United States
             Securities and Exchange Commission
                    Washington, DC  20549

                          Form 10-Q



 {X}       Quarterly Report Pursuant to Section 13 or 15(d)
           of the Securities Exchange Act of 1934

      For the quarterly period ended September 30, 2000

                             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 001-13460


                   PhyAmerica Physician Group, Inc.
   (Exact name of registrant as specified in its charter)
     Delaware                                                    56-1379244
  (State or other jurisdiction of                          (IRS Employer
   incorporation or organization)                       Identification   No.)

     2828 Croasdaile Drive, Durham, NC                            27705
   (Address of principal executive offices)                    (Zip Code)
                       (919) 383-0355
     (Registrant's telephone number including area code)

                            None
   (Former name, former address and former fiscal year, if
                 changed since last report)

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.

          {X} Yes                                             {  } No

As of October 31, 2000 there were outstanding 42,968,965
shares of common stock, par value $.01 per share.









             PHYAMERICA PHYSICIAN  GROUP,  INC.
                            INDEX



PART I - FINANCIAL INFORMATION

Item 1. Financial Statements
        Consolidated Balance Sheets at December 31,1999
        and September 30, 2000 (unaudited)
        Unaudited Consolidated Statements of Operations -
        Three and Nine months ended September 30, 2000 and 1999
        Unaudited Consolidated Condensed Statements of Cash Flows
     Nine months ended September 30, 2000 and 1999
     Notes to Consolidated Financial Statements (Unaudited)

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

PART II - OTHER INFORMATION
     Item5. Other Information
     Item 6. Exhibits and Other Reports

     SIGNATURES
















                 PHYAMERICA PHYSICIAN GROUP, INC.
                   Consolidated Balance Sheets
              (In thousands, except per share data)

                                        September         December
                                           30,              31,
                                          2000             1999
               Assets                   (Unaudited)
Current assets:
Cash and cash equivalents             $         -      $         -
Trade accounts receivable, net             25,092           25,113
Reserves held by NCFE                      17,108           16,167
Accounts receivable, other                  2,272            2,329
Receivables from related party              2,903            1,129
Prepaid expenses and other current          6,214            7,194
assets
          Total current assets             53,589           51,932

Property and equipment, at cost, less       7,056            7,651
accumulated depreciation
Excess of cost over fair value of net      20,544           24,158
assets acquired, net
Other assets                                4,961            5,042
          Total assets                $    86,150      $    88,783

Liabilities and Shareholders' Equity
              (Deficit)
Current liabilities:
Current maturities and other short-   $       819      $     7,477
term borrowings
Accounts payable                           33,841           30,277
Accrued physician fees and medical         17,226           18,429
costs
Accrued expenses                            8,943            8,191
          Total current liabilities        60,829           64,374

Long-term debt, excluding current         152,026          120,736
maturities
          Total liabilities               212,855          185,110

Shareholders' equity (deficit):
Common stock $.01 par value; shares
authorized 100,000; shares
issued and outstanding 42,969 and             430              426
42,573, respectively
Additional paid-in capital                178,340          178,285
Common stock warrants                       1,675            1,675
Retained earnings (accumulated          (307,150)        (276,713)
deficit)
          Total shareholders' equity    (126,705)         (96,327)
(deficit)
          Total liabilities and       $    86,150      $    88,783
shareholders' equity (deficit)


   See accompanying notes to consolidated financial statements.



           PHYAMERICA PHYSICIAN GROUP, INC.
         Consolidated Statements of Operations
         (In thousands, except per share data)
                      (Unaudited)
                                  Three months ended
                                    September 30,
                                 2000          1999

Operating revenue, net      $     81,887   $    80,032

Costs and expenses:
Physician and other               62,944        66,835
provider services
Medical support services           9,413         8,631
Selling, general and              16,260        11,959
administrative
Related party expense, net           468           746
Total costs and expenses          89,085        88,171

Operating loss                   (7,198)       (8,139)

Other income (expense):
Interest expense                 (4,377)       (4,125)
Interest income                       23            45
Other related party                (102)          (52)
expense, net
Other, net                         1,222       (2,904)
 Total other expense             (3,234)       (7,036)


Loss before income taxes        (10,432)      (15,175)

Income taxes                           -             -

Net loss                    $   (10,432)   $  (15,175)

Net loss per common share:
Basic and diluted loss per  $     (0.24)   $    (0.40)
share


Shares used to compute loss
per share, basic and              42,764        37,989
diluted


   See accompanying notes to consolidated financial
                      statements.













           PHYAMERICA PHYSICIAN GROUP, INC.
         Consolidated Statements of Operations
         (In thousands, except per share data)
                      (Unaudited)
                                  Nine months ended
                                    September 30,
                                 2000          1999

Operating revenue, net      $    241,376   $   179,913

Costs and expenses:
Physician and other              184,688       136,140
provider services
Medical support services          27,121        25,981
Selling, general and              47,281        26,660
administrative
Related party expense, net         1,287         1,043
Total costs and expenses         260,377       189,824

Operating loss                  (19,001)       (9,911)

Other income (expense):
Interest expense                (12,321)       (9,356)
Interest income                       70           124
Other related party                (304)         (256)
expense, net
Other, net                        1,119        (2,872)
 Total other expense            (11,436)      (12,360)
Loss before income taxes        (30,437)      (22,271)

Income taxes                           -             -

Net loss                    $   (30,437)   $  (22,271)

Net loss per common share:
Basic and diluted loss per  $    (0.71)   $    (0.59)
share
Shares used to compute loss
per share, basic and             42,656        37,921
diluted


   See accompanying notes to consolidated financial
                      statements.













