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Anthem Professional Forum

December 2004, Volume 8, Number 12

W H AT ' S I N S I D E

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Electronic Medicare Claims Cardiac Event Monitors Use LabCorp for VAP® Cholesterol Test Anthem Makes Change to HealthKeepers Plus Drug Formulary Pharmacy Management Procedures Available Online Anthem Modifies Prescription Drug Plans to Lower Costs for Members

A monthly update for the health care professional community from Anthem Blue Cross and Blue Shield and its affiliated HMOs: HealthKeepers, Inc., Peninsula Health Care, Inc. and Priority Health Care, Inc.*

Anthem Announces Changes to Performance Extra Program for 2005 Anthem and Wellpoint Complete Merger

E L E C T RO N I C BU S I N E S S

Anthem Announces Changes to Performance Extra Program for 2005

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Anthem Eliminates Two Telephone Numbers in February 2005

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This issue of the Anthem Professional Forum provides formal notification of improvements and changes Anthem Blue Cross and Blue Shield and our affiliated HMOs -- HealthKeepers Inc.,Peninsula Health Care Inc.and Priority Health Care Inc.-- are making to the Performance Extra Program for 2005.

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2005 Performance Extra Program Changes

In your recent contract amendment,the maximum per member per month (PMPM) payment has been increased to four dollars ($4.00).This increase reflects our commitment to exceptional quality care for our members and rewards top-performing

Commonwealth of Virginia Makes Change to Retirees'Health Plans New Provision Impacts Ethics and Fairness in Carrier Business Practices Act

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physicians who share this commitment. Our 2005 physician incentive program focuses more on clinical activities related to prevention and management of a variety of chronic and acute conditions as well as quality service and other evidence-based gauges of state-of-the art medical practice. Wherever applicable,we will use national benchmarks to assist in defining distinctive and exceptional performance.This year,the program contains minimum and maximum payout thresholds for the majority of the indicators. The Performance Extra Program applies only to PCPs under the terms of PCP Addenda to Anthem Services Inc. continued on page 2

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Anthem and Wellpoint Complete Merger

Business as Usual Earlier this month, Anthem and Wellpoint Health Networks joined together to form the new WellPoint,the nation's leading health benefits company.Together,we are positioned to improve the way we serve approximately 28 million members across the country. Although the corporate name changed to WellPoint,with headquarters in Indianapolis,the company continues to do business in Virginia as Anthem Blue Cross and Blue Shield. Local Nature of Health Care

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Olivia Walker, Editor

We welcome your comments, questions and story ideas. Send a fax to (804) 354-3885 or write: Anthem Blue Cross and Blue Shield Attn: Anthem Professional Forum Mail Drop VA46D, P.O. Box 27401 Richmond, VA 23279

*The information in this newsletter pertains to all these entities, unless otherwise noted.

We believe health care is best managed locally with decisions about such things as policy implementation,provider contracting and payments continuing to be made in Virginia.We expect a seamless transition in the coming months with a "business as usual"approach in our region. You can continue to connect with us online as you always have at www.anthem.com,except for corporate and investor information,which can now be found at www.wellpoint.com.

Read the Anthem Professional Forum on-line at www.anthem.com.

continued from page 1 Professional Provider and Preferred Professional Provider Agreements (Corporate and non-Corporate) and to those PCPs in the Anthem HealthKeepers and Anthem HealthKeepers Plus (Medicaid) networks of HealthKeepers Inc.,Peninsula Health Care Inc.and Priority Health Care Inc.The measurement period for this program is January 1 to December 31,2005.Any payments that may ultimately be earned under this program will be made on or around April 30, 2006. For Anthem HealthKeepers and Anthem HealthKeepers Plus (Medicaid) PCPs,the payment will be made to each physician's reporting group during the program year.If a PCP changes his/her group affiliation during the program year but continues to be an Anthem HealthKeepers or Anthem HealthKeepers Plus PCP for the entire program year,any payments for that program year will be prorated among the groups with which the PCP was affiliated during such program year. The prorated amount will be based on whole months dependent upon the PCP's group affiliation at the end of each month. If a physician terminates his/her PCP agreement with HealthKeepers Inc.,Peninsula Health Care Inc.and Priority Health Care Inc.or otherwise leaves the Anthem HealthKeepers network or Anthem HealthKeepers Plus network after the end of the program year,any payment will be mailed to the financial address of the physician or the physician group with which the physician was affiliated during the program year.For Anthem Blue Cross and Blue Shield Point of Service ("POS") PCPs,the payment will be made to the active PCP indicated on the Election/Membership Report Tax Financial Mailing Address at the end of the program year. The measurement indicators for the 2005 Performance Extra Program are shown below:

Clinical Effectiveness*

Appropriate Asthma Management Care Management Ratio Asthma Medication Ratio Appropriate Diabetic Management HbA1c Testing for Diabetics Retinal Eye Exams for Diabetics Microalbuminuria Testing for Diabetics ACE/ARB Diabetics Appropriate Cholesterol Management Cholesterol Screening Appropriate Hypertension Management Hypertension Serum Chemistries Hypertension Follow up Office Visit Appropriate Mental Health Management ADHD Follow up Care Appropriate Use of Antibiotics Acute Otitis Media Pharyngitis Sinusitis Preventive Medicine Mammograms Childhood Immunization QUALITY OF SERVICE Patient Satisfaction Practice Open Point of Care Electronic Medical Record (EMR) RESOURCE MANAGEMENT Generic Drugs TOTAL AVAILABLE

Minimum Payout Threshold 67.00% 69.00% 89.00% 56.00% 53.00% 71.00% 70.00% 74.00% 74.00% 95.00% 69.00% 90.00% 72.00% 79.00% 80.00% 4.14 n/a n/a n/a 55.00%

