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 June 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 July 31, 2000 there were outstanding 42,761,284 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 June 30, 2000 (unaudited)
     Unaudited Consolidated Statements of Operations -
     Three and Six months ended June 30, 2000 and 1999
     Unaudited Consolidated Condensed Statements of Cash Flows
     Six months ended June 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
     Item 6. Exhibits and Other Reports

     SIGNATURES























                 PHYAMERICA PHYSICIAN GROUP, INC.
                   Consolidated Balance Sheets
              (In thousands, except per share data)
                                         June 30,         December
                                                            31,
                                          2000             1999
               Assets                   (Unaudited)

Current assets:
Cash and cash equivalents             $         -      $         -
Trade accounts receivable, net             24,728           25,113
Reserves held by NCFE                      15,846           16,167
Accounts receivable, other                  2,401            2,329
Receivables from related party                730            1,129
Prepaid expenses and other current          6,289            7,194
assets
          Total current assets             49,994           51,932

Property and equipment, at cost, less       7,395            7,651
accumulated depreciation
Excess of cost over fair value of net      21,749           24,158
assets acquired, net
Other assets                                5,129            5,042
          Total assets                $    84,267      $    88,783

Liabilities and Shareholders' Equity
              (Deficit)
Current liabilities:
Current maturities and other short-   $     3,109      $     7,477
term borrowings
Accounts payable                           25,964           30,277
Accrued physician fees and medical         17,032           18,429
costs
Accrued expenses                            8,090            8,191
          Total current liabilities        54,195           64,374

Long-term debt, excluding current         146,374          120,736
maturities
          Total liabilities               200,569          185,110

Shareholders' equity (deficit):
Common stock $.01 par value; shares
authorized 100,000; shares
issued and outstanding 42,761                 428              426
and 42,573, respectively
Additional paid-in capital                178,313          178,285
Common stock warrants                       1,675            1,675
Retained earnings (accumulated          (296,718)        (276,713)
deficit)
          Total shareholders' equity    (116,302)         (96,327)
(deficit)
          Total liabilities and       $    84,267      $    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
                                       June 30,
                                 2000          1999

Operating revenue, net      $     80,834   $    49,186

Costs and expenses:
Physician and other               60,634        34,398
provider services
Medical support services           8,983         8,919
Selling, general and              15,532         7,451
administrative
Related party expense, net           415           207
Total costs and expenses          85,564        50,975

Operating loss                   (4,730)       (1,789)

Other income (expense):
Interest expense                 (4,064)       (2,802)
Interest income                       30            16
Other related party income         (101)          (90)
expense, net
Other, net                          (76)          (95)
 Total other expense             (4,211)       (2,971)


Loss before income taxes         (8,941)       (4,760)

Income taxes                           -             -

Net loss                    $    (8,941)   $   (4,760)

Net loss per common share:
Basic and diluted loss per  $     (0.21)   $    (0.13)
share


Shares used to compute loss
per share, basic and              42,631        37,943
diluted


   See accompanying notes to consolidated financial
                      statements.













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

Operating revenue, net      $    159,489   $    99,881

Costs and expenses:
Physician and other              121,744        69,305
provider services
Medical support services          17,708        17,350
Selling, general and              31,021        14,701
administrative
Related party expense, net           819           297
Total costs and expenses         171,292       101,653

Operating loss                  (11,803)       (1,772)

Other income (expense):
Interest expense                 (7,944)       (5,231)
Interest income                       47            79
Other related party                (202)         (204)
expense, net
Other, net                         (103)            32
 Total other expense             (8,202)       (5,324)


Loss before income taxes        (20,005)       (7,096)

Income taxes                           -             -

Net loss                    $   (20,005)   $   (7,096)

Net loss per common share:
Basic and diluted loss per  $     (0.47)   $    (0.19)
share


Shares used to compute loss
per share, basic and              42,601        37,888
diluted


   See accompanying notes to consolidated financial
                      statements.













