American Healthways Receives JCAHO, NCQA Privacy Award; Certification Recognizes Company's Commitment to Safeguarding Confidential Information.

NASHVILLE, Tenn. -- American Healthways, Inc. (Nasdaq: AMHC) has received certification from the Privacy Certification for Business Associates (PCBA) program, a leading indicator of an organization's rigorous protections against the unintentional release of protected health information. The PCBA program was established in 2003, by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and the National Committee for Quality Assurance (NCQA), the nation's leading advocates for quality in health care.

"Since the passage of the Health Insurance Portability and Accountability Act of 1996 (HIPPA), we have gone to great lengths to ensure that the confidential health information of the members in our programs is protected, private and secure. Gaining PCBA certification was a top priority for us, and we're pleased to be among the first organizations in the country to achieve certification," said American Healthways Chief Medical Officer James E. Pope, M.D.

The certification program is designed to assess whether organizations referred to as "business associates" under HIPAA, such as disease management vendors, software vendors and benefit management firms, sufficiently safeguard personal health information. HIPAA requires that "covered entities," such as health plans and hospitals, perform due diligence and obtain satisfactory assurances that their business associates are appropriately protecting private health care information. Working with PCBA-certified entities satisfies this requirement.

"Maintaining confidentiality isn't just a serious legal issue, it's good business," said PCBA Director William Tulloch. "Hospitals and health plans are looking for vendors that aren't going to accidentally release people's medical information. By stepping forward and earning PCBA Certification, American Healthways has identified itself as a real leader in the field."

American Healthways' certification indicates that the company has met rigorous standards related to protecting oral, written and electronic health information. Certification is also based on a review of processes and practices regarding the use, disclosure and secure storage of personal health information. Extensive employee training in protecting personal health information is one of the required processes and practices. The program also requires that contracts between covered entities and their business associates spell out privacy-related responsibilities.

Founded in 1951, the Joint Commission on Accreditation of Healthcare Organizations seeks to continuously improve the safety and quality of care provided to the public through the provision of health care accreditation and related services that support performance improvement in health care organizations. The Joint Commission evaluates and accredits nearly 16,000 health care organizations and programs in the United States, including 8,000 hospitals and home care organizations, and more than 8,000 other health care organizations that provide long term care, assisted living, behavioral health care, laboratory and ambulatory care services. The Joint Commission also accredits health plans, integrated delivery networks, and other managed care entities. An independent, not-for-profit organization, the Joint Commission is the nation's oldest and largest standards-setting and accrediting body in health care.

NCQA is a private, non-profit organization dedicated to improving health care quality. NCQA accredits and certifies a wide range of health care organizations and manages the evolution of HEDIS(R), the performance measurement tool used by more than 90 percent of the nation's health plans. NCQA is committed to providing health care quality information through the Web and the media in order to help consumers, employers and others make more informed health care choices.

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 Nov. 30, 2004, the Company had over 1.4 million lives under management nationwide. For more information, visit www.americanhealthways.com.