DOCTORS HEALTH INC
424B3, 1997-11-25
MISC HEALTH & ALLIED SERVICES, NEC
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PROSPECTUS SUPPLEMENT NO. 32                    Filed pursuant to Rule 424(b)(3)
To the Prospectus dated January 24, 1997,            Registration No.: 333-01926
As Supplemented to Date

                                  1,250 Shares

                                        of
 
                   Class B Common Stock of Doctors Health, Inc.
 
    This Prospectus Supplement No. 31 relates to the issuance by Doctors Health,
Inc., a Maryland corporation ("Doctors Health") of 1,250 shares of its Class B
Common Stock, par value $.01 per share (the "Class B Common Stock") pursuant to
the Primary Care Participation Agreement (the "Participation Agreement") to be
entered into between Dr. M. Wajeed Khan ("Physician"), and Doctors Health. This
Prospectus Supplement should be read in conjunction with the Prospectus dated
January 24, 1997, the Prospectus Supplement No. 1 dated March 14, 1997 which
contains the Company's Quarterly Report on Form 10-Q for the period ended
December 31, 1996, the Prospectus Supplement No. 14 dated May 16, 1997 which
contains the Company's Quarterly Report on Form 10-Q for the period ended March
31, 1997.
 
    Doctors Health's principal executive office is located at 10451 Mill Run
Circle, Tenth Floor, Owings Mills, Maryland 21117, telephone number (410)
654-5800. IPA's principal executive office is located at 10451 Mill Run Circle,
Tenth Floor, Owings Mills, Maryland 21117 telephone number (410) 654-5800.
 
    NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER OF ANY
PERSON TO EXCHANGE OR SELL, OR A SOLICITATION FROM ANY PERSON OF AN OFFER TO
EXCHANGE OR PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS SUPPLEMENT, OR
THE SOLICITATION OF A PROXY FROM ANY PERSON, IN ANY JURISDICTION IN WHICH IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT NOR ANY DISTRIBUTION OF THE SECURITIES TO WHICH THIS
PROSPECTUS SUPPLEMENT RELATES SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED THEREIN IS CORRECT AT ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
                           __________________
 
    THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
                           ___________________
 
    See "Risk Factors" referred to on page S-2 hereof for certain information
that should be considered in connection with an investment in securities of
Doctors Health.
 
    The date of this Prospectus Supplement is September 16, 1997.



<PAGE>
 
                                  RISK FACTORS
 
FINANCIAL PERFORMANCE OF DOCTORS HEALTH
 
    Doctors Health has a limited operating history and for the fiscal year ended
June 30, 1996 and the six months ended December 31, 1996, recorded a net loss of
approximately $6.6 million and $6.7 million, respectively. Doctors Health is
likely to record a net loss for the fiscal year ending June 30, 1997. There can
be no assurance that after the Closing Date Doctors Health will earn operating
profits.
 
Risk Factors set forth in the Prospectus dated January 24, 1997
 
    The Risk Factors set forth in the Prospectus are incorporated herein by
reference and should be read carefully by investors.
 
PROPOSED PRIMARY CARE PARTICIPATION AGREEMENT AMONG DOCTORS
HEALTH AND DR. M. WAJEED KHAN
 
    The following description of the transactions contemplated by the
Participation Agreement does not purport to be complete and is qualified in its
entirety by reference to the Participation Agreement, a copy of which is
attached to this Prospectus Supplement as Annex A and is incorporated herein.
Physician is urged to read the Participation Agreement in its entirety.
 
GENERAL
 
    Pursuant to the Participation Agreement, (i) Physician agrees to participate
in the managed care agreements that Doctors Health enters into with Payors who
have contracted with Doctors Health with respect to HMO managed care products
("Doctors Health HMO Plans"), (ii) Physician agrees to provide eligible persons
who elect to enroll in Doctors Health HMO Plans (each, a "Doctors Health HMO
Member") with those primary care services customarily provided by primary care
physicians, as may be required by the Doctors Health HMO Plans, (iii) Physician
will be paid cash in the amount of $18,725 upon execution of the Participation
Agreement and satisfactory completion of credentialling of Physician by Doctors
Health, and (iv) Doctors Health will issue to the Physician 1,250 shares of its
Class B Common Stock.
 
