NEWS RELEASE


         Contact: R. Christopher Minor
                   Sr. Vice President and CFO
                   CareAdvantage, Inc.
                   (732) 602-7017
                                                          FOR IMMEDIATE RELEASE



CAREADVANTAGE ANNOUNCES AGREEMENT FOR DEBT CONVERSION

Iselin,  New Jersey,  December 5, 2000 --  CareAdvantage,  Inc. (OTC: CADV) (the
"Company) today announced that it entered into a Debt Satisfaction  Agreement to
convert  approximately  $1.58 million in indebtedness owed to Horizon Blue Cross
and Blue Shield of New Jersey  ("BCBS")  and Horizon  Healthcare  of New Jersey,
Inc.  into  the  Company's  common  stock  ("Healthcare").  BCBS  is  one of the
Company's  major  stockholders   owning   approximately  45%  of  its  currently
outstanding common stock.

Under the Debt Satisfaction  Agreement,  the Company will issue shares of common
stock  equal to the amount of the  indebtedness  owed by the Company to BCBS and
Healthcare  divided by the greater of (i) the average  mean  between the closing
bid  and  asked  prices  per  share  of  the  Company's   common  stock  on  the
over-the-counter bulletin board market for the twenty (20) trading days ending 5
business days before closing, or (ii) twelve ($.12) cents. The Company will also
issue to BCBS and  Healthcare  an  additional  number of shares of common  stock
equal to twenty (20%) percent of the foregoing amount.

Closing is subject to several contingencies including the consent by CW Ventures
II, L.P.,  another major stockholder of the Company,  which holds  approximately
45% of its  outstanding  common stock.  This consent has already been  obtained.
Also,  because BCBS desires to hold the stock to be  distributed  to Healthcare,
closing is subject to  approval  by the boards of  directors  of  Healthcare  (a
second-tier subsidiary of BCBS) and Healthcare's parent corporation,  as well as
on approvals from the New Jersey Department of Banking and Insurance and the New
Jersey  Department of Health and Senior Services.  Unless the parties  otherwise
agree,  in the event that the closing has not  occurred by March 31,  2001,  the
agreement will be null and void.

In connection  with the  transaction,  the Company will amend its Certificate of
Incorporation  to  increase  the  number of shares  of common  stock  that it is
authorized to issue from 103.6 million shares to 200 million shares.

At the same time that it authorized the Company's entering into the Satisfaction
of  Indebtedness  Agreement,  the  Company's  Board  of  Directors  amended  the
Company's  Stock Option Plan to increase the number of shares  authorized  under
the Company's Stock Option Plan from 18,648,000 shares to 22,648,000 shares, and
beginning January 1, 2002, to increase the number of shares authorized under the
plan by three (3%) percent annually.

The Company's two major stockholders, BCBS and CW Ventures II, L.P., owning more
than  90%  of  the  Company's  common  stock,  approved  the  amendment  to  the
Certificate  of  Incorporation  and the amendments to the Stock Option Plan. The
Company will be providing an Information  Statement  describing the action taken
by these stockholders to the Company's stockholders of record as of December 11,
2000.

                              (continued on page 2)










Press Release
CareAdvantage, Inc.
December 5, 2000


Certain  statements  in  this  News  Release  may  constitute   "forward-looking
statements"  under  the  Private  Securities  Litigation  Reform  Act  of  1995,
including those concerning  management's plans, intentions and expectations with
respect to future financial performance and future events, particularly relating
to revenues from  performance-based  services and re-negotiation of existing and
new contracts with customers.  Such statements  involve known and unknown risks,
uncertainties  and  contingencies,  many of which are beyond the  control of the
Company,  and which could cause actual results and outcomes to differ materially
from those  expressed  herein.  Although  the Company  believes  that its plans,
intentions and  expectations  reflected in such forward  looking  statements are
reasonable, it can give no assurance that such plans, intentions or expectations
will be achieved.  Certain risk factors  exist,  such as the ability to generate
new business, the Company's ability to manage its costs under its contracts, and
the  Company's  inability to prevent its  customers  from  terminating  existing
contracts by invoking standard  termination  clauses,  as well as other inherent
contractual  risks,  which are beyond the control of the  Company,  could have a
material adverse impact on the Company or prevent the Company from achieving the
growth or obtaining the results  discussed.  For a more  complete  discussion of
these and other risk factors,  please see  "Cautionary  Statements" in Item 6 of
the Company's Form 10K-SB for the fiscal year ended December 31, 1999 filed with
the Securities and Exchange Commission on March 30, 2000.

CareAdvantage,  Inc.  as a care  management  resource  company,  provides a full
spectrum of products and services inclusive of consulting, outsourcing, training
and  information  management  options,  that  complement  the  managed  care and
insurance industry care management continuum.