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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




---

FORM 10-Q

|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|           |  | For the quarterly period ended March 31,
    2002                                           
|or        
|          
|o          |  | 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 000-19480

Per-Se Technologies, Inc.

(Exact name of Registrant as specified in its
charter)


|                                                                                            |  |                                         
|------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                    |  | 58-1651222                              
|(State or other jurisdiction of
    incorporation or organization)                          |  | (I.R.S. Employer
    Identification No.)
|                                                                                           
|2840 Mt. Wilkinson Parkway
    Atlanta, Georgia(Address of principal executive
    offices) |  | 30339(Zip code)                         

(770) 444-5300

Registrants telephone number, including
area code:


Not Applicable

(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 þ  No o

Indicate the number of shares of stock
outstanding of each of the issuers classes of common
stock, as of the latest practicable date.

|                                        |  |                                  
|--------------------------------------- |  | ---------------------------------
|Title of Class                          |  | Shares Outstanding as May 7, 2002
|                                        |  |                                  
|Common Stock $0.01 Par Value            |  | 30,042,455 shares                
|Non-voting Common Stock $0.01 Par Value |  | 0 Shares                         



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TABLE OF CONTENTS



|                                                       |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------------ | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I: FINANCIAL INFORMATION                         
|                                                       | Item 1. Financial Statements                                                                 
|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 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                            
|EX-10.1 NON-QUALIFIED DEFERRED COMPENSATION PLAN      
|EX-10.2 DEFERRED STOCK UNIT PLAN TRUST AGREEMENT      



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##### Table of Contents



PER-SE TECHNOLOGIES, INC.

FORM 10-Q

For the Fiscal Quarter Ended March 31,
2002


|                              |  |                                                                                              |  |      |    | 
|----------------------------- |  | -------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                              |  |                                                                                              |  | Page
|                              |  |                                                                                              |  |     
|PART I: FINANCIAL INFORMATION
|Item 1:                       |  | Financial Statements                                                                         |  |      |    | 
|                              |  | Consolidated Balance Sheets as of March 31,
    2002 and December 31, 2001                   |  |      | 2  | 
|                              |  | Consolidated Statements of Operations for the
    three months ended March 31, 2002 and 2001 |  |      | 3  | 
|                              |  | Consolidated Statements of Cash Flows for the
    three months ended March 31, 2002 and 2001 |  |      | 4  | 
|                              |  | Notes to Consolidated Financial Statements                                                   |  |      | 5  | 
|Item 2:                       |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations    |  |      | 12 | 
|PART II: OTHER INFORMATION   
|Item 1:                       |  | Legal Proceedings                                                                            |  |      | 19 | 
|Item 6:                       |  | Exhibits and Reports on Form 8-K                                                             |  |      | 19 | 

1



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##### Table of Contents






PART I: FINANCIAL INFORMATION




Item 1.     Financial
Statements

PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value
data)


|                            |                                                                                                                                                                      |                             |         |              |         |   |         |          |         |  
|--------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------- | ------- | ------------ | ------- | - | ------- | -------- | ------- | -
|                            |                                                                                                                                                                      | March 31,                   |         | December 31,
|                            |                                                                                                                                                                      | 2002                        |         | 2001        
|                            |                                                                                                                                                                      |                             |         |             
|                            |                                                                                                                                                                      | (Unaudited)                 |         |             
|Current Assets:             |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            | Cash and cash equivalents                                                                                                                                            |                             | $       | 24,478       |         |   | $       | 36,493   |        
|                            | Restricted cash                                                                                                                                                      |                             |         | 4,444        |         |   |         | 4,419    |        
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            |                                                                                                                                                                      | Total cash                  |         |              | 28,922  |   |         |          | 40,912  |  
|                            | Accounts receivable, billed (less allowances of
    $4,935 and $5,144, respectively)                                                                                 |                             |         | 50,231       |         |   |         | 45,719   |        
|                            | Accounts receivable, unbilled (less allowances of
    $948 and $1,345, respectively)                                                                                 |                             |         | 6,102        |         |   |         | 4,150    |        
|                            | Other                                                                                                                                                                |                             |         | 7,226        |         |   |         | 5,000    |        
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            |                                                                                                                                                                      | Total current assets        |         |              | 92,481  |   |         |          | 95,781  |  
|Property and equipment, net |                                                                                                                                                                      |                             | 24,299  |              |         |   | 25,012  |         
|Other intangible assets     |                                                                                                                                                                      |                             | 38,942  |              |         |   | 42,108  |         
|Goodwill                    |                                                                                                                                                                      |                             | 37,442  |              |         |   | 35,160  |         
|Other                       |                                                                                                                                                                      |                             | 4,469   |              |         |   | 4,830   |         
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            |                                                                                                                                                                      | $                           | 197,633 |              |         | $ | 202,891 |         
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|Current Liabilities:        |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            | Accounts payable                                                                                                                                                     |                             | $       | 5,054        |         |   | $       | 6,085    |        
|                            | Accrued compensation                                                                                                                                                 |                             |         | 21,390       |         |   |         | 23,884   |        
|                            | Accrued expenses                                                                                                                                                     |                             |         | 19,537       |         |   |         | 21,705   |        
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            |                                                                                                                                                                      |                             | 45,981  |              |         |   | 51,674  |         
|                            | Deferred revenue                                                                                                                                                     |                             |         | 18,916       |         |   |         | 19,800   |        
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            |                                                                                                                                                                      | Total current liabilities   |         |              | 64,897  |   |         |          | 71,474  |  
|Long-term debt              |                                                                                                                                                                      |                             | 175,004 |              |         |   | 175,091 |         
|Other obligations           |                                                                                                                                                                      |                             | 6,247   |              |         |   | 6,456   |         
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            |                                                                                                                                                                      | Total liabilities           |         |              | 246,148 |   |         |          | 253,021 |  
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|Stockholders Deficit:      |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            | Preferred stock, no par value, 20,000 authorized;
    none issued                                                                                                    |                             |         |             |         |   |         |         |        
|                            | Common stock, voting, $0.01 par value, 200,000
    authorized, 30,021 and 29,969 issued and outstanding as of
    March 31, 2002 and December 31, 2001, respectively |                             |         | 300          |         |   |         | 300      |        
|                            | Common stock, non-voting, $0.01 par value, 600
    authorized; none issued                                                                                           |                             |         |             |         |   |         |         |        
|                            | Paid-in capital                                                                                                                                                      |                             |         | 775,337      |         |   |         | 774,983  |        
|                            | Warrants                                                                                                                                                             |                             |         | 1,495        |         |   |         | 1,495    |        
|                            | Accumulated deficit                                                                                                                                                  |                             |         | (825,647     | )       |   |         | (826,908 | )      
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            |                                                                                                                                                                      | Total stockholders deficit |         |              | (48,515 | ) |         |          | (50,130 | )
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         
|                            |                                                                                                                                                                      | $                           | 197,633 |              |         | $ | 202,891 |         
|                            |                                                                                                                                                                      |                             |         |              |         |   |         |         

See notes to consolidated financial statements.

2



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PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

(in thousands, except per share
data)


|                                                                         |                                               |                    |                   |      |      |        |        |       |       |        |  
|------------------------------------------------------------------------ | --------------------------------------------- | ------------------ | ----------------- | ---- | ---- | ------ | ------ | ----- | ----- | ------ | -
|                                                                         |                                               |                   
|                                                                         |                                               | Three Months Ended
|                                                                         |                                               | March 31,         
|                                                                         |                                               |                   
|                                                                         |                                               | 2002               |                   | 2001
|                                                                         |                                               |                    |                   |     
|Revenue                                                                  |                                               | $                  | 85,436            |      |      | $      | 80,296 |      
|                                                                         |                                               |                    |                   |      |      |        |        |      
|Salaries and wages                                                       |                                               |                    | 49,727            |      |      |        | 50,004 |      
|Other operating expenses                                                 |                                               |                    | 23,780            |      |      |        | 24,256 |      
|Depreciation                                                             |                                               |                    | 2,969             |      |      |        | 3,249  |      
|Amortization                                                             |                                               |                    | 2,847             |      |      |        | 3,177  |      
|Interest expense, net                                                    |                                               |                    | 4,461             |      |      |        | 4,015  |      
|Process improvement project expenses                                     |                                               |                    |                  |      |      |        | 965    |      
|Non-recurring and other expenses                                         |                                               |                    |                  |      |      |        | 641    |      
|                                                                         |                                               |                    |                   |      |      |        |        |      
|                                                                         |                                               |                    | Total expenses    |      |      | 83,784 |        |       |       | 86,307 |  
|                                                                         |                                               |                    |                   |      |      |        |        |      
|Income (loss) before income taxes                                        |                                               |                    | 1,652             |      |      |        | (6,011 | )    
|Income tax expense                                                       |                                               |                    | 252               |      |      |        | 176    |      
|                                                                         |                                               |                    |                   |      |      |        |        |      
|Income (loss) from continuing operations                                 |                                               |                    | 1,400             |      |      |        | (6,187 | )    
|                                                                         |                                               |                    |                   |      |      |        |        |      
|Loss from discontinued operations, net of tax                            |                                               |                    | (101              | )    |      |        | (31    | )    
|                                                                         |                                               |                    |                   |      |      |        |        |      
|                                                                         |                                               |                    | Net income (loss) |      | $    | 1,299  |        |       | $     | (6,218 | )
|                                                                         |                                               |                    |                   |      |      |        |        |      
|Basic net income (loss) per common share:                                |                                               |                    |                   |      |      |        |        |      
|                                                                         | Income (loss) from continuing operations      |                    | $                 | 0.04 |      |        | $      | (0.21 | )    
|                                                                         | Loss from discontinued operations, net of tax |                    |                   |     |      |        |        |      |      
|                                                                         |                                               |                    |                   |      |      |        |        |      
|                                                                         |                                               | Net income (loss)  |                   | $    | 0.04 |        |        | $     | (0.21 | )     
|                                                                         |                                               |                    |                   |      |      |        |        |      
|Weighted average shares used in computing basic
    earnings per share   |                                               |                    | 29,990            |      |      |        | 29,902 |      
|                                                                         |                                               |                    |                   |      |      |        |        |      
|Diluted net income (loss) per common share:                              |                                               |                    |                   |      |      |        |        |      
|                                                                         | Income (loss) from continuing operations      |                    | $                 | 0.04 |      |        | $      | (0.21 | )    
|                                                                         | Loss from discontinued operations, net of tax |                    |                   |     |      |        |        |      |      
|                                                                         |                                               |                    |                   |      |      |        |        |      
|                                                                         |                                               | Net income (loss)  |                   | $    | 0.04 |        |        | $     | (0.21 | )     
|                                                                         |                                               |                    |                   |      |      |        |        |      
|Weighted average shares used in computing diluted
    earnings per share |                                               |                    | 32,527            |      |      |        | 29,902 |      
|                                                                         |                                               |                    |                   |      |      |        |        |      