ACCESS TO DOCTORS HEALTH SERVICES; CREDENTIALLING
 
    Pursuant to the Participation Agreement, Doctors Health agrees to provide to
Physician, once Physician has 100 Doctors Health Members in his medical practice
and at no cost to Physician, access to the managed care component of Doctors
Health's information system, which offers patient registration, referral
tracking and management and data management capabilities. Doctors Health will
also undertake to credential Physician, at no cost to Physician. Pursuant to the
Participation Agreement, Physician agrees to cooperate with the Doctors Health
credentialling and review process at no cost to Physician.
 
EXCLUSIVE IPA ARRANGEMENT
 
    Pursuant to the Participation Agreement, Physician agrees to participate in
the managed care agreements that Doctors Health enters into with Doctors Health
HMO Plans. Physician is required pursuant to the Participation Agreement to
cooperate with Doctors Health in accepting Doctors Health HMO Members under the
Doctors Health HMO Plans, and agrees not to participate or contract with any
other HMO or other payor offering managed care or other risk-type plans directly
or indirectly; provided, however, that if Doctors Health chooses not to pursue a
contract with an identified HMO or is unable to negotiate such a contract within
a commercially reasonable time period, Physician shall be free to pursue a
contract with the identified HMO.

                                    S-2

<PAGE> 

CAPITATION RATES; BONUS POOL
 
    The Participation Agreement provides that Doctors Health will determine 
the commercial and Medicare primary care base capitation rates using their 
good faith best efforts to reflect the prevailing market rate for the county 
and city in which Physician provides covered services (the "Primary Care Base 
Capitation Rates"). The Primary Care Base Capitation Rates may be adjusted 
for age and sex of the Doctors Health HMO members. The Primary Care Base 
Capitation Rate shall be adjusted by an amount up to ten percent each based 
upon (i) a formula for Commercial HMO Members taking into account certain 
factors as capitation panel size, Doctors Health membership growth, scheduled 
office hours and service and medical care coordination considerations; and 
(ii) a formula for Medicare HMO Members taking into account the number of HMO 
Members served by Physician's medical practice. The Commercial and Medicare 
formulas are set forth on Exhibit D-21 of the Participation Agreement. All 
payments of the Primary Care Base Capitation Rates will be made by Doctors 
Health directly to Physician, by the fifth day of the month for the prior 
month's enrollment. Physician agrees pursuant to the Participation Agreement 
not to seek or collect or accept any reimbursement from Doctors Health HMO 
Members or the Doctors Health HMO Plans for any covered services provided to 
Doctors Health HMO Members, except for copayments and coinsurance.
 
    The Participation Agreement also provides that Physician may participate in
a bonus pool established by Doctors Health's affiliated physicians. The amount
of bonus awards are determined according to Doctors Health's primary care bonus
system, rewarding high clinical quality, appropriate utilization, patient
satisfaction and retention and the extent of cooperation with other
participating physicians, and Doctors Health. Based upon these factors,
Physician may receive a bonus based upon the surplus generated in Physician's
panel of Doctors Health HMO Members, after managed care expenses, up to a
maximum of 25% of all Primary Care Base Capitation payments received by
Physician that year or the limits provided by applicable health care
regulations. Bonus awards for a calendar year, if any, will be paid by April of
the following year. There can be no assurance that a bonus will be paid in any
given year or, if paid, as to the amount of any bonus. A copy of Doctors
Health's bonus system for primary care physicians is on file at the offices of
Doctors Health and will be made available at the request of Physician.
 
