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Providence Service Corporation Comments on U.S. Court of Appeals' Decision to Uphold Federal Injunction Blocking California's 10% Cut in Medi-Cal Payments
Date:7/15/2009

with efficiency, economy and quality of care." An injunction was granted on August 18, 2008 blocking the 10% cuts for all but managed-care plans and acute-care hospitals not under contract with the state. After arguments by the state's health-care department, the injunction was modified to apply only to payments for services provided on or after August 18, the day the judge issued the order. This prompted appeals from both sides, with the director of California's health-care department appealing the underlying injunction, while the plaintiffs challenged the modification order and asked the court to block the rate reduction retroactively. The federal injunction was reaffirmed in December 2008 and the final decision upholding the injunction and making it retroactive was issued by the Ninth Circuit on July 10, 2009.

About Providence

The Providence Service Corporation, through its owned and managed entities, provides home and community based social services and non-emergency transportation services management to government sponsored clients under programs such as welfare, juvenile justice, Medicaid and corrections. Providence does not own or operate beds, treatment facilities, hospitals or group homes, preferring to provide services in the client's own home or other community setting. The Company provides a range of services through its direct and managed entities to over 81,000 clients through 1,019 contracts at March 31, 2009, with an estimated 6.7 million individuals eligible to receive the Company's non-emergency transportation services related to its LogistiCare operations. Combined, the Company has a nearly $1 billion book of business including managed entities.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believe," "demonstrate," "expect," "estimate," "a
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