FOR IMMEDIATE RELEASE CONTACT: Diane Landry King
Wednesday, November 10, 1999 (301) 838-5636

MAMSI ANNOUNCES THIRD QUARTER EARNINGS:
Company Exceeds Expectations

Rockville, Md. -- Mid Atlantic Medical Services, Inc. (MAMSI) (NYSE-MME), one of the mid-Atlantic region's largest managed care companies, reported its earnings today for the third quarter and first nine months ended September 30, 1999. The Company earned $0.17 per share for the third quarter, exceeding the consensus of analysts (as reported by First Call), by two cents per share. It is the Company's best quarter since the first quarter of 1996.

Net income for the third quarter of 1999 was $7,120,000 or $0.17 per share on 40,928,386 weighted average shares outstanding, compared with $3,982,000 or $.09 per share on 45,042,891 weighted average shares outstanding for the same period in 1998, prior to the one-time accrual for a potential settlement of an examination performed by the Office of Personnel Management (OPM) in the third quarter of 1998, an increase of $3,138,000 or 78.8 %. Net income for the third quarter of 1998, after the one-time item, was a loss of $(6,743,000) or $(0.15) per share.

Revenue for the third quarter of 1999 was $335.3 million, compared to $299.5 million for the same quarter in 1998, an increase of $35.8 million or 11.9%. Medical and home health patient services expenses for the third quarter of 1999 were $286.3 million, compared with $255.4 million for the same period in 1998. Third quarter 1999 administrative expenses were $37.4 million, compared with $33.3 million for the same period in 1998.

Net income for the first nine months of 1999 was $17,497,000 or $0.42 per share on 41,802,295 weighted average shares, compared with $14,257,000 or $0.31 per share on 46,422,587 weighted average shares for the first nine months of 1998, prior to the one-time item. This is an increase of $3,240,000 or 22.7%, year over year. Net income for the nine months of 1998 after the one-time item was $3,532,000 or $0.08 per share, an increase of $14.0 million year over year.

Revenue for the first nine months of 1999 was $972.0 million, compared with $883.3 million for the same period in 1998, an increase of $88.7 million or 10%. Medical and home health patient services costs for the nine months ended September 30, 1999 were $831.8 million, compared with $754.6 million for the same period in 1998. Administrative expenses for the first three quarters of 1999 were $110.8 million, compared with $99.6 million for the same period in 1998.

"These results show that our new management team is delivering solid, reliable results," stated Mark D. Groban, M.D., Chairman of the Board. "The product pricing discipline, professional partnering policies and administrative cost controls we put in place have had the impact we predicted would be seen in the third quarter. We expect to maintain this momentum. We are well-positioned for a strong year."

"We're beginning to see the results of our new direction and it's very exciting," said Thomas P. Barbera, President and CEO. "We will continue our focus on improving quality services to members, physicians, and employers; attracting and retaining the best employees; and increasing shareholder value."

The Company's provider network numbered 38,194 physicians, specialists, and affiliate providers; 336 hospitals; and 20,425 pharmacies as of September 30, 1999.

Membership in MAMSI's health plans continued an upward trend, reaching 1,843,000 covered lives in all products as of September 30, 1999, up from 1,790,700 on December 31, 1998, representing an increase of 52,300 covered lives or 2.9%. Of the 1999 figure, 773,000 are HMO, indemnity, and ASO plan members; and 1,070,000 are PPO members.

Membership figures for individual product categories are as follows:

Product 9-30-99
Membership 		12-31-98
Membership 		Increase/
(Decrease) 		%
Change
HMO/Commercial *

725,000

 		681,800

43,200

 		6.3
HMO/Medicaid

37,000

 		30,900

6,100

 		19.7
HMO/Medicare 0 7,000 (7,000) N/A
ASO 11,000 11,000 0 0
Subtotal 773,000 730,700 42,300 5.8
PPO 1,070,000 1,060,000 10,000 0.9
TOTAL 1,843,000 1,790,700 52,300 2.9

* Includes indemnity members.

In other news, MAMSI announced:

Mid Atlantic Medical Services, Inc.'s subsidiaries cover over 1.8 million lives in Maryland, Washington D.C., Virginia, West Virginia, Delaware, North Carolina and Pennsylvania. It is one of the mid-Atlantic region's largest managed care companies. The Company's web site at www.mamsi.com.

