SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                 FORM 10-Q/A
                              (Amendment No. 1)

        {X}  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                       SECURITIES EXCHANGE ACT OF 1934


                 For the quarterly period ended June 30, 2002
                                     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 0-15846

                           First Health Group Corp.
                     (formerly HealthCare COMPARE Corp.)
            (Exact name of registrant as specified in its charter)

             Delaware                                36-3307583
 -------------------------------         ------------------------------------
 (State or other jurisdiction of         (IRS Employer Identification Number)
  incorporation or organization)

              3200 Highland Avenue, Downers Grove, Illinois 60515
              ---------------------------------------------------
              (Address of principal executive offices, Zip Code)

                                (630) 737-7900
               ------------------------------------------------
               (Registrant's phone 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.

 The number of shares of Common Stock, par value $.01 per share, outstanding
 on August 7, 2002, was 101,299,204.

<PAGE>


   Explanatory Note
   ----------------
   First Health Group  Corp. is filing this  Quarterly Report on Form  10-Q/A
   in order  (i)  to correct  an immaterial,  computational  error  contained
   in  its presentation of cash flows from operating activities  for  the six
   months ended June 30, 2002,  as contained in its Consolidated Statement of
   Cash Flows for  the six months  ended June  30, 2002,  which  results in a
   decrease by $200,000  (from $131,788,000 to $131,588,000)  of  the  amount
   presented in the subtotal "net cash provided  by operating activities" for
   the six months ended June 30, 2002, and (ii) to  correct the corresponding
   sentence contained in "Liquidity and Capital Resources" under Management's
   Discussion and Analysis  of Financial Condition and Results  of Operations
   to  decrease  by $200,000  (from  $131,788,000 to $131,588,000) the amount
   of net cash provided by operating activities for the six months ended June
   30, 2002.

   This  amendment  has  no  effect  on  net  income,  total  assets,   total
   liabilities or  total equity  as previously  reported.   Pursuant to  Rule
   12b-15 under  the Securities Exchange  Act of 1934,  the complete text  of
   Items 1 and 2 of Form 10-Q as revised is included in this filing.


<PAGE>

 PART 1.  Financial Information

 Item 1.  Financial Statements

 First Health Group Corp. and Subsidiaries
 CONSOLIDATED BALANCE SHEETS
 (in thousands) (Unaudited)
 ----------------------------------------------------------------------------

 ASSETS                                       June 30, 2002 December 31, 2001
                                                ----------      ----------
  Current Assets:
   Cash and cash equivalents ............      $    31,611     $    14,001
   Short-term investments ...............            2,130           2,381
   Accounts receivable, less allowances
      for doubtful accounts of $16,220
      and $ 14,327 respectively..........           75,689          78,793
   Deferred income taxes ................           27,540          27,429
   Other current assets .................           15,996          20,757
   Assets held for sale .................               --           6,958
                                                 ---------       ---------
   Total current assets .................          152,966         150,319

 Long-Term Investments:

   Marketable securities ................           67,943          65,766
   Other ................................           56,081          55,205
                                                 ---------       ---------
                                                   124,024         120,971
                                                 ---------       ---------
 Property and Equipment:
   Land, buildings and improvements .....           94,247          87,468
   Computer equipment and software ......          193,480         180,152
   Office furniture and equipment .......           24,449          20,282
                                                 ---------       ---------
                                                   312,176         287,902
   Less accumulated depreciation and
      amortization.......................         (127,832)       (105,393)
                                                 ---------       ---------
   Net property and equipment ...........          184,344         182,509
                                                 ---------       ---------
 Goodwill, less accumulated amortization
   of $ 17,341 and $ 17,341, respectively          280,105         255,855

 Intangible assets, less accumulated
   amortization of $ 2,447 and $ 955,
   respectively .........................           47,025          42,859
 Reinsurance recoverable.................           25,277          26,140
 Other Assets............................            4,795           2,081
                                                 ---------       ---------
                                                $  818,536      $  780,734
                                                 =========       =========

                See Notes to Consolidated Financial Statements
<PAGE>

 First Health Group Corp. and Subsidiaries
 CONSOLIDATED BALANCE SHEETS
 (in thousands) (Unaudited)
 ----------------------------------------------------------------------------

 LIABILITIES AND STOCKHOLDERS' EQUITY

                                              June 30, 2002 December 31, 2001
                                                 ---------       ---------
 Current Liabilities:

   Accounts payable .....................       $   43,225       $  33,257
   Accrued expenses .....................           65,102          66,384
   Current maturities of long-term debt..               --         197,500
   Claims reserves ......................           13,745          12,308
   Income taxes payable .................           13,574              --
                                                 ---------       ---------
   Total current liabilities ............          135,646         309,449


 Long-Term Debt..........................          130,000              --
 Claims Reserves - Non-Current...........           25,277          26,140
 Deferred Taxes..........................           84,579          84,828
 Other Non-Current Liabilities...........           21,191          21,018
                                                 ---------       ---------
   Total liabilities ....................          396,693         441,435
                                                 ---------       ---------
 Commitments and Contingencies...........               --              --

 Stockholders' Equity:

   Common stock .........................            1,334           1,313
   Additional paid-in capital ...........          289,768         255,489
   Retained earnings ....................          449,807         386,309
   Stock option loan receivable .........           (1,688)         (1,776)
   Accumulated comprehensive gain (loss).             (302)            161
   Treasury stock, at cost ..............         (317,076)       (302,197)
                                                 ---------       ---------
   Total stockholders' equity ...........          421,843         339,299
                                                 ---------       ---------
                                                $  818,536      $  780,734
                                                 =========       =========

                See Notes to Consolidated Financial Statements
<PAGE>

 First Health Group Corp. and Subsidiaries
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands) (Unaudited)
 ----------------------------------------------------------------------------

                                                Three Months Ended June 30,
                                                ---------------------------
                                                   2002            2001
                                                 ---------       ---------
 Revenues............................           $  175,923      $  138,949
                                                 ---------       ---------
 Operating expenses:

   Cost of services .................               75,077          60,438
   Selling and marketing ............               17,755          13,233
   General and administrative .......               11,956           8,622
   Healthcare benefits ..............                3,903           3,396
   Depreciation and amortization ....               13,356          11,285
                                                 ---------       ---------
                                                   122,047          96,974
                                                 ---------       ---------
 Income from operations..............               53,876          41,975

 Other (income) expense:

   Interest expense .................                1,503           1,119
   Interest income ..................               (1,544)         (1,714)
                                                 ---------       ---------
 Income before income taxes..........               53,917          42,570

