<PAGE>   1

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

CHECK ONE                           FORM 10-Q

[X]              QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                      OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 1998
                                                ----------------
                                       OR
[ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
             FOR THE TRANSACTION PERIOD FROM _________ TO _________.

                           AMERICAN HOMEPATIENT, INC.
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

           DELAWARE                     0-19532                62-1474680
 ------------------------------       ------------          -------------------
(STATE OR OTHER JURISDICTION OF       (COMMISSION             (IRS EMPLOYER 
 INCORPORATION OR ORGANIZATION)       FILE NUMBER)          IDENTIFICATION NO.)


            5200 MARYLAND WAY, SUITE 400, BRENTWOOD, TENNESSEE 37027
--------------------------------------------------------------------------------
            (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)        (ZIP CODE)

                                 (615) 221-8884
--------------------------------------------------------------------------------
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)


                                      NONE
--------------------------------------------------------------------------------
             (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF
                          CHANGED SINCE LAST REPORT.)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES  X    NO
                                             ----     ----

                                   14,959,659
--------------------------------------------------------------------------------
       (OUTSTANDING SHARES OF THE ISSUER'S COMMON STOCK AS OF MAY 8, 1998)

                          TOTAL NUMBER OF SEQUENTIALLY
                              NUMBERED PAGES IS 23




                                       1
<PAGE>   2


                          PART I. FINANCIAL INFORMATION


ITEM 1 - FINANCIAL STATEMENTS

                           AMERICAN HOMEPATIENT, INC.

                  INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (unaudited)


ASSETS
<TABLE>
<CAPTION>
                                                                          December 31,         March 31,
                                                                               1997               1998
                                                                          -------------      -------------
<S>                                                                       <C>                <C>          
CURRENT ASSETS                                                        
   Cash and cash equivalents                                              $  12,050,000      $   6,411,000
   Restricted cash                                                               50,000             50,000
   Accounts receivable, less allowance for doubtful accounts of       
       $43,862,000 and $44,293,000 respectively                             114,386,000        118,415,000
   Inventories                                                               25,824,000         23,792,000
   Prepaid expenses and other assets                                          1,423,000          2,665,000
   Income tax receivable                                                      8,099,000          5,184,000
   Deferred tax asset                                                         8,998,000          8,998,000
                                                                          -------------      -------------
            Total current assets                                            170,830,000        165,515,000
                                                                          -------------      -------------
                                                                      
PROPERTY AND EQUIPMENT, at cost                                             146,803,000        151,630,000
   Less accumulated depreciation and amortization                           (66,729,000)       (73,631,000)
                                                                          -------------      -------------
            Net property and equipment                                       80,074,000         77,999,000
                                                                          -------------      -------------
                                                                      
OTHER ASSETS                                                          
   Excess of cost over fair value of net assets acquired, net               262,294,000        274,854,000
   Investment in unconsolidated joint ventures                               14,974,000         16,018,000
   Deferred costs, net                                                        3,967,000          3,789,000
   Other assets                                                              26,227,000         26,184,000
                                                                          -------------      -------------
            Total other assets                                              307,462,000        320,845,000
                                                                          -------------      -------------
                                                                      
                                                                          $ 558,366,000      $ 564,359,000
                                                                          =============      =============
                                                                      
</TABLE>                                                        


                                   (Continued)



                                       2
<PAGE>   3


                           AMERICAN HOMEPATIENT, INC.

                  INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Continued)
                                   (unaudited)


LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                          December 31,         March 31,
                                                                               1997               1998
                                                                          -------------      -------------
<S>                                                                       <C>                <C>          
CURRENT LIABILITIES                                                
   Current portion of long-term debt and capital leases                   $   9,361,000      $  10,519,000
   Trade accounts payable                                                    13,484,000         12,170,000
   Other payables                                                             1,343,000          1,237,000
   Accrued expenses:                                               
      Payroll and related benefits                                            9,553,000          5,615,000
      Restructuring accruals                                                 13,604,000          9,985,000
      Other                                                                  10,764,000         11,718,000
                                                                          -------------      -------------
            Total current liabilities                                        58,109,000         51,244,000
                                                                          -------------      -------------
                                                                   
NONCURRENT LIABILITIES                                             
   Long-term debt and capital leases, less current portion                  291,963,000        300,870,000
   Deferred income taxes                                                      2,046,000          1,798,000
   Other noncurrent liabilities                                              12,159,000         12,167,000
                                                                          -------------      -------------
            Total noncurrent liabilities                                    306,168,000        314,835,000
                                                                          -------------      -------------
                                                                   
COMMITMENTS AND CONTINGENCIES                                      
                                                                   
SHAREHOLDERS' EQUITY                                               
   Preferred stock, $.01 par value; authorized 5,000,000           
      shares; none issued and outstanding                                            --                 --
   Common stock, $.01 par value; authorized 35,000,000             
      shares; issued and outstanding, 14,901,000 and 14,960,000
      shares, respectively                                                      149,000            150,000
   Paid-in capital                                                          171,133,000        172,334,000
   Retained earnings                                                         22,807,000         25,796,000
                                                                          -------------      -------------
            Total shareholders' equity                                      194,089,000        198,280,000
                                                                          -------------      -------------
                                                                   
                                                                          $ 558,366,000      $ 564,359,000
                                                                          =============      =============
</TABLE>

The accompanying notes to interim condensed consolidated financial statements
are an integral part of these statements.






                                       3
<PAGE>   4

                           AMERICAN HOMEPATIENT, INC.

             INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)


<TABLE>
<CAPTION>
                                                       Three Months Ended March 31
                                                       ---------------------------
                                                          1997              1998
                                                       -----------     ------------
<S>                                                    <C>             <C>         
REVENUES:                                      
   Sales and related service revenues                  $39,033,000     $ 48,180,000
   Rentals and other revenues                           43,807,000       52,623,000
   Earnings from joint ventures                          1,746,000        1,990,000
                                                       -----------     ------------
            Total revenues                              84,586,000      102,793,000
                                                       -----------     ------------
                                               
EXPENSES:                                      
   Cost of sales and related services                   19,004,000       24,523,000
   Operating                                            43,965,000       54,348,000
   General and administrative                            3,852,000        3,504,000
   Depreciation and amortization                         7,229,000       10,038,000
   Interest                                              2,908,000        5,398,000
                                                       -----------     ------------
            Total expenses                              76,958,000       97,811,000
                                                       -----------     ------------
                                               
INCOME FROM OPERATIONS BEFORE INCOME TAX                 7,628,000        4,982,000
                                               
PROVISION FOR INCOME TAXES                               2,990,000        1,993,000
                                                       -----------     ------------
                                               
NET INCOME                                             $ 4,638,000     $  2,989,000
                                                       ===========     ============
                                               
NET INCOME PER COMMON SHARE -                  
   BASIC                                               $       .31     $        .20
                                                       ===========     ============
   DILUTED                                             $       .31     $        .20
                                                       ===========     ============
                                               
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING - 
   BASIC                                                14,731,000       14,953,000
                                                       ===========     ============
   DILUTED                                              15,065,000       15,181,000
                                                       ===========     ============
</TABLE>

The accompanying notes to interim condensed consolidated financial statements
are an integral part of these statements.






