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 March 31, 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 April 30, 2000 there were outstanding 42,629,295 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 March 31, 2000 (unaudited)
     Unaudited Consolidated Statements of Operations -
     Three months ended March 31, 2000 and 1999
     Unaudited Consolidated Condensed Statements of Cash Flows -
     Three months ended March 31, 2000 and 1999
     Notes to Consolidated Financial Statements
     (Unaudited)
Item 2.  Management's Discussion and Analysis of
             Financial Condition and Results of Operations

PART II - OTHER INFORMATION
     Item 1. Legal Proceedings
     Item 5. Other Information
     Item 6. Exhibits and Other Reports

     SIGNATURES























                 PHYAMERICA PHYSICIAN GROUP, INC.
                   Consolidated Balance Sheets
              (In thousands, except per share data)
                                          March           December
                                           31,              31,
                                          2000             1999
               Assets                   (Unaudite
                                           d)
Current assets:
Cash and cash equivalents             $         -      $         -
Trade accounts receivable, net             31,324           25,113
Reserves held by NCFE                      15,008           16,167
Accounts receivable, other                  2,841            2,329
Receivables from related party                369            1,129
Prepaid expenses and other current          6,462            7,194
assets
          Total current assets             56,004           51,932

Property and equipment, at cost, less       7,486            7,651
accumulated depreciation
Excess of cost over fair value of net      22,953           24,158
assets acquired, net
Other assets                                4,587            5,042
          Total assets                $    91,300      $    88,783

Liabilities and Shareholders' Equity
              (Deficit)
Current liabilities:
Current maturities and other short-   $     5,328      $     7,477
term borrowings
Accounts payable                           31,884           30,277
Accrued physician fees and medical         18,140           18,429
costs
Accrued expenses                            8,713            8,191
          Total current liabilities        64,065           64,374

Long-term debt, excluding current         134,613          120,736
maturities
          Total liabilities               198,678          185,110

Shareholders' equity (deficit):
Common stock $.01 par value; shares
authorized 100,000; shares
issued and outstanding 42,629 and             426              426
42,573, respectively
Additional paid-in capital                178,298          178,285
Common stock warrants                       1,675            1,675
Retained earnings (accumulated          (287,777)        (276,713)
deficit)
          Total shareholders' equity    (107,378)         (96,327)
(deficit)
          Total liabilities and       $    91,300      $    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
                                      March 31,
                                 2000          1999

Operating revenue, net      $     78,655   $    50,695

Costs and expenses:
Physician and other               61,110        34,907
provider services
Medical support services           8,725         8,431
Selling, general and              15,489         7,250
administrative
Related party expense, net           404            90
Total costs and expenses          85,728        50,678

Operating (loss) income          (7,073)            17

Other income (expense):
Interest expense                 (3,880)       (2,429)
Interest income                       17            63
Other related party income         (101)         (114)
(expense), net
Other, net                          (27)           127
 Total other expense             (3,991)       (2,353)


Loss before income taxes        (11,064)       (2,336)

Benefit for income taxes               -             -

Net loss                    $   (11,064)   $   (2,336)

Net loss per common share:
Basic and diluted loss per  $     (0.26)   $    (0.06)
share


Shares used to compute loss
per share, basic and              42,572        37,832
diluted


   See accompanying notes to consolidated financial
                      statements.














            PHYAMERICA PHYSICIAN GROUP, INC.
    Consolidated Condensed Statements of Cash Flows
                     (In thousands)
                      (Unaudited)
                                          Three Months
                                             Ended
                                           March 31,

                                        2000       1999
Net cash used in operating           $ (11,50    $  (9,45
activities                                3)          8)

Cash flows from investing
activities:
     Purchases of property and         (238)       (158)
equipment, net
          Net cash used in investing   (238)       (158)
activities

Cash flows from financing
activities:
     Borrowing of debt, net            11,728       11,95
                                                       5
     Net proceeds from issuances of       13          11
common stock
          Net cash provided by         11,741       11,96
financing activities                                   6
          Net increase in cash and         0       2,350
cash equivalents
Cash and cash equivalents at               0          45
beginning of period
Cash and cash equivalents at end of  $     0    $  2,395
period


Supplemental disclosures of cash
flow information:
     Cash payments during the period
for:
          Interest                   $ 4,016    $  2,565
          Income taxes                   135          60

   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) Comprehensive Income

Statement  of Financial Accounting Standards No. 130,  "Reporting
Comprehensive  Income", establishes rules for the  reporting  and
display   of  comprehensive  income  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.