 Income taxes........................              (21,433)        (17,241)
                                                 ---------       ---------
 Net income                                     $   32,484      $   25,329
                                                 =========       =========
 Weighted average shares outstanding - basic       101,217          97,765
                                                 =========       =========
 Net income per common share - basic.           $      .32      $      .26
                                                 =========       =========
 Weighted average shares outstanding - diluted     104,735         102,396
                                                 =========       =========
 Net income per common share - diluted          $      .31      $      .25
                                                 =========       =========

                See Notes to Consolidated Financial Statements
<PAGE>

 First Health Group Corp. and Subsidiaries
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands) (Unaudited)
 ----------------------------------------------------------------------------

                                                 Six Months Ended June 30,
                                                 -------------------------
                                                   2002            2001
                                                 ---------       ---------

 Revenues............................           $  345,284      $  275,933
                                                 ---------       ---------
 Operating expenses:

   Cost of services .................              148,049         120,175
   Selling and marketing ............               34,833          26,177
   General and administrative .......               23,349          16,992
   Healthcare benefits ..............                7,684           7,099
   Depreciation and amortization ....               26,328          21,887
                                                 ---------       ---------
                                                   240,243         192,330
                                                 ---------       ---------
 Income from operations..............              105,041          83,603

 Other (income) expense:

   Interest expense .................                2,819           3,590
   Interest income ..................               (3,172)         (3,565)
                                                 ---------       ---------
 Income before income taxes..........              105,394          83,578

 Income taxes........................              (41,896)        (33,849)
                                                 ---------       ---------
 Net income..........................           $   63,498      $   49,729
                                                 =========       =========

 Weighted average shares outstanding - basic       100,759          97,270
                                                 =========       =========
 Net income per common share - basic            $      .63      $      .51
                                                 =========       =========
 Weighted average shares outstanding - diluted     104,584         102,034
                                                 =========       =========
 Net income per common share - diluted          $      .61      $      .49
                                                 =========       =========

                See Notes to Consolidated Financial Statements
<PAGE>

 First Health Group Corp. and Subsidiaries
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (in thousands) (Unaudited)
 ----------------------------------------------------------------------------
                                                Three Months Ended June 30,
                                                ---------------------------
                                                   2002            2001
                                                 ---------       ---------
 Net income..................................   $   32,484      $   25,329
                                                 ---------       ---------
 Unrealized gains (losses) on securities,
   before tax................................         (179)            79
 Income tax (expense) benefit related to
   items of other comprehensive income.......           66            (45)
                                                 ---------       ---------
 Other comprehensive income (loss)...........         (113)            34
                                                 ---------       ---------
 Comprehensive income........................   $   32,371        $25,363
                                                 =========       =========



                                                 Six Months Ended June 30,
                                                 -------------------------
                                                   2002            2001
                                                 ---------       ---------
 Net income..................................   $   63,498      $   49,729
                                                 ---------       ---------
 Unrealized gains (losses) on securities,
   before tax................................         (712)          1,673
 Income tax (expense) benefit related to
   items of other comprehensive income.......          249            (630)
                                                 ---------       ---------
 Other comprehensive income (loss)...........         (463)          1,043
                                                 ---------       ---------
 Comprehensive income........................   $   63,035      $   50,772
                                                 =========       =========

                See Notes to Consolidated Financial Statements
<PAGE>


 First Health Group Corp. and Subsidiaries
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands) (Unaudited)
 ----------------------------------------------------------------------------
                                                 Six Months Ended June 30,
                                                 -------------------------
                                                   2002            2001
                                                 ---------       ---------
 Cash flows from operating activities:
   Cash received from customers ............    $  350,126      $  265,706
   Cash paid to suppliers and employees ....      (202,865)       (163,697)
   Healthcare benefits paid ................        (7,418)         (8,545)
   Interest income received ................         1,684           2,613
   Interest expense paid ...................        (2,500)         (3,848)
   Income taxes paid, net ..................        (7,439)        (15,976)
                                                 ---------       ---------
   Net cash provided by operating activities       131,588          76,253
                                                 ---------       ---------
 Cash flows from investing activities:
   Purchases of investments ................       (30,355)        (22,711)
   Sales of investments ....................        27,096          12,211
   Acquisition, net of cash acquired .......       (24,227)             --
   Assets held for sale ....................           923              --
   Purchase of property and equipment ......       (27,001)        (37,107)
                                                 ---------       ---------
   Net cash used in investing activities ...       (53,564)        (47,607)
                                                 ---------       ---------
 Cash flows from financing activities:
   Purchase of treasury stock ..............       (14,813)             --
   Issuances of long-term debt .............       150,000              --
   Repayment of long-term debt .............      (217,500)        (65,000)
   Stock option loans to employees .........        (2,272)         (1,500)
   Stock option loan repayments ............         2,360             756
   Proceeds from issuance of common stock ..        21,436          25,649
   Sales of put options on common stock ....           375              --
                                                 ---------       ---------
   Net cash used in financing activities ...       (60,414)        (40,095)
                                                 ---------       ---------
 Net increase (decrease) in cash and
   cash equivalents.........................        17,610         (11,449)

 Cash and cash equivalents,
   beginning of period......................        14,001          23,538
                                                 ---------       ---------
 Cash and cash equivalents, end of period...    $   31,611      $   12,089
                                                 =========       =========

                See Notes to Consolidated Financial Statements

<PAGE>


 First Health Group Corp. and Subsidiaries
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands) (Unaudited)
 ----------------------------------------------------------------------------
                                                 Six Months Ended June 30,
                                                 --------------------------
                                                   2002            2001
                                                 ---------       ---------
 Reconciliation of Net Income to Net Cash
   Provided by Operating Activities:

 Net Income..................................    $  63,498        $ 49,729
                                                 ---------       ---------
 Adjustments to Reconcile Net Income to Net
   Cash Provided by Operating Activities Net
   of Effects of Acquisition:

     Depreciation and amortization ..........       26,328          21,887
     Change in provision for uncollectible
       receivables ..........................        1,893               2
     Tax benefit from stock options exercised       12,423          10,935
     Deferred income taxes ..................         (111)          5,649
     Other, net .............................          303          (1,024)

     Changes in Assets and Liabilities:
     Accounts receivable ....................        1,790         (11,320)
     Other current assets ...................        4,788           2,436
     Reinsurance recoverable ................          863           1,023
     Accounts payable and accrued expenses...        8,206          (1,903)
     Claims reserves ........................          574          (1,155)
     Income taxes payable ...................       13,574              --
     Non-current assets and liabilities .....       (2,541)             (6)
                                                 ---------       ---------
   Total adjustments ........................       68,090          26,524
                                                 ---------       ---------
   Net cash provided by operating activities    $  131,588      $   76,253
                                                 =========       =========


                See Notes to Consolidated Financial Statements

<PAGE>

 First Health Group Corp. and Subsidiaries
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)

