<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)

    [X]      Quarterly report pursuant to Section 13 or 15(d) of the
             Securities Exchange Act of 1934

             For the quarterly period ended March 31, 2001 or

    [ ]      Transition report pursuant to Section 13 or 15(d) of the
             Securities Exchange Act of 1934

             For the transition period from            to
                                            ------------------------

             Commission file number           0-15416
                                   -------------------------



                             RESPONSE ONCOLOGY, INC.
                             -----------------------
             (Exact name of registrant as specified in its charter)



            Tennessee                                     62-1212264
  ---------------------------------                   ------------------
    (State or Other Jurisdiction                      (I. R. S. Employer
  of Incorporation or Organization)                   Identification No.)


    1805 Moriah Woods Blvd., Memphis, TN                     38117
  ---------------------------------------                  ---------
  (Address of principal executive offices)                 (Zip Code)


                                 (901) 761-7000
                                 --------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                               Yes  [X]     No   [ ]


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

Common Stock, $.01 Par Value, 12,290,764 shares as of May 15, 2001.


<PAGE>   2


INDEX




<TABLE>
<S>        <C>                                                          <C>
PART I.    FINANCIAL INFORMATION


Item 1.    Financial Statements                                         Page

           Consolidated Balance Sheets,
           March 31, 2001 and December 31, 2000 ...................      3

           Consolidated Statements
           of Operations for the Three Months Ended
           March 31, 2001 and March 31, 2000 ......................      4

           Consolidated Statements of
           Cash Flows for the Three Months Ended
           March 31, 2001 and March 31, 2000 ......................      5

           Notes to Consolidated
           Financial Statements ...................................      6

Item 2.    Management's Discussion and Analysis
           of Financial Condition and Results
           of Operations ..........................................     11

Item 3.    Quantitative and Qualitative Disclosures
           About Market Risk ......................................     18

PART II.   OTHER INFORMATION


Item 1.    Legal Proceedings ......................................     19

Item 2.    Changes in Securities and Use of Proceeds ..............     19

Item 3.    Defaults Upon Senior Securities ........................     19

Item 4.    Submission of Matters to a Vote of Security Holders ....     19

Item 5.    Other Information ......................................     19

Item 6.    Exhibits and Reports on Form 8-K .......................     19

Signatures ........................................................     20
</TABLE>


                                      -2-
<PAGE>   3


PART I - FINANCIAL INFORMATION

ITEM 1:  FINANCIAL STATEMENTS
         RESPONSE ONCOLOGY, INC. AND SUBSIDIARIES
         CONSOLIDATED BALANCE SHEETS
         (Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                     March 31, 2001    December 31, 2000
ASSETS                                                                                 (Unaudited)          (Note 1)
                                                                                     --------------    -----------------
<S>                                                                                  <C>               <C>
CURRENT ASSETS
     Cash and cash equivalents                                                         $   5,590           $   7,327
     Accounts receivable, less allowance for doubtful accounts
         of $3,591 and $3,489                                                             11,082               9,469
     Supplies and pharmaceuticals                                                          3,189               3,702
     Prepaid expenses and other current assets                                             3,844               3,529
     Due from affiliated physician groups                                                 14,665              19,121
     Deferred income taxes                                                                 1,168               1,168
                                                                                       ---------           ---------
         TOTAL CURRENT ASSETS                                                             39,538              44,316

     Property and equipment, net                                                           2,867               3,212
     Deferred charges, less accumulated amortization of $398 and $320                         78                 156
     Management service agreements, less accumulated amortization of
         $8,220 and $7,685                                                                43,697              44,231
     Other assets                                                                            298                 498
                                                                                       ---------           ---------
         TOTAL ASSETS                                                                  $  86,478           $  92,413
                                                                                       =========           =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable                                                                  $  16,369           $  14,665
     Accrued expenses and other liabilities                                                3,573               4,581
     Current portion of notes payable                                                     29,955              34,509
     Current portion of capital lease obligations                                            284                 277
                                                                                       ---------           ---------
         TOTAL CURRENT LIABILITIES                                                        50,181              54,032

     Capital lease obligations, less current portion                                         228                 303
     Deferred income taxes                                                                 3,525               3,525
     Minority interest                                                                       375               1,164

STOCKHOLDERS' EQUITY
     Series A convertible preferred stock, $1.00 par value (aggregate
       involuntary liquidation preference $183), authorized 3,000,000 shares;
       issued and outstanding 16,631 shares at each period end                                17                  17
     Common stock, $.01 par value, authorized 30,000,000 shares; issued and
       outstanding 12,290,764 shares at each period end                                      123                 123
     Paid-in capital                                                                     102,011             102,011
     Accumulated deficit                                                                 (69,982)            (68,762)
                                                                                       ---------           ---------
                                                                                          32,169              33,389
                                                                                       ---------           ---------
         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $  86,478           $  92,413
                                                                                       =========           =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      -3-
<PAGE>   4



RESPONSE ONCOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollar amounts in thousands except for share data)

<TABLE>
<CAPTION>
                                                                                                 Three Months Ended
                                                                                          -------------------------------------
                                                                                           March 31,                 March 31,
                                                                                              2001                     2000
                                                                                          ------------             ------------

<S>                                                                                       <C>                      <C>
NET REVENUE                                                                               $     31,552             $     35,586

COSTS AND EXPENSES
  Salaries and benefits                                                                          4,684                    5,513
  Pharmaceuticals and supplies                                                                  22,852                   24,165
  Other operating costs                                                                          1,787                    2,480
  General and administrative                                                                     1,838                    1,474
  Depreciation and amortization                                                                    986                    1,135
  Interest                                                                                         890                      827
  Provision for doubtful accounts                                                                  232                      210
                                                                                          ------------             ------------
                                                                                                33,269                   35,804
                                                                                          ------------             ------------

LOSS BEFORE INCOME TAXES AND MINORITY INTEREST                                                  (1,717)                    (218)
  Minority owners' share of net earnings                                                             4                      255
                                                                                          ------------             ------------

 LOSS BEFORE INCOME TAXES                                                                       (1,721)                    (473)
  Income tax benefit                                                                              (568)                    (180)
                                                                                          ------------             ------------

LOSS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                                 (1,153)                    (293)
  Cumulative effect of change in accounting principle, net of tax (see Note 3)                     (67)                      --
                                                                                          ------------             ------------

NET LOSS                                                                                  $     (1,220)            $       (293)
                                                                                          ============             ============

LOSS PER COMMON SHARE:
  Basic:
       Before cumulative effect of change in accounting principle                         $      (0.09)            $      (0.02)
       Cumulative effect of accounting change, net                                        $      (0.01)                      --
                                                                                          ------------             ------------
       Net loss                                                                           $      (0.10)            $      (0.02)
                                                                                          ============             ============
  Diluted:
       Before cumulative effect of change in accounting principle                         $      (0.09)            $      (0.02)
       Cumulative effect of accounting change, net                                        $      (0.01)                      --
                                                                                          ------------             ------------
       Net loss                                                                           $      (0.10)            $      (0.02)
                                                                                          ============             ============
  Weighted average number of common shares:
       Basic                                                                                12,290,764               12,282,139
                                                                                          ============             ============
       Diluted                                                                              12,290,764               12,282,139
                                                                                          ============             ============
</TABLE>

 See accompanying notes to consolidated financial statements.