The  components of comprehensive income, net of related tax,  for
the quarter ended March 31, 2000 and 1999, are as follows:

In thousands of       Three months ended
dollars                    March 31,
                        2000      1999
Net loss               $(11,064  $(2,336)
                              )
Unrealized gains             --        --
(losses)on securities
Comprehensive Income   $(11,064  $(2,336)
                              )

(3) Segment Information

During the quarters ended March 31, 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 March 31, 2000

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther
Totals
Revenue from external sources$69,253$4,474  $4,910 $ -$78,637
$18             $78,655
Intersegment revenues -      - 6,472     -   6,472   - 6,472
Interest expense  2,893    912    93     -   3,898(18) 3,880
Depreciation and amortization1,373 6   203       -1,582   28
1,610
Segment profit (loss)(9,211)(630)1,287 (2) (8,556)(2,508)(11,064)
Segment assets   71,614  4,11414,170 2,423  92,321(1,021)91,300




Quarter ended March 31, 1999

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther
Totals
Revenue from external sources$41,972$4,362  $4,345$ --$50,679
$16             $50,695
Intersegment revenues--     -- 3,544    --   3,544  -- 3,544
Interest expense  1,642    743    --    --   2,385  44 2,429
Depreciation and amortization104   9   197       1 311    43
354
Segment profit (loss)(874)(635)1,090  (21)   (440)(1,896)(2,336)
Segment assets   32,721  2,78111,408   649  47,55913,58961,148



(4) Recently Issued Accounting Pronouncements

Effective for fiscal quarters and 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 does not
believe that this pronouncement will have a material impact 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

FIRST  QUARTER ENDED MARCH 31, 2000 COMPARED TO THE FIRST QUARTER
ENDED MARCH 31, 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 first
quarter of  2000 was $78.7 million, representing an increase of
$28.0 million, or 55.2 %, from  operating revenues of $50.7
million in the first quarter of 1999.  The increases in operating
revenue among the various businesses were as follows:
               Three Months Ended March 31,
                    2000     1999                  %
                                       Increase
   Core businesses     $78.7    $50.7     $28.0    55.2%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                       $78.7    $50.7     $28.0    55.2%

     The increase in the revenue of the core businesses was due
mostly to the Sterling Acquisition.  In the first quarter  of
2000, the emergency physician management business generated
approximately $69.3 million in revenue, which was an increase of
approximately $27.3 million, or 65.0%, from approximately $42.0
million of revenue in the first quarter of 1999.  Approximately
$29.9 of this increase was attributable to Sterling offset by a
decrease in the non-Sterling contracts, related to contract
terminations.  The government services group accounted for
approximately $4.5 million in the first quarter of 2000, which
was an increase of approximately $0.1 million, or 2.3%, from $4.4
million in the first quarter of 1999. Revenue for the billing and
collections operations was $4.9 million for the first quarter of
2000, which was an increase of approximately $0.6 million, or
14.0%, from $4.3 million in the first quarter of 1999 due to
growth in the billing contracts and fees. Revenue of the billing
and business management operations excludes intersegment revenue
of approximately $6.5 million in the first quarter of 2000 and
approximately $3.5 million in the first quarter 1999 representing
fees billed to the emergency physician management business.
     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 $26.2 million, or  75.1%, to
approximately $61.1 million in the first quarter of 2000 from
approximately $34.9 million in the first quarter  of 1999.
Physician and other provider services costs and expenses
increased as follows:
               Three Months Ended March 31,
                      2000     1999    Increase    %

   Core businesses     $61.1    $34.9     $26.2    75.1%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                       $61.1    $34.9     $26.2    75.1%


      These  expenses  for the core businesses  increased  mostly
because  of  the Sterling acquisition.  In the first  quarter  of
2000,  physician and other provider services costs  and  expenses
for  the  emergency physician management group were approximately
$57.6 million.  This represented an increase of $26.3 million, or
84.0%,  from  $31.3  million  in  the  first  quarter  of   1999.
Approximately   $26.8  of  this  increase  was  attributable   to
Sterling,  offset  by  a decrease in the non-Sterling  contracts,
related   to  contract  terminations.   The  government  services
group's  expenses were approximately $3.5 million  in  the  first
quarter  of  2000, representing a decrease of approximately  $0.1
million,  or 2.8%, from approximately $3.6 million in  the  first
quarter  of  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 $0.3 million, or 3.6%, to $8.7 million in the first
quarter of 2000 from $8.4 million in the first quarter of 1999.
Medical support services costs and expenses increased as follows:
               Three Months Ended March 31,
                      2000     1999    Increase    %