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

                                        2000       1999
Net cash used in operating         $ (20,762)    $ (13,102)
activities

Cash flows from investing
activities:
    Proceeds from sale (Purchases)     (538)         562
of property and equipment, net
          Net cash (used in)           (538)         562
provided by investing activities

Cash flows from financing
activities:
     Proceeds from borrowing of        21,270      14,147
debt, net of repayments
     Net proceeds from issuances of       30          11
common stock
          Net cash provided by         21,300      14,158
financing activities
          Net increase in cash and         0       1,618
cash equivalents
Cash and cash equivalents at               0          45
beginning of period
Cash and cash equivalents at end of  $     0    $  1,663
period


Supplemental disclosures of cash
flow information:
     Cash payments during the period
for:
          Interest                   $ 8,216    $  5,504
          Income taxes                   213         221

   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  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
six  months  ended  June  30, 2000 and  1999,  comprehensive
income is equal to the Company's net loss.


(4) Segment Information

During the three  and  six months ended June 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 June 30, 2000

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther Totals
Revenue from external sources$71,016$4,654  $5,205 $ -$80,875    $(41)
$80,834
Intersegment revenues -      - 7,009     -   7,009   - 7,009
Interest expense  2,976  1,040    64     -   4,080(16) 4,064
Depreciation and amortization1,371 7   204       11,583   32     1,615
Segment profit (loss)(6,800)(483)1,830   2 (5,451)(3,490)(8,941)
Segment assets  $65,128 $3,607$14,128$2,426$85,289$(1,022)$84,267




Quarter ended June 30, 1999

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther Totals
Revenue from external sources$40,177$4,335  $4,656$ --$49,168    $18  $49,186
Intersegment revenues--     -- 3,959    --   3,959  -- 3,959
Interest expense  1,727    846    --    --   2,573 229 2,802
Depreciation and amortization94    6   184      -- 284    35     319
Segment profit (loss)(3,234)(681)1,397  25 (2,493)(2,267)(4,760)
Segment assets  $31,654 $2,777$10,810$2,371$47,612$10,986$58,598






Six months ended June 30, 2000

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther Totals
Revenue from external sources$140,269$9,128$10,115 $ -$159,512   $(23)
$159,489
Intersegment revenues -      -13,481     -  13,481   -13,481
Interest expense  5,869  1,952   157     -   7,978(34) 7,944
Depreciation and amortization2,74413   407       13,165   60     3,225
Segment profit (loss)(16,011)(1,113) 3,117       -(14,007)(5,998)     (20,005)
Segment assets  $65,128 $3,607$14,128$2,426       $85,289
$(1,022)        $84,267




Six months ended June 30, 1999

               Emergency                    Total
               PhysicianGov't      Divested Reportable   All
(In Thousands) ManagementServices   BillingSegmentsSegmentsOther Totals
Revenue from external sources$82,149$8,697  $9,001$ --$99,847    $34  $99,881
Intersegment revenues--     -- 7,503    --   7,503  -- 7,503
Interest expense  3,369  1,589    --    --   4,958 273 5,231
Depreciation and amortization198  15   381       1 595    78     673
Segment profit (loss)(4,108)(1,316)2,487 4 (2,933)(4,163)(7,096)
Segment assets  $31,654 $2,777$10,810$2,371$47,612$10,986$58,598



(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 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
SECOND  QUARTER ENDED JUNE 30, 2000 COMPARED TO  THE  SECOND
QUARTER ENDED JUNE 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
second quarter  of  2000 was $80.8 million, representing an
increase of $31.6 million, or 64.2 %, from  operating
revenues of $49.2 million in the second quarter of 1999.
The increases in operating revenue in the Company's core
businesses were:

                Three Months Ended June 30,
                        2000     1999              %
                                       Increase
   Core businesses     $80.8    $49.2     $31.6    64.2%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                       $80.8    $49.2     $31.6    64.2%

     The increase in the revenue of the core businesses was
due mostly to the Sterling Acquisition.  In the second
quarter of  2000, the emergency physician management
business generated approximately $71.0 in revenue, which was
an increase of approximately $30.8 million, or 76.6%, from
approximately $40.2 million of revenue in the second quarter
of 1999.  Approximately $29.8 of this increase was
attributable to Sterling, with the remaining increase
attributed to non-Sterling contracts.  The government
services group accounted for approximately $4.6 million in
the second quarter of 2000, which was an increase of
approximately $0.3 million, or 7.0%, from $4.3 million in
the second quarter of 1999. Revenue for the billing and
collections operations was $5.2 million for the second
quarter of 2000, which was an increase of approximately $0.5
million, or 10.6%, from $4.7 million in the second 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 $7.0 million
in the second quarter of 2000 and approximately $4.0 million
in the second 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  76.2%, to approximately $60.6 million in the
second quarter of 2000 from approximately $34.4 million in
the second quarter  of 1999.  Physician and other provider
services costs and expenses increased as follows:
                Three Months Ended June 30,
                        2000     1999              %
                                       Increase