Selected Income Statement Information
In thousands except share amounts
(unaudited)

  3Q 1999 3Q 1998 YTD '99
1st 9 Mos. 		YTD '98
1st 9 Mos.
Revenue $ 335,250 $ 299,546 $ 971,978 $ 883,273
Expenses $ 324,689 $ 310,685 $ 945,376 $ 878,024
Income Before Taxes $ 10,561 $ (11,139) $ 26,602 $ 5,249
Diluted Earnings per Common Share $ 0.17 $ (0.15) $ 0.42 $ 0.08
Weighted Average Shares Outstanding 40,928,386 45,042,891 41,802,295 46,422,587

Note 1: Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: All forward-looking information or statements contained in this release are based on management's current knowledge of factors, all with inherent risks and uncertainties, affecting MAMSI's business. MAMSI's actual results may differ materially if these assumptions prove invalid. Significant risk factors, while not all-inclusive, are: the possibility of increasing price competition in the Company's marketplace; the possibility of state or Federal budget mandates that reduce premium levels; the possibility of increased medical expenses due to increased utilization, inflation or legislative mandates; and the possibility that the Company is not able to expand its Service Area as planned. Investors should review other risks and uncertainties contained in Company documents filed with the Securities and Exchange Commission.

Note 2: MAMSI is a regional holding company for health care organizations that provide comprehensive health insurance products and services including: M.D. IPA, a traditional HMO, and M.D. IPA Preferred, an open-ended version of the HMO; Optimum Choice, Inc.®, a non-federally qualified HMO; Optimum Choice of the Carolinas, Inc.; Optimum Choice, Inc. of Pennsylvania; Alliance PPO, LLC., a preferred provider organization; Mid Atlantic Psychiatric Services, Inc., a preferred provider organization offering managed psychiatric health care services; MAMSI Life and Health Insurance Company, an indemnity insurance company; HomeCall, Inc. and FirstCall, Inc., home health care companies; and HomeCall Pharmaceutical Services, Inc., a mail order pharmacy and home infusion services company.

Note 3: Mid Atlantic Medical Services, Inc. common stock is traded on the New York Stock Exchange (NYSE-MME).

MID ATLANTIC MEDICAL SERVICES, INC.
IN 000's EXCEPT PMPM AND PER SHARE
(UNAUDITED)

 

QUARTER ENDED

 		 

QUARTER ENDED

 		 

QUARTER ENDED

 		 
 

9/30/99

 		 

9/30/98

 		 

6/30/99

 		 

MEMBER MONTHS

2,259,662

 

2,087,902

 

2,211,884

 

MEMBER MONTHS - ASO

32,813

 

31,486

 

33,012

 
             

HEALTH PREMIUM

$318,794

 

$281,777

 

$307,880

 

PMPM

 		 

$141.08

 

$134.96

 

$139.19

FEE AND OTHER

5,224

 

5,006

 

5,375

 

LIFE AND SHORT-TERM DISABILITY

2,089

 

1,751

 

2,005

 

HOME HEALTH SERVICES

6,531

 

5,171

 

5,839

 

INVESTMENT

2,612

 

944

 

2,431

 

GAIN ON SALE OF REAL ESTATE

 		   

4,897

     

TOTAL REVENUE

335,250

 

299,546

 

323,530

 
             

MEDICAL EXPENSE

281,050

 

250,997

 

274,096

 

PMPM

 		 

$124.38

 

$120.21

 

$123.92

MED LOSS RATIO

 		 

88.2%

 		 

89.1%

 		 

89.0%

LIFE AND SHORT-TERM DISABILITY

934

 

930

 

1,028

 

HOME HEALTH COSTS

5,264

 

4,397

 

4,900

 

ADMINISTRATIVE

37,441

 

33,257

 

36,536

 

ADMIN EXPENSE RATIO

 		 

11.2%

 		 

11.1%

 		 

11.3%

LOSS ON RETIREMENT OF COMPUTER EQUIPMENT

 		   

4,604

     

FEHBP POTENTIAL SETTLEMENT

 		   

16,500

     
             

INCOME (LOSS) BEFORE TAX

10,561

 

(11,139)

 		 

6,970

 

TAX PROVISION (BENEFIT)

3,441

 

(4,396)

 		 

2,464

 

EFFECTIVE TAX RATE

 		 

32.6%

 		 

39.5%

 		 

35.4%
             

NET INCOME (LOSS)