OBLIGATIONS OF PHYSICIAN
 
    Pursuant to the Participation Agreement, Physician agrees to abide by and
comply with the relevant provisions of the agreements between Doctors Health and
the Doctors Health HMO Plans. Doctors Health will provide Physician with all
relevant provisions that may apply to such Physician. In such connection, the
Participation Agreement provides that Physician shall work cooperatively and in
good faith with Doctors Health and the other Doctors Health affiliated
physicians providing services to the Doctors Health HMO members. Physicians are
required to (i) prepare and maintain customary medical records for services
provided to Doctors Health HMO Members and provide Doctors Health with access to
such records without charge, (ii) comply with and accept the payment conditions
of the Participation Agreement, (iii) comply with managed care medical standards
adopted by Doctors Health affiliated physicians as part of the arrangements with
the Doctors Health HMO Plans, and (iv) cooperate with Doctors Health's efforts
to contact eligible Medicare and adult medicine patients in Physician's
practice, including providing mailing lists and the use of Physician's name in
correspondence, and (v) sign and submit in a timely manner authorizations,
consents, encounter data and other forms adopted by Doctors Health.
 
    Pursuant to the Participation Agreement, Physician will own and operate all
aspects of his medical practice and will remain responsible for all operations
of the medical practice, including all patient treatment decisions and employee,
office, lease and financial affairs. Doctors Health is not engaged in the
practice of medicine and will not interfere in any patient treatment decisions.
The

                                    S-3


<PAGE>

Participation Agreement provides an agreement by Physician not to 
differentiate or discriminate in the treatment of patients as to the quality 
of services delivered because of race, sex, age, religion, place of 
residence, health status or source of payment. Physician is required to make 
arrangements for 24 hour seven day per week coverage to Doctors Health HMO 
Members through other primary care physicians who participate in the Doctors 
Health provider network.
 
    Doctors Health will provide to Physician a list of other physicians and
other health care providers who provide medical services in the Doctors Health
provider network. Other than in cases of a bona fide emergency, the
Participation Agreement requires Physician to utilize the Doctors Health
provider network when arranging for additional medical services required by
Doctors Health HMO Members. Doctors Health may use Physician's name, specialty,
telephone number and business location in marketing, descriptive and other
information relating to the Doctors Health HMO Plans. The Participation
Agreement provides that Physician may be precluded from participating in a
Doctors Health HMO product by one of the Doctors Health HMO Plans. In such
event, Doctors Health will notify Physician, in writing, within 30 days of
learning of such an action, and will assist Physician, if requested, in seeking
to overturn such an action.

EXISTING PRIMARY CARE CAPITATION CONTRACTS
 
    The Participation Agreement provides that if Physician is a party, directly
or indirectly, to any primary care capitation contract, Physician must notify
Doctors Health of such contract and must use his commercially reasonable best
efforts to assist Doctors Health in replacing such contract with a Doctors
Health HMO Plan, provided that the payment terms of such Doctors Health HMO Plan
are at or above the payment terms of such existing contract.
 
QUALITY ASSURANCE/UTILIZATION REVIEW PROGRAMS
 
    Pursuant to the Participation Agreement, Physician will participate in all
utilization review, quality assurance and credentialling programs operated by
Doctors Health to assure or improve the quality and effective utilization of
health care services to the Doctors Health HMO Members. In such connection,
Physician agrees (i) not to hold Doctors Health or any other participants in
such quality assurance/ utilization review programs responsible for reasonable
recommendations made or actions taken in good faith with respect to Physician,
and (ii) to participate in all programs developed by Doctors Health that are
designed to resolve Doctors Health HMO Member grievances.
 
DOCTORS HEALTH PROTOCOLS
 
    Pursuant to the Participation Agreement, Physician agrees to follow the
protocols and practice procedures which have been developed by Doctors Health's
affiliated physicians which are applicable to physician participants in the
Doctors Health provider network. In such connection, if Physician should ever
deem any aspect of such protocols to be medically inappropriate or otherwise
inappropriate for utilization, Physician may notify Doctors Health in writing
with sufficient specificity to enable Doctors Health to respond to Physician's
concerns.
 
TERM; TERMINATION
 
    The Participation Agreement will terminate five years from its effective
date unless earlier terminated pursuant to its terms.
 
