EXHIBIT 10.17

                                 THIRD AMENDMENT
                                       TO
                              EMPLOYMENT AGREEMENT



         THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT (this "Amendment") is made
and entered into effective the 1st day of January, 2001 by and between
PHYAMERICA PHYSICIAN GROUP, INC., f/k/a COASTAL HEALTHCARE GROUP, INC., a
Delaware corporation ("Employer" or the "Company"), and STEVEN M. SCOTT, M.D.
("Employee").

                              W I T N E S S E T H:
                              --------------------

         WHEREAS, Employer and Employee have previously entered into that
certain Employment Agreement dated April 1, 1991, as amended by that certain
Amendment to Employment Agreement dated April 1, 1994, and as further amended by
that certain Second Amendment to Employment Agreement dated September 1, 1999
(collectively, the "Agreement") under which Employee is currently employed by
the Company; and

         WHEREAS, Employer and Employee desire to modify the existing terms of
employment with respect to the compensation paid to Employee, so that
compensation will be set forth in an attachment to the Agreement labeled Exhibit
A and such compensation shall be subject to annual review and adjustment;

         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.   In order to increase the Base Salary and to redefine the Incentive Bonus
     Employee may earn under the Agreement, Paragraph 3 of the Employment
     Agreement is deleted in its entirety and replaced by the following:

       Compensation. For all services rendered by the Employee under this
         Agreement, the Corporation shall pay Employee compensation as set forth
         on the attached Exhibit A.

2.   In accordance with the replacement of Paragraph 3 of the Employment
     Agreement provided for above in Section 1 of this Amendment, the Agreement
     is hereby modified to include Exhibit A, dated January 1, 2001 and attached
     to this Amendment, as the Exhibit A now referenced in Paragraph 3 of the
     Agreement.

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

                                    PHYAMERICA PHYSICIAN GROUP, INC.




                                    By:
                                       -----------------------------------------
                                    Its:
                                        ----------------------------------------

ATTEST:


------------------------------
         Secretary

[Corporate Seal]
                                    EMPLOYEE:


                                                                          (SEAL)
                                    --------------------------------------
                                    Steven M. Scott, M.D.

<PAGE>
                                    EXHIBIT A
                                    ---------


                                  Compensation
                                  ------------


                                 January 1, 2001

1.   Base Salary. For services provided as an employee of the Corporation,
     Employee shall receive, retroactive to January 1, 2001, a base salary of
     $550,000 per annum (the "Base Salary") payable in accordance with the
     Corporation's current payroll practices. The Base Salary shall be subject
     to annual review and adjustment as of each January 1, commencing January 1,
     2002.

2.   Incentive Bonus. For calendar year 2001, Employee shall be entitled to an
     incentive or performance bonus (the "Incentive Bonus") of up to 40% of
     annual Base Salary, based on the following:

     (a.) 2.5% of Base Salary for each calendar quarter (up to a total of 10% of
          Base Salary per year) in which PhyAmerica Physician Services, Inc.
          ("PPS") achieves an operating profit of 5% or greater. For purposes of
          this incentive calculation only, operating profit shall be determined
          prior to debt and financing expense allocated to PPS, including
          program fees or other financing costs arising out of the receivables
          financing provided by affiliates of National Century Financial
          Enterprises, Inc. ("NCFE").

     (b)  2.5% of Base Salary for each calendar quarter (up to a total of 10% of
          Base Salary per year) in which the Company, on a consolidated basis,
          achieves or exceeds budgeted net operating results, after debt
          expense, including the program fees and related costs of the NCFE
          financing.

     (c)  up to 20% of Base Salary as determined solely in the discretion of the
          Compensation Committee of the Board of Directors of PhyAmerica
          Physician Group, Inc.