SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                   FORM 10-QSB

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2003



                         COMMISSION FILE NUMBER 0-26168


                               CAREADVANTAGE, INC.
        (Exact name of small business issuer as specified in its charter)


DELAWARE                                                            52-1849794
(State or other jurisdiction of                               (I.R.S. Employer
Incorporation or organization)                            dentification Number)

485-C Route 1 South, Iselin, New Jersey                                  08830
(Address of principal executive offices)                              Zip Code)


         Issuer's telephone number, including area code: (732) 362-5000

     Check whether the issuer (1) has filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 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
                                      ---         ---

                                   99,795,000
      Number of shares of Common Stock outstanding as of October 24, 2003

                 Transitional Small Business Disclosure Format
                                  Yes___ No_X_




<PAGE>

                      CareAdvantage, Inc. and Subsidiaries
                                  Form 10-QSB
                  For the nine months ended September 30, 2003


                                    I N D E X
                                    ----------

Part I  -  Financial Information

  Item 1.    Financial Statements

       o   Condensed Consolidated Balance Sheets -
           September 30, 2003 (Unaudited) and December 31, 2002.............  2

       o   Unaudited Condensed Consolidated Statements of Operations -
           Three and Nine months ended September 30, 2003 and
           September 30, 2002...............................................  3

       o   Unaudited Condensed Consolidated Statements of Cash Flows -
           Nine months ended September 30, 2003 and September 30, 2002......  4

       o   Notes to Unaudited Condensed Consolidated Financial Statements...  5

  Item 2.    Management's Discussion and Analysis of
             Financial Condition and Results of Operations..................  7

  Item 3.    Controls and Procedures........................................ 10

Part II -  Other Information

  Item 1.    Legal Proceedings.............................................. 11

  Item 2.    Changes in Securities.......................................... 11

  Item 3.    Defaults Upon Senior Securities................................ 11

  Item 4.    Submission of Matters to a Vote of Security Holders............ 12

  Item 5.    Other Information ............................................. 12

  Item 6.    Exhibits and Reports on Form 8-K............................... 12

  Signature................................................................. 13




<PAGE>
<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION
ITEM 1.  Financial Statements

                       CAREADVANTAGE, INC AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<S>                                                             <C>                         <C>

                                                                September 30,                December 31,
         ASSETS                                                     2003                        2002
                                                                  Unaudited                   Audited
                                                                --------------             --------------
Current assets:
     Cash and cash equivalents                                  $  4,712,000                $  7,793,000
     Restricted cash                                                 100,000                     100,000
     Accounts receivable for services:
         Stockholder, net of allowance of $779,000                   762,000                   1,531,000
         Other                                                       627,000                     441,000
     Other current assets                                            174,000                     221,000
                                                                --------------             --------------

                  Total current assets                             6,375,000                  10,086,000

Property and equipment, at cost less accumulated depreciation        837,000                   1,056,000
Intangible assets                                                    185,000                     277,000
Other assets                                                          74,000                      84,000
                                                                --------------             --------------

Total Assets                                                    $  7,471,000                $ 11,503,000
                                                                ==============             ==============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Accounts payable                                           $     91,000                $    114,000
     Accrued compensation and related benefits                       268,000                   1,801,000
     Accrued expenses and other current liabilities                2,375,000                     385,000
                                                                --------------             --------------

     Total current liabilities                                     2,734,000                   2,300,000
                                                                --------------             --------------

Stockholders' equity:
     Preferred stock-par value $.10 per share;
        authorized 10,000,000 shares; none issued
     Common stock-par value $.001 per share;
        authorized 200,000,000 shares; issued
        and outstanding 99,794,152                                   100,000                     100,000
     Additional capital                                           23,801,000                  23,801,000
     Accumulated deficit                                         (19,164,000)                (14,698,000)
                                                                --------------             --------------

Total Stockholders' Equity                                         4,737,000                   9,203,000
                                                                --------------             --------------
Total Liabilities and Stockholders' Equity                      $  7,471,000                $ 11,503,000
                                                                ==============             ==============

       The accompanying notes are an part of these financial statements.

</TABLE>

                                       2
<PAGE>

<TABLE>
<CAPTION>

                      CAREADVANTAGE, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<S>                                                  <C>             <C>                  <C>              <C>

                                                        Three Months Ended                     Nine Months Ended
                                                           September 30,                          September 30,
                                                        2003            2002                   2003            2002
                                                        ----            ----                   ----            ----

Net revenues                                         $   761,000     $ 5,506,000          $  2,909,000     $17,315,000

Costs of services                                        543,000       3,068,000             1,838,000       8,707,000
                                                        --------       ---------             ---------       ---------

Gross margin                                             218,000       2,438,000             1,071,000       8,608,000

Operating Expenses:

Selling, general and administration                      843,000       1,887,000             5,557,000       6,178,000
                                                        --------       ---------             ---------       ---------

Operating income/(loss)                                 (625,000)        551,000            (4,486,000)      2,430,000

Interest income - net                                      8,000          19,000                32,000          48,000

Provision for income taxes                                 2,000           2,000                12,000         154,000
                                                        --------       ---------             ---------       ---------

Net income/(loss)                                    $  (619,000)    $   568,000          $ (4,466,000)    $ 2,324,000
                                                        ========       =========             =========       =========

Net income/(loss)
per share of common stock-basic and diluted                ($.01)           $.01                 ($.04)           $.02
                                                           ======           ====                 ======           ====

Weighted average number
of common shares outstanding -

     Basic                                            99,795,000      99,795,000            99,795,000      99,791,000
                                                      ==========      ==========            ==========      ==========