            PHYAMERICA PHYSICIAN GROUP, INC.
    Consolidated Condensed Statements of Cash Flows
                     (In thousands)
                      (Unaudited)
                                       Nine Months Ended
                                         September 30,

                                        2000       1999
Net cash used in operating         $ (23,954)    $(30,645)
activities

Cash flows from investing
activities:
    Proceeds from sale (purchases)     (737)          99
of property and equipment, net
    Acquisition of subsidiaries, net      --      (20,392)
of cash acquired
          Net cash used in investing   (737)      (20,293)
activities

Cash flows from financing
activities:
     Proceeds from borrowing of       24,632       51,903
debt, net of repayments
     Net proceeds from issuances of       59          36
common stock
          Net cash provided by        24,691       51,939
financing activities
          Net increase in cash and         0       1,001
cash equivalents
Cash and cash equivalents at               0          45
beginning of period
Cash and cash equivalents at end of  $     0    $  1,046
period


Supplemental disclosures of cash
flow information:
  Cash payments during the period for:
          Interest                   $ 12,731    $  9,767

          Income taxes                   223         421

   See accompanying notes to consolidated financial
                      statements.


























              PHYAMERICA PHYSICIAN GROUP, INC.
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         (UNAUDITED)

(1) Basis of Presentation

The accompanying consolidated financial statements of
PhyAmerica Physician Group, Inc. (the "Company") are
unaudited and, in the opinion of management, include all
adjustments which are necessary for a fair presentation.
The unaudited consolidated financial statements should be
read in conjunction with the Company's audited consolidated
financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1999. Operating results for the interim periods
presented are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31,
2000.

(2) Excess of Cost Over Fair Value of Net Assets Acquired
     The assets and liabilities of acquired entities
accounted for under the purchase method of accounting are
adjusted to their estimated fair values as of the
acquisition dates. The amounts recorded as excess of cost
over fair value of net assets acquired ("goodwill")
represent amounts paid that exceed estimated fair values
assigned to the assets and liabilities of each acquired
business. Such amounts are being amortized on a straight-
line basis over periods ranging from five to twenty years,
depending on the specific circumstances of each acquisition
     Under Statement of Financial Accounting Standards No.
121 ("SFAS 121"), "Accounting for the Impairment of Long-
Lived Assets and Long-Lived Assets to Be Disposed Of",
management performs an evaluation of the carrying value and
remaining amortization periods of unamortized amounts. In
connection with the ongoing application of SFAS 121,
management performs such an evaluation whenever events or
changes in circumstances occur which indicate such carrying
values may not be recoverable. Management considers the
performance of hospital contracts to be the most important
indicator of possible impairment.

(3) Comprehensive Income

Statement  of  Financial  Accounting  Standards   No.   130,
"Reporting Comprehensive Income", establishes rules for  the
reporting  and display of comprehensive income or  loss  and
its  components.  This  Statement requires  that  unrealized
gains   or   losses   on  the  Company's  available-for-sale
securities  be included in other comprehensive  income.  For
the three and nine months ended September 30, 2000 and 1999,
comprehensive income is equal to the Company's net loss.


(4) Segment Information

During the three and nine months ended September 30, 2000
and 1999, the Company had four reportable segments:
emergency physician management, government services, billing
and business management services and divested businesses.
The emergency physician management group contracts
principally with hospitals and government agencies to
identify and recruit physicians as candidates for admission
to a client's medical staff and to coordinate the on-going
scheduling of independent contractor physicians who provide
clinical coverage in designated areas. While the Company
also provides obstetrics, gynecology and pediatrics
emergency physician management, the provision of contract
management services to hospital emergency departments
represents the Company's principal hospital-based service.
The government services segment provides similar services to
governmental agencies such as the Department of Defense and
state and local governments. The billing and business
management services segment provides support to independent
contractor physicians, independent practices and other
health care practitioners. These services are often provided
as part of the Company's emergency physician management and
are also marketed independently to unaffiliated providers.
Divested businesses consist of two health plans which were
divested during 1998 and the wrap up of businesses divested
prior to 1998. The Company also has a corporate group
included in "All Other" that provides administrative
services to the operating segments. "All other" also
includes amounts related to eliminations.
Information About Segment Profit/Loss and Segment Assets
The Company evaluates performance based on profit or loss
from operations before interest, income taxes, depreciation
and amortization. Intersegment revenues are recorded at
amounts similar to revenues from external customers.
Intersegment profits or losses are eliminated in
consolidation. Also, the Company does not allocate certain
expenses such as certain professional fees or certain
employee benefits to its segments. The Company's reportable
segments are business units that are responsible for certain
quantitative thresholds of revenue, profits or losses or
assets.