                                       4
<PAGE>   5

                           AMERICAN HOMEPATIENT, INC.

             INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                                  Three Months Ended March 31
                                                                                 -----------------------------
                                                                                     1997               1998
                                                                                 ------------      ------------
<S>                                                                              <C>               <C>         
      CASH FLOWS FROM OPERATING ACTIVITIES:
         Net income from operations                                              $  4,638,000      $  2,989,000
         Adjustments to reconcile net income from operations
            to net cash provided from operating activities:
               Depreciation and amortization                                        7,229,000        10,038,000
               Equity in earnings of unconsolidated joint ventures                   (938,000)         (326,000)
               Minority interest                                                       49,000            43,000

         Change in assets and liabilities, net of effects from acquisitions:
               Restricted cash                                                        375,000                --
               Accounts receivables, net                                           (8,249,000)       (2,689,000)
               Inventories                                                           (487,000)        2,146,000
               Prepaid expenses and other                                            (901,000)       (1,241,000)
               Income taxes receivable                                              1,804,000         3,050,000
               Trade accounts payable, accrued expenses
                  and other current liabilities                                    (6,810,000)       (6,063,000)
               Restructuring accrual                                                       --        (3,619,000)
               Other assets                                                          (508,000)         (792,000)
                                                                                 ------------      ------------
                  Net cash provided from (used in) operating activities            (3,798,000)        3,536,000
                                                                                 ------------      ------------

      CASH FLOWS FROM INVESTING ACTIVITIES:
         Acquisitions, net of cash acquired                                       (29,426,000)      (43,729,000)
         Additions to property and equipment, net                                  (7,704,000)       (7,263,000)
         Distributions from (advances to)
            unconsolidated joint ventures, net                                       (695,000)         (507,000)
         Distributions to minority interest owners                                    (41,000)               --
                                                                                 ------------      ------------
            Net cash used in investing activities                                 (37,866,000)      (51,499,000)
                                                                                 ------------      ------------

</TABLE>
                                   (Continued)





                                       5
<PAGE>   6


                           AMERICAN HOMEPATIENT, INC.

             INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
                                   (Continued)


<TABLE>
<CAPTION>
                                                                                  Three Months Ended March 31
                                                                                 -----------------------------
                                                                                     1997               1998
                                                                                 ------------      ------------
<S>                                                                              <C>               <C>         
      CASH FLOWS FROM FINANCING ACTIVITIES:
         Principal payments on debt and capital leases                             (3,176,000)       (1,537,000)
         Proceeds from issuance of debt                                            39,600,000        43,500,000
         Proceeds from exercise of stock options                                      995,000           385,000
         Deferred financing costs                                                     (29,000)          (24,000)
                                                                                 ------------      ------------
                  Net cash provided from financing activities                      37,390,000        42,324,000
                                                                                 ------------      ------------

      DECREASE IN CASH AND CASH
         EQUIVALENTS                                                               (4,274,000)       (5,639,000)

      CASH AND CASH EQUIVALENTS, beginning of period                                7,299,000        12,050,000
                                                                                 ------------      ------------

      CASH AND CASH EQUIVALENTS, end of period                                   $  3,025,000      $  6,411,000
                                                                                 ============      ============

      SUPPLEMENTAL INFORMATION:
         Cash payments of interest                                               $  2,777,000      $  5,119,000
                                                                                 ============      ============

         Cash payments of income taxes                                           $  1,786,000      $    619,000
                                                                                 ============      ============
</TABLE>


The accompanying notes to interim condensed consolidated financial statements
are an integral part of these statements.







                                       6
<PAGE>   7


                           AMERICAN HOMEPATIENT, INC.

          NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                             MARCH 31, 1998 AND 1997


        1.    ORGANIZATION AND BACKGROUND

        The registrant is a health care services company engaged in the
        provision of home health care services. The Company's home health care
        services consist primarily of the provision of respiratory and infusion
        therapies and the rental and sale of home medical equipment and home
        health care supplies. For the three months ended March 31, 1998, such
        services represented 48%, 20% and 32%, respectively, of net revenues. As
        of March 31, 1998, the Company provided these services to patients
        primarily in the home through 336 centers in Alabama, Arizona, Arkansas,
        California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois,
        Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota,
        Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New
        York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode
        Island, South Carolina, Tennessee, Texas, Virginia, Washington and
        Wisconsin.

        2.    MEDICARE OXYGEN REIMBURSEMENT REDUCTIONS AND RELATED RESTRUCTURING

        In August 1997, Congress enacted and President Clinton signed the
        Balanced Budget Act of 1997 which reduced the Medicare reimbursement
        rate for oxygen related services by 25 percent and drugs and biologicals
        by 5 percent on January 1, 1998, and will reduce the Medicare
        reimbursement rate for oxygen related services by another five percent
        in 1999. In addition, Consumer Price Index increases in oxygen
        reimbursement rates will not resume until the year 2003. American
        HomePatient is one of the nation's largest providers of home oxygen
        services to patients, many of whom are Medicare recipients, and is
        therefore significantly affected by this legislation. Medicare oxygen
        reimbursements account for approximately 23.5 percent of the Company's
        revenues.

        On September 25, 1997, the Company announced initiatives to aggressively
        respond to planned Medicare oxygen reimbursement reductions by
        fundamentally reshaping the Company for long-term growth. More than 100
        of the Company's total operating and billing locations were impacted by
        the planned activities. The specific actions resulted in pre-tax
        accounting charges in the third quarter of 1997 of $65.0 million due to
        the closure, consolidation, or scaling back of approximately 20 percent
        of the Company's total operating centers, the closure or scaling back of
        nine billing centers, the reduction of operating regions, the scaling
        back or elimination of marginal products and services at numerous
        locations, and the related termination of approximately 375 employees in
        the affected locations. These activities are expected to be
        substantially completed by June 1998.





