TUCSON, Ariz., Aug. 25 /PRNewswire-FirstCall/ -- The Providence Service Corporation (Nasdaq: PRSC) today commented on the report that U.S. District Judge Christina Snyder of Los Angeles has issued a preliminary injunction against a 10% cut in Medi-Cal payments to various health care providers that was initially passed by the California Legislature in February 2008. The decision is expected to be retroactive to the start of the fiscal year, July 1, 2008.

"With almost half of our California business being Medicaid, we view this as good news for the Company," said Fletcher McCusker, CEO. "We are pleased that once again the federal court has intervened on behalf of Medicaid beneficiaries, although we understand that the fight isn't over as the state could appeal. We will continue to monitor the situation."

The Company is making no revisions to its guidance at this time.

In her ruling, Judge Snyder said she was aware of California's large deficit, now $17.2 billion (including $2 billion in reserves) with the budget 50 days overdue and legislators still deadlocked. But she said the state has accepted federal funds for Medi-Cal and is bound to use them to provide quality health care to low-income residents. The judge noted that federal law requires states to consider the impact on health care quality and access when setting reimbursement rates for Medicaid, which is called Medi-Cal in California. She said the state offered no evidence that it examined those factors, or anything besides its fiscal problems, when it ordered the 10 percent cuts.

About Providence

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 nearly 78,000 clients through nearly 950 contracts at June 30, 2008, with an estimated six 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.

Certain statements herein, such as any statements about Providence's confidence or strategies or its expectations about revenues, results of operations, profitability, earnings per share, contracts, collections, award of contracts, acquisitions and related growth, growth resulting from initiatives in certain states, effective tax rate or market opportunities, constitute "forward-looking statements" within the meaning of the private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause Providence's actual results or achievements to be materially different from those expressed or implied by such forward-looking statements. These factors include, but are not limited to, reliance on government-funded contracts, risks associated with government contracting, risks involved in managing government business, legislative or policy changes, challenges resulting from growth or acquisitions, adverse media and legal, economic and other risks detailed in Providence's filings with the Securities and Exchange Commission, including its Form 10-K for the year ended December 31, 2007. Words such as "believe," "demonstrate," "expect," "estimate," "anticipate," "should" and "likely" and similar expressions identify 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. Providence undertakes no obligation to update any forward-looking statement contained herein.

SOURCE  The Providence Service Corporation
    -0-                             08/25/2008
    /CONTACT:  Fletcher McCusker - Chairman and CEO, or Kate Blute - Director
of Investor and Public Relations, both of The Providence Service Corporation,
+1-520-747-6600; or Alison Ziegler of Cameron Associates, +1-212-554-5469, for
The Providence Service Corporation/
    /Web site:  http://www.provcorp.com /
    (PRSC)

CO:  The Providence Service Corporation
ST:  Arizona, Georgia, California
IN:  HEA
SU:  LAW LEG

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