.8.1(D); 4.8.3; 4.8.4; 4.8.6(A)3;
4,8.7(B); 4.8.7(C); 4.8.7(D); 4.8.7(E); 4.8.8; 4.8.8(A)1; 4.8.8(0);
4.8.8(C)4; 4.8.8(C)5; 4.8.8(C)14; 4.8.8(C)16; 4.8.8(C)22; 4.8.8(C)23
(DELETED); renumber remaining sections; 4.8.8(D)2; 4.8.8(D)6 (DELETED);
4.8.8(E); 4.8.8(E)16; 4.8.8(F); 4.8.8(F)1 (NEW); 4.8.8(F)2; 4.8.8(F)3;
4.8.8(F)4; renumber remaining sections; 4.8.8(G); 4.8.8(H)8 (NEW);
4.8.8(H)9 (NEW); 4.8.8(H)10 (NEW); 4.8.8(H)11 (NEW); 4.8.8(I);
4.8.8(J)8; 4.8.8(M) (NEW); 4.9.1 (F); 4.9.1(F)5 (NEW); 4.9.3(A);
4.9.4(A); 4.9.5 and 4.10(E)

shall be amended as reflected in Article 4, Sections 4.1,
4.1.1(G)3, 4.1.1(P), 4.1.2(A)14, 4.1.2(A)19, 4.1.2(A)23, 4.1.2(B)3;
4.1.2(B)4, 4.1.2(B)5, 4.1.2(B)6, 4.1.2(B)7, 4.1.2(B)8, 4.1.2(B)9,
4.1.2(B)10, 4.1.2(B)11, 4.1.2(B)16, 4.1.2(B)17, 4.1.2(B)18, 4.1.2(B)21,
4.1.2(B)25, 4.1.2(B)26, 4.1.2(B)27, 4.1.2(B)28, 4.1.2(B)29; 4.1.4(B),
4.1.4(C), 4.1.7, 4.1.8(S), 4.1.8(T),

Sections 4.2.1(D)2, 4.2.1(F), 4.2.1(G), 4.2.1(B)1, 4.2.1(H)1,
4.2.1(H)3, 4.2.1(I), 4.2.1(K)2, 4.2.3, 4.2.3(C), 4.2.4(C)8, 4.2.7(A),
4.6.1(B), 4.6.2(A), 4.6.2(J), 4.6.4(A)1, 4.6.4(B), 4.6.4(B)2,
4.6.4(B)4, 4.6.4(B)5, 4.6.4(B)6, 4.6.4(B)8, 4.6.4(B)8(a), 4.6.4(B)8(d),
4.6.4(B)8(i), 4.6.4(B)8(j), 4.6.4(C)2, 4.6.4(C)2(h), 4.6.4(C)2(i),
4.6.4(C)2(j), 4.6.4(C)2(k), 4.6.4(C)2(l), 4.6.4(C)4, 4.6.4(C)6,
4.6.4(C)7, 4.6.4(C)8, 4.6.4(C)9,

Sections 4.8.1(B)1, 4.8.1(D), 4.8.3, 4.8.4, 4.8.6(A)3,
4.8.7(B), 4.8.7(C), 4.8.7(D), 4.8.7(E), 4.8.8, 4.8.8(A)1, 4.8.8(C),
4.8.8(C)4, 4.8.8(C)5, 4.8.8(C)14, 4.8.8(C)16, 4.8.8(C)22, 4.8.8(C)23,
4.8.8(D)2, 4.8.8(D)6,

4,8.8(E), 4.8.8(E)16, 4.8.8(F), 4.8.8(F)1, 4.8.8(F)2, 4.8.8(F)3,
4.8.8(F)4, 4.8.8(G), 4.8.8(H)8, 4.8.8(H)9, 4.8.8(H)10, 4.8.8(H)11,
4.8.8(1), 4.8.8(J)8, 4.8.8(M), 4.9.1(F), 4.9.1 (F)5, 4.9.3(A),
4.9.4(A), 4.9.5 and 4.10(E) attached hereto and incorporated herein.