     Diluted                                          99,795,000      99,956,000            99,795,000     101,720,000
                                                      ==========      ==========            ==========     ===========




   The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       3
<PAGE>

<TABLE>
<CAPTION>

                      CAREADVANTAGE, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

                                                                   Nine Months Ended September 30,

<S>                                                           <C>                        <C>
                                                                   2003                      2002
                                                                   ----                      ----

Cash flows from operating activities:

Net income/(loss)                                             $ (4,466,000)              $ 1,756,000

Adjustments to reconcile net income/(loss)
to net cash (used in)/provided from operating
activities:

     Depreciation and amortization                                 349,000                   381,000

Change in assets and liabilities:

Accounts receivable stockholder                                    769,000                  (234,000)
Accounts receivable other                                         (186,000)                 (128,000)
Other assets                                                        57,000                  (219,000)
Accounts payable                                                   (23,000)                 (181,000)
Accrued expenses and other liabilities                             457,000                   610,000
                                                              --------------             -------------

Net cash (used in)/provided by
operating activities                                            (3,043,000)                1,985,000
                                                              --------------             -------------

Cash flows from investing activity:

Capital expenditures                                               (38,000)                 (833,000)
                                                              --------------             -------------

Cash flows from financing activities:

Proceeds from issuance of Common Stock                                    -                    2,000
                                                              --------------             -------------


Net (decrease)/increase in cash                                 (3,081,000)                1,154,000

Cash - beginning of period                                       7,793,000                 4,297,000
                                                              --------------             -------------
Cash - end of period                                            $4,712,000                $5,451,000
                                                              ==============             =============


   The accompanying notes are an integral part of these financial statements.

</TABLE>

                                       4
<PAGE>


                               CAREADVANTAGE, INC.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


Note A--Basis of preparation:

The condensed consolidated financial statements as of September 30, 2003 and for
the three and  nine-month  periods  ended  September 30, 2003 and 2002 have been
prepared by  CareAdvantage,  Inc. (the "Company").  The  accompanying  financial
statements   include  all  adjustments  (which  include  only  normal  recurring
adjustments), which in the opinion of management are necessary to present fairly
the financial  position,  results of operations  and cash flows  presented.  All
amounts contained herein the financial  statements,  except per share data, have
been rounded to the nearest thousand.

Certain  information  and  footnote  disclosures  required  to  be  included  in
consolidated   financial  statements  prepared  in  accordance  with  accounting
principles  generally  accepted in the United  States have been  omitted.  These
condensed  consolidated  financial statements should be read in conjunction with
the  consolidated  financial  statements  and notes  thereto  included  with the
Company's  December  31,  2002  Annual  Report on Form  10-KSB.  The  results of
operations  for  the  period  ended  September  30,  2003  are  not  necessarily
indicative of operating results to be expected for the full year.

Note B--Termination of Horizon BCBSNJ Contract:

Prior to January 1, 2003,  the Company  provided,  principally  to Horizon  Blue
Cross Blue Shield of New Jersey  ("Horizon  BCBSNJ") and another Blue Cross Blue
Shield  organization,   certain  health  care  containment  services,  including
utilization  review,  case  management and disease  management  and  independent
reviews.  During 2002, the Company ceased  providing these services to the other
Blue Cross Blue Shield organization,  which accounted for 4% of net revenues for
the year ended  December  2002. As of December 31, 2002,  Horizon  BCBSNJ ceased
purchasing the Company's services.  As a result,  beginning January 1, 2003, the
Company  ceased  offering  these  services,  since it no longer  maintained  the
employees and infrastructure necessary to support their delivery. Horizon BCBSNJ
accounted for 82% of net revenues for the year ended December 31, 2002.

Note C--Per share data:

Basic  net  income/(loss)  per  share has been  computed  based on the  weighted
average number of shares outstanding  during the periods.  Dilutive earnings per
share reflects the potential  dilution that could occur if dilutive  options and
warrants outstanding were exercised and converted into common stock.

Note D-- Stock-Based Compensation:

Statement of Financial  Accounting  Standards ("SFASB") No. 123, "Accounting for
Stock-Based  Compensation"  encourages the use of the fair value based method of
accounting for stock-based employee  compensation.  Alternatively,  SFAS No. 123
allows  entities to continue to apply the intrinsic  value method  prescribed by
Accounting  Principles Board ("APB") Opinion 25, "Accounting for Stock Issued to
Employees", and related interpretations and provide pro forma disclosures of net
income (loss) and earnings  (loss) per share,  as if the fair value based method
of accounting  had been applied to employee  awards.  The Company has elected to
continue to apply the  provisions of APB Opinion 25 and provide the  disclosures
required  by  SFAS  No.  123 and  SFAS  No.  148,  "Accounting  for  Stock-Based
Compensation - Transition and  Disclosure",  which was released in December 2002
as an amendment of SFAS No. 123. The following  table  illustrates the effect on
net  income  and  earnings  per share if the fair  value  based  method had been
applied to all awards.