                                       7
<PAGE>   8


        The following actions have occurred related to the restructuring:

<TABLE>
<CAPTION>
                                                             For the Quarters Ended
                                                             ----------------------
                                                               Mar. 31,     Dec. 31,
                                                                 1998         1997     Total
                                                                 ----         ----     -----
<S>                                                              <C>          <C>      <C>
      Employees terminated                                        47          323       370
      Operating centers closed                                     4           47        51
      Billing locations closed                                     4            5         9
      Operating centers consolidated, scaled back or had
          marginal products and services eliminated                3           44        47
</TABLE>


        The expected cash payments related to the restructuring charge accrued
        on September 25, 1997 were approximately $17.7 million. As costs were
        incurred and payments were made, $4.1 million and $3.6 million were
        charged against the related accruals during the fourth quarter of 1997
        and first quarter of 1998, respectively. The remaining accrual at March
        31, 1998 primarily represents estimated employee severance and related
        exit costs ($2.1 million), estimated facility exit costs ($4.0 million),
        termination of management contracts ($3.0 million) and other exit costs
        ($0.9 million).

        For the quarter ended March 31, 1998, the Company estimates the Medicare
        oxygen reimbursement reductions decreased net revenue and pre-tax income
        by approximately $6.1 million.

        3.    ACQUISITIONS

        During 1998 and effective through March 31, 1998, the Company acquired 2
        home health care businesses with combined annualized revenue of
        approximately $17 million for total consideration of approximately $16.5
        million, including cash, satisfaction of certain liabilities, and notes
        payable issued to sellers.

        Since January 1, 1997 and effective through March 31, 1998, American
        HomePatient has acquired 30 home health care companies.

        The terms of the 1997 and 1998 acquisitions, including the consideration
        paid, were the result of arm's-length negotiations. The acquisitions
        were funded via a combination of cash from Company reserves,
        seller-financed notes, and draws on the Company's Bank Credit Facility
        (see below).

        On December 19, 1997, the Company entered into a Fourth Amended and
        Restated Credit Agreement ("Bank Credit Facility") to increase
        commitments thereunder to $400.0 million. This Bank Credit Facility
        includes a $75.0 million five-year term loan and a $325.0 million
        five-year revolving line of credit. The various financial and operating
        covenants are substantially similar to those under the first amended and
        restated Bank Credit Facility. Borrowings under the Bank Credit Facility
        may be used for acquisitions and other general corporate purposes,
        subject to the terms and conditions of the respective credit and
        security agreements. Most of the Company's operating assets have been
        pledged as security for borrowings under the Bank Credit Facility. The
        Bank Credit Facility contains various 





                                       8
<PAGE>   9

        financial covenants, the most restrictive of which relate to
        measurements of shareholders' equity, leverage ratios, debt to equity
        ratios and interest coverage ratios.

        4.    EARNINGS PER SHARE

        In the fourth quarter of 1997, the Company adopted the provisions of
        Statement of Financial Accounting Standards No. 128, "Earnings per
        Share" ("SFAS 128"). SFAS 128 establishes standards for computing
        and presenting earnings per share. Under the standards established by
        SFAS 128, earnings per share is measured at two levels: basic earnings
        per share and diluted earnings per share. Basic earnings per share is
        computed by dividing net income by the weighted average number of common
        shares outstanding during the year. Diluted earnings per share is
        computed by dividing net income by the weighted average number of common
        shares after considering the additional dilution related to convertible
        preferred stock, convertible debt, options and warrants. Net income per
        common share for prior periods have been restated to comply with SFAS
        128. In computing diluted earnings per share, the outstanding stock
        warrants and stock options are considered dilutive using the treasury
        stock method. The following table information is necessary to calculate
        earnings per share for the periods presented:

<TABLE>
<CAPTION>
                                                        (unaudited)
                                             -------------------------------
                                               Three Months ended March 31,
                                             -------------------------------
                                                  1997              1998
                                              -----------        -----------


<S>                                           <C>                <C>
      Net Income                              $ 4,638,000        $ 2,989,000
                                              ===========        ===========

      Weighted average common shares
          outstanding                          14,731,000         14,953,000

      Effect of dilutive options and              
          warrants                                334,000            228,000
                                              -----------        -----------
      Adjusted diluted common shares
          outstanding                          15,065,000         15,181,000
                                              ===========        ===========

      Net income per common share
          - Basic                             $      0.31        $      0.20
                                              ===========        ===========
          - Diluted                           $      0.31        $      0.20
                                              ===========        ===========
</TABLE>









                                       9
<PAGE>   10


        5.    BASIS OF FINANCIAL STATEMENTS

        The interim condensed consolidated financial statements of the Company
        for the three months ended March 31, 1998 and 1997 included herein have
        been prepared by the Company, without audit, pursuant to the rules and
        regulations of the Securities and Exchange Commission. Certain
        information and footnote disclosures normally included in financial
        statements prepared in accordance with generally accepted accounting
        principles have been condensed or omitted pursuant to such rules and
        regulations. In the opinion of management of the Company, the
        accompanying unaudited interim consolidated financial statements reflect
        all adjustments (consisting of only normally recurring accruals)
        necessary to present fairly the financial position at March 31, 1998 and
        the results of operations and the cash flows for the three months ended
        March 31, 1998 and 1997.

        The results of operations for the three months ended March 31, 1998 and
        1997 are not necessarily indicative of the operating results for the
        entire respective years. These interim consolidated financial statements
        should be read in conjunction with the audited financial statements and
        notes thereto included in the Company's Annual Report on Form 10-K for
        the year ended December 31, 1997.

        6.    IMPLEMENTATION OF FINANCIAL ACCOUNTING STANDARDS

        Statement of Financial Accounting Standards No. 130, "Reporting
        Comprehensive Income" ("SFAS 130") has been issued effective for fiscal
        years beginning after December 15, 1997. SFAS 130 establishes standards
        for reporting and display of comprehensive income and its components in
        a full set of general purpose financial statements. The Company adopted
        the provisions of SFAS 130 which resulted in no material effect on the
        Company's financial position or results of operations.