                                      -4-
<PAGE>   5



RESPONSE ONCOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                                                        Three Months Ended
                                                                                    --------------------------
                                                                                    March 31,        March 31,
                                                                                      2001             2000
                                                                                    ---------        --------
<S>                                                                                 <C>              <C>
OPERATING ACTIVITIES
Net loss                                                                             $(1,220)        $  (293)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities:
   Depreciation and amortization                                                         986           1,135
   Provision for doubtful accounts                                                       232             210
   Gain on sale of property and equipment                                                (10)            (28)
   Minority owners' share of net earnings                                                  4             255
   Changes in operating assets and liabilities:
      Accounts receivable                                                             (1,585)         (1,610)
      Supplies and pharmaceuticals, prepaid expenses and other current assets            198              33
      Deferred charges and other assets                                                   77             (30)
      Due from affiliated physician groups                                             4,456          (1,227)
      Accounts payable and accrued expenses                                              560           1,023
                                                                                     -------         -------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                    3,698            (532)

INVESTING ACTIVITIES
   Proceeds from sale of property and equipment                                           22              33
   Purchase of equipment                                                                 (42)           (199)
                                                                                     -------         -------
NET CASH USED IN INVESTING ACTIVITIES                                                    (20)           (166)

FINANCING ACTIVITIES
   Distributions to joint venture partners                                              (793)             --
   Proceeds from exercise of stock options                                                --              32
   Principal payments on notes payable                                                (4,554)           (501)
   Principal payments on capital lease obligations                                       (68)            (67)
                                                                                     -------         -------
NET CASH USED IN FINANCING ACTIVITIES                                                 (5,415)           (536)

DECREASE IN CASH AND CASH EQUIVALENTS                                                 (1,737)         (1,234)
   Cash and cash equivalents at beginning of period                                    7,327           7,195
                                                                                     -------         -------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                           $ 5,590         $ 5,961
                                                                                     =======         =======
</TABLE>


See accompanying notes to consolidated financial statements.


                                      -5-
<PAGE>   6


RESPONSE ONCOLOGY, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2001

NOTE 1 -- ORGANIZATION AND DESCRIPTION OF BUSINESS/BANKRUPTCY PROCEEDINGS

Response Oncology, Inc. (the "Company") is a comprehensive cancer management
company which owns and/or operates a network of outpatient treatment centers
("IMPACT(R) Centers"), that provide stem cell supported high dose chemotherapy
and other advanced cancer treatment services under the direction of practicing
oncologists; compounds and dispenses pharmaceuticals to certain oncologists for
a fixed or cost plus fee; owns the assets of and manages oncology practices; and
conducts outcomes research on behalf of pharmaceutical manufacturers.

On March 29, 2001, the Company filed voluntary petitions for reorganization
under Chapter 11 of the United States Bankruptcy Code and began operating its
business as a debtor-in-possession under the supervision of the Bankruptcy
Court. A statutory creditors committee may be appointed in the Chapter 11 case,
and substantially all of the Company's liabilities as of the filing date
("prepetition liabilities") are subject to settlement under a plan of
reorganization. Generally, actions to enforce or otherwise effect repayment of
all prepetition liabilities as well as all pending litigation against the
Company are stayed while the Company continues to operate its business as
debtor-in-possession. Schedules were filed by the Company with the Bankruptcy
Court setting forth its assets and liabilities as of the filing date as
reflected in the Company's accounting records. Differences between amounts
reflected in such schedules and claims filed by creditors will be investigated
and either amicably resolved or subsequently adjudicated before the Bankruptcy
Court. The ultimate amount and settlement terms for such liabilities are subject
to a plan of reorganization, and accordingly, are not presently determinable.
The Company's financial statement auditors have included an explanatory
paragraph to their opinion dated March 30, 2001, stating that the bankruptcy
filing and related matters raise substantial doubt about the Company's ability
to continue as a going concern. There can be no assurance that any
reorganization plan that is effected will be successful.

NOTE 2 -- BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required for complete financial statements by generally accepted accounting
principles. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31, 2001 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2001. For further information, refer to the consolidated
financial statements and footnotes thereto included in Response Oncology, Inc.
and Subsidiaries' (the "Company's") annual report on Form 10-K for the year
ended December 31, 2000.

Net Revenue: The Company's net patient service revenue includes charges to
patients, insurers, government programs and other third-party payers for medical
services provided. Such amounts are recorded net of contractual adjustments and
other uncollectible amounts. Contractual adjustments result from the differences
between the amounts charged for services performed and the amounts allowed by
government programs and other public and private insurers.

The Company's revenue from practice management affiliations includes a fee equal
to practice operating expenses incurred by the Company (which excludes expenses
that are the obligation of the physicians, such as physician salaries and
benefits) and a management fee either fixed in amount or equal to a percentage
of each affiliated oncology group's adjusted net revenue or net operating
income. In certain affiliations, the Company may also be entitled to a
performance fee if certain financial criteria are satisfied.

Pharmaceutical sales to physicians are recorded based upon the Company's
contracts with physician groups to manage the pharmacy component of the groups'
practice. Revenue recorded for these contracts represents the cost of
pharmaceuticals plus a fixed or percentage fee.


                                      -6-
<PAGE>   7

Clinical research revenue is recorded based on the Company's contracts with
various pharmaceutical manufacturers to manage clinical trials and is generally
measured on a per patient basis for the monitoring and collection of data.

The following table is a summary of net revenue by source for the respective
three month periods ended March 31, 2001 and 2000.

<TABLE>
<CAPTION>
     (In thousands)                                  Three Months Ended
                                                          March 31,
                                                    ---------------------
                                                     2001          2000
                                                    -------       -------
    <S>                                             <C>           <C>
    Net patient services revenue                    $ 2,189       $ 4,633
    Practice management service fees                 18,049        19,993
    Pharmaceutical sales to physicians               11,196        10,781
    Clinical research revenue                           118           179
                                                    -------       -------
                                                    $31,552       $35,586
                                                    =======       =======
</TABLE>

Revenue is recognized when earned. Sales and related cost of revenues are
generally recognized upon delivery of goods or performance of services.

Net Loss Per Common Share: A reconciliation of the basic loss per share and the
diluted loss per share computation is presented below for the three month
periods ended March 31, 2001 and 2000.

(Dollar amounts in thousands except per share data)

<TABLE>
<CAPTION>
                                                            Three Months Ended
                                                                 March 31,
                                                       -------------------------------
                                                           2001                2000
                                                       -----------         -----------
<S>                                                    <C>                 <C>
Weighted average shares outstanding                     12,290,764           12,282,139
Net effect of dilutive stock options and
  warrants based on the treasury stock
  method                                                    -- (A)                -- (A)
                                                       -----------         ------------
Weighted average shares and common stock
  equivalents                                           12,290,764           12,282,139
                                                       ===========         ============

Net loss before cumulative effect of accounting
  change                                               $    (1,153)        $       (293)
                                                       ===========         ============
Diluted per share amount                               $     (0.09)        $      (0.02)
                                                       ===========         ============
</TABLE>

(A) Stock options and warrants are excluded from the weighted average number of
common shares due to their anti-dilutive effect.

