Product Portfolio and Benefit Design Updates, Effective October 1, 2009

As part of our ongoing effort to improve the quality and affordability of the health care that our members receive, effective October 1, 2009, we are instituting several changes to our standard plan designs and have introduced one new plan option. Please review the Product Portfolio and Benefit Design Update brochure and the Standard Plan Design Changes chart for a detailed overview of the changes.

If you have any questions about the plan changes or new plan option, please contact your account executive.

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Massachusetts Insurers Named in Lawsuit

The Massachusetts Division of Insurance (DOI) has filed suit against HMA MGU LLC, New England Custom Health Plan Administrators LLC, Jedediah Brettschneider, and Mark Celentano for reasons, including:

1. Licensing application violations (lying on producer license applications etc.);
2. Unfair/deceptive acts in the business of insurance under c. 176D, section 2 (the insurance consumer protection statute); and
3. Violations of the nondiscrimination provisions of HIPAA triggering the general "untrustworthiness in the conduct of business" of insurance under c. 175, section 162R(a)(8).

The DOI is seeking:

1. The "Cease and Desist" from all actions alleged and any further insurance business;
2. The revocation of all insurance licenses granted to the Respondents; and
3. Monetary penalties against the Respondents.

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PPO Out-of-Network Reimbursement Update

Effective October 1, 2009, out-of-network coverage for non-preferred physicians and other covered non-preferred professional providers for our Blue Care Elect^SM and Preferred Blue PPO^SM plans will change. This change will affect new sales and existing PPO customers on renewal dates on and after October 1, 2009.

This change will include the application of a usual and customary fee schedule for providers in Massachusetts. The fee schedule will apply when a member in one of these plans receives services from a Massachusetts provider that is not part of our PPO network. Beginning October 1, 2009, claim payments for most non-preferred physicians and other covered non-preferred professional providers in Massachusetts will be calculated based on Blue Cross Blue Shield of Massachusetts' standard indemnity fee schedule or the provider's actual charge if it is less than the fee schedule. In instances in which a provider's charges are greater than the standard indemnity fee schedule, the member will be responsible for the difference, plus any applicable cost-sharing amount.

This change will not affect claim payments for services received outside of Massachusetts. If a member receives services from a provider outside of Massachusetts who does not participate with the local Blue Cross Blue Shield plan, Blue Cross Blue Shield of Massachusetts will make claim payments based on the provider's charges.

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September 1, 2009 Pharmacy Updates

As part of our continuing effort to provide high-quality, affordable prescription medication benefits to all of our members, we have made some changes to our pharmacy program. These changes are based on clinical guidelines and on recommendations from our Pharmacy and Therapeutics Committee, which is made up of independently practicing physicians and pharmacists who are not employed by Blue Cross Blue Shield of Massachusetts. The following changes are effective September 1, 2009:

1. Institution of Step Therapy for Certain Medications
Step therapy is a key part of our prior-authorization program, which allows us to assist physicians with appropriate and affordable drug treatments. Before Blue Cross Blue Shield of Massachusetts will pay for certain costly Step 2 medications, the member must first try an effective, but less expensive Step 1 medication. Certain medications may require multiple steps before authorization is granted.

We are adding a step-therapy policy for certain drugs used in the treatment of Parkinson's disease. The following is a list of the medications that will be included in step-therapy program, effective September 1, 2009:

Drugs Used in the Treatment of Parkinson's Disease
Step 1: Ropinirole
Step 2: Requip, Requip XL, Mirapex

2. New Prior-Authorization Requirements
For certain medications, prior authorization is required. It is generally required in cases where the patient must meet certain medical-necessity criteria in order to receive coverage.

The following is a list of medications that will have a prior-authorization requirement, effective September 1, 2009:

• Actiq
• Amitiza
• Banzel
• fentanyl
• Fentora

3. Pharmacy Medical Policy Updates
The following medical policies will be effective September 1, 2009.

For more information on any of the programs mentioned above, please visit our website at www.bluecrossma.com/pharmacy.

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New Prior-Authorization Requirement for Select Medications

Effective October 1, 2009, certain drugs that are provided under the medical benefit will now require prior authorization for HMO/POS plans. This change is to ensure that drug utilization is consistent with current medical policy guidelines for the safety and effectiveness of the members who take these medications.

Providers will be asked to submit requests for authorization, including demographic and relevant clinical information, prior to administrating these medications. Providers will submit the necessary information for review using an Express Scripts^®'', Inc. web-based tool. Requests meeting Blue Cross Blue Shield of Massachusetts criteria will be approved immediately via the web, while requests requiring further clinical review will be forwarded to Blue Cross Blue Shield of Massachusetts. In addition, providers can also submit requests for other drugs that require prior authorization that are provided under the pharmacy benefit using this web-based tool.

The following is a list of the medications that are affected as part of this change:

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Driving for Quality, Affordable Health Care

We are proud to announce the launch of a new website, Quality = Affordability, that provides information and resources supporting Blue Cross Blue Shield of Massachusetts' position that improving the quality of health care will lead to more affordable health care. The site will be a resource for members, accounts, brokers, and media who are interested in learning more about the overuse, underuse, and misuse of health care here in Massachusetts, and what we're doing to impact these trends. Please visit www.bluecrossma.com/quality to learn more.

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Indigo Partners with the Massachusetts Biotechnology Council

Indigo Insurance Services, LLC (Indigo), a wholly owned subsidiary of Blue Cross Blue Shield of Massachusetts, is pleased to provide you with the opportunity to leverage a strategic partnership with the Massachusetts Biotechnology Council (MBC). Massachusetts-based MBC members with two or more employees will have access to Group and Voluntary Life insurance as well as Short and Long Term Disability insurance, with preferred rates and benefits. In addition, MBC members will experience the convenience and cost-savings of a single point of contact for all their employee benefits needs and a consolidated electronic bill for all products purchased through both Blue Cross Blue Shield of Massachusetts and Indigo.

This partnership offers you and your MBC clients a comprehensive, affordable, easy-to-administer benefit package that can attract and retain the talented employees this growing Massachusetts industry needs. For more information on this offer and available benefit programs, please contact your Blue Cross Blue Shield of Massachusetts account executive or contact Indigo, toll-free, at 1-888-483-7083.

Indigo Insurance Services, LLC is a subsidiary of Blue Cross and Blue Shield of Massachusetts, Inc. Indigo sells certain products of USAble Life, which is owned in part by Blue Cross and Blue Shield Massachusetts, Inc.

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If the above links are not functioning in your email, copy and paste the URLs listed below into a browser window:

Product Portfolio and Benefit Design Update brochure
http://www.bluecrossma.com/bluelinks-for-brokers/pdf/enews/06-2009/product-portfolio-and-benefit-design-update.pdf

Standard Plan Design Changes chart
http://www.bluecrossma.com/bluelinks-for-brokers/pdf/enews/06-2009/standard-plan-design-changes.pdf

Blue Cross Blue Shield of Massachusetts Pharmacy site
http://www.bluecrossma.com/pharmacy

Blue Cross Blue Shield of Massachusetts Quality site
http://www.bluecrossma.com/quality