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, 1998
                               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

                  COASTAL 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.
                                
                    { } Yes           {X} No
                                
 As of May 31, 1998 there were outstanding 37,621,750 shares of
             common stock, par value $.01 per share.
                COASTAL  PHYSICIAN  GROUP,  INC.
                              INDEX
                                
                                
                                
PART I - FINANCIAL INFORMATION                              PAGE

Item 1. Financial Statements
          Consolidated Balance Sheets at December
           31, 1997 and March 31, 1998 (Unaudited)            1
        Unaudited Consolidated Statements of
           Operations                                         2
        Unaudited Consolidated Condensed
           Statements of Cash Flows                           3
        Notes to Consolidated Financial Statements
           (Unaudited)                                        4
Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations      6

PART II - OTHER INFORMATION                                   9
Item 1.  Legal Proceedings
Item 2.  Changes in Securities
Item 6.  Exhibits and Reports on Form 8-K

SIGNATURES                                                   10



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

                                          March 31,     December
                                            1998           31,
                                                          1997
                 Assets                   (unaudite    
                                             d)
Current assets:                                        
 Cash and cash equivalents                  $    866      $   8,921
 Marketable securities                         2,499          5,735
 Trade accounts receivable, net               24,792         23,612
 Reserves held by NCFE                         7,453          6,396
 Accounts receivable, other                    8,725         12,684
 Receivables from related party                4,204          9,405
 Prepaid expenses and other current            7,102          7,923
assets
      Total current assets                    55,641         74,676
Property and equipment, at cost, less                              
    accumulated depreciation                  9,333         10,342
Excess of cost over fair value of net                              
      assets acquired, net                     2,404          2,450
Other assets                                   8,203          8,628
      Total assets                                 $      $  96,096
                                             75,581
                                                                  
  Liabilities and Shareholders' Equity                            
Current liabilities:                                               
 Current maturities and other short-term                           
      borrowings                            $  5,804      $   2,529
 Accounts payable                             24,963         31,364
  Income taxes payable                         1,363          1,359
 Accrued physicians fees and medical          21,411         31,431
costs
 Accrued expenses                             10,711         16,142
     Total current liabilities               64,252         82,825
Long-term debt, excluding current             74,548         74,698
maturities
      Total                                  138,800        157,523
Deferred credit on business transferred                            
net of note receivable                        2,743            ---
Shareholders' deficit:                                             
 Preferred stock $.01 par value; shares                            
      authorized 10,000; none issued or                            
      outstanding                                ---            ---
 Common stock $.01 par value; shares                               
authorized                                                        
      100,000; shares issued and                 376            375
outstanding
      37,572 and 37,493, respectively
 Additional paid-in capital                  160,433        160,374
Common stock warrants                         1,582          1,582
 Retained earnings (accumulated deficit)    (228,505)     (223,912)
 Unrealized appreciation of available-                             
     for-sale securities                        152            154
   Total shareholders' deficit              (65,962)       (61,427)
   Total liabilities and shareholders'     $  75,581      $  96,096
deficit

  See accompanying notes to consolidated financial statements.

                 COASTAL PHYSICIAN GROUP, INC.
        Unaudited Consolidated Statements of Operations
             (In thousands, except per share data)

                                           Three months ended
                                                March 31,
                                           1998           1997
                                                       
Operating revenue, net                    $   87,877             $
                                                          124,714
                                                                  
Costs and expenses:                                               
                                                                  
 Physician and other provider services        72,644        94,644
 Medical support services                      1,986        13,341
 Selling, general and administrative          15,906        25,029
      Total costs and expenses                90,536       133,014
                                                                  
Operating loss                               (2,659)        (8,300)
                                                                  
Other income (expense):                                           
 Interest expense                            (2,140)       (3,843)
 Interest Income                                  56           326
 Other, net                                      150           251
      Total other expense                    (1,934)       (3,266)
                                                                  
Loss before income taxes                     (4,593)      (11,566)
                                                                  
Benefit for income taxes                         ---           ---
                                                                  
Net loss                                  $  (4,593)     $(11,566)
                                                                  
Basic and diluted loss per share          $   (0.12)     $  (0.48)
                                                                  
Weighted average number of shares                                 
 outstanding                                  37,516        24,129

  See accompanying notes to consolidated financial statements.

