Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit Against Healthways,...

Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit Against Healthways, Inc.

NEW YORK--(Business Wire)--
Coughlin Stoia Geller Rudman & Robbins LLP ("Coughlin Stoia")
(http://www.csgrr.com/cases/healthways/) today announced that a class
action has been commenced in the United States District Court for the
Middle District of Tennessee on behalf of purchasers of Healthways,
Inc. ("Healthways" or the "Company") (NASDAQ:HWAY) common stock during
the period between October 17, 2007 and February 26, 2008 (the "Class
Period").

If you wish to serve as lead plaintiff, you must move the Court no
later than 60 days from today. If you wish to discuss this action or
have any questions concerning this notice or your rights or interests,
please contact plaintiff's counsel, Samuel H. Rudman or David A.
Rosenfeld of Coughlin Stoia at 800/449-4900 or 619/231-1058, or via
e-mail at djr@csgrr.com. If you are a member of this class, you can
view a copy of the complaint as filed or join this class action online
at http://www.csgrr.com/cases/healthways/. Any member of the purported
class may move the Court to serve as lead plaintiff through counsel of
their choice, or may choose to do nothing and remain an absent class
member.

The complaint charges Healthways and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
Healthways provides disease management and wellness programs for
health plans, hospitals and small businesses, helping members with
diabetes, cancer and other diseases to coordinate care, keep up with
treatment and maintain healthy behaviors.

The complaint alleges that, during the Class Period, defendants
issued a series of materially false and misleading statements
concerning the Company's financial performance and prospects.
According to the complaint, starting in 2005, Healthways, along with
four other companies, became involved in the Medicare Health Support
("MHS") pilot program launched by the Centers for Medicare & Medicaid
Services ("CMS"). The MHS program was designed to improve quality of
care and life for people with multiple chronic conditions, and to help
the Medicare program and its beneficiaries save money. Under the
plan's first three-year phase, patients were tracked to evaluate care,
satisfaction and whether the plan achieved savings targets. Based on
those results, CMS would decide whether to expand the program to a
second phase.

Specifically, the complaint alleges that Healthways failed to
disclose that: (i) Healthways was not meeting the savings targets,
among other requirements, set by CMS. As a result of Healthways'
failure, CMS would not expand the MHS program to a second phase and
the Company would be required to reimburse CMS for the fees they had
already received through the program; (ii) Healthways was in danger of
losing at least two existing contracts and was experiencing slower
enrollment in an existing contract due to a decline in the need for
the Company's services; and (iii) as a result of the foregoing, the
Company had no reasonable basis for its revenues and earnings guidance
for fiscal 2008.

Then, on February 26, 2008, the Company announced that it was
lowering its financial guidance for fiscal 2008 "due to
slower-than-projected enrollment in a new Health Support program with
one large health plan customer and the recent indication that two
previously anticipated contracts will not materialize during this
fiscal year." Upon this news, shares of the Company's stock fell
$13.42 per share, or approximately 30%, to close at $31.93 per share,
on heavy trading volume.

Plaintiff seeks to recover damages on behalf of all purchasers of
Healthways common stock during the Class Period (the "Class"). The
plaintiff is represented by Coughlin Stoia, which has expertise in
prosecuting investor class actions and extensive experience in actions
involving financial fraud.

Coughlin Stoia, a 190-lawyer firm with offices in San Diego, San
Francisco, Los Angeles, New York, Boca Raton, Washington, D.C.,
Philadelphia and Atlanta, is active in major litigations pending in
federal and state courts throughout the United States and has taken a
leading role in many important actions on behalf of defrauded
investors, consumers, and companies, as well as victims of human
rights violations. The Coughlin Stoia Web site (http://www.csgrr.com)
has more information about the firm.

Coughlin Stoia Geller Rudman & Robbins LLP
Samuel H. Rudman, 800-449-4900
David A. Rosenfeld
djr@csgrr.com

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