 1.  The unaudited  financial statements  herein have  been  prepared by  the
     Company pursuant  to the  rules and  regulations of  the Securities  and
     Exchange  Commission.  The  accompanying  interim  financial  statements
     have  been prepared  under the  presumption that  users  of the  interim
     financial information  have either read  or have  access to the  audited
     financial  statements for  the latest  fiscal  year ended  December  31,
     2001.    Accordingly, footnote  disclosures  which  would  substantially
     duplicate the  disclosures contained  in the December  31, 2001  audited
     financial  statements have  been omitted  from these  interim  financial
     statements.   Certain  information  and  footnote  disclosures  normally
     included in financial statements prepared in accordance  with accounting
     principles generally accepted in the United States  of America have been
     condensed or omitted pursuant  to such rules and regulations.   Although
     the  Company believes  that the  disclosures are  adequate  to make  the
     information  presented  not  misleading,  it  is  suggested  that  these
     interim financial statements be  read in conjunction with  the financial
     statements  and the  notes  thereto  included in  the  Company's  latest
     Annual Report on Form 10-K.

 2.  On August 16, 2001, the Company completed the acquisition  of all of the
     outstanding shares of  capital stock of CCN  Managed Care, Inc.  ("CCN")
     and  Preferred  Works, Inc.  ("PW"  and  together  with  CCN,  the  "CCN
     Companies")  from  HCA-The Healthcare  Company  and  VH  Holdings,  Inc.
     (collectively, the "Sellers")  for a purchase price  of $195 million  in
     cash, plus  a working  capital adjustment which  increased the  purchase
     price to $198 million.  The allocation of the  purchase price is subject
     to  completion of  the  Company's  restructuring and  integration  plan.
     Changes to the preliminary purchase price allocation  resulting from the
     finalization of  these items  may be material.   The  allocation of  the
     purchase price  to the  fair value  of assets  acquired and  liabilities
     assumed is as follows:

     (in thousands)
     Purchase price                                     $195,000
     Working capital adjustment                            3,514
     Transaction costs                                     2,000
                                                         -------
     Total estimated purchase price                     $200,514
                                                         -------

     Purchase price has been allocated as follows:
     Fair value of assets acquired                      $ 33,611
     Assets held for sale                                  9,965
     Goodwill                                            177,350
     Intangible assets acquired                           43,814
     Liabilities assumed                                 (23,113)
     Liability for restructuring and integration costs   (41,113)
                                                         -------
                                                        $200,514
                                                         -------

     In conjunction  with the acquisition,  the Company  recorded as part  of
     the  purchase  price a  $41.1  million  reserve  for  restructuring  and
     integration  costs as  part  of  an overall  plan  to  reduce  operating
     expenses and  integrate the  business of  the acquired  companies.   The
     specific actions included in  the restructuring plan are expected  to be
     substantially  complete  by  December  31,  2002.    Components  of  the
     purchase reserve are as follows:

                                               Accrual     2002      Accrual
     (in thousands)                  Total     Balance   Balance     Amount
     --------------                 Charges    1/01/02   Incurred    6/30/02
                                    -------    -------   --------    -------
     Severance and related          $13,712    $ 6,031   $(2,766)    $ 3,265
     benefits
     Facilities integration          10,370      9,528      (693)      8,835
     Contract losses                 10,000      9,750      (267)      9,483
     Other reserves                   7,031      7,028       (21)      7,007
                                    -------    -------   --------    -------
     Total                          $41,113    $32,337   $(3,747)    $28,590
                                    =======    =======   ========    =======

     The restructuring plan includes the reduction of  employees from various
     offices within  the United States.   The Company  expects to reduce  the
     number of  CCN employees  from approximately 1,300  at the  time of  the
     acquisition  to approximately  650 at  December 31,  2002.   There  were
     approximately 700 such employees as of June 30, 2002.   During the first
     six  months of  2002,  approximately $2.8  million  was charged  to  the
     purchase reserve for severance  and related employee benefits  with $1.6
     million of such costs charged during the second quarter.

     Facilities integration costs represent the costs the  Company expects to
     incur  to  integrate  CCN's  facilities  into  the   Company's  existing
     operations.  The  majority of the facilities  integration costs will  be
     incurred to consolidate CCN's former corporate headquarters  and various
     sales offices throughout the United States.   Approximately $0.7 million
     of costs for facilities integration was charged  to the purchase reserve
     in the first  six months of  2002 with $0.4  million charged during  the
     second quarter.

     Contract losses relate to the anticipated net loss to  be incurred on an
     assumed contract  to provide certain  screening services to  individuals
     who have agreed to be bound by a proposed settlement  in a legal matter.
     CCN signed a contract in  March 2000 to provide these services  for four
     years and the Company  has agreed to have its network  providers provide
     these services as part of the acquisition of CCN.  The Company estimates
     as many as 250,000 covered persons may seek such screening  services and
     the Company will incur a significant administrative burden in completing
     claims  to the  satisfaction  of the  contractual  terms.  Approximately
     $0.3 million of  costs under this contract was  charged to  the purchase
     reserve during  the six months  ended June  30, 2002  with $0.1  million
     charged during the second quarter.

     Other reserves  represent various  operational and  tax liabilities  the
     Company expects to  incur to fully  integrate the Company's  operations.
     Approximately $21,000  was charged to  the purchase  reserve in the  six
     months ended June 30, 2002, none in the second quarter.

     The  Company  reviewed   the  various  businesses  comprising   the  CCN
     Companies and determined  to hold the PW  and the Resource  Opportunity,
     Inc. ("ROI") businesses of CCN for sale.  The sale  of ROI was completed
     on December 28,  2001 for a sale  price of $9 million.   The sale of  PW
     was completed on June  28, 2002 for a sale  price of $4.1 million.   The
     Company  adjusted  the goodwill  on  the  CCN  acquisition  from  $171.3
     million to $177.3 million as a result of the completion of these sales.

     The following unaudited  pro forma information  reflects the results  of
     the  Company's operations  as if  the acquisition  had  occurred at  the
     beginning  of 2001  adjusted for  (i) the  effect  of recurring  charges
     related to  the acquisition,  primarily the  amortization of  intangible
     assets over estimated  useful lives of 15  or 20 years, as  appropriate,
     and  the recording  of interest  expense on  borrowings  to finance  the
     acquisition;  (ii) the  reduction of  depreciation  expense due  to  the
     write-down to fair value of fixed assets,  the reduction of amortization
     expense related to the  CCN Companies' preexisting goodwill at  the date
     of acquisition and the elimination of compensation  and benefit expenses
     for certain executives  of the CCN Companies  who were terminated at  or
     immediately subsequent to the acquisition and will  not be replaced; and
     (iii) the removal of revenues and related cost  of services and expenses
     for acquired businesses that are held for sale.