5. ARTICLE 5, "ENROLLEE SERVICES," Sections 5.2(A)8 (DELETED); 5.3;
5.4(A); 5.5(A); 5.5(G)1(c); 5.5(G)1(c)i; 5.5(K); 5.5(P) (NEW);

Sections 5.8.1(A); 5.8.1(B); 5.8.1(D) (NEW); 5.8.1(E) (NEW);
5.8.2; 5.8.2(I); 5.8.2(K); 5.8.2(T); 5.8.2(V); 5.8.2(TT)1; 5.8.2(CCC)
(NEW); 5.10.2(A)1(b) (NEW); 5.10.3(A); 5.10.3(A)1; 5.10.3(C);

Sections 5.15.1 (A); 5.15.1(B); 5.15.2(A); 5.15.2(B)1
(DELETED); (renumber remaining items); 5.15.2(B)6; 5.15.2(B)7;
5.15.2(C); 5.15.3(B); 5.15.3(C); 5.15.3(D); 5.15.4(B) and 5.16.1(C)

shall be amended as reflected in Article 5, Sections 5.2(A)8,
5.3, 5.4(A), 5.5(A), 5.5(G)1(c), 5.5(G)1(c)i, 5.5(K), 5.5(P),

Sections 5.8.1(A), 5.8.1(B), 5.8.1(D), 5.8.1(E), 5.8.2,
5.8.2(I), 5.8.2(K), 5.8.2(T), 5.8.2(V), 5.8.2(TT)1, 5.8.2(CCC),

Sections 5.10.2(A)1(b), 5.10.3(A), 5.10.3(A)1, 5.10.3(C),
5.15.1 (A), 5.15.1(B), 5.15.2(A), 5.15.2(B)1, 5.15.2(B)6, 5.15.2(B)7,
5.15.2(C), 5.15.3(B), 5.15.3(C), 5.15.3(D), 5.15.4(B) and 5.16.1(C)
attached hereto and incorporated herein.

6. ARTICLE 6, "PROVIDER INFORMATION," Section 6.2(A)18 (NEW); 6.5(D);
6.5(D)1 and 6.5(D)2

shall be amended as reflected in Article 6, Sections 6.2(A)18,
6.5(D), 6.5(D)1 and 6.5(D)2 attached hereto and incorporated herein.

7. ARTICLE 7, "TERMS AND CONDITIONS," Section 7.2(B)3; 7.2(B)5 (NEW)
(renumber remaining items); 7.2(F); 7.2(G); 7.3(A); 7.4(E)1; 7.8(D);
7.8(E); 7.11.2(A); 7.12(C)6 (NEW); 7.12(C)8 (NEW); 7.15(B);

Sections 7.16.8.1 (F) (NEW); 7.16.8.1(6) (NEW); 7.16.8.1 (H)
(NEW); 7.16.8.2(A)1; 7.20.1 (B) (NEW); 7.20.2(B) (NEW); 7.20.2(C)
(NEW);

Sections 7.26(F); 7.27.1(8) (DELETED AND REPLACED WITH NEW
SECTION); 7.33(B)1 (NEW); 7.38.2(A)3 (NEW); 7.38.2(B); 7.38.2(D)3 and
7.40(A)

shall be amended as reflected in Article 7, 7.2(8)3, 7.2(B)5,
7.2(F), 7.2(G),

Sections 7.3(A), 7.4(E)1, 7.8(D), 7.8(E), 7.11.2(A), 7.12(C)6,
7.12(C)8, 7.15(B), 7.16.8.1(F), 7.16.8.1(G), 7.16.8.1(H),
7.16.8.2(A)1,

Sections 7.20.1(B), 7.20.2(B), 7.20.2(C), 7.26(F), 7.27.1(B),
7.33(B)1, 7.38.2(A)3, 7.38.2(B), 7.38.2(0)3 and 7.40(A) attached hereto
and incorporated herein.