See notes to consolidated financial statements.

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PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

(in thousands)


|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |       |        |        |  
|----------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ------------------------------ | ----------------------------------------------------------- | ----- | ------ | ------ | ------ | ----- | ------ | ------ | -
|                                                                                          |                                                                                            |                               
|                                                                                          |                                                                                            | Three Months Ended            
|                                                                                          |                                                                                            | March 31,                     
|                                                                                          |                                                                                            |                               
|                                                                                          |                                                                                            | 2002                           |                                                             | 2001 
|                                                                                          |                                                                                            |                                |                                                             |      
|Cash Flows From Operating
    Activities:                                                 |                                                                                            |                                |                                                             |       |        |        |        |      
|Net income (loss)                                                                         |                                                                                            | $                              | 1,299                                                       |       |        | $      | (6,218 | )    
|Adjustments to reconcile net income
    (loss) to net cash used for operating activities: |                                                                                            |                                |                                                             |       |        |        |        |      
|                                                                                          | Depreciation and amortization                                                              |                                |                                                             | 5,816 |        |        |        | 6,426 |       
|                                                                                          | Loss from discontinued operations                                                          |                                |                                                             | 101   |        |        |        | 31    |       
|                                                                                          | Changes in assets and liabilities, excluding
    effects of acquisitions and divestitures: |                                |                                                             |       |        |        |        |       |       
|                                                                                          |                                                                                            | Restricted cash                |                                                             |       | (19    | )      |        |       | 273    |       
|                                                                                          |                                                                                            | Accounts receivable, billed    |                                                             |       | (4,037 | )      |        |       | 1,492  |       
|                                                                                          |                                                                                            | Accounts receivable, unbilled  |                                                             |       | (1,952 | )      |        |       | 1,129  |       
|                                                                                          |                                                                                            | Accounts payable               |                                                             |       | (1,031 | )      |        |       | (3,414 | )     
|                                                                                          |                                                                                            | Accrued compensation           |                                                             |       | (1,994 | )      |        |       | (2,562 | )     
|                                                                                          |                                                                                            | Accrued expenses               |                                                             |       | (2,985 | )      |        |       | (4,656 | )     
|                                                                                          |                                                                                            | Accrued litigation settlements |                                                             |       |       |        |        |       | (1,602 | )     
|                                                                                          |                                                                                            | Deferred revenue               |                                                             |       | (451   | )      |        |       | 1,699  |       
|                                                                                          |                                                                                            | Other, net                     |                                                             |       | (2,729 | )      |        |       | (1,215 | )     
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      
|                                                                                          |                                                                                            |                                | Net cash used for continuing operations                     |       |        | (7,982 | )      |       |        | (8,617 | )
|                                                                                          |                                                                                            |                                | Net cash used for discontinued operations                   |       |        | (101   | )      |       |        |       |  
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      
|                                                                                          |                                                                                            |                                | Net cash used for operating activities                      |       |        | (8,083 | )      |       |        | (8,617 | )
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      
|Cash Flows From Investing
    Activities:                                                 |                                                                                            |                                |                                                             |       |        |        |        |      
|Purchases of property and equipment                                                       |                                                                                            |                                | (2,295                                                      | )     |        |        | (1,021 | )    
|Software development costs                                                                |                                                                                            |                                | (1,957                                                      | )     |        |        | (1,377 | )    
|Proceeds from sale of property and equipment                                              |                                                                                            |                                | 4                                                           |       |        |        | 1,544  |      
|Acquisitions, net of cash acquired                                                        |                                                                                            |                                | (20                                                         | )     |        |        | (226   | )    
|Other                                                                                     |                                                                                            |                                |                                                            |       |        |        | (31    | )    
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      
|                                                                                          |                                                                                            |                                | Net cash used for investing activities                      |       |        | (4,268 | )      |       |        | (1,111 | )
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      
|Cash Flows From Financing
    Activities:                                                 |                                                                                            |                                |                                                             |       |        |        |        |      
|Proceeds from the exercise of stock options                                               |                                                                                            |                                | 353                                                         |       |        |        |       |      
|Payments of debt                                                                          |                                                                                            |                                | (17                                                         | )     |        |        |       |      
|Deferred financing costs                                                                  |                                                                                            |                                |                                                            |       |        |        | (227   | )    
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      
|                                                                                          |                                                                                            |                                | Net cash provided by (used for) by financing
    activities |       |        | 336    |        |       |        | (227   | )
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      
|Cash and Cash Equivalents:                                                                |                                                                                            |                                |                                                             |       |        |        |        |      
|Net change                                                                                |                                                                                            |                                | (12,015                                                     | )     |        |        | (9,955 | )    
|Balance at beginning of period                                                            |                                                                                            |                                | 36,493                                                      |       |        |        | 30,970 |      
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      
|Balance at end of period                                                                  |                                                                                            | $                              | 24,478                                                      |       |        | $      | 21,015 |      
|                                                                                          |                                                                                            |                                |                                                             |       |        |        |        |      

See notes to consolidated financial statements.

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PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


Note 1  Basis of
Presentation

The accompanying unaudited condensed consolidated
financial statements of Per-Se Technologies, Inc. (the
Company) are presented in accordance with the
requirements of Form 10-Q and Rule 10-01 of
Regulation S-X. For further information, the reader of this
Form 10-Q may wish to refer to the audited consolidated
financial statements of the Company for the fiscal year ended
December 31, 2001, included in the Companys Annual
Report on Form 10-K filed March 27, 2002, with the
Securities and Exchange Commission.

The unaudited condensed financial information has
been prepared in accordance with the Companys customary
accounting policies and practices. In the opinion of management,
all adjustments, consisting of normal recurring adjustments
considered necessary for a fair presentation of results for the
interim period, have been included.

The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and
expenses. Actual results could differ from those estimates.

Activity related to the Medaphis Services
Corporation (Hospital Services) and Impact
Innovations Group (Impact) businesses, which were
sold in 1998 and 1999, respectively, has been presented as
discontinued operations for all periods presented.

Note 2  Earnings (Loss) Per
Share

Basic earnings per share (EPS) is
calculated by dividing net income (loss) by the weighted
average number of shares of common stock outstanding during the
period. Diluted EPS reflects the potential dilution that could
occur from common shares issuable through stock options. The
following sets forth the computation of basic and diluted
earnings (loss) per share for the periods ended
March 31, 2002 and 2001 (in thousands, except per share
data):

|                                  |                                                                          |                    |       |        |  |   |        |        |  
|--------------------------------- | ------------------------------------------------------------------------ | ------------------ | ----- | ------ |  | - | ------ | ------ | -
|                                  |                                                                          |                   
|                                  |                                                                          | Three Months Ended
|                                  |                                                                          | March 31,         
|                                  |                                                                          |                   
|                                  |                                                                          | 2002               |       | 2001  
|                                  |                                                                          |                    |       |       
|Net income (loss)                 |                                                                          | $                  | 1,299 |        |  | $ | (6,218 | )     
|                                  |                                                                          |                    |       |        |  |   |        |       
|Common shares outstanding:        |                                                                          |                    |       |        |  |   |        |       
|                                  | Weighted average shares used in computing basic
    earnings per share   |                    |       | 29,990 |  |   |        | 29,902 |  
|                                  | Effect of potentially dilutive stock options                             |                    |       | 2,537  |  |   |        |       |  
|                                  |                                                                          |                    |       |        |  |   |        |       
|                                  | Weighted average shares used in computing diluted
    earnings per share |                    |       | 32,527 |  |   |        | 29,902 |  
|                                  |                                                                          |                    |       |        |  |   |        |       
|Earnings (loss) per common share: |                                                                          |                    |       |        |  |   |        |       
|                                  | Basic                                                                    |                    | $     | 0.04   |  |   | $      | (0.21  | )
|                                  |                                                                          |                    |       |        |  |   |        |       
|                                  | Diluted                                                                  |                    | $     | 0.04   |  |   | $      | (0.21  | )
|                                  |                                                                          |                    |       |        |  |   |        |       

Options to purchase 2.8 million shares of
common stock outstanding during the three months ended
March 31, 2002 were excluded from the computation of
diluted earnings per share because the options exercise
price was greater than the average market price of the common
shares, and therefore, the effect would have been antidilutive.