                                             Three Months     Six Months
                                             Ended June 30,  Ended June 30,
                                                 2001            2001
      (In thousands except per share data)   --------------  --------------

      Pro forma:
        Revenue                                 $163,834        $325,703
        Net income                                24,892          49,394
        Net income per common share - basic          .25             .51
        Net income per common share - diluted        .24             .48

     These pro  forma results  have been  prepared  for comparative  purposes
     only and  do not  purport to  be indicative  of  what operating  results
     would  have  been had  the  acquisition  actually  taken  place  at  the
     beginning of 2001,  nor do they purport  to represent results of  future
     operations of the merged companies.

     On May  1, 2002,  the Company  completed the  acquisition of  HealthCare
     Value Management ("HCVM") for an initial purchase  price of $24 million.
     The Company may pay an additional $16 million over  the next three years
     based upon  certain HCVM  performance measures.   HCVM  is  a small  New
     England  based PPO  company,  headquartered  in suburban  Boston.    The
     acquisition was accounted  for by the purchase  method of accounting  in
     accordance with  Statement of  Financial Accounting  Standards No.  141.
     The  acquisition  was  financed  from  borrowings  under  the  Company's
     existing line of credit.  The results of  operations and assets acquired
     are immaterial to the consolidated financial statements  of the Company.
     Consequently, no pro forma financial results are included herein.

 3.  On April 23, 2002, the Company obtained a  $400 million revolving credit
     facility to replace its  previous $350 million credit facility  that was
     due to expire on  June 30, 2002.  This  new credit facility has  a five-
     year  term and  provides  for interest  at  a  Euro dollar  rate  (which
     approximates LIBOR)  plus a  variable margin which  fluctuates based  on
     the Company's debt  rating.  The facility  also has a corresponding  fee
     calculated  at  a  variable  rate  of  the  available  facility  balance
     depending on the debt rating of the Company.  The  interest rate at June
     30, 2002 was approximately  5% per annum. No principal payments  are due
     on this facility until its maturity.

 4.  The Company's investments in marketable securities which  are classified
     as available  for sale  had a  net unrealized  loss in  market value  of
     $463,000, net of deferred  income taxes, for the six month  period ended
     June 30, 2002.   The net unrealized loss  as of June 30,  2002, included
     as a component  of stockholders' equity, was  $302,000, net of  deferred
     income taxes.   The Company  has six separate  investments in a  limited
     partnership  which  invests  in  equipment  which  is  leased  to  third
     parties.   The total investment  as of  June 30,  2002 and December  31,
     2001  was  $47.9  million  and  $47.1  million,   respectively,  and  is
     accounted for  using the  equity method.    The Company's  proportionate
     share of the partnership's income was $1.5 million  and $1.4 million for
     the  six months  ended June  30, 2002  and  2001, respectively,  and  is
     included  in  interest  income.    Approximately  90   percent  of  this
     partnership  is owned  by parties  related to  a  former member  of  the
     Company's Board  of Directors.   All transactions are  made on an  arms-
     length basis at equal terms between all limited partners.

 5.  The Company's Board  of Directors has approved  the repurchase of up  to
     15 million shares  of the Company's outstanding  common stock under  its
     current  authorization.   Purchases  may  be made  from  time  to  time,
     depending on market conditions  and other relevant factors.   During the
     quarter ended June  30, 2002 the Company  repurchased 525,000 shares  on
     the open market for approximately  $14.8 million.  As of June  30, 2002,
     approximately 4.7 million  shares remain available for  repurchase under
     the  Company's current  repurchase authorization.   In  connection  with
     this stock repurchase plan, during the quarter ended  June 30, 2002, the
     Company sold put  options which obligated the  Company, at the  election
     of the  option holders,  to repurchase up  to 500,000  shares of  common
     stock at a price of $26.45.  No such put options  were outstanding as of
     June 30, 2001.

 6.  Weighted average shares  outstanding increased for diluted  earnings per
     share  by  3,518,000  and  3,825,000  and  by  4,631,000  and  4,764,000
     respectively, for the three and six months ended June  30, 2002 and 2001
     due to the effect of stock options outstanding.   Diluted net income per
     share was  .01 and  .02 less than  basic net  income per  share for  the
     three and  six months ended  June 30, 2002  due to  the effect of  stock
     options outstanding.  Diluted net income per share was  .01 and .02 less
     than basic net income per share for the three and  six months ended June
     30, 2001 due to the effect of stock options outstanding.

 7.  Effective January 1,  2001, the Company  adopted Statement of  Financial
     Accounting  Standards  No.   133,  ("SFAS  No.  133),   "Accounting  For
     Derivative Instruments and Hedging  Activities".  SFAS No.  133 requires
     that  all derivative  instruments  be  recognized as  either  assets  or
     liabilities in  the balance  sheet and  that  derivative instruments  be
     measured at  fair value.   This statement also  requires changes in  the
     fair  value  of derivatives  to  be  recorded  each  period  in  current
     earnings or comprehensive  income depending on the  intended use of  the
     derivative.  There  was no material effect  on the Company's results  of
     operations or  financial position as  a result of  the adoption of  SFAS
     No. 133.

     In July 2001, the  Financial Accounting Standards Board  ("FASB") issued
     Statement  of  Financial Accounting  Standards  No.  141  ("SFAS  141"),
     "Business  Combinations."   SFAS 141  requires  the purchase  method  of
     accounting for business combinations  initiated after June 30,  2001 and
     eliminates the  pooling-of-interests method.   In  July  2001, the  FASB
     issued  Statement  of Financial  Accounting  Standards  No.  142  ("SFAS
     142"),  "Goodwill  and  Other  Intangible  Assets",  which  the  Company
     adopted  effective January  1, 2002.   SFAS  142  requires, among  other
     things, the discontinuance  of goodwill amortization effective  December
     31,  2001.   In  addition,  the standard  includes  provisions  for  the
     reassessment of the useful lives of existing  recognized intangibles and
     the  identification  of  reporting  units  for  purposes   of  assessing
     potential future impairments of goodwill.

     In accordance with these  pronouncements, the Company accounted  for the
     acquisition of  CCN as a  purchase and allocated  the purchase price  to
     all identifiable tangible  and intangible assets  and liabilities.   The
     goodwill resulting from  this acquisition of approximately  $177 million
     has not been amortized.  Goodwill and intangible assets of approximately
     $102 million  acquired in business combinations completed before July 1,
     2001 was amortized  through  December 31, 2001.  In accordance with SFAS
     142, none of the  Company's $280  million in  net goodwill was amortized
     during the six months ended June 30, 2002.