NOTE 3 -- NOTES PAYABLE

The terms of the Company's original lending agreement provided for a $42.0
million Credit Facility, to mature in June 2002, to fund the Company's
acquisition and working capital needs. The Credit Facility, originally comprised
of a $35.0 million Term Loan Facility and a $7.0 million Revolving Credit
Facility, is collateralized by the assets of the Company and the common stock of
its subsidiaries. The Credit Facility bears interest at a variable rate equal to
LIBOR plus an original spread between 1.375% and 2.5%, depending upon borrowing
levels. The Company was also obligated to a commitment fee of .25% to .5% of the
unused portion of the Revolving Credit Facility. At March 31, 2001, $29.2
million aggregate principal was outstanding under the Credit Facility with an
interest rate of approximately 10%. The Company is subject to certain
affirmative and negative covenants which, among other things, originally
required that the Company maintain certain financial ratios, including minimum
fixed charge coverage, funded debt to EBITDA and minimum net worth. This
original lending agreement was subsequently and significantly amended in
November 1999, and March 2000, as described below.


                                      -7-
<PAGE>   8

In November 1999, the Company and its lenders amended certain terms of the
Credit Facility. As a result of this amendment, the Revolving Credit Facility
was reduced from $7.0 million to $6.0 million and the interest rate was adjusted
to LIBOR plus a spread of 3.25%. The Company's obligation for commitment fees
was adjusted from a maximum of .5% to .625% of the unused portion of the
Revolving Credit Facility. Repayment of the January 1, 2000 quarterly
installment was accelerated. In addition, certain affirmative and negative
covenants were added or modified, including minimum EBITDA requirements for the
fourth quarter of 1999 and the first quarter of 2000. Compliance with certain
covenants was also waived for the quarters ended September 30, 1999 and December
31, 1999.

On March 30, 2000, the Company and its lenders again amended various terms of
the Credit Facility. As a result of this amendment, certain affirmative and
negative covenants were added (including minimum quarterly cash flow
requirements through March 2001), and certain other existing covenants were
modified. Additionally, certain principal repayment terms were modified and
certain future and current compliance with specific covenants was waived.
Finally, the maturity date of the Credit Facility was accelerated to June 2001.

During the third quarter of 2000, the Company did not meet certain financial
covenants of the Credit Facility, including those related to minimum cash flow
requirements. This occurred primarily due to further erosion in high dose
chemotherapy volumes. As a result of this event of default, the Company's
lenders adjusted the interest rates on the outstanding principal to the default
rate of prime plus 3% (12.5% at the time of default) and terminated any
obligation to advance additional loans or issue letters of credit. As a result
of this termination, the Company has not experienced an impact on operating cash
flow. Under the terms of the Credit Facility, additional remedies available to
the lenders (as long as an event of default exists and has not been cured)
include acceleration of all principal and accrued interest outstanding, the
right to foreclose on related security interests in the assets of the Company
and stock of its subsidiaries, and the right of setoff against any monies or
deposits that the lenders have in their possession.

Effective December 29, 2000, the Company executed a forbearance agreement with
its lenders. Under the terms of the forbearance agreement, the lenders agreed to
forbear from enforcing their rights or remedies pursuant to the Credit Facility
documents until the earlier of (i) March 30, 2001 (as amended), or (ii) certain
defined events of default. During this period, the interest rate was adjusted to
prime plus 2%. The forbearance agreement also provided that a financial advisor
be retained by the Company to assist in the development of a restructuring plan
and perform certain valuation analyses.

With the Company's March 29, 2001 Chapter 11 bankruptcy filing, any potential
future revisions to the Credit Facility are subject to Chapter 11 reorganization
processes (described elsewhere in conjunction with discussion of the filing).
There can be no assurances as to the form of such revisions (if any) or their
impact on the Company's financial position or continued business viability.
Additionally, as of the date of the bankruptcy filing, the Company was in
technical default under the terms of the Credit Facility. Consistent with all of
the above described factors, the Company has classified all amounts due under
the Company's Credit Facility as current.

The Company enters into LIBOR-based interest rate swap agreements ("Swap
Agreement") with the Company's lender as required by the terms of the Credit
Facility. In June 2000, the Company entered into a new Swap Agreement effective
July 1, 2000. Amounts hedged under this most recent Swap Agreement accrue
interest at the difference between 7.24% and the ninety-day LIBOR rate and are
settled quarterly. The Company has hedged $17.0 million under the terms of the
Swap Agreement. The Swap Agreement matures on July 1, 2001. The Company has
reviewed the applicability and implications of SFAS No. 133 for the Company's
financial statements. The sole derivative instrument to which the accounting
prescribed by the Statement is applicable is the Swap Agreement described above.
The Company recorded a cumulative adjustment charge in implementing SFAS No. 133
in the first quarter of 2001 of approximately $100,000 in recognition of the
reported fair value of the Swap Agreement.

The installment notes payable to affiliated physicians and physician practices
were issued as partial consideration for the practice management affiliations.
Principal and interest under the long-term notes may, at the election of the
holders, be paid in shares of common stock of the Company based on conversion
prices ranging from $11.50 to $16.97.



                                      -8-
<PAGE>   9

NOTE 4 -- INCOME TAXES

Upon the consummation of the physician practice management affiliations, the
Company recognized deferred tax assets and liabilities for the future tax
consequences attributable to differences between the financial statement
carrying amounts of purchased assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.

NOTE 5 -- COMMITMENTS AND CONTINGENCIES

With respect to professional and general liability risks, the Company currently
maintains an insurance policy that provides coverage during the policy period
ending August 1, 2001, on a claims-made basis, for $1,000,000 per claim in
excess of the Company retaining $25,000 per claim, and $3,000,000 in the
aggregate. Costs of defending claims are in addition to the limit of liability.
In addition, the Company maintains a $10,000,000 umbrella policy with respect to
potential professional and general liability claims. Since inception, the
Company has incurred no professional or general liability losses and as of March
31, 2001 the Company was not aware of any pending professional or general
liability claims that would have a material adverse effect on the Company's
financial condition or results of operations.

NOTE 6 -- DUE FROM AFFILIATED PHYSICIANS

Due from affiliated physicians consists of management fees earned and due
pursuant to the management service agreements ("Service Agreements"). In
addition, the Company funds certain working capital needs of the affiliated
physicians from time to time.

NOTE 7 -- SEGMENT INFORMATION

The Company's reportable segments are strategic business units that offer
different services. The Company has three reportable segments: IMPACT Services,
Physician Practice Management and Cancer Research Services. The IMPACT Services
segment provides stem cell supported high dose chemotherapy and other advanced
cancer treatment services under the direction of practicing oncologists as well
as compounding and dispensing pharmaceuticals to certain medical oncology
practices. The Physician Practice Management segment owns the assets of and
manages oncology practices. The Cancer Research Services segment conducts
clinical cancer research on behalf of pharmaceutical manufacturers.

