American Shared Hospital Services Comments on the Recently Approved Increase in Medicare Reimbursement for Outpatient Gamma Knife Procedures.

SAN FRANCISCO -- American Shared Hospital Services (AMEX:AMS)(PCX:AMS), the leading provider of Gamma Knife(R) radiosurgery services, today announced that it is pleased that the Center for Medicare & Medicaid Services' (CMS) final ruling on changes to the Hospital Outpatient Prospective Payment System and Physician Fee Schedule for 2006 includes an approximately 28% increase in Medicare outpatient reimbursement rates of Gamma Knife therapeutic procedures compared to current rates. CMS published its ruling in the Federal Register on November 2, 2005.

"We are gratified that the CMS ruling will assure the continued availability of Gamma Knife radiosurgery services to patients seeking treatment for serious brain disorders," said Ernest A. Bates, M.D., Chairman and Chief Executive Officer of American Shared. "The rate increase is likely to have a positive financial impact on AMS through the contractual relationships for certain of our retail sites. Equally important, by underscoring the value of the non-invasive Gamma Knife system in treating malignant and benign brain tumors, vascular malformations, facial pain and other conditions, we believe that this decision may accelerate adoption of this advanced technology and make its benefits available to even more people seeking treatment in the future."

About AMS

American Shared Hospital Services is building a profitable medical services company in an underserved niche -- turnkey technology solutions for advanced radiosurgical procedures. The Company's core business is supplying hospitals with the Gamma Knife -- a non-invasive treatment for malignant and benign brain tumors, vascular malformations and trigeminal neuralgia (facial pain). The Gamma Knife, the gold standard in radiosurgery, reduces surgical risk and patient discomfort, resulting in a shorter hospital stay and lower risk of complications. In most cases, Gamma Knife patients resume their normal activities within a few days of treatment, compared to weeks or months for patients who undergo conventional surgery. More than 250,000 patients worldwide have already received this treatment. American Shared Hospital Services is the world leader in providing Gamma Knife radiosurgery services.

Safe Harbor Statement

This press release may be deemed to contain certain forward-looking statements with respect to the financial condition, results of operations and future plans of American Shared Hospital Services, which involve risks and uncertainties including, but not limited to, the risks of the Gamma Knife business and the risks of developing its IMRT and The Operating Room for the 21st Century(R) programs. Further information on potential factors that could affect the financial condition, results of operations and future plans of American Shared Hospital Services is included in the filings of the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2004, its Quarterly Report on Form 10-Q for the periods ended March 31, 2005 and June 30, 2005 and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 16, 2005.