American Healthways, Blue Cross and Blue Shield of Minnesota Expand Award-Winning Partnership to Include Cancer, Chronic Kidney Disease and High-Risk Health Management.

NASHVILLE, Tenn. -- Building on stellar first-year clinical and financial outcomes and a prestigious industry award for innovation, American Healthways (Nasdaq:AMHC) and Blue Cross and Blue Shield of Minnesota (Blue Cross) today announced an expansion of their 10-year strategic partnership to include programs for oncology, chronic kidney disease (CKD) and high-risk health management. Beginning today, the new programs are available for fully insured Blue Cross members and will be available as an option to the health plan's self-insured customers beginning Jan. 1, 2005.

"American Healthways and Blue Cross and Blue Shield of Minnesota share both a vision and a passion for improving health by focusing on improving health outcomes," said Blue Cross Chief Medical Officer Dr. Bill Gold, MD. "Broadening our program offering in this way will reach even more of our members and support them in ways that help them make more informed decisions about their health, avoid unnecessary trips to the hospital and achieve an enhanced quality of life."

The program, BluePrint for Health(R), is the first total population disease management program proven to bend a health plan's overall medical cost trend by improving the health of members with chronic diseases and conditions. In the first 18 months of the program, Blue Cross estimates:

--A return on investment greater than 2:1,

--An 11 percent decrease in the rate of emergency room visits,

--A 14 percent decrease in the overall rate of hospital admissions for members in the programs compared with the previous year's members with these conditions, and

--A reduction in the health plan's overall medical cost trend of 200-300 basis points.

Initiated in March 2002, the program was recently recognized with the 2004 AstraZeneca-National Managed Health Care Congress (NMHCC) Partnership Award for innovation in health care. BluePrint for Health(R) currently provides programs for 17 chronic diseases and conditions,reaching nearly 15 percent of health plan members compared to less than 8 percent in less comprehensive disease management programs.

"Our partnership with Blue Cross and Blue Shield of Minnesota continues to push the envelope of what's possible through completely integrated and coordinated disease management and care support services," said American Healthways President and CEO Ben R. Leedle Jr.

Expansion of program

--Chronic Kidney Disease -- The goal of the CKD program is to help members manage their condition, avoid complications and prevent or postpone the progression to end stage renal disease (ESRD). ESRD results in lifelong kidney dialysis and other health complications. According to the National Kidney Foundation, nearly 11 percent of the U.S. population--approximately 20 million people--suffers from CKD, while another 20 million are at serious risk of developing it.

--Cancer (Oncology) -- The oncology program delivers support and service for members and caregivers with one of nine different types of cancer -- brain, colorectal, esophageal, liver, lung, ovarian, pancreatic and stomach cancers, and carcinomas of unknown primary origins. These specific cancers were included because of their complex treatment plans, need for educational support on treatment plans, side effects and clinical trial options. They were also chosen because of other psychosocial needs such as hospice options and end-of-life issues.

--High-Risk Care Management -- This program manages a very select "high risk" population by using state-of-the-art predictive modeling to identify members. These members will receive more intensive, personalized telephonic nurse support to help prevent major illness, avoidable hospitalizations and re-admissions, and other complications.

Leedle said, "We look forward to working together to drive continued success and innovation in helping health plan members be as healthy as possible. That includes ongoing work with Blue Cross to add depression and anxiety programs targeted for rollout in early 2005."

About Blue Cross and Blue Shield of Minnesota

Blue Cross, a not-for-profit, taxable organization with headquarters in the St. Paul suburb of Eagan, is the largest health plan based in Minnesota, covering 2.6 million members in Minnesota and nationally through its health plans or plans administered by its affiliated companies. Blue Cross and Blue Shield of Minnesota is an independent licensee of the Blue Cross and Blue Shield Association, headquartered in Chicago.

About American Healthways

American Healthways is the nation's leading and largest provider of specialized, comprehensive disease management, care enhancement and high-risk health management services proven to improve the quality of health care and lower costs. As of June 17, 2004, the Company had over 1.2 million lives under management nationwide. For more information, visit www.americanhealthways.com.

Safe Harbor Provisions

This press release contains forward-looking statements that are based upon current expectations and involve a number of risks and uncertainties. In order for American Healthways to utilize the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, investors are hereby cautioned that these statements may be affected by the important factors, among others, included in the discussion in Part I, Item 1, and Part II, Item 7, of American Healthways' Annual Report on Form 10-K for the fiscal year ended August 31, 2003, and Part I, Item 2 of American Healthways' Quarterly Report on Form 10-Q for the quarter ended February 29, 2004. Consequently, actual operations and results may differ materially from those expressed in these forward-looking statements. American Healthways undertakes no obligation to update or revise any such forward-looking statements.