IASIS Healthcare Announces Third Quarter 2012 Results

IASIS Healthcare LLC:W. Carl Whitmer, 615-844-2747President and Chief Executive OfficerorJohn M. Doyle, 615-844-2747Chief Financial Officeror:Michele Simpson, 615-467-1255VP, Corporate Communications

IASIS Healthcare® LLC (“IASIS”) today announced financial and operating results for the fiscal third quarter and nine months ended June 30, 2012. In the first quarter of fiscal 2012, IASIS adopted accounting guidance that results in the classification of the provision for bad debts as a revenue deduction rather than an operating expense, and such guidance has been applied to the financial statements of both the current and prior year periods.

Net revenue for the third quarter totaled $631.3 million, a decrease of 3.0%, compared to $650.5 million in the prior year quarter. The decline in consolidated net revenue is primarily attributable to a $46.4 million decrease in premium revenue at Health Choice, the Company’s Medicaid and Medicare managed health plan in Arizona, as a result of a state mandated reduction in certain Medicaid enrollees, along with capitation rate reductions implemented by the Arizona Health Care Cost Containment System (“AHCCCS”). Acute care revenue for the third quarter increased $27.2 million or 5.9% compared to the prior year quarter. Adjusted EBITDA for the third quarter totaled $70.5 million, compared to $82.4 million in the prior year quarter. Adjusted EBITDA for the third quarter did not include any Medicaid electronic health records (“EHR”) incentive payments, compared to the prior year quarter which included $8.1 million. Excluding the impact of Medicaid EHR incentive payments, adjusted EBITDA declined $3.8 million for the third quarter, compared to the prior year quarter, including a $4.8 million decline in adjusted EBITDA at Health Choice. Net earnings from continuing operations for the third quarter totaled $11.8 million, compared to $2.3 million in the prior year quarter, which included a $23.1 million loss on extinguishment of debt.

In the third quarter, admissions and adjusted admissions increased 3.6% and 4.1%, respectively, compared to the prior year quarter. On a same-facility basis, admissions decreased 0.4% and adjusted admissions increased 0.5%, while net patient revenue per adjusted admission increased 2.2%, each compared to the prior year quarter. Along with an increase in bad debt expense resulting primarily from the effects of Arizona’s reduction in Medicaid eligibility, net patient revenue per adjusted admission has been negatively impacted by reimbursement reductions from state Medicaid programs, particularly in Texas and Arizona.

Net revenue for the nine months ended June 30, 2012, totaled $1.9 billion, an increase of 0.7% compared to the prior year period. Adjusted EBITDA for the nine months ended June 30, 2012, totaled $231.5 million, which includes a net favorable impact of $7.0 million resulting from the combination of an industry-wide settlement with the Centers for Medicare and Medicaid Services (“CMS”) and the issuance of updates to certain payment factors used for determining Medicare Disproportionate Hospital reimbursement, compared to $229.9 million in the prior year period. Net earnings from continuing operations for the nine months ended June 30, 2012, totaled $28.3 million, compared to $42.4 million in the prior year period, which included a $23.1 million loss on extinguishment of debt.

For the nine months ended June 30, 2012, admissions and adjusted admissions increased 12.6% and 12.8%, respectively, compared to the prior year period. On a same-facility basis, admissions and adjusted admissions increased 1.5% and 2.6%, respectively, while net patient revenue per adjusted admission increased 1.4%, each compared to the prior year period.

A listen-only simulcast and 30-day replay of IASIS’ third quarter conference call will be available by clicking the “For Investors” link on the Company’s Web site at beginning at 11:00 a.m. Eastern Time on August 7, 2012. A copy of this press release will also be available on the Company’s Web site.

IASIS Healthcare, located in Franklin, Tennessee, is a leading provider of high quality, affordable healthcare services in urban and suburban markets. With total annual net revenue of approximately $2.6 billion, IASIS owns and operates 19 acute care hospitals, one behavioral health hospital facility, several outpatient service facilities, more than 160 physician clinics, and Medicaid and Medicare managed health plans in Arizona and Utah that serve more than 178,000 members. IASIS’ healthcare facilities offer a variety of access points for convenient patient care in numerous regions across the U.S., including: Salt Lake City, Utah; Phoenix, Arizona; Tampa-St. Petersburg, Florida; five cities in Texas, including Houston and San Antonio; Las Vegas, Nevada; and West Monroe, Louisiana. For more information on IASIS, please visit the Company’s Web site at .

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