    Doctors Health may terminate the Participation Agreement by notice in
writing to Physician (i) if Physician materially breaches the Participation
Agreement and such breach continues for 30 days after written notice is given to
Physician by Doctors Health specifying the nature of such breach, or (ii) for
"good cause." The Participation Agreement defines "good cause

                                    S-4


<PAGE>

" to mean the occurrence of any one of the following: (a) Physician's 
membership in any professional organization is terminated for cause related 
to professional conduct, or Physician resigns from any professional 
organizations under the threat of disciplinary action for professional 
conduct, (b) Physician is indicted for a charge of committing a felony or any 
misdemeanor involving moral turpitude, (c) Physician fails to comply with 
rules, regulations and policies imposed with regard to Medicare programs or 
fails to preserve his or her eligibility to participate in Medicare programs, 
(d) physician fails to comply with any material Doctors Health protocols, (e) 
Physician takes any action which puts a Doctors Health HMO Member's health at 
risk, or (f) Physician loses his or her license or certificate to practice 
medicine.
 
    Physician may terminate the Participation Agreement upon 90 days' written
notice to Doctors Health if Doctors Health fails to perform its obligations to
Physician to pay any amounts required to be paid by Doctors Health to Physician.
 
MAINTENANCE OF LIABILITY INSURANCE
 
    The Participation Agreement provides that Physician must maintain, at his 
expense, general and professional liability insurance coverage of not less 
than $1 million per claim and $3 million per year. Physician is required 
pursuant to the Participation Agreement to provide Doctors Health with copies 
of such policies or other evidence of compliance with such insurance 
requirements and is required to notify Doctors Health of any changes or 
cancellations to any such policy. In the event of a cancellation of a policy, 
Physician is required to purchase an extension of coverage endorsement within 
10 days of written notice of discontinuance and must provide Doctors Health 
with a copy of such endorsement. Pursuant to the Participation Agreement, 
Physician must also notify Doctors Health promptly when any patient of 
Physician files a claim or any notice of intent to commence legal action 
alleging professional negligence against Physician, or of the settlement of 
any such claim, or if a judgment is entered against Physician in any such 
claim.
 
                         RESALE OF CLASS B COMMON STOCK
 
    The shares of Class B Common Stock offered by this Prospectus Supplement
have been registered under the Securities Act of 1933, as amended. The shares
will be subject to the Shareholders Letter Agreement attached hereto as Annex B
and therefore, will not be freely transferable. In addition, there is no public
market for the Class B Common Stock.
 
                                 LEGAL MATTERS
 
    The validity of the Class B Common Stock offered hereby have been passed
upon for the Company by Venable, Baetjer and Howard, LLP, Baltimore, Maryland.
 
                                    ANNEXES
 
    Annex A--Participation Agreement between Doctors Health System, Inc. and M.
Wajeed Khan
 
    Annex B--Shareholders Letter Agreement, delivered to Physician as Prospectus
Supplement No. 26

                                    S-5

<PAGE>
 
                                    ANNEX A
 
                      PRIMARY CARE PARTICIPATION AGREEMENT
 
1.  "Effective Date") by DOCTORS HEALTH, INC. ("DH") and the Physician whose
    name appears below.
 
2.  DH agrees to arrange for the provision of various management, administrative
    and support services in connection with managed care contracting, including
    contracting, marketing, care management and information systems support.
    (For a description of these services see Exhibit A-2 attached.)
 
3.  Physician or the Physician's group practice entity, if the Physician
    participates as a partner or employee of a group practice entity, will be
    paid a Signing Bonus in part cash and part shares of DH Class B Common
    Stock, as set forth on Exhibit B-3 attached hereto and made a part hereof.
    This payment will be made upon execution of this Agreement, satisfactory
    credentialing of Physician by DH and provision of Physicians' financial
    statements and Medicare patient list and is subject to modification to the
    extent the information received by DH differs from the information provided
    on Exhibit B-3. This payment is made based upon Physician's assurance to DH
    that he/she is an actively practicing primary care physician who intends to
    enter into a cooperative relationship with other DH affiliated physicians to
    manage care to DH HMO Members.
 