Quarter ended September 30, 2000

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther Totals
Revenue from external sources$70,391$6,230  $5,278 $ -$81,899    $(12)
$81,887
Intersegment revenues -      - 6,303     -   6,303   - 6,303
Interest expense  2,695  1,900    32     -   4,627(250)4,377
Depreciation and amortization1,371 8   322       -1,701   42     1,743
Segment profit (loss)(5,475)(839)384     5 (5,925)(4,507)(10,432)
Segment assets  $65,140 $4,318$13,028$2,438$84,924$1,226$86,150




Quarter ended September 30, 1999

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther Totals
Revenue from external sources$70,743$4,542  $4,744$ --$80,029    $3   $80,032
Intersegment revenues--     -- 3,930    --   3,930  -- 3,930
Interest expense  3,213    906    --    --   4,119   6 4,125
Depreciation and amortization1,322 6   160      --1,488   33     1,521
Segment profit (loss)(12,207)(608)1,211(47)(11,651)(3,524)(15,175)
Segment assets  $76,063 $2,833$11,030$2,479$92,405$6,254$98,659






Nine months ended September 30, 2000

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther Totals
Revenue from external sources$210,660$15,358$15,393$ -$241,411   $(35)
$241,376
Intersegment revenues -      -19,784     -  19,784   -19,784
Interest expense  8,564  3,852   189     -  12,605(284)12,321
Depreciation and amortization4,11521   729       14,866  102     4,968
Segment profit (loss)(21,486)(1,952) 3,501       5(19,932)(10,505)    (30,437)
Segment assets  $65,140 $4,318$13,028$2,438       $84,924
$1,226  $86,150




Nine months ended September 30, 1999

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther Totals
Revenue from external sources$152,930$13,239$13,744$ --$179,913  $-   $179,913
Intersegment revenues--     --11,433    --  11,433  --11,433
Interest expense  6,583  2,494    --    --   9,077 279 9,356
Depreciation and amortization1,52022   540       22,084  112     2,196
Segment profit (loss)(16,317)(1,924) 3,698    (43)(14,586)(7,685)     (22,271)
Segment assets  $76,063 $2,833$11,030$2,479$92,405$6,254$98,659



(5) Recently Issued Accounting Pronouncements

Effective for fiscal quarters in fiscal years beginning
after June 15, 2000, the Company will be required to adopt
Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging
Activities" ("SFAS 133"). SFAS 133 requires entities to
disclose information for derivative financial instruments,
and to recognize all derivatives as assets or liabilities
measured at fair value. The Company will evaluate the impact
of the statement on the Company's financial position and
results of operations and adopt SFAS 133 as required.

In  December  1999, the SEC staff released Staff  Accounting
Bulletin No. 101 ("SAB 101"), which provides guidance on the
recognition,  presentation  and  disclosure  of  revenue  in
financial  statements. The Company will evaluate the  impact
of  the  bulletin  on the Company's financial  position  and
results of operations and adopt SAB 101 as required  in  the
fourth quarter of 2000.

In   September 2000, the FASB issued Statement of  Financial
Accounting Standards No. 140, "Accounting for Transfers  and
Servicing   of  Financial  Assets  and  Extinguishments   of
Liabilities  (A  Replacement of FASB  Statement  125)"("SFAS
140").  SFAS  140  provides  the  accounting  and  reporting
guidance for transfers and servicing of financial assets and
extinguishments of liabilities. While most of the provisions
of  SFAS  140 will become effective for transactions entered
into  after March 31, 2001, the disclosures in SFAS 140 will
be  effective  for  fiscal years ending after  December  15,
2000. The Company is in the process of evaluating the impact
that  this pronouncement will have on its financial position
or results of operations.







































              PHYAMERICA PHYSICIAN GROUP, INC.
           Management's Discussion And Analysis Of
        Financial Condition And Results Of Operations

RESULTS OF OPERATIONS
THIRD QUARTER ENDED SEPTEMBER 30, 2000 COMPARED TO THE THIRD
QUARTER ENDED SEPTEMBER 30, 1999.
During 1998, the Company completed its divestiture strategy.
The objective of the divestiture strategy was to identify
operating units that were either underperforming or were not
deemed critical to the overall operating strategy.  The
Company sold Doctors Health Plan, Inc. ("DHP") in March
1998, and HealthPlan Southeast ("HPSE") in October 1998.
The Company sold Better Health Plan ("BHP") in August 1997.
Collectively, these businesses are referred to as the HMOs.
During 1997, the Company also sold the last of its clinic
operations.  The Company refers to the HMOs, clinic
operations and some smaller related businesses as the
divested businesses.  The core businesses are comprised of
emergency medicine practice management, government services
and medical billing and business management services.
      In  July  1999,  in  order  to  expand  its  Emergency
Physician  Management  business, the  Company  acquired  the
hospital  emergency department staffing assets  of  Sterling
Healthcare,  Inc. ("Sterling"), a subsidiary of FPA  Medical
Management, Inc., which was in a Chapter 11 proceeding under
the  United States Bankruptcy Code, for a purchase price  of
approximately $69.3 million plus assumption  of  up  to  $18
million  in operating liabilities. In addition, on  December
14,  1999 the Company increased the size of its Billing  and
Business  Management  business  by  approximately  25%  when
Healthcare Business Resources, Inc. ("HBR"), a subsidiary of
the   Company,  acquired  from  a  subsidiary  of   Per   Se
Technologies,  Inc.  the assets used  in  providing  billing
services for the hospital staffing contracts acquired in the
Sterling   Acquisition  (the  "Per  Se  Acquisition").   The
acquisitions  were  accounted for  in  accordance  with  the
purchase  method of accounting, and, therefore, the  results
of  operations for the acquired operations are  included  in
the  accompanying financial statements since the acquisition
date.