     The following table  reflects the effect of  SFAS 142 on net  income and
     earnings per share  as if SFAS 142  had been in  effect for all  periods
     presented:

                                                Three Months    Six Months
      (in thousands)                               Ended          Ended
                                                  June 30,       June 30,
                                                    2001           2001
                                                  -------        -------
      Net income                                  $25,329        $49,729
      Add back goodwill amortization                  867          1,734
      Tax effect of amortization                     (351)          (702)
                                                  -------        -------
      Adjusted net income                         $25,845        $50,761
                                                  =======        =======
      Adjusted income per common share - Basic    $   .26        $   .52
                                                  =======        =======
      Adjusted income per common share - Diluted  $   .25        $   .50
                                                  =======        =======

     In accordance with the  provisions of SFAS 142, the Company  completed a
     transitional goodwill impairment test  within six months of the  date of
     adoption.  The Company  used standard valuation techniques  including an
     analysis  of  expected  business  performance  and  analysis  of  recent
     acquisitions within the  healthcare industry.   There was no  impairment
     in goodwill amounts  as a result of  this transitional impairment  test.
     The Company will perform  an annual impairment during the  third quarter
     of each  year or  at such  earlier time  that  circumstances warrant  an
     interim valuation.

     Effective January 1,  2002, the Company  adopted Statement of  Financial
     Accounting  Standards  No.   144  ("SFAS  144"),  "Accounting   for  the
     Impairment  or Disposal  of  Long-Lived  Assets".   SFAS  144  addresses
     accounting and reporting  for the impairment  or disposal of  long-lived
     assets,  including discontinued  operations,  and establishes  a  single
     accounting model for long-lived assets  to be disposed of by sale.   The
     adoption of  this pronouncement did  not have a  material impact on  the
     financial position and results of operations of the Company.

 8.  On  July  1,  2002,  the  Company  completed   its  acquisition  of  the
     operational and administrative assets  from CNA Insurance Company  for a
     purchase price  of $20  million.  Included  in this  transaction is  the
     transfer of approximately 1,000  CNA employees and related  assets which
     support the Mail Handlers  Benefit Plan (the "Plan") offices  in various
     cities.   The  acquisition  relates to  a  long-term contract  that  the
     Company announced  in April  2002 to  provide  its comprehensive  health
     plan services to the Plan.

 9.  The Company and its  subsidiaries are subject to various  claims arising
     in the  ordinary course  of business and  are parties  to various  legal
     proceedings that  constitute litigation  incidental to  the business  of
     the  Company  and  its   subsidiaries.    The  Company's   wholly  owned
     subsidiary, First Health Services Corporation ("Services")  continues to
     be subject  to an investigation  by the District  of Columbia Office  of
     Inspector  General ("OIG").   In  July 2000,  the  OIG issued  a  report
     evaluating the  District of Columbia's  Medicaid program and  suggesting
     ways to  improve the  program.  Services,  a subsidiary  of the  Company
     that was acquired in July 1997, has acted as  the program's fiscal agent
     intermediary  for  more  than  20  years.     The  OIG  report  included
     allegations that  from 1993  to 1996, Services,  in its  role as  fiscal
     agent intermediary,  made erroneous  Medicaid payments  to providers  on
     behalf of  patients no  longer eligible  to  receive Medicaid  benefits.
     The Company  does  not believe  that the  outcome of  the  claim or  the
     investigation  will have  a material  adverse  effect on  the  Company's
     business or financial position.


 First Health Group Corp. and Subsidiaries
 Item 2.

 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 AND RESULTS OF OPERATIONS
 (Unaudited)


 Forward-Looking Information
 ---------------------------
   This  Management's Discussion  and  Analysis of  Financial  Condition  and
 Results of Operations may include certain forward-looking statements, within
 the meaning of Section 27A  of the Securities Act  of 1933, as amended,  and
 Section 21E of the  Securities Exchange Act of  1934, as amended,  including
 (without limitation) statements with respect to anticipated future operating
 and financial performance,  growth and acquisition  opportunities and  other
 similar forecasts and statements of expectation.   Words such as  "expects",
 "anticipates", "intends", "plans", "believes", "seeks", "estimates", "could"
 and "should"  and variations  of these  words and  similar expressions,  are
 intended to  identify  these forward-looking  statements.    Forward-looking
 statements made by the  Company and its management  are based on  estimates,
 projections, beliefs  and assumptions  of management  at  the time  of  such
 statements and  are  not guarantees  of  future performance.    The  Company
 disclaims any obligation to update  or revise any forward-looking  statement
 based on the occurrence of future events, the receipt of new information  or
 otherwise.

   Actual  future performance,  outcomes and  results may  differ  materially
 from those expressed in forward-looking statements  made by the Company  and
 its management  as  a  result  of  a  number  of  risks,  uncertainties  and
 assumptions.   Representative examples  of  these factors  include  (without
 limitation) general industry and economic conditions; interest rate  trends;
 cost of capital  and capital  requirements; competition  from other  managed
 care companies;  the  ability  to expand  certain  areas  of  the  Company's
 business;  shifts  in  customer  demands;  changes  in  operating  expenses,
 including employee wages, benefits  and medical inflation; governmental  and
 public policy changes  and the continued  availability of  financing in  the
 amounts and on the terms necessary to support the Company's future business.
 In addition, if the Company does not continue to successfully implement  new
 contracts and  programs  and control  healthcare  benefit expenses;  if  the
 Company is  not  able to  successfully  integrate CCN  (defined  below)  and
 achieve the cost synergies anticipated as a result of the acquisition; or if
 the Company   does  not successfully  integrate the  recently acquired  Mail
 Handlers Benefit Plan administrative  assets (discussed below); the  Company
 may not achieve its anticipated 2002 financial results.

 Recent Developments
 -------------------
    Mail Handlers Benefit Plan
    --------------------------
   On April 16, 2002, the Company entered into a  long-term contract with the
 National Postal  Mail  Handlers Union,  the  sponsor  of the  Mail  Handlers
 Benefit  Plan  (the   "Plan"),  whereby   the  Company   will  provide   its
 comprehensive health plan services to the Plan.  The Plan has nearly 400,000
 federal employees  and  annuitants  representing approximately  one  million
 members nationwide, and is one of  the nation's largest health plans.   This
 new contract  builds on  an  existing agreement  which  the Company  has  to
 provide the First Health Network[R] to the Plan's members.  The new contract
 is valued at over $1.3 billion in service revenue over the initial five-year
 term.

   On July 1, 2002, the Company completed the  acquisition of the operational
 and administrative assets used to  provide the various services  required by
 this new contract (see  Note 8) for a  purchase price of  $20 million.   The
 transaction includes the transfer  of approximately 1,000 CNA  employees and
 related assets  which support  the Plan  in various  offices throughout  the
 United States.   These employees  will assume  the same  function for  First
 Health providing the Company with  an experienced team of  personnel already
 accustomed to  administering  the  one-million-member  plan.    The  Company
 believes this acquisition  will significantly  reduce the  need for  typical
 implementation efforts related to the new contract.