$7,120

 

$(6,743)

 		 

$4,506

 
             

DILUTED EPS

$0.17

 

$(0.15)

 		 

$0.11

 
             

WEIGHTED AVERAGE SHARES

40,928

 

45,043

 

41,934

 
             

NET MARGIN

2.1%

 		 

-2.3%

 		 

1.4%

 		 
             

MEDICAL CLAIMS PAYABLE AT END OF PERIOD

$151,320

 

$115,237

 

$144,970

 
             

ADDITIONAL INFORMATION:

 		           
             

MEDICAID PROGRAM:

 		           
             

PREMIUM

$14,698

 

$9,118

 

$12,667

 

PMPM

 		 

$133.78

 

$111.34

 

$124.49

             

MEDICAL EXPENSE

13,774

 

7,733

 

11,807

 

PMPM

 		 

$125.38

 

$94.43

 

$116.04

MED LOSS RATIO

 		 

93.7%

 		 

84.8%

 		 

93.2%
             

MEDICARE PROGRAM:

 		           
             

PREMIUM

 		   

$10,355

     

PMPM

 		     

$456.43

   
             

MEDICAL EXPENSE

 		   

11,225

     

PMPM

 		     

$494.77

   

MED LOSS RATIO

 		     

108.4%

 		   

MID ATLANTIC MEDICAL SERVICES, INC.
IN 000's EXCEPT PMPM AND PER SHARE
(UNAUDITED)

   

NINE MONTHS ENDED
9/30/99

 		 

NINE MONTHS ENDED
9/30/98

 		 
           

MEMBER MONTHS

 		 

6,663,650

 

6,195,722

 

MEMBER MONTHS - ASO

 		 

99,005

 

95,780

 
           

HEALTH PREMIUM

 		 

$925,335

 

$833,872

 

PMPM

 		   

$138.86

 

$134.59

FEE AND OTHER

 		 

16,063

 

15,405

 

LIFE AND SHORT-TERM DISABILITY

 		 

6,043

 

5,051

 

HOME HEALTH SERVICES

 		 

17,279

 

15,606

 

INVESTMENT

 		 

7,258

 

7,647

 

GAIN ON SALE OF REAL ESTATE

 		     

5,692

 

TOTAL REVENUE

 		 

971,978

 

883,273

 
           

MEDICAL EXPENSE

 		 

817,635

 

741,844

 

PMPM

 		   

$122.70

 

$119.73

MED LOSS RATIO

 		   

88.4%

 		 

89.0%

LIFE AND SHORT-TERM DISABILITY

 		 

2,849

 

2,742

 

HOME HEALTH COSTS

 		 

14,117

 

12,718

 

ADMINISTRATIVE

 		 

110,775

 

99,616

 

ADMIN EXPENSE RATIO

 		   

11.4%

 		 

11.3%

LOSS ON RETIREMENT OF COMPUTER EQUIPMENT

 		     

4,604

 

FEHBP POTENTIAL SETTLEMENT

 		     

16,500

 

INCOME BEFORE TAX

 		 

26,602

 

5,249

 

TAX PROVISION

 		 

9,105

 

1,717

 

EFFECTIVE TAX RATE

 		   

34.2%

 		 

32.7%
           

NET INCOME

 		 

$17,497

 

$3,532

 
           

DILUTED EPS

 		 

$0.42

 

$0.08

 
           

WEIGHTED AVERAGE SHARES

 		 

41,802

 

46,423

 
           

NET MARGIN

 		 

1.8%

 		 

0.4%

 		 
           

MEDICAL CLAIMS PAYABLE AT END OF PERIOD

 		 

$151,320

 

$115,237

 

ADDITIONAL INFORMATION:

 		         
           

MEDICAID PROGRAM:

 		         

PREMIUM

 		 

$38,124

 

$26,957

 

PMPM

 		   

$125.56

 

$108.50

           

MEDICAL EXPENSE

 		 

35,341

 

22,270

 

PMPM

 		   

$116.39

 

$89.64

MED LOSS RATIO

 		   

92.7%

 		 

82.6%

MEDICARE PROGRAM:

 		         
           

PREMIUM

 		     

$36,289

 

PMPM

 		       

$449.29

           

MEDICAL EXPENSE

 		     

38,461

 

PMPM

 		       

$476.17

MED LOSS RATIO

 		       

106.0%

# # #