American Healthways to Provide High-Risk Care Management to Alameda Alliance Medi-Cal Beneficiaries.

NASHVILLE, Tenn. -- American Healthways, Inc. (NASDAQ: AMHC) today announced a new, two-year agreement to provide its StatusOne high-risk care management program to Medi-Cal beneficiaries of Alameda Alliance, a California-based, not-for-profit health plan serving more than 91,500 Alameda County residents. The new agreement begins September 1, 2005.

American Healthways will support a specific group of beneficiaries of Alameda Alliance's managed Medicaid program, Medi-Cal, who are at highest risk for imminent acute and high-cost health episodes. The agreement with American Healthways is part of a broad effort by Alameda Alliance to improve the health and contain the cost of health care for members under its care.

"We firmly believe that healthy families build healthy communities, and by partnering with American Healthways we are extending our commitment to the families we serve," said Arthur Chen, M.D., chief medical officer for Alameda Alliance. "We expect this program to deliver better coordination of care and significant improvements in the health of our high-risk members who actively participate in it."

Using a proprietary predictive modeling technology, American Healthways' StatusOne program identifies individuals at highest risk of incurring significant medical costs within the next 12 months and assigns them a personal care manager to assist them in managing a broad array of health conditions through a customized care-support system. The program takes a whole person approach by addressing all medical and psychosocial needs of members.

American Healthways President and CEO Ben R. Leedle, Jr. said, "As more high-risk Medi-Cal members shift into managed care programs, health plans will be faced with the difficult scenario of meeting an increasingly complex set of health and social needs with limited resources. American Healthways partners with health plans to address the needs of this high-risk population through intensive one-on-one nurse counseling that has been proven to improve health. And, since our high-risk program pays for itself, we believe it's a natural fit for managed Medicaid plans. We're pleased to that Alameda has chosen us as its partner in the ongoing quest for high quality, affordable health care."

Alameda Alliance for Health is a not-for-profit health plan committed to making a difference in the quality and access of health care services to the people of Alameda County. Established in January 1996, the Alliance currently provides health care services to more than 91,500 Alameda County residents.

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 Aug. 31, 2004, and Part I, Item 2 of American Healthways' Quarterly Report on Form 10-Q for the quarter ended May 31, 2005. 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.

About American Healthways

American Healthways, Inc. 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 May 31, 2005, the Company had more than 1.6 million lives under management nationwide. For more information visit www.americanhealthways.com.