United Government Services Awarded Government Subcontract.

Business Editors/Health Writers

MILWAUKEE--(BUSINESS WIRE)--Oct. 24, 2001

United Government Services, LLC. (UGS), a wholly-owned subsidiary of Cobalt Corporation, will be participating with PricewaterhouseCoopers LLP (PwC) in the initial phase of the implementation of the Healthcare Integrated General Ledger Accounting System (HIGLAS).

The HIGLAS contract was awarded to PwC by the Department of Health and Human Services' Centers for Medicare and Medicaid Services (CMS) in an effort to enhance their financial reporting systems. The project will replace CMS' own internal administrative accounting systems and the accounting systems used by 53 intermediaries and carriers to capture Medicare financial data. The implementation of this pilot system is expected to span October 2001 through March 2003. After a thorough evaluation of the pilot implementations, a decision will be made on expanding the implementations to the remaining contractors and CMS' internal operations. All conversion activities are projected to be completed by November 2006.

United Government Services will provide its Part A Medicare expertise encompassing financial subsystems, provider payment activities, reimbursement, chief financial officer reporting, accounting and auditing activities. United Government Services expects to provide eight staff to assist in this initial phase.

"The contract is expected to last ten years and UGS expects to do more work in future phases of the project after the completion of this initial 18 month phase," said Tim Cullen, chairman of UGS.

Sandy Coston, president of UGS, participated in a kick-off meeting for the HIGLAS project in Baltimore, Md., on September 28th.

United Government Services, LLC., is a wholly owned subsidiary of Cobalt Corporation. Headquartered in Milwaukee, Wisconsin, United Government Services is the largest Medicare Part A claims processor in the country. UGS employs 1,300 nationwide including 500 employees at its office in downtown Milwaukee. Other offices include Monona and Ashland, Wisconsin; East Lansing and Detroit, Michigan; Valhalla, New York; Charleston, West Virginia; Roanoke and Richmond, Virginia; Mount Vernon and Moline, Illinois; Mendota Heights, Minnesota; and Camarillo and Oakland, California.

United Government Services processes Medicare claims for providers in all 50 states, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa and the Northern Marianna Islands. The company will process an estimated 30 million Medicare claims annually, with an estimated $23 billion in payments. UGS processes approximately 20 percent of the Medicare Part A claims nationwide. The company also has a contract with EDS to process claims for the Wisconsin Medicaid program.

Cobalt Corporation is one of the leading, publicly traded managed care companies in the nation, offering a diverse portfolio of complementary insurance and managed care products to employer, individual, insurer and government customers. Headquartered in Milwaukee and formed by the combination of Blue Cross & Blue Shield United of Wisconsin and United Wisconsin Services, Inc., Cobalt Corporation (NYSE: CBZ) serves 2.8 million lives in 50 states. For more information, visit our Web site at www.cobaltcorporation.com.