    CCN Acquisition
    ---------------
   On August 16,  2001, the Company completed  the acquisition of all  of the
 outstanding shares of capital  stock of CCN Managed  Care, Inc. ("CCN")  and
 Preferred Works, Inc. ("PW" and together with CCN, the "CCN Companies") from
 HCA-The  Healthcare  Company  and  VH  Holdings,  Inc.   (collectively,  the
 "Sellers") for a  purchase price  of $195 million  in cash,  plus a  working
 capital adjustment which increased the  purchase price to $198  million. The
 acquisition  was  effected  pursuant  to  the  terms  of  a  Stock  Purchase
 Agreement, dated as  of May 18,  2001 (as  amended as  of August 16,  2001),
 among the  Company and  the  Sellers.   The  acquisition was  financed  from
 borrowings under  the  Company's  previous  line of  credit.    The  Company
 reviewed the various businesses comprising the CCN Companies  and determined
 to hold the PW and the Resource Opportunity, Inc. ("ROI") businesses  of CCN
 for sale.  The Company completed the sale of ROI on December  28, 2001 for a
 sale price of $9 million.  The sale of PW was completed on June 28, 2002 for
 a sale price of $4.1 million.

   In conjunction with the  acquisition, the Company recorded as part  of the
 purchase price a  $41.1 million  reserve for  restructuring and  integration
 costs as part of an overall plan to reduce operating expenses  and integrate
 the business of the  acquired companies.  The  specific actions included  in
 the restructuring plan are expected to be substantially complete by December
 31, 2002.    The  actions taken  to  implement  the restructuring  plan  are
 expected to generate in excess of $25 million in annualized savings  for the
 Company from lower salaries and  benefits costs and lower  overall operating
 expenses, beginning in  2002.   Components of  the purchase  reserve are  as
 follows:

                                               Accrual     2002      Accrual
  (in thousands)                     Total     Balance    Amount     Balance
  --------------                    Charges    1/01/02   Incurred    6/30/02
                                    -------    -------   --------    -------
  Severance and related benefits    $13,712    $ 6,031   $ (2,766)   $ 3,265
  Facilities integration             10,370      9,528       (693)     8,835
  Contract losses                    10,000      9,750       (267)     9,483
  Other reserves                      7,031      7,028        (21)     7,007
                                    -------    -------   --------    -------
  Total                             $41,113    $32,337   $ (3,747)   $28,590
                                    =======    =======   ========    =======

   The restructuring  plan includes the reduction  of employees from  various
 offices within the United States.  The Company expects to reduce  the number
 of CCN employees from approximately 1,300 at the time of the  acquisition to
 approximately 650 at December 31, 2002.   There were approximately  680 such
 employees as  of June  30, 2002.    During the  first  six months  of  2002,
 approximately $2.8 million was charged to the purchase reserve for severance
 and related employee benefits with $1.6 million of such costs charged during
 the second quarter.

   Facilities integration  costs represent the costs  the Company expects  to
 incur to integrate CCN's facilities into the Company's  existing operations.
 The majority  of  the  facilities  integration costs  will  be  incurred  to
 consolidate CCN's former  corporate headquarters  and various sales  offices
 throughout the  United States.   Approximately  $0.7  million of  costs  for
 facilities integration was charged to the purchase reserve in the  first six
 months of 2002 with $0.4 million charged during the second quarter.

   Contract losses relate  to the anticipated net  loss to be incurred  on an
 assumed contract to  provide certain screening  services to individuals  who
 have agreed to be  bound by a proposed  settlement in a  legal matter.   CCN
 signed a contract in March 2000 to provide these services for four years and
 the Company has agreed to have its network providers provide  these services
 as a part  of the acquisition  of CCN.    The Company  estimates as many  as
 250,000 covered persons  may seek  such screening services  and the  Company
 will incur a significant administrative  burden in completing claims  to the
 satisfaction of the contractual terms.  Approximately $0.3 million  of costs
 under this  contract was  charged to  the purchase  reserve  during the  six
 months ended  June 30,  2002 with  $0.1 million  charged  during the  second
 quarter.

   Other  reserves represent  various  operational  and tax  liabilities  the
 Company  has  incurred   to  fully   integrate  the  Company's   operations.
 Approximately $21,000 was  charged to the  reserve in  the six months  ended
 June 30, 2002, none during the second quarter.

    HCVM Acquisition
    ----------------
   On May 1, 2002, the Company completed the  acquisition of HealthCare Value
 Management ("HCVM")  for an  initial purchase  price of  $24  million.   The
 Company may pay an additional $16 million over the next three years  if HCVM
 meets certain performance measures.  HCVM  is a small New England  based PPO
 company, headquartered in  suburban Boston.   The  acquisition was  financed
 from borrowings under the Company's existing line of credit.

 Results of Operations
 ---------------------
   The  Company's revenues  consist primarily  of  fees for  cost  management
 services provided under contracts on a percentage of savings basis  (PPO) or
 on a predetermined contractual  basis (claims administration, fee  schedule,
 pharmacy benefit management and clinical management services).  As  a result
 of the  Company's  insurance  company acquisitions,  revenues  also  include
 premium revenue.

   The following table sets forth information with respect  to the sources of
 the Company's revenues for the three and six months ended June 30,  2002 and
 2001, respectively:

   Sources of Revenue
                                                ($ in thousands)
                                           Three Months Ended June 30,
                                           ---------------------------
                                           2002     %      2001      %
                                          -------  ---    -------   ---
      Sources of Revenue:
        PPO Services                     $110,078   63%  $ 78,104    56%
        Claims Administration              44,491   25     42,529    31
        Fee Schedule Services              10,583    6      7,759     5
        Clinical Management Services        6,961    4      6,824     5
        Premiums, Net                       3,810    2      3,733     3
                                          -------  ---    -------   ---
      Total Revenue                      $175,923  100%  $138,949   100%
                                          =======  ===    =======   ===


                                                ($ in thousands)
                                            Six Months Ended June 30,
                                           ---------------------------
                                           2002     %      2001      %
                                          -------  ---    -------   ---
      Sources of Revenue:
        PPO Services                     $214,999   62%  $153,815    56%
        Claims Administration              88,311   26     84,074    30
        Fee Schedule Services              20,614    6     16,513     6
        Clinical Management Services       13,540    4     13,911     5
        Premiums, Net                       7,820    2      7,620     3
                                          -------  ---    -------   ---
      Total Revenue                      $345,284  100%  $275,933   100%
                                          =======  ===    =======   ===