        Statement of Financial Accounting Standards No. 131 "Disclosures about
        Segments of an Enterprise and Related Information" ("SFAS 131") has been
        issued effective for fiscal years beginning after December 15, 1997.
        SFAS 131 establishes standards for the way that public business
        enterprises report information about operating segments in annual
        financial statements and require that these enterprises report selected
        information about operating segments in interim financial reports issued
        to shareholders. The Company is required to adopt the provisions of SFAS
        131 in the fourth quarter of 1998 and does not expect adoption thereof
        to have a material effect on the Company's financial position or results
        of operations.




                                       10
<PAGE>   11


        ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                 RESULTS OF OPERATIONS

        THIS QUARTERLY REPORT ON FORM 10-Q INCLUDES FORWARD-LOOKING STATEMENTS
        WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
        1995 INCLUDING, WITHOUT LIMITATION, STATEMENTS CONTAINING THE WORDS
        "BELIEVES," "ANTICIPATES," "INTENDS," "EXPECTS," "ESTIMATES," "MAY,"
        "WILL" AND WORDS OF SIMILAR IMPORT. SUCH STATEMENTS INCLUDE STATEMENTS
        CONCERNING THE COMPANY'S BUSINESS STRATEGY, ACQUISITION STRATEGY,
        OPERATIONS, COST SAVINGS INITIATIVES, INDUSTRY, ECONOMIC PERFORMANCE,
        FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES, EXISTING
        GOVERNMENT REGULATIONS AND CHANGES IN, OR THE FAILURE TO COMPLY WITH,
        GOVERNMENTAL REGULATIONS, LEGISLATIVE PROPOSALS FOR HEALTHCARE REFORM,
        THE ABILITY TO ENTER INTO JOINT VENTURES, STRATEGIC ALLIANCES AND
        ARRANGEMENTS WITH MANAGED CARE PROVIDERS ON AN ACCEPTABLE BASIS AND
        CHANGES IN REIMBURSEMENT POLICIES. SUCH STATEMENTS ARE SUBJECT TO
        VARIOUS RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER
        MATERIALLY FROM THE RESULTS DISCUSSED IN SUCH FORWARD-LOOKING STATEMENTS
        BECAUSE OF A NUMBER OF FACTORS, INCLUDING THOSE IDENTIFIED IN THE "RISK
        FACTORS" SECTION AND ELSEWHERE IN THIS QUARTERLY REPORT ON FORM 10-Q.
        THE FORWARD-LOOKING STATEMENTS ARE MADE AS OF THE DATE OF THIS QUARTERLY
        REPORT ON FORM 10-Q AND THE COMPANY DOES NOT UNDERTAKE TO UPDATE THE
        FORWARD-LOOKING STATEMENTS OR TO UPDATE THE REASONS THAT ACTUAL RESULTS
        COULD DIFFER FROM THOSE PROJECTED IN THE FORWARD-LOOKING STATEMENTS.

        GENERAL

        The Company has three principal services or product lines: home
        respiratory services, home infusion services and home medical equipment
        and supplies. Home respiratory services include oxygen systems,
        nebulizers and home ventilators and are provided primarily to patients
        with severe and chronic pulmonary diseases. Home infusion services are
        used to administer nutrients, antibiotics and other medications to
        patients with medical conditions such as neurological impairments,
        infectious diseases or cancer. The Company also sells and rents a
        variety of home medical equipment and supplies, including wheelchairs,
        hospital beds and ambulatory aids. The following table sets forth the
        percentage of the Company's net revenues represented by each line of
        business for the periods presented:


<TABLE>
<CAPTION>
                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                         1997         1998
                                                         ----         ---- 
<S>                                                      <C>          <C>
      Home respiratory therapy services                    48%          48%
      Home infusion therapy services                       18           20
      Home medical equipment and medical supplies          34           32
                                                          ---          --- 
           Total                                          100%         100%
                                                          ===          ===
</TABLE>


        The Company reports its net revenues as follows: (i) sales and related
        services; (ii) rentals and other; and (iii) earnings from hospital joint
        ventures. Sales and related services revenues are derived from the
        provision of infusion therapies, the sale of home medical equipment and
        supplies, the sale of aerosol and respiratory therapy equipment and
        supplies and services 





                                       11
<PAGE>   12

        related to the delivery of these products. Rentals and other revenues
        are derived from the rental of home health care equipment, enteral pumps
        and equipment related to the provision of respiratory therapies. The
        majority of the Company's hospital joint ventures are not consolidated
        for financial statement reporting purposes. Earnings from hospital joint
        ventures represent the Company's equity in earnings from unconsolidated
        hospital joint ventures and management and administrative fees for
        unconsolidated hospital joint ventures. Cost of sales and related
        services includes the cost of equipment, drugs and related supplies sold
        to patients. Operating expenses include center labor costs, delivery
        expenses, selling costs, occupancy costs, costs related to rentals other
        than depreciation, billing center costs, provision for doubtful
        accounts, area management and other operating costs. General and
        administrative expenses include corporate and senior management expenses
        and costs.

        Since its inception, the Company has experienced substantial growth.
        This growth is primarily attributable to the Company's pursuit of an
        acquisition strategy targeting successful, operating home health care
        businesses and forming joint venture partnerships with hospitals and
        hospital systems. Since the Company's initial public offering in
        November 1991, the Company has expanded operations from 24 home health
        care centers in four states to 336 home health care centers in 37 states
        as of March 31, 1998. The Company acquired 28 home health care companies
        during 1997 and 2 companies during the three months ended March 31,
        1998. The Company continues its integration of recently acquired home
        health care centers. The Company's experience and management expertise
        is applied wherever possible to improve the operating efficiency of the
        new centers. Quality methods and ideas from the acquired centers become
        part of the systems and procedures of the combined Company. Profitable
        services that were not formerly provided are being added where such
        opportunities exist. As the Company grows, economies of scale are
        realized in purchasing goods and services used in the Company's business
        and, to some extent, its management of overhead expenses.

