Advanced Health Corporation and Advanced Heart Physicians and Surgeons Network, PC in Dispute.

TARRYTOWN, N.Y.--(BUSINESS WIRE)--Oct. 16, 1998--Advanced Health Corporation (Nasdaq: ADVH) announced today that there is a dispute between the Company and one of its physician practice clients, Advanced Heart Physicians and Surgeons Network, PC, (the "Practice") and its partners, Drs. Jeffrey Moses and Valavanur Subramanian, in connection with the Practice's management services agreement (MSA).

Dr. Jeffrey Moses has issued a notice of "Irreconcilable Differences" with his partner, Dr. Subramanian. Based on this notice, Dr. Moses has informed ADVH that he and his partner are seeking to exercise a purported termination right under the MSA, and are therefore seeking to have the Company repurchase approximately 545,000 shares of ADVH stock granted to them in 1995 and to pay certain fees in connection with the termination of the MSA. The aggregate amount being demanded by Drs. Moses and Subramanian in connection with the purported termination and the stock repurchase is $3.5 million. ADVH believes the Practice does not have grounds to terminate the MSA, receive the disputed fees or require ADVH to repurchase stock it had granted to Drs. Moses and Subramanian. Under the current MSA, if the physicians did have grounds to terminate the MSA due to Irreconcilable Differences, they would each be required to enter into separate, substantially similar management services agreements with ADVH. There can be no assurance as to the outcome of this dispute.

Advanced Health is a leading health care services company that vertically integrates outsourcing services with clinical information systems. Through its Advanced Health Management subsidiary, the Company provides outsourcing services to independent and hospital-affiliated practices and networks. Through its Advanced Health Technologies subsidiary, the Company provides clinical information solutions to health care organizations. These information systems provide physicians and integrated delivery systems with patient-specific clinical and health plan information at the point of care to improve the quality and reduce the costs of health care.

This press release contains forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be significantly impacted by certain risks and uncertainties herein and in the Company's Annual Report on Form 10-K filed with Securities and Exchange Commission for the year ended December 31, 1997.