The accounting policies of the segments are the same as those described in the
summary of significant accounting policies except that the Company does not
allocate interest expense, taxes or corporate overhead to the individual
segments. The Company evaluates segment performance based on profit or loss from
operations before income taxes and unallocated amounts.

(In thousands)

<TABLE>
<CAPTION>
                                                                         Physician
                                                       IMPACT             Practice     Cancer Research
                                                      Services           Management        Services           Total
                                                      --------           ----------    ----------------      --------
<S>                                                   <C>                <C>           <C>                   <C>
For the three months ended March 31, 2001:
Net revenue                                           $ 13,385             $18,049            $118            $31,552
Total operating expenses                                13,485              16,329              87             29,901
                                                      --------             -------            ----            -------
Segment contribution (deficit)                            (100)              1,720              31              1,651
Depreciation and amortization                               99                 822              --                921
                                                      --------             -------            ----            -------
Segment profit (loss)                                 $   (199)            $   898            $ 31            $   730
                                                      ========             =======            ====            =======

Segment assets                                        $ 14,129             $62,080            $809            $77,018
                                                      ========             =======            ====            =======

Capital expenditures                                        --             $    36              --            $    36
                                                      ========             =======            ====            =======
</TABLE>


                                      -9-
<PAGE>   10

<TABLE>
<CAPTION>
                                                                         Physician
                                                       IMPACT             Practice     Cancer Research
                                                      Services           Management        Services             Total
                                                      --------           ----------    ----------------        --------
<S>                                                   <C>                <C>           <C>                     <C>

For the three months ended March 31, 2000:
Net revenue                                           $15,414            $19,993            $   179             $ 35,586
Total operating expenses                               14,639             17,514                181               32,334
                                                      -------            -------            -------             --------
Segment contribution (deficit)                            775              2,479                 (2)               3,252
Depreciation and amortization                              93                987                 --                1,080
                                                      -------            -------            -------             --------
Segment profit (loss)                                 $   682            $ 1,492            $    (2)            $  2,172
                                                      =======            =======            =======             ========

Segment assets                                        $19,494            $87,796            $ 1,241             $108,531
                                                      =======            =======            =======             ========

Capital expenditures                                  $    10            $   172                 --             $    182
                                                      =======            =======            =======             ========
</TABLE>


Reconciliation of profit:

<TABLE>
<CAPTION>
                                                                Three Months Ended
                                                                     March 31,
                                                            ---------------------------
                                                              2001               2000
                                                            -------             -------
<S>                                                         <C>                 <C>
Segment profit                                              $   730             $ 2,172
Unallocated amounts:
  Corporate salaries, general and administrative              1,485               1,771
  Corporate depreciation and amortization                        65                  55
  Corporate interest expense                                    901                 819
                                                            -------             -------

Loss before income taxes                                    $(1,721)            $  (473)
                                                            =======             =======
</TABLE>

Reconciliation of consolidated assets:

<TABLE>
<CAPTION>
                                                     As of March 31,
                                               ---------------------------
                                                 2001               2000
                                               -------            --------
<S>                                            <C>                <C>
Segment assets                                 $77,018            $108,531
Unallocated amounts:
  Cash and cash equivalents                      5,590               5,961
  Prepaid expenses and other assets              3,152               4,763
  Property and equipment, net                      718                 845
                                               -------            --------

Consolidated assets                            $86,478            $120,100
                                               =======            ========
</TABLE>


                                      -10-
<PAGE>   11



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

The Company is a comprehensive cancer management company. The Company provides
advanced cancer treatment services through outpatient facilities known as IMPACT
Centers under the direction of practicing oncologists; owns the assets of and
manages the nonmedical aspects of oncology practices; compounds and dispenses
pharmaceuticals to certain medical oncology practices for a fixed or cost plus
fee; and conducts outcomes research on behalf of pharmaceutical manufacturers.
As of March 31, 2001, approximately 260 medical oncologists are associated with
the Company through these programs.

As further discussed throughout this document, the Company sees important
threats and opportunities for its businesses which will require management's
focused attention over the near-term. The material decline in the Company's
IMPACT Center volumes, coupled with continuing contractual issues in its
physician practice management segment, have required and will continue to
require significant and rapid strategic and operational responses to facilitate
the Company's continued viability. The Company's focused business plan is
currently being modified to not only incorporate such responses, but also to
explore management's plans to exploit key opportunity areas and more effectively
leverage important Company assets, including possibilities to expand and enhance
the Company's pharmaceutical services.

In order to preserve its operational strength and the assets of its businesses,
the Company sought protection under the federal bankruptcy laws by filing a
voluntary petition for relief on March 29, 2001, under Chapter 11 of the United
States Bankruptcy Code. Under Chapter 11, the Company continues to conduct
business in the ordinary course under the protection of the Bankruptcy Court,
while a reorganization plan is developed to restructure its obligations. The
Company's financial statement auditors have included an explanatory paragraph to
their opinion dated March 30, 2001, stating that the bankruptcy filing and
related matters raise substantial doubt about the Company's ability to continue
as a going concern. There can be no assurance that any reorganization plan that
is effected will be successful.

In 1990 the Company began development of a network of specialized IMPACT Centers
to provide complex outpatient chemotherapy services under the direction of
practicing oncologists. The majority of the therapies provided at the IMPACT
Centers entail the administration of high dose chemotherapy coupled with
peripheral blood stem cell support of the patient's immune system. At March 31,
2001, the Company's network consisted of 23 IMPACT Centers, including 14
wholly-owned, 7 managed programs, and 2 owned and operated in joint venture with
a host hospital. Subsequent to March 31, 2001, the Company decided to close 11
additional Centers and is currently evaluating the long-term viability of the
remaining Centers. Prior to January 1997, the Company derived substantially all
of its revenues from outpatient cancer treatment services through reimbursements
from third party payors on a fee-for-service or discounted fee-for-service
basis. During 1997, the Company began concentrating its efforts on contracting
on a "global case rate" basis where the Company contracts with the appropriate
third-party payor to receive a single payment that covers the patient's entire
course of treatment at the center and any necessary in-patient care.

In May of 1999, the results of certain breast cancer studies were released at
the meeting of the American Society of Clinical Oncology (ASCO). These studies,
involving the use of high dose chemotherapy, sparked controversy among
oncologists, and, in the aggregate, caused confusion among patients, third-party
payers, and physicians about the role of high dose chemotherapy in the treatment
of breast cancer. Since the release of these data, the Company's high dose
business has slowed significantly, as evidenced by a 44% decrease in high dose
procedures in the first quarter of 2001 as compared to the same period in 2000.
High dose procedures in the Company's wholly-owned IMPACT Centers decreased 56%
in the first quarter of 2001 as compared to the same period in 2000, while
procedures in the Company's managed and joint venture Centers decreased 23% and
26%, respectively. The Company closed 16 IMPACT Centers since the first quarter
of 2000 due to decreased patient volumes and is currently in the process of
closing 11 additional centers. On an ongoing basis, the Company evaluates the
economic feasibility of the centers in its IMPACT network. The Company is
generally able to re-deploy related assets throughout the IMPACT Center network.