   Core businesses      $8.7     $8.4      $0.3     3.6%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                        $8.7     $8.4      $0.3     3.6%

      These  expenses  for the core businesses increased  due  to
contract terminations in the emergency physician management group
and  growth  in the billing operations.  In the first quarter  of
2000,  medical  support  services  costs  and  expenses  for  the
emergency  physician  management group  were  approximately  $0.9
million.  This represented a decrease of $0.7 million, or  43.8%,
from  $1.6  million in the first quarter of 1999.  The government
services group's expenses were approximately $0.5 million in  the
first  quarter of 2000, representing an increase of approximately
$0.1  million, or 25.0%, from approximately $0.4 million  in  the
first  quarter  of  1999.   The billing and  business  management
group's  expenses were approximately $7.3 million  in  the  first
quarter  of  2000 representing an increase of approximately  $0.9
million,  or 14.1%, from approximately $6.4 million in the  first
quarter of 1999.

     Selling, General and Administrative Costs and Expenses.
Selling, general and administrative costs and expenses increased
by $8.2 million, or 112.3%, to $15.5 million in the first quarter
of 2000 from $7.3 million in the first quarter  of 1999.
Selling, general and administrative costs and expenses increased
as follows:
               Three Months Ended March 31,
                      2000     1999    Increase    %

   Core businesses     $15.5     $7.3      $8.2   112.3%
   Divested              0.0      0.0       0.0      0.0
   businesses
                       $15.5     $7.3      $8.2   112.3%

     Selling, general and administrative costs and expenses for
the core businesses increased because of the Sterling and Per Se
acquisitions. In the first quarter of 2000, selling, general and
administrative costs and expenses for the Physician Contract
group were approximately $10.6 million.  This represented an
increase of  $5.8 million, or 120.8%, from $4.8 million in the
first quarter of 1999.  Approximately $4.8 million of the
increase is attributable to the Sterling acquisition. The
government services group's expenses were approximately $0.2
million in the first quarter of 2000 representing a decrease of
approximately $0.1 million, or 33.3%, from approximately $0.3
million in the first quarter of 1999.  The billing and business
management group's expenses were approximately $2.7 million in
the first quarter of 2000 representing an increase of
approximately $2.3 million, or 575.0%, from approximately $0.4
million in the first quarter of 1999. Approximately $2.1 million
of the increase is attributable to the Per Se acquisition.
Selling, general and administrative costs and expenses for the
corporate group increased to approximately $2.0 million in the
first quarter of 2000 representing an increase of approximately
$0.2 million, or 11.1%, from approximately $1.8 million in the
first quarter of 1999.
     Related party expense, net.  Related party expenses, net
increased by $0.3 million, or 300.0%, to $0.4 million in the
first quarter of 2000 from $0.1 million in the first quarter of
1999.  This increase is primarily due to rent and premium expense
to related parties.
     Interest Expense.  Interest expense increased by $1.5
million to $3.9 million in the first quarter of 2000 from $2.4
million in the first quarter of 1999 due primarily to the
Sterling Acquisition resulting in higher outstanding amounts of
debt during the first quarter of 2000.  The costs associated with
the sale of eligible accounts receivable in the first quarter of
2000 and 1999 have been included in selling, general and
administrative expenses.
     Other, net.  Other expenses increased by $1.6 million or
66.7% , to $4.0 million in the first quarter of 2000 from $2.4
million in the first quarter of 1999.
     Benefit (provision) for income taxes.  There was no benefit
(provision) for income taxes for the first 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 $11.1 million in the first quarter
of 2000 compared to a net loss of $2.3 million in the first
quarter of 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  March  31, 2000, the Company  had  outstanding
advances  of approximately $204 million of receivables financing,
of  which approximately $74 million related to billed receivables
and  approximately  $130 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.   Of  the
total  purchase commitments of $260 million on these  facilities,
the  remaining  availability for purchases is  approximately  $17
million  at March 31, 2000.  Pursuant to the Sale Agreement,  the
Company  pays a program fee ranging from approximately 10.94%  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  is repayable in nine monthly installments beginning 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 4%.  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 March 31, 2000.
     The Company has met its cash requirements during the periods
covered by the accompanying consolidated financial statements
through the sale of certain existing and future accounts
receivable, as more fully discussed below, and the sale of
certain of its subsidiaries.  The Company's principal uses of
cash have been to support operating activities.  Net cash used in
operating activities increased by $2.0 million, or 21.1%, for the
three months ended March 31, 2000, to $11.5 million as compared
to $9.5 million for the three months ended March 31, 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 was $.2 million for the three months ended
March 31, 2000 and 1999. Net cash provided by financing
activities decreased by $0.3 million, or 2.5%, to $11.7 million
for the three months ended March 31, 2000, from $12.0 million for
the three months ended March 31, 1999. During the three months
ended March 31, 2000, the Company had net borrowings of $11.7
million as compared to $12.0 million for the three months ended
March 31, 1999. Net borrowings increased during the three months
ended March 31, 2000 in order to fund the Company's net cash used
to support operating activities.
     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
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.