Payout ($pmpm) $.15

Maximum Payout Threshold 78.00% 79.00% 91.00% 64.00% 62.00% 84.00% 78.00% 82.00% 82.00% 100.00% 80.00% 96.00% 84.00% 83.00% 85.00% 4.33 Open 12 Months Self Reported 62.00%

Payout ($pmpm) $.30

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$.25 $.30

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$.25 $.30

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$.08 n/a n/a n/a $.70

$.15 $.20 $.15 $1.40 $4.00

35 Transactions Per Quarter $.10

*For the Clinical Effectiveness category, the maximum payout that can be earned is $2.00 PMPM. The $2.00 PMPM will be divided according to the number of indicators for which a PCP is eligible. Eligibility for each indicator is defined later in this document. Also, in order to earn a payout for any Clinical Effectiveness indicator, the minimum payout threshold must be met for all eligible measures within that indicator.

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Performance Extra Program Highlights: The maximum per member per month payment will be four dollars ($4.00).Additionally,the minimum requirements to qualify for a Performance Extra payment are as follows: 1. Average at least 80 members who have selected you as their PCP ,measured as a minimum of 960 member months for the calendar year. 2. Comply with the Admission Review program and other Medical Management activities. 3. The Anthem Blue Cross and Blue Shield Point of Service (POS) member data and the Anthem HealthKeepers (HMO) and Anthem HealthKeepers Plus (Medicaid) member data will be combined for indicator measurement,eligibility and payment purposes.Member months for POS,HMO and Medicaid will also be combined for eligibility and payment purposes.Member data and member months for any members in any networks in which the physician did not participate for the entire year will be excluded.

vent exacerbations and chronic symptoms for all patients with persistent asthma.Inhaled corticosteroids are the preferred therapy for patients with mild,moderate and severe persistent asthma.Cromolyn,leukotriene modifiers,nedocromil and methylxanthines are alternative long- term control medications. The use of short-acting inhaled beta2-agonists should be minimized.Over reliance on short-acting inhaled beta2-agonists (e.g.,use of more than one canister a month) indicates inadequate control of asthma and the need to initiate or intensify long-term-control therapy. Members are identified as having persistent asthma when any of the following occur in the year prior to the measurement year: 1. At least four asthma medication dispensing events; 2. At least one emergency department visit with asthma as the principal diagnosis; 3. At least one acute inpatient discharge with asthma as the principal diagnosis;or 4. At least four outpatient asthma visits and at least two asthma medication dispensing events. The Care Management Ratio measurement is based on the percentage of members with persistent asthma assigned to the PCP whose asthma was managed appropriately,resulting in a low rate of visits to acute care centers during the measurement year.The ratio calculates the number of office visits to the number of visits to an acute care center.This ratio indicates a measure of control and whether the patient's care plan is effective.The NHLBI states that once a patient's persistent asthma is controlled,follow-up visits should be done at least every six months to properly manage the long-term medication and maintain control of the asthma.To qualify for the minimum payout threshold,67.00 percent of your assigned members with persistent asthma must have a calculated ratio of office visit to acute care visits that is equal to or greater than 3:1.To qualify for the maximum payout threshold,78.00 percent of your assigned members with persistent asthma must have a calculated ratio of office visit to acute care visits that is equal to or greater than 3:1. The Asthma Medication Ratio measurement is based on the percentage of members with persistent asthma assigned to PCP continued on page 4

Description of the Indicators for the 2005 Performance Extra Program

Clinical Effectiveness: According to recent studies,nearly half of all Americans suffer from some sort of chronic illness.Additionally,less than half of all Americans with diabetes and asthma receive appropriate treatment.Further,although only four percent of U.S.health care dollars are spent on prevention,a full 50 percent of medical illnesses or conditions can be traced to controllable behaviors. Recognizing and managing risk factors can dramatically improve future health.The following quality indicators,as part of Anthem's Quality-In-Sights® program,are designed to promote accountability around outcomes and improve the health of the members we serve. Appropriate Asthma Management: NHLBI Guidelines Adherence: Long-Term Management of Asthma -- The National,Heart,Lung and Blood Institute's (NHLBI) National Asthma Education and Prevention Program (NAEPP) Guidelines for the Diagnosis and Management of Asthma recommend daily long-term control medications to pre-