While additional data presented at the 2000 ASCO annual meeting appeared to
somewhat clarify the role of high dose therapies for breast cancer and indicated
favorable preliminary results, the Company has not experienced an increase in


                                      -11-
<PAGE>   12

referrals for breast cancer patients nor does the Company expect this trend to
reverse in the foreseeable future. Because of the significance of this negative
trend to the Company's IMPACT Center volumes, the Company is actively evaluating
the best fashion in which to leverage the IMPACT Center network. This evaluation
includes the exploration of opportunities to deliver high dose therapies against
diseases other than breast cancer; however, there can be no assurance that other
such diseases and related treatment protocols can be identified, implemented,
and/or effectively managed through the existing network. Continuing declines in
high dose therapy volumes and/or an inability to develop new referral lines or
treatment options for the network that result in increased non-breast cancer
volumes will adversely affect the financial results of this line of business.
Such adverse results would likely require that the Company evaluate potential
additional closures of individual IMPACT Centers in the network.

During the first quarter of 2000, the Company decided to expand into the
specialty pharmaceutical business and began to put in place certain of the
resources necessary for this expansion. The Company intends to leverage its
expertise and resources in the delivery of complex pharmaceuticals to cancer
patients into the delivery of specialty drugs to patients with a wide range of
chronic, costly and complex diseases. Specifically, this will include the
distribution of new drugs with special handling requirements, and is expected to
involve the use of the Company's regional network of specialized pharmaceutical
centers. In addition, the Company intends to use its national network of IMPACT
Centers and its highly trained healthcare professionals to administer the most
fragile compounds to the expanded patient population. The Company has hired an
expert consultant to assist in the development of the business plan. In
addition, the Company recruited a chief medical officer and a vice president of
operations in the third quarter of 2000. These individuals have operating
responsibilities over the existing business segments and for the development of
the specialty pharmaceutical business. The Company has also engaged in
discussions with potential strategic partners, including certain pharmaceutical
manufacturers, partner hospitals, and affiliated physicians. Various clinical
and marketing materials have also been developed. These services have been
marketed to select physicians and third-party payers in existing locations
within the IMPACT Center network. The Company treated its first patient
utilizing such specialty drugs in the second quarter of 2001. Although the
Company is still pursuing this strategy, given its current financial and
operating constraints, there can be no assurances that this plan will be
successfully implemented.

The Company also provides pharmacy management services for certain medical
oncology practices through its IMPACT Center pharmacies. These services include
compounding and dispensing pharmaceuticals for a fixed or cost plus fee.

During 1996, the Company executed a strategy of diversification into physician
practice management and subsequently affiliated with 43 physicians in 12 medical
oncology practices in Florida and Tennessee. Pursuant to Service Agreements, the
Company provides management services that extend to all nonmedical aspects of
the operations of the affiliated practices. The Company is responsible for
providing facilities, equipment, supplies, support personnel, and management and
financial advisory services.

In its practice management relationships, the Company has predominantly used two
models of Service Agreements: (i) an "adjusted net revenue" model; and (ii) a
"net operating income" model. Service Agreements utilizing the adjusted net
revenue model provide for payments out of practice net revenue, in the following
order: (A) physician retainage (i.e. physician compensation, benefits, and
perquisites, including malpractice insurance) equal to a defined percentage of
net revenue ("Physician Expense"); (B) a clinic expense portion of the
management fee (the "Clinic Expense Portion") equal to the aggregate actual
practice operating expenses exclusive of Physician Expense; and (C) a base
service fee portion (the "Base Fee") equal to a defined percentage of net
revenue. In the event that practice net revenue is insufficient to pay all of
the foregoing in full, then the Base Fee is first reduced, followed by the
Clinic Expense Portion of the management fee, and finally, Physician Expense,
therefore effectively shifting all operating risk to the Company. In each
Service Agreement utilizing the adjusted net revenue model, the Company is
entitled to a Performance Fee equal to a percentage of Annual Surplus, defined
as the excess of practice revenue over the sum of Physician Expense, the Clinic
Expense Portion, and the Base Fee.

Service Agreements utilizing the net operating income model provide for a
management fee equal to the sum of a Clinic Expense Portion (see preceding
paragraph) plus a percentage (the "Percentage Portion") of the net operating
income of the practice (defined as net revenue minus practice operating
expenses). Practice operating expenses do not include Physician Expense. In
those practice management relationships utilizing the net operating income model
Service Agreement, the Company and the physician group share the risk of expense
increases and revenue declines, but likewise share the benefits of expense
savings, economies of scale and practice enhancements.


                                      -12-
<PAGE>   13

Each Service Agreement contains a liquidated damages provision binding the
physician practice and the principals thereof in the event the Service Agreement
is terminated "for cause" by the Company. The liquidated damages are a declining
amount, equal in the first year to the purchase price paid by the Company for
practice assets and declining over a specified term. Principals are relieved of
their individual obligations for liquidated damages only in the event of death,
disability, or retirement at a predetermined age. Each Service Agreement
provides for the creation of an oversight committee, a majority of whom are
designated by the practice. The oversight committee is responsible for
developing management and administrative policies for the overall operation of
each clinic. However, under each Service Agreement, the affiliated practice
remains obligated to repurchase practice assets, typically including intangible
assets, in the event the Company terminates the Service Agreement for cause.

In February 1999 and April 1999, respectively, the Company announced that it had
terminated its Service Agreements with Knoxville Hematology Oncology Associates,
PLLC, and Southeast Florida Hematology Oncology Group, P.A., two of the
Company's three underperforming net revenue model relationships. Since these
were not "for cause" terminations initiated by the Company, the affiliated
practices were not responsible for liquidated damages. In 1998 the Company
recorded an impairment charge related to the three Service Agreements in
accordance with Financial Accounting Standards Board Statement No. 121
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets To
Be Disposed Of" ("SFAS No. 121"). The structure of these contracts failed over
time to align the physician and Company incentives, producing deteriorating
returns and/or negative cash flows to the Company. The Company currently has no
plans to terminate the Service Agreement with the third physician group.

In the fourth quarter of 1999, the Company terminated its Service Agreement with
one single-physician practice in Florida. This termination was initiated on a
"for cause" basis and the Company is seeking recovery of liquidated damages.
During the same period, the Company began negotiations to terminate another
Service Agreement with a single-physician practice. Since this was not a "for
cause" termination initiated by the Company, the affiliated practice was not
responsible for liquidated damages. The Company experienced deteriorating
returns on this particular Service Agreement and concluded that continuing the
relationship was not economically feasible. At December 31, 1999, the Company
had recorded an impairment charge related to both Service Agreements and
associated assets. The Company terminated the second Service Agreement in April
of 2000.