        The Office of the Inspector General of the Department of Health and
        Human Services ("OIG") has expanded its auditing of the healthcare
        industry in an effort to better detect and remedy fraud and abuse and
        irregularities in Medicare and Medicaid billing. On February 12, 1998, a
        subpoena from the OIG was served on the Company at its Pineville,
        Kentucky center in connection with an investigation relating to possible
        improper claims for Medicare payment. The Company has retained
        experienced health care counsel to represent it in this connection and
        intends to fully cooperate. Although the Company's counsel has conducted
        initial meetings with governmental officials and governmental officials
        have interviewed Company officers, this matter is still in its
        preliminary stages. In addition the Company from time to time receives
        notices and subpoenas from various governmental agencies concerning
        their plans to audit the Company or requesting information regarding
        certain aspects of the Company's business, and the Company cooperates
        with the various agencies in responding to such requests. While the
        government has broad authority to enforce applicable laws and
        regulations, and therefore the scope and outcome of these investigations
        and inquiries cannot be predicted with certainty, management does not
        believe at the present time that any pending investigations or inquiries
        will have a material adverse impact on the Company.

        MEDICARE - REIMBURSEMENT FOR OXYGEN THERAPY SERVICES

        The Balanced Budget Act of 1997 reduced Medicare oxygen reimbursement
        rates by 25 percent and drugs and biologicals by 5 percent beginning
        January 1, 1998, and will reduce Medicare oxygen reimbursement rates
        by another five percent beginning January 1, 1999. In addition, Consumer
        Price Index increases in Medicare oxygen reimbursement rates will 




                                       12
<PAGE>   13

        not resume until the year 2003. The Company is one of the nation's
        largest providers of home oxygen services to patients, many of whom are
        Medicare recipients, and is therefore significantly affected by this
        legislation. Medicare oxygen reimbursements account for approximately
        23.5 percent of the Company's revenues.

        For the quarter ended March 31, 1998, the Company estimates the Medicare
        oxygen reimbursement reductions decreased net revenue and pre-tax income
        by approximately $6.1 million.

        On September 25, 1997, the Company announced initiatives to respond to
        the Medicare oxygen reimbursement reductions by fundamentally reshaping
        the Company for long-term growth. The restructuring impacted more than
        100 of the Company's total operating and billing centers. Specific
        actions resulted in pre-tax accounting charges of $65.0 million in the
        third quarter of 1997 due to the closure, consolidation, or scaling down
        of approximately 20 percent of the Company's operating centers, the
        closure or scaling back of nine billing centers, the reduction of
        operating regions, the scaling back or elimination of marginal products
        and services at numerous locations, and the related termination of
        approximately 375 employees.

        RESULTS OF OPERATIONS

        The following table and discussion set forth, for the periods indicated,
        the percentage of net revenues represented by the respective financial
        items:

                           PERCENTAGE OF NET REVENUES

<TABLE>
<CAPTION>
                                                        Three Months Ended March 31,
                                                        ----------------------------
                                                            1997            1998
                                                           ------          ------
<S>                                                        <C>             <C>   
      Net revenues                                          100.0%          100.0%

      Costs and expenses:
          Cost of sales and related services                 22.5            23.9
          Operating expenses                                 52.0            52.9
          General and administrative                          4.6             3.4
          Depreciation and amortization                       8.5             9.8
          Interest                                            3.4             5.2
                                                           ------          ------
               Total costs and expenses                      91.0            95.2
                                                           ------          ------
      Income from operations before income taxes              9.0             4.8
      Provision for income taxes                              3.5             1.9
                                                           ------          ------
               Income from operations                         5.5%            2.9%
                                                           ======          ======

               OTHER DATA:
                   EBITDA                                    20.9%           19.8%
                                                           ======          ======
</TABLE>


        Historically, the Company reported same-store growth. Due to the
        restructuring activity that occurred during the fourth quarter of 1997,
        the Company determined that internal growth is a 




                                       13
<PAGE>   14

        more meaningful representation of revenue growth than same-store growth.
        The Company has moved to an internal growth calculation which still
        reflects the strength of operations excluding acquired revenues. The
        internal growth calculation includes the net revenues of hospital joint
        ventures managed by the Company and accounted for under the equity
        method.

        THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH
        31, 1997

        The operations of acquired centers are included in the operations of the
        Company from the effective date of each acquisition. Because of the
        substantial acquisition activity, the comparison of the results of
        operations between 1998 and 1997 is materially impacted by the
        operations of these acquired businesses. Also, the comparison of the
        results of operations between 1998 and 1997 is materially impacted by
        the Medicare oxygen reimbursement reductions.

        NET REVENUES. Net revenues increased from $84.6 million for the quarter
        ended March 31, 1997 to $102.8 million for the same period in 1998, an
        increase of $18.2 million, or 22%. For the quarter ended March 31, 1998,
        the Company estimates the Medicare oxygen reimbursement reductions
        decreased net revenue by approximately $6.1 million. Excluding the
        Medicare oxygen reimbursement reductions, net revenues increased from
        $84.6 million to $108.9 million for the quarters ended March 31, 1997
        and 1998, respectively, an increase of $24.3 million, or 29%. The
        Company estimates that $17.6 million of this increase is attributable to
        the acquired businesses net of dissolutions. The remainder of the
        increase is primarily attributable to internal revenue growth generated
        through the Company's sales and marketing efforts. Internal revenue
        growth, excluding the Medicare oxygen reimbursement reductions, was 10%
        for the quarter ended March 31, 1998. Following is a discussion of the
        components of net revenues:

             Sales and Related Services Revenues. Sales and related services
             revenues increased from $39.0 million for the quarter ended March
             31, 1997 to $48.2 million for the same period in 1998, an increase
             of $9.2 million, or 24%. This increase is primarily attributable to
             the acquisition of home health care businesses and internal revenue
             growth.

             Rentals and Other Revenue. Rentals and other revenues increased
             from $43.8 million for the quarter ended March 31, 1997 to $52.6
             million for the same period in 1998, an increase of $8.8 million,
             or 20%. This increase is primarily attributable to the acquisition
             of home health care businesses and internal revenue growth net of
             the estimated $6.1 million impact of the Medicare oxygen
             reimbursement reductions.

             Earnings from Hospital Joint Ventures. Earnings from hospital joint
             ventures increased from $1.7 million for the quarter ended March
             31, 1997 to $2.0 million for the same period in 1998, an increase
             of $300,000, or 18%, which was primarily attributable to internal
             growth and newly formed joint ventures. Internal revenue growth of
             joint ventures, excluding the Medicare oxygen reimbursement
             reductions, was 26% for the quarter ended March 31, 1998 compared
             to the same period in 1997, increasing the Company's total internal
             revenue growth by 2%.

        COST OF SALES AND RELATED SERVICES. Cost of sales and related services
        increased from $19.0 million for the quarter ended March 31, 1997 to
        $24.5 million for the same period in 1998, 





                                       14
<PAGE>   15

        an increase of $5.5 million, or 29%. As a percentage of sales and
        related services revenues, cost of sales and related services increased
        from 49% to 51%. This increase is attributable to the changes in the mix
        of sales and related service revenues.