                 COASTAL PHYSICIAN GROUP, INC.
   Unaudited Consolidated Condensed Statements of Cash Flows
                         (In thousands)

                                           Three months ended
                                                March 31,
                                           1998          1997
                                                                  
Net cash used in operating activities     $  (5,467)    $  (1,599)
                                                                  
Cash flows from investing activities:                             
Sales of marketable securities and                                 
investments, net                                245         2,388
Purchases of property and equipment, net         (153)         (115)
 Disposition of subsidiaries, net of                              
    cash disposed                           (5,865)           900
 Net cash provided by (used in)                                   
investing activities                        (5,773)         3,173
                                                                  
Cash flows from financing activities:                             
 Repayments of long-term debt                  (614)         (522)
 Borrowings on long-term debt                  3,739         9,815
 Net proceeds from issuances of common                            
    stock                                        60            30
          Net cash provided by                                    
          financing activities                 3,185         9,323
                                                                  
                  Net increase (decrease) in                               
cash and cash equivalents                   (8,055)        10,897
                                                                  
Cash and cash equivalents at beginning                            
    of period                                 8,921        10,239
Cash and cash equivalents at end of                               
    period                                   $  866     $  21,136
                                                                  
Supplemental disclosures of cash flow                             
      information:
      Cash payments (refunds) during                              
      the period for:
             Interest                       $  2,140      $  2,050
             Income taxes                     $  ---      $(3,979)
                                                                  
                                                                  

  See accompanying notes to consolidated financial statements.

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


(1)   Basis Of Presentation

The  accompanying  consolidated financial statements  of  Coastal
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, 1997.  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, 1998.

(2) Sale of Doctors Health Plan, Inc.

In  March 1998, the Company received regulatory approval  of  the
sale  of  Doctor's Health Plan ("DHP") to DHP Holdings  LLC.,  an
entity that is controlled by Dr. Steven M. Scott, Chief Executive
of  Coastal Physician Group, Inc. and the largest shareholder  of
the  Company. Under terms of the sale, the Company received  cash
of  $993,000  and  a  note in the amount of  $5,000,000,  bearing
interest at the rate of twelve percent 12% per annum until  paid.
In addition, the purchaser assumed all liabilities as of December
31,  1997,  in excess of a certain amount as agreed upon  between
the  buyer  and the Company. The Company for accounting  purposes
has  not treated the sale as a completed transaction. As a result
the  difference between the proceeds and the Company's  basis  is
shown on the Consolidated Balance Sheet as of March 31, 1998 as a
Deferred  credit.  The Deferred credit has been  reduced  by  the
$5,000,000 note received from the buyer.

Net  revenues for DHP for the quarters ended March 31,  1998  and
1997,  included in the Consolidated Statement of Operations  were
$10.0  and  $5.5  million  respectively.  DHP's  operating   loss
included  in  the  Statement  of Operations  for  the  respective
periods was $.2 million and $.9 million.

                  COASTAL PHYSICIAN GROUP, INC.
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           (Continued)
                           (UNAUDITED)
                                
(3) Income Taxes

The  Company has not made a provision for federal or state income
taxes for the quarter ended March 31, 1998 because it anticipates
utilizing  a  portion of its net operating loss carryforwards  to
offset any income tax liability.

(4) Capital Stock

In  March 1998, the Company issued 78,857 shares of common  stock
with  a  market  value at the date of issue $0.75  per  share  to
Berger  Davis  &  Singerman, P.A., a law firm in which,  Mitchell
Berger,  a director, is a principal, in satisfaction of directors
fees due and owing for calendar year 1997.

                                
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS



RESULTS OF OPERATIONS

FIRST  QUARTER ENDED MARCH 31, 1998 COMPARED TO THE FIRST QUARTER
ENDED MARCH 31, 1997.