                                       5

<PAGE>

<TABLE>
<CAPTION>

                              CAREADVANTAGE, INC.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)
<S>                                                                 <C>                   <C>
                                                                      Nine Months Ended September 30,
                                                                      -------------------------------

                                                                        2003                 2002
                                                                        ----                 ----

    Reported net income (loss)                                      (4,466,000)           2,324,000
    Stock-based employee compensation determined
       under the fair value based method, net of tax                   124,000              201,000
    Pro forma net income (loss)                                     (4,590,000)           2,123,000
    Basic income (loss) per share:
         As reported                                                      (.04)                 .02
         Pro forma                                                        (.05)                 .02
    Diluted income (loss) per share:
         As reported                                                      (.04)                 .02
         Pro forma                                                        (.05)                 .02
</TABLE>

Note E--Contingencies:

CareAdvantage,  Inc. v. Horizon Blue Cross Blue Shield of New Jersey, pending in
Superior  Court of New Jersey,  arises  under a service  agreement  that Horizon
BCBSNJ  terminated as of December 31, 2002. The Company is seeking  service fees
in the amount of  $1,547,000,  which we have not been paid by Horizon  BCBSNJ in
connection  with certain  disputes under the  agreement,  as well as damages for
Horizon  BCBSNJ's  hiring of the Company's  employees.  The Company has reserved
$779,000  relating  to the  amounts due for such  service  fees.  In April 2003,
Horizon BCBSNJ filed a counterclaim against CareAdvantage,  Inc. seeking damages
for breach of contract,  breach of implied duty of good faith and fair  dealing,
tortuous  interference  with  prospective  economic  advantage,  trade libel and
unfair competition. The Company believes that the counterclaim is without merit.

The Company is also the plaintiff in two other unrelated cases.


Note F--Loss Due to Termination of Horizon BCBSNJ Contract:

In June 2002, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial  Accounting  Standards  ("SFAS")  No. 146,  "Accounting  for Costs
Associated with Exit or Disposal Activities," and nullifies Emerging Issues Task
Force  ("EITF")  Issue No. 94-3,  "Liability  Recognition  for Certain  Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (including  Certain
Costs Incurred in a Restructuring)".  SFAS No. 146 requires that a liability for
a cost  associated  with an exit or  disposal  activity be  recognized  when the
liability is incurred. Under EITF Issue No. 94-3, a liability for exit costs was
recognized at the date of an entity's  commitment to an exit plan.  SFAS No. 146
is effective for exit or disposal  activities  that are initiated after December
31, 2002.

The Company adopted SFAS No. 146, and  accordingly has recognized  certain costs
in exiting the following  activities.  As of December 31, 2002,  Horizon  BCBSNJ
ceased  purchasing  the  Company's  certain  health care  containment  services,
including  utilization  review,  case  management,  and disease  management  and
independent  reviews. As a result, the Company ceased offering these services as
of January 1, 2003.

As of December  31, 2002,  the Company  incurred  certain  costs in exiting this
business,  which included employee termination costs of approximately $1,128,000
and the write down of intangible  assets  related to the Horizon  BCBSNJ service
agreement of approximately $468,000.

In 2003, the Company  incurred costs  associated with the termination of certain
operating  leases,  including the lease for its office space in Iselin,  NJ. The
Company recorded a charge in the amount of approximately  $2,639,000 relating to
the operating  leases on January 1, 2003,  the date the Company ceased using the
majority  of the  facility.  The charge is  included  in  selling,  general  and


                                       6

<PAGE>


                               CAREADVANTAGE, INC.



administrative expenses on the accompanying statement of operations. Rent in the
amount of  approximately  $515,000  was charged to such  liability  for the nine
months ended  September  30,  2003.  As of September  30,  2003,  the  remaining
liability is $2,124,000.



ITEM 2.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations

Cautionary Statements:

Statements  in this Form  10-QSB  may  constitute  "forward-looking  statements"
within  the  meaning of the  Private  Securities  Litigation  Reform Act of 1995
("PSLRA"),  including statements concerning  management's plans,  intentions and
expectations  with respect to future  financial  performance  and future events,
particularly   relating  to  revenues   from   performance-based   services  and
re-negotiations  of existing and new  contracts  with  customers.  Many of these
statements  involve known and unknown risks,  uncertainties  and  contingencies,
many of which are beyond our  control,  which  could  cause  actual  results and
outcomes to differ  materially from those  expressed in this 10-QSB.  For a more
complete discussion of these risk factors, please see "Cautionary Statements" in
Item 6 of the Company's Form 10-KSB for the fiscal year ended December 31, 2002.
Although we believe that our plans,  intentions  and  expectations  reflected in
these forward-looking  statements are reasonable,  we can give no assurance that
our plans, intentions or expectations will be achieved.



GENERAL OVERVIEW:

CareAdvantage,  Inc.  ("CAI"  or the  "Company")  and its  direct  and  indirect
subsidiaries,  CareAdvantage  Health  Systems,  Inc.  ("CAHS") and  Contemporary
HealthCare  Management,   Inc.  ("CHCM"),  are  in  the  business  of  providing
management and consulting  services  designed to enable  integrated  health care
delivery  systems and other care management  organizations  to reduce the costs,
while improving the quality,  of medical services provided to their subscribers.
The  management  and  consulting   services  include  care  management   program
enhancement services,  executive and clinical management services,  and training
programs. The Company's management and consulting services have been provided to
integrated health care delivery systems and other care management organizations.

In April 2002, the Company received  notification from Blue Cross Blue Shield of
Rhode Island  ("BCBSRI") that the existing services  arrangement  between BCBSRI
and the  Company  was  terminated,  effective  May 31,  2002.  The  Company  had
previously  given  notice in January 2002 that it was  terminating  the contract
effective July 31, 2002. This contract with BCBSRI  accounted for  approximately
4% of net revenues for the year ended December 31, 2002.

In June 2002,  the Company  received  notification  from Horizon Blue Cross Blue
Shield of New Jersey ("Horizon  BCBSNJ") that the existing services  arrangement
between  Horizon  BCBSNJ and the Company was  terminated,  effective  January 1,
2003. This contract with Horizon BCBSNJ accounted for  approximately  82% of net
revenues for the year ended December 31, 2002.

