Systems Xcellence to Address HIPAA Regulatory Standards.

Business Editors

MILTON, Ontario--(BUSINESS WIRE)--Jan. 16, 2001

Systems Xcellence (TSE:SXC.)

New Standards Estimated to Have Over a $3.0 Billion

Impact on US Healthcare Industry

Early Release Helps Customers Proactively Manage

Compliance Needs

Systems Xcellence Inc., (TSE:SXC.) announced today that its Pharmacy Benefit Systems (HX-PBS) product suite and its HxBenefit application service (ASP) will enable customer compliance with new standards mandated by the U.S. Government's Health Insurance Portability and Accountability Act (HIPAA) for drug benefit management transaction processing by the end of 2001.

The Health Insurance Portability and Accountability Act (HIPAA) is a federal law requiring healthcare organizations providing and paying for care, to meet certain standards for electronic transaction management and health information privacy and security. Under the Administrative Simplification provisions of the Act, healthcare organizations will have a two-year time frame from date of publication to be in compliance with the law. In light of a complex and lengthy compliance process, the intent of the regulation is to save the industry billions of dollars through improved efficiency and reduced costs in claims administration.

Systems Xcellence will be among the first system suppliers to be offering HIPAA - enabled drug benefit management systems to the marketplace, well in advance of the October 16, 2002 regulatory deadline. As a result, Systems Xcellence will ensure that current and future customers will be able to focus on their compliance preparation and requirements for their respective customers.

Systems Xcellence will enable compliance with the HIPAA mandated changes through two product updates. The first update is planned for September 2001 and will enable processing for NCPDP 5.1 transaction standards and code sets. The NCPDP 5.1 transaction set supported will include on-line prior authorization transactions (P1-P4) and claim billing transactions (B1-B3). Claim billing functionality will include multiple ingredient compound, partial fill and co-ordination of benefits processing. The second update is planned for December 2001 and will enable enrollment and payment advice processing for ANSI X12 transaction standards and code sets. Systems Xcellence is currently analysing the system requirements associated with the recently published HIPAA ruling on The Standards for Privacy and Security of Individually Identifiable Health Information. Once completed, a similar position will be communicated to the marketplace.

"By providing a HIPAA enabled application product and service offering in advance of the regulatory deadline, we are providing our customers a real competitive advantage," stated Gordon Glenn, President and CEO. "By allowing us to address system compliance requirements, our customers can focus their core competencies on understanding and developing strategic initiatives that may result from this regulatory change."

"We anticipate an increase in market demand for in-house HIPAA enabled pharmacy benefit management systems during the first six months of the new calendar year given the traditional conversion timeframes," added Walt Ellenberger, SVP Sales and Marketing. "We believe we are uniquely positioned to offer both a product solution to meet in-house demands and an application service solution for prospects interested in outsourcing their processing needs."

Systems Xcellence is headquartered in Milton, Ontario, and provides advanced online transaction processing solutions for the healthcare benefits management industry. The Company combines robust software products, business expertise, and services to deliver superior solutions to the ever-changing managed care sector. The Company's shares are traded on the Toronto Stock Exchange under the symbol SXC. Systems Xcellence can be found on the Internet at http://www.systemsxcellence.com.

HxBenefit Inc. is an application service provider (ASP) focussed on the delivery of comprehensive pharmacy benefit processing and analysis services directly to Pharmacy Benefit Managers (PBMs), Managed Care Organizations (MCO's), retail pharmacies and other healthcare intermediaries involved in managing drug benefit programs. HxBenefit hosts the Systems Xcellence Inc. suite of Healthcare Xcellence (HX) (TM) software as an ASP, utilizing on-line transaction processing systems and the Internet. Customers have Internet portal-based access to the Company's rich and full function suite of products on a transaction or subscription fee basis. HxBenefit Inc. is located in its new data and operations centre in Scottsdale, Arizona. HxBenefit Inc. can be found on the Internet at http://www.hxbenefit.com.