     Operating Revenue, Net.  Net operating revenue in the
third quarter of 2000 was $81.9 million, representing an
increase of $1.9 million, or 2.4 %, from operating revenues
of $80.0 million in the third quarter of 1999.  The increase
in operating revenue in the Company's core businesses were:

             Three Months Ended September 30,
                        2000     1999              %
                                       Increase
   Core businesses     $81.9    $80.0      $1.9     2.4%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                       $81.9    $80.0      $1.9     2.4%

     The increase in the revenue of the core businesses was
due to growth in the government services group and the
billing and collections operations, as well as the Per Se
acquisition during the fourth quarter of 1999.  In the third
quarter of 2000, the emergency physician management business
generated approximately $70.4 in revenue, which was a
decrease of approximately $0.4 million, or 0.6%, from
approximately $70.8 million of revenue in the third quarter
of 1999. Sterling accounted for approximately $29.5 million
of the revenue in the emergency physician management
business for the third quarter 2000 versus $31.4 million for
the third quarter 1999.  The government services group
accounted for approximately $6.2 million in the third
quarter of 2000, which was an increase of approximately $1.7
million, or 37.8%, from $4.5 million in the third quarter of
1999. The increase in revenue for the government services
group was directly related to the addition of new contracts
in the third quarter 2000. Revenue for the billing and
collections operations was $5.3 million for the third
quarter of 2000, which was an increase of approximately $0.6
million, or 12.8%, from $4.7 million in the third quarter of
1999. .  Revenue of the billing and business management
operations excludes intersegment revenue of approximately
$6.3 million in the third quarter of 2000 and approximately
$3.9 million in the third quarter 1999 representing fees
billed to the emergency physician management business. Per
Se accounted for approximately $2.0 million of gross revenue
for the billing and business management operations, before
the exclusion of intersegment revenue, for the third quarter
2000
     Physician and Other Provider Services Costs and
Expenses.  Physician and other provider services costs and
expenses consist primarily of fees paid to physicians and
other health care providers.  Physician and other provider
services costs and expenses decreased by approximately $3.9
million, or 5.8%, to approximately $62.9 million in the
third quarter of 2000 from approximately $66.8 million in
the third quarter of 1999.  Physician and other provider
services costs and expenses decreased as follows:
             Three Months Ended September 30,
                        2000     1999              %
                                       Decrease

   Core businesses     $62.9    $66.8    ($3.9)     5.8%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                       $62.9    $66.8    ($3.9)     5.8%


      These  expenses  for  the  core  businesses  decreased
because  of terminated contracts in the emergency  physician
management group offset by growth in the government services
group.   In  the third quarter of 2000, physician and  other
provider  services  costs  and expenses  for  the  emergency
physician management group were approximately $57.9 million.
This  represented a decrease of $5.3 million, or 8.4%,  from
$63.2  million  in  the  third  quarter  of  1999.  Sterling
accounted  for approximately $26.0 million of the  physician
and other provider services costs and expenses for the third
quarter  2000  versus $31.9 million for  the  third  quarter
1999.   The   government  services  group's  expenses   were
approximately  $5.1 million in the third  quarter  of  2000,
representing an increase of approximately $1.5  million,  or
41.7%,  from approximately $3.6 million in the third quarter
of  1999.  The  increase  in physician  and  other  provider
services  costs  and  expenses for the  government  services
group  is  directly related to the addition of new contracts
in   the  third  quarter  2000.  The  billing  and  business
management  operations  did not incur  physician  and  other
provider services costs and expenses.

     Medical Support Services Costs and Expenses.  Medical
support services costs and expenses include all other direct
costs and expenses of practice management activities, as
well as billing, collection and physician business
management services costs and expenses.  Medical support
services costs and expenses increased by $0.8 million, or
9.3%, to $9.4 million in the third quarter of 2000 from $8.6
million in the third quarter of 1999.  Medical support
services costs and expenses increased as follows:
             Three Months Ended September 30,
                        2000     1999  Increase    %

   Core businesses      $9.4     $8.6      $0.8     9.3%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                        $9.4     $8.6      $0.8     9.3%

      In the third quarter of 2000, medical support services
costs  and  expenses for the emergency physician  management
group  were approximately $1.0 million.  This represented  a
decrease of $0.1 million, or 9.1%, from $1.1 million in  the
third  quarter of 1999. Sterling accounted for $0.5  million
of  the medical support services costs and expenses for  the
emergency  physician management group for the third  quarter
of  2000  and 1999. The government services group's expenses
were approximately $0.5 million in the third quarter of 2000
and  1999.  The  billing  and  business  management  group's
expenses  were  approximately  $7.9  million  in  the  third
quarter  of  2000 representing an increase of  approximately
$0.9  million, or 12.9%, from approximately $7.0 million  in
the  third quarter of 1999. The increase in medical  support
services  costs  and expenses for the billing  and  business
management  group  is  due to start-up expenses  related  to
preparation for servicing additional outside clients.

     Selling, General and Administrative Costs and Expenses.
Selling, general and administrative costs and expenses
increased by $4.3 million, or 35.8%, to $16.3 million in the
third quarter of 2000 from $12.0 million in the third
quarter of 1999.  Selling, general and administrative costs
and expenses increased as follows:
             Three Months Ended September 30,
                        2000     1999              %
                                       Increase
   Core businesses     $16.3    $12.0      $4.3    35.8%
   Divested              0.0      0.0       0.0    100.0
   businesses
                       $16.3    $12.0      $4.3    35.8%

