Aetna Announces Integrated Behavioral Health Strategy; Clinical Enhancements, Aetna-Dedicated Business Units Part of New Two-Year Agreement with Magellan Behavioral Health.

Business Editors

HARTFORD, Conn.--(BUSINESS WIRE)--March 11, 2003

Aetna continues to closely monitor service during Magellan bankruptcy

Aetna (NYSE: AET) today announced a new strategic focus for its behavioral health programs that includes closer integration of behavioral and medical health care for members to optimize care and service. In order to support this new strategy, Aetna has extended its agreement with Magellan Behavioral Health, Inc. through December 31, 2005. As part of the agreement, Magellan will establish three customer service sites dedicated and designed to serve Aetna members, and focused on clinical and network management.

Aetna's new strategic focus and agreement with Magellan will feature clinical enhancements designed to promote a stronger integration of care between mind and body, and provide a better way to detect and facilitate the treatment of behavioral health issues associated with chronic medical illnesses. These enhancements will be phased in immediately.

"As the business landscape has evolved, an increasing number of employers are recognizing the impact that mental illness and substance abuse is having on productivity, and are viewing treatment as an investment in their employees," said John W. Rowe, M.D., chairman and CEO of Aetna. "We believe our new strategy will have a positive impact on the patient's experience and provide Aetna the opportunity to better serve the needs of employers."

Magellan is filing for bankruptcy to restructure its financial position. Aetna's agreement with Magellan is subject to approval by the bankruptcy court, the successful completion of its restructuring and other customary conditions.

"We continue to have confidence that Magellan will be able to fulfill its obligations to our members," said Mark Bertolini, Aetna's senior vice president of specialty products. "By restructuring its debt, we believe that Magellan would emerge in a much stronger position. The company and its financial advisers have been very forthcoming in discussing these issues with us, including their plans to place a priority on servicing members and behavioral health treatment providers throughout the bankruptcy. We strongly support Magellan's motion with the court to treat behavioral health clinicians as 'critical vendors' during the bankruptcy, a special status that will allow their claims to be paid in the ordinary course of business.

"The health and safety of our members are Aetna's primary concerns, and we have taken a number of steps over the past several months to address the continuity of care for members. We have intensified our already-stringent monitoring and found no deterioration in service. Looking to the future, Aetna will continue to monitor Magellan to ensure that our members continue to receive services in accordance with our service standards," Bertolini said.

The agreement is a two-year extension at competitive rates, with an option to extend for an additional year. With regard to the remaining $60 million payment due to Aetna under the original contract, Magellan will pay Aetna $15 million at the conclusion of the bankruptcy proceedings and provide a $45 million note with interest.

Aetna is one of the nation's leading providers of health care, dental, pharmacy, group life, disability and long-term care benefits, serving approximately 13.7 million medical members, 11.8 million dental members, and 11.7 million group insurance customers, as of December 31, 2002. The company has expansive nationwide networks of more than 552,000 health care services providers, including over 332,000 primary care and specialist physicians and 3,373 hospitals. For more information about Aetna, please visit the company's Web site at www.aetna.com.