YEAR 2000 ISSUES
     The Company places significant reliance upon information
technology for day to day operations.  The Company's reliance on
non-Information Technology systems is not significant.  In 1997,
the Company began a review of computer applications and platforms
to determine that they were Year 2000 compliant before December
31, 1999.  The Company completed the review of all applications
and has not experienced any significant problems or adverse
consequences with its major applications.  The costs of the
project were not material and a significant reallocation of
resources was not required to address Year 2000 issues.
     The Company relies on a number of outside parties to process
claims for emergency department visits.  The outside parties are
computer processing and telecommunications vendors, insurance
companies, HMOs and entities that process claims on behalf of
Medicare and state Medicaid programs.  The Company is not aware
of any significant problems or adverse consequences encountered
by the outside parties that have had, or may have, an adverse
impact on the Company.
     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 1. Legal Proceedings
On March 23, 2000, two shareholders filed a lawsuit styled Bosco,
et  al  v.  Scott,  et  al in the U. S. District  Court  for  the
District  of  Delaware, individually and on behalf of  all  those
similarly  situated,  and derivatively  as  shareholders  of  the
Company,  alleging  five  claims for  relief.   The  first  claim
alleges  breach  of  fiduciary duty by the  directors,  primarily
related to the sales of certain assets to Dr. Scott.  The  second
claim  is  brought against NCFE and Lance Poulsen,  Chairman  and
Chief  Executive  Officer  of   NCFE,  alleging  the  aiding  and
abetting   the  breach  of  fiduciary  duty  by  the   individual
defendents.  The third claim is brought derivatively against  Dr.
Scott,  Mr. Poulsen and NCFE alleging violation of the  Racketeer
Influenced and Corrupt Organizations Act.  Count four is  brought
against   the  individual  directors  for  allegedly   unlawfully
amending  the Company's Certificate of Incorporation to  restrict
transferability  of the Company's stock.  Count five  is  brought
individually  against the directors for breach of fiduciary  duty
in  failing  to  disclose the reason for  the  delisting  of  the
Company's stock by the New York Stock Exchange in December  1998.
The Company believes that the actions taken by management and the
Board   of   Directors  in  divesting  certain  operations   were
appropriate,  were  done for fair and adequate consideration  and
have  been  properly  documented  and  publicly  disclosed.   The
Company  intends  to vigorously defend the action  and,  at  this
stage  of  the litigation, the exposure to the Company cannot  be
determined.
      The  New York State Department of Taxation and Finance  has
written a letter to Better Health Plan, Inc. ("BHP") stating that
as  a  result of an audit of the Corporation Finance  Tax  return
filed  by BHP for the period from May 2, 1995 to May 5, 1995,  it
has  determined  that an adjustment is required to  the  BHP  tax
liability  for that period.  The Company has requested additional
time  to  review the findings.  Based on the limited  information
available  at  this time, the exposure to the  Company,  if  any,
cannot be determined.

Item 5. Other  Information
Effective April 30, 2000 W. Randall Dickerson resigned from the
Board of Director's of PhyAmerica Physician Group, Inc. Mr.
Dickerson also resigned from his positions as Executive Vice
President, Chief Financial Officer and Chief Accounting Officer.