     Selling, general and administrative costs and expenses
for the core businesses increased primarily because of the
Per Se acquisition, and increases in overhead. In the third
quarter of 2000, selling, general and administrative costs
and expenses for the Physician Contract group were
approximately $8.3 million.  This represented a decrease of
$2.0 million, or 19.4%, from $10.3 million in the third
quarter of 1999.  .  Sterling accounted for approximately
$2.3 million of the selling, general and administrative cost
and expenses for the Physician Contract group for the third
quarter 2000 versus $3.9 million for the third quarter 1999.
The decrease in selling, general and administrative costs
and expenses for the Physician Contract group is related to
contract termination and the cost associated with the sale
of eligible accounts receivable. The government services
group's expenses were approximately negative $0.5 million
for the nine months ended September 30, 2000, this
represented a decrease of $0.6 million or 600%, from
approximately $0.1 million in the third quarter of 1999.
The decrease in selling, general and administrative costs
and expenses for the government services group is primarily
due to the cost associated with the sale of eligible
accounts receivable. The billing and business management
group's expenses were approximately $3.2 million in the
third quarter of 2000 representing an increase of
approximately $2.7 million, or 540.0%, from approximately
$0.5 million in the third quarter of 1999. Per Se accounted
for approximately $2.5 million of the selling, general and
administrative expenses for the billing and business
management group for the third quarter 2000.  Selling,
general and administrative costs and expenses for the
corporate group increased to approximately $5.3 million in
the third quarter of 2000 representing an increase of
approximately $4.2 million, or 381.8%, from approximately
$1.1 million in the third quarter of 1999. The increase in
selling, general and administrative costs and expenses for
the corporate group increased primarily due to the cost
associated with the sale of eligible accounts receivable as
well as increased legal and overhead expenses.
     Related party expense, net.  Related party expense, net
decreased by $0.2 million, or 28.6%, to $0.5 million in the
third quarter of 2000 from $0.7 million in the third quarter
of 1999.  This decrease is primarily due to reductions in
premium expense to a related party and the discontinuation
of management fee income from a related party.
     Interest Expense.  Interest expense increased by $0.2
million, or 4.8%, to $4.4 million in the third quarter of
2000 from $4.2 million in the third quarter of 1999 due
primarily to higher amounts of outstanding debt during the
third quarter of 2000.  The costs associated with the sale
of eligible accounts receivable in the third quarter of 2000
and 1999 have been included in selling, general and
administrative expenses.
     Other expenses.  Other expenses decreased by $3.8
million or 54.3%, to $3.2 million in the third quarter of
2000 from $7.0 million in the third quarter of 1999,
primarily due to the settlement of prior litigation in the
third quarter 2000 and non-repetitive legal accruals
recognized during the third quarter 1999.
     Benefit (provision) for income taxes.  There was no
benefit (provision) for income taxes for the third quarter
of 2000 and 1999.  This is due to continued net operating
losses.
      Net Loss.  Primarily as a result of the foregoing, the
Company  reported a net loss of $10.4 million in  the  third
quarter  of 2000 compared to a net loss of $15.2 million  in
the third quarter of 1999.

























NINE  MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO  THE  NINE
MONTHS ENDED SEPTEMBER 30, 1999.

     Operating Revenue, Net.  Net operating revenue for the
nine months ended September 30, 2000 was $241.4 million,
representing an increase of $61.5 million, or 34.2 %, from
operating revenue of
$179.9 million for the nine months ended September 30, 1999.
The increases in operating revenue among the various
businesses were as follows:
              Nine Months Ended September 30,
                        2000     1999              %
                                       Increase
   Core businesses    $241.4   $179.9     $61.5    34.2%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                      $241.4   $179.9     $61.5    34.2%

     The increase in the revenue of the core businesses was
due to growth in the government services group and the
billing and collections operations, as well as the Sterling
and Per Se acquisitions. For the nine months ended September
30, 2000, the emergency physician management business
generated approximately $210.7 in revenue, which was an
increase of approximately $57.8 million, or 37.8%, from
approximately $152.9 million of revenue for the nine months
ended September 30, 1999.  Sterling accounted for
approximately $89.4 million of the revenue in the emergency
physician management business for the nine months ended
September 30, 2000 versus $31.4 million for the nine months
ended September 30, 1999. The government services group
accounted for approximately $15.3 million for the nine
months ended September 30, 2000, which was an increase of
approximately $2.1 million, or 15.9%, from $13.2 million for
the nine months ended September 30, 1999. Revenue for the
billing and collection operations was $15.4 million for the
nine months ended September 30, 2000, which was an increase
of approximately $1.6 million, or 11.6%, from $13.8 million
for the nine months ended September 30, 1999. Revenue of the
billing and business management operations excludes
intersegment revenue of approximately $19.8 million for the
nine months ended September 30, 2000 and approximately $11.4
million for the nine months ended September 30, 1999,
representing fees billed to the emergency physician
management business. Per Se accounted for approximately $6.6
million of the gross revenue for the billing and business
management operations, before the exclusion of intersegment
revenue, for the nine months ended September 30, 2000.
     Physician and Other Provider Services Costs and
Expenses.  Physician and other provider services costs and
expenses consist primarily of fees paid to physicians and
other health care providers.  Physician and other provider
services costs and expenses increased by approximately $48.6
million, or 35.7%, to approximately $184.7 million for the
nine months ended September 30, 2000 from approximately
$136.1 million for the nine months ended September 30,1999.
Physician and other provider services costs and expenses
increased as follows:
              Nine Months Ended September 30,
                        2000     1999  Increase    %

   Core businesses    $184.7   $136.1     $48.6    35.7%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                      $184.7   $136.1     $48.6    35.7%


     These expenses for the core businesses increased mostly
because  of  the  Sterling acquisition  and  growth  in  the
government  services group, which were offset by  terminated
contracts  in the emergency physician management group.  For
the  nine  months  ended September 30, 2000,  physician  and
other provider services costs and expenses for the emergency
physician   management   group  were  approximately   $172.5
million.  This represented an increase of $47.1 million,  or
37.6%,  from  $125.4  million  for  the  nine  months  ended
September  30,  1999. Sterling accounted  for  approximately
$78.7  million of the physician and other provider  services
costs  and expenses for the nine months ended September  30,
2000   versus  $31.9  million  for  the  nine  months  ended
September  30, 1999. The government services group  expenses
were  approximately $12.2 million for the nine months  ended
September  30,  2000, which was an increase of approximately
$1.5  million,  or 14.0%, from $10.7 million  for  the  nine
months  ended  September 30, 1999. The billing and  business
management  operations  did not incur  physician  and  other
provider services costs and expenses.

