Aug. 31, 2005

FOR IMMEDIATE RELEASE

CONTACT: MARSHA TAPSCOTT

(662) 377-3193

JOHN SEWELL

(601) 664-5726

NORTH MISSISSIPPI MEDICAL CENTER SIGNS NEW CONTRACT

WITH BLUE CROSS & BLUE SHIELD OF MISSISSIPPI

TUPELO, Miss. -- North Mississippi Medical Center in Tupelo and Blue Cross & Blue Shield of Mississippi reached an agreement in their contract talks Monday, when the North Mississippi Health Services Board of Directors approved the new contract.

“We are extremely pleased that we have come to an agreement with Blue Cross,” said John Heer, NMHS president and chief executive officer. “This has been a long and difficult process and we're glad that our valued Blue Cross patients will again be able to utilize our services.”

Rick Hale, Blue Cross & Blue Shield president and CEO, said, “We are extremely pleased that we have reached an agreement with North Mississippi Medical Center. This has been a long process, but from the beginning Blue Cross & Blue Shield of Mississippi has been committed to an agreement that is in the best interests of our customers. We want to thank John Heer for his leadership and his commitment to health care in north Mississippi. This agreement is effective Sept. 1, 2005.”

All Blue Cross patients, including those in Alabama and other states, are covered under this agreement

As part of the new contract agreement, NMMC is making the transition to a Diagnosis Related Group (DRG) system for inpatients. Outpatient care will be reimbursed through an Ambulatory Payment Group (APG) system, which is the equivalent of a DRG system for outpatient procedures and tests.

“The advantage of having more of our patients in a DRG/APG reimbursement environment is that a larger percentage of our patients will be on the same system, and we will be able to manage their progression through our organization more effectively,” Heer said. “Medicare has utilized this type of payment system since 1984. Under a DRG system, you are rewarded for efficiency but penalized for inefficiency.”

To help improve its efficiency, NMMC is identifying ways to reduce its cost per adjusted discharge through supply expense reduction, effective resource utilization in conjunction with the medical staff and appropriate staffing to volume, Heer said. The cost per adjusted discharge will be further reduced by the anticipated increase in volume related to Blue Cross patients.

NMMC invites Blue Cross & Blue Shield policyholders that have questions about their policy’s coverage and billing questions to call the hospital’s Blue Cross HelpLine at 1-888-615-0595. This free service is staffed from 8 a.m. to 8 p.m. Monday through Friday and 8 a.m. to noon on Saturday.

-30-