   Revenue  for the  three  and six  months  ended  June 30,  2002  increased
 $36,974,000 (27%) and $69,351,000 (25%), respectively, from the same periods
 of 2001  due to  strong PPO  revenue  which increased  41% from  the  second
 quarter of 2001.  The increase in  PPO revenue for the three and  six months
 ended June 30, was  due to new client  activity, existing clients  utilizing
 more PPO services, the overall increase in PPO providers and the addition of
 CCN and HCVM  revenue.  Claims  administration revenue increased  $1,962,000
 (5%) and $4,237,000 (5%)  from the same periods  last year due primarily  to
 new business  particularly  in the  commercial  sector.   Revenue  from  fee
 schedule services increased $2,824,000  (36%) and $4,101,000 (25%)  from the
 comparable periods in 2001 due primarily  to the inclusion of  CCN business.
 Revenue from clinical cost  management services increased $137,000  (2%) for
 the three months ended June 30, 2002 and decreased $371,000 (3%) for the six
 months ended June 30, 2002 from the comparable periods in 2001.  The overall
 decrease is  due  principally  to  the  termination  of  certain  healthcare
 management contracts with various state Medicaid programs.   Premium revenue
 increased $77,000 (2%) and $200,000 (3%) for the three and six  months ended
 June 30,  2002 due  primarily to  the addition  of new  stop loss  insurance
 clients.

   Cost of  services increased  $14,639,000 (24%)  and $27,874,000 (23%)  for
 the three and six months ended June 30, 2002 from the comparable  periods of
 2001 due primarily to the inclusion of CCN and HCVM costs.  Cost of services
 consists primarily of salaries and  related costs for personnel  involved in
 claims  administration,  PPO  administration,  development   and  expansion,
 utilization management programs, fee schedule and other cost  management and
 administrative services offered by the Company.  To a lesser extent, cost of
 services includes  telephone  expenses,  facility expenses  and  information
 processing costs.  As a percentage of revenue, cost of services decreased to
 42.7% and  42.9%  for  the  three  and  six  months  ended  June  30,  2002,
 respectively, from  43.5% and  43.6% in  the comparable  periods last  year.
 More importantly,  cost  of services  remained  consistent with  the  fourth
 quarter of 2001 due to the  synergies associated with combining  various CCN
 and First Health operations.

   Selling and marketing  costs for the three  and six months ended  June 30,
 2002 increased $4,522,000  (34%) and  $8,656,000 (33%)  from the  comparable
 periods of 2001 also as a result of the addition of CCN costs.   To a lesser
 extent, the  increase is  due to  increased expenditures  for the  Company's
 focused national marketing campaign which began in the first quarter of 2000
 and to the addition of new sales personnel.

   General and administrative costs  for the three and six months  ended June
 30, 2002 increased $3,334,000 (39%) and $6,357,000 (37%) from the comparable
 periods of 2001 due primarily to the inclusion of CCN costs.  These expenses
 remain consistent with the fourth quarter  of 2001 as a result  of synergies
 achieved by combining CCN and First Health operations.

   Healthcare benefits represent  medical losses incurred by insureds  of the
 Company's insurance entities.  Healthcare benefits increased  $507,000 (15%)
 and $585,000 (8%) for the three and six months ended June 30,  2002 from the
 comparable periods of 2001.  This  increase was due primarily to  new client
 activity.  The loss ratio (healthcare benefits as a percent of premiums) was
 102% and 98% for the  three and six months  ended June 30, 2002  compared to
 91% and 93%  for the comparable  periods of 2001.   Management continues  to
 review the book of business in detail to minimize the loss ratio.  Stop-loss
 insurance is related to  the PPO business and  is used as  a way to  attract
 additional PPO business, which is the Company's most profitable product.

   Depreciation and amortization  expenses  increased  $2,071,000  (18%)  and
 $4,441,000 (20%) for the three and  six months ended June 30, 2002  from the
 comparable  periods  of  2001  due  primarily  to  increased  infrastructure
 investments made over the  course of the past  few years as well  as various
 software applications which came on-line during 2001 and 2002.  The increase
 was partially offset by the  reduction in goodwill amortization  of $867,000
 and $1,734,000 for the  three and six months  ended June 30, 2002  (See Note
 7).  Depreciation  expense will continue  to grow primarily  as a result  of
 continuing investments the Company is making in its infrastructure.

   Interest  income  for  the three  and  six  months  ended  June  30,  2002
 decreased  $170,000  (10%)  and  $393,000  (11%),  respectively,   from  the
 comparable periods of 2001 due  primarily to the aggressive  debt repayments
 the Company  has  made  with its  available  cash  as well  as  the  overall
 reduction in interest rates earned on marketable securities.

   Interest  expense for  the  three and  six  months  ended June  30,  2002,
 increased $384,000 (34%)  and decreased $771,000  (21%) from the  comparable
 periods of 2001.  The fluctuations in interest expense are primarily  due to
 changes in the interest rate on the Company's credit facility.  The interest
 rate at June 30,  2002 was approximately  5% per annum  and the Company  had
 $130 million of debt outstanding.

   Net income  for the three and  six months ended  June 30, 2002,  increased
 $7,155,000 (28%) and $13,769,000 (28%) from the comparable periods  of 2001.
 This increase is due primarily to the increase in PPO revenue as well as the
 synergies achieved  in combining  CCN  and First  Health  and, to  a  lesser
 extent, the other factors discussed above.

   Diluted net  income per common share  for the three  and six months  ended
 June 30, 2002 increased 24% to $.31 per share and 24% to  .61 per share from
 the comparable periods of 2001.  The increase in net income per common share
 was favorably impacted by the repurchase of 525,000 shares of Company common
 stock during the second  quarter of 2002.   The increase was also  favorably
 impacted by the adoption  of SFAS No.  142 (See Note  7 and "New  Accounting
 Pronouncements").  For the three months and six months ended June  30, 2002,
 diluted common shares outstanding  increased 2% from the  comparable periods
 of 2001.

 Liquidity and Capital Resources
 -------------------------------

   The Company had $17,320,000  in working capital at June 30,  2002 compared
 with negative working capital of $159,130,000 at December 31, 2001.   All of
 the Company's outstanding  debt at  December 31,  2001 was  classified as  a
 current liability as the Company's credit facility was due to expire on June
 30, 2002.   On April  23, 2002, management  obtained a  new credit  facility
 which matures in 2007; consequently, the outstanding debt is  now classified
 as  long-term.   Through  the  first  six  months  of  the  year,  operating
 activities  provided  $131,588,000  of  cash.   Investment  activities  used
 $53,564,000 of cash representing  purchases of fixed assets  of $27,001,000,
 the acquisition of HCVM for $24,227,000 and net purchases of  investments of
 $3,259,000 partially offset by $923,000 in changes in assets held  for sale.
 Financing activities used  $60,414,000 of  cash representing $67,500,000  in
 repayment  of  long-term  debt  (net  of  $150,000,000  in  debt  issuance),
 $14,813,000 in  purchases  of  Company  common  stock  partially  offset  by
 $21,436,000 in proceeds from issuance of common stock, $375,000  in proceeds
 from the sale  of put options  and $88,000 in  stock option loan  repayments
 (net of $2,272,000 in stock option loans granted).