Net  operating revenue ("operating revenue") decreased 29.5%  for
the first quarter of 1998 to $87.9 million from $124.7 million in
the first quarter of 1997.  The decrease in operating revenue due
to  dispositions completed since the first quarter  of  1997  for
which  prior periods' results were not restated was approximately
$18.7  million or 15.0% of the 1997 first quarter revenues.   The
dispositions included the sale of certain assets of Better Health
Plan,  Inc.  in  August 1997, Coastal Physician Services  of  the
West, Inc. and Coastal Physician Services of South Florida,  Inc.
in November 1997, and the sale of certain clinics in May 1997 and
November  1997;  the  sale of the stock  of  Integrated  Provider
Networks,  Inc.,  Practice Solutions,  Inc.  and  Sunlife  OB/GYN
Services  of Broward County, Inc. in November 1997, and the  sale
of  the  stock  of  Doctors  Health Plan,  Inc.  in  March  1998.
Operating  revenue  not  related to disposed  entities  decreased
approximately $23.2 million or 18.6% from the 1997 first  quarter
revenues.  This decline includes the net favorable  impact  of  a
growth  in  revenue  from  those  contracts  that  have  been  in
operation for one year as of January 1, 1998 within the emergency
room  services group and a growth in the number of  enrollees  in
the  Company's North Carolina and Florida health plans offset  by
contract  terminations, net of new contracts added. This  decline
in  operating  revenue is likely to continue  during  1998  as  a
result of the dispositions listed above.

Operating expenses decreased 32.0% to $90.5 million in the  first
quarter of 1998 from $133.0 million in the first quarter of 1997.
The decrease in operating expenses due to dispositions completed,
as  detailed  above, for which prior periods'  results  were  not
restated  was approximately $30.3 million or 22.8%  of  the  1997
first  quarter operating expenses. Operating expenses not related
to  disposed  entities decreased approximately $16.5  million  or
12.4%.  This change was partly due to decreases in the number  of
contracts  within the emergency room services group. In addition,
the  reductions in personnel, telecommunication, and  information
technology  costs,  as well as, the closure  of  certain  offices
contributed to the reduction in operating costs. These reductions
were  offset by increased expenses associated with the growth  in
the  number of enrollees in the Company's health plans  in  North
Carolina  and Florida. In addition, the Company has  included  in
operating  costs  approximately  $1.8  million  of  program  fees
associated with the sale of accounts receivable.

The changes in operating revenue and operating expenses described
above resulted in an operating loss of $2.7 million for the first
quarter  of  1998, compared to an operating loss of $8.3  million
for the first quarter of 1997.

The  Company  experienced improved operating margins  during  the
first three months of 1998 compared to the first three months  of
1997.  The  operating  margin (excluding  the  program  fees,  as
discussed  above, for the three months ended March 31,  1998  was
negative 1.0% versus a negative 6.7% for the same period  in  the
prior year.

Interest expense decreased $1.7 million, or 44.3%, for the  first
quarter  of 1998 from $3.8 million in the first quarter of  1997.
The  decrease is primarily due to a change in the Company's  debt
structure  and  lower  interest  rates  charged  in  the  current
quarter.

There  was  no provision for income taxes recorded for the  first
quarter  of 1998 or 1997.  The Company expects to record  no  tax
expense  or  benefit, other than as a result of  potential  asset
dispositions,  until the Company utilizes federal and  state  net
operating  loss carryforwards("NOL"). As of March  31,  1998  the
Company  has  approximately $170 and $240  million  in  NOLs  for
federal and state purposes respectively.

Overall, the Company had a net loss of $4.6 million in the  first
quarter of 1998 as compared to a net loss of $11.6 million in the
first quarter of 1997 for the reasons discussed above.

Weighted   average  shares  outstanding  increased   55.5%   from
24,129,000  shares  in the first quarter of  1997  to  37,516,000
shares  in  the first quarter of 1998. The increase is  primarily
the result of shares issued to Dr. Scott during 1997.

LIQUIDITY AND CAPITAL RESOURCES

Net  cash used in operating activities for the three months ended
March 31, 1998 was $5.5  million as compared to $1.6 million  for
the  three months ended March 31, 1997. The increase in  the  net
cash used in operating activities is primarily due to the sale of
DHP and a decline in the accounts receivable balances, due to the
sale  of  eligible accounts receivable to affiliates of  National
Century Financial Enterprises, Inc. ("NCFE") under a program that
was  begun  in June 1997.  Borrowings on long-term debt  for  the
three  months ended March 31, 1998 was $3.7 as compared  to  $9.8
million for the three months ended March 31, 1997. The net income
for  the  three  months  ended March 31, 1998  was  $4.6  million
compared  to a net loss of $11.6 million for the same  period  in
1997.

