Blue Cross/Promina Negotiations Collapse; Contract Dispute Ends Relationship.

Business Editors

ATLANTA--(BUSINESS WIRE)--Aug. 18, 2003

Blue Cross and Blue Shield of Georgia (BCBSGA) and its health plan, Blue Cross Blue Shield Healthcare Plan of Georgia (BCBSHP) today announced that their relationship with Promina Health Systems has officially ended.

"It saddens us to end such a longstanding relationship," said John Watts, BCBSGA president and CEO, "but Promina's demands left us little choice."

For more than a year, BCBSGA has been in discussions with Promina regarding renewal of its HMO/POS contract. As negotiations proceeded, BCBSGA demonstrated its good faith by agreeing to four separate extensions and two interim increases in its present contract with Promina in the hope that Promina leaders would accept a reasonable compromise. In July, a mediator was appointed who attempted to resolve differences between the two parties. Regrettably, the parties were unable to reach an agreement.

Effective August 31, 2003, five metro area hospitals that contract through Promina Health Systems will no longer participate in the BCBSHP HMO/POS network. They are: Decatur Hospital, DeKalb Medical Center, Gwinnett Medical Center, Joan Glancy Memorial Hospital and Southern Regional Medical Center.

If members do not select a new primary care physician by September 15, one will be selected for them and the assignment will be effective October 1. Included with the notification letter is a list of more than 1,100 primary care physicians and 36 hospitals remaining in the network. In addition, 3,600 specialists remain in the HMO network.

In the case of a medical emergency, affected members should not hesitate to go to the nearest hospital emergency room for proper care, regardless of whether or not the hospital is in the network.

In Gwinnett County, BCBSHP network hospital is Eastside Medical Center of Emory University. In DeKalb County, BCBSHP network hospitals are Emory University Hospital System and Northlake Medical Center. For Clayton County, alternative network hospitals are Fayette Community Hospital, Grady Memorial, Henry Medical Center, and South Fulton Medical Center.

In late spring, HMO members were advised by BCBSHP that the plan and Promina would end their relationship if negotiations failed to produce a new agreement. BCBSHP will send a letter informing affected members of the dissolution of the relationship and asking that they select another primary care physician by September 15. Sixty-one primary care physicians and 163 specialists are affected.

"We believe our members and Promina patients are best served by a long-term, mutually beneficial relationship between us," Charlie Harman, vice president of public affairs, said. "We understand that operating a hospital in today's environment is challenging and that hospital spending accounted for over half of the overall increase in health costs. Further, our quarrel has not been with the physicians, many of whom have enjoyed a long relationship with BCBSGA. However, Promina's financial and operational demands for 2003 and the ensuing years were extraordinary and inconsistent with maintaining quality and affordable health care coverage," added Harman.

BCBSGA repeated its willingness to meet with Promina officials when there is a demonstrated interest in arriving at an agreement that is in the best interest of Promina patients and BCBSGA members.

BCBSGA has posted additional details of this action on its website, www.bcbsga.com, including a Q&A page. In addition, members may call the customer service number listed on their member identification card.

Blue Cross and Blue Shield of Georgia serves more than 2.3 million medical members and is the oldest and largest health benefits company in Georgia. Blue Cross and Blue Shield of Georgia is an operating subsidiary of WellPoint Health Networks Inc., one of the nation's largest publicly traded health care companies serving the health care needs of more than 13.3 million medical members and more than 49 million specialty members nationally. WellPoint offers a broad spectrum of quality network-based health products including open access PPO, POS and hybrid products, HMO and specialty products. Specialty products include pharmacy benefit management, dental, management, vision, health, life and disability insurance, long term care insurance. Blue Cross and Blue Shield of Georgia may be found on the web at www.bcbsga.com. Blue Cross and Blue Shield of Georgia is an independent licensee of the Blue Cross and Blue Shield Association.