Prior to January 1, 2003,  the Company  provided,  principally to Horizon BCBSNJ
and BCBSRI, certain health care cost containment services, including utilization
review,  case management and disease  management and independent  reviews.  As a
result of the loss of the  aforesaid  customers  and the  Company's  concomitant
reduction  in  employees  and  infrastructure,  beginning  January 1, 2003,  the
Company ceased offering these services.


RESULTS OF OPERATIONS:

The following  discussion  compares the Company's  results of operations for the
three and nine months ended  September  30,  2003,  with those for the three and
nine months ended  September  30, 2002.  The  Company's  consolidated  financial
statements and notes thereto included  elsewhere in this report contain detailed
information  that  should  be  referred  to in  conjunction  with the  following
discussion.


                                       7

<PAGE>
                               CAREADVANTAGE, INC.



Three Months Ended September 30, 2003, Compared to Three Months
Ended September 30, 2002

Revenues:

The  Company's  total  operating  revenues  for the  three-month  periods  ended
September  30, 2003 and  September  30,  2002 were  approximately  $761,000  and
$5,506,000, respectively. This represents a decrease of approximately $4,745,000
for the  three-month  period  ended  September  30, 2003 from the  corresponding
period of the prior year. The decrease for the three months ended  September 30,
2003  resulted  from a  decrease  of  approximately  $4,490,000  as a result  of
terminated  contracts  with  Horizon  BCBSNJ  and a  decrease  of  approximately
$255,000 from consulting business.

Cost of services:

The Company's  total direct cost of services for the  three-month  periods ended
September  30,  2003 and  September  30,  2002 was  approximately  $543,000  and
$3,068,000, respectively. This represents a decrease of approximately $2,525,000
for the  three-month  period  ended  September  30, 2003 over the  corresponding
period  of the  prior  year.  The  decrease  in the  cost  of  services  for the
three-month  period  ended  September  30, 2003 was  primarily  due to decreased
personnel costs of approximately $2,122,000, professional costs of approximately
$193,000,   travel  costs  of   approximately   $22,000  and   depreciation  and
amortization costs of approximately $188,000.

Selling, general and administrative expenses:

The  Company's  total  selling,   general,  and  administrative  costs  for  the
three-month  periods  ended  September  30,  2003 and  September  30,  2002 were
approximately $843,000 and $1,887,000,  respectively. This represents a decrease
of approximately  $1,044,000 for the three-month period ended September 30, 2003
over  the  corresponding  period  of the  prior  year.  This  decrease  for  the
three-month  period ended  September  30, 2003 is primarily  due to decreases in
personnel  costs of  approximately  $709,000,  facility  costs of  approximately
$225,000,  which includes approximately $174,000 of rent payments applied to the
facility lease liability, travel costs of approximately $10,000, information and
communications costs of approximately $107,000, other general and administrative
costs of  approximately  $37,000  and  depreciation  and  amortization  costs of
approximately $9,000, offset by increases in professional costs of approximately
$53,000.

Interest income:

The  Company's  total net  interest  income for the  three-month  periods  ended
September 30, 2003 and September 30, 2002 was approximately  $8,000 and $19,000,
respectively.  This  represents  a  decrease  of  approximately  $11,000  in net
interest  income for the  three-month  period ended  September 30, 2003 from the
corresponding  period of the prior year. The decrease in net interest  income of
approximately  $11,000 is largely due to the  decline of interest  rates in 2003
and a decrease in the operating cash balance.

Nine Months Ended September 30, 2003, Compared to Nine Months
Ended September 30, 2002

Revenues:

The  Company's  total  operating  revenues  for  the  nine-month  periods  ended
September  30, 2003 and  September 30, 2002 were  approximately  $2,909,000  and
$17,315,000,   respectively.   This  represents  a  decrease  of   approximately
$14,406,000  for the  nine-month  period  ended  September  30,  2003  from  the
corresponding  period of the prior year.  The decrease for the nine months ended
September 30, 2003 resulted from a decrease of  approximately  $14,751,000  as a
result of  terminated  contracts  with Horizon  BCBSNJ and BCBSRI,  offset by an
increase of approximately $345,000 from consulting business.

Cost of services:

The  Company's  total direct cost of services for the  nine-month  periods ended
September  30, 2003 and  September  30, 2002 was  approximately  $1,838,000  and
$8,707,000, respectively. This represents a decrease of approximately $6,869,000
for the nine-month period ended September 30, 2003 over the corresponding period
of the prior  year.  The  decrease in the cost of  services  for the  nine-month

                                       8
<PAGE>

                               CAREADVANTAGE, INC.



period ended  September 30, 2003 was primarily due to decreased  personnel costs
of  approximately  $6,125,000,  professional  costs of  approximately  $453,000,
travel costs of approximately  $9,000 and depreciation and amortization costs of
approximately $282,000.

Selling, general and administrative expenses:

The  Company's  total  selling,   general,  and  administrative  costs  for  the
nine-month  periods  ended  September  30,  2003 and  September  30,  2002  were
approximately  $5,557,000  and  $6,178,000,   respectively.  This  represents  a
decrease of approximately $621,000 for the nine-month period ended September 30,
2003 over the  corresponding  period of the prior year.  This  decrease  for the
nine-month  period ended  September  30, 2003 is  primarily  due to decreases in
personnel costs of  approximately  $2,275,000,  facility costs of  approximately
$559,000, information and communications costs of approximately $299,000, travel
costs of  approximately  $110,000,  other  general and  administrative  costs of
approximately  $146,000 and depreciation and amortization costs of approximately
$59,000,  offset  by  a  reserve  for  loss  on  sublease  of  office  space  of
approximately $2,639,000 and increases of approximately $188,000 in professional
costs.