     Medical Support Services Costs and Expenses.  Medical
support services costs and expenses include all other direct
costs and expenses of practice management activities, as
well as billing, collection and physician business
management services costs and expenses.  Medical support
services costs and expenses increased by $1.1 million, or
4.2%, to $27.1 million for the nine months ended September
30, 2000 from $26.0 million for the nine months ended
September 30, 1999.  Medical support services costs and
expenses increased as follows:
              Nine Months Ended September 30,
                        2000     1999  Increase    %

   Core businesses     $27.1    $26.0      $1.1     4.2%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                       $27.1    $26.0      $1.1     4.2%

      The increase in the medical support services costs and
expenses  of  the core businesses was due to growth  in  the
government  services group and the billing  and  collections
operations, as well as the Sterling and Per Se acquisitions.
For  the  nine  months  ended September  30,  2000,  medical
support  services  costs  and  expenses  for  the  emergency
physician management group were approximately $3.0  million.
This  represented a decrease of $1.5 million, or 33.3%, from
$4.5  million  for the nine months ended September  30,1999.
Sterling  accounted for approximately $2.1  million  of  the
medical   support  services  costs  and  expenses  for   the
emergency  physician management group for  the  nine  months
ended  September 30, 2000 versus $0.6 million for  the  nine
months  ended  September 30, 1999. The  government  services
group's  expenses were approximately $1.4  million  for  the
nine months ended September 30, 2000 and September 30, 1999.
The  billing  and business management group's expenses  were
approximately  $22.7  million  for  the  nine  months  ended
September 30, 2000 representing an increase of approximately
$2.6 million, or 12.9%, from approximately $20.1 million for
the nine months ended September 30, 1999.

     Selling, General and Administrative Costs and Expenses.
Selling, general and administrative costs and expenses
increased by $20.6 million, or 77.2%, to $47.3 million for
the nine months ended September 30, 2000 from $26.7 million
for the nine months ended September 30, 1999.  Selling,
general and administrative costs and expenses increased as
follows:
              Nine Months Ended September 30,
                        2000     1999  Increase    %

   Core businesses     $47.3    $26.6     $20.7    77.8%
   Divested              0.0      0.1       0.0      0.0
   businesses
                       $47.3    $26.7     $20.6    77.2%

     Selling, general and administrative costs and expenses
for the core businesses increased primarily because of the
Sterling and Per Se acquisitions, and increases in overhead.
For the nine months ended September 30, 2000, selling,
general and administrative costs and expenses for the
Physician Contract group were approximately $28.9 million.
This represented an increase of  $8.2 million, or 39.6%,
from $20.7 million for the nine months ended September 30,
1999.  Sterling accounted for approximately $11.5 million of
the selling, general and administrative cost and expenses
for the physician contract group for the nine month ended
September 30, 2000 versus $3.9 million for the nine months
September 30, 1999. The increase in selling, general and
administrative costs and expenses for the Physician Contract
group is related to the cost associated with the sale of
eligible accounts receivable, goodwill associated with the
Sterling acquisition and increases in overhead expenses. The
government services group's expenses were approximately a
negative $0.2 million for the nine months ended September
30, 2000 representing a decrease of approximately $0.8
million, or 133.3%, from approximately $0.6 million for the
nine months ended September 30, 1999.  The decrease in
selling, general and administrative costs and expenses for
the government services group is primarily due to the cost
associated with the sale of eligible accounts receivable.
The billing and business management group's expenses were
approximately $8.7 million for the nine months ended
September 30, 2000 representing an increase of approximately
$7.4 million, or 569.2%, from approximately $1.3 million for
the nine months ended September 30, 1999. Per Se accounted
for approximately $7.0 million of the selling, general and
administrative expenses for the billing and business
management group for the nine months ended September 30,
2000. Selling, general and administrative costs and expenses
for the corporate group increased to approximately $9.9
million for the nine months ended September 30, 2000
representing an increase of approximately $5.9 million, or
147.5%, from approximately $4.0 million for the nine months
ended September 30, 1999. The increase in selling, general
and administrative costs and expenses for the corporate
group increased primarily due to the cost associated with
the sale of eligible accounts receivable as well as
increased legal and overhead expenses. For the nine months
ended September 30, 1999, there were approximately $0.1
million in selling, general and administrative costs
associated with continued wrap-up activities for divested
businesses.
     Related party expense, net.  Related party expense, net
increased by $0.3 million, or 30.0%, to $1.3 million for the
nine months ended September 30, 2000 from $1.0 million for
the nine months ended September 30, 1999.  This increase is
primarily due to rent, premium and other miscellaneous
expenses to related parties, offset by decreases related to
the discontinuation of management fee income from a related
party.
     Interest Expense.  Interest expense increased by $2.9
million, or 30.9%, to $12.3 million for the nine months
ended September 30, 2000 from $9.4 million for the nine
months ended September 30, 1999 due primarily to higher
amounts of outstanding debt during the nine months ended
September 30, 2000.  The costs associated with the sale of
eligible accounts receivable for the nine months ended
September 30, 2000 and 1999 have been included in selling,
general and administrative expenses.
     Other expenses.  Other expenses decreased by $1.0
million or 8.1%, to $11.4 million for the nine months ended
September 30, 2000 from $12.4 million for the nine months
ended September 30, 1999, primarily due to the settlement of
prior litigation in the third quarter 2000 and non-
repetitive legal accruals recognized during the third
quarter 1999, partially offset by the increase in interest
expense described above.
     Benefit (provision) for income taxes.  There was no
benefit (provision) for income taxes for the nine months
ended September 30, 2000 and 1999.  This is due to continued
net operating losses.
     Net Loss.  Primarily as a result of the foregoing, the
Company reported a net loss of $30.4 million for the nine
months ended September 30, 2000 compared to a net loss of
$22.3 million for the nine months ended September 30, 1999.

