SecProbe.io

October 19, 2011
 Via E-mail

Terren S. Peizer, Chief Executive Officer Catasys, Inc. 11150 Santa Monica Blvd.   Suite 1500 Los Angeles, California  90025
        Re:  Catasys, Inc.
                Amendment No. 4 to Registration Statement on Form S-1
                Filed October 11, 2011                 File No. 333-173659

Dear Mr. Peizer:
We have limited our review of your amende d registration statement to those issues
we have addressed in our comments.  In some of our comments, we may ask you to provide us with information so we may better understand your disclosure.
 Please respond to this letter by amendi ng your registration statement and providing
the requested information.  Where you do not be lieve our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
 After reviewing any amendment to your re gistration statement and the information
you provide in response to these comments,  we may have additional comments.

Amendment No. 4 to Registration Statement on Form S-1

1. We have reviewed the letter submitted to us on October 13, 2011 and note your
reference to “factual information about the Company that has been released in the
Company’s ordinary course of business” in  response to comment one of our letter
dated October 3, 2011.  It is unclear whethe r you are attempting to  rely on Rule 168
under the Securities Act of 1933.  Please advise.  If you are relying on Rule 168,
please provide us with a detailed an alysis supporting such reliance.

2. In this regard, please also advise us of the timing, manner and content of your
disclosures made in the “ordinary course of  business.”  We are unable to locate such
past disclosure.

3. We note your statements that the informati on in the presentation is “consistent” with
the information in the registration statement.  Please advise us of the location of such
information in the registration statement.  For example, we note (a) slides eight and
24 of the presentation titled “A Health Plan  Solution to the High Cost of Substance
Abuse” where you discuss your approximate br eak-even coverage and sales pipeline;

Terren S. Peizer
Catasys, Inc. October 19, 2011 Page 2
 (b) your statement on slide 12 that you have no direct competition;” and (c) your
statement on slide 24 that you are “movi ng to profitability in 2012.”

4. We note the statement that th e authors of the articles were not “compensated” or
“affiliated” with the company.  Please confir m, if true, that you did not provide the
relevant information to them.

We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that th e filing includes the information the Securities Act
of 1933 and all applicable S ecurities Act rules require.  Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.

Notwithstanding our comments, in the event you request accelerati on of the effective
date of the pending registration statement pl ease provide a written statement from the
company acknowledging that:

 should the Commission or the staff, acting purs uant to delegated authority, declare the
filing effective, it does not foreclose th e Commission from taking any action with
respect to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effective,  does not relieve the company from its full responsibility
for the adequacy and accuracy of th e disclosure in the filing; and

 the company may not assert staff comments a nd the declaration of effectiveness as a
defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.  Please refer to Rules 460 and 461 regard ing requests for acceleration.  We will
consider a written request for acceleration of th e effective date of th e registration statement
as confirmation of the fact that those request ing acceleration are aware of their respective
responsibilities under the Securi ties Act of 1933 and the Securiti es Exchange Act of 1934 as
they relate to the proposed public offering of th e securities specified in  the above registration
statement.  Please allow adequate time for us to review any amendment prior to the requested
effective date of the regist ration statement.
 Please contact Shehzad Niazi at (202) 551- 3121 or Jim Lopez at (202) 551-3536 with
any questions.
Sincerely,
   /s/ James Lopez (for)   John Reynolds,
Assistant Director