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Press Release

Independence Blue Cross, Chester County Hospital

Philadelphia, PA - February 17, 2004 - Independence Blue Cross (IBC) and The Chester County Hospital (CCH) today announced a settlement in the lawsuit filed by the hospital in May 2002.

Both sides said the settlement addresses any question of whether IBC had unfairly reimbursed the hospital for the care it provided to IBC’s members.

“We are pleased to be able to put this chapter behind us and devote our full attention to meeting the healthcare needs of our Chester County community,” said H. L. Perry Pepper, CCH president and CEO. “When we filed this suit, we alleged that IBC had forced The Chester County Hospital and other hospitals to accept unfair rates of reimbursement. Over the last year, there has been extensive discovery into all issues in the case. Based on that discovery, we are satisfied that IBC and its affiliates are attempting to balance the interests of subscribers and providers in the marketplace. Accordingly, we are withdrawing our lawsuit. The facts show that IBC and The Chester County Hospital are each faced with the same enormous cost pressures confronting everyone in the healthcare system,” Pepper said.

As part of the settlement, the two sides agreed on a new, six-year contract, the length of which is unprecedented. Terms of the new contract were not disclosed. But G. Fred DiBona, Jr., IBC President and CEO, said the contract was consistent with those reached with CCH and other hospitals in recent years.

“The good news is IBC’s members in Chester County will continue to have access to the services of their community hospital,” DiBona said. “But the bad news is both parties wasted two years of unnecessary litigation and incurred significant legal fees to reach the very same kind of agreement we reach across the bargaining table with many providers again and again every year.

“IBC is prepared to continue working with the hospitals of this region as we all try to navigate through this very complex crisis of ever rising health care costs,” DiBona said. “Our members count on us to do that. It’s part of our promise to stand behind them and ensure them access to quality healthcare .”