UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                   FORM 10-QSB

(Mark  One)

  X     QUARTERLY  REPORT  UNDER  SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 ---    ACT  OF  1934

               For  the  quarterly  period  ended  March  31,  1999
                                                  -----------------

       TRANSITION  REPORT  UNDER  SECTION  13  OR  15(d)  OF THE EXCHANGE ACT
 ---
               For  the  transition  period  from  ________  to  ________

               COMMISSIONS  FILE  NUMBER:  000-24807

                            CORECARE  SYSTEMS,  INC.
                            ------------------------
     (Name  of  small  business  issuer  as  specified  in  its  charter)

                Delaware                               23-2840367
           -------------------                        -------------
        (State of jurisdiction of                   (I.R.S. Employer
      incorporation or organization)               Identification  No.)

         c/o Kirkbride Center, 111 North 49th St., Phila., PA 19139
         ----------------------------------------------------------
                (Address  of  principal  executive  offices)

                               (215)  471-2600
                            ---------------------
                          (Issuer's Telephone Number)

Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d)  of  the  Exchange  Act during the past 12 months (or 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  No  X
                                                                            ---

           As of April 15, 1999 the issuer had issued and outstanding
               15,949,128 shares, $.001 par value, of Common Stock

<PAGE>

                               CARE SYSTEMS, INC.
                                   FORM 10-QSB

                                TABLE OF CONTENTS
                                -----------------


PART  I  -  FINANCIAL  INFORMATION
                                                                            PAGE

Item  1:     Financial  Statements                                             2
Item  2:     Management's  Discussion
             and  Analysis  of  Financial  Condition
             and  Results  of  Operations                                    2-4

Item  3:     Quantitative  and  Qualitative
             Disclosures  About  Market  Risk                                  4



PART  II  -  OTHER  INFORMATION
                                                                            PAGE

Item  1:     Legal  Proceedings                                                5
Item  2:     Changes  in  Securities  and  Use  of  Proceeds                   5
Item  3:     Default  and  Senior  Securities                                  5
Item  4:     Submission of Matters to a Vote of Security Holders               5
Item  5:     Other  Information                                                5
Item  6:     Exhibits  and  Reports  on  Form  8-K                             5


                          INDEX TO FINANCIAL STATEMENTS
                          -----------------------------

     Consolidated  Balance  Sheet
     Three  months  ended
     March  31,  1999  and
     Fiscal  Year  Ended
     December  31,  1998                                                    9-10

     Consolidated Statement of Operations
     Three  months  ended
     March  31,  1999  and  1998                                              11

                                      1
<PAGE>
ITEM  1.     FINANCIAL  STATEMENTS


     The  financial  statements can be found at the end of this report beginning
on  pages  7  through  11.


ITEM  2.     Management's  Discussion  and  Analysis
ITEM  1.     FINANCIAL  STATEMENTS

     CoreCare Systems, Inc. (the "Company") is a regional behavioral health care
network  operating  in  Eastern  Pennsylvania, which performs behavioral therapy
services  and  associated clinical research in central nervous system drugs. The
Company's  headquarters  are  located  at  c/o  Kirkbride Center, 111 North 49th
Street, Philadelphia, PA  19139 having recently moved its executive offices from
940  West  Valley Road, Suite 2102, Wayne, PA 19087. Its telephone number at its
new  location  is  (215) 471-2600. In 1996, the Company transferred its state of
incorporation  from  Nevada  to  Delaware.

     Management's  discussion  and  analysis  is  based  upon  the  unaudited
consolidated  financial  statements  of  the Company for the three month periods
ended  March  31, 1999 and 1998, and include the accounts of the Company and its
subsidiaries  after  elimination of any inter-company balances and transactions.