4.  This Agreement will expire five (5) years from the Effective Date of this
    Agreement (the "Term"), unless earlier terminated pursuant to the terms
    hereof.
 
5.  DH agrees to provide Physician, once Physician has at least 100 DH
    Members, at no cost to the Physician, access to the DH Information System
    managed care components, offering Enrollment, Eligibility, Referral
    Management and Data Management capabilities.
 
6.  Physician agrees to provide to eligible persons who elect to enroll in an
    HMO Medicare managed care product offered by any Payor who has contracted
    with DH (the "DH HMO Plans") those primary care services customarily
    provided by primary care physicians to eligible patients, as may be
    required by the DH HMO Plans and the Health Care Financing Administration.
    These patients are referred to in this Agreement as the "DH HMO Members".
 
7.  DH will credential Physician. Physician agrees to cooperate with the DH
    credentialing and review process, all at no cost to Physician.
 
8.  Physician agrees to participate in the managed care agreements that DH
    enters into with DH HMO Plans. Physician agrees to cooperate with DH in
    accepting DH HMO Members under the DH HMO Plans, and agrees not to
    participate or contract with any other HMO or other payor offering managed
    care or other risk type plans directly or through another similar entity or
    other IPA. However, if DH chooses not to pursue a contract with an
    identified HMO or is unable to negotiate such a contract within a
    commercially reasonable period, Physician shall be free to pursue a
    contract with the identified HMO.
 
9.  If Physician, as of the Effective Date, is a party (directly or
    indirectly through another similar entity or IPA) to any primary care
    capitation contract (each an "Existing Primary Care Capitation Contract"),
    Physician agrees to notify DH of such Existing Primary Care Capitation
    Contract. Physician agrees to use his or her commercially reasonable best
    efforts to assist DH in replacing such Existing Primary Care Capitation
    Contract with a DH HMO Plan, provided the payment terms to the Physician
    under the DH HMO Plan are at or above the payment terms of the Existing
    Primary Care Capitation Contract. Until DH is able to replace the Existing
    Primary Care Capitation Contract with a DH HMO Plan, the Physician shall be
    free to renew the Existing Primary Care Capitation Contract for additional
    one year terms.
 
10. Physician agrees to abide by and comply with the relevant provisions of
    the agreements between DH and the DH HMO Plans. DH will provide all relevant
    provisions that may apply to Physician.


<PAGE>
 
11. Physician agrees to work cooperatively and in good faith with DH and the
    other DH affiliated physicians providing services to the DH HMO Members. To
    this end, Physician will use all reasonable efforts to:

          - Prepare and maintain customary medical records for services provided
            to DH HMO Members and provide the IPA with access to such records
            without charge. DH agrees that all patient records will be treated
            as confidential and will comply with laws and regulations related to
            confidentiality and all ethical standards for physicians regarding
            the confidentiality of patient records. This paragraph shall survive
            the termination of this Agreement for any reason.

          - Comply with and accept payment conditions of this Agreement.

          - Comply with managed care medical standards adopted by DH affiliated
            physicians as part of arrangements with the DH HMO Plans.

          - Cooperate with DH's efforts to contact eligible Medicare patients in
            Physician's practice, including providing mailing lists and use of
            Physician's name in correspondence.

          - Sign and submit in a timely manner authorizations, consents,
            encounter data and other forms adopted by DH.

          - Comply with DH policies and guidelines which DH provides to
            physician.
 
12. Physician will participate in all utilization review, quality assurance and
    credentialing programs operated This Participation Agreement is entered into
    on September 10, 1997 (the "Effective Date") by DH and the IPA to assure or
    improve the quality and effective utilization of health care services to the
    IPA HMO Members ("QA/UR Programs"). Physician agrees not to hold DH and
    other participants in the QA/UR Programs responsible for any reasonable
    recommendations made or actions taken in good faith with respect to
    Physician. Physician will participate in all programs developed by DH that
    are designed to resolve DH HMO Member grievances.
 
13. Physician agrees not to differentiate or discriminate in the treatment of
    patients as to the quality of services delivered to DH HMO Members because
    of race, sex, age, religion, place of residence, health status or source of
    payment, and to observe, protect and promote the rights of DH HMO Members
    as patients.
 