Options to purchase 1.6 million shares of
common stock outstanding during the three months ended
March 31, 2001 were excluded from the computation of
diluted earnings per share due to their antidilutive effect as a
result of the Companys loss from continuing operations for
the period.

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##### Table of Contents



PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

Note 3  Restricted
Cash

At March 31, 2002, restricted cash
principally represented restrictions on the Companys cash
as security for the Companys letters of credit.

Note 4  New Accounting
Pronouncements

In June 2001, the Financial Accounting Standards
Board (FASB) issued Statement of Financial
Accounting Standards No. 142 Goodwill and Other
Intangible Assets(SFAS No. 142). SFAS
No. 142 requires goodwill and indefinite lived intangible
assets to be reviewed periodically for impairment and no longer
amortized. The Company adopted SFAS No. 142 on
January 1, 2002.

In accordance with SFAS No. 142, the Company
discontinued the amortization of goodwill and indefinite lived
intangible assets effective January 1, 2002. For the three
months ended March 31, 2002, the Company had a reduction in
amortization expense of approximately $0.5 million related
to the adoption of SFAS No. 142. For the three months ended
March 31, 2001, a reconciliation has been provided of
previously reported net loss and net loss per share amounts.
These amounts exclude the amortization expense recognized
related to goodwill and intangible assets that are no longer
amortized.

|                                            |                                    |                       |       |      |  |   |        |      | 
|------------------------------------------- | ---------------------------------- | --------------------- | ----- | ---- |  | - | ------ | ---- | 
|                                            |                                    |                      
|                                            |                                    | Three Months Ended   
|                                            |                                    | March 31,            
|                                            |                                    |                      
|                                            |                                    | 2002                  |       | 2001
|                                            |                                    |                       |       |     
|                                            |                                    |                      
|                                            |                                    | (in thousands, except
|                                            |                                    | per-share data)      
|Reported net income (loss)                  |                                    | $                     | 1,299 |      |  | $ | (6,218 | )   
|Add back: Goodwill amortization, net of tax |                                    |                       |      |      |  |   | 573    |     
|                                            | Trademark amortization, net of tax |                       |       |     |  |   |        | 14   | 
|                                            | Workforce amortization, net of tax |                       |       |     |  |   |        | 11   | 
|                                            |                                    |                       |       |      |  |   |        |     
|Adjusted net income (loss)                  |                                    | $                     | 1,299 |      |  | $ | (5,620 | )   
|                                            |                                    |                       |       |      |  |   |        |     
|Basic earnings (loss) per share:            |                                    |                       |       |      |  |   |        |     
|Reported net income (loss)                  |                                    | $                     | 0.04  |      |  | $ | (0.21  | )   
|                                            | Goodwill amortization, net of tax  |                       |       |     |  |   |        | 0.02 | 
|                                            | Trademark amortization, net of tax |                       |       |     |  |   |        |     | 
|                                            | Workforce amortization, net of tax |                       |       |     |  |   |        |     | 
|                                            |                                    |                       |       |      |  |   |        |     
|Adjusted net income (loss)                  |                                    | $                     | 0.04  |      |  | $ | (0.19  | )   
|                                            |                                    |                       |       |      |  |   |        |     
|Diluted earnings (loss) per share:          |                                    |                       |       |      |  |   |        |     
|Reported net income (loss)                  |                                    | $                     | 0.04  |      |  | $ | (0.21  | )   
|                                            | Goodwill amortization, net of tax  |                       |       |     |  |   |        | 0.02 | 
|                                            | Trademark amortization, net of tax |                       |       |     |  |   |        |     | 
|                                            | Workforce amortization, net of tax |                       |       |     |  |   |        |     | 
|                                            |                                    |                       |       |      |  |   |        |     
|Adjusted net income (loss)                  |                                    | $                     | 0.04  |      |  | $ | (0.19  | )   
|                                            |                                    |                       |       |      |  |   |        |     

In December 2001, the FASBs Emerging Issues
Task Force (EITF) issued EITF 01-14 Income
Statement Characterization of Reimbursements Received for
Out-of-Pocket Expenses Incurred(EITF
01-14). The Company adopted EITF 01-14 on January 1,
2002. EITF 01-14 requires companies that provide services as
part of their central ongoing operations to characterize the
reimbursement of out-of-pocket expenses related to those
services as revenue. In prior year periods, reimbursed
out-of-pocket expenses were recorded as a reduction to other
operating expenses. In accordance with EITF 01-14, the Company

6



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PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

reclassified $0.3 million of reimbursed
out-of-pocket expenses in the Application Software division for
the three months ended March 31, 2001, from other operating
expenses to revenue.

In August 2001, the FASB issued SFAS
No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets(SFAS No. 144). SFAS
No. 144 replaces SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of(SFAS No. 121). SFAS
No. 144 requires that long-lived assets to be disposed of
by sale, including those of discontinued operations, be measured
at the lower of carrying amount or fair value less cost to sell,
whether reported in continuing operations or in discontinued
operations. Discontinued operations will no longer be measured
at net realizable value or include amounts for operating losses
that have not yet been incurred. SFAS No. 144 also broadens
the reporting of discontinued operations to include all
components of an entity with operations that can be
distinguished from the rest of the entity and that will be
eliminated from the ongoing operations of the entity in a
disposal transaction. The Company adopted the standard on
January 1, 2002. There has been no asset impairment as a
result of adoption.

Note 5  Acquisitions

On April 27, 2001, the Company acquired all
of the assets of Virtual Information Systems, Inc.
(VIS) for consideration of $7.0 million in
cash. The purchase agreement also provided for a purchase price
adjustment of up to $1.5 million payable in cash should VIS meet
certain financial targets over the twelve months following the
date of acquisition. As of December 31, 2001, the Company
had recorded the purchase price adjustment of $1.5 million.
During the three months ended March 31, 2002, VIS met the
financial targets in the purchase agreement. On May 10,
2002, the payment for the purchase price adjustment of
$1.5 million was paid. VISs core product, Virtual
Remittance Processing System, is an automated remittance
processing solution, which ensures accurate and efficient
processing of cash collections.

Additionally, on April 27, 2001, the Company
acquired all of the assets of Officemed.com LLC
(OfficeMed) for consideration of $3.25 million
in cash. OfficeMed offers a Web-based application service
provider (ASP) solution, which gives healthcare and
payer organizations the ability to perform secure, realtime
benefits inquiries against patients insurance plans,
ensuring eligibility at the point of care.

Both the VIS and OfficeMed acquisitions were
recorded using the purchase method of accounting and,
accordingly, the purchase price was allocated to the assets
acquired and the liabilities assumed based on their estimated
fair market value at the date of acquisition. Approximately
$5.0 million of the combined purchase price was allocated
to goodwill and other indefinite-lived assets that are not being
amortized. Approximately $5.2 million of the combined
purchase price was allocated to finite-lived assets with lives
ranging from 5 to 10 years. The operating results of VIS
and OfficeMed are included in the Companys Consolidated
Statements of Operations from the date of acquisition in the
e-Health Solutions division.

Note 6  Discontinued
Operations and Divestitures

In 1998, management initiated a plan to focus the
Companys financial and management resources on its three
core healthcare segments in an effort to return the Company to
profitability. Management defined these segments as: Physician
Services, Application Software and e-Health Solutions.
Management began to seek alternatives for the remaining non-core
business segments: Hospital Services and Impact. On
November 30, 1998, the Company completed the sale of
Hospital Services. In 1999, the Company completed the sale of
both divisions of Impact.

During the three months ended March 31,
2002, and March 31, 2001, the Company incurred expenses,
primarily legal costs, associated with these discontinued
business segments. Pursuant to Accounting Principles Board
Opinion No. 30, Reporting the Results of
Operations  Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions, the

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PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

consolidated financial statements of the Company
have been presented to reflect the activity associated with
Hospital Services and Impact as discontinued operations for all
periods presented.

Note 7  Legal
Matters

The Company is subject to claims, litigation and
official billing inquiries in the ordinary course of its
business. Within the Companys industry, federal and state
civil and criminal laws govern medical billing and collection
activities. These laws provide for various fines, penalties,
damages, assessments and sanctions for violations, including
possible exclusion from federal and state healthcare programs.