In the fourth quarter of 2000, the Company began negotiating, in response to
certain contract disputes, to sell the assets of Oncology/Hematology Group of
South Florida, P.A. ("the OHG Group") to the existing physician group.
Concurrent with the sale of the assets, the Service Agreement was terminated,
and the parties signed a pharmacy management agreement for the Company to
provide turnkey pharmacy management services to the practice. The sale and
pharmacy management agreement were completed and effective February 1, 2001. At
December 31, 2000, the Company adjusted the Service Agreement and associated
assets to their net realizable value as measured by the termination and sale
agreement.

In the first quarter of 2001, the Company began negotiating the termination of a
three-physician practice in Florida. These negotiations resulted from several
contractual disagreements between the practice and the Company. Although the
termination is probable, the financial terms have not been agreed upon and
therefore the financial impact of any potential termination is not currently
estimable.

From time to time, the Company and its affiliated physicians disagree on the
interpretation of certain provisions of the Service Agreements. The Company has
one pending arbitration proceeding and recently received a ruling on another
case. The pending arbitration matter relates to a dispute over the methodology
utilized for certain financial calculations provided for in the Service
Agreement. The dispute is generally related to the timing of recording certain
adjustments that affect the calculation of the Company's service fee and
physician compensation. The Company believes that it has a contractual basis for
its position, but there can be no assurances that the Company will prevail in
arbitration. In such event, the Company's service fee and the physician's
compensation would be increased. The arbitration ruling received by the Company
addressed issues related to the economic feasibility of certain capital
expenditures. In this matter, the arbitrator ruled that outlays by the Company
for capital expenditures are subject to economic feasibility standards. However,
the Company was required to expand the office space for this particular
practice.


                                      -13-
<PAGE>   14

In January 2001, the Company received a notice of default from one of its
affiliated physician practices alleging a breach of contract for failure to
obtain or take adequate steps to develop certain ancillary services. The Company
has negotiated a forbearance agreement with the practice to prevent issuance of
a notice of termination while it works to develop the project. These activities
have included negotiations related to building construction and the purchase of
land and equipment. While the Company has made progress on the development of
these services, there can be no assurance that the Company will satisfy all
requirements of the project. These matters are currently subject to the
automatic stay provided for under Chapter 11 of the United States Bankruptcy
Code and will likely be resolved in the context of the bankruptcy proceedings.

During the second quarter of 2000, the Health Care Financing Administration
("HCFA"), which runs the Medicare program, announced its intent to adjust
certain pharmaceutical reimbursement mechanisms. HCFA targeted dozens of drugs,
principally those used for the treatment of cancer and AIDS. More specifically,
Medicare utilizes the average wholesale price ("AWP") of pharmaceuticals as the
benchmark for reimbursement. It is HCFA's stated position that some drug
companies are reporting artificially inflated AWPs to industry guides that are
used for government-reimbursement purposes resulting in overpayments by Medicare
and excess profits for physicians and other providers. HCFA's investigation into
inflated AWPs is ongoing.

On September 8, 2000, HCFA announced that the previously reported reductions in
reimbursement rates for oncology drugs would not be fully implemented pending a
comprehensive study to develop more accurate reimbursement methodologies for
cancer therapy services. However, HCFA did encourage its intermediaries to adopt
a new fee schedule for selected chemotherapy agents. To date, the Company has
not experienced any reduction in reimbursement levels related to these
chemotherapy agents. However, should any of these reimbursement changes occur,
it could have a material adverse effect on reimbursement for certain
pharmaceutical products utilized by the Company's affiliated physicians in the
practice management division. Consequently, the Company's management fee in its
practice management relationships could be materially reduced. Given the dynamic
nature of the proposed changes, the Company is currently not able to reasonably
estimate their financial impact.

On December 1, 2000, the Company received a delisting notification from the
Nasdaq Stock Market for failure to maintain a minimum bid price of $1.00 over
the last 30 consecutive trading days as required under the maintenance standards
of the Nasdaq National Market. The Company had 90 calendar days, or until
January 30, 2001, to regain compliance with this rule by obtaining a bid price
on its common stock of at least $1.00 for a minimum of 10 consecutive trading
days. On March 15, 2001, the Company's common stock was delisted from the Nasdaq
Stock Market. The decision was issued following a written appeal and hearing
before the Nasdaq Listing Qualifications Panel due to the non-compliance with
the listing standard that requires the Company's stock to maintain a minimum bid
price of $1.00 or more. The Company's common stock is currently traded on the
OTC Bulletin Board.

RESULTS OF OPERATIONS

Net revenue decreased 11% to $31.6 million for the quarter ended March 31, 2001,
compared to $35.6 million for the quarter ended March 31, 2000. Practice
management service fees were $18.0 million for the first quarter of 2001
compared to $20.0 million for the same period in 2000 for a 10% decrease. This
decrease is primarily due to the termination and sale of related assets of a
certain Service Agreement effective February 1, 2001. Net revenue on a
same-practice basis increased $.7 million, or 5%, due to growth in patient
volumes for both ancillary and non-ancillary services and pharmaceutical
utilization. Pharmaceutical sales to physicians increased $.4 million, or 4%,
from $10.8 million for the first three months of 2000 to $11.2 million in 2001.
This increase is due to increased drug utilization by the physicians serviced
under these agreements and the addition of one pharmacy management contract
effective February 1, 2001, but was tempered by the termination of
pharmaceutical sales agreements with two physician practices effective July 1,
2000. Additionally, net patient service revenues from IMPACT services decreased
$2.4 million, or 52%, from $4.6 million in the first quarter of 2000 to $2.2
million in the first quarter of 2001. This decrease in high dose chemotherapy
revenues continues to reflect the confusion and related pullback in breast
cancer related admissions resulting from the high dose chemotherapy/breast
cancer study results presented at ASCO in May 1999. In addition, the Company
experienced a decline in insurance approvals on high dose referrals obtained.
Since the release of the study results, the Company's high dose business has
slowed significantly, as evidenced by a 44% decrease in high dose procedures in
the first quarter of 2001 as compared to the first quarter of 2000.


                                      -14-
<PAGE>   15

Salaries and benefits costs decreased $.8 million, or 15%, from $5.5 million for
the first quarter of 2000 to $4.7 million in 2001. The decrease is primarily due
to the termination of certain Service Agreements, the closing of various IMPACT
Centers and a reduction in corporate staffing. Salaries and benefits expense as
a percentage of net revenue was 15% and 16% for the quarters ended March 31,
2001 and 2000, respectively.

Supplies and pharmaceuticals expense decreased $1.3 million, or 5%, from the
first quarter of 2000 to the first quarter of 2001. The decrease is primarily
related to the net effect of increased volume in pharmaceutical sales to
physicians and greater utilization of new chemotherapy agents with higher costs
in the practice management division, tempered by the termination of two
pharmaceutical sales agreements effective July 1, 2000 and a decrease in patient
volumes in the IMPACT Centers. Supplies and pharmaceuticals expense as a
percentage of net revenue was 72% and 68% for the quarters ended March 31, 2001
and 2000, respectively. The increase as a percentage of net revenue is due to
the lower margin associated with the increased pharmaceutical sales to
physicians as well as general price increases in pharmaceuticals used in the
practice management division.