LIQUIDITY AND  CAPITAL RESOURCES
      The  Company's  primary financing source  consists  of
three  accounts receivable sale programs with affiliates  of
NCFE.    Under  these  programs,  NCFE  purchases  qualified
receivables  generated by the Company  or  acquired  by  the
Company   from   independent  contractor  physicians.    The
proceeds  from  these sales are used to fund  the  Company's
working  capital  needs.  One program purchases  receivables
generated  by  the hospital contracts of the  Company  other
than   those  acquired  in  the  Sterling  Acquisition  (the
"Coastal   Program"),  one  program  purchases   receivables
generated by the hospital contracts acquired in the Sterling
Acquisition  (the "Sterling Program"), and a  third  program
purchases  receivables generated in the Government  Services
business   (the   "Government  Program").    The   Emergency
Physician  Management business and the  Government  Services
business   have   not  been  able  to  generate   sufficient
receivables  to sell to the programs to finance the  ongoing
working  capital needs of the Company.  NCFE  has  supported
the Company by funding the purchase of receivables billed by
the  Company  and those to be billed in the  future  by  the
Company.   As  of  September  30,  2000,  the  Company   had
outstanding  advances  of  approximately  $230  million   of
receivables   financing,  net  of  reserves  held   on   the
outstanding  balances  of  which approximately  $81  million
related to billed receivables and approximately $149 million
of which related to future receivables. Financing related to
the purchase of future receivables is reflected as long-term
debt  in the accompanying financial statements.  The Coastal
Program  provides for the purchase of up to $115 million  of
receivables  and terminates on June 30, 2001.  The  Sterling
Program  provides for the purchase of up to $95  million  of
receivables and terminates on June 30, 2003. The  Government
Program  provides for the purchase of up to $50  million  of
receivables  and  terminates on June 30,  2001.  Management
expects to renew the  funding  of the Coastal Program
by rolling the amounts into the Sterling Program and the
Government Program.  This will be reflected in new Sale
and Subservicing Agreements being prepared  by NCFE.
The   agreement   should   maintain   the   current purchase
commitment level and will extend the  term  to  June  30,
2002.  Of the total purchase commitments of $260 million  on
these  facilities, including reserve balances  there  is  no
remaining  availability for purchases as  of  September  30,
2000.   Pursuant to the Sale Agreement, the Company  pays  a
program   fee   ranging   from   approximately   10.8%    to
approximately 12.50% per annum on the outstanding amount  of
uncollected  purchased current and future receivables.   The
Company  also borrowed $6.7 million from NCFE under  a  note
dated  December 14, 1999.  The funds were used to  terminate
the   billing  agreement  with  a  subsidiary  of   Per   Se
Technologies,  Inc. and to acquire certain  of  its  billing
operations in December 1999.  The note was repaid in full in
September, 2000 via the payment of nine monthly installments
which  began on January 14, 2000, including interest at  13%
per annum.

     Under a separate loan and security agreement, an
affiliate of NCFE has agreed to provide the Company with a
revolving line of credit of up to $20 million through June
30, 2001.  Interest on outstanding amounts under this line
of credit is payable monthly at prime plus 3%.  The line of
credit is secured by substantially all of the Company's
assets, including pledges of the common stock of each of its
subsidiaries. There is no outstanding balance as of
September 30, 2000.
     The Company has met its cash requirements during the
periods covered by the accompanying consolidated financial
statements through the sale of certain existing accounts
receivable and advances against receivables expected to be
generated in the future, as more fully discussed below.  The
Company's principal uses of cash have been to support
operating activities.  Net cash used in operating activities
decreased by $6.6 million, or 21.6%, for the nine months
ended September 30, 2000, to $24.0 million as compared to
$30.6 million for the nine months ended September 30, 1999.
The Company's net use of cash to support operating
activities resulted primarily from operating losses,
including medical costs of providers, administrative
expenses, legal and professional fees and information
technology initiatives.  Net cash used in investing
activities decreased by $19.6 million, or 96.6%, for the
nine months ended September 30, 2000, to $0.7 million as
compared to $20.3 million for the nine months ended
September 30, 1999. Net cash provided by financing
activities decreased by $27.2 million, or 52.4%, to $24.7
million for the nine months ended September 30, 2000, from
$51.9 million for the nine months ended September 30, 1999.
During the nine months ended September 30, 2000, the
Company had net borrowings of $24.6 million as compared
to $51.9 million for the nine months ended September 30,
2000.
     The Company expects to satisfy its anticipated demands
and commitments for cash in the next twelve months from the
amounts available under the various agreements with NCFE
discussed above, as well as a reduction in cash used in
operations.  The Company continues to review all aspects of
the business units and implement actions to improve cash
flow and profitability.  Among the key actions being
implemented by the Company are changes in the method of
compensating the independent contractor physicians under the
Practice Partners Program.  The Company also centralized
certain administrative tasks and is evaluating ways of
expanding its customer base.  The primary objectives are to
increase cash flow to repay debt, to improve overall
financial results and improve the Company's stock price.  If
the Company is unable to achieve these objectives, it will
likely experience a material decrease in liquidity which
would cause the Company to increase its reliance on
financing under the revolving line of credit provided by an
affiliate of NCFE.  Until the Company significantly improves
cash flow, it will be dependent upon the continued weekly
purchases of eligible accounts receivable by NCFE and the
line of credit provided by an affiliate of NCFE in order to
meet its obligations.
     For the foreseeable future, to continue as a going
concern, the Company will depend upon NCFE to fund its
working capital needs either by purchases of current and
future accounts receivable or through the line of credit.
The Company's accounts receivables sales programs and line
of credit with NCFE have been or will be extended to June
30, 2001 and beyond.  Management believes that NCFE will be
able to fulfill the Company's needs.  The consolidated
financial statements do not include any adjustments to the
financial statements that might be necessary should NCFE not
provide the necessary working capital or should the Company
be unable to continue as a going concern.



