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continued from page 3 whose prescribed medication during the measurement year is appropriate.The ratio calculates the number of prescriptions for long-term (anti-inflammatory) control agents to the number of prescriptions of short- acting (rescue) beta-agonists.The ratio indicates a measure of control and whether the patient has been prescribed a long-term control agent.To qualify for the minimum payout threshold,69.00 percent of your assigned members with persistent asthma must have a calculated ratio of number of prescriptions for long-term (anti-inflammatory) control agents to the number of prescriptions of short-acting (rescue) beta-agonists that is equal to or greater than 1:1.To qualify for the maximum payout threshold,79.00 percent of your assigned members with persistent asthma must have a calculated ratio of number of prescriptions for long-term (anti-inflammatory) control agents to the number of prescriptions of short-acting (rescue) beta-agonists that is equal to or greater than 1:1. PCPs who are assigned five (5) or more members who meet the criteria are eligible.To be counted,male and female members who were age 5 through 56 years during the measurement year must be continuously enrolled during the measurement year and the year prior to the measurement year,with no more than one month gap in enrollment during the measurement year,and enrolled as of the last day of the measurement year. In order to receive payout for this indicator,a PCP must meet the minimum or maximum payout thresholds for which he/she is eligible.If a PCP does not have enough members to be eligible for the indicator,the minimum and maximum payout threshold amounts will be incorporated into the remaining indicators within the Clinical Effectiveness category. Appropriate Diabetic Management: ADA Guidelines Adherence: Glycosylated Hemoglobin (HbA1c) Testing -- Good blood glucose control in diabetics reduces the risk of developing complications.The HbA1c test reflects the level of blood glucose control over the preceding two to three months.The ADA (American Diabetes Association) Clinical Guidelines recommend HbA1c testing should be performed routinely in all patients with diabetes. The HbA1c Testing for Diabetics measurement is based on the percentage diabetic members assigned to the PCP who have one or more HbA1c tests in the measurement year. Physicians who are assigned ten (10) or more diabetic members are eligible for the indicator.For HbA1c testing,the eligible member definition includes male and female members who were 18 to 75 years of age during the measurement year and were continuously enrolled with no more than one month gap in enrollment during the measurement year,and enrolled as of the last day of the measurement year. The indicator minimum payout threshold is 89.00 percent and the maximum payout threshold is 91.00 percent. ADA Guidelines Adherence:Annual Diabetic Retinal Exam -- The ADA Clinical Guidelines recommend an annual dilated retinal exam by an ophthalmologist or optometrist who is knowledgeable and experienced in diagnosing the presence of diabetic retinopathy and is aware of its management.Diabetic retinopathy is the most frequent case of new cases of blindness among adults 20 to74 years. The Retinal Eye Exam for Diabetics measurement is based on the percentage of diabetic members assigned to the PCP who have one or more dilated retinal exams in the measurement year or the year prior to the measurement year. Physicians who are assigned ten (10) or more diabetic members are eligible for the indicator.For retinal eye exams,the eligible member definition includes male and female members who were age 18 through 75 years during the measurement year and prior year were continuously enrolled with no more than one month gap in enrollment during the measurement year,and enrolled as of the last day of the measurement year. The indicator minimum payout threshold is 56.00 percent and the maximum payout threshold is 64.00 percent. ADA Guidelines Adherence: Microalbuminuria Screening -- Early detection of microalbuminuria allows for the early identification of patients with nephropathy. A test for microalbumin should be performed after a five-year duration for patients with type 1 diabetes and at the time of diagnosis in patients with type 2 diabetes. After the initial screening for microalbumin,an annual microalbumuria screening should be done.In the United States,diabetic neuropathy accounts for about 40 percent of new cases of End Stage Renal Disease (ESRD),and the cost for treatment of diabetic patients with ESRD was in excess of $15.6 billion in 1997.

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The Microalbuminuria measurement is based on the percentage of diabetic members assigned to the PCP between the ages of 18 to 75 years who have had a least one or more microalbuminuria screenings done during the measurement year.Such members must be continuously enrolled during the enrollment year with no more than one month gap.Physicians who are assigned ten (10) or more such diabetic members are eligible for the indicator. The indicator minimum payout threshold is 53.00 percent and the maximum payout threshold is 62.00 percent. ADA Guidelines Adherence:Hypertensive Diabetics taking an Angiotensin converting enzyme inhibitors (ACEs) or Angiotensin receptor blocker class of drugs (ARBs).The American Diabetes Association strongly supports the evidence that pharmacologic therapy of hypertension in patients with diabetes is effective in producing substantial decreases in cardiovascular and microvascular diseases.ACE inhibitors and ARBs are highly effective in retarding the development and progression of diabetic neuropathy and producing favorable cardiovascular outcomes. The ACE/ARB measurement is based on the percentage of diabetic members assigned to the PCP with hypertension between the ages of 18 to75 years who are on two or more antihypertensive medications so long as one is an ACE or ARB during the measurement year.Such members must be continuously enrolled during the enrollment year with no more than one month gap.Physicians who are assigned ten (10) or more diabetic members with hypertension are eligible for the indicator.The indicator minimum payout threshold is 71.00 percent and the maximum payout threshold is 84.00 percent. The National Committee for Quality Assurance's (NCQA) Diabetes Physician Recognition Program, (www.ncqa.org/dprp),co-sponsored by the American Diabetes Association (ADA),is a voluntary program for individual physicians or physician groups that provide care to people with diabetes.Physicians,in all settings,can achieve recognition by submitting data that demonstrates they are providing quality diabetes care.The Program assesses key measures that were carefully defined and tested for their relationship to improved care for people with diabetes.Physicians who earn recognition through the National Committee for Quality Assurance's (NCQA) Diabetes Physician Recognition Program will automatically receive maximum credit for the diabetes measures. In order to receive payout for this indicator,a PCP must meet the minimum or maximum payout thresholds for which he/she

is eligible.If a PCP does not have enough members to be eligible for the indicator,the minimum and maximum payout threshold amounts will be incorporated into the remaining indicators within the Clinical Effectiveness category. Appropriate Cholesterol Management: The Cholesterol (LDL-C) measurement is based on the percentage of members assigned to each PCP with one of the following clinical conditions:Ischemic Heart Disease,Cerebral Artery Disease,Vascular Disease, Aortic Aneurysm or Diabetes who have had a cholesterol (LDL-C) screening during the past two years. The National Cholesterol Education Program from the National Heart,Lung and Blood Institute recommends a fasting lipoprotein should be obtained at least once every five years or for adult patients with values in lower-risk levels every two years.Physicians who are assigned ten (10) or more members who meet the above criteria are eligible.The indicator minimum payout threshold is 70.00 percent and the maximum payout threshold is 78.00 percent. In order to receive payout for this indicator,a PCP must meet the minimum or maximum payout thresholds for which he/she is eligible.If a PCP does not have enough members to be eligible for the indicator,the minimum and maximum payout threshold amounts will be incorporated into the remaining indicators within the Clinical Effectiveness category. Appropriate Hypertension Management: The National Institute of Health states that hypertension affects approximately 50 million individuals in the United States and approximately 1 billion worldwide. NHLBI Guidelines Adherence: The Seventh Report of the Joint National Committee on Prevention, Detection, Evaluation and Treatment of High Blood Pressure recommends once antihypertensive drug therapy is initiated,most patients should return for follow up and adjustments of their medications monthly until the blood pressure goal is reached.Once the goal is reached,follow-up visits could be at intervals of three to six months.The laboratory tests serum potassium and creatinine should be monitored at least one to two times a year while on drug therapy. The Serum Chemistries (potassium and creatinine) measurement is based on the percentage of hypertensive members continued on page 6