In February 2002, the Company settled claims for
alleged breach of contract arising out of a 1997 contract for
emergency room billing services to be provided by the Physician
Services division to a former client. The Company and its
insurance carrier each paid the plaintiff $2.0 million in
cash in exchange for a release of all claims asserted against
the Company. The Company is seeking reimbursement of the
$2.0 million from its insurance carrier.

The Company believes that it has meritorious
defenses to the claims and other issues asserted in pending
legal matters. There can be no assurance that pending or future
claims, government investigations, or other legal matters will
not have an adverse effect on the Company. Since the Company is
often unable to estimate a range of awards or losses, if any, in
pending legal matters, amounts thereof have not been reflected
in the financial statements unless estimable and probable.

Note 8  Process Improvement
Project

The Company is currently implementing a process
improvement project within the Physician Services division (the
Project). The Project installs a formalized set of
productivity and quality measures, workflow processes and a
management operating system in the Companys major
processing centers. The Project focuses on productivity
improvements that result in both improved client service for the
divisions clients as well as improved profitability for
the division. The costs associated with the Project during 2001
primarily consisted of professional fees paid to outside
consultants retained exclusively for implementation of the
Project.

The Company incurred approximately
$1.0 million of expense in the three months ended
March 31, 2001, during the first phase of the Project,
which involved implementation in twelve processing centers. The
first phase of the Project was completed in the third quarter of
2001 with all external project costs for this phase incurred as
of September 30, 2001. The Company began the second phase
of the Project in the first quarter of 2002. The second phase
will be implemented with internal resources, and therefore the
Company will not incur any external project costs. As of
March 31, 2002, the second phase had been implemented in
three of the projected fifteen offices, with no external project
costs.

Note 9  Non-Recurring and
Other Expenses

During the first quarter of 2001, the Company
recorded a severance expense of approximately $0.6 million
associated with former executive management.

Note 10  Long-Term
Debt

Under the Indenture governing the 9 1/2%
$175 million of Senior Notes due 2005 (the
Notes), the balance of net proceeds, as defined by
the Indenture governing the Notes, from the sale of any assets
having a fair value in excess of $1.0 million must be
invested in the Companys business within 360 days of
receipt of proceeds related to the sale or they become excess
proceeds. If the aggregate of excess proceeds is greater than
$10.0 million, the Company is required to offer to
repurchase the Notes at par with such excess proceeds. As

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PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

of March 31, 2002, the Company did not have
excess proceeds (as defined by the Indenture governing the
Notes) in excess of $10.0 million related to the sale of
non-core operations or other assets.

The Company entered into a $50 million
credit facility (the Credit Facility) on
April 6, 2001. Availability under the Credit Facility is
determined by a Borrowing Base calculated based on eligible
billed accounts receivable of the Companys Physician
Services and e-Health Solutions divisions, as defined in the
Credit Facility. The Company has the option of entering into
LIBOR based loans or index rate loans, each as defined in the
Credit Facility. LIBOR based loans bear interest at LIBOR plus
amounts ranging from 1.85% to 2.65% based on the Companys
leverage ratio, as defined in the Credit Facility. Index rate
loans bear interest at rates approximating Prime plus amounts
ranging from 0.35% to 1.15% based on the Companys leverage
ratio, as defined in the Credit Facility. In addition, the
Company pays a quarterly commitment fee on the unused portion of
the Credit Facility of 0.375% per annum.

The Credit Facility contains financial and other
restrictive covenants, including, without limitation, those
restricting the incurrence of additional indebtedness, creation
of liens, payment of dividends, sales of assets, stock
offerings, capital expenditures and prepayment of the Notes and
those requiring maintenance of minimum EBITDA and minimum fixed
charge coverage, each as defined in the Credit Facility. The
initial term of the Credit Facility is 42 months expiring on
October 6, 2004. The Company and the lender can mutually
agree to extend this term by 18 months if certain
conditions have been met. The Company intends to use the Credit
Facility, as needed, for future investments in its operations
including capital expenditures, acquisitions and other general
corporate purposes. The Company did not have any borrowings
outstanding under the Credit Facility at March 31, 2002.

Note 11  Income
Taxes

As of March 31, 2002, the Company had a net
deferred tax asset, which was fully offset by a valuation
allowance. Realization of the net deferred tax asset is
dependent upon the Company generating sufficient taxable income
prior to the expiration of the federal net operating loss
carryforwards. The Company will adjust this valuation reserve
accordingly, if during future periods, management believes the
Company will generate sufficient taxable income to realize the
net deferred tax asset.

Note 12  Segment
Reporting

The Companys reportable segments are
operating units that offer different services and products.
Per-Se provides its services and products through its three
operating divisions: Physician Services, Application Software
and e-Health Solutions.

Physician Services provides business management
outsourcing services to the hospital-affiliated physician
practice market, physicians in academic settings and other large
physician practices. Services include clinical data collection,
data input, medical coding, billing, contract management, cash
collections and accounts receivable management. These services
are designed to assist healthcare providers with the business
management functions associated with the delivery of healthcare
services, allowing physicians to focus on providing quality
patient care. These services also assist physicians in improving
cash flows and reducing administrative costs and burdens.

The Application Software division provides
enterprise-wide financial, clinical and administrative software,
including patient financial management software, clinical
information software and patient and staff scheduling systems,
to acute care healthcare organizations. These applications
enable healthcare organizations to simultaneously optimize the
quality of care while improving profitability and the efficiency
of their business operations.

The e-Health Solutions division provides
healthcare providers and payers with connectivity and business
intelligence solutions that help reduce administrative costs and
enhance revenue cycle management. Solutions

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PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

include electronic claims processing, referral
submissions, eligibility verification and other electronic and
paper transaction processing. In addition, e-Health Solutions
offers physician practice management software as an ASP to
physician practices and offers managed care solutions to payers
in ASP, turnkey or outsourced formats.

The Company evaluates each divisions
performance based on segment operating margin. The e-Health
Solutions division revenue includes intersegment revenue for
services provided to the Physician Services division, which is
shown in Eliminations to reconcile to total consolidated
revenue. Certain prior year amounts have been reclassified to
conform to current year presentation.

Information concerning the Companys
reportable operating segments is as follows:

|                                                                                          |                      |                    |        |        |   |   |        |        |  
|----------------------------------------------------------------------------------------- | -------------------- | ------------------ | ------ | ------ | - | - | ------ | ------ | -
|                                                                                          |                      |                   
|                                                                                          |                      | Three Months Ended
|                                                                                          |                      | March 31,         
|                                                                                          |                      |                   
|                                                                                          |                      | 2002               |        | 2001  
|                                                                                          |                      |                    |        |       
|                                                                                          |                      |                   
|                                                                                          |                      | (in thousands)    
|Revenue:                                                                                  |                      |                    |        |        |   |   |        |       
|                                                                                          | Physician Services   |                    | $      | 56,505 |   |   | $      | 55,141 |  
|                                                                                          | Application Software |                    |        | 16,008 |   |   |        | 15,186 |  
|                                                                                          | e-Health Solutions   |                    |        | 15,785 |   |   |        | 12,682 |  
|                                                                                          | Eliminations         |                    |        | (2,862 | ) |   |        | (2,713 | )
|                                                                                          |                      |                    |        |        |   |   |        |       
|                                                                                          |                      | $                  | 85,436 |        |   | $ | 80,296 |       
|                                                                                          |                      |                    |        |        |   |   |        |       
|Segment operating expenses(1):                                                            |                      |                    |        |        |   |   |        |       
|                                                                                          | Physician Services   |                    | $      | 51,922 |   |   | $      | 54,253 |  
|                                                                                          | Application Software |                    |        | 13,730 |   |   |        | 13,948 |  
|                                                                                          | e-Health Solutions   |                    |        | 13,553 |   |   |        | 12,710 |  
|                                                                                          | Corporate            |                    |        | 2,980  |   |   |        | 2,488  |  
|                                                                                          | Eliminations         |                    |        | (2,862 | ) |   |        | (2,713 | )
|                                                                                          |                      |                    |        |        |   |   |        |       
|                                                                                          |                      | $                  | 79,323 |        |   | $ | 80,686 |       
|                                                                                          |                      |                    |        |        |   |   |        |       
|Segment operating margin(1):                                                              |                      |                    |        |        |   |   |        |       
|                                                                                          | Physician Services   |                    | $      | 4,583  |   |   | $      | 888    |  
|                                                                                          | Application Software |                    |        | 2,278  |   |   |        | 1,238  |  
|                                                                                          | e-Health Solutions   |                    |        | 2,232  |   |   |        | (28    | )
|                                                                                          | Corporate            |                    |        | (2,980 | ) |   |        | (2,488 | )
|                                                                                          |                      |                    |        |        |   |   |        |       
|                                                                                          |                      | $                  | 6,113  |        |   | $ | (390   | )     
|                                                                                          |                      |                    |        |        |   |   |        |       
|Interest expense, net                                                                     |                      | $                  | (4,461 | )      |   | $ | (4,015 | )     
|                                                                                          |                      |                    |        |        |   |   |        |       
|Non-recurring and other expenses (including
    process
    improvement project expenses) |                      |                    |        |        |   |   |        |       
|                                                                                          | Physician Services   |                    | $      |       |   |   | $      | (965   | )
|                                                                                          | Corporate            |                    |        |       |   |   |        | (641   | )
|                                                                                          |                      |                    |        |        |   |   |        |       
|                                                                                          |                      | $                  |       |        |   | $ | (1,606 | )     
|                                                                                          |                      |                    |        |        |   |   |        |       
|Income (loss) before income taxes                                                         |                      | $                  | 1,652  |        |   | $ | (6,011 | )     
|                                                                                          |                      |                    |        |        |   |   |        |       