Interest income:

The  Company's  total net  interest  income  for the  nine-month  periods  ended
September 30, 2003 and September 30, 2002 was approximately $32,000 and $48,000,
respectively.  This  represents  a  decrease  of  approximately  $16,000  in net
interest  income for the  nine-month  period ended  September  30, 2003 from the
corresponding  period of the prior year. The decrease in net interest  income of
approximately  $16,000 is largely due to the  decline of interest  rates in 2003
and a decrease in the operating cash balance.

LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES:

General overview:

At  September  30,  2003,  the  Company  had  working  capital of  approximately
$3,641,000,  stockholders equity of approximately  $4,737,000 and an accumulated
deficit since its inception of approximately $19,164,000. However, the Company's
operations have been significantly impacted by the events described below.

Significant development:

As stated above,  Horizon  BCBSNJ  terminated  its services  agreement  with the
Company,  effective  January 1, 2003. The Company  recognized  approximately $19
million in revenues in 2002 from Horizon BCBSNJ due to the services arrangement.

As a result of the termination of the services  agreement with Horizon BCBSNJ as
of December 31,  2002,  the Company has  significantly  reduced the scope of its
operations.

As of January 1, 2003, the Company had 29 employees,  down from 191 employees as
of July 1, 2002.  As of September  30, 2003,  the Company has 26  employees.  In
addition,  the Company no longer needs 20,500  square feet of the 28,000  square
feet of office space it currently  has under lease in Iselin,  New Jersey and is
currently attempting to sublease all or a portion of such space.  Moreover,  the
Company has  terminated and  renegotiated  a variety of information  systems and
communications  agreements.  There can be no guaranty that the Company,  through
these various measures,  will be successful in mitigating the effect of the loss
of the  services  agreement  with  Horizon  BCBSNJ and to  continue to remain in
business.

Because the Company no longer maintains the infrastructure  necessary to support
the provision of certain health care containment services (including utilization
review, case management and disease management, and independent reviews), it has
ceased  offering  these  services for sale.  The Company is instead  focusing on
offering its  management and  consulting  services.  The Company had not heavily
marketed these services in the past,  because the Company's primary focus was on
the health care containment  services provided under the Horizon BCBSNJ services
agreement.  At the present time, the Company's  primary focus now is to build up
revenues from these management and consulting  services,  which will require the
Company to devote  significant  resources,  both in the time and  efforts of its
employees as well as funding,  to promote and support these activities.  As part
of this effort,  the Company has developed  RPNavigator,  a proprietary  tool to
help managed care plans and employers  better  understand and forecast  resource
consumption,  risks and costs associated with their respective populations.  The
tool uses 3M's Clinical Risk Groups (CRGs),  a  classification  methodology that
groups members according to risk related to that  individual's  clinical history
and demographic  information.  Using RPNavigator,  CAI will enable its customers
to:

                                       9
<PAGE>
                              CAREADVANTAGE, INC.


        o   track population and member-related disease progression changes
            over time;
        o   compare health plan sub-populations on a valid and reliable basis;
        o   profile providers using case mix and severity-adjusted techniques;
        o   select and prioritize members to optimize the allocation and
            assess the impact of care management resources, direct
            interventions and initiatives; and
        o   reduce client dependence on internal information technology
            resources.

If the  Company  is  unable to build up these  services  to a level  that  would
support its business, it may have to seek additional capital financing or may be
required to further reduce planned operational expenses. However, if the Company
is not  successful  with  these  measures,  it may not be able to  continue  its
operations.

Financial condition:

At September  30, 2003,  the Company had cash of  approximately  $4,712,000  and
working capital of approximately  $3,641,000.  At December 31, 2002, the Company
had cash of  approximately  $7,793,000  and  working  capital  of  approximately
$7,786,000.

The use of cash in operations  related  principally  to the Company's nine month
loss of $4,466,000 and the payment of accrued  severance,  offset by an increase
in accrued expenses as a result of a $2,124,000 liability for the potential loss
on the  sublease of its office space and the  reduction  of accounts  receivable
from stockholders of $769,000.

Net cash used in investing activities amounted to approximately  $38,000 for the
nine-month  period ended  September 30, 2003 and is due to capital  expenditures
during the nine-month period.

There were no financing activities for the nine-month period ended September 30,
2003.

In light of the termination of the services  agreement with Horizon BCBSNJ,  the
Company has reduced its operations significantly and concentrated on building up
its remaining sources of revenues to continue to operate.  While there can be no
assurances,  management believes that its cash on hand and projected future cash
flows from operations will support the Company's  anticipated  cash needs for at
least the next 12 months.

Application of Critical Accounting Policies:

The Company's  consolidated condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America.  Certain  accounting  policies  have a  significant  impact on  amounts
reported in the financial statements.  A summary of those significant accounting
policies can be found in Note B to the Company's  financial  statements included
in the Company's 2002 Annual Report on Form 10-KSB.  The Company has not adopted
any  significant  new  accounting  policies  during the quarter ended  September
30,2003.

Among the  significant  judgments  made by management in the  preparation of the
Company's  financial  statements  are the  determination  of the  allowance  for
doubtful  accounts and  adjustments.  The financial  statements  for the quarter
ended  September  30, 2003 also include a significant  estimate  relating to the
liability recorded for the loss on the office space lease (see Note F).

ITEM 3.  Controls and Procedures

a) Evaluation  of  disclosure  controls and  procedures.  The Company  maintains
disclosure  controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934 (the "Exchange Act") that are designed
to ensure that  information  required to be disclosed in the  Company's  reports
filed under the  Exchange  Act,  such as this  Quarterly  Report,  is  recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange Commission rules and forms, and that such information is
accumulated and  communicated to the Company's  management,  including the Chief
Executive  Officer  ("CEO"),  who is also  currently the acting Chief  Financial

                                       10
<PAGE>
                               CAREADVANTAGE, INC.