   Core businesses     $60.6    $34.4     $26.2    76.2%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                       $60.6    $34.4     $26.2    76.2%


     These expenses for the core businesses increased mostly
because  of the Sterling acquisition.  In the second quarter
of  2000,  physician and other provider services  costs  and
expenses  for the emergency physician management group  were
approximately $57.0 million.  This represented  an  increase
of  $26.1  million,  or  84.5%, from $30.9  million  in  the
second quarter of 1999. Approximately $26.0 of this increase
was  attributable  to  Sterling.   The  government  services
group's  expenses  were approximately $3.6  million  in  the
second   quarter  of  2000,  representing  an  increase   of
approximately $0.1 million, or 2.9%, from approximately $3.5
million  in  the  second 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 $0.1 million, or
1.1%, to $9.0 million in the second quarter of 2000 from
$8.9 million in the second quarter of 1999.  Medical support
services costs and expenses increased as follows:
                Three Months Ended June 30,
                        2000     1999  Increase    %

   Core businesses      $9.0     $8.9      $0.1     1.1%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                        $9.0     $8.9      $0.1     1.1%

     In the second quarter of 2000, medical support services
costs  and  expenses for the emergency physician  management
group  were approximately $1.1 million.  This represented  a
decrease of $0.6 million, or 35.3%, from $1.7 million in the
second  quarter  of 1999.  The government  services  group's
expenses  were  approximately $0.4  million  in  the  second
quarter of 2000 representing a decrease of $0.1 million,  or
20.0%  from approximately $0.5 million in the second quarter
of   1999.  The  billing  and  business  management  group's
expenses  were  approximately $7.5  million  in  the  second
quarter  of  2000 representing an increase of  approximately
$0.8  million, or 11.9%, from approximately $6.7 million  in
the  second quarter of 1999. The increase in medical support
services  costs  and expenses for the billing  and  business
management group is due to growth in  billing operations.

     Selling, General and Administrative Costs and Expenses.
Selling, general and administrative costs and expenses
increased by $8.0 million, or 106.7%, to $15.5 million in
the second quarter of 2000 from $7.5 million in the second
quarter of 1999.  Selling, general and administrative costs
and expenses increased as follows:
                Three Months Ended June 30,
                        2000     1999              %
                                       Increase

                                       (Decreas
                                             e)
   Core businesses     $15.5     $7.4      $8.1   109.5%
   Divested              0.0      0.1     (0.1)  (100.0)
   businesses
                       $15.5     $7.5      $8.0   106.7%

     Selling, general and administrative costs and expenses
for the core businesses increased primarily because of the
Sterling and Per Se acquisitions. In the second quarter of
2000, selling, general and administrative costs and expenses
for the Physician Contract group were approximately $10.0
million.  This represented an increase of  $4.5 million, or
81.8%, from $5.5 million in the second quarter of 1999.
Approximately $4.4 million of the increase is attributable
to the Sterling acquisition. The government services group's
expenses were approximately $0.1 million in the second
quarter of 2000 and 1999.  The billing and business
management group's expenses were approximately $2.8 million
in the second quarter of 2000 representing an increase of
approximately $2.3 million, or 460.0%, from approximately
$0.5 million in the second quarter of 1999. Approximately
$2.3 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
$2.6 million in the second quarter of 2000 representing an
increase of approximately $1.3 million, or 100.0%, from
approximately $1.3 million in the first quarter of 1999.
The increase in selling, general and administrative costs
and expenses for the corporate group is primarily related to
legal payments. There were $0.1 million in selling, general
and administrative costs and expenses, in the second quarter
of 1999, related to wrap-up operations activity for the
HMO's.
     Related party expense, net.  Related party expenses,
net increased by $0.2 million, or 100.0%, to $0.4 million in
the second quarter of 2000 from $0.2 million in the second
quarter of 1999.  This increase is primarily due to rent and
premium expense to related parties.
     Interest Expense.  Interest expense increased by $1.2
million to $4.0 million in the second quarter of 2000 from
$2.8 million in the second quarter of 1999 due primarily to
the Sterling and PerSe Acquisitions 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 second quarter of 2000 and 1999
have been included in selling, general and administrative
expenses.
     Other, expenses.  Other expenses increased by $1.2
million or 40.0% , to $4.2 million in the second quarter of
2000 from $3.0 million in the second quarter of 1999,
primarily due to the increase in interest expense.
     Benefit (provision) for income taxes.  There was no
benefit (provision) for income taxes for the second 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 $8.9 million in  the  second
quarter  of  2000 compared to a net loss of $4.8 million  in
the second quarter of 1999.