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continued from page 5 assigned to each PCP between the ages of 18 to 75 years who have had at least one or more electrolytes and renal parameter screening performed during the measurement year.Physicians who are assigned ten (10) or more such members are eligible. The indicator low threshold is 74.00 percent and the high threshold is 82.00 percent. The Hypertension Follow up Office Visit measurement is based on the percentage of hypertensive members assigned to each PCP between the ages of 18 to75 years who have had one or more office visits during the measurement year to monitor the blood pressure after they become stable.Members must be continuously enrolled during the enrollment year with no more than one month gap.Physicians who are assigned ten (10) or more members who meet the criteria are eligible.The indicator minimum payout threshold is 74.00 percent and the maximum payout threshold is 82.00 percent. In order to receive payout for this indicator,a PCP must meet the minimum or maximum payout thresholds for which he/she is eligible.If a PCP does not have enough members to be eligible for the indicator,the minimum and maximum payout threshold amounts will be incorporated into the remaining indicators within the Clinical Effectiveness category. Appropriate Mental Health Management: ADHD Follow-up Care -- ADHD affects approximately 3 to 5 percent of all school age children.It is the most frequently diagnosed childhood behavioral disorder.An excess of 5 million American children are prescribed psychostimulant medications to treat ADHD.According to a National Institutes of Health consensus statement in 1998,"the degree of assessment and follow-up by primary care physicians varies significantly.This variance may contribute to the marked differences in appropriate prescribing practices.Adequate follow-up is required for any prescribed medications,especially for higher doses of psychostimulants." This measure is based on the percentage of children (under age 13) diagnosed with ADHD and assigned to PCP who have been prescribed psychostimulant drugs by their PCP who receive follow-up care within six months.This follow-up care can be performed by a PCP or by a mental health physician. PCPs who are assigned ten (10) or more such members are eligible. The indicator minimum payout threshold is 95.00 percent and the maximum payout threshold is 100.00 percent. In order to receive payout for this indicator,a PCP must meet the minimum or maximum payout thresholds for which he/she is eligible.If a PCP does not have enough members to be eligible for the indicator,the minimum and maximum payout threshold amounts will be incorporated into the remaining indicators within the Clinical Effectiveness category. Acute Condition Management: Appropriate Use of Antibiotics Antibiotic resistance is one of the nation's most dangerous public health threats.In 1995,the Centers for Disease Control and Prevention (CDC) launched a national campaign to reduce antimicrobial resistance through promotion of more appropriate antibiotic use.Anthem's Quality-In-Sights® program supports the CDC's initiative.Our initiative analyzes antibiotic prescribing patterns for certain infections.Individual physician profiles are provided.The profile presents a summary of an analysis of antibiotic choices with attention to variance from Centers for Disease Control and Prevention/American Academy of Pediatrics/American College of Physicians (CDC/AAP/ACP) guidelines.These quality indicators are derived from the Quality-In-Sights® program results. Initial Management of Acute Otitis Media (AOM) -- The CDC Guidelines state Amoxicillin is the first-line antibiotic for the treatment of uncomplicated AOM.The ACP and AAP recommend for patients who have severe illness (moderate to severe otalgia or fever = 39°C) therapy should be initiated with highdose Amoxicillin-Clavulanate. The Acute Otitis Media measurement is based on the percentage of episodes where a member assigned to the PCP who is less than six years of age with AOM is initially prescribed a first-line antibiotic versus a second-line antibiotic. Physicians who manage ten (10) or more qualifying episodes are eligible for the indicator.The indicator minimum payout threshold is 69.00 percent and the maximum payout threshold is 80.00 percent.

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Initial Management of Pharyngitis -- The CDC Guidelines recommend the following: Diagnosis of group A Streptococcal pharyngitis should be made on the basis of appropriate lab tests.Antimicrobial therapy should not be given to a child in the absence of diagnosed group A streptococcal infection.A penicillin type antibiotic remains the drug of choice for treating group A streptococcal pharyngitis.If a patient is allergic to penicillin,the recommendation is to use erythromycin. The Pharyngitis measurement is based on the percentage of episodes where a member assigned to the PCP who is 17 years of age or under with pharyngitis is initially prescribed a firstline antibiotic versus a second-line antibiotic. Physicians who manage ten (10) or more qualifying episodes are eligible for the indicator.The indicator minimum payout threshold is 90.00 percent and the maximum payout threshold is 96.00 percent. Initial Management of Sinusitis -- The CDC Guidelines recommend targeting likely organisms with first-line drugs such as Amoxicillin or Amoxicillin/Clavulanate. The Sinusitis measurement is based on the percentage of episodes where a member assigned to the PCP who is 75 years of age or under with acute sinusitis is initially prescribed a firstline antibiotic versus a second-line antibiotic. Physicians who manage ten (10) or more qualifying episodes are eligible for the indicator.The indicator minimum payout threshold is 72.00 percent and the maximum payout threshold is 84.00 percent. In order to receive payout for this indicator,a PCP must meet the minimum or maximum payout thresholds for which he/she is eligible.If a PCP does not have enough members to be eligible for the indicator,the minimum and maximum payout threshold amounts will be incorporated into the remaining indicators within the Clinical Effectiveness category.

