Very much like the Blister Check pattern.
Cast on with Color A and knit one row.
Colors A and B.
Repeat rows 1 - 12
Row #SideColorBegin RowRepeatRepeat From *End Row
1WA*purl* 
2RB*knit* 
3WB*knit* 
4RB*purl* 
5WB*knit* 
6WAk2*drop next stitch off needle and unravel 4 rows down; insert needle into the front of Color A stitch in 5th row below and knit, catching the 4 loose strands in stitch; k3*k2
7RA*purl* 
8WB*knit* 
9RB*purl* 
10WB*knit* 
11RB*purl* 
12WAk4*drop next stitch off needle and unravel 4 rows down; insert needle into the front of Color A stitch in 5th row below and knit, catching the 4 loose strands in stitch; k3 *k1