Item 6. - Exhibits and Reports on Form 8-K
(a)  Exhibit Index
10. 1 Employment Agreement By and Between Coastal Physician
Services of South Florida, Inc. and
        Sherman Podolsky, M.D. (1)
10.2 First Amendment to Employment Agreement By and Between
Coastal Physician Services of South
        Florida, Inc. and Sherman  Podolsky, M.D. Dated January
1, 1999. (2)
10.3 Second Amendment to Employment Agreement By and Between
Coastal Physician Services of South
       Florida, Inc. and Sherman  Podolsky, M.D. Dated January 1,
2000.
10.4 Restated and Amended Employment Agreement By and Between
Coastal Physician Group, Inc.
        and Eugene F. Dauchert, Jr.  Dated January 15, 1997. (3)
10.5 Amended and Restated Employment Agreement By and Between
Coastal Physician
       Group, Inc. and Eugene F. Dauchert, Jr. Dated July 1,
1997. (1)
10.6 First Amendment to Employment Agreement By and Between
Coastal Physician Group, Inc. and
        Eugene F. Dauchert, Jr. Dated January 1, 1999. (4)
10.7 Second Amendment to Employment Agreement By and Between
PhyAmerica Physician Group, Inc. and
        Eugene F. Dauchert, Jr. Dated January 1, 2000.

10.8 Employment Agreement By and Between Healthcare Business
Resources, Inc., and Edward L. Suggs,
        Jr. Dated March 1, 1997. (3)
10.9 First Amendment to Employment Agreement By and Between
Healthcare Business Resources, Inc. and
        Edward L. Suggs, Jr. Dated March 1, 2000.
27.  Financial Data Schedule

(b) Reports on Form 8-K
     None


(1)  Incorporated by reference to the December 31, 1997 Form 10-K
  filed by the Company on June 5, 1998.
  (File No. 001-13460)

(2)  Incorporated by reference to the December 31, 1999 Form 10-K
filed by the Company on April 14, 2000.
       (File No. 001-13460)

(3)  Incorporated by reference to the Company's Annual Report on
  Form 10-K for the year ended
  December 31, 1996.

(4)  Incorporated by reference to the Company's Annual Report on
Form 10-K for the year ended
       December 31, 1998.


























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             May 22, 2000
Steven M. Scott, M.D.                             Directors,
President and
Chief Executive Officer







































                                                     Exhibit 10.3
STATE OF NORTH CAROLINA                  SECOND AMENDMENT
                                                TO
COUNTY OF DURHAM                       EMPLOYMENT AGREEMENT

       THIS   SECOND  AMENDMENT  TO  EMPLOYMENT  AGREEMENT  (this
"Amendment") is made and entered into effective the  1st  day  of
January,  2000  by and between PHYAMERICA PHYSICIAN  SERVICES  OF
SOUTH  FLORIDA, INC. ("the "Employer" or "PhyAmerica"), a Florida
corporation, and SHERMAN PODOLSKY, M.D. ("Employee").

                       W I T N E S S E T H

      WHEREAS, Employer and Employee have previously entered into
an  employment  agreement  dated  January  1,  1998,  as  amended
pursuant  to  a  First  Amendment to Employment  Agreement  dated
September  1,  1999 (collectively the "Agreement"),  under  which
Employee is currently employed by Employer; and

     WHEREAS, Employer and Employee desire to modify the existing
terms  of  employment  of Employee to modify  certain  provisions
regarding the Base Salary;

     NOW, THEREFORE, in consideration of the terms and conditions
set  forth in this Amendment, the parties hereby agree  that  the
Agreement is hereby modified as follows:

      1.    Section  1,  of  Exhibit A, Compensation,  is  hereby
amended to delete all language after the first two sentences  (to
eliminate  provisions  which provided for certain  automatic  CPI
adjustments to Base Salary), so that such section shall hereafter
read in its entirety as follows:

           1.    Base  Salary. For services provided  as  an
     employee   of   Employer,   Employee   shall   receive,
     beginning  in January, 2000, a base salary of  $300,000
     per  annum  (the "Base Salary") payable  in  accordance
     with  Employer's current payroll practices.   The  Base
     Salary   shall   be  subject  to  annual   review   and
     adjustment  as  of each January 1 during  the  term  of
     this Agreement, beginning January 1, 2001.

      2.    This Amendment shall be an amendment and modification
to  the  Agreement  and shall become part of  the  Agreement  and
employment  arrangement between Employee and  Employer  from  and
after  the  date  of this Amendment.  All capitalized  terms  not
defined  herein shall have the same meaning as set forth  in  the
Agreement.  Any conflict between terms of this Amendment and  the
Agreement will be resolved in favor of this Amendment.  Except as
amended  herein, all terms of the Agreement shall remain in  full
force and effect.
     IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first above written.