Preventive Medicine: Mammograms -- This measurement is based on the number of female members age 52 to 69 years assigned to PCP who receive one or more mammogram(s) during the measurement year or the year prior to the measurement year.To be counted,women age 52 to 69 years must be continuously enrolled during the measurement year and the year prior to the measurement year with no more than one month gap in enrollment during each year of continuous enrollment,and enrolled as of the last day of the measurement year.PCPs must have at least 10 female patients within the 52 to 69 age category to qualify for this measure.The indicator minimum payout threshold is 79.00 percent and the maximum payout threshold is 83.00 percent. Childhood Immunization -- Routine check-up visits are important for children.The American Academy of Pediatrics and the American Family of Physicians have developed guidelines for preventive care.Each child is unique;therefore,these recommendations for Preventive Pediatric Health Care are designed for the care of children who have no important health problems. This measurement is based on the percentage of members age 2 or younger assigned to the PCP who receive the immunizations specified below prior to their second birthday.To be counted,the member must be age 2 as of the last day of the measurement year and an Anthem,HMO or Medicaid member 23 months prior to their second birthday.Immunizations should have been administered during the measurement year or during the 23 months prior to the child's second birthday.For the purpose of this program,immunizations counted will consist of four DTaP/DT,three OPV/IPV ,one MMR,three H Influenza type B and two Hepatitis B.Physicians who are assigned five (5) or more members who meet the criteria are eligible.The indicator minimum payout threshold is 80.00 percent and the maximum payout threshold is 85.00 percent. In order to receive payout for this indicator,a PCP must meet the minimum or maximum payout thresholds for which he/she is eligible.If a PCP does not have enough members to be eligible for the indicator,the minimum and maximum payout threshold amounts will be incorporated into the remaining indicators within the Clinical Effectiveness category. continued on page 8

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continued from page 7 Quality of Service: Patient Satisfaction -- We are highly interested in what members perceive as the quality of the services they receive from their PCPs and office staff.Therefore,Anthem and our affiliated HMOs conduct patient satisfaction surveys.Members are asked questions about the services they receive from their PCPs.In order for surveys to be sent out,a PCP must have a combined minimum of 35 HMO and/or POS encounters/claims submitted during the program year.If the minimum number of encounters/claims is not met,we do not send any surveys out for the PCP a combined minimum of 15 HMO and/or POS surveys is .If not returned,a score is not calculated for the PCP ,and the PCP is not eligible to receive the payout for this measure.The survey consists of 20 questions,divided into four factors -- physician, physician availability,office and overall.Survey results are scored on a scale of 1 to 5,with 5 being excellent.Based on feedback from our members,survey questions relating to appointment access,coordination of care and length of time waiting at the office will carry more weight towards the overall score for patient satisfaction in 2005.The indicator minimum payout threshold is a 4.14 average overall survey score and the maximum payout threshold is a 4.33 average overall survey score. Practice Open -- Having a PCP office open to new patients is important to ensure members have adequate access to providers listed in our network directories.However,it is not the purpose of the program to penalize a PCP if,in the interest of patient access and quality of care,a PCP is forced to close his/her practice because he/she has reached a maximum capacity.For this reason,if a PCP group closes to additional HMO members while maintaining at least 500 HMO members (including HMO Medicaid members) per PCP in the group,the maximum score in this category will be awarded. In order to receive credit for the Practice Open indicator for Resource Management,a PCP practice must be open to new and existing patients for all provider numbers and affiliations,including Anthem HealthKeepers Plus (Medicaid),where offered for the entire 12 months of the calendar year.The payout a PCP receives based on the above information will be applied to combined HMO and POS member months.If a PCP does not have any HMO members,Anthem will conduct the Practice Open measurement for POS only and apply the same sliding scale. Point of Care (POC) -- Anthem's Web-based provider information system offers electronic access to eligibility,benefits,claims status,adjustment requests (151 forms),various reports,authorizations and a link to the Anthem Professional Forum online. One transaction will be counted on POC for each of the following situations: Submitting an Admission Review (inpatient pre-certification) Submitting a Specialty Care Review (referral) Viewing eligibility Viewing benefits Viewing claim details Viewing existing authorizations Submitting an adjustment request (151 form) Viewing reports A Performance Extra payout for POC transactions is contingent upon a PCP staying actively connected to POC,pursuant to the POC agreement,through the end of the calendar year.The Point of Care measurement is based on the number of transactions submitted to Anthem through POC each calendar quarter.For PCPs contracted at a group practice level,this measurement will be calculated at the group practice level and will be the average of all physicians participating under their group practice tax identification number.The number of transactions must meet or exceed an average of 35 transactions per PCP per quarter to be eligible to receive the maximum payout.(The average is calculated at the group practice level.) Eligible payment if the transaction target is met for: 01/01/2005 to 03/31/2005 = $.025 PMPM 04/01/2005 to 06/30/2005 = $.025 PMPM 07/01/2005 to 09/30/2005 = $.025 PMPM 10/01/2005 to 12/31/2005 = $.025 PMPM

