Pegasystems Healthcare Software Goes Live At HealthNow New York Inc.

CAMBRIDGE, Mass., Jul. 22, 2002 — Pegasystems (NASDAQ: PEGA) announced today that HealthNow, doing business as BlueCross BlueShield of Western New York and BlueShield of Northeastern New York, has completed its implementation of the first phase of Pegasystems' claims-automation software.

Pegasystems' rules-driven process automation technology is helping HealthNow to improve claims processing to maximize its operators' productivity for those claims requiring manual intervention. Automating claims processes helps to remove inefficiency, to improve payment turnaround time and subsequently may increase customer satisfaction. It also positions healthcare payers for real-time adjudication, a rising goal of the healthcare community.

"Installed in less than 120 days, Pegasystems' software has reduced our claims inventory by 41% after 3 weeks of use," said Gary Kerl, HealthNow's senior vice president and chief information officer. "We have eliminated manual processes, increased the number of pended claims handled per hour, reduced overtime and increased management control. This type of return on investment is a compelling reason for other healthcare organizations to select Pegasystems."

Continued Kerl, "Our next Pegasystems' initiative is aimed at increasing our first pass rate and decreasing the number of claims that pend overall. We expect to realize a 10 to 25% increase in our first pass rate as a result."

"We appreciate that there are limitations to core claims adjudication systems and that code-based solutions can drain a health plan's IT resources," said Tom Congoran, vice president of Healthcare and Insurance, Pegasystems. "Our products can extend the functionality of healthcare organizations' legacy systems and may be modified by business users to help respond to changing regulatory requirements and business conditions."

Claims-automation software is part of the PegaHEALTHCARE product suite. The solution implemented at HealthNow provides pre-configured claims exception processing automation including skill-based routing and workbasket management.

IBM's (NYSE: IBM) pSeries application and database servers power the Pegasystems solution at HealthNow. These servers provide HealthNow with the processing power and easily scale, matching HealthNow's business growth. Pegasystems' software, in conjunction with IBM's WebSphere MQ infrastructure software can provide service representatives with real-time access to customer claims information.

About HealthNow New York

HealthNow New York Inc. serves the healthcare needs of more than 760,000 members residing in 53 counties in upstate New York. In 2001, divisions in Western New York, Northeastern New York and Central New York generated revenues of $1.4 billion. Through its Upstate Medicare Division in Binghamton NY and DMERC in Nanticoke, PA, HealthNow processed 16 million Medicare Part B claims and 8 million durable medical equipment claims for a total of $2 billion. The Company traces its roots back to 1936 and continues to offer innovative and flexible health care products to its growing membership.

Forward-Looking Statements

Certain statements contained in this press release may be construed as "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. The company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause the Company's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include impact of pending regulatory proceedings, difficulty in predicting the completion of product implementations and consequently the timing of revenue recognition, the inability to attract and retain key employees, reliance on key third-party relationships, management of the Company's growth, and other risks and uncertainties. Further information regarding these and other factors which could cause the Company's actual results to differ materially from any forward-looking statements contained in this press release is contained in the Company's Quarterly Report on Form 10Q for the quarter ended March 31, 2002 on file with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

NOTE: Pegasystems is a registered trademark of Pegasystems Inc. Other product and company names may be trademarks of their respective owners.

About Pegasystems

Pegasystems (NASDAQ: PEGA) develops strategic applications for marketing, sales, service, and operations. Pega’s applications streamline critical business operations, connect enterprises to their customers seamlessly in real-time across channels, and adapt to meet rapidly changing requirements. Pega’s Global 3000 customers include many of the world’s most sophisticated and successful enterprises. Pega’s applications, available in the cloud or on-premises, are built on its unified Pega 7 platform, which uses visual tools to easily extend and change applications to meet clients’ strategic business needs. Pega’s clients report that Pega gives them the fastest time to value, extremely rapid deployment, efficient re-use, and global scale. For more information, please visit us at

All trademarks are the property of their respective owners.

The information contained in this press release is not a commitment, promise, or legal obligation to deliver any material, code or functionality. The development, release and timing of any features or functionality described remains at the sole discretion of Pegasystems, Pegasystems specifically disclaims any liability with respect to this information.


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