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

RESULTS  OF  OPERATIONS:

          Revenue - Revenue in the three-month period ending March 31, 1999, was
          -------
$6,919,018,  representing an increase of approximately 48% over total revenue in
----------
the  comparable 1998 period. The material increase in total revenue in the first
three  months of 1999, compared with the prior year period, is attributable to a
number  of  factors,  including  the  following:

          Net  Patient  Revenue     -Net  patient  revenue  increased  49.9%  to
          ---------------------     -
$6,067,821.  The  increase  was  primarily  due  to  the following developments:

          (a)  Drug and alcohol unit (licensed for 63 beds) was opened for three
months  of  operation  at  Kirkbride  Center during 1999 and was not operational
during  the  first  quarter  1998;

          (b)  Patient  days  at  the  Kirkbride Center and Westmeade at Warwick
increased  by  80%  in  1999  from  1998;

          (c)  New  programs  at  the  Kirkbride  Center including the geriatric
partial  hospitalization;

                                      2
<PAGE>
          (d)  Dual  diagnosis  program  at the Kirkbride Center expanded during
1998  and

                    Management  Services  Revenue  -Management  services revenue
                    --------------------------------
declined  33.6%  to  $307,126  due  to  the  expiration of a hospital management
contract  on  June  30,  1998.

          Other  Revenue-  CoreCare  Management  also  experienced  revenue
          ---------------
fluctuations between periods due to the of absence of Preferred Medical Services
Revenue  in  the  1st Quarter of 1998 as (as acquired April 1998) as well as the
loss  of several billing clients in first quarter 1999.  Other revenue increased
to  $544,071  from  $149,450  in  1998. The increase includes first time revenue
productions from the Company's subsidiary Quantum Clinical Service Group in 1999
from  clinical  research  drug  trials  on  behalf  of pharmaceutical companies.
Quantum  has  signed clinical research contracts in effect in the first quarter,
which  are  projected  to  continue  in  1999.  Additionally, rental income from
tenant  revenue  doubled  over  the  period  the  period  from  1999  over 1998.

Operating  Expenses:  The operating expenses of $6,303,522 for the quarter ended
-------------------
March 31, 1999 increased 35% over the first quarter of 1998.  Operating expenses
increased  at  a  rate  much  lower  than the 48% increase in revenue. Operating
expenses  as  a percentage of revenue declined to 91.1% from 100.2% for the same
quarter  a  year ago.  The company was able to achieve the benefits of operating
leverage  and  improved  operating  efficiency.

          Salaries  and  Employees  Benefits-  Salaries  and  Employee  Benefits
          ----------------------------------
increased  approximately  $1.2  million  or 68% during the first quarter 1999 as
compared  to  the  first  quarter 1998. This large increase is mainly due to the
more  services being offered at the Kirkbride Center.  During 1999 the number of
acute patients was greater than 1998, the drug and alcohol unit was operational,
and  the outpatient programs have increased.  These additional services required
an  increase  in  staffing  costs  along with start-up costs associated with the
clinical  drug  research  and  restructuring costs associated with the company's
re-engineering  activities.

          Purchased  Services-  Purchased  services  include costs acquired from
          -------------------
outside  entities  such  as  dietary,  laboratory,  and  pharmacy.  These  costs
increased  by  approximately $200,000 or 57%. This large increase is also due to
more  services  being  offered  at  the  Kirkbride  Center.  Many of these costs
increase  as  patient  volume  increases.  With  the  increase  in  volume these
expenses  increased.

                                      3
<PAGE>
          Administrative  Expenses  -  Administrative  expenses  decreased  by
          ------------------------
approximately  $10,000.  The  company  was  able  to  control the administrative
expenses substantially reducing expenses from 19.5% of revenues in 1998 to 12.9%
of  revenues in 1999.  This reflects the company improving operating efficiency.

          Bad  Debt  Expense  -  Bad  debt  expense  increased  by approximately
          ------------------
$277,000  or  71%.  This  was  due  to an increase in the allowance for doubtful
accounts  for  1998  activity.

          Interest  Expense  -  Interest  expense  increased  by  approximately
          -----------------
$480,000.  This  was  due  to  higher  outstanding debt at March 31, 1999 versus
1998.  In  1999  all  interest  was  expensed  during  the quarter while in 1998
interest  was  capitalized  on  portions  of  the  facility  that  were  under
construction  and  not  yet placed inservice, consistent with generally accepted
accounting  principals.

          Depreciation  and Amortization expense - Depreciation and amortization
          --------------------------------------
expense  decreased  by  about  $136,000.  This  is  due  to  reduction  in  the
amortization  on  the  mortgage  costs  in  1999.

          Net  Loss declined to $620,708 from $1,267,053 a year ago, a reduction
          ---------
of  51%.

