America Service Group Responds to Media Coverage of Prison Health Services.

BRENTWOOD, Tenn. -- America Service Group Inc. (NASDAQ:ASGR) released the text of a message distributed by Chairman, President and Chief Executive Officer Michael Catalano in response to coverage of the Company and its subsidiary, Prison Health Services, Inc., in The New York Times. In his message, Mr. Catalano said:

"Some of you may have seen the recent coverage of Prison Health Services in The New York Times. This blatantly unfair story contains so many mischaracterizations, exaggerations and oversimplifications that it is difficult to know how to start to set the record straight.

"The fact is that PHS doctors, nurses and other healthcare professionals provide high quality and effective care 24-hours-a-day, 365-days-a-year, in over a million patient encounters a year, under extremely difficult circumstances. And day after day, under these challenging conditions, they save lives. Unfortunately, rather than acknowledging the countless success stories we've had - stories that can be found in every facility we work with - the reporter chose to use only very select anecdotal information to form unfair, misleading and inaccurate conclusions.

"PHS routinely improves the quality of healthcare in facilities it serves. The National Commission for Correctional Health Care (NCCHC) and American Correctional Association (ACA) have established guidelines for correctional healthcare, and we are proud of our track record in achieving a 100% success rate in obtaining and maintaining accreditation by these organizations in each case where our clients have elected to meet these standards. Jail facilities served by PHS have received accreditation at a rate several times higher than other jail facilities around the country.

"The positive results are clear. And while this reporter cites a number of lawsuits against our company, the fact is that the number of lawsuits against PHS is a fraction of the average number of lawsuits filed by inmates in correctional facilities around the United States. And the vast majority of cases against PHS are dismissed.

"Our clinicians treat patients with compassion, dignity and respect. We are proud of them. We respect their professionalism and judgment. They go through the same type of credentialing process that is used by most community hospitals, and we know they are well qualified to do their jobs. We also know that they will continue their good work guided by the principle that our patients always come first.

"It seems as if anyone who tried to present our side of the story to this Times' reporter - or anyone who provided evidence contradicting his view - was dismissed with no more than a minor obligatory reference.

"In his lengthy descriptions of cases in which patients died, the reporter gives tremendous credence to the New York State Commission on Corrections (COC). The article barely mentions that PHS and jail officials themselves have refuted many of the COC conclusions and have offered evidence that contradicts them. It also ignores the fact that many of the COC's recommendations are contrary to practices recommended by the Institute of Medicine and the Agency for Health Care Research and Quality.

"The suggestion that our staff operates in a reckless manner or puts business interests ahead of patients' needs is outrageous, repugnant and demeaning to the thousands of dedicated employees whose commitment, competence and caring save lives in some of the most challenging situations imaginable. They understand that good clinical care and honesty are fundamental values of our company, and they share those values.

"Remarkably, the Times portrays our clients, government officials around the country, as either uncaring or incompetent individuals who are simply being duped. The reporter's assertion that government officials support PHS for fear of being sued is ludicrous. We believe they do so because they recognize our outstanding record of quality performance.

"The story discounts the possibility that our company's growth and consistent record of contract renewal is based on merit. Perhaps the reporter believes that private companies should not be in the correctional healthcare business. But we, our clients and an increasing number of corrections officials around the country obviously disagree. The reality is that PHS provides quality care. We are dedicated to achieving the highest standards of operational excellence, clinical quality and client service, bearing in mind that our patients come to us with a history of being medically underserved and with a high incidence of infectious and chronic diseases, drug abuse and mental illness.

"PHS is proud of the thousands of dedicated medical, dental and mental health professionals who work tirelessly to serve a very challenging population who are very frequently sick, violent and plagued with mental health or drug abuse problems. We will continue to ensure these individuals receive high quality care."

America Service Group Inc., based in Brentwood, Tennessee, is the leading provider of correctional healthcare services in the United States. America Service Group Inc., through its subsidiaries, provides a wide range of healthcare and pharmacy programs to government agencies for the medical care of inmates.

This press release may contain "forward-looking" statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including the Company's beliefs and expectations of future performance, the effects of any stock split and may be indicated by words or phrases such as "anticipate," "estimate," "plans," "expects," "projects," "should," "will," "believes" or "intends" and similar words and phrases. As such, they involve risk and uncertainty that actual results may differ materially from those projected in the forward-looking statements including, without limitation, risks related to the following: the Company's ability to retain existing client contracts and obtain new contracts; whether or not government agencies continue to privatize correctional healthcare services; increased competition for new contracts and renewals of existing contracts; the Company's ability to execute its expansion strategies; the Company's ability to limit its exposure for catastrophic illnesses and injuries in excess of amounts covered under contracts or insurance coverage; the outcome of pending litigation; and the Company's dependence on key personnel. A discussion of these important factors and assumptions regarding the statements and risks involved is contained in the Company's annual report on Form 10-K and other filings with the Securities and Exchange Commission. These forward-looking statements are made as of the date of this release. The Company assumes no obligations to update or revise them or provide reasons why actual results may differ.