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PER-SE TECHNOLOGIES, INC. AND
SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)  (Continued)

|                               |                      |                    |       |       |  |   |       |       | 
|------------------------------ | -------------------- | ------------------ | ----- | ----- |  | - | ----- | ----- | 
|                               |                      |                   
|                               |                      | Three Months Ended
|                               |                      | March 31,         
|                               |                      |                   
|                               |                      | 2002               |       | 2001 
|                               |                      |                    |       |      
|                               |                      |                   
|                               |                      | (in thousands)    
|Depreciation and amortization: |                      |                    |       |       |  |   |       |      
|                               | Physician Services   |                    | $     | 2,700 |  |   | $     | 2,930 | 
|                               | Application Software |                    |       | 1,636 |  |   |       | 1,843 | 
|                               | e-Health Solutions   |                    |       | 1,255 |  |   |       | 1,320 | 
|                               | Corporate            |                    |       | 225   |  |   |       | 333   | 
|                               |                      |                    |       |       |  |   |       |      
|                               |                      | $                  | 5,816 |       |  | $ | 6,426 |      
|                               |                      |                    |       |       |  |   |       |      
|Capital expenditures:          |                      |                    |       |       |  |   |       |      
|                               | Physician Services   |                    | $     | 1,074 |  |   | $     | 451   | 
|                               | Application Software |                    |       | 177   |  |   |       | 165   | 
|                               | e-Health Solutions   |                    |       | 845   |  |   |       | 404   | 
|                               | Corporate            |                    |       | 199   |  |   |       | 1     | 
|                               |                      |                    |       |       |  |   |       |      
|                               |                      | $                  | 2,295 |       |  | $ | 1,021 |      
|                               |                      |                    |       |       |  |   |       |      

|                     |                      |           |         |              |  |   |         |        | 
|-------------------- | -------------------- | --------- | ------- | ------------ |  | - | ------- | ------ | 
|                     |                      |          
|                     |                      | As of    
|                     |                      |          
|                     |                      | March 31, |         | December 31,
|                     |                      | 2002      |         | 2001        
|                     |                      |           |         |             
|Identifiable Assets: |                      |           |         |              |  |   |         |       
|                     | Physician Services   |           | $       | 59,488       |  |   | $       | 55,812 | 
|                     | Application Software |           |         | 35,167       |  |   |         | 33,172 | 
|                     | e-Health Solutions   |           |         | 66,907       |  |   |         | 65,713 | 
|                     | Corporate            |           |         | 36,071       |  |   |         | 48,194 | 
|                     |                      |           |         |              |  |   |         |       
|                     |                      | $         | 197,633 |              |  | $ | 202,891 |       
|                     |                      |           |         |              |  |   |         |       



---



|    |                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------
|(1) | Excludes process improvement project,
    non-recurring and other expenses and net interest expense.

11



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|         |                                                                                          
|-------- | -----------------------------------------------------------------------------------------
|Item  2. | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

General

Per-Se Technologies, Inc. (Per-Se or
the Company), a corporation organized in 1985 under
the laws of the State of Delaware, is a provider of integrated
business management outsourcing services, application software,
and Internet-enabled connectivity for the healthcare industry.
Per-Se delivers its services and products through its three
operating divisions: Physician Services, Application Software
and e-Health Solutions.

Physician Services provides business management
outsourcing services to the hospital-affiliated physician
practice market, physicians in academic settings and other large
physician practices. Services focus on the management of revenue
cycle and include clinical data collection, data input, medical
coding, billing, contract management, cash collections and
accounts receivable management. These services are designed to
assist healthcare providers with the business management
functions associated with the delivery of healthcare services,
allowing physicians to focus on providing quality patient care.
These services also assist physicians in improving cash flows
and reducing administrative costs and burdens.

The Application Software division provides
enterprise-wide financial, clinical and administrative software,
including patient financial management software, clinical
information software and patient and staff scheduling systems,
to acute care healthcare organizations. These applications
enable healthcare organizations to simultaneously optimize the
quality of care while improving profitability and the efficiency
of their business operations.

The e-Health Solutions division provides
healthcare providers and payers with connectivity and business
intelligence solutions that help reduce administrative costs and
enhance revenue cycle management. Solutions include electronic
claims processing, referral submissions, eligibility
verification and other electronic and paper transaction
processing. In addition, e-Health Solutions offers physician
practice management software as an application service provider
(ASP) to physician practices and offers managed care
solutions to payers in ASP, turnkey or outsourced formats.

Per-Se markets its products and services to
constituents of the healthcare industry, including
hospital-affiliated physician practices, integrated healthcare
delivery networks (IDNs), hospitals and office-based
physicians.

Results of Operations



| |  |                                                                                       
| |  | --------------------------------------------------------------------------------------
| |  | Three months ended March 31, 2002 as
    compared to three months ended March 31, 2001

Revenue.Revenue
classified by the Companys reportable segments
(divisions) is as follows:

|                     |  |                    |        |      |  |   |        |  
|-------------------- |  | ------------------ | ------ | ---- |  | - | ------ | -
|                     |  |                   
|                     |  | Three Months Ended
|                     |  | March 31,         
|                     |  |                   
|                     |  | 2002               |        | 2001
|                     |  |                    |        |     
|                     |  |                   
|                     |  | (in thousands)    
|Physician Services   |  | $                  | 56,505 |      |  | $ | 55,141 |  
|Application Software |  |                    | 16,008 |      |  |   | 15,186 |  
|e-Health Solutions   |  |                    | 15,785 |      |  |   | 12,682 |  
|Eliminations         |  |                    | (2,862 | )    |  |   | (2,713 | )
|                     |  |                    |        |      |  |   |        |  
|                     |  | $                  | 85,436 |      |  | $ | 80,296 |  
|                     |  |                    |        |      |  |   |        |  

Revenue for the Physician Services division
increased 2.5% in the three months ended March 31, 2002, as
compared to the same period in 2001, even though there was one
less business day in the three months ended March 31, 2002,
as compared to the three months ended March 31, 2001.
Revenue per business day increased by approximately 4%. The
Company continued to experience high client retention in the
three months ended March 31, 2002, consistent with
full-year 2001 levels. Net backlog at March 31, 2002 was
approximately $2 million, compared to approximately
$3 million at December 31, 2001. Net backlog
represents the

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##### Table of Contents



annualized revenue related to new contracts
signed with the business still to be implemented, net of the
annualized revenue related to client discontinuance
notifications received with the business still to ramp down.


Revenue for the Application Software division
increased approximately 5% for the three months ended
March 31, 2002, as compared to the same period in 2001.
Revenue in the division is recognized using the
percentage-of-completion method of accounting, and the increase
over the prior-year period was primarily the result of large
implementation projects that were sold in the first quarter of
2001. The division ended March 31, 2002 with a backlog of
approximately $39 million as compared to approximately
$43 million at December 31, 2001.

Revenue for the e-Health Solutions division
increased $3.1 million or 24% for the three months ended
March 31, 2002, as compared to the same period in 2001.
Excluding the impact of the April 2001 acquisitions of Virtual
Information Systems, Inc. (VIS) and Officemed.com
LLC (OfficeMed), the year-over-year increase in
revenue would have been 18%. The increase in the base business
is due to demand for the divisions hospital and physician
transaction processing services in the marketplace. The division
ended the first quarter of 2002 with a backlog of approximately
$7 million, which was the same level as of
December 31, 2001.

In December 2001, the Financial Accounting
Standards Boards (FASB) Emerging Issues Task
Force (EITF) issued EITF 01-14 Income Statement
Characterization of Reimbursements Received for
Out-of-Pocket Expenses Incurred(EITF
01-14). The Company adopted EITF 01-14 on January 1,
2002. EITF 01-14 requires companies that provide services as
part of their central ongoing operations to characterize the
reimbursement of out-of-pocket expenses related to those
services as revenue. In prior year periods, reimbursed
out-of-pocket expenses were recorded as a reduction to other
operating expenses. In accordance with EITF 01-14, the Company
reclassified $0.3 million of reimbursed out-of-pocket
expenses in the Application Software division for the three
months ended March 31, 2001 from other operating expenses
to revenue.