General and administrative expenses increased $.3 million, or 20%, from $1.5
million in the first quarter of 2000 to $1.8 million in the first quarter of
2001. The increase was primarily due to the net effect of increased expenses for
professional services, principally legal and consulting fees related to the
Company's restructuring efforts and bankruptcy filings, and decreased
administrative expenses due to the closure of various IMPACT Centers and the
termination of certain Service Agreements.

Other operating expenses decreased $.7 million, or 28%, from $2.5 million in
2000 to $1.8 million in 2001. Other operating expenses consist primarily of
medical director fees, purchased services related to global case rate contracts,
rent expense, and other operational costs. The decrease is primarily due to the
closure of various IMPACT Centers and lower purchased services and physician
fees as a result of lower IMPACT and cancer research volumes as compared to the
first quarter of 2000.

For the three months ended March 31, 2001, all operating and general expenses
other than those related to pharmaceuticals and supplies were reduced by $1.2
million, or 12%, as compared with those for the three months ended March 31,
2000. These reductions reflect cost reduction and containment steps put in place
in the first quarter of 2000, the closure of IMPACT Centers, lower patient
volumes and the termination of certain Service Agreements, tempered by
increases for professional services, principally legal and accounting fees,
related to the Company's restructuring efforts and bankruptcy filing.

Depreciation and amortization decreased $.1 million from $1.1 million for the
first quarter of 2000 to $1.0 million for the first quarter of 2001. This
decrease is primarily due to the termination of certain Service Agreements.

EBITDA (earnings before interest, taxes, depreciation and amortization)
decreased $1.3 million, or 87%, to $.2 million for the quarter ended March 31,
2001 in comparison to $1.5 million for the quarter ended March 31, 2000. EBITDA
from the IMPACT services segment decreased $.9 million, or 113%, for the quarter
ended March 31, 2001 as compared to the quarter ended March 31, 2000. The
decrease is primarily due to a decrease in referral volumes and high dose
chemotherapy procedures. In addition, during the second quarter of 2000, the
Company received notices of termination of pharmaceutical sales agreements from
two physician practices effective July 1, 2000. EBITDA from the physician
practice management division decreased $.8 million, or 31%, primarily due to
increases in pharmaceutical and supply costs, increases in contractual
adjustments, and the termination and modification of certain Service Agreements.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2001, the Company had a working capital deficit of ($10.7) million
with current assets of $39.5 million and current liabilities of $50.2 million.
Cash and cash equivalents represented $5.6 million of the Company's current
assets. Negative working capital is primarily attributable to the current
balance sheet classification of amounts due under the Company's Credit Facility,
as further described below.

Cash provided by operating activities was $3.7 million in the first quarter of
2001 compared to cash used by operating activities of $.5 million for the same
period in 2000. This increase is largely attributable to a reduction in amounts
due from affiliated physician groups resulting from the sale proceeds and
recovery of working capital associated with the asset sale and concurrent
termination of a Service Agreement in the first quarter of 2001.


                                      -15-
<PAGE>   16

Cash used in investing activities was $20,000 and $.2 million for the quarters
ended March 31, 2001 and 2000, respectively. The decrease is primarily
attributable to a reduction in capital expenditures in the first quarter of 2001
as compared to the first quarter of 2000.

Cash used in financing activities was $5.4 million for the first quarter of 2001
and $.5 million for the same period in 2000. The increase in cash used in
financing activities is primarily attributable to additional payments on notes
payable and distributions to joint venture partners in the first quarter of 2001
as compared to the first quarter of 2000.

The terms of the Company's original lending agreement provided for a $42.0
million Credit Facility, to mature in June 2002, to fund the Company's
acquisition and working capital needs. The Credit Facility, originally comprised
of a $35.0 million Term Loan Facility and a $7.0 million Revolving Credit
Facility, is collateralized by the assets of the Company and the common stock of
its subsidiaries. The Credit Facility bears interest at a variable rate equal to
LIBOR plus an original spread between 1.375% and 2.5%, depending upon borrowing
levels. The Company was also obligated to a commitment fee of .25% to .5% of the
unused portion of the Revolving Credit Facility. At March 31, 2001, $29.2
million aggregate principal was outstanding under the Credit Facility with a
current interest rate of approximately 10%. The Company is subject to certain
affirmative and negative covenants which, among other things, originally
required that the Company maintain certain financial ratios, including minimum
fixed charge coverage, funded debt to EBITDA and minimum net worth. This
original lending agreement was subsequently and significantly amended in
November 1999, and March 2000, as described below.

In November 1999, the Company and its lenders amended certain terms of the
Credit Facility. As a result of this amendment, the Revolving Credit Facility
was reduced from $7.0 million to $6.0 million and the interest rate was adjusted
to LIBOR plus a spread of 3.25%. The Company's obligation for commitment fees
was adjusted from a maximum of .5% to .625% of the unused portion of the
Revolving Credit Facility. Repayment of the January 1, 2000 quarterly
installment was accelerated. In addition, certain affirmative and negative
covenants were added or modified, including minimum EBITDA requirements for the
fourth quarter of 1999 and the first quarter of 2000. Compliance with certain
covenants was also waived for the quarters ending September 30, 1999 and
December 31, 1999.

On March 30, 2000, the Company and its lenders again amended various terms of
the Credit Facility. As a result of this amendment, certain affirmative and
negative covenants were added (including minimum quarterly cash flow
requirements through March 2001), and certain other existing covenants were
modified. Additionally, certain principal repayment terms were modified and
certain future and current compliance with specific covenants was waived.
Finally, the maturity date of the Credit Facility was accelerated to June 2001.

During the third quarter of 2000, the Company did not meet certain financial
covenants of the Credit Facility, including those related to minimum cash flow
requirements. This occurred primarily due to further erosion in high dose
chemotherapy volumes. As a result of this event of default, the Company's
lenders adjusted the interest rates on the outstanding principal to the default
rate of prime plus 3% (12.5% at the time of default) and terminated any
obligation to advance additional loans or issue letters of credit. As a result
of this termination, the Company has not experienced an impact on operating cash
flow. Under the terms of the Credit Facility, additional remedies available to
the lenders (as long as an event of default exists and has not been cured)
include acceleration of all principal and accrued interest outstanding, the
right to foreclose on related security interests in the assets of the Company
and stock of its subsidiaries, and the right of setoff against any monies or
deposits that the lenders have in their possession.

Effective December 29, 2000, the Company executed a forbearance agreement with
its lenders. Under the terms of the forbearance agreement, the lenders agreed to
forbear from enforcing their rights or remedies pursuant to the Credit Facility
documents until the earlier of (i) March 30, 2001 (as amended), or (ii) certain
defined events of default. During this period, the interest rate was adjusted to
prime plus 2%. The forbearance agreement also required that the Company retain a
financial advisor to assist in the development of a restructuring plan and
perform certain valuation analyses.