     Earnings  Before  Interest  Taxes  Depreciation  and  Amortization {EBITDA}
     ------------------------------------------------------------------
improved  by  $624,760  from  ($9,264)  in  1998  to  $615,496  in  1999.

<TABLE>
<CAPTION>
                  CALCULATION OF EBITDA
                 Corecare Systems, Inc.
              For the Quarter ended March 31

                                   1999        1998
                               ----------  -----------
Revenue                        $6,919,018  $4,660,201
<S>                           <C>         <C>
Operating Expenses
Salaries & Employee Ben.       $4,170,676  $3,006,893 
Purchased Services             $  566,199  $  361,851 
Selling & Admin. Exp.          $  897,226  $  908,477 
Provision for Bad Debts        $  669,421  $  392,244 
------------------------       ----------  -----------
Sub-Total                      $6,303,522  $4,669,465 

EBITDA                         $  615,496  $   (9,264)
</TABLE>

                                      4
<PAGE>
ITEM  3.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  AND  MARKET  RISK

     Not  Applicable

<PAGE>
                           PART II - OTHER INFORMATION


ITEM  1.     LEGAL  PROCEEDINGS

          None


ITEM  2.     CHANGES  IN  SECURITIES  AND  USE  OF  PROCEEDS

          None


ITEM  3.     DEFAULTS  ON  SENIOR  SECURITIES

          None


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

          None


ITEM  5.     OTHER  INFORMATION

          None


ITEM  6.     EXHIBITS  AND  REPORTS

            (a)     Exhibits.
                    --------

                    SEC
Exhibit             Reference
  No.               No.
-------             ---------
  27                Financial Data Schedule

            (b)     Reports  on  Form  8-K.
                    ----------------------
                    No  new reports on Form 8-K were filed in the quarter ended
                    March 31,  1999.

                                      6
<PAGE>
                                   SIGNATURES


          In  accordance  with the requirements of the Exchange Act of 1934, the
registrant  caused  this  report  to be signed on its behalf by the undersigned,
thereunto  duly  authorized.


Date:  May  17,  1999
     ----------------


                                   CORECARE  SYSTEMS,  INC.


     BY: /S/ ROSE  S.  DIOTTAVIO
         -----------------------------------
             ROSE  S.  DIOTTAVIO,  PRESIDENT

                                      7
<PAGE>
Notes  to  Financial  Statements

1.     Basis  of  presentation:
The accompanying unaudited financial statements have been prepared in accordance
with  generally accepted accounting principles for interim financial information
and  with  the  instructions  for  Form  10-Q  and Article 10 of Regulation S-X.
Accordingly,  they  do not include all of the information and footnotes required
by  generally  accepted accounting principles for complete financial statements.
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 months ended March 31, 1999 are not necessarily
indicative  of the results that may be expected for the year ending December 31,
1999.  The unaudited financial statements should be read in conjunction with the
financial  statements  and  footnote thereto included in the Company's report on
Form  10-SB  for  the  year  ended  December  31,  1998.

2.     The  Business:
Corecare  Systems,  Inc.  through  its  nine  operating  subsidiaries,  provides
management  services to behavioral health service providers; provides, owns, and
operates  outpatient and inpatient behavioral health services; provides clinical
trial services to the pharmaceutical industry; and develops billing software for
the  health  industry.

3.     Summary  of  significant  accounting  policies:

Principles  of  consolidation:
The  March  31,  1999  and December 31, 1998 financial statements of the Company
include  accounts  of  Corecare Systems, Inc. and its wholly owned subsidiaries.

                                      8
<PAGE>
<TABLE>
<CAPTION>
CORECARE  SYSTEMS,  INC.
CONSOLIDATED  BALANCE  SHEET

Current assets:                                        03/31/99      12/31/98
                                                      -----------  ------------
<S>                                                   <C>          <C>
   Cash & cash equivalents                               161,382       115,242 
   Accounts receivable                                 6,332,572     5,588,188 
   Prepaid expenses                                      737,651       224,215 
                                                      -----------  ------------
 Total current assets                                  7,231,605     5,927,645 

 Contract rights                                         265,300     1,288,919 
   Less accumulated amortization                         (47,013)  (1,023,619))
                                                      -----------  ------------
                                                         218,287       265,300 

 Property and equipment, at cost                      15,525,373    15,607,366 
   Less accumulated depreciation                      (1,399,125)   (1,455,579)
                                                      -----------  ------------
                                                      14,126,248    14,151,787 