Segment Operating Margin.Segment operating margin is net
income/(loss) excluding net interest expense, income taxes and
discontinued operations, net of taxes, for all periods
presented. For the three months ended March 31, 2001,
segment operating margin also excluded the process improvement
project expenses and non-recurring and other expenses. Segment
operating margin, classified by the Companys divisions, is
as follows:

|                     |  |                    |        |      |  |   |        |  
|-------------------- |  | ------------------ | ------ | ---- |  | - | ------ | -
|                     |  |                   
|                     |  | Three Months Ended
|                     |  | March 31,         
|                     |  |                   
|                     |  | 2002               |        | 2001
|                     |  |                    |        |     
|                     |  |                   
|                     |  | (in thousands)    
|Physician Services   |  | $                  | 4,583  |      |  | $ | 888    |  
|Application Software |  |                    | 2,278  |      |  |   | 1,238  |  
|e-Health Solutions   |  |                    | 2,232  |      |  |   | (28    | )
|Corporate            |  |                    | (2,980 | )    |  |   | (2,488 | )
|                     |  |                    |        |      |  |   |        |  
|                     |  | $                  | 6,113  |      |  | $ | (390   | )
|                     |  |                    |        |      |  |   |        |  

Physician Services segment operating margin
increased $3.7 million in the three months ended
March 31, 2002, compared to the same period in 2001. The
increase is due to efficiencies and cost savings realized from
the productivity initiatives implemented during 2001, as well as
revenue gains in the division.

Application Softwares segment operating
margin increased $1.0 million or 84% in the three months
ended March 31, 2002, compared to the same period in 2001.
The increase is attributable to the revenue increase previously
discussed, as well as a reduction in operating expenses that
resulted from managements continued focus on productivity
improvements in the implementation process and on cost
containment.

e-Health Solutions segment operating margin
increased $2.3 million in the three months ended
March 31, 2002, compared to the same period in 2001. This
increase is the result of a 33% increase in transaction volume,
the impact of the VIS and OfficeMed acquisitions and the
decrease in goodwill amortization expense related to the
Companys adoption of the FASB Statement of Financial
Accounting

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##### Table of Contents



Standards No. 142 Goodwill and Other
Intangible Assetson January 1, 2002 (for more
information refer to Note 4  New
Accounting Pronouncements in the Companys Notes to
Consolidated Financial Statements).


The Companys corporate overhead expenses
increased in the three months ended March 31, 2002,
compared to the same period in 2001; however, the corporate
overhead expense levels are consistent with annualized 2001
expenses.

Interest.Net
interest expense was $4.5 million for the three months
ended March 31, 2002, as compared to $4.0 million for
the same period in 2001. The 11% increase is attributable to a
reduction in interest income due to a decrease in investment
rates available.

Process Improvement Project.The Company is currently implementing
a process improvement project within the Physician Services
division (the Project). The Project installs a
formalized set of productivity and quality measures, workflow
processes and a management operating system in the
Companys major processing centers. The Project focuses on
productivity improvements that result in both improved client
service for the divisions clients as well as improved
profitability for the division. The costs associated with the
Project during 2001 primarily consisted of professional fees
paid to outside consultants retained exclusively for
implementation of the Project.

The Company incurred approximately
$1.0 million of expense in the three months ended
March 31, 2001 during the first phase of the Project, which
involved implementation in twelve processing centers. The first
phase of the Project was completed in the third quarter of 2001
with all external project costs for this phase incurred as of
September 30, 2001. The Company began the second phase of
the Project in the first quarter of 2002. The second phase will
be implemented with internal resources, and therefore the
Company will not incur any external project costs. As of
March 31, 2002, the second phase had been implemented in
three of the projected fifteen offices, with no external project
costs.

Non-recurring and Other Expenses.During the first quarter of 2001, the
Company recorded severance expense of approximately
$0.6 million associated with former executive management.

Income Taxes.Income
tax expense, which was primarily related to state income taxes,
was $0.3 million for the three months ended March 31,
2002, as compared to income tax expense of $0.2 million for
the same period in 2001. As of March 31, 2002, the Company
had a net deferred tax asset, which was fully offset by a
valuation allowance. Realization of the net deferred tax asset
is dependent upon the Company generating sufficient taxable
income prior to the expiration of the federal net operating loss
carryforwards. The Company will adjust this valuation reserve
accordingly if, during future periods, management believes the
Company will generate sufficient taxable income to realize the
net deferred tax asset.

Liquidity and Capital Resources

As of March 31, 2002, the Company had
working capital of $27.6 million compared to
$24.3 million at December 31, 2001. The increase in
working capital is primarily related to the increase in accounts
receivable. Restricted cash totaled $4.4 million as of
March 31, 2002, and as of December 31, 2001.
Restricted cash principally represents restrictions on the
Companys cash as security for the Companys letters
of credit. Cash and cash equivalents totaled $24.5 million
at March 31, 2002, a decrease of $12.0 million compared to
December 31, 2001.

Cash used for continuing operations was
$8.0 million in the three months ended March 31, 2002,
compared to cash used for continuing operations in the three
months ended March 31, 2001, of $8.6 million. This
improvement in cash flow was driven by improvements in
operations, net of depreciation and amortization, that resulted
in net income of $1.3 million in the three months ended
March 31, 2002, versus a net loss of $6.2 million in
the same period in 2001. The improvement in cash flow from
operations was partially offset by the changes in current assets
and current liabilities.

The Company used $4.3 million in cash for
investing activities during the three months ended
March 31, 2002, compared to $1.1 million during the
same period in 2001. The increase was primarily driven by

14



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##### Table of Contents



normalized capital spending in the three months
ended March 31, 2002, as compared to reduced levels in the
same period in 2001.


Cash provided by financing activities was
$0.3 million in the three months ended March 31, 2002,
compared to cash used for financing activities of $0.2 million
in the same period in 2001. These amounts were primarily
attributable to proceeds from the exercise of stock options in
the three months ended March 31, 2002, compared to deferred
financing costs incurred in the same period in 2001.

For more information about the Companys
long-term debt, refer to Note 10  Long-Term
Debt in the Companys Notes to Consolidated Financial
Statements.

Cash flow in the first and third quarters is
negatively impacted by the semi-annual interest payments
required under the $175 million 9 1/2% Senior Notes
due 2005. The Company believes that its current cash flow will
be sufficient to meet working capital needs and capital
expenditures for the next twelve months.

15



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Forward-Looking Statements

Certain statements included in the Notes to
Consolidated Financial Statements, Managements Discussion
and Analysis of Financial Condition and Results of Operations,
and elsewhere in this report including certain statements set
forth under the captions Note 7  Legal
Matters, Note 8  Process Improvement
Project, Note 10  Long-Term Debt,
Results of Operations and Liquidity and
Capital Resources, are forward-looking
statements within the meaning of the Securities Act of
1933 and the Securities Exchange Act of 1934, as amended by the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements include the Companys
expectations with respect to meritorious defenses to the claims
and other issues asserted in pending legal matters, the effect
of industry and regulatory changes on the Companys
customer base, the impact of revenue backlog on future revenue,
the impact of operational improvement or cost reduction
initiatives, operating margins, overall profitability and the
availability of capital. Although the Company believes that the
statements it has made are based on reasonable assumptions, they
are based on current information and beliefs and, accordingly,
the Company can give no assurance that its expectations will be
achieved. In addition, these statements are subject to factors
that could cause actual results to differ materially from those
suggested by the forward-looking statements. These factors
include, but are not limited to, factors identified below under
the caption Factors That May Affect Future Results of
Operations, Financial Condition or Business. The Company
disclaims any responsibility to update any forward-looking
statements.

Factors That May Affect Future Results of
Operations, Financial Condition or Business



| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | Competition with Business Management
    Outsourcing Services Companies and In-house Providers

The business management outsourcing business,
especially surrounding the areas of billings and collections, is
highly competitive. The Company competes with regional physician
reimbursement organizations, national information and data
processing organizations, and physician groups that provide
their own business management services. Successful competition
within this industry is dependent on numerous industry and
market conditions.

Potential industry and market changes that could
adversely affect the Companys ability to compete for
business management outsourcing services include an increase in
the number of competitors providing comparable services, and new
alliances between healthcare providers and third-party payers in
which healthcare providers are employed by such third-party
payers.



| |                                                      
| | -----------------------------------------------------
| | Competition with Information Technology
    Companies

The business of providing application software,
information technology and consulting services is also highly
competitive. The Company competes with national and regional
companies in this regard. Some competitors have longer operating
histories and greater financial, technical and marketing
resources than that of the Company. The Companys
successful competition within this industry is dependent on
numerous industry and market conditions.



| |                      
| | ---------------------
| | Major Client Projects

The Companys Application Software division
involves projects designed to reengineer customer operations
through the strategic use of imaging, client/server and other
advanced technologies. Failure to meet customers
expectations with respect to a major project could have adverse
consequences, including but not limited to the following: damage
the Companys reputation and standing in this marketplace;
impair its ability to attract new client/server information
technology business; inhibit its ability to collect for services
performed on a project; and inhibit its ability to collect for
services to be performed on a project.



| |                                   
| | ----------------------------------
| | Changes in the Healthcare Industry

The markets for the Companys software and
e-commerce products and services as well as our business
management outsourcing services are characterized by rapidly
changing technology, evolving industry

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standards and frequent new product introductions.
The Companys ability to keep pace with changes in the
healthcare industry may be dependent on a variety of factors,
including its ability to enhance existing products and services;
introduce new products and services quickly and cost
effectively; achieve market acceptance for new products and
services; and respond to emerging industry standards and other
technological changes.