14. Physician will in good faith make arrangements, with the support of
    Physician's assigned DH representative, for twenty-four hours, seven days a
    week coverage to DH HMO Members through other primary care physicians who
    participate in the DH provider network to the extent the DH provider network
    is adequate to provide such coverage in Physician's service area.
 
15. Physician agrees to respond within seven (7) days of receipt to any written
    inquiry from DH regarding services provided to DH HMO Members or any other
    matters relating to this Agreement, subject to all laws regarding the
    confidentiality of medical records.
 
16. DH will provide to Physician a list of other physicians and other health
    care providers who provide medical services in the DH provider network.
    Other than in cases of a bona-fide medical emergency or where DH and the
    Physician have agreed the DH provider network is insufficient, Physician
    agrees to utilize the DH provider network when arranging for additional
    medical services required by DH HMO Members.
 
17. DH' affiliated physicians have developed protocols and practice procedures
    applicable to fellow physician participants in the DH provider network (the
    "DH Protocols"). Physician agrees to follow the DH Protocols when treating
    DH HMO Members. If Physician should ever deem any aspect of the DH Protocols
    to be medically inappropriate or otherwise inappropriate for utilization by
    Physician, Physician may notify DH in writing, with sufficient specificity
    to enable DH to respond to Physician's concerns.
 
18. Physician will own and operate all aspects of his or her medical practice
    and will remain responsible for all operations of the medical practice,
    including all patient treatment decisions and employee, office, lease and
    financial affairs. DH is not engaged in the practice of medicine and will
    not interfere in any patient treatment decisions.

                                    A-2


<PAGE>
 
19. DH may use Physician's name, specialty, telephone number(s), and business
    location(s) in marketing, descriptive, and other information relating to the
    DH HMO Plans, and will include Physician as a member of the DH provider
    network during this Agreement. Physician may nonetheless be precluded from
    participating in a DH HMO Product by one of the DH HMO Plans. In such an
    event, DH will notify Physician, in writing, within 30 days of learning of
    such an action, and will assist Physician, if requested, in seeking to
    overturn such an action.
 
20. During the calendar year 1997, DH will pay to Physician, and Physician
    agrees to accept from DH as compensation for all covered services provided
    by Physician to DH HMO Members the Primary Care Base Capitation Rates as
    shall be set forth on Exhibit C-20 to be attached hereto and made a part
    hereof. For calendar year 1998 and beyond, DH shall establish in cooperation
    with DH participating primary care physicians a Primary Care Base Capitation
    Rate that shall reflect at least the prevailing market rate for the county
    or city in which the Physician provides covered services.
 
21. The Primary Care Base Capitation Rates may be adjusted for age and sex of
    the DH HMO Members. The Primary Care Base Capitation Rates will be increased
    by an amount up to ten percent (10%) (the "Capitation Rate Modifier"),
    according to a Medicare and Commercial formula established by DH as set
    forth on Exhibit D-21 attached hereto and made a part hereof.
 
22. Physician will, in addition to the Primary Care Capitation payment, be paid
    on a fee for service basis for certain identified services which are not 
    considered covered services according to the DH fee schedule that will be
    approximately equal to cost and less than alternative specialist
    expenditures.
 
23. In order to provide economic incentives for Physicians to provide the best
    possible health care to DH HMO Members while fostering efficiencies in
    utilization and quality assurance, DH' affiliated physicians have
    established, and Physician will participate in, a bonus pool. The amount of
    bonus awards are determined according to DH' primary care bonus point
    system, rewarding high clinical quality, appropriate utilization, patient
    satisfaction and retention and the extent of cooperation with other
    participating physicians DH. Based upon this system, DH will fund a primary
    care physician bonus pool which will be credited with 25% of the managed
    care surplus remaining after deduction of the actual costs associated with
    the provision of managed care services. The Physician will receive a bonus
    based upon the net surplus in the bonus pool that is generated in
    Physician's panel of DH HMO Members up to the limits permitted by applicable
    health care regulations. The Primary Care Capitation Rates for any year are
    guaranteed and never charged or offset for any losses. Losses are the sole
    responsibility of DH. Bonus Awards for calendar year 1996 will be paid by DH
    in April of 1997. Awards for calendar year 1997 will be made in April of
    1998 etc. (The DH "Bonus Point System" for Primary Care Physicians is set
    forth on Exhibit F-23 attached hereto and made a part hereof.)
 
