FPA Medical Management, Inc. announces timing of special meeting of stockholders and expansion into North Carolina.

SAN DIEGO--(BUSINESS WIRE)--Sept. 11, 1996--FPA Medical Management, Inc. (Nasdaq:FPAM) announced today that its special meeting of stockholders to approve the proposed merger with Sterling Healthcare Group, Inc. (Nasdaq:STER) and transaction with Foundation Health Corporation (Nasdaq:FH) is expected to be held in October.

FPA and Foundation have agreed to enter into a management agreement prior to the completion of the proposed acquisition by FPA of 30 healthcare centers from Foundation. Effective October 1, 1996, FPA is expected to begin managing Foundation's healthcare centers in California and Arizona which provide services to approximately 275,000 HMO members.

"The mailing of the proxy statement and the special meeting has been delayed by approximately one month due to a routine review by the Securities and Exchange Commission," stated Steven M. Lash, Executive Vice President and Chief Financial Officer. "We remain very enthusiastic about both the Sterling and Foundation transactions and look forward to their consummation."

Following the completion of the Sterling and Foundation transactions, FPA is expected to expand its service area to 24 states through contracts with more than 3,700 primary care physicians who provide services to over 630,000 HMO members.

Separately, FPA announced the signing of an exclusive five year administrative services agreement with Wake Primary Care Physicians, PA., an independent practice association ("IPA") with operations in North Carolina.

The IPA consists of 70 primary care physicians currently servicing 11,000 Healthsource (Nasdaq:HS) HMO enrollees. FPA will immediately begin providing management services. In addition, FPA will have local network development and provider relations representatives in North Carolina with corporate support services being provided from FPA's Philadelphia office.

Dr. Sol Lizerbram, Chairman and President of FPA Medical Management, Inc. stated, "The agreement allows FPA to enter into another market with a new payor. With the assistance of the Wake Primary Care IPA, we will begin developing a statewide network."

Dr. Seth Flam, Chief Executive Officer, added, "This transaction compliments our South Carolina operations and continues to strengthen our IPA model. We expect to generate $6 million annually from the additional 11,000 enrollees."

FPA Medical Management, Inc. is a national healthcare management service organization which organizes and manages primary care physician networks to contract with HMOs and other prepaid health insurance plans to provide physician and related health care services.

Certain statements contained in this release are forward looking. Although FPA Medical Management, Inc. believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. Factors that could cause actual results to differ from expectations include the difficulty in controlling healthcare costs, increasing and managing growth in the number of new enrollees in the FPA Network and the possible negative effects of prospective healthcare reform. For other important factors that may cause FPA Medical Management, Inc.'s actual results to differ materially from expectations and underlying assumptions, see reports filed by FPA Medical Management, Inc. with the Securities and Exchange Commission.

CONTACT: FPA Medical Management, Inc.

Investor Contact:

Steven M. Lash

ExecutiveVice President and

Chief Financial Officer

619-295-7005

or

Evan Smith/Jill Ruja

Morgen-Walke Associates

212-850-5600