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Electronic Medical Record (EMR) -- Information technology is proving to be a vital element in the administration of health care.Specifically,most health care institutions in the United States are adopting information systems that provide more accurate and timely information regarding patient care.An electronic medical record system was introduced as a way to facilitate a centralized patient information repository.Benefits realized by this system include immediate and remote access to patient records,automated clinical guidelines,direct access to international data bases,automated referral and prescription generation,statistical reporting,multiple data views and reduction in office-related administrative costs and tasks. In order to qualify for this indicator,the PCP must have fully implemented an Electronic Medical Record system by Dec.31, 2005.The EMR system must contain all of the following attributes: 1. Decision support tool using evidence-based medicine for pharmacy management (to include by not limited to the following): Drug recommendations using calculated or inferred knowledge (drug choice guided by lab results,drug dosing and body weight). Medication alerts for the prevention of adverse drug events including complex interaction checks (drugdrug,drug-allergy,drug-disease). Ability to update the system in a timely fashion for medications withdrawn from the market or changes in indications. Medication recommendations based on diagnoses in the EMR. 2. Formulary management tool: Ability to accept formularies of Anthem and its affiliated HMOs. Ability to direct drug utilization toward generic options and formulary drugs. Ability to capture copayments. E-faxing prescription (e-prescribing) capability. 3. Chronic disease management tool 4. Preventive medicine tool 5. Ability to link to diagnostic providers -- labs and X-rays 6. Database capability with ability to query 7. Ambulatory computerized physician order entry system

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To measure this indicator,a survey will be communicated via the Anthem Professional Forum in the first quarter of 2005. Resource Management Indicators: Generic Drugs -- Prescription drugs can be a costly medical expense,especially for older people and those who are chronically ill.Generic drugs can cost anywhere from 25 to 80 percent less than their brand-name counterparts.According to the Congressional Budget Office,generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies compared with the price of brand-name drugs.Due to this price differential and the increase in the number of expiring patents on brandname drugs,generic drug dispensing is growing.Equally important,the Food and Drug Administration reviews generic drugs to ensure that they provide the same level of benefit to patients as the brand-name counterparts.The FDA has approved approximately 7,000 generic drugs for various treatments. The Generic Drugs measurement identifies the total number of generic drug prescriptions dispensed as a percentage of the total number of prescriptions dispensed.The indicator minimum payout threshold is 55.00 percent and the maximum payout threshold is 62.00 percent.

NOTE:This serves as notification of an amendment to your existing Performance Extra Program criteria as stated in PCP Attachment A of the Primary Care Physician Addendum to the Anthem Services, Inc. Professional Provider and Preferred Professional Provider Agreements, as applicable; and/or your HealthKeepers Inc., Peninsula Health Care Inc., Priority Health Care Inc. Primary Care Physician or Center Agreement as indicated in Exhibit G, as applicable. If you object to this modification, you have all the rights available to you described in the amendment paragraph of your Primary Care Physician Addendum or your HealthKeepers Inc., Peninsula Health Care Inc., Priority Health Care Inc. Primary Care Physician or Center Agreement.

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ELECTRONIC BUSINESS

Anthem Eliminates Two Telephone Numbers in February 2005

Anthem is working to make it easier for you to reach us via one local or toll-free number with Data Touch -- Anthem's interactive voice response system (IVR).To that end,Anthem will eliminate two of our telephone numbers in February 2005.During the transition,callers dialing the following numbers will receive a recorded message outlining the upcoming telephone number eliminations effective February 1: Telephone Number (804) 359-7277 (800) 242-7277 Description Anthem Medical Management (Local Number) Anthem Medical Management (Toll-free Number) Information Available on Data Touch

Anthem Areas Call Data Touch for Information on: Option

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Provider Network Administration

Provider practice information, network participation agreements or credentialing

Pharmacy Management Outpatient pharmacy drug health services review (prior authorization) Behavioral Health Medical Management Behavioral health inquiries Initiating or updating health services reviews (pre-authorizations), admission reviews (pre-certifications) or specialty care reviews (referrals) Peer- to-peer reviews Technical assistance with Point of Care, www.anthem.com and Anthem Open Network

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Use Data Touch Use Data Touch to reach the Medical Management area to update or to initiate a health services review (pre-authorization),admission review (pre-certification) or specialty care review (referral). Data Touch Toll Free: Richmond Area: Eliminate Transfers Once you dial Data Touch,listen carefully to the voice prompts to avoid unnecessary transfers,as menu options have changed.To reach the Medical Management area directly,first select option 2 (for providers).Next,select option 5 and then option 4. Telephone Numbers: (800) 533-1120 (804) 342-0010

Customer Solutions Center

6

Data Touch Brochure Navigating the IVR is easy.If you would like a Data Touch brochure as a quick reference tool,you can: Visit the provider section of the Anthem Web site at www.anthem.com.Select "Virginia" as your site from the drop down listing of states,and click on the "Enter Site" button.Select the "Communications" tab and then "General Information." Choose the brochure and download to print. Contact your network consultant. Complete Anthem's supply request form and order stock item number "AVA1184."

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2004

ELECTRONIC BUSINESS

Electronic Medicare Claims

All Blue Cross and Blue Shield plans will have the ability to electronically transmit an electronic transaction called a "Blue 835"-- a payment advice (remittance voucher) for electronic Medicare "supplemental"* and "crossover"* claims.This feature allows you to receive electronic Blue 835 transactions for Medicare crossover claims via one central location -- Anthem Blue Cross and Blue Shield.If you are interested in taking advantage of this service offered through Anthem beginning Dec.31,here are the details. Registration Providers can opt to register for this option for Medicare crossover claims but must first grant permission for Anthem to facilitate this process with other Blue Cross and Blue Shield plans.The registration process is easy -- just contact an Anthem EDI representative at (804) 354-4470 (Richmond-area callers) or (800) 991-7259 (outside Richmond). Blue 835 Transaction The Blue 835 transaction is the same as the standard 835 transaction required by the Health Insurance Portability and Accountability Act (HIPAA) with the exception of the payor information that contains the other plan's information. Account Settlements While Anthem will work to ensure the timely delivery of Blue 835 transactions,electronic fund transfers/checks may not be delivered at the same time as vouchers due to system variations among Blue Cross and Blue Shield plans.For example,providers may receive Blue 835 transactions before funds are posted to accounts or checks are received by mail.Please keep this in mind when working through any account posting/settlement process. *Medicare supplemental refers to policies that supplement or fill the gaps left by Medicare, paying for services like deductibles and coinsurances not paid by Medicare. "Crossover" refers to claims that are automatically submitted to the Medicare supplemental insurers once Medicare completes its processing.

