Pioneer Behavioral Health Announces Expanded Contract For Its Harmony Healthcare Subsidiary

PEABODY, Mass., Oct. 21 /PRNewswire-FirstCall/ -- PHC, Inc., d.b.a. Pioneer Behavioral Health (BULLETIN BOARD: PIHC) , a leading provider of inpatient and outpatient behavioral health services and pharmaceutical research, today announced that its Harmony Healthcare subsidiary, has successfully negotiated an expansion of the contract with its largest Nevada payor, PacifiCare of Nevada. Under the terms of the expanded contract, Harmony will provide additional value-added behavioral health services for PacifiCare’s Secure Horizons members.

The contract, which became effective on October 1, 2004, specifies a rate increase for the approximately 24,000 Medicare Advantage program members (formerly the Medicare + Choice program) currently enrolled in the Secure Horizons program. Harmony expects approximately $150,000 in annualized new revenues from this expanded contract.

Bruce A. Shear, Pioneer Behavioral Health’s President and Chief Executive Officer, commented, “This announcement represents another step in our national expansion strategy, and an important announcement for the citizens of the greater Las Vegas metropolitan area. Over the last seven years, Harmony and PacifiCare have developed an outstanding, mutually beneficial relationship, with Harmony as a leading provider of behavioral healthcare services for PacifiCare’s health management, point-of-sale and Secure Horizons plans. With Harmony’s already-strong presence in the Las Vegas area, this contract expands our mark in that region, which is an important step for our growth strategy. Expanding our footprint in the rapidly growing Las Vegas region, one of the fastest growing metro areas in the country, is an important step for our growth strategy.”

About Pioneer Behavioral Health

Pioneer Behavioral Health operates companies that provide inpatient and outpatient behavioral health care services, clinical research and Internet- and telephonic-based referral services. The companies contract with national insurance companies, government payors, and major transportation and gaming companies, among others, to provide such services. For more information, please visit http://www.phc-inc.com/ or http://www.haydenir.com/.

Statement under the Private Securities Litigation Reform Act of 1995: This press release may include “forward-looking statements” that are subject to risks and uncertainties. Forward-looking statements include information about possible or assumed future results of the operations or the performance of the company and its future plans and objectives. Various future events or factors may cause the actual results to vary materially from those expressed in any forward-looking statements made in this press release. For a discussion of these factors and risks, see the company’s annual report on Form 10-KSB for the most recently ended fiscal year.

Company Contact: Investor Relations Contact: PHC, Inc. Hayden Communications, Inc. Bruce A. Shear Matthew Hayden 978-536-2777 1-843-272-4653

PHC, Inc.

CONTACT: Bruce A. Shear of PHC, Inc., +1-978-536-2777, or InvestorRelations, Matthew Hayden of Hayden Communications, Inc., +1-843-272-4653, forPHC, Inc.