        OPERATING EXPENSES. Operating expenses increased from $44.0 million for
        the quarter ended March 31, 1997 to $54.3 million for the same period in
        1998, an increase of $10.3 million, or 23%. This increase was primarily
        attributable to increased costs associated with the Company's increased
        revenues. As a percentage of net revenues, operating expenses increased
        from 52% to 52.9%. Excluding the estimated $6.1 million impact of the
        Medicare oxygen reimbursement reductions, operating expenses as a
        percentage of net revenues decreased from 52% to 50%. This decrease is
        primarily attributable to a lower bad debt expense as a percentage of
        net revenues and an overall reduction in operating expenses due to cost
        saving initiatives.

        GENERAL AND ADMINISTRATIVE. General and administrative expenses
        decreased from $3.9 million for the quarter ended March 31, 1997 to $3.5
        million for the same period in 1998, a decrease of $400,000, or 10%. As
        a percentage of net revenues, general and administrative expenses have
        decreased from 4.6% to 3.4% as a result of a larger base of revenues to
        which to allocate the general and administrative expenses. The larger
        base of revenues is due to internal growth and acquisitions. Excluding
        the estimated $6.1 million impact of the Medicare oxygen reimbursement
        reductions, general and administrative expenses as a percentage of net
        revenue decreased from 4.6% to 3.2%. This decrease is primarily
        attributable to lower personnel expenses resulting from the Company's
        restructuring activities and other cost savings initiatives. 

        DEPRECIATION AND AMORTIZATION. Depreciation and amortization expenses
        increased from $7.2 million for the quarter ended March 31, 1997 to
        $10.0 million for the same period in 1998, an increase of $2.8 million,
        or 39%. This increase is primarily attributable to depreciation expense
        and the amortization of goodwill recorded in connection with
        acquisitions.

        INTEREST. Interest expense increased from $2.9 million for the quarter
        ended March 31, 1997 to $5.4 million for the same period in 1998, an
        increase of $2.5 million, or 86%. The increase was attributable to
        interest expense on increased borrowings under the Bank Credit Facility
        to fund acquisitions of home healthcare businesses.

        LIQUIDITY AND CAPITAL RESOURCES

        At March 31, 1998, the Company's working capital was $114.3 million and
        the current ratio was 3.2x as compared to working capital of $112.7
        million and a current ratio of 2.9x at December 31, 1997. The Company
        had current maturities of long-term debt and capital leases of
        approximately $10.5 million at March 31, 1998.

        The Company's future liquidity will continue to be dependent upon the
        relative amounts of current assets (principally cash, accounts
        receivable and inventories) and current liabilities (principally
        accounts payable, and accrued expenses). In that regard, accounts
        receivable can have a significant impact on the Company's liquidity.
        Accounts receivable are generally outstanding for longer periods of time
        in the health care industry than many other industries because of
        requirements to provide third party payors with additional information
        subsequent to billing and the time required by such payors to process
        claims. Certain accounts 





                                       15
<PAGE>   16

        receivable frequently are outstanding for more than 90 days,
        particularly where the account receivable relates to services for a
        patient (i) receiving a new medical therapy or (ii) covered by Medicare
        or Medicaid. Net patient accounts receivable were $102.4 million and
        $107.4 million at December 31, 1997 and March 31, 1998, respectively.
        This increase was primarily attributable to the acquisition of home
        health care businesses in the first quarter of 1998 and internal revenue
        growth. This represented an average of approximately 88 and 97 days'
        sales in accounts receivable at December 31, 1997 and March 31, 1998,
        respectively. The Company estimates that three days of the increase is
        attributable to the Medicare oxygen reimbursement reductions and one day
        is related to operating centers closed in the fourth quarter of 1997.

        Net cash used in operating activities was $3.8 million and net cash
        provided from operating activities was $3.5 million for the three months
        ended March 31, 1997 and 1998, respectively. These amounts primarily
        represent net income plus depreciation and amortization and provisions
        for doubtful accounts and changes in the various components of working
        capital. Net cash used in investing activities was $37.9 million and
        $51.5 million for the three months ended March 31, 1997 and 1998,
        respectively. Acquisition expenditures increased from $29.4 million for
        the three months ended March 31, 1997 to $43.7 million for the same
        period in 1998, an increase of $14.3 million. Capital expenditures
        decreased from $7.7 million for the three months ended March 31, 1997 to
        $7.3 million for the same period in 1998, a decrease of $400,000. Net
        cash provided from financing activities was $37.4 million and $42.3
        million for the three months ended March 31, 1997 and 1998,
        respectively. The cash provided from financing activities for the three
        months ended March 31, 1997 and 1998 primarily related to proceeds from
        the Bank Credit Facility.

        The Company's principal capital requirements are for acquisitions of
        additional home health care companies and expansion of the services
        provided through its existing home health care centers. The Company has
        financed and intends to continue to finance these requirements, its net
        revenue growth, and working capital needs with net cash provided by
        operations and with borrowings under the Bank Credit Facility. On
        December 19, 1997 the Company amended and restated the Bank Credit
        Facility to increase commitments thereunder to $400.0 million. The Bank
        Credit Facility includes a $75.0 million five-year term loan and a
        $325.0 million five-year revolving line of credit. Borrowings under the
        Bank Credit Facility may be used to finance acquisitions and for other
        general corporate purposes, subject to the terms and conditions of the
        credit and security agreements. Most of the Company's operating assets
        have been pledged as security for borrowings under the Bank Credit
        Facility. Interest is payable on borrowings under the Bank Credit
        Facility, at the election of the Company, at either a "Base Lending
        Rate" or an "Adjusted Eurodollar Rate" (each as defined in the Bank
        Credit Facility), plus a margin from 0% to 0.625% and from 0.375% to
        1.375%, respectively. The Company's ability to borrow under the Bank
        Credit Facility terminates on December 16, 2002, subject to exceptions
        set forth therein. As of March 31, 1998 the weighted average borrowing
        rate was 6.80%. A commitment fee of up to .375% per annum (.375% as of
        March 31, 1998) is payable by the Company on the undrawn balance. The
        interest rate and commitment fee vary depending on the Company's ratio
        of total debt to adjusted pro forma earnings before interest, taxes,
        depreciation and amortization, as such ratio is defined in the Bank
        Credit Facility.