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Cardiac Event Monitors

Anthem Blue Cross and Blue Shield considers ambulatory cardiac event monitors with extended memory and automatic real time event notification to be investigational for all indications. These devices -- also known as real time,remote heart monitors -- include but are not limited to CardioNet Mobile Cardiac Outpatient Telemetry Service,LifeWatch Cardiac Event Monitoring Service,HEARTLink II System and Medtronic's Reveal Plus.Beginning Dec.1,2004,the complete coverage guideline is available for review via the Internet at www.anthem.com.

Commonwealth of Virginia Makes Change to Retirees' Health Plans

Administration of Advantage 65 and Medicare Complementary (Option I) Plans Effective Jan.1,2005,Medco Health will administer prescription drug benefits directly for the commonwealth of Virginia Medicare-eligible retirees enrolled in Anthem's Advantage 65 and Medicare Complementary (Option I) health plans.This means that all drug prior authorization requests must be sent to Medco Health.Covered retirees will receive both a medical identification card from Anthem and a prescription drug identification card from Medco Health.There are no other benefit changes to the two plans. Medicare Supplemental (Option II) There are no benefit changes for this plan. Dental Benefits for Retirees Anthem will continue to administer the dental benefits. Group Numbers on Identification Cards for State Medicare Retirees All state Medicare-eligible retirees enrolled in the Advantage 65, Medicare Complementary (Option I) or Medicare Supplemental (Option II) plan will have one group number -- 12000800 -- on their Anthem identification cards.Anthem will issue new identification cards for all state Medicare retirees in midDecember.

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2004

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New Provision Impacts Ethics and Fairness in Carrier Business Practices Act

Section 38.2 -- 3407.15 of the Virginia Code,also known as the Ethics and Fairness in Carrier Business Practices Act,was amended in the most recent session of the General Assembly.A new provision -- subparagraph B.7 -- was added and applies to all new provider contracts entered into,amended,extended or renewed on or after July 1,2004.The provision reads as follows: ... no carrier shall impose any retroactive denial of payment or in any other way seek recovery or refund of a previously paid claim unless the carrier specifies in writing the specific claim or claims for which the retroactive denial is to be imposed or the recovery or refund is sought.The written communication shall also contain an explanation of why the claim is being retroactively adjusted. Anthem and our affiliated HMOs are complying with this new provision of the law and have been doing so since the effective date.Going forward,this new language will be included in all new provider contracts under Exhibit B and in all new hospital and facility contracts under Exhibit H.If you would like a copy of the newest version of this law for your records,visit the Web site at:http://leg1.state.va.us/000/lst/LS612037.HTM.

Use LabCorp for VAP® Cholesterol Test

LabCorp offers the VAP, cholesterol test,a comprehensive test for lipoprotein analysis that helps improve patient diagnosis and treatment and provides a more comprehensive coronary heart disease risk assessment than the conventional lipoprotein profile.Unlike the conventional lipoprotein profile,the VAP cholesterol test measures all primary and secondary targets of therapy and the new emerging lipid risk factors identified by the Adult Treatment Panel III of the National Cholesterol Education Program guidelines.Direct measurements -- not estimations -- are provided for total cholesterol,LDL,HDL, VLDL and cholesterol sub-classes. Anthem has contracted with LabCorp to provide outpatient laboratory services for all Anthem products and members.In addition,LabCorp is the exclusive laboratory provider for all HMO products (with the exception of the Charlottesville area). When ordering a lipoprotein analysis for Anthem members, please refer members to LabCorp and use test number 804500. (A fasting specimen is required.) LabCorp Locations LabCorp has more than 60 Patient Service Centers in Virginia and the Washington,D.C.,suburbs -- offering convenient access to specimen collection services to help meet your needs.With facilities in Herndon,Richmond,Chesapeake and Roanoke, LabCorp provides the benefits of local service along with access to the broadest test portfolio available. To find the location closest to your practice,call the LabCorp Patient Service Center Locator at 1-888-LabCorp.You may also find Patient Service Center locations online at www.LabCorp.com. If you have questions about the services LabCorp offers, please call LabCorp toll free at (800) 222-7566,extension 66613.

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Anthem Makes Change to HealthKeepers Plus Drug Formulary

Earlier in the month,you may have received notification about upcoming changes,effective Jan.1,2005,to our HealthKeepers Plus (Medicaid) formulary.For ease of reference,we are again including the notification in this edition of the Anthem Professional Forum along with a partial listing of the most frequently used drugs impacted by the change. Please note that those members who are currently taking any of the non-formulary medications below may continue with their present therapy. However,physicians may want to consider whether patients with this closed formulary prescription benefit are candidates for the formulary medications. Physicians may also prescribe these drugs for new users who are unable to take formulary medications by filling out a nonformulary drug request form and returning it as directed on the form.The criteria for consideration of any of the non-formulary drugs are: 1. Trial and failure of the formulary alternatives,or 2. Any contraindication of the formulary alternatives. Please allow 24 hours for any non-formulary request to be processed. Beginning January 1,please visit our Web site at www.anthem.com or call toll free (800) 750-0156 to receive a FULL list of Medicaid drugs that are not on the Medicaid HealthKeepers Plus formulary.At any time,you may contact our Member Services area toll free at (800) 901-0020 regarding these changes. Changes to the Anthem HealthKeepers Plus Formulary Effective Jan. 1, 2005 NOTE:While there are additional non-formulary drugs, the changes in the next column represent the most frequently used drugs impacted by this change.