Officer  ("CFO"),  as  appropriate,  to allow  for  timely  decisions  regarding
required  disclosure.  A  control  system,  no  matter  how well  conceived  and
operated,  can  provide  only  reasonable,  not  absolute,  assurance  that  the
objectives  of the  control  system  are met.  Further,  the design of a control
system  must  reflect  the fact that  there are  resource  constraints,  and the
benefits of controls must be considered  relative to their costs. These inherent
limitations  include the  realities  that  judgments in  decision-making  can be
faulty,  and that  breakdowns  can occur  because  of simple  error or  mistake.
Additionally,  controls  can be  circumvented  by the  individual  acts  of some
persons,  by collusion of two or more people,  or by management  override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving  its stated goals under all  potential
future  conditions;  over time, control may become inadequate because of changes
in conditions,  or the degree of compliance  with the policies or procedures may
deteriorate.

An evaluation of the effectiveness of these disclosure  controls and procedures,
as of the end of the period covered by this Quarterly Report on Form 10-QSB, was
carried out under the  supervision and with the  participation  of the Company's
management,  including  the CEO/CFO.  Based on that  evaluation,  the  Company's
management,  including the CEO/CFO,  has concluded that the Company's disclosure
controls and procedures are effective.

(b)  Changes  in  internal  control  over  financial  reporting.  There  were no
significant changes in our internal control over financial reporting or in other
factors during our last fiscal  quarter that have  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.


PART II--OTHER INFORMATION

Item 1.  Legal Proceedings

In CareAdvantage,  Inc. v. Princeton  Insurance Company,  the Company is seeking
damages  against the Princeton  Insurance  Company arising out of that company's
denial of coverage  under an officers and directors  insurance  policy issued to
the Company;  Princeton Insurance Company has counterclaimed against the Company
for its attorneys  fees in defending the instant  action.  In January 2003,  the
trial judge  granted  summary  judgement  to  Princeton  Insurance  Company with
respect to the Company's claim and denied Princeton's  counterclaim  against the
Company for attorneys  fees.  The Company's  appeal to the Superior Court of New
Jersey, Appellate Division, is presently pending.

CareAdvantage,  Inc. v. Blue Cross & Blue Shield of Rhode Island and Coordinated
Health  Partners,  pending in the Superior  Court of the State of Rhode  Island,
arises  out of the  defendants'  termination  of an  Agreement  effective  as of
January  1, 2000,  among the  parties  pursuant  to which the  Company  had been
providing services. The Company is seeking declaratory relief including judgment
(i) that the Company's  failure to attain  Performance Goals under the Agreement
was as a result of the defendants'  conduct,  (ii) that defendants lack cause to
terminate the Agreement  based on the Company's  failure to meet the Performance
Goals,  and  (iii)  that the  Company  is  entitled  to  compensation  under the
Agreement,  including  compensation  for  having  been  deemed  to have  met the
Performance Goals. In addition, the suit seeks equitable relief and damages with
respect to defendants' hiring a physician formerly employed by the Company.

For a description of additional legal  proceedings,  see Note E to the Financial
Statements.  With the exception of the legal proceedings  described above and in
Note  E to  the  Financial  Statements,  there  are no  material  pending  legal
proceedings other than ordinary routine litigation incidental to the business of
the Company.

Item 2.  Changes in Securities

None.

Item 3.  Defaults Upon Senior Securities

None.

                                       11
<PAGE>

                               CAREADVANTAGE, INC.



Item 4.  Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of the Company's security holders during the
last quarter of calendar year ended September 30, 2003.

Item 5.  Other Information

None.

Item 6. Exhibits and reports on Form 8-K

   (a) Exhibits

           See Exhibit Index.


(b) Reports on Form 8-K.

        On August 6, 2003, the Company filed a Report on Form 8-K, dated
        August 5, 2003, under  Items 5 and 7 of Form 8-K,  announcing  the
        commercial  introduction  of RPNavigator.


                                       12
<PAGE>

                               CAREADVANTAGE, INC.



                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed  on its  behalf  by the  undersigned  thereunto  duly
authorized.



                                 CareAdvantage, Inc



November 14, 2003    /s/ Dennis J. Mouras
                     -------------------------------------------------------
                     Dennis J. Mouras

                     Chief Executive Officer and acting Principal Financial
                     Officer

                                       13
<PAGE>

                               CAREADVANTAGE, INC.



                                  EXHIBIT INDEX
Exhibit
No.             Description of Exhibit
-------         ----------------------

2.1           Deposit  Agreement  dated October 31, 1994 among  Midlantic  Bank,
              N.A., PMDX and the Registrant incorporated by reference to Exhibit
              2.1 filed with the  Company's  Registration  Statement on Form S-1
              (File No. 33-89176).

2.2           Certificate  of Merger of Care  Advantage  Health  Systems  (f/k/a
              Advantage  Health  Systems,  Inc.),  a  Georgia  corporation  into
              CareAdvantage   Health  Systems,   Inc.,  a  Delaware  corporation
              incorporated  by reference to Exhibit 2.2 filed with the Company's
              Registration Statement on Form S-1 (File No. 33-89176).

3.1           Registrant's   Certificate  of   Incorporation   incorporated   by
              reference  to Exhibit  3.1 filed with the  Company's  Registration
              Statement on Form S-1 (File No. 33-89176).

3.1(a)        Amended and Restated Certificate of Incorporation  incorporated by
              reference to the Company's  Information  Statement dated September
              1996.

3.2           Registrant's  By-Laws  incorporated  by  reference  to Exhibit 3.2
              filed with the Company's  Registration Statement on Form S-1 (File
              No. 33-89176).

