Providence Service Corporation Comments on Senate Health Care Reform

TUCSON, Ariz., Dec. 28  /PRNewswire-FirstCall/ -- The Providence Service Corporation (NASDAQ:PRSC) today commented on the landmark healthcare legislation that was passed last week by the United States Senate.  The Senate Bill, which still needs to be merged with the House Bill and therefore could still undergo substantial changes, has a number of features that are expected to add funding for many of the types of home and community based social services that Providence provides to Medicaid eligible populations.  While the Senate's version of the bill also implements some cuts and cost saving measures, primarily to out of home care providers and hospitals' "Disproportionate Share" programs, the cuts are not expected to affect the Company's services.

  Included in the Patient Protection and Affordability Act are:

  --  An increase in the eligibility for Medicaid to 133% of the federal
      poverty level. This is estimated to add approximately 15 million to
      the roles of Medicaid.  The House version of the bill is even more
      generous and increases eligibility to 150%.  This increase is designed
      to be effective in 2014 but the bill also provides incentives for
      states that are identified as early implementers.
  --  An increase in the percentage of state's Medicaid costs paid by the
      federal government, known as the state's FMAP.
  --  Expansion of the State Children's Health Insurance (SCHIP) Program. 
      The expansion of SCHIP will include eligibility for foster care kids
      that previously were aging out of the system.
  --  Streamlined Medicaid enrollment, online enrollment, and new outreach
      services, for which $10 billion is provided over five years.
  --  Expanded community and home based services, with financial incentives
      for states to expand home based services and penalties for states that
      do not.
  --  The Community Living Assisted Support and Services Act (CLASS). 
      CLASS, which is in both the Senate and House bills, mandates that
      states develop incentives for community and home based programs,
      requires outcome data, and provides preferential treatment to
      community health centers.  This is well aligned with Providence's own
      mission statement to provide services in the home and community.
  --  Insurance Company Services Requirement.  The Senate bill also includes
      a requirement that insurance companies spend 85% of revenues in
      services.  This along with the requirement that everyone obtain
      insurance would make a whole new market available to the Company that
      has not been insured previously.




"After years of operating under the Medicaid waiver and continuing to demonstrate the value of home and community based services we are pleased that Congress is recognizing that preventative and home based care may be the best use of Medicaid dollars," said Fletcher McCusker, Chairman and CEO.

The bill will now go to a committee combined of House and Senate members to reconcile the differences in the two pieces of legislation.  There could be substantial changes to the current draft and the benefits outlined above are contingent on the passage of a final bill.

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 74,000 clients through 843 active contracts at September 30, 2009, with an estimated 7.3 million individuals eligible to receive the Company's non-emergency transportation services. 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," "anticipate," "should" and "likely" and similar expressions identify forward-looking statements. In addition, statements that are not historical should also be considered forward-looking statements. Readers are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to the global credit crisis, capital market conditions, and other risks detailed in Providence's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2008. Providence is under no obligation to (and expressly disclaims any such obligation to) update any of the information in this press release if any forward-looking statement later turns out to be inaccurate whether as a result of new information, future events or otherwise. 

DATASOURCE: The Providence Service Corporation



CONTACT:  Fletcher McCusker, Chairman and CEO, or Kate Blute, Director of

Investor and Public Relations, both of The Providence Service Corporation,

[phone]; or Alison Ziegler of Cameron Associates, [phone], for

The Providence Service Corporation



Web Site:  http://www.provcorp.com/ 

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