Drugs Moving to a "Non-Formulary" Status on Jan. 1, 2005

Possible Formulary Alternatives

Nasonex Rhinocort Aqua Ambien Sonata Levaquin Biaxin, XL Benzaclin Benzashave Cipro XR Nuvaring Ovcon-35, 50 Ciprodex Pravachol Accupril Ery-Tab Cipro HC Cozaar Ditropan XL Azmacort Triaz Lescol, XL Tricor Hyzaar Optivar Maxalt, MLT Tazorac Estrostep FE Alomide Vivelle; Dot patch Benicar Actonel Crestor Famvir Accuneb Flomax Atacand Benicar HCT Alocril MetroGel Prandin Micardis HCT Vospire ER Clindagel Travatan Mavik Foradil Atacand HCT Ovrette Tequin Beconase AQ

flunisolide, Nasacort AQ, Flonase flunisolide, Nasacort AQ, Flonase temazepam, flurazepam, Restoril 7.5 temazepam, flurazepam, Restoril 7.5 ciprofloxacin, ofloxacin erythromycin, Zithromax benzoyl peroxide, clindamycin, erythromycin, Duac benzoyl peroxide ciprofloxacin, ofloxacin Formulary oral contraceptives or patches (generics), Yasmin, Ortho Tri-cyclen Lo, Ortho Evra Formulary oral contraceptives or patches (generics), Yasmin, Ortho Tri-cyclen Lo, Ortho Evra generic Cortisporin Otic, Floxin Otic lovastatin, Lipitor, Zocor lisinopril, benazepril, fosinopril, Altace erythromycin, Zithromax generic Cortisporin Otic, Floxin Otic Avapro, Diovan oxybutynin, Detrol, Detrol LA Flovent, Pulmicort benzoyl peroxide lovastatin, Lipitor, Zocor gemfibrozil, lovastatin, Lipitor, Zocor Avalide, Diovan HCT Livostin, Zaditor Imitrex, Zomig benzoyl peroxide, tretinoin, clindamycin, Retin-A Micro, Dovonex (psoriasis) Formulary oral contraceptives or patches (generics), Yasmin, Ortho Tri-cyclen Lo, Ortho Evra cromolyn, Alamast Climara Avapro, Diovan Evista, Fosamax lovastatin, Lipitor, Zocor acyclovir, Valtrex albuterol doxazosin, prazosin, terazosin, Proscar Avapro, Diovan Avalide, Diovan HCT cromolyn, Alamast metronidazole cream Starlix Avalide, Diovan HCT albuterol clindamycin, benzoyl peroxide Lumigan, Xalatan lisinopril, benazepril, fosinopril, Altace Serevent Avalide, Diovan HCT Formulary oral contraceptives or patches (generics), Yasmin, Ortho Tri-cyclen Lo, Ortho Evra ciprofloxacin, ofloxacin flunisolide, Nasacort AQ, Flonase

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Pharmacy Management Procedures Available Online

Anthem's pharmaceutical management procedures are available on theVirginia provider section of ourWeb site,www.anthem.com. Select the "Download Commonly Requested Forms"link on the left side of the screen under "Answers @ Anthem." Next,select the "Drug Health Services Review Form" link. Other information available online and/or in printed materials includes: Copayment and coinsurance requirements and the pharmaceuticals or pharmaceutical classes to which they apply. Lists of preferred pharmaceuticals or formularies. Prior authorization criteria. Procedures for generic substitution, therapeutic interchange,step therapy or other management methods to which the practitioner's prescribing decisions are subject. Any other requirements,restrictions, limitations or incentives that apply to the use of certain pharmaceuticals. Health Services Review Forms. If you need further information and/or do not have access to our Web site,please call us toll free at (800) 533-1120 and request written information for any pharmaceutical management procedures,including our formularies.

Anthem Modifies Prescription Drug Plans to Lower Costs for Members

As one step in addressing spiraling prescription drug costs, Anthem is revising some of our drug benefit designs based on market demand and input from various constituents.The changes are effective Jan.1,2005,for groups joining or renewing Anthem health coverage on or after this date. Changes to the Tier 3 Benefit Design Anthem will modify four of our standard threetier drug benefit options.Members will now pay the greater of the third-tier copayment OR a 20 percent coinsurance with a $200 per prescription maximum.Mail order benefits will be two times the third-tier retail copayment or a 20 percent coinsurance with a $400 per prescription maximum.A $3,500 per member per calendar year out-ofpocket maximum applies for both retail and mail order combined. Changing the third tier benefit design helps encourage members to consider better value Tier 1 and Tier 2 drugs.These lower cost alternatives will not only save members money,but they can increase compliance,particularly for maintenance medications. Anthem Patients May Have Questions As always,physicians should prescribe medications and dosages they deem appropriate.Please note,however,that Anthem patients may have questions about moving to lower cost drug alternatives and are encouraged to speak with their physicians before making any prescription drug changes.

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P r s r t S t d M a il U . S . Po s t a g e

Anthem Professional Forum

2221 Edward Holland Drive Richmond,VA 23230

Anthem Blue Cross and Blue Shield is the trade name of Anthem Health Plans of Virginia,Inc.Anthem Blue Cross and Blue Shield and its affiliated HMOs, HealthKeepers,Inc.,Peninsula Health Care,Inc.and Priority Health Care,Inc., are independent licensees of the Blue Cross and Blue Shield Association. ® Registered marks Blue Cross and Blue Shield Association.

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16

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2004

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