10.1          Letter of intent dated  September 30, 1994 between the  Registrant
              and New Jersey  BCBS,  amendments  thereto of December  29,  1994,
              February 27, 1995 and April 4, 1995 and Interim Services Agreement
              as of April 1, 1995  between  the  Registrant  and New Jersey BCBS
              incorporated   by  reference  to  Exhibit  10.12  filed  with  the
              Company's Registration Statement on Form S-1 (File No. 33-89176).

10.1(a)       December 22, 1995 Letter Agreement  between the Registrant and New
              Jersey BCBS  extending  the Letter of Intent and Interim  Services
              Agreement to March 31, 1996  incorporated  by reference to Exhibit
              10.12(a) filed with the Company's Annual Report on Form 10-KSB for
              the year ended October 31, 1996.

10.2          Lease  Agreement  dated April 14, 1995 between the  Registrant and
              Metropolitan Life Insurance  Company  incorporated by reference to
              Exhibit 10.13 filed with the Company's  Registration  Statement on
              Form S-1 (File No. 33-89176).

10.3          Letter of Intent  dated  January 2, 1996  between CW Ventures  II,
              L.P., the Registrant and its  CareAdvantage  Health Systems,  Inc.
              subsidiary  incorporated  by reference to Exhibit 10.14 filed with
              the  Company's  Annual  Report on Form  10-KSB  for the year ended
              October 31, 1996.

10.4          Securities  Purchase  Agreement  dated  February 22, 1996 among CW
              Ventures,  CAHS and the  Registrant  incorporated  by reference to
              Exhibit  10.15  filed  with the  Company's  Annual  Report on Form
              10-KSB for the year ended October 31, 1996.

10.5          CW  Exchangeable  Note  incorporated by reference to Exhibit 10.16
              filed with the Company's Annual Report on Form 10-KSB for the year
              ended October 31, 1996.

10.6          Stock  Acquisition  Agreement  dated  February 22, 1996 among EHC,
              CHCM, CAHS and the Registrant incorporated by reference to Exhibit
              10.17 filed with the  Company's  Annual  Report on Form 10-KSB for
              the year ended October 31, 1996.

                                       14
<PAGE>

                               CAREADVANTAGE, INC.



10.7          EHC Exchangeable  Note  incorporated by reference to Exhibit 10.18
              filed with the Company's Annual Report on Form 10-KSB for the year
              ended October 31, 1996.

10.8          Services  Agreement  dated February 22, 1996 among Horizon BCBSNJ,
              CHCM, CAHS and the Registrant incorporated by reference to Exhibit
              10.19 filed with the  Company's  Annual  Report on Form 10-KSB for
              the year ended October 31, 1996.

10.9          Stockholders'  Agreement  dated  February  22,  1996 among EHC, CW
              Ventures and the Registrant  incorporated  by reference to Exhibit
              10.20 filed with the  Company's  Annual  Report on Form 10-KSB for
              the year ended October 31, 1996.

10.10         Joint Services Agreement,  dated May 29, 1997, among Allied Health
              Group, Inc., CAHS, Inc. and the Company  incorporated by reference
              to Exhibit  10(c)  filed with the  Company's  Form  10-QSB for the
              quarter ended April 30, 1997.

10.11         Agreement, dated as of January 1, 1997 between Blue Cross and Blue
              Shield of Rhode Island  ("BCBSRI") and CAHS, Inc.  incorporated by
              reference to Exhibit  10(a) filed with the  Company's  Form 10-QSB
              for the quarter ended July 31, 1997.

10.12         Consultant  Agreement  dated March 17, 1997,  between  Coordinated
              Health Partners, Inc. d/b/a Blue Chip, and CAHS, Inc. incorporated
              by reference to Exhibit 10(d) filed with the Company's Form 10-QSB
              for the quarter ended April 30, 1997.

10.13         Letter Agreement,  dated as of March 1, 1997, between Medigroup of
              New Jersey,  Inc.  d/b/a HMO Blue,  the Company and Allied  Health
              Group, Inc.  incorporated by reference to Exhibit 10(e) filed with
              the Company's Form 10-QSB for the quarter ended April 30, 1997.

10.14         First Amendment and Restatement of Services Agreement, dated as of
              June 13, 1997,  among CAHS,  Inc.,  CHCM,  the Company and Horizon
              BCBSNJ  incorporated  by reference to Exhibit 10(b) filed with the
              Company's Form 10-QSB for the quarter ended April 30, 1997.

10.15         Credit  Agreement  among  Summit  Bank,  the  Company  and Horizon
              BCBSNJ,  dated June 13, 1997  incorporated by reference to Exhibit
              10(f) filed with the  Company's  Form 10-QSB for the quarter ended
              April 30, 1997.

10.16         Revolving Credit Note, dated June 13, 1997 by the Company in favor
              of Summit  Bank in the  original  principal  amount of  $1,500,000
              incorporated  by  reference  to  Exhibit  10(f)(1)  filed with the
              Company's Form 10-QSB for the quarter ended April 30, 1997.

10.17         Term Note,  dated June 13, 1997, by the Company in favor of Summit
              Bank in the original  principal amount of $1,500,000  incorporated
              by reference to Exhibit  10(f)(2)  filed with the  Company's  Form
              10-QSB for the quarter ended April 30, 1997.

10.18         Promissory  Note and Security  Agreement,  dated April 1, 1997, by
              CHCM in favor of Horizon BCBSNJ, in the original  principal amount
              of $1,862,823  incorporated by reference to Exhibit 10(f)(3) filed
              with the  Company's  Form 10-QSB for the  quarter  ended April 30,
              1997.