With the Company's March 29, 2001 Chapter 11 bankruptcy filing, any potential
future revisions to the Credit Facility are subject to Chapter 11 reorganization
processes (described elsewhere in conjunction with discussion of the filing).
There can be no assurances as to the form of such revisions (if any) or their
impact on the Company's financial position or continued business viability.
Additionally, as of the date of the bankruptcy filing, the Company was in
technical default under the terms of the Credit Facility. Consistent with all of
the above described factors, the Company has


                                      -16-
<PAGE>   17

classified all amounts due under the Company's Credit Facility as current. The
Company is currently operating under an interim cash collateral order which
expires June 29, 2001. Under the terms of this order, the Company is allowed
operate in the normal course of business within the parameters of an approved
cash budget. A hearing on the permanent cash collateral order is set for June
29, 2001.

The Company enters into LIBOR-based interest rate swap agreements ("Swap
Agreement") with the Company's lender as required by the terms of the Credit
Facility. In June 2000, the Company entered into a new Swap Agreement effective
July 1, 2000. Amounts hedged under this most recent Swap Agreement accrue
interest at the difference between 7.24% and the ninety-day LIBOR rate and are
settled quarterly. The Company has hedged $17.0 million under the terms of the
Swap Agreement. The Swap Agreement matures on July 1, 2001. The Company has
reviewed the applicability and implications of SFAS No. 133 for the Company's
financial statements. The sole derivative instrument to which the accounting
prescribed by the Statement is applicable is the Swap Agreement described above.
The Company recorded a cumulative adjustment charge in implementing SFAS No. 133
in the first quarter of 2001 of approximately $100,000 in recognition of the
reported fair value of the Swap Agreement.

Long-term unsecured amortizing promissory notes bearing interest at rates from
4% to 9% were issued as partial consideration for the practice management
affiliations consummated in 1996. Principal and interest under the long-term
notes may, at the election of the holders, be paid in shares of common stock of
the Company based upon conversion rates ranging from $11.50 to $16.97. The
unpaid principal amount of the long-term notes was $.8 million at March 31,
2001.

The Company is committed to future minimum lease payments under operating leases
of approximately $14.5 million for administrative and operational facilities.
Such commitments may be reduced as a result of the rejection of certain real
property leases in the context of the bankruptcy proceeding.

HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996

The federal Health Insurance Portability and Accountability Act of 1996
("HIPAA"), required that standards be developed for the privacy and protection
of individually identifiable health information. As directed by HIPAA, the
federal government proposed detailed regulations to protect individual health
information that is maintained or transmitted electronically from improper
access, alteration or loss. The transactions and code sets standards and privacy
standards were finalized effective October 2000 and April 2001, respectively.
The Company will be required to comply with the new standards 24 months after
their respective effective dates of adoption. The Company is currently assessing
preliminary HIPAA issues, with detailed compliance and integration measures
taking place in 2002 and 2003.

Because only certain elements of the HIPAA regulations have been finalized, the
Company has not been able to determine the impact of the new standards on its
financial position or results. The Company does expect to incur costs to
evaluate and implement the rules, and will be actively evaluating such costs and
their impact on its financial position and operations.

FORWARD-LOOKING STATEMENTS

With the exception of historical information, the matters discussed in this
filing are forward-looking statements that involve a number of risks and
uncertainties. The actual future results of the Company could differ
significantly from those statements. The Private Securities Litigation Reform
Act of 1995 provides a safe harbor for forward-looking statements. Factors that
could cause or contribute to such differences include, but are not limited to:
(i) a continued decline in high dose chemotherapy referrals due to the high dose
chemotherapy breast cancer results; (ii) difficulty in transitioning operating
responsibilities to new members of senior management; (iii) continued decline in
margins for cancer drugs; (iv) reductions in third-party reimbursement from
managed care plans and private insurance resulting from stricter utilization and
reimbursement standards; (v) the inability of the Company to recover all or a
portion of the carrying amounts of the cost of service agreements, resulting in
an additional charge to earnings; (vi) the Company's dependence upon its
affiliations with physician practices, given that there can be no assurance that
the practices will remain successful or that key members of a particular
practice will remain actively employed; (vii) changes in government regulations;
(viii) risk of professional malpractice and other similar claims inherent in the
provision of medical services; (ix) the Company's dependence on the ability and
experience of its executive officers; (x) the Company's inability to raise
additional capital or refinance existing debt; (xi) uncertainty pertaining to
the outcome of the


                                      -17-
<PAGE>   18

Chapter 11 filing by the Company; and (xii) issues related to the implementation
of the Company's new business plan. The Company cautions that any
forward-looking statement reflects only the beliefs of the Company or its
management at the time the statement is made. The Company undertakes no
obligation to update any forward-looking statement to reflect events or
circumstances after the date on which the statement was made.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's primary market risk exposure is to changes in interest rates
obtainable on its Credit Facility. The Company's interest rate risk objective is
to limit the impact of interest rate fluctuations on earnings and cash flows and
to lower its overall borrowing costs by selecting favorable interest periods for
traunches of the Credit Facility based on the current market interest rates. The
Company has the option of fixing current interest rates for interest periods of
1, 2, 3 or 6 months.

The Company is also a party to a LIBOR based interest rate swap agreement ("Swap
Agreement") with an affiliate of one of the Company's lenders as required by the
terms of the Credit Facility. Amounts hedged under the Swap Agreement accrue
interest at the difference between 7.24% and the ninety-day LIBOR rate and are
settled quarterly. As of March 31, 2001, approximately 58% of the Company's
outstanding principal balance under the Credit Facility was hedged under the
Swap Agreement. The Swap Agreement matures in July 2001. The Company does not
enter into derivative or interest rate transactions for speculative purposes.

At March 31, 2001, $29.2 million aggregate principal was outstanding under the
Credit Facility with an interest rate of approximately 10%. The Company does not
have any other material market-sensitive financial instruments.


                                      -18-
<PAGE>   19



PART II - OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

         Not applicable.

ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

         Not applicable.

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

         Not applicable.

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

ITEM 5.           OTHER INFORMATION

         Not applicable.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

                  (A)      EXHIBITS

                  10(y)    Termination Agreement and Release between Registrant
                           and Patrick J. McDonough dated January 15, 2001

                  (B)      REPORTS ON FORM 8-K

                           A report on Form 8-K disclosing the Company's
                           bankruptcy filing under Item 3 was filed on April 9,
                           2001.


                                      -19-
<PAGE>   20



                                   SIGNATURES

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

                                             RESPONSE ONCOLOGY, INC.


                                             By:  /s/ Anthony M. LaMacchia
                                                  ------------------------------
                                                  Anthony M. LaMacchia
                                                  President and Chief Executive
                                                  Officer

                                                  Date:  May 21, 2001


                                             By:  /s/ Peter A. Stark
                                                  ------------------------------
                                                  Peter A. Stark
                                                  Executive Vice President and
                                                  Chief Financial Officer

                                                  Date:  May 21, 2001


                                      -20-