The  Company  expects  to  satisfy its  anticipated  demands  and
commitments for cash in the next twelve months from the  sale  of
receivables under purchase agreements with affiliates of NCFE and
a  line  of credit with an affiliate of NCFE, the sale of certain
non-core  assets that the Company has identified, as  well  as  a
reduction  in  cash used in operations. The Company is  dependent
upon  NCFE  to  purchase  eligible accounts  receivable  for  its
primary source of funds.

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:  receipt   of
sufficient proceeds from divested assets, and the timing  of  any
divestitures;  the  level  and  timing  of  improvements  in  the
operational efforts; the possibility of poor accounts  receivable
generation,  collection  and/or  reimbursement  experience;   the
possibility  of  increased  medical  expenses  due  to  increased
utilization; the possibility that the Company may not be able  to
improve  operations  or  execute  its  divestiture  strategy   as
planned; and other important factors disclosed from time to  time
in  the  Company's Form 10-K, Form 10-Q and other Securities  and
Exchange Commission filings.

PART II - OTHER INFORMATION

Item 1. - Legal Proceeding

See Item 6 8-K filing on March 27, 1998

Item 2. - Changes in Securities

In  March 1998, the Company issued 78,857 shares of common  stock
with  a  market  value at the date of issue $0.75  per  share  to
Berger  Davis  &  Singerman, P.A., a law firm in which,  Mitchell
Berger,  a director, is a principal, in satisfaction of directors
fees  totaling $58,900 due and owing for calendar year 1997.  The
issuance of the shares was exempt from registration under Section
4(2) of the Securities Act of 1933, as amended.


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

(a) Exhibits

None


(b) Reports on Form 8-K

Two  reports on Form 8-K was filed during the quarter  for  which
this report is filed:

1.   On January 15, 1998, the Company filed a report on Form  8-K
filing under Item 5 - Other Events.
I)  The event disclosed in the filing was the sale by the Company
and  certain  of  its  subsidiaries to Scott  Medical  Group  LLC
("Scott Medical") the following assets: (i) all of the issued and
outstanding stock of Integrated Provider Networks, Inc., (ii) all
outstanding stock of Practice Solutions, Inc. (iii)  all  of  the
outstanding  stock of Sunlife OB/GYN Services of Borward  County,
Inc.   (iv)  substantially  all  the  assets  of  Ft.  Lauderdale
Perinatal  Associates (v) certain accounts receivable of  Sunlife
(vi) the assets of Physician Access Center.
II.  Also  disclosed in the filing was resignation of Jacques  J.
Sokolov,  M.D. from the Board of Directors effective January  18,
1998.

2.  On  March  27, 1998, the Company filed a report on  Form  8-K
filing under Item 2 and Item 5 thereof.
I)  Under  Item  2, the report disclosed the disposition  of  the
Company's  Doctors Health Plan, Inc. subsidiary  to  DHP,  LLC  a
company  controlled by Steven M. Scott, M.D.,  the  Chairman  and
Chief  Executive Officer of the Company and the Company's largest
shareholder.   The  report  disclosed  the  purchase   price   of
approximately $6.0 million and that the Company has the right  to
market and sell Doctors Health Plan to third party purchasers.
Under Item 5, the report disclosed the following:
II)  On  March  9,  1998, the Company entered into  a  definitive
written Stipulation of Settlement with counsel for the plaintiffs
in  the  matter of In re Coastal Physician Group, Inc. Securities
Litigation, Case No. 1:95CV00306, a class action lawsuit filed in
the United States District Court for the Middle District of North
Carolina. The settlement required a funding of $8,150,000 into an
Escrow Account, which has been fully funded as of the date of the
filing.
III) In a letter dated January 19, 1998, Deborah L. Redd resigned
as  a  member of the Board of Directors of the Company and as  an
officer  of  several  of  the Company's  subsidiaries,  effective
February 18, 1998.






SIGNATURES



Pursuant  to the requirements of the Securities Exchange  Act  of
1934, the Registrant has duly caused this report to be signed  on
its behalf by the undersigned thereunto duly authorized.



                              COASTAL PHYSICIAN GROUP, INC.
                              (Registrant)



Date: June 17, 1998           By: /S/Steven M. Scott, M.D.
                                 Steven M. Scott, M.D.
                              Chairman of the Board of Directors,
                                President  and  Chief   Executive
Officer

Date: June 17, 1998             By: /S/Charles F. Kuoni III
                                 Charles F. Kuoni III
                                   Executive Vice President
                                    and Chief Financial
                                    Officer