   The Company had a revolving line  of credit in the amount of  $350 million
 which was due to expire on  June 30, 2002.   On April 23, 2002,  the Company
 obtained a  new $400  million revolving  line of  credit  that replaced  the
 previous credit  facility.    The new  facility  has  a five-year  term  and
 provides for interest at a Euro dollar rate (which approximates  LIBOR) plus
 a variable margin and a facility  fee that fluctuate based on  the Company's
 debt rating. As of June 30, 2002, $130 million was outstanding under the new
 facility.

   The  Company believes  that its  working  capital, long-term  investments,
 credit facility and cash generated from future operations will be sufficient
 to fund the Company's anticipated operations and expansion plans.

 New Accounting Pronouncements
 -----------------------------
   Effective  January 1,  2001, the  Company adopted  Statement of  Financial
 Accounting Standards No.  133, ("SFAS No.  133), "Accounting For  Derivative
 Instruments and  Hedging  Activities".    SFAS No.  133  requires  that  all
 derivative instruments be recognized as either assets or liabilities  in the
 balance sheet and  that derivative  instruments be measured  at fair  value.
 This statement also requires changes in the fair value of derivatives  to be
 recorded each period in  current earnings or comprehensive  income depending
 on the intended use of the derivative.  There was no material  effect on the
 Company's results of  operations or financial  position as  a result of  the
 adoption of SFAS No. 133.

   In July  2001, the  Financial Accounting  Standards Board ("FASB")  issued
 Statement of Financial Accounting Standards No. 141 ("SFAS  141"), "Business
 Combinations."   SFAS 141  requires the  purchase method  of accounting  for
 business combinations  initiated  after June  30,  2001 and  eliminates  the
 pooling-of-interests method.   In July  2001, the FASB  issued Statement  of
 Financial Accounting Standards  No. 142  ("SFAS 142"),  "Goodwill and  Other
 Intangible Assets", which  the Company  adopted effective  January 1,  2002.
 SFAS 142  requires,  among  other things,  the  discontinuance  of  goodwill
 amortization effective  December  31,  2001.    In  addition,  the  standard
 includes provisions for  the reassessment  of the useful  lives of  existing
 recognized  intangibles  and  the  identification  of  reporting  units  for
 purposes of assessing potential future impairments of goodwill.

   In accordance  with these  pronouncements, the  Company accounted for  the
 acquisition of CCN  as a purchase  and allocated the  purchase price to  all
 identifiable tangible and intangible  assets and liabilities.   The goodwill
 resulting from this acquisition of  approximately $177 million has  not been
 amortized.  Goodwill  and intangible  assets of  approximately $102  million
 acquired  in  business  combinations  completed  before  July  1,  2001  was
 amortized through December 31, 2001.   In accordance with SFAS 142,  none of
 the Company's $280  million in  net goodwill  was amortized  during the  six
 months ended  June 30,  2002.   The Company  recorded goodwill  amortization
 expense of approximately $0.9 million and $1.7 million, respectively, during
 the three and six months ended June 30, 2001.

   In accordance  with the provisions  of SFAS 142,  the Company completed  a
 transitional goodwill  impairment test  within six  months  of the  date  of
 adoption.   The  Company used  standard  valuation techniques  including  an
 analysis  of   expected  business   performance  and   analysis  of   recent
 acquisitions within the  healthcare industry.   There was  no impairment  in
 goodwill amounts as  a result  of this  transitional impairment  test.   The
 Company will perform an annual impairment  during the third quarter  of each
 year  or  at  such  earlier  time  that  circumstances  warrant  an  interim
 valuation.

   Effective  January 1,  2002, the  Company adopted  Statement of  Financial
 Accounting Standards No. 144 ("SFAS 144"), "Accounting for the Impairment or
 Disposal of Long-Lived Assets".  SFAS 144 addresses accounting and reporting
 for the impairment or disposal of long-lived assets,  including discontinued
 operations, and establishes a single accounting model for  long-lived assets
 to be disposed of by sale.  The adoption of this pronouncement  did not have
 a material impact on the financial position and results of operations of the
 Company.

 Legal Proceedings
 -----------------
   The Company and its subsidiaries are subject to  various claims arising in
 the ordinary course of business and are parties to various legal proceedings
 that constitute litigation incidental to the business of the Company and its
 subsidiaries.  The Company's wholly owned subsidiary, First  Health Services
 Corporation ("Services") continues to be subject to an investigation  by the
 District of Columbia Office of Inspector General (OIG").  In July  2000, the
 OIG issued a report evaluating  the District of Columbia's  Medicaid program
 and suggesting ways to improve the  program.  Services, a subsidiary  of the
 Company that was acquired  in July 1997, has  acted as the program's  fiscal
 agent intermediary  for  more  than  20  years.   The  OIG  report  included
 allegations that from  1993 to 1996,  Services, in it  role as fiscal  agent
 intermediary, made erroneous  Medicaid payments  to providers  on behalf  of
 patients no longer eligible to receive Medicaid benefits.  The  Company does
 not believe that the outcome of  the claim or the investigation will  have a
 material adverse effect on the Company's business or financial position.


 PART II

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

         Exhibits:

           (a) Exhibit 11 - Computation of Basic Earnings Per Common Share
               (Filed with First Health Group Corp.'s Quarterly Report on
               Form 10-Q filed August 13, 2002)

           (b) Exhibit 11 - Computation of Diluted Earnings Per Common
               Share (Filed with First Health Group Corp.'s Quarterly Report
               on Form 10-Q filed August 13, 2002)

           (c) Exhibit 99.1 - Certification Pursuant to 18 U.S.C. Section
               1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
               Act of 2002 - Edward L. Wristen

           (d) Exhibit 99.2 - Certification Pursuant to 18 U.S.C. Section
               1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
               Act of 2002 - Joseph E. Whitters


         Reports on Form 8-K:

           None

<PAGE>

                            SIGNATURES


      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 thereunto duly authorized.

                     First Health Group Corp.




      Dated:  August 15, 2002       /s/Edward L. Wristen
                                    ------------------------------------
                                    Edward L. Wristen
                                    President and Chief Executive Officer



      Dated:  August 15, 2002       /s/Joseph E. Whitters
                                    ------------------------------------
                                    Joseph E. Whitters
                                    Vice President, Finance and Chief
                                    Financial Officer (Principal
                                    Financial Officer)