SIX  MONTHS  ENDED JUNE 30, 2000 COMPARED TO THE SIX  MONTHS
ENDED JUNE 30, 1999.

     Operating Revenue, Net.  Net operating revenue for the
six months ended June 30,  2000 was $159.5 million,
representing an increase of $59.6 million, or 59.7 %, from
operating revenue of $99.9 million for the six months ended
June 30, 1999.  The increases in operating revenue among the
various businesses were as follows:
                 Six Months Ended June 30,
                        2000     1999              %
                                       Increase
   Core businesses    $159.5    $99.9     $59.6    59.7%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                      $159.5    $99.9     $59.6    59.7%

     The increase in the revenue of the core businesses was
due mostly to the Sterling Acquisition.  For the six months
ended June 30,  2000, the emergency physician management
business generated approximately $140.3 in revenue, which
was an increase of approximately $58.2 million, or 70.9%,
from approximately $82.1 million of revenue for the six
months ended June 30, 1999.  Approximately $59.7 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 $9.1 million for the six months ended June 30,
2000, which was an increase of approximately $0.4 million,
or 4.6%, from $8.7 million for the six months ended June 30,
1999. Revenue for the billing and collections operations was
$10.1 million for the six months ended June 30, 2000, which
was an increase of approximately $1.1 million, or 12.2%,
from $9.0 million for the six months ended June 30, 1999,
due to  growth in the billing contracts and fees. Revenue of
the billing and business management operations excludes
intersegment revenue of approximately $13.5 million for the
six months ended June 30, 2000 and approximately $7.5
million for the six months ended June 30, 1999, representing
fees billed to the emergency physician management business.
Other miscellaneous revenue was $0.1 million during the six
months ended June 30, 1999.
     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 $52.4
million, or  75.6%, to approximately $121.7 million for the
six months ended June 30, 2000 from approximately $69.3
million for the six months ended June 30,1999.  Physician
and other provider services costs and expenses increased as
follows:
                 Six Months Ended June 30,
                        2000     1999  Increase    %

   Core businesses    $121.7    $69.3     $52.4    75.6%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                      $121.7    $69.3     $52.4    75.6%


     These expenses for the core businesses increased mostly
because  of  the Sterling acquisition.  For the  six  months
ended  June 30, 2000, physician and other provider  services
costs  and  expenses for the emergency physician  management
group  were  approximately $114.6 million.  This represented
an  increase of $52.4 million, or  84.2%, from $62.2 million
for  the six months ended June 30, 1999. Approximately $52.8
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 $7.1 million for the six months ended June 30,
2000, and June 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 $0.3 million, or
1.7%, to $17.7 million for the six months ended June 30,
2000 from $17.4 million for  the six months ended June 30,
1999.  Medical support services costs and expenses increased
as follows:
                 Six Months Ended June 30,
                        2000     1999  Increase    %

   Core businesses     $17.7    $17.4      $0.3     1.7%
   Divested              0.0      0.0       0.0     0.0%
   businesses
                       $17.7    $17.4      $0.3     1.7%

     These expenses for the core businesses increased due to
contract  terminations in the emergency physician management
group  offset by growth in the billing operations.  For  the
six  months  ended  June 30, 2000, medical support  services
costs  and  expenses for the emergency physician  management
group  were approximately $2.0 million.  This represented  a
decrease  of  $1.3 million, or 39.4%, from $3.3 million  for
the  six months ended June 30,1999.  The government services
group's expenses were approximately $0.9 million for the six
months  ended June 30, 2000 and June 30, 1999.  The  billing
and  business management group's expenses were approximately
$14.8  million  for  the  six months  ended  June  30,  2000
representing an increase of approximately $1.6  million,  or
12.1%,  from approximately $13.2 million for the six  months
ended June 30, 1999.