 Cost in excess of net assets of acquired businesses   1,751,731     2,024,905 
   Less accumulated amortization                          (9,549)     (496,924)
                                                      -----------  ------------
                                                       1,742,182     1,527,981 

 Deferred finance costs & fees                         2,201,408     2,202,807 
   Less accumulated amortization                      (1,926,749)   (1,759,635)
                                                      -----------  ------------
                                                         274,659       443,172 

 Long-term investments:
 Real estate held for development                      1,881,489     1,881,489 
 Property and equipment, net of accumulated             (794,565)     (781,489)
                                                      -----------  ------------
   depreciation held for sale                          1,086,924     1,100,000 


 Other Assets:
 Deposits                                                127,313       316,375 
 Other                                                   590,814       981,436 
                                                      -----------  ------------
 Total Other Assets                                      718,127     1,297,811 

 Total Assets                                         25,398,032    24,713,696 
                                                      ===========  ============
</TABLE>

                                      9
<PAGE>
<TABLE>
<CAPTION>
CORECARE  SYSTEMS,  INC.
CONSOLIDATED  BALANCE  SHEET

                                                   03/31/99      12/31/98
                                                 ------------  ------------
Current liabilities:
<S>                                              <C>           <C>
   Accounts payable                                3,526,394     3,748,884 
   Payrolls and related taxes                      3,338,224     3,048,183 
   Accrued expenses                                1,493,429       840,354 
   Due to third party                              1,501,079     1,000,000 
   HCFP Funding                                    3,626,220     4,308,703 
   Notes Pay. incl. current portion LTD           15,994,171    15,199,388 
   Current portion on capital lease obligations       76,521        38,565 
   Loans payable-officers                            902,489       910,692 
                                                 ------------  ------------
 Total current liabilities                        30,458,527    29,094,769 

 Long-term liabilities:
 Long-term debt, net of current portion            2,180,904     2,192,374 
                                                 ------------  ------------
                                                   2,180,904     2,192,374 

 Total liabilities                                32,639,431    31,287,143 

 Shareholders' equity
   Preferred Stock, par value $.001                        -             - 
     1,000,000 shares authorized,                          -             - 
     issued and outstanding 30,604 shares                 17            17 
 Common Stock, par Value $.001                             -             - 
     50,000,000 shares authorized,                    15,949        15,949 
     issued and outstanding 10,270,176 shares              -             - 
 Additional paid in capital                       11,327,095    11,374,340 
 Retained earnings                               (18,584,460)  (17,963,752)
                                                 ------------  ------------
 Total stockholders' equity                       (7,241,399)   (6,573,446)
                                                 ------------  ------------

 Total liabilities and stockholders' equity       25,398,032    24,713,697 
                                                 ============  ============
                                                           -             - 
</TABLE>

                                      10
<PAGE>
<TABLE>
<CAPTION>
 CORECARE  SYSTEMS,  INC.
 CONSOLIDATED  STATEMENT  OF  OPERATIONS
 QUARTER  ENDING  MARCH  31

                                     1999         1998
                                  -----------  -----------
Revenue:
<S>                               <C>          <C>
   Net patient service revenue     6,067,821    4,047,883 
   Management service revenue        307,126      462,868 
   Other                             544,071      149,450 
                                  -----------  -----------
                                   6,919,018    4,660,201 

 Operating Expenses:
 Salaries and employee benefits    4,170,676    3,006,893 
 Purchased services                  566,199      361,851 
 Administrative expenses             897,226      908,477 
 Bad debt expense                    669,421      392,244 
                                  -----------  -----------
 Total operating expenses          6,303,522    4,669,465 

 Income(loss) from operations        615,496       (9,263)

 Other expenses:
 Interest expense                    847,338      363,252 
 Impaired asset write down                 -      369,380 
 Depreciation and Amortization       388,866      525,157 
                                           - 
                                  -----------  -----------
 Total other expenses/(income)     1,236,204    1,257,789 
                                  -----------  -----------

 Net income(loss)                   (620,708)  (1,267,052)
                                  ===========  ===========

 shares outstanding               15,949,128   13,118,944 

 loss per share                        (0.04)       (0.10)
</TABLE>

                                      11
<PAGE>