CAREMATRIX REPORTS FILING ITS ANNUAL REPORT

FORM 10-K FOR 1999

-- Restated Financial Results for Year End 1998 and the First Three Quarters of 1999 --

Needham, MA, July 5, 2000 – CareMatrix Corporation (NASDAQ: CMDCE), a fully integrated assisted living company, today announced that it has filed its financial statements for the fourth quarter and twelve months ended December 31, 1999, with the Securities and Exchange Commission, (“SEC”).  The Company has restated its financial results as of and for the fiscal year ended December 31, 1998 and the fiscal quarters beginning March 31, 1998 through September 30, 1999.

The restatement resulted primarily from a modification in the accounting for certain development, management, and lease agreements with certain affiliates of Chancellor Senior Housing Group, Inc., and other third parties.

The overall effect of the restatement on net income and net income per diluted share in each of the periods subject to restatement is shown in the following table:

As Previously Reported                                                                                              As Restated

                                    Net Income                   Net Income (Loss)                      Net Income                   Net Income (Loss)
                                         (Loss)                       Per Diluted Share                             (Loss)                        Per Diluted Share

Year Ended
12/31/98                     $18,058,941                            $0.99                                         $7,175,700                      $0.40

Quarter Ended
3/31/99                       $  5,895,841                             $0.32                                         $1,653,828                      $0.09

Quarter Ended
6/30/99                       $  6,308,881                             $0.34                                         $   979,821                      $0.05

Quarter Ended
9/30/99                      ($1,214,178)                              ($0.07)                                    ($3,728,490)                    ($0.21)

                For the year ended December 31, 1999, the Company reported a net loss of $65.2 million after charges related to asset impairment and other charges of $48.0 million. Operating revenues for the year ended December 31, 1999 were $184.9 million, an increase of 36.0%, over restated revenues for the previous year ended December 31, 1998.

            CareMatrix Corporation is a leading provider of senior housing services including assisted living, supportive independent living and specialized programs for people with Alzheimer’s disease.

This release contains forward-looking statements regarding the Company’s future plans, operations and prospects.  The Company’s actual results could differ materially from the results anticipated in these forward looking statements as a result of uncertainties, including risks relating to demand, pricing, competition, construction, financing, collectibility of receivables, and other factors identified in the Company’s filings with the Securities and Exchange Commission.

 EDITOR’S NOTE: This release is available on the Internet at http://www.carematrix.com.