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Providence Service Corporation Does Not Expect California Budget Issues to Materially Impact Its Business in the State
Date:7/7/2009

TUCSON, Ariz., July 7 /PRNewswire-FirstCall/ -- The Providence Service Corporation (Nasdaq: PRSC) today commented on recent budget discussions in California as part of the state's attempt to close its large budget deficit.

"As we have stated previously, given that our programs in California are primarily funded by Medicaid and the Mental Health Services Act (Proposition 63 of 2004), we do not expect to experience material funding issues for our California book of business," said Fletcher McCusker, Chairman and CEO. "Also, any delay in payments from the state to our county payers should typically not impact our recognition of revenue for services we provided."

As previously reported, in May 2009, California voters rejected several of the Governor's budget propositions. Chief among these special election referendums was Proposition 1E, which would have amended the Mental Health Services Act to allow the Governor to redirect funds, for a two-year period, from mental health services for children and young adults. The Federal Court has also issued a permanent injunction preventing Medicaid cuts in the state.

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 Compan
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