Cobalt Corporation: United Government Services Awarded West Virginia Medicaid Audit and Reimbursement Contract.

Business Editors

MILWAUKEE--(BUSINESS WIRE)--May 29, 2003

Cobalt Corporation (NYSE:CBZ) announced today that United Government Services, LLC (UGS), a wholly-owned subsidiary of Cobalt Corporation, has been awarded a contract by the State of West Virginia to provide audit, reimbursement and other management services for all acute care hospitals, rehabilitation hospitals, psychiatric hospitals, critical access hospitals, skilled nursing facilities, home heath agencies, federally qualified health centers and community mental health centers in West Virginia. The contract, effective May 1, 2003, will run through April 30, 2004 with two renewals, and has potential revenue to the company in excess of $880,000.

UGS is currently the Medicare Part A contractor in West Virginia. The new contract involves cost report review, auditing and other management services for the State of West Virginia for health care facilities that file a Medicare cost report under the Medicaid program. According to Susan Hereford, manager of UGS' Charleston, West Virginia office, "our local presence will allow UGS to provide effective and efficient service to Medicaid providers in West Virginia." United Government Services will initially hire two local UGS employees as a result of this contract, who will operate out of the Charleston, West Virginia office.

"This contract is further evidence of UGS' strong commitment to provide quality audit and related services in our current markets. We are very pleased that the State of West Virginia has recognized our ability to deliver these services," said Michael Driscoll, Director of Provider Audit and Reimbursement in the Milwaukee corporate office.

United Government Services, headquartered in Milwaukee, is the largest Medicare Part A claims processor in the country. "Our workforce is the cornerstone to our solid reputation as a government contractor," said Tim Cullen, Senior Vice President of Cobalt Corporation and Chairman of the Board of Government Health Services, the holding company over Cobalt Corporation's government business.

The company annually processes an estimated 32 million Medicare claims paying approximately $26 billion for providers in all 50 states, American Samoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands. The addition of this Medicaid contract continues the growth of the Medicaid business for United Government Services. The company already provides audit services for the States of Wisconsin, Michigan and Hawaii Medicaid programs and serves as a subcontractor to EDS Federal Corporation to process Medicaid claims for Wisconsin's Medicaid program.

United Government Services employs nearly 1,500 staff nationwide. It has offices in California, New York, Michigan, Virginia, West Virginia, Illinois, Wisconsin and Hawaii. Cobalt Corporation is an independent licensee of the BlueCross BlueShield Association, and holds the exclusive license to use the Blue Cross and Blue Shield names and marks in the state of Wisconsin. Cobalt is one of four publicly traded Blue Cross and Blue Shield companies. Headquartered in Milwaukee, Wis., Cobalt Corporation (NYSE: CBZ) offers a diverse portfolio of complementary insurance, managed care products and administrative services to employer, individual, insurer and government customers.