Quantitative and Qualitative Disclosures About Market Risk.
The table below provides quantitative disclosure information
about the Company's market risk sensitive instruments as of
September 30, 2000 and December 31, 1999. The market risk
sensitive instruments are categorized as instruments entered
into for other than trading purposes. The Company's primary
market risk exposure is associated with debt obligations
arising from three accounts receivable sale programs with
affiliates of NCFE, and a note payable to NCFE.  These debt
obligations are maintained at fixed interest rates. The
details on how these programs are managed are described in
the preceding section on Liquidity and Capital Resources.
The information is presented in U.S. dollar equivalents,
which is the Company's reporting currency.


                         Liabilities
                         September 30,  December 31,
                         2000           1999
   Long-term Debt
       Fixed Rate              $152,845        $128,213
       Weighted Average          11.29%          11.29%
   Interest Rate


     Forward-looking Information or Statements: Except for
statements of historical fact, statements made herein are
forward-looking in nature and are inherently subject to
uncertainties.  The actual results of the Company may differ
materially from those reflected in the forward-looking
statements based on a number of important risk factors,
including, but not limited to: the level and timing of
improvements in the operations of the Company's businesses;
the possibility that the Company may not be able to improve
operations as planned; the inability to obtain continued
and/or additional necessary working capital financing as
needed; and other important factors discussed above under
"Other Trends and Uncertainties" and disclosed from time to
time in the Company's Form 10-K, Form 10-Q and other
periodic reports filed with the Securities and Exchange
Commission.














PART II - OTHER INFORMATION
Item 5
On September 19, 2000, the company filled two vacancies on
the Board of Directors by appointing Mr. Fred Jinks and Mr.
Ernest Bacon to the Board to complete the unexpired terms of
two former directors.  Mr. Jinks, 49, is a resident of
Wilmington, North Carolina, and is a former Financial
Consultant and First Vice President of Merrill Lynch, Pierce
Fenner & Smith, where he worked for over 20 years.  He is a
past member of the President's Club, Chairman's Club, Circle
of Excellence and retired as a member of the Director's
Circle of Merrill Lynch.  Mr. Bacon, 63, is a resident of
Franklin, Tennessee, and is a former executive of
HealthTrust, Inc., Columbia/HCA Healthcare Corporation and
Community Health Systems, and most recently has worked with
a number of Quorum Health Group Affiliated Companies.

     The company's chairman, chief executive officer and
majority shareholder, Steven M. Scott, M.D., has made a
proposal dated November 6, 2000 to acquire, through a cash
out merger transaction, the approximately 43% of the
Company's outstanding common stock that is not owned or
controlled by him or his family members or affiliates.  The
consummation of the offer would mean that PhyAmerica would
become a privately held company.  The proposed offer price
is equivalent to $0.15 per share in cash or an aggregate
price of approximately $2.76 million.

     In response to the offer by Dr. Scott, the Company's
Board of Directors has appointed three outside directors to
a Special Committee to review and evaluate the terms of the
proposal and make a full recommendation to the Board.  The
members of the Special Committee are Mr. Jinks, Mr. Bacon
and Mr. Charles Potter, who has served on the Board since
April, 1977.  The consummation of the proposed transaction
to take the Company private would be subject to, among other
things, the negotiation of a mutually acceptable definitive
merger agreement and the approval of the merger agreement by
the holders of a majority of outstanding shares of the
Company's common stock at a Special Meeting of the
Shareholders.  The Special Committee will also engage
independent legal counsel and independent financial advisors
to advise it in connection with its review and evaluation of
the proposal.  If the Special Committee recommends approval
of the proposal, the Company will furnish a detailed proxy
statement to the shareholders.


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

(a)  Exhibits
None
(b) Reports on Form 8-K
None











SIGNATURES

     Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed by the following
persons in the capacities and on the dates indicated.

PHYAMERICA PHYSICIAN GROUP, INC.
                    (Registrant)

Name                        Title                    Date

/S/Steven M. Scott, M.D.  Chairman of the Board of  November 15, 2000
Steven M. Scott, M.D.     Directors, President and
                          Chief Executive Officer

/S/Marc Weiner            Interim Chief Financial   November 15,2000
Marc Weiner               Officer and Executive
                          Vice President