October 20, 2008
Medical Practices Maximize Incentive Payments Using athenahealth's National Physician Network for the Physician Quality Reporting Initiative

Network-Based Practice Management Services Help Drive Increased
Physician Participation in Government's
Pay-for-Performance Program

WATERTOWN, Mass., Oct 20, 2008 (BUSINESS WIRE) -- athenahealth, Inc. (NASDAQ: ATHN), a leading provider of internet-based business services to physician practices, today announced at The Medical Group Management Association (MGMA) Annual Conference being held in San Diego, that medical group clients that participated in the 2007 Physician Quality Reporting Initiative (PQRI) experienced positive financial outcomes by using athenahealth's centrally-hosted, on-demand practice management and EMR services network. athenahealth's analyst teams integrated the 74 quality-of-care performance measures established by the Centers for Medicare and Medicaid Services' (CMS) program into athenaNet's(R) real-time rules engine, athenaRulesSM, which is designed to enforce physician office workflow requirements. Participating athenahealth clients across the nation were automatically alerted to which PQRI measures applied to them, helping to maximize participation and reimbursement under the program.

The PQRI is a voluntary program and, in accordance with a law passed by Congress in 2006, physicians and other eligible professionals are able to receive bonus payments of 1.5 percent of their total allowed Medicare charges, subject to a cap, by satisfactorily submitting quality information for services they furnished between July and December of 2007. CMS reported that more than 109,000 professionals participated in the 2007 program.

"We successfully used athenahealth's services to participate in the PQRI reporting program and saw tremendous financial results. For 2007, we received the maximum financial reward defined under the PQRI program and plan to continue that success for 2008 with the expectation of an even greater financial return based on a full-year of participation. Since athenahealth is a network-based company, its virtual back-office service allowed all eight of our practice locations to participate in the program without the disruption of having to maintain and update a traditional software-only solution," said Mark Netherland, CFO of Virginia Cardiovascular Specialists, a leading cardiovascular specialty group based in Richmond, Virginia.

According to CMS, the average incentive amount for individual medical professionals participating in the program in 2007 was over $600 and the average incentive payment for a physician group practice was over $4,700, with the largest payment to a physician group practice totaling over $205,700.Among the 78 athenahealth medical group clients that participated, several practices earned significant payments after only six months of participation in the program.

"In a time when physician practices are facing increased reimbursement challenges, being able to leverage a national physician network like athenahealth's has allowed us to further optimize collections under the PQRI program," said Beth Kluge, Director of the Business Office, Coding and Healthcare Information Services (HIS) of Rockford Health Physicians, a large multi-specialty group based in Rockford, Illinois. "As a result of athenahealth building our practice's 21 specific PQRI measures directly into our everyday workflow, we were able to generate an additional $52,000 in revenue in 2007 after only six months of participation and we anticipate continued PQRI revenue benefits in 2008."

"athenahealth understands the inherent challenges presented by emerging pay-for-performance programs for medical providers. Similar to traditional payer reimbursement, physician practices will need the ability to understand and maintain the various reporting rules associated with these programs and build them into the office workflow," said Jonathan Bush, Chairman and CEO of athenahealth. "By incorporating the 2007 PQRI measures into our unique, industry-leading rules engine, we looked to maximize participation by enabling our medical practice clients to select the measures that were appropriate for their specialty and then identify those claims eligible to be reported for those measures. This capability helped to elevate participation, financial results, and overall patient care."

The 2007 PQRI program was a positive step toward more extensive reporting on quality information. According to CMS, the 2008 PQRI program includes significant enhancements to the scope of measures, affords participants the opportunity to receive incentive payments for the entire year, the ability to report measures within a group for a specified number of patients, and the use of registries to report quality measures. In preparation for the 2008 program, athenahealth researched, qualified, and updated its network with all 119 new quality-of-care performance measures, leading the Company's clients to anticipate greater benefits in CMS' 2008 PQRI program.

About athenahealth

athenahealth is a leading provider of internet-based business services for physician practices. The Company's service offerings are based on proprietary web-native practice management electronic medical record (EMR) software, a continuously updated payer knowledge-base and integrated back-office service operations. For more information visit www.athenahealth.com or call (888) 652-8200.

This press release contains forward-looking statements which are made pursuant to the safe harbor provisions of Private Securities Litigation Reform Act of 1995, including statements regarding the benefits of the athenahealth's service offerings. These statements are neither promises nor guarantees, and are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: the risk that our services offerings will not operate in the manner that we expect, due to design flaws, security breaches or otherwise; potential interruptions or delays in our internet-based services offerings; our reliance upon third parties, such as computer hardware, software, data-hosting and internet infrastructure providers, which reliance may result in failures or disruptions in our service offerings; errors or omissions included in our payer and clinical intelligence rules engine and database; and the evolving and complex government regulatory compliance environment in which we and our clients operate. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. athenahealth, Inc. undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise. For additional disclosure regarding these and other risks faced by athenahealth, Inc., see the disclosure contained in our public filings with the Securities and Exchange Commission.

SOURCE: athenahealth, Inc.

athenahealth, Inc. 
John Hallock (Media), 617-402-1428 
Director, Corporate Communications 
media@athenahealth.com 
or 
Jennifer Heizer (Investors), 617-402-1322 
Senior Manager, Investor Relations 
investorrelations@athenahealth.com

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