                              PHYAMERICA PHYSICIAN SERVICES
                              OF FLORIDA, INC.


                              By:_____________________________
                              Its:_____________________________




                              ____________________________(SEAL)

Sherman Podolsky, M.D.








































                                                     Exhibit 10.7
STATE OF NORTH CAROLINA                  SECOND AMENDMENT
                                                TO
COUNTY OF DURHAM                       EMPLOYMENT AGREEMENT

       THIS   SECOND  AMENDMENT  TO  EMPLOYMENT  AGREEMENT  (this
"Amendment") is made and entered into effective the  1st  day  of
January,  2000 by and between PHYAMERICA PHYSICIAN  GROUP,  INC.,
f/k/a   COASTAL   PHYSICIAN  GROUP,  INC.  ("the  "Employer"   or
"PhyAmerica"), a Delaware corporation with its principal place of
business  in Durham, North Carolina, and EUGENE F. DAUCHERT,  Jr.
("Employee").

                       W I T N E S S E T H

      WHEREAS, Employer and Employee have previously entered into
an employment agreement dated July 1, 1997 (the "Agreement"), and
amended  January  1,  1999,  under which  Employee  is  currently
employed by Employer; and

      WHEREAS, Employer and Employee desire to substantially  and
materially  modify the existing terms of employment  of  Employee
to,  among  other matters, increase his Base Salary,  modify  the
Incentive  Bonus  structure, extend the Term of  employment,  and
provide for payment of earned bonuses;

     NOW, THEREFORE, in consideration of the terms and conditions
set  forth in this Amendment, the parties hereby agree  that  the
Agreement is hereby modified as follows:

      1.    The  Agreement is hereby extended,  effective  as  of
January 1, 2000 and shall continue through and including December
31,  2000  (the  "Term"), unless the Agreement is  (a)  otherwise
terminated  in  accordance with the provisions contained  in  the
Agreement,  or (b) extended by mutual agreement of  Employer  and
Employee.   After  the  Term, the Agreement  may  be  renewed  or
extended upon mutual agreement of the parties.  If the parties do
not  agree  to  an extension on other terms, then  the  Agreement
shall  automatically renew on a year-to-year basis  until  either
Employer or Employee terminates the Agreement pursuant to Section
12 therein.

      2.    Replacement  of Exhibit A.  Exhibit A,  Compensation,
attached  to  the Agreement is hereby replaced by the  Exhibit  A
dated January 1, 2000 and attached to this Amendment.

      3.    This Amendment shall be an amendment and modification
to  the  Agreement  and shall become part of  the  Agreement  and
employment  arrangement between Employee and  Employer  from  and
after  the  date  of this Amendment.  All capitalized  terms  not
defined  herein shall have the same meaning as set forth  in  the
Agreement.  Any conflict between terms of this Amendment and  the
Agreement will be resolved in favor of this Amendment.  Except as
amended  herein, all terms of the Agreement shall remain in  full
force and effect.

     IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first above written.

                              PHYAMERICA PHYSICIAN GROUP, INC.


                              By:_____________________________
                              Its:_____________________________




                              ____________________________(SEAL)
                                   Eugene F. Dauchert, Jr.
                            EXHIBIT A

                          Compensation

                         January 1, 2000

1.    Base  Salary.   For services provided  as  an  employee  of
Employer,  Employee shall receive, beginning January 1,  2000,  a
base salary of $220,000 per annum (the "Base Salary") payable  in
accordance with Employer's current payroll practices.   The  Base
Salary  shall  be subject to annual review and adjustment  as  of
each January 1, commencing January 1, 2001.

2.   Earned Incentive Bonuses.  Under Section 3 of the Exhibit A
  which this Exhibit A replaces, Employee was entitled to earn
 certain incentive bonuses.  Employer acknowledges that Employee
  earned incentive bonuses in the aggregate amount of $77,400,
  which shall be paid in four monthly installments beginning in
       December, 1999 and continuing through March, 2000.