                                       16
<PAGE>   17

        The Bank Credit Facility contains various financial covenants, the most
        restrictive of which relate to measurements of stockholders' equity,
        leverage ratios, debt to equity ratios and interest coverage ratios. The
        Bank Credit Facility also contains certain covenants which, among other
        things, impose certain limitations or prohibitions on the Company with
        respect to the incurrence of certain indebtedness, the creation of
        security interest on the assets of the Company, the payment of dividends
        on and the redemption or repurchase of securities of the Company,
        investments, acquisitions, investments in joint ventures, capital
        expenditures and sales of Company assets. The Company must generally
        obtain bank consent for any single acquisition with an aggregate
        purchase price of $30.0 million or more, and any acquisition which, when
        combined with all acquisitions completed in the prior 12 months, exceeds
        $100.0 million and certain other transactions. The Company was in
        compliance with these covenants at March 31, 1998.

        During 1997, the Company installed a new general ledger system to
        provide expanded capacity and functionality. In so doing, Year 2000
        compliance was also accomplished. Remaining actions for Year 2000
        involve primarily upgrading field support software and desktop computers
        as part of an overall Year 2000 plan. The remaining costs are not
        material to the Company.
        
        RISK FACTORS

        This section summarizes certain risks, among others, that should be
        considered by stockholders and prospective investors in the Company.

                Medicare Reimbursement for Oxygen Therapy Services. In 1997
        oxygen therapy services reimbursement from Medicare accounted for
        approximately 23.5% of the Company's revenues. The Balanced Budget Act
        of 1997, as amended, reduced Medicare reimbursement rates for oxygen and
        certain oxygen equipment to 75% of their 1997 levels beginning January
        1, 1998 and to 70% of their 1997 levels beginning January 1, 1999.
        Reimbursement for drugs and biologicals was reduced by 5% beginning
        January 1, 1998. In addition, Consumer Price Index increases in Medicare
        oxygen reimbursement rates will not resume until the year 2003 and the
        Company cannot be certain that additional reimbursement reductions for
        oxygen therapy services or other services and products provided by the
        Company will not occur. Any such reductions could have a material
        adverse effect on the Company's net revenues and net income. See
        "Medicare Oxygen Reimbursement Reductions and Related Restructuring" and
        "Management's Discussion and Analysis of Financial Condition and Results
        of Operations - Medicare Reimbursement for Oxygen Therapy Services."

                Dependence on Reimbursement by Third-Party Payors. For the
        quarter ending March 31, 1998, the percentage of the Company's net
        revenues derived from Medicare, Medicaid and private pay was 41%, 9% and
        50%, respectively. The net revenues and profitability of the Company are
        affected by the continuing efforts of all payors to contain or reduce
        the costs of health care by lowering reimbursement rates, narrowing the
        scope of covered services, increasing case management review of services
        and negotiating reduced contract pricing. Any changes in reimbursement
        levels under Medicare, Medicaid or private pay programs and any changes
        in applicable government regulations could have a material adverse
        effect on the Company's net revenues. Changes in the mix of the
        Company's patients among Medicare, Medicaid and private pay categories
        and among different types of private 




                                       17
<PAGE>   18
        pay sources, may also affect the Company's net revenues and
        profitability. There can be no assurance that the Company will continue
        to maintain its current payor or revenue mix. Also, many payors are
        dependent upon their computer systems for determining and paying
        reimbursements to the Company. If such payors computer systems are
        adversely impacted by the Year 2000 it could have a material adverse
        impact on the Company's revenues.

                Role of Managed Care. As managed care assumes an increasingly
        significant role in markets in which the Company operates, the Company's
        success will, in part, depend on retaining and obtaining profitable
        managed care contracts. There can be no assurance that the Company will
        retain or continue to obtain such managed care contracts. In addition,
        reimbursement rates under managed care contracts are likely to continue
        experiencing downward pressure as a result of payors' efforts to contain
        or reduce the costs of health care by increasing case management review
        of services and negotiating reduced contract pricing. Therefore, even if
        the Company is successful in retaining and obtaining managed care
        contracts, unless the Company also decreases its cost for providing
        services and increases higher margin services, it will experience
        declining profit margins.

                Government Regulation. The Company is subject to extensive and
        frequently changing federal, state and local regulation. In addition,
        new laws and regulations are adopted periodically to regulate new and
        existing products and services in the health care industry. Changes in
        laws or regulations or new interpretations of existing laws or
        regulations can have a dramatic effect on operating methods, costs and
        reimbursement amounts provided by government and other third-party
        payors. Federal laws governing the Company's activities include
        regulation of the repackaging and dispensing of drugs, Medicare
        reimbursement and certification and certain financial relationships with
        physicians and other health care providers. Although the Company intends
        to comply with all applicable fraud and abuse laws, there can be no
        assurance that administrative or judicial interpretation of existing
        laws or regulations or enactments of new laws or regulations will not
        have a material adverse effect on the Company's business. In addition,
        the OIG has expanded its auditing of the healthcare industry in an
        effort to better detect and remedy fraud and abuse and irregularities in
        Medicare and Medicaid billing. The Company and many other healthcare
        providers have received subpoenas and other requests for information in
        connection with such activities. There can be no assurance such
        activities will not have a material adverse effect on the Company's
        results of operations, financial condition or prospects. The Company is
        subject to state laws governing Medicaid, professional training,
        certificates of need, licensure, financial relationships with physicians
        and the dispensing and storage of pharmaceuticals. The facilities
        operated by the Company must comply with all applicable laws,
        regulations and licensing standards. In addition, many of the Company's
        employees must maintain licenses to provide some of the services offered
        by the Company. There can be no assurance that federal, state or local
        governments will not change existing standards or impose additional
        standards. Any failure to comply with existing or future standards could
        have a material adverse effect on the Company's results of operations,
        financial condition or prospects.