8. ARTICLE 8, "FINANCIAL PROVISIONS," Section 8.3.1; 8.5.1; 8.5.2 (NEW);
8.5.2.1; 8.5.2.2; 8.5.2.3; 8.5.2.4; 8.5.2.5; 8.5.2.6; 8.5.2.7; 8.5.2.8;
8.5.2.9; 8,5.2.10 (NEW); 8,5.3 (NEW); 8.5.4; 8.5.5; 8.5.6; 8.5.7;
8.5.8;

Sections 8.6 (DELETED AND REPLACED WITH NEW SECTION); 8.7(J)1;
8.8(C) and 8.8(D)

shall be amended as reflected in Article 8, Sections 8.3.1,
8.5.1, 8.5.2, 8,5.2.1, 8.5.2.2, 8.5.2.3, 8.5.2.4, 8.5.2,5, 8.5.2.6,
8.5.2,7, 8.5.2.8, 8.5.2.9, 8.5.2.10, 8.5.3, 8.5.4, 8.5.5, 8.5.6, 8.5.7,
8.5,8,

Sections 8.6, 8.7(J)1, 8.8(C) and 8.8(D) attached hereto and
incorporated herein.

9. APPENDIX, SECTION A, "REPORTS"

- Section A, Reports Narrative;

- A.0.0-Summary Table of Reports (DELETED);

- A.4.1 - Provider Network File: Electronic Media Provider
Files, Attachment A, Attachment B and Attachment E;

- A.4,2 - Data Elements for Assessment of Provider Capacity by
County (DELETED);

- A.7.5 - Table 3: Grievance Summary (DELETED AND REPLACED WITH
TABLES 3A, 3B, 3C);

- A.7.2 - Fraud and Abuse (ADDED SECTION C);

- A.7.21 - Table 19: Income Statement by Rate Cell Grouping,
Tables T- AF (NEW);

- A.7.23 (NEW) - Table 19T: Maternity Outcome Counts

shall be amended as reflected in Appendix, Section A, A.0.0,
A.4.1, A.4.2, A.7.5, A.7.21 and A.7.23 attached hereto and incorporated
herein.

10. APPENDIX, SECTION B, "REFERENCE MATERIALS"

- B.2.2 - Pre-Contracting Checklist (DELETED);

- B.3.3 - Managed Care Medicaid Encounter Claims EMC Manual
(DELETED);

- B.4.3 - ACIP Recommended Childhood and Adolescent Immunization
Schedule (DELETED);

- B.4.14 - New Jersey Modified QARI/QISMC Standards: Standard
XX, X0; Standard X, A6, A13 (NEW);

- B.5.2 - Cost-Sharing Requirements for NJ FamilyCare Plan C and
Plan D Beneficiaries: Title; Plan H (DELETED); "No copayments
shall be charged for the following services" (DELETED);

- B.7.1 - Physician Incentive Plan Provisions: VI.B.1(a), (b),
(c); VIII;

- B.7.2 - Provider Contract/Subcontract Provisions: 2; 2E;
2H(3), (4); 21(1), (2), (4), (5), (6), (7); 2J(1); 2K; 2Q(2);
2R(1), (3); 4B;

- B.7.3 - Financial Guide for Reporting Medicaid/NJ FamilyCare
Rate Cell Grouping Costs; and

- B.7.4 Agreed Upon Procedures For Rate Cell Cost Reports (NEW);

shall be amended as reflected in Xxxxxxxx, Xxxxxxx X, X.0.0,
X.0.0, X.0,0; B.4.14, B.5.2, B.7.1, B.7.2, B.7.3, and B.7.4 attached
hereto and incorporated herein.

11. APPENDIX, SECTION C, "CAPITATION RATES," shall be revised as reflected
in SFY 2004 Capitation Rates attached hereto and incorporated herein

Ail other terms and conditions of the October 1, 2000 contract and subsequent,
amendments remain unchanged except as noted above.

The contracting parties indicate their agreement by their signatures.

UNIVERSITY HEALTH STATE OF NEW JERSEY
PLANS, INC. DEPARTMENT OF HUMAN SERVICES

BY: Xxxxxxxxx XxXxxx BY: /S/ Xxxxxxx X. Plant
--------------------------------
XXXXXXX X. PLANT

TITLE: President & CEO TITLE: DIRECTOR, DMAHS

DATE: 4/30/03 DATE: 5/4/03

APPROVED AS TO FORM ONLY

ATTORNEY GENERAL

STATE OF NEW JERSEY

BY: [ILLEGIBLE]
------------------------
DEPUTY ATTORNEY GENERAL

DATE: 5/4/03

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