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CareFirst, Healthways Announce Expansion and Extension of Contract

Services Support the Delivery of CareFirst Patient-Centered Medical Home Program; Largest Program of its Type in the Nation

Baltimore, MD & Nashville, TN (October 17, 2012) - CareFirst BlueCross BlueShield (CareFirst) and Healthways (NASDAQ: HWAY) today announced an important expansion and three-year extension through June 2016 of their partnership helping CareFirst deliver its network-wide Patient-Centered Medical Home (PCMH) program. CareFirst’s PCMH program, approved in 2010 and launched in 2011, is designed to provide primary care providers with a more complete view of their CareFirst members’ needs and of the services they receive from other providers so that they can better manage their individual risks, keep them in better health and produce better outcomes. CareFirst’s PCMH places a differential focus on patients with multiple chronic conditions or those at risk for such conditions. The program requires greater provider-patient engagement and meaningfully compensates providers for that engagement. The PCMH program has a significant “upside” for the provider, for the patient and for CareFirst as a steward of its members’ healthcare dollars. When the PCMH program was launched in 2011 there were approximately 2,200 primary care providers participating in the program, making it the largest program of its type in the nation. Today more than 3,600, or roughly 80%, of the eligible primary care providers actively practicing in the District, Maryland and Northern Virginia are taking part in the CareFirst program. The program has grown quickly to its current size and now covers approximately 1,000,000 CareFirst subscribers.

Since the inception of the program, Healthways has been at the heart of the PCMH program, aiding panels of five to 15 providers to develop and follow up on care plans for CareFirst members with the greatest health needs. Chet Burrell, president and CEO of CareFirst, remarked, “We want physicians to take care of the patients that need them the most so they can effectively break the cycle of complication that leads to hospital admissions, readmissions and emergency room visits. Patients that are targeted for care plans typically have multiple chronic conditions or are under a large number of medications. This program focuses on the roughly 10% of CareFirst’s membership who account for nearly 50 to 60 percent of all our claims cost.” Burrell continued, “Expanding our work with Healthways is an important element of building upon the success we have already experienced in the first year of operating our PCMH model.”

“After more than a year of experience with the PCMH model, we can clearly see the very positive impact that the partnership with Healthways has had on improved delivery of care,” said Burrell. “We have nurses in every region who follow up with patients on a daily basis. The key to a good clinical and financial outcome for a program like this is to make sure as few patients as possible fall through the cracks. The nurses are key to this task, along with the integration of information-driven tools to scale this program to even larger measures of success over the next few years. We look forward to exploring continued opportunities to partner with Healthways in serving our members.”

“In the post-healthcare reform environment, the best solutions assure that care is provided effectively, efficiently and by healthcare professionals who are able to maximize their capabilities,” said Healthways president and CEO, Ben R. Leedle, Jr. “CareFirst’s PCMH program has been very successful in its first year, and we applaud the vision that Chet Burrell has shown in bringing this program to life within CareFirst. Healthways has the experience and capabilities to continue to refine, in partnership with CareFirst, the scaled delivery of services that will support CareFirst’s PCMH in improving care quality and reducing costs over time. We appreciate the structure that CareFirst has put in place with Healthways to create incentives for us to drive increasing numbers of care plans and effectively reduce the costs of care through improved care coordination on behalf of the primary care physicians in the CareFirst network. The PCMH program is focused on improving the quality of care delivered to CareFirst members, and the long-term contract extension between CareFirst and Healthways confirms that both companies are committed to health and care support approaches that meet each person at their greatest points of need and empower them to move to a better state of well-being.”

About CareFirst
In its 75th year of service, CareFirst, an independent licensee of the Blue Cross and Blue Shield Association, is a not-for-profit health care company which, through its affiliates and subsidiaries, offers a comprehensive portfolio of health insurance products and administrative services to 3.4 million individuals and groups in Maryland, the District of Columbia and Northern Virginia. In 2011, CareFirst contributed $51 million to community programs designed to increase the accessibility, affordability, safety and quality of health care throughout its market areas. To learn more about CareFirst BlueCross BlueShield, visit our web site at www.carefirst.com or follow us on Twitter: http://twitter.com/CareFirst_News.

About Healthways
Healthways (NASDAQ: HWAY) is the largest independent global provider of well-being improvement solutions. Dedicated to creating a healthier world one person at a time, the Company uses the science of behavior change to produce and measure positive change in well-being for our customers, which include employers, integrated health systems, hospitals, physicians, health plans, communities and government entities. We provide highly specific and personalized support for each individual and their team of experts to optimize each participant’s health and productivity and to reduce health-related costs. Results are achieved by addressing longitudinal health risks and care needs of everyone in a given population. The Company has scaled its proprietary technology infrastructure and delivery capabilities developed over 30 years and now serves approximately 40 million people on four continents. Learn more at www.healthways.com or www.silversneakers.com.

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