3.   Incentive Bonus.  For 2000, Employee shall be entitled to an
incentive or performance bonus (the "Incentive Bonus") of  up  to
forty  percent  (40%)  of  annual  Base  Salary,  based  on   the
following:

      (a)  Employee must be employed by Employer at the time  the
event  described  below occurs and at December  31,  2000  unless
employment  is  terminated (i) by Employer  without  cause  under
Section  12(a),  (ii) by death or disability  of  Employee  under
Section  12(d) where such death or disability occurs  within  the
last  four  months  of the calendar year, or  (iii)  by  Employee
because  of a material breach by Employer as provided in  section
12(e).

      (b)   Employee's  Incentive Bonus shall  be  based  on  the
following  criteria, or such other criteria as may be recommended
by  the  Chief Executive Officer and approved by the Compensation
Committee of the Board as a replacement or modification  thereof,
subject  to  a  cap  of 40% of annual Base Salary  as  previously
indicated:

           (i)   10%  of  Base Salary shall be  earned  upon  the
     closing  of  a transaction providing a complete  or  partial
     replacement   of   the  Company's  existing   securitization
     financing  program  with a new bank loan,  credit  facility,
     securitization or financing program, an equity  infusion  or
     recapitalization of the Company and its subsidiaries, or  an
     additional capital or financing for the Company in  addition
     to the existing facility.

          (ii) 0.5% of the "Transaction Consideration" paid shall
     be  earned  upon the closing of a transaction involving  any
     significant merger, acquisition or divestiture of or by  the
     Company  or any of its subsidiaries ("significant" shall  be
     understood  to  include  any  transaction,  or   series   of
     transactions   that   are   related,   involving    purchase
     consideration  or  valuation greater than $10,000,000  or  a
     target  company with gross annualized revenues in excess  of
     $25,000,000).   The  "Transaction  Consideration"  shall  be
     understood to mean the consideration paid or calculated  for
     purposes of compensating the Company's investment bankers on
     a  percentage basis as such term, or its equivalent, is used
     in  the  agreement  between the Company and  its  investment
     bankers retained for such transaction.

          (iii)     2.5% of Base Salary for each calendar quarter
     in  which Employer and its consolidated subsidiaries achieve
     a  net profit (after all financing expenses) as reflected on
     the regularly prepared financial statements of Employer.

           (iv)  One percent (1%) of any amounts recovered  after
     January  1, 2000 by Employer or any of its subsidiaries  for
     any  disputed  claims, unpaid amounts owed, recoveries  from
     bankruptcies,  reorganizations,  creditor  arrangements   or
     similar  insolvency proceedings, recoveries from  litigation
     or  claim  settlements;  provided, however,  this  provision
     shall not apply to any matter in which Employee shall become
     a material witness.

           (v)   up  to  8% of Base Salary as determined  in  the
     discretion of Employer's Chief Executive Officer.

4.    Stock  Options or Awards.  Employee shall be  eligible  for
stock options and awards available to other senior management  of
Employer  and its affiliates from time to time.  This  subsection
shall  not be a guarantee of any awards or options, and  Employee
recognizes that the awarding of such compensation is governed  by
plans adopted by the Board of Directors of Employer from time  to
time.
















































                                                     Exhibit 10.9
STATE OF NORTH CAROLINA                  FIRST AMENDMENT
                                                TO
COUNTY OF DURHAM                       EMPLOYMENT AGREEMENT

       THIS   FIRST  AMENDMENT  TO  EMPLOYMENT  AGREEMENT   (this
"Amendment") is made and entered into effective the  1st  day  of
January, 2000 by and between HEALTHCARE BUSINESS RESOURCES,  INC.
("the  "Employer"  or "HBR"), a North Carolina  corporation,  and
EDWARD L. SUGGS, Jr. ("Employee").

                       W I T N E S S E T H

      WHEREAS, Employer and Employee have previously entered into
an  employment  agreement dated March 1, 1997  (the  "Agreement")
under which Employee is currently employed by Employer; and

      WHEREAS, Employer and Employee desire to substantially  and
materially  modify the existing terms of employment  of  Employee
to,  among  other matters, increase his Base Salary,  modify  the
Performance  Bonus structure, and provide for payment  of  earned
bonuses;

     NOW, THEREFORE, in consideration of the terms and conditions
set  forth in this Amendment, the parties hereby agree  that  the
Agreement is hereby modified as follows:

      1.    Replacement  of Exhibit A.  Exhibit A,  Compensation,
attached  to  the Agreement is hereby replaced by the  Exhibit  A
dated January 1, 2000 and attached to this Amendment.

