Birman Managed Care, Inc. Announces Year-End Financial Results; The Company Makes Operational Changes to Focus On Health Care Consulting.

COOKEVILLE, Tenn.--(BUSINESS WIRE)--Oct. 12, 1998--BIRMAN MANAGED CARE, INC., (NASDAQ: BMAN) a physician-driven health care consulting and management company, has released its year-end financial statements for the fiscal year ending June 30, 1998.

For the fiscal year ended June 30, 1998, the Company reported revenues from continuing operations of $8,722,514, a decline from the reported $12,333,877 for fiscal 1997. The net loss from continuing operations was $2,132,124, or $.26 per share-basic, as compared with a net income from continuing operations of $813,869 or $.12 per share-basic in fiscal 1997. For the fiscal year ended June 30, 1998, the net loss was $6,682,746, or $.83 per share-basic as compared to net income of $175,981 or $.03 per share-basic in fiscal 1997. These results include after tax charges of $4,550,622, or $.57 per share, for fiscal 1998 and $637,888 or $.09 per share-basic, for fiscal 1997 from the discontinued operations of the Care3 health plan operated in Mississippi.

The Company attributes the Care3 loss to competitive pressures and the inability of even the large well-capitalized HMO companies to thrive in this cost-cutting environment. As a result, Birman made a business decision in July of 1998 to discontinue its Care3 health plan operations. This change removed a substantial drain on the Company's financial and managerial resources.

David N. Birman, MD, Chairman, President and CEO of Birman Managed Care, Inc. said, "Despite these losses we are optimistic about our improved financial outlook. For the past few months we have focused on our core competencies of physician-to-physician training to meet the rapidly-growing demands for our consulting services. As of today, we have contracts to provide our flagship "Quality Management Program" at 32 hospitals, up from only 22 hospitals nine months ago.

Dr. Birman added, "We have recently tripled our sales staff, which has resulted in a record number of hospitals currently in late stage negotiations. Additionally, we have developed several new ancillary consulting services to complement our already profitable core product offerings. In the midst of this sales ramp-up, we have been able to reduce our operating costs. As the only physician-to-physician company of its kind in a very competitive market, we look to 1999 as a "break-through" year for us."

BIRMAN MANAGED CARE, INC. is a health care consulting company with a physician-focused core competency. Through its subsidiary, Birman & Associates, the Company offers a range of compliance products and quality management services customized for health care providers including hospitals and physician offices. The Company also operates Hughes & Associates, a licensed pre-certification and utilization review company; and Rehab Partners, a workers compensation Preferred Provider Organization (PPO) in Mississippi.

The information contained herein includes "forward looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The statements by Dr. Birman addressing future operations are to be considered "forward-looking" for purposes of the Act. Investors are cautioned that forward-looking statements involve risks and uncertainties, including general economic conditions, delays and risks associated with the performance of contracts, consumer and industry acceptance and regulatory risks. -0-

              BIRMAN MANAGED CARE, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              For The Years Ended June 30, 1998 and 1997


                                        1998           1997
----------------------------------------------------------------------
Consulting revenues               $  8,722,514    $ 12,333,877
Cost of revenues                     4,017,490       4,222,316
                                  ------------    ------------
Gross profit                         4,705,024       8,111,561
General and
 administrative expenses,
  including $1,191,665
  non-cash compensation
  in 1997                            7,884,642       6,147,453
                                  ------------    ------------
Income (loss) from
 continuing operations              (3,179,618)      1,964,108
                                  ------------    ------------
Other income (expense):
     Interest income                   316,373         219,903
     Interest expense                  (19,590)         (2,874)
     Miscellaneous revenue                --             5,035
     Loss on disposal
     of assets                         (42,973)         (8,126)
                                   ------------    ------------
                                       253,810         213,938
Income (loss) from continuing
 operations before provision
 for income taxes                   (2,925,808)      2,178,046
Provision for income tax
 (expense) benefit                     793,684      (1,364,177)
                                   ------------    ------------
Net Income (loss) from
 continuing operations              (2,132,124)        813,869
Net (Loss) from discontinued
 operations of health plan,
 net of tax                         (3,565,649)       (637,888)
Net (Loss) on disposal of
 health plan, net of tax              (984,973)           --
                                   ------------    ------------
Net Income (Loss)                 $ (6,682,746)   $    175,981
                                   ------------    ------------
                                   ------------    ------------

Earnings (Loss) Per Common
  Share - Basic
  Income (Loss) from
   Continuing Operations          $       (.26)   $        .12
  Loss from Discontinued
   Operations of Health Plan,
   net of tax                             (.44)           (.09)
  Loss on Disposal of Health
   Plan, net of tax                       (.13)             --
                                   ------------    ------------
  Net Income (Loss)               $       (.83)   $        .03
                                   ------------    ------------
                                   ------------    ------------
Earnings (Loss) Per Common
  Share - Assuming Dilution
  Income (Loss) from Continuing
   Operations                      $      (.26)   $        .11
  Loss from Discontinued
   Operations of Health Plan,
   net of tax                             (.44)           (.09)
  Loss on Disposal of Health
  Plan, net of tax                        (.13)             --
                                   ------------    ------------
  Net Income (Loss)                $      (.83)   $        .02
                                   ------------    ------------
                                   ------------    ------------

Basic weighted average common
  stock shares outstanding           8,089,588       6,954,464
                                   ------------    ------------
                                   ------------    ------------
Weighted average diluted common
  stock shares outstanding           8,089,588       7,364,974
                                   ------------    ------------
                                   ------------    ------------