     Selling, General and Administrative Costs and Expenses.
Selling, general and administrative costs and expenses
increased by $16.3 million, or 110.9%, to $31.0 million for
the six months ended June 30, 2000 from $14.7 million for
the six months ended June 30, 1999.  Selling, general and
administrative costs and expenses increased as follows:
                 Six Months Ended June 30,
                        2000     1999  Increase    %

   Core businesses     $31.0    $14.7     $16.3   110.9%
   Divested              0.0      0.0       0.0      0.0
   businesses
                       $31.0    $14.7     $16.3   110.9%

     Selling, general and administrative costs and expenses
for the core businesses increased primarily because of the
Sterling and Per Se acquisitions. For the six months ended
June 30, 2000, selling, general and administrative costs and
expenses for the Physician Contract group were approximately
$20.6 million.  This represented an increase of  $10.3
million, or 100.0%, from $10.3 million for the six months
ended June 30, 1999.  Approximately $9.2 million of the
increase is attributable to the Sterling acquisition. The
government services group's expenses were approximately $0.3
million for the six months ended June 30, 2000 representing
a decrease of approximately $0.1 million, or 25.0%, from
approximately $0.4 million for the six months ended June 30,
1999.  The billing and business management group's expenses
were approximately $5.5 million for the six months ended
June 30, 2000 representing an increase of approximately $4.6
million, or 511.1%, from approximately $0.9 million for the
six months ended June 30, 1999. Approximately $4.4 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 $4.6 million
for the six months ended June 30, 2000 representing an
increase of approximately $1.5 million, or 48.4%, from
approximately $3.1 million for the six months ended June 30,
1999. The increase in selling, general and administrative
costs and expenses for the corporate group is primarily
related to legal payments.
     Related party expense, net.  Related party expenses,
net increased by $0.5 million, or 166.7%, to $0.8 million
for the six months ended June 30, 2000 from $0.3 million for
the six months ended June 30, 1999.  This increase is
primarily due to rent and premium expense to related
parties.
     Interest Expense.  Interest expense increased by $2.7
million to $7.9 million for the six months ended June 30,
2000 from $5.2 million for the six months ended June 30,
1999 due primarily to the Sterling and PerSe Acquisitions
resulting in higher outstanding amounts of debt during the
six months ended June 30,  2000.  The costs associated with
the sale of eligible accounts receivable for the six months
ended June 30, 2000 and 1999 have been included in selling,
general and administrative expenses.
     Other, expenses.  Other expenses increased by $2.9
million or 54.7% , to $8.2 million for the six months ended
June 30, 2000 from $5.3 million for the six months ended
June 30, 1999, primarily due to the increase in interest
expense.
     Benefit (provision) for income taxes.  There was no
benefit (provision) for income taxes for the six months
ended June 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 $20.0 million for the six
months ended June 30, 2000 compared to a net loss of $7.1
million for the six months ended June 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 June 30, 2000, the Company had outstanding
advances   of  approximately  $221  million  of  receivables
financing, net of reserves held on the outstanding  balances
of   which  approximately  $78  million  related  to  billed
receivables and approximately $143 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. Of  the  total
purchase  commitments of $260 million on  these  facilities,
including   reserve   balances   there   is   no   remaining
availability  for purchases at June 30, 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 June 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
increased by $7.7 million, or 58.8%, for the six months
ended June 30, 2000, to $20.8 million as compared to $13.1
million for the six months ended June 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 was $0.5 million for
the six months ended June 30, 2000. Net cash provided by
investing activities was $0.6 million for the six months
ended June 30, 1999. Net cash provided by financing
activities increased by $7.1million, or 50.0%, to $21.3
million for the six months ended June 30, 2000, from $14.2
million for the six months ended June 30, 1999. During the
six months ended June 30, 2000, the Company had net
borrowings of $21.3 million as compared to $14.1 million for
the six months ended June 30, 1999. Net borrowings increased
during the six months ended June 30, 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.

























Quantitative and Qualitative Disclosures About Market Risk.
The table below provides quantitative disclosure information
about the Company's market risk sensitive instruments as of
June 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
                         June 30, 2000  December 31,
                                        1999
   Long-term Debt
       Fixed Rate              $149,483        $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 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      August 10, 2000
Steven M. Scott, M.D.                             Directors,
President and
Chief Executive Officer

/S/Marc Weiner                                    Interim
Chief Financial Officer                           August 10,
2000
Marc Weiner          and Executive Vice President