Aetna Ranks First in 2008 PayerView(SM) Ranking; Pays Medical Providers the Fastest Among National Commercial Insurers

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Athenahealth, Inc. (NASDAQ: ATHN), a leading provider of internet-based business services to physician practices, and Physicians Practice(R), America’s leading practice management journal for physicians, today released the third annual PayerView(SM) Rankings announcing that Aetna has assumed the new number one overall ranking among national payers for their business dealings with physicians. 

This year’s rankings utilized athenahealth claims performance data from more than 12,000 medical providers representing over 30 million medical charge lines for all four quarters of 2007. The data is derived from athenahealth’s national on-demand athenaNet(R) system database, and ranks health insurers according to specific measures of financial, administrative performance, and medical policy complexity. The complete 2008 PayerView Rankings, evaluating 137 national, regional and government payers, can be found at www.athenaPayerView.com.

“Aetna is committed to better serving physicians and hospitals. We have made tremendous progress in simplifying business transactions, delivering quality service and information, and making our business processes as transparent as possible to physicians doing business with us,” says Ronald A. Williams, Aetna Chairman and CEO. “While we are pleased that the progress we have made has been recognized, we are committed to continuous improvement in this area. By being easier to work with and collaborating with the medical community and businesses such as athenahealth, we can help improve the quality and cost-effectiveness of health care.”

“We commend Aetna for their progress in improving what should be any insurer’s core competency: paying insurance claims accurately and promptly,” said William F. Jessee, MD, FACMPE, president and CEO, Medical Group Management Association (MGMA). The MGMA serves 21,500 members who lead and manage more than 13,500 organizations in which almost 270,000 physicians practice. “We hope other payers will similarly work to reduce the crushing economic burden imposed by their unnecessarily complex administrative policies and flawed claims payment processes.”

The PayerView Rankings are designed to look at payers’ performance based on a number of categories, which combine to provide an overall ranking aimed at quantifying the “ease of doing business with the payer.” All data used for the rankings come from actual claims performance data of athenahealth providers and depict athenahealth’s experience in dealing with individual payers across the nation. The rankings include national payers with at least 120,000 charge lines of data and regional payers with a minimum of 20,000 charge lines and include medical services billed from 39 states to payers in 45 states.

“Our ongoing collaboration with athenahealth, such as expanding real-time claim adjudication into their national physician network, is one example of how we are delivering new technologies that reduce costs for consumers and physicians and simplify the service experience,” said David Wichmann, President of UnitedHealth Group Operations. “As a result of these and other innovations we are already seeing significant service improvements with athenahealth, such as days in accounts receivable dropping by 4.5 days in the first half of 2008 as a result of real-time adjudication. This ranking is a good validation of the types of enhancements we are making across our national service platform to improve service for all physicians and consumers we serve.”

“In only its third year, the PayerView Ranking Initiative has allowed athenahealth to dramatically expand its advocacy on behalf of our national medical provider clients by addressing some of the current administrative breakdowns that medical groups face in their dealings with payers – a place where the healthcare industry badly needs greater process integrity,” said Jonathan Bush, Chairman and CEO of athenahealth. “athenahealth has been able to harness PayerView data to form strategic and operational initiatives with payers, like our real-time adjudication platform that is aimed at creating better transparency in the transactions between payers and providers and that is designed to deliver better financial and operational outcomes for our provider clients.”

Key findings and trends from the 2008 PayerView Rankings:

— Aetna’s greatest performance gain was realized from a 10.6% reduction in its denial rate, which also provided Aetna with the best denial rate across the national payers. Across the other metrics, Aetna either maintained or improved its rank including the fastest payment to providers for the second straight year, which gave it the edge to surpass last year’s leader, CIGNA Healthcare.

— Medicaid-New York ranked last for the third straight year in the Days in Account Receivable metric (DAR) among all payers ranked. That program took on average over 137 days to pay a medical claim submitted by an athenahealth client, compared to an average of 33 days for national commercial carriers.

— Patient liability for the national payers was only up slightly at 0.4% compared to a 19% increase experienced the year prior. Both Humana and UnitedHealthcare launched new real-time adjudication projects with athenahealth in 2007 to address the growing demand on providers to collect payment from patients with new consumer-centric benefit plans.

— The Centers for Medicare and Medicaid Services (CMS) National Provider Identifier (NPI) initiative caused a great deal of confusion for providers in 2007 concerning which payers would adhere to the original, May 23, 2007 deadline, and what each payer’s contingency plans were. Payers had varying instructions for providers for how to exchange NPI information, which was needed for a payer to be able to process a medical claim – this resulted generally in increased denials rates and multiple submissions to resolve. While this impact was still small in 2007, the industry may feel the full impact in 2008 when the requirement officially goes into effect.

About Physicians Practice

Physicians Practice creates content to help physicians strengthen their practice operations to improve patient care through its award-winning journal, popular Web site, audioconferences, newsletters, and live seminars. Physicians Practice(R), America’s Leading Practice Management Journal, received numerous awards in 2006-2007, including: Publication of the Year, Best Publication Redesign, and Best Regular Column for “The Bigger Picture” from the American Society of Healthcare Publication Editors (ASHPE); Publication Redesign from the American Society of Business Publication Editors (ASBPE); and recognition as one of Baltimore’s Future 50 companies from SmartCEO magazine. For more information about Physicians Practice, visit our web site at www.PhysiciansPractice.com

About athenahealth

athenahealth is a leading provider of internet-based business services for physician practices. The Company’s service offerings are based on proprietary web-native practice management and electronic medical record (EMR) software, a continuously updated payer knowledge-base and integrated back-office service operations. For more information visit www.athenahealth.com or call (888) 652-8200.

This press release contains forward-looking statements which are made by athenahealth, Inc. pursuant to the safe harbor provisions of Private Securities Litigation Reform Act of 1995, including statements regarding expectations for the benefits of the Company’s service offerings. The forward-looking statements in this release do not constitute guarantees or promises of future performance. They are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other thing: risk that our services offerings will not operate in the manner that we expect; risk of interruptions in service or errors or omissions that may occur in our rules engine, software and databases; and, risk in the evolving and complex government regulatory compliance environment in which we and our clients operate. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. athenahealth, Inc. undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise. For additional disclosure regarding these and other risks faced by athenahealth, Inc., see the disclosure contained in our public filings with the Securities and Exchange Commission, available on our investor relations website at www.athenahealth.com and on the SEC’s website at www.sec.gov.

UnitedHealthcare and Humana Expand Real-Time Adjudication in
athenahealth National Physician Network

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