24. All Payments of the Primary Care Capitation Rate will be made by DH directly
    to Physician, by the fifth business day of each month for the prior month's
    enrollment. The Capitation Rate Modifier will be calculated at the beginning
    of each quarter and used to determine the following quarters' Primary Care
    Capitation Rate.
 
25. Physician understands that DH will be paid by the DH HMO Plans for all
    services provided by Physician to DH HMO Members.
 
26. Physician agrees not to bill or collect any reimbursement from DH HMO
    Members or the DH HMO Plans unless the service provided was not a covered
    service under the DH HMO Plan and the DH HMO Member was given prior written
    notice that the services would not be covered. However, Physician may
    charge, bill, collect and keep from DH HMO Members any copayments or
    coinsurance. Physician agrees that, whether or not there is any unresolved
    dispute for payment, under no circumstances, including but not limited to
    nonpayment by DH or DH insolvency, will Physician make any claims, other
    than for copayments or coinsurance, against any DH HMO Member for covered
    services.
 
27. Physician will maintain, at his or her expense, general and professional
    liability insurance coverage of not less than $1,000,000 per claim and
    $3,000,000 per year. Physician will

                                    A-3


<PAGE>

    provide DH with copies of the policies or other evidence of compliance with
    the insurance requirements. Physician will notify DH when any patient of
    Physician files a claim or any notice of intent to commence legal action
    alleging professional negligence against Physician or of the settlement of
    any such claim by Physician or if a judgment is rendered against Physician
    in any such legal action. Physician will promptly notify DH in writing of
    any changes in or cancellations of any policy of insurance maintained by
    Physician. If such policy is written on a claims made basis and such 
    coverage is discontinued, Physician will purchase an "Extension of
    Coverage Endorsement" within ten (10) days of written notice of
    discontinuance and shall provide DH with a copy of this endorsement.
 
28. Each party shall indemnify, hold harmless and defend the other, its
    officers, directors, employees, agents, successors and assigns, from and
    against any liability, loss, damages, claim, cause of action, cost or
    expense, including reasonable attorneys' fees, caused or asserted to have
    been caused, directly or indirectly, by or as a result of the performance
    or failure to perform its obligations under this Agreement.
 
29. This Agreement may be terminated by Physician upon 90 days prior written
    notice to DH if DH fails to perform its obligations to Physician or to pay
    any amounts required to be paid by DH to Physician.
 
30. DH may terminate this Agreement by notice in writing to Physician for good
    cause, or if Physician materially breaches this Agreement and such breach
    continues for a period of thirty (30) days after written notice is given to
    Physician by DH specifying the nature of the breach. Good cause means:

         - Physician's membership in any professional organization is
           terminated for cause related to professional conduct, or Physician
           resigns from any professional organizations under the threat of
           disciplinary action for professional conduct. 

         - Physician is indicted upon a charge of committing a felony or any
           misdemeanor involving moral turpitude.

         - Physician fails to comply with rules, regulations and policies
           imposed with regard to the Medicare programs or to preserve his or
           her eligibility to participate in the Medicare programs.

         - Physician fails to comply with any material DH Protocols.

         - Physician takes any action which puts a DH HMO Members' health at
           risk.

         - Physician loses his/her license, certificate, permit or board
           approval to practice medicine.
 
31. To the extent required to enable DH and the IPA to comply with Section 952
    of the Medicare and Medicaid Amendments of 1980, or regulations promulgated
    pursuant thereto, Physician shall until the expiration of four (4) years
    after the furnishing of services under this Agreement, make available,
    upon written request, to the Secretary of Health and Human Services or the
    Comptroller General of the United States, or to any of their duly
    authorized representatives, this Agreement and such of Physician's books,
    documents and records as are necessary to certify the nature and extent of
    costs under this Agreement.
 
