SIE Sierra Health Svcs

Sierra Health Services Inc. (NYSE:SIE) reported today that its wholly owned subsidiary, Health Plan of Nevada Inc. (HPN), has been informed by the Division of Healthcare Financing and Policy of the state of Nevada (DHCFP) that the DHCFP intends to award a contract to HPN to provide certain Medicaid services. The award is subject to the negotiation of final contract terms and specifications and any protests filed by the losing bidders. Once final negotiations are completed, the DHCFP will issue a formal Notification of Award. As previously disclosed, the DHCFP recently issued a request for proposal (RFP) to provide services to certain Medicaid members. DHCFP has completed the evaluation process for the RFP and has preliminarily selected HPN along with another bidder. Once awarded, the new contract will be effective for a two-year period beginning July 1, 2006. The new contract includes a provision which allows the DHCFP, at its sole option, to extend the contract on a year-to-year basis for up to three additional years. HPN currently has an existing contract with the DHCFP to provide health care coverage to certain Medicaid eligible individuals and uninsured children who do not qualify for Medicaid. As of Sept. 30, 2005, HPN had approximately 40,700 members enrolled in its HMO Medicaid risk program. To enroll in this program, an individual must be eligible for the Temporary Assistance for Needy Families or the Children's Health Assurance Program categories of the state of Nevada's Medicaid program. HPN also has an additional 12,600 Nevada Check Up members. Nevada Check Up is the State Children's Health Insurance Program which covers uninsured children who do not qualify for Medicaid. HPN receives a monthly fee for each Medicaid and Nevada Check Up member enrolled by the state's managed care division and also receives a per case fee for each Medicaid and Nevada Check Up eligible newborn delivery. In total, as of Sept. 30, 2005, HPN had 53,300 Medicaid members. Sierra Health Services Inc., based in Las Vegas, is a diversified healthcare services company that operates health maintenance organizations, indemnity insurers, preferred provider organizations and multi-specialty medical groups. Sierra's subsidiaries serve more than 600,000 people through health benefit plans for employers, government programs and individuals. For more information, visit the company's Web site at www.sierrahealth.com. Statements in this news release that are not historical facts are forward looking and based on management's projections, assumptions and estimates; actual results may vary materially. Forward-looking statements are subject to certain risks and uncertainties, which include but are not limited to: 1) potential adverse changes in government regulations, contracts and programs, including the Medicare Advantage program, the Medicare Prescription Drug Plan, Medicaid and legislative proposals to eliminate or reduce ERISA pre-emption of state laws that would increase potential managed care litigation exposure; 2) competitive forces that may affect pricing, enrollment, renewals and benefit levels; 3) unpredictable medical costs, malpractice exposure, reinsurance costs and inflation; 4) impact of economic conditions; 5) changes in healthcare reserves; and 6) the amount of actual proceeds to be realized from the note receivable related to the sale of the workers' compensation insurance operation. Further factors concerning financial risks and results may be found in documents filed with the Securities and Exchange Commission and which are incorporated herein by reference. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by Sierra will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, Sierra or its business or operations. Sierra assumes no obligation to update publicly any such forward-looking statements, whether as a result of new information, future events or otherwise.