Phyhealth Files Amended S-1 Registration Statement Related to Spin Off of Phyhealth Corporation and Issues 2009 Financial Statements

Physicians Healthcare Management Group, Inc. (Phyhealth) (Pink Sheets: PHYH), announced that it has filed an amended S-1 registration statement related to its previously announced spin-off of its wholly-owned subsidiary, Phyhealth Corporation ("Phyhealth"). Phyhealth will assume substantially all the businesses, assets and liabilities of PHYH at the time of, or prior to, the spin-off. The company also announced that it has issued its financial statements for the twelve months ended December 31, 2009. The financials are being posted today on the Pink Sheets website (www.pinksheets.com) (see also Managed Care).

The amendment reflects changes to the company's business strategy following enactment of the Patient Protection and Affordable Care Act along with the Health Care and Education Reconciliation Act of 2010, both of which were signed into law by President Obama in March 2010. This comprehensive legislation touches nearly all components of the healthcare and health insurance systems, and introduces the most sweeping change in the nation's healthcare since Medicare was enacted in 1965. The amended S-1 discusses and analyzes these changes as they relate to the industry in general and to Phyhealth in particular.

The company believes these changes will favorably impact its ability to insure a broader patient population, particularly for its planned individual and small group commercial product lines and for the expanded Medicaid program. The Company's community health plan model when integrated with its Physhield medical malpractice program is designed to provide high quality, affordable healthcare insurance coverage in full compliance with the new and existing state and federal regulations.

Separate from its community health plan model, the Company has initiated marketing a stand-alone Physhield medical malpractice insurance program aimed at qualified physicians and physician groups. Physhield has filed for registration in Maryland and the District of Columbia, adding these two markets to the states of Nevada, Texas and Florida where Physhield Insurance Exchange, a Risk Retention Group, is already registered and authorized to do business.

Phyhealth Plans are designed to be built on the foundation of a state licensed, for-profit HMO. The Company's community health plan structure is unique in its design in keeping physicians in control of the physician-patient relationship and placing the responsibility for managing 100 percent of patient healthcare costs directly with the physicians. To accomplish this, the Company will share ownership of its community health plans with the local physicians to ensure that the incentives for delivering patient-centered care at the least possible cost are aligned between the physician and the health plan/insurer.