MultiPlan to Acquire Private Healthcare Systems; Combined Company Will Provide Medical Network Access to Over 40 Million Americans

New York, NY and Waltham, MA - MultiPlan, Inc. and Private Healthcare Systems, Inc. (PHCS) today announced that MultiPlan will acquire PHCS, creating the industry’s most comprehensive medical cost management provider. The transaction is expected to close early to mid fourth quarter, 2006, subject to satisfaction of closing conditions, including customary regulatory approvals. Financial terms were not disclosed.

Established in 1985 as a collaboration of mid-sized commercial insurance companies seeking to develop competitive managed care programs, PHCS maintains the nation's largest proprietary primary PPO network and is the second largest independent care management provider in the country. The company contracts with nearly 450,000 providers and serves over 16 million health plan members.

Founded in 1970, MultiPlan is a provider of PPO network and related transaction-based solutions that reduce the per-unit costs of medical claims. MultiPlan's network of over 4,000 hospitals, 90,000 ancillary care facilities and 700,000 practitioner locations is typically used to complement a health plan's primary PPO network. An estimated 27 million Americans have access to The MultiPlan Network®.

The most common type of health plan today, PPO networks save money on medical costs while offering plan members a high level of choice and flexibility. Savings through these plans are generated through discounts that the providers offer in exchange for listings in medical directories and prompt reimbursements from payers.

"PHCS joins the MultiPlan family at the right time for our industry," said Mark Tabak, MultiPlan's Chief Executive Officer. "The addition of their national primary PPO network to our comprehensive product line creates an end-to-end solution for controlling rising healthcare costs while maintaining employee choice. Together, we give healthcare providers access to patients from the country's most diverse base of healthcare payers, and in exchange deliver to payers the provider financial arrangements that help them drive more savings from more medical claims."

MultiPlan will continue to operate PHCS under the PHCS Network brand, as the national primary PPO network offering of MultiPlan working in concert with MultiPlan's complementary network, specialty transplant network, fee negotiation and claim routing services.

Added Joseph Driscoll, PHCS President and CEO, "PHCS and MultiPlan have highly complementary solutions that enable us immediately to enhance the value we offer to our respective clients. MultiPlan gives our clients access to additional services and technology, and we strengthen MultiPlan's position with medium and small payers that lease - rather than own - their primary PPO networks."

With the addition of the PHCS network and care management services, MultiPlan offers healthcare payers a single point of entry to an integrated suite of solutions that reduce the per unit cost of healthcare claims and avoid unnecessary claims. Together, the companies receive an estimated $60 billion in charges annually for network discounting or negotiation.

About MultiPlan
For 35 years, MultiPlan has helped healthcare payers and providers partner together to combat rising healthcare costs. MultiPlan serves as a single gateway to a host of primary, complementary and out-of-network strategies for managing the financial risks associated with healthcare claims. Clients include large and mid-sized insurers, third-party administrators, self-funded plans, HMOs and other entities that pay claims on behalf of health plans. MultiPlan is owned by a group of investors led by The Carlyle Group. For more information, visit www.multiplan.com/ .

About PHCS
For more than 20 years, PHCS has been the national leader in health care cost management. PHCS meets the strategic, financial and quality needs of health care purchasers through the largest, most cost-effective network of health care providers and state-of-the-market care management services. PHCS is also the first and only national PPO to earn four endorsements of quality from two independent, nationally recognized quality assurance organizations, NCQA and URAC.