                No Assurance of Successful Integration of Acquisitions or
        Continued Growth. The Company intends to continue to expand its business
        through acquisitions of home health care companies, growth in same-store
        net revenues and the formation of additional hospital joint ventures and
        strategic alliances. There can be no assurance that suitable
        acquisitions will be identified, that consent from the Company's
        lenders, where required, will be obtained or that acquisitions will be
        consummated on acceptable terms. In addition, there can be no assurance
        that these companies, once acquired, will be integrated successfully
        into the Company's operations or that any acquisition will not have a
        material adverse effect upon the Company's results of operations,
        financial condition or prospects, especially in the fiscal quarters
        immediately following such transactions. In addition, although the
        Company intends to expand its business through hospital joint ventures
        and strategic alliances, there can be no assurance that the Company will
        be able to maintain such relationships. Finally, there can be no
        assurance that the Company can increase or maintain growth in net
        revenues, enter into 





                                       18
<PAGE>   19

        additional hospital joint ventures and strategic alliances or increase
        net revenues at existing hospital joint ventures and strategic
        alliances. The price of the Company's common stock may fluctuate
        substantially in response to quarterly variations in the Company's
        operating and financial results, announcements by the Company or other
        developments affecting the Company, as well as general economic and
        other external factors. See "Management's Discussion and Analysis of
        Financial Condition and Results of Operations - Liquidity and Capital
        Resources."

                Management of Growth. As the Company's business develops and
        expands, the Company may need to implement enhanced operational and
        financial systems and may require additional employees and management,
        operational and financial resources. There can be no assurance that the
        Company will successfully (i) implement and maintain any such
        operational and financial systems, or (ii) apply the human, operational
        and financial resources needed to manage a developing and expanding
        business. Failure to implement such systems successfully and use such
        resources effectively could have a material adverse effect on the
        Company's results of operations, financial condition or prospects.

                Competition. The home health care market is highly fragmented
        and competition varies significantly from market to market. In the small
        and mid-size markets in which the Company primarily operates, the
        majority of its competition comes from local independent operators or
        hospital-based facilities, whose primary competitive advantage is market
        familiarity. In the larger markets, regional and national providers
        account for a significant portion of competition. Some of the Company's
        present and potential competitors are significantly larger than the
        Company and have, or may obtain, greater financial and marketing
        resources than the Company. In addition, there are relatively few
        barriers to entry in the local markets served by the Company, and it may
        encounter substantial competition from new market entrants. As the
        industry consolidates, the Company also faces competition for
        acquisitions from current and new market participants that could
        increase acquisition prices or inhibit the Company's acquisition
        strategy.

                Impact of Health Care Reform. The health care industry continues
        to undergo dramatic changes. There can be no assurance that federal
        health care legislation to impose greater control on health care
        spending will not be adopted in the future. Some states are adopting
        health care programs and initiatives as a replacement for Medicaid. It
        is also possible that proposed federal legislation will include language
        which provides incentives to further encourage Medicare recipients to
        shift to Medicare at-risk managed care programs. There can be no
        assurance that the adoption of such legislation or other changes in the
        administration or interpretation of governmental health care programs or
        initiatives will not have a material adverse effect on the Company.

                Liability and Adequacy of Insurance. The provision of health
        care services entails an inherent risk of liability. Certain
        participants in the home health care industry may be subject to lawsuits
        which may involve large claims and significant defense costs. It is
        expected that the Company periodically will be subject to such suits as
        a result of the nature of its business. The Company currently maintains
        product and professional liability insurance intended to cover such
        claims in amounts which management believes are in keeping with industry
        standards. There can be no assurance that the Company will be able to
        obtain liability 





                                       19
<PAGE>   20

        insurance coverage in the future on acceptable terms, if at all. There
        can be no assurance that claims in excess of the Company's insurance
        coverage or claims not covered by the Company's insurance coverage will
        not arise. A successful claim against the Company in excess of the
        Company's insurance coverage could have a material adverse effect upon
        the results of operations, financial condition or prospects of the
        Company. Claims against the Company, regardless of their merit or
        eventual outcome, may also have a material adverse effect upon the
        Company's ability to attract patients or to expand its business.

                Influence of Executive Officers, Directors and Principal
        Stockholder. On May 8, 1998, the Company's executive officers, directors
        and principal stockholder, Counsel Corporation ("Counsel"), in the
        aggregate, beneficially owned approximately 36% of the outstanding
        shares of the common stock of the Company. As a result of such equity
        ownership and their positions in the Company, if the executive officers,
        directors and principal stockholder were to vote all or substantially
        all of their shares in the same manner, they could significantly
        influence the management and policies of the Company, including the
        election of the Company's directors and the outcome of matters submitted
        to stockholders of the Company for approval. The Company is highly
        dependent upon its senior management, and competition for qualified
        management personnel is intense. The inability to attract and retain
        qualified personnel could adversely affect the Company's business.




                                       20
<PAGE>   21


                           PART II. OTHER INFORMATION

        ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

        (A)  Exhibits. The exhibits filed as part of this Report are listed on
             the Index to Exhibits immediately following the signature page.

        (B)  Reports on Form 8-K. A report on Form 8-K was filed on February
             17, 1998 with respect to the acquisition of National Medical 
             Systems, Inc. and a related Form 8-K/A was filed on April 15, 1998 
             with respect to such transaction and related financial statements.




                                       21
<PAGE>   22


                                   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.



                                   AMERICAN HOMEPATIENT, INC.

        May 15, 1998               By: /s/Mary Ellen Rodgers
                                       ---------------------
                                       Mary Ellen Rodgers
                                       Chief Financial Officer and An Officer 
                                       Duly Authorized to Sign on Behalf of the 
                                       registrant





                                       22
<PAGE>   23

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER       DESCRIPTION OF EXHIBITS
------       -----------------------

<C>          <C>
10.1         Amendment No. 7 to 1991 Non-qualified Stock Option Plan
10.2         Asset Purchase Agreement dated February 27, 1998 among American HomePatient, Inc. 
             and Evocare, Inc., Evocare Home Health Care Services, Inc., Chester Black, 
             Bernard Lambrese and Kelly Lambrese.
10.3         Amendment to Asset Purchase Agreement dated March 12, 1998 among America
             HomePatient, Inc. and Evocare, Inc., Evocare Home Health Services, Inc.,
             Chester Black, Bernard Lambrese and Kelly Lambrese.
10.4         Confidentiality, Non-Competition and Severance Pay Agreement dated June 16, 1996
             between David R. Gnass and American HomePatient, Inc.
10.5         Confidentiality, Non-Competition and Severance Pay Agreement dated April 1, 1996
             between Mary Ellen Rodgers and American HomePatient, Inc.
10.6         Confidentiality, Non-Competition and Severance Pay Agreement dated December 23,
             1997 between Kathey S. Palmer and American HomePatient, Inc.
27           Financial Data Schedule (for SEC use only)
</TABLE>




                                       23