SurgiCare Announces Acquisition of Collection Company and Restructuring

HOUSTON, TX – SurgiCare, Inc. (AMEX: SRG), a Houston-based ambulatory surgery center company, announced today that it has entered into agreements relating to business combinations with three other companies, an equity investment and a recapitalization that would result in a significantly expanded healthcare services company with a new capital structure. As part of these transactions, the resulting company will be renamed “Orion HealthCorp, Inc.” (“Orion”) under a new trading symbol yet to be determined.

Closing of the transactions is conditioned upon several factors, including: approval of SurgiCare’s stockholders; approval of continued listing of Orion’s stock on the American Stock Exchange; satisfactory completion of due diligence by certain of the parties; satisfactory resolution of outstanding issues with creditors; simultaneous closing of all transactions; and other conditions commonly found in similar transactions.

One of the business combinantions includes the acquisition of DCPS and MBS by Orion. Orion will acquire both Dennis Cain Physician Solutions, Ltd. (“DCPS”) and Medical Billing Services, Inc. (“MBS”) for a combination of $3 million in cash, a $1 million promissory note and shares of Orion Class A Common representing up to approximately 9.5% of the Orion Common outstanding after these acquisitions. This purchase price is subject to retroactive adjustment based on the financial results of these two companies in the two years following their acquisition. SurgiCare, DCPS and MBS have entered into a letter of intent with respect to the proposed transaction and are negotiating the terms of the definitive acquisition agreements.

Keith LeBlanc, SurgiCare CEO, commented: “I would like to thank our physician partners and our shareholders for their patience and continued support through this difficult period. These contemplated combinations and recapitalization will establish a powerful platform for stability and future growth. We are looking forward to expanding our business and vastly improving our financial performance.”

“Strategically, the combination with IPS and DCPS/MBS increases our capacity to offer a comprehensive suite of services to our physician partners and their clientele, while also providing a vehicle for future acquisitions and de novo surgery center and imaging center development,” continued Mr. LeBlanc. “The addition of the DCPS/MBS entities will enhance our goals of achieving maximum reimbursement and superior accounts receivable management.”

Dennis Cain Physician Solutions, Ltd. and Medical Billing Systems, Inc. are affiliated companies headquartered in Houston, Texas that provide billing and collections and practice management services to hospital based physicians, imaging centers, and surgery centers. For the year ended December 31, 2002 and nine months ended September 30, 2003, DCPS and MBS, on a combined basis, had $8.7 million and $7.6 million, respectively, of revenues.

SurgiCare, Inc., based in Houston, Texas, operates freestanding, licensed, certified and Medicare-approved outpatient ambulatory surgery centers that are staffed by board-certified surgeons. SurgiCare’s mission is to deliver high-quality, affordable, community-based healthcare and provide access to local, specialized services in its centers through program affiliations. For the year ended December 31, 2002 and nine months ended September 30, 2003, SurgiCare had approximately $11.6 million and $5.9 million, respectively, of revenues. Additional information concerning SurgiCare is available at www.surgicareinc.com.