8-K

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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934


         Date of Report (Date of earliest event reported): MAY 12, 1998




                                 PMR CORPORATION
             (Exact name of registrant as specified in its charter)



                                    DELAWARE
                 (State or other jurisdiction of incorporation)



           000-20488                                 23-2491707
     (Commission File No.)                (IRS Employer Identification No.)

                        501 WASHINGTON STREET, 5TH FLOOR
                           SAN DIEGO, CALIFORNIA 92103
              (Address of principal executive offices and zip code)


       Registrant's telephone number, including area code: (619) 610-4001



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ITEM 5.   OTHER EVENTS.

PMR hereby incorporates by reference the contents of the news release announcing
a special charge and preliminary estimate of fourth quarter results filed as
Exhibit 99.1 to this report.



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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.

        (C)    EXHIBITS.

               99.1 News Release dated May 12, 1998.



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                                    SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                        PMR CORPORATION




Dated:  May 13, 1998                    By: /s/ MARK P. CLEIN
                                           --------------------------------
                                           Mark P. Clein
                                           Executive Vice President and
                                           Chief Financial Officer



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                                INDEX TO EXHIBITS

                                                                       PAGE NO.

               99.1   News Release dated May 12, 1998.



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EX-99.1

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Exhibit 99.1

                              PMR CORPORATION LOGO

                        501 Washington Street, 5th Floor
                               San Diego, CA 92103


FOR IMMEDIATE RELEASE                                               MAY 12, 1998


             PMR CORPORATION ANNOUNCES PLAN TO TAKE A SPECIAL CHARGE
               AND PRELIMINARY ESTIMATE OF FOURTH QUARTER RESULTS

San Diego, CA - PMR CORPORATION (NASDAQ NMS - "PMRP") announced today that it
plans to recognize a special charge in the quarter ended April 30, 1998 in an
amount preliminarily estimated to be approximately $4.7 million. The charge will
be comprised primarily of expenses associated with the closing of several
programs, including a $2.2 million reserve for anticipated reductions in
collections due to site closures, as well as an accrual for anticipated expenses
related primarily to the previously disclosed "provider based" challenges at the
San Diego programs.

Fourth quarter results including the special charge will be a loss ranging from
$1.7 million to $1.9 million, or $.25 to $.28 per share. Exclusive of the
special charge, the company anticipates reporting fourth quarter net income from
operations of approximately $850,000 to $1,050,000, or $.11 to $.14 per share.
These operating earnings include expenses of approximately $390,000 or $.03 per
share related to the losses from the closed sites and legal and accounting costs
associated with an incompleted acquisition which were incurred during the fourth
quarter but were not part of the special charge. Earnings in the quarter were
adversely affected by a level of general and administrative expenses which
anticipated new program implementations which did not occur due primarily to
regulatory uncertainties.

The estimates for the special charge and fourth quarter results are preliminary
and subject to the completion of the company's year-end audit. The company
anticipates reporting year-end audited results in mid June.

"Given the scheduled change from cost reimbursement to a prospective payment
system on January 1, 1999 in the Outpatient Program business, we felt it was
prudent to evaluate all of our programs and in conjunction with our providers,
terminate those management contracts which were under-performing financially, or
were not anticipated to prosper in a prospective payment environment, due to
their presence in smaller markets," said Allen Tepper, CEO. "We believe that the
closing of these programs should have a positive impact on the company's future
financial results."



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The Company plans a conference call for tomorrow, Wednesday May 13, at 8:30 AM
EST to discuss these events and other issues of interest. Participants please
call 1-800-289-0438, confirmation number 478314. A replay of the call will run
for approximately 24 hours, beginning at 10:30 AM EST. The number for the replay
is 1-888-821-9362.


PMR is a leader in the development and management of programs and services for
individuals with a serious mental illness. PMR currently manages 50 programs in
12 states in both fee-for-service and managed care environments, principally
focused on the public sector market.

This press release contains forward looking statements that involve risks and
uncertainties, including the risk that the closing of certain programs will not
have a positive impact on the Company's future financial results, risks that the
preliminary estimate of the amount of the special charge, the net loss and
operating earnings will be different than the actual amounts ultimately
determined and reported, as well as the risk that the special charge does not
include all of the potential costs related to the closed programs and the
regulatory issues associated with certain programs; and the risks and
uncertainties set forth in the Company's periodic reports and other filings with
the Securities and Exchange Commission. Forward looking statements reflect the
Company's current views with respect to future events. Actual results may vary
materially and adversely from those anticipated, believed, estimated, or
otherwise indicated.



Contact:
PMR Corporation, 619-610-4001
Mark Clein, Executive V.P./CFO


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