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Childrenís National Medical Center
Press release on contract with CareFirst BlueCross BlueShield
January 27, 2003

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NEWS RELEASE

FOR IMMEDIATE RELEASE Contact: Jacqueline Bowens
January 27, 2003 202-884-4500

CAREFIRST BLUECROSS BLUESHIELD AND D.C. CHILDRENíS HOSPITAL AGREE ON NEW CONTRACT

Three-year agreement ensures that Childrenís remains in insurerís network

WASHINGTON, D.C. (January 27, 2003) -- CareFirst BlueCross BlueShield and Childrenís National Medical Center today announced that they had reached agreement on a new three-year contract that ends almost three months of uncertainty over whether the pediatric specialty hospital would remain in the provider networks of the regionís largest health insurer.

The contract provides CareFirst's nearly 2 million greater Washington-area members continued access at network rates to Children's Hospital, its 300 pediatric specialists, six regional outpatient centers, and ambulatory surgery center.

In keeping with corporate policy of not discussing details of contracts, CareFirst and Childrenís officials said the terms of the agreement represented compromise from both organizations. The agreement supports the best interests of the children both organizations serve, while supporting the financial objectives of both CareFirst and Childrenís Hospital.

Unable to reach agreement before their contract was to expire, both organizations agreed in December to extend the existing agreement through the end of January. The additional negotiating time enabled both sides to gain a greater understanding of the financial and operational challenges facing both organizations.

"Under this agreement, CareFirstís reimbursements to Childrenís Hospital will fall within the general framework of fees for comparable high quality, cost-effective pediatric services at other network facilities, including Johns Hopkins and the University of Maryland Medical System," according to David D. Wolf, CareFirstís executive vice president for medical services and corporate development.

Edwin K. Zechman, Jr., president and CEO of Childrenís, added, "Throughout the negotiations, both organizations worked toward a common goal of ensuring that the families we serve would enjoy continued, uninterrupted care from the physicians and hospital they have come to trust and rely upon -- one of the top 10 children's hospitals in America."

Wolf and Zechman said both organizations regret any concern the extended negotiations caused for some families, and added that CareFirst and Childrenís stand ready to work together in a renewed spirit of cooperation they have enjoyed as partners in the care of the area's children for many years. Neither organization will have any additional public comment on the contract issue.

Insurance regulators in both the District of Columbia and Maryland have been informed of the settlement.

# # #

Children's National Medical Center, located in Washington, D.C., is a leader in the development of innovative new treatments for childhood illness and injury. Among the top pediatric hospitals in America, CNMC has been serving the nation's children for over 130 years. Visit our web site at www.dcchildrens.com.

# # #

CareFirst, Inc., an independent licensee of the Blue Cross and Blue Shield Association, is a not-for-profit health care company which, along with its affiliates and subsidiaries, offers a comprehensive portfolio of health insurance products, direct health care and administrative services to nearly 3.2 million individuals and groups in Northern Virginia, the District of Columbia, Maryland and Delaware. For more information, visit the CareFirst web site at www.carefirst.com.

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