32. Notwithstanding termination of this Agreement for any reason, Physician
    shall, at DH's request, continue treatment of any DH HMO Member, for the
    shorter of such periods of time (i) as may be required by law, (ii) required
    by a Benefit Plan, or (iii) until the medically required course of treatment
    has been completed, and Physician shall be entitled to payment hereunder for
    such purposes. Physician shall continue to provide covered services for a
    period of thirty (30) days notwithstanding the inability of DH or a Payor to
    pay amounts due Physician, and Physician shall use its best efforts to
    assist in the orderly transfer of such Members at DH's direction.
 
33. In the event that any state or federal laws or regulations, now existing or
    enacted or promulgated after the effective date of this Agreement, are
    interpreted by judicial decision, a regulatory agency or legal counsel to
    either party in such a manner as to indicate that the structure of this
    agreement may be in violation of such laws or regulations, the parties shall
    amend this Agreement as necessary to bring it into compliance with the law.
 
34. This Agreement shall be construed by and governed under the laws of the
    State of Maryland.

                                    A-4


<PAGE>
 
35. DH shall have the right, upon giving prior written notice to Physician,
    to assign its rights and obligations under this Agreement to a DH Affiliate.
    Physician may not assign his rights and obligations under this Agreement
    without the prior written consent of DH.
 
IN WITNESS WHEREOF, this Agreement is entered into and executed as of the date
first written above.
 
 PRINTED NAME OF PHYSICIAN                PHYSICIAN
 
________________________________          By:
__________________________________________________________________________(SEAL)
Please Attach Business Card                                          , M.D.
 
                                          DOCTORS HEALTH, INC.
 

                                   By:_______________________________     (SEAL)

                                         Name:__________________________________
                                         Title:_________________________________

                                    A-5

<PAGE>
 
                                  EXHIBIT A-2
 
                               SCHEDULE OF SERVICES
 
I. Care Management includes:
 
    A. Credentialing and Provider File Maintenance. In compliance with NCQA
       standards, the credentialing process gathers information on our member
       providers, performs primary source verification, provides automatic
       recredentialing activities and alerts providers when items need to be
       renewed and/or reevaluated.
 
    B. Referral Management. The DH Referral Management Program provides for
       the maintenance of referral directories; authorization of DH referrals to
       network providers; clinical review of referrals for appropriateness,
       according to DH physician approved criteria; and tracking and reporting
       of referral patterns to identify outliers and encourage recommendations
       for change.
 
    C. Utilization Management. The DH Utilization Management Program reviews and
       tracks the utilization of healthcare services, particularly inpatient
       stays, to facilitate appropriate hospital admissions; provides
       recommendations for alternate site care and assists with the coordination
       of these services; provides clinical review of procedural necessity; and
       works with the physician to identify practice pattern trends.
 
    D. Case Management. The DH Case Management Program offers to physicians
       the skills of registered nurses and licensed clinical social workers in
       order to assist in the coordination of the care and services required by
       patients with catastrophic and/or chronic illnesses or injuries. The case
       manager works in conjunction with the physician, patient and family to
       identify healthcare needs, develop a plan of care, establish realistic
       treatment goals, coordinate and monitor necessary resources, and evaluate
       treatment progress.
 
II.  Data Management. The DH Data Management service coordinates the receipt
     and maintenance of payor eligibility and benefit plan information. It also
     allows for the coordination and integration of a variety of data components
     to yield meaningful reports which will reflect the overall performance of a
     provider network, i.e., utilization, costs and quality.
 
III. Patient Services. DH provides all Participating Physicians, access to nurse
     triage and patient advocacy services. Through these services, specially
     trained nurses are available by phone to answer questions regarding access
     to services, treatment alternatives and self care options.
 
IV.  Third Party Administration. The DH Third Party Administration services
     provide for the appropriate adjudication of claims, coordination of
     benefits, subrogation services and integration with the reinsurance
     carrier.

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