Aetna Announces Milestones in Pay for Performance Program For California; Payouts for 2003 and Program Guidelines for 2004 Rolled Out.

SAN RAMON, Calif. -- Aetna (NYSE: AET) today announced payments to participating IPAs and medical groups for their performance in 2003, the first year of Aetna's Pay for Performance program. Aetna also announced the guidelines for the second year of its program to reward physician groups in California for quality care as part of the California Pay for Performance Initiative. The initiative, led by the Integrated Healthcare Association (IHA), is a collaborative effort to reward physician groups in California based on their performance on quality and patient satisfaction criteria as well as their information technology infrastructure.

Aetna will be paying a total of $2 million to 54 California IPAs, representing 107 medical groups, for activity occurring in 2003. Payouts will be made by the end of the third quarter of 2004.

"We are excited to announce the first bonus payouts from Aetna's program as part of the Pay for Performance Initiative," said Jerry Bishop, M.D., senior medical director for Aetna in California. "Aetna is committed to improving relationships with physicians and physician organizations. Our continued participation in Pay for Performance demonstrates our belief in the importance of rewarding physician organizations that measurably excel in defined areas of patient care and member satisfaction."

Under Aetna's Pay for Performance program, medical groups and IPAs have the opportunity to earn up to an additional 3.5 percent of their annual capitation. Aetna funds a bonus pool, and all IPAs and medical groups are ranked by their scores on the performance criteria developed under the auspices of the IHA. Those provider organizations performing in the top 25 percent of this ranking of their peers will receive a payout from the Pay for Performance pool.

IHA's performance criteria include measures for the quality of preventive care and care for chronic diseases such as asthma and diabetes; patient satisfaction; and adoption of information technology to support patient care.

Aetna's participation criteria for year two remain the same as they were for the first year. All medical groups and IPAs contracting with Aetna as of January 1, 2005, and that have averaged 1,000 or more Aetna members, have a signed Aetna delegation agreement, and that participate in the Consumer Assessment Survey are eligible to receive a payout.

As one of the nation's leading providers of health care, dental, pharmacy, group life, disability and long-term care benefits, Aetna puts information and helpful resources to work for its approximately 13.4 million medical members, 11.4 million dental members, 8.1 million pharmacy members and 12.6 million group insurance members to help them make better informed decisions about their health care and protect their finances against health-related risks. Aetna provides easy access to cost-effective health care through a nationwide network of more than 633,000 health care professionals, including over 377,000 primary care and specialist doctors and 3,866 hospitals. For more information, please visit www.aetna.com. (Figures as of June 30, 2004)