10.19         Employment  Agreement between the Company and Thomas Riley,  dated
              June 10, 1997, as  supplemented  by a side  agreement  with CW and
              Horizon BCBSNJ,  of even date therewith  incorporated by reference
              to Exhibit  10(a)  filed with the  Company's  Form  10-QSB for the
              quarter ended April 30, 1997.

10.20         Services  Agreement as of January 5, 1998, by and between New York
              Care Plus Insurance Company, Inc. and the Company, incorporated by
              reference to Exhibit  10.20 filed with the  Company's  Form 10-KSB
              for the year ended October 31, 1997.

                                       15
<PAGE>

                               CAREADVANTAGE, INC.


10.21         Consultation  Agreement  dated  October 1, 1997 by and between the
              Company  and  David  McDonnell,  an  independent  director  of the
              Company, incorporated by reference to Exhibit 10.21 filed with the
              Company's Form 10-KSB for the year ended October 31, 1997.

10.22         Mutual Release  Agreement  dated as of January 6, 1998 between the
              Company and MEDecision, Inc., incorporated by reference to Exhibit
              10.22  filed  with the  Company's  Form  10-KSB for the year ended
              October 31, 1997.

10.23         Separation  Agreement  dated April 20, 1995  between  PMDX and the
              Registrant  incorporated  by  reference to Exhibit 10.1 filed with
              the  Company's  Registration  Statement  on  Form  S-1  (File  No.
              33-89176).

10.24         Agreement dated as of January 1, 1995, between Maine BCBS and CAHS
              incorporated by reference to Exhibit 10.2 filed with the Company's
              Registration Statement on Form S-1 (File No. 33-89176).

10.25         Products and  Services  Agreement  dated  November 7, 1994 between
              MEDecision,  Inc.  and CAHS  incorporated  by reference to Exhibit
              10.3 filed with the Company's  Registration  Statement on Form S-1
              (File No. 33-89176).

10.26         Registrant's 1995 Comprehensive  Stock Incentive Plan incorporated
              by reference to Exhibit 4.2 filed with the Company's  Registration
              Statement on Form S-1 (File No. 33-89176).

10.27         Registrant's  1996 Stock Option Plan  incorporated by reference to
              the Company's Information Statement dated September 1996.

10.28         Registrant's  1996  Director  Stock  Option Plan  incorporated  by
              reference to the Company's  Information  Statement dated September
              1996.

10.29         Option   Agreement   between  CW  Ventures   and  Horizon   BCBSNJ
              incorporated  by  reference  to  Exhibit  5 of  Schedule  13(d) of
              Horizon BCBSNJ respecting  beneficial ownership of Common Stock of
              the Company dated June 1997.

10.30         Settlement  and Release  Agreement  dated January 13, 1998 between
              the Company and John Petillo  incorporated by reference to Exhibit
              10.30  filed  with the  Company's  Form  10-KSB for the year ended
              October 31, 1997.

10.31         Settlement and Release  Agreement  dated December 19, 1997 between
              the Company  and Vince  Achilarre  incorporated  by  reference  to
              Exhibit  10.31 filed with the  Company's  Form 10-KSB for the year
              ended October 31, 1997.

10.32         Employment  Agreement  between the Company and David Noone,  dated
              January 8, 1999,  incorporated by reference to Exhibit 10.32 filed
              with the  Company's  Form 10-KSB for the year ended  September 30,
              1998.

10.33         Confidentiality,  Invention, and Non-Compete Agreement between the
              Company and David Noone, dated as of January 8, 1999, incorporated
              by reference to Exhibit 10.33 filed with the Company's Form 10-KSB
              for the year ended September 30, 1998.

10.34         Settlement  and  Release  Agreement  entered  into  among  Horizon
              BCBSNJ, the Company,  CAHS, and CHCM,  Enterprise Holding Company,
              Inc. ("EHC") and CW Ventures, incorporated by reference to Exhibit
              10(a) filed with the  Company's  Form 10-QSB for the quarter ended
              July 31, 1998.

10.35         Services  Agreement  dated as of January 1, 1999,  by and  between
              HealthNow New York, Inc. ("HNNY") and the Company, incorporated by
              reference to Exhibit  10.35 filed with the  Company's  Form 10-KSB
              for the year ended September 30, 1998.


                                       16
<PAGE>

                               CAREADVANTAGE, INC.



10.36         Amended and Restated Employment  Agreement,  dated as of September
              29, 1998, with Richard W. Freeman, M.D., CAHS and the Company (the
              "Freeman  Employment  Agreement"),  incorporated  by  reference to
              Exhibit  10.36 filed with the  Company's  Form 10-KSB for the year
              ended September 30, 1998.

10.37         Employment  Agreement,  dated as of March 25, 1997, by and between
              the Company and Elaine del Rossi,  incorporated  by  reference  to
              Exhibit  10.37 filed with the  Company's  Form 10-KSB for the year
              ended September 30, 1998.

10.38         Confidentiality,  Invention and Non-Compete  Agreement dated as of
              March  25,  1998   between  the  Company  and  Elaine  del  Rossi,
              incorporated   by  reference  to  Exhibit  10.38  filed  with  the
              Company's Form 10-KSB for the year ended September 30, 1998.

10.39         Employment Agreement, effective as of April 28, 1998, by and among
              Stephan D. Deutsch,  M.D., the Company and CAHS,  incorporated  by
              reference to Exhibit  10.39 filed with the  Company's  Form 10-KSB
              for the year ended September 30, 1998.

10.40         Employment  Agreement,  effective  as of April 19,  1999,  between
              Dennis M. Mouras,  and the Company,  incorporated  by reference to
              Exhibit  10.40 filed with the  Company's  