FPA Medical Management, Inc. expands to Florida market with acquisition of PCA subsidiary.

SAN DIEGO--(BUSINESS WIRE)--May 6, 1996--FPA Medical Management, Inc. (Nasdaq:FPAM) announced today that it has signed a definitive agreement with Physician Corporation of America (Nasdaq:PCAM) to purchase Physicians First, Inc. ("PFI"), a wholly owned subsidiary of PCA. PFI is a network of 125 physicians, of which 118 are primary care physicians and 7 are specialists, operating out of 40 healthcare centers throughout Florida. The network currently provides medical services to approximately 80,000 HMO members enrolled in the PCA health plans and 10,000 members in other associated plans in Florida. The transaction is expected to add $100 million in annual revenue.

FPA Medical Management, Inc. stated that a critical part of its expansion strategy will be to further penetrate the Florida market by contracting with additional HMOs and servicing their members through the existing primary care healthcare centers as well as through newly developed IPAs. FPA is currently in negotiations with additional significant payors.

The consideration to be paid by FPA is approximately $23 million, consisting of cash, common stock and notes, and $2 million based on adding additional enrollees. The transaction is expected to close on or about June 1, 1996.

Commenting on the acquisition, Dr. Seth Flam, Chief Executive Officer, stated, Our optimism for this transaction is based on our experience in efficiently managing pre-paid capitated lives in other markets with high managed care penetration. We will apply the same systems and operating strategies to create another successful region for FPA."

Dr. Sol Lizerbram, Chairman and President, added, "We are excited to enter Florida, since the demographics of this market fit well with our current structure and make this a strategic opportunity for FPA. We are confident that several payors will contract with us to utilize our new healthcare centers in Florida."

FPA Medical Management, Inc. is a national health care 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 which 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 which 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.

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Steven M. Lash

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Media Contact: Miriam Adler

Morgen-Walke Associates

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