      2.    This Amendment shall be an amendment and modification
to  the  Agreement  and shall become part of  the  Agreement  and
employment  arrangement between Employee and  Employer  from  and
after  the  date  of this Amendment.  All capitalized  terms  not
defined  herein shall have the same meaning as set forth  in  the
Agreement.  Any conflict between terms of this Amendment and  the
Agreement will be resolved in favor of this Amendment.  Except as
amended  herein, all terms of the Agreement shall remain in  full
force and effect.

     IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first above written.

                                   HEALTHCARE BUSINESS
                                   RESOURCES, INC.



By:_____________________________

Its:_____________________________



____________________________(SEAL)
                                   Edward L. Suggs, Jr.

                          EXHIBIT A

                        Compensation

                       January 1, 2000

1.    Base Salary.  For services provided as an employee  of
Employer, Employee shall receive, retroactive to November 1,
1999,  a  base  salary  of $260,000  per  annum  (the  "Base
Salary")  payable  in  accordance  with  Employer's  current
payroll  practices.   The Base Salary shall  be  subject  to
annual   review  and  adjustment  as  of  each  January   1,
commencing  January 1, 2001.  Employee has  been  paid  from
November  1, 1999 through December 31, 1999 on the basis  of
an annual salary of $220,000 and so was underpaid $6,666.67,
which  amount shall be paid to Employee by the end  of  May,
2000.   These  amounts shall be added to and paid  with  the
payouts  of  deferred earned performance bonus described  in
Section 2 below.

2.    Earned  Performance Bonus.  Under  Section  3  of  the
Exhibit  A  which  this  Exhibit A  replaces,  Employee  was
entitled to earn certain performance bonuses.  Employer  and
Employee   acknowledge  that  Employee  earned   performance
bonuses  in the aggregate amount of $60,000 which  have  not
been  paid, the balance of which shall be paid in four equal
monthly installments of $10,000 beginning February, 2000 and
continuing through May, 2000.  This amount shall be combined
with   the   payment  of  installments  of   deferred   base
compensation under Section 1 (for a total monthly payment of
$11,333.33  per  month  during the first  five  months,  and
$10,000 during the sixth month).

3.    Incentive  Bonus.   For calendar year  2000,  Employee
shall be entitled to an incentive or performance bonus  (the
"Incentive  Bonus") of up to forty percent (40%)  of  annual
Base Salary, based on the following:

      (a)  Employee must be employed by Employer on December
31,  2000  unless Employee's employment has been  terminated
(i)  by Employer without cause under Section 12(a), (ii)  by
death  or  disability of Employee under Section 12(d)  where
such  death or disability occurs within the last four months
of 2000 or (iii) by Employee because of a material breach by
Employer as provided in Section 12(c).

      (b)  Employee's Incentive Bonus shall be based on  the
following  criteria, subject to a cap of 40% of annual  Base
Salary as previously indicated:

           (i)  up to 16% of Base Salary based on Employer's
     increase  in  Free Cash Flow ("FCF") for that  calendar
     year.  The "Free Cash Flow" shall be understood to mean
     the  cash  flow  produced  by  the  operations  of  HBR
     (earnings  of HBR before adjustments for noncash  items
     such as depreciation and amortization).  The FCF payout
     will be calculated as follows:

           Increase in FCF               Percentage of  Base
     Salary

          Less than 10%                        0%
           10% to 19.99%                   Prorated from >0%
     to <16%
          20% or more                          16%

           (ii)  up  to 16% of Base Salary based on  of  the
     increase  in  Net  Revenues ("NR") related  to  clients
     other than PhyAmerica for the calendar year.  The  "Net
     Revenues"  shall be understood to mean  the  excess  of
     revenues  from  contracts with  non-PhyAmerica  clients
     over  the operating expenses related to contracts.  The
     non-PhyAmerica transactions payout will  be  calculated
     as follows:

           Increase in NR                Percentage of  Base
     Salary

          Less than 10%                        0%
           10% to 19.99%                   Prorated from >0%
     to <16%
          20% or more                          16%

           (iii)      up  to 8% of Base Salary as determined
     solely  in  the  discretion  of  Employer's  Board   of
     Directors.

4.    Stock  Options or Awards.  Employee shall be  eligible
for  stock  options  and awards available  to  other  senior
management of Employer and its affiliates from time to time.
This  subsection shall not be a guarantee of any  awards  or
options, and Employee recognizes that the awarding  of  such
compensation  is governed by plans adopted by the  Board  of
Directors of Employer from time to time.