Competitors may develop competitive products that
could adversely affect the Companys operating results. It
is possible that the Company will be unsuccessful in refining,
enhancing and developing our software and billing systems going
forward. The costs associated with refining, enhancing and
developing its software and billing systems may increase
significantly in the future. Existing software and technology
may become obsolete as a result of ongoing technological
developments in the marketplace.



| |                                 
| | --------------------------------
| | Consolidation in the Marketplace

In general, consolidation initiatives in the
healthcare marketplace may result in fewer potential customers
for the Companys services. Some of these types of
initiatives include but are not limited to employer initiatives
such as creating group purchasing cooperatives (GPOs); provider
initiatives, such as risk-sharing among healthcare providers and
managed care companies through capitated contracts; and
integration among hospitals and physicians into comprehensive
delivery systems.

Continued consolidation of management and billing
services through integrated delivery systems may result in a
decrease in demand for the Companys business management
outsourcing services for particular physician practices.



| |                       
| | ----------------------
| | Government Regulations

The healthcare industry is highly regulated and
is subject to changing political, economic and regulatory
influences. Federal and state legislatures have periodically
considered programs, such as the Balanced Budget Act, to reform
or amend the U.S. healthcare system at both the federal and
state level and to change healthcare financing and reimbursement
systems. These programs may contain proposals to increase
governmental involvement in healthcare, lower reimbursement
rates or otherwise change the environment in which healthcare
industry participants operate. Current or future government
regulations or healthcare reform measures may affect our
business. Healthcare industry participants may respond by
reducing their investments or postponing investment decisions,
including investments in the Companys products and
services.

Medical billing and collection activities are
governed by numerous federal and state civil and criminal laws.
Federal and state regulators use these laws to investigate
healthcare providers and companies that provide billing and
collection services. In connection with these laws, the Company
may be subjected to federal or state government investigations
and possible penalties may be imposed upon the Company, false
claims actions may have to be defended, private payers may file
claims against the Company, and the Company may be excluded from
Medicare, Medicaid and/or other government-funded healthcare
programs.

In the past, the Company has been the subject of
federal investigations, and it may become the subject of false
claims litigation or additional investigations relating to its
billing and collection activities. Any such proceeding or
investigation could have a material adverse effect on the
Companys business.

The final Health Insurance Portability and
Accountability Act of 1996 (HIPAA) rules for the
standards for electronic transactions and standards of privacy
of individually identifiable health information were published
in 2000. The implementation deadline for the standards for
electronic transactions is October 2002 with the possibility of
a one-year delay for healthcare providers, healthcare
clearinghouses and large health plans upon filing an extension.
The implementation deadline for the standards of privacy is
April 2003. These rules set new or higher standards for the
healthcare industry as to handling healthcare transactions and
information and will require changes to the manner in which the
industry handles such information. One of the most contentious
areas of HIPAA reform is in the area of privacy and security.

Currently in the area of privacy and security of
health information, numerous federal and state civil and
criminal laws govern the collection, use, storage and disclosure
of health information. Penalties for noncompliance, both
criminal and civil, may be brought by federal or state
governments. Persons who believe

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their health information has been misused or
disclosed improperly may bring claims and payers who believe
instances of noncompliance with privacy and security standards
have occurred may bring administrative sanctions or remedial
actions against offending parties.


Passage of HIPAA is part of a wider healthcare
reform initiative. The Company expects that healthcare reform
will continue to be widely debated. The Company also expects
that the federal government as well as state governments will
pass laws and issue regulations addressing healthcare issues and
reimbursement of healthcare providers. The Company cannot
predict whether new legislation and regulations will be enacted
and, if enacted, whether such new developments will affect its
business.



| |     
| | ----
| | Debt

The Company has a significant amount of long-term
indebtedness and, as a result, obligations to make interest
payments on that debt. If unable to make the required debt
payments, the Company could be required to reduce or delay
capital expenditures, sell certain assets, restructure or
refinance its indebtedness, or seek additional equity capital.
The Companys ability to make payments on its debt
obligations will depend on future operating performance, which
will be affected by certain conditions that are beyond the
Companys control.



| |           
| | ----------
| | Litigation

The Company is involved in litigation arising in
the ordinary course of its business, which may expose it to loss
contingencies. These matters include, but are not limited to,
claims brought by former customers with respect to the operation
of our business. The Company has also received written demands
from customers and former customers that have not yet resulted
in legal action. Many of the Companys software products
provide data for use by healthcare providers in providing care
to patients. Although no claims have been brought against the
Company to date regarding injuries related to the use of its
products, such claims may be made in the future.

The Company may not be able successfully to
resolve such legal matters, or other legal matters that may
arise in the future. In the event of an adverse outcome with
respect to such legal matters or other legal matters in which
the Company may become involved, its insurance coverage, product
liability coverage or otherwise, may not fully cover any damages
assessed against the Company. Although the Company maintains all
insurance coverage in amounts that it believes is sufficient for
its business, there can be no assurance that such coverage will
prove to be adequate or that such coverage will continue to
remain available on acceptable terms, if at all. A successful
claim brought against the Company, which is uninsured or
under-insured, could materially harm its business, results of
operations or financial condition.



| |                       
| | ----------------------
| | Stock Price Volatility

The trading price of the Companys common
stock may be volatile. The market for the Companys common
stock may experience significant price and volume fluctuations
in response to a number of factors, including actual or
anticipated quarterly variations in operating results, changes
in expectations of future financial performance or changes in
estimates of securities analysts, government regulatory action,
healthcare reform measures, client relationship developments and
other factors, many of which are beyond the Companys
control. Furthermore, the stock market in general and the market
for software, healthcare and high technology companies in
particular, has experienced extreme volatility that often has
been unrelated to the operating performance of particular
companies. These broad market and industry fluctuations may
adversely affect the trading price of the Companys common
stock, regardless of actual operating performance.

18



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##### Table of Contents






PART II: OTHER INFORMATION






|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

The information required by this Item is included
in Note 7  Legal Matters of Notes to
Consolidated Financial Statements in Item 1 of Part I.






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

(A) Exhibits

|        |     |  |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | --- |  |  | -------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |  |  |         
|Number  |     |  |  | Document
|        |     |  |  |         
|        | 2.1 |  |  |         |  | Stock Purchase Agreement dated as of
    October 15, 1998, between Registrant and NCO Group, Inc.
    (incorporated by reference to Exhibit 2.1 to Quarterly
    Report on Form 10-Q for the quarter ended
    September 30, 1998).                                                                                                                                                                 
|        | 2.2 |  |  |         |  | Stock Purchase Agreement dated as of
    April 20, 1999, among Complete Business Solutions, Inc.,
    E-Business Solutions.com, Inc., Impact Innovations Holdings,
    Inc. and Registrant (incorporated by reference to
    Exhibit 2.1 to Current Report on Form 8-K filed on
    May 5, 1999).                                                                                                   
|        | 2.3 |  |  |         |  | Stock Purchase Agreement dated as of
    November 4, 1999, among J3 Technology Services Corp.,
    Impact Innovations Holdings, Inc., Impact Innovations Government
    Group, Inc. and Registrant (incorporated by reference to
    Exhibit 2.3 to Quarterly Report on Form 10-Q for the
    quarter ended September 30, 1999).                                                                    
|        | 2.4 |  |  |         |  | Stock Purchase Agreement dated as of
    December 8, 2000, among Registrant, Health Data Services,
    Inc., Patient Account Management Services, Inc., and Marc
    Saltzberg, Raymond DelBrocco, Charles Moore, and Larry Shaw
    (incorporated by reference to Exhibit 2.1 to Current Report
    on Form 8-K filed on December 20, 2000).                                                       
|        | 2.5 |  |  |         |  | Asset Purchase Agreement dated as of
    April 27, 2001, among Registrant, Health Data Services,
    Inc., Virtual Information Systems, Inc., and Paul M. Helmick and
    William T. Adams (incorporated by reference to Exhibit 2.5
    to Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001).                                                                                
|        | 2.6 |  |  |         |  | Asset Purchase Agreement dated as of
    April 27, 2001, among Registrant, Per-Se Transaction
    Services, Inc., officemed.com LLC, SoftLinc, Inc., and Daniel
    Mansfield (incorporated by reference to Exhibit 2.6 to
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001).                                                                                             
|        | 3.1 |  |  |         |  | Restated Certificate of Incorporation of
    Registrant (incorporated by reference to Exhibit 3.1 to
    Annual Report on Form 10-K for the year ended
    December 31, 1999 (the 1999 Form 10-K)).                                                                                                                                                                                               
|        | 3.2 |  |  |         |  | Restated By-laws of Registrant (incorporated by
    reference to Exhibit 3.2 to the 1999 Form 10-K).                                                                                                                                                                                                                                                                                                
|        | 4.1 |  |  |         |  | Indenture dated as of February 20, 1998,
    among Registrant, as Issuer, the Subsidiary Guarantors named in
    the Indenture and State Street Bank and Trust Company, as
    Trustee (including form of note) (incorporated by reference to
    Exhibit 10.3 to Current Report on Form 8-K filed on
    March 3, 1998).                                                                           
|        | 4.2 |  |  |         |  | Warrant Agreement dated as of July 8, 1998,
    between Registrant and SunTrust Bank, Atlanta, as Warrant Agent
    (including form of warrant certificate) (incorporated by
    reference to Exhibit 4.2 to Registration Statement on
    Form 8-A filed on July 21, 1998).                                                                                                                        
|        | 4.3 |  |  |         |  | Settlement Agreement dated as of June 24,
    1999, by and among Lori T. Caudill, William J. DeZonia, Carol T.
    Shumaker, Alyson T. Stinson, James F. Thacker, James F. Thacker
    Retained Annuity Trust, Paulanne H. Thacker Retained Annuity
    Trust and Borrower (incorporated by reference to
    Exhibit 10.1 to Quarterly Report on Form 10-Q for the
    quarter ended June 30, 1999).
|        | 4.4 |  |  |         |  | Rights Agreement dated as of February 11,
    1999, between Registrant and American Stock Transfer & Trust
    Company (including form of rights certificates) (incorporated by
    reference to Exhibit 4 to Current Report on Form 8-K
    filed on February 12, 1999).                                                                                                                           
|        | 4.5 |  |  |         |  | First Amendment to Rights Agreement dated as of
    February 11, 1999, between Registrant and American Stock
    Transfer & Trust Company, entered into as of May 4,
    2000 (incorporated by reference to Exhibit 4.4 to Quarterly
    Report of Form 10-Q for the quarter ended March 31,
    2000).                                                                                             

19



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##### Table of Contents



|        |      |  |  |          |  |                                                                                                                                                                                                                                                                                                                                                 
|------- | ---- |  |  | -------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |  |  |         
|Number  |      |  |  | Document
|        |      |  |  |         
|        | 4.6  |  |  |         |  | Second Amendment to Rights Agreement dated as of
    February 11, 1999, between Registrant and American Stock
    Transfer & Trust Company, entered into as of
    December 6, 2001, to be effective as of March 6, 2002
    (incorporated by reference to Exhibit 4.12 to Annual Report
    on Form 10-K for the year ended December 31, 2001).
|        | 10.1 |  |  |         |  | The Per-Se Technologies, Inc. Non-Qualified
    Deferred Compensation Plan Trust Agreement dated as of
    February 12, 2002, between Registrant and Merrill Lynch
    Trust Company, FSB.                                                                                                                                                      
|        | 10.2 |  |  |         |  | The Per-Se Technologies, Inc. Deferred Stock Unit
    Plan Trust Agreement dated as of May 1, 2002, between
    Registrant and Merrill Lynch Trust Company, FSB.                                                                                                                                                                                

(B) Reports on Form 8-K

The Company did not file any reports on
Form 8-K during the quarter ended March 31, 2002.

20



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##### Table of Contents






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.



| |                          
| | -------------------------
| | PER-SE TECHNOLOGIES, INC.
| | (Registrant)             



| |     |                     
| | --- | --------------------
| | By: | /s/ CHRIS E. PERKINS

| |                             
| | ----------------------------
| |                             
| | Chris E. Perkins            
| | Executive Vice President and
| | Chief Financial Officer     

Date: May 14, 2002

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##### Table of Contents



INDEX TO EXHIBITS

|        |      |  |  |          |  |                                                                                                                                                                                                                                                                                                                                                                                                     
|------- | ---- |  |  | -------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |  |  |         
|Number  |      |  |  | Document
|        |      |  |  |         
|        | 2.1  |  |  |         |  | Stock Purchase Agreement dated as of
    October 15, 1998, between Registrant and NCO Group, Inc.
    (incorporated by reference to Exhibit 2.1 to Quarterly
    Report on Form 10-Q for the quarter ended
    September 30, 1998).                                                                                                                                                                 
|        | 2.2  |  |  |         |  | Stock Purchase Agreement dated as of
    April 20, 1999, among Complete Business Solutions, Inc.,
    E-Business Solutions.com, Inc., Impact Innovations Holdings,
    Inc. and Registrant (incorporated by reference to
    Exhibit 2.1 to Current Report on Form 8-K filed on
    May 5, 1999).                                                                                                   
|        | 2.3  |  |  |         |  | Stock Purchase Agreement dated as of
    November 4, 1999, among J3 Technology Services Corp.,
    Impact Innovations Holdings, Inc., Impact Innovations Government
    Group, Inc. and Registrant (incorporated by reference to
    Exhibit 2.3 to Quarterly Report on Form 10-Q for the
    quarter ended September 30, 1999).                                                                    
|        | 2.4  |  |  |         |  | Stock Purchase Agreement dated as of
    December 8, 2000, among Registrant, Health Data Services,
    Inc., Patient Account Management Services, Inc., and Marc
    Saltzberg, Raymond DelBrocco, Charles Moore, and Larry Shaw
    (incorporated by reference to Exhibit 2.1 to Current Report
    on Form 8-K filed on December 20, 2000).                                                       
|        | 2.5  |  |  |         |  | Asset Purchase Agreement dated as of
    April 27, 2001, among Registrant, Health Data Services,
    Inc., Virtual Information Systems, Inc., and Paul M. Helmick and
    William T. Adams (incorporated by reference to Exhibit 2.5
    to Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001).                                                                                
|        | 2.6  |  |  |         |  | Asset Purchase Agreement dated as of
    April 27, 2001, among Registrant, Per-Se Transaction
    Services, Inc., officemed.com LLC, SoftLinc, Inc., and Daniel
    Mansfield (incorporated by reference to Exhibit 2.6 to
    Quarterly Report on Form 10-Q for the quarter ended
    March 31, 2001).                                                                                             
|        | 3.1  |  |  |         |  | Restated Certificate of Incorporation of
    Registrant (incorporated by reference to Exhibit 3.1 to
    Annual Report on Form 10-K for the year ended
    December 31, 1999 (the 1999 Form 10-K)).                                                                                                                                                                                               
|        | 3.2  |  |  |         |  | Restated By-laws of Registrant (incorporated by
    reference to Exhibit 3.2 to the 1999 Form 10-K).                                                                                                                                                                                                                                                                                                
|        | 4.1  |  |  |         |  | Indenture dated as of February 20, 1998,
    among Registrant, as Issuer, the Subsidiary Guarantors named in
    the Indenture and State Street Bank and Trust Company, as
    Trustee (including form of note) (incorporated by reference to
    Exhibit 10.3 to Current Report on Form 8-K filed on
    March 3, 1998).                                                                           
|        | 4.2  |  |  |         |  | Warrant Agreement dated as of July 8, 1998,
    between Registrant and SunTrust Bank, Atlanta, as Warrant Agent
    (including form of warrant certificate) (incorporated by
    reference to Exhibit 4.2 to Registration Statement on
    Form 8-A filed on July 21, 1998).                                                                                                                        
|        | 4.3  |  |  |         |  | Settlement Agreement dated as of June 24,
    1999, by and among Lori T. Caudill, William J. DeZonia, Carol T.
    Shumaker, Alyson T. Stinson, James F. Thacker, James F. Thacker
    Retained Annuity Trust, Paulanne H. Thacker Retained Annuity
    Trust and Borrower (incorporated by reference to
    Exhibit 10.1 to Quarterly Report on Form 10-Q for the
    quarter ended June 30, 1999).
|        | 4.4  |  |  |         |  | Rights Agreement dated as of February 11,
    1999, between Registrant and American Stock Transfer & Trust
    Company (including form of rights certificates) (incorporated by
    reference to Exhibit 4 to Current Report on Form 8-K
    filed on February 12, 1999).                                                                                                                           
|        | 4.5  |  |  |         |  | First Amendment to Rights Agreement dated as of
    February 11, 1999, between Registrant and American Stock
    Transfer & Trust Company, entered into as of May 4,
    2000 (incorporated by reference to Exhibit 4.4 to Quarterly
    Report of Form 10-Q for the quarter ended March 31,
    2000).                                                                                             
|        | 4.6  |  |  |         |  | Second Amendment to Rights Agreement dated as of
    February 11, 1999, between Registrant and American Stock
    Transfer & Trust Company, entered into as of
    December 6, 2001, to be effective as of March 6, 2002
    (incorporated by reference to Exhibit 4.12 to Annual Report
    on Form 10-K for the year ended December 31, 2001).                                                    
|        | 10.1 |  |  |         |  | The Per-Se Technologies, Inc. Non-Qualified
    Deferred Compensation Plan Trust Agreement dated as of
    February 12, 2002, between Registrant and Merrill Lynch
    Trust Company, FSB.                                                                                                                                                                                                          
|        | 10.2 |  |  |         |  | The Per-Se Technologies, Inc. Deferred Stock Unit
    Plan Trust Agreement dated as of May 1, 2002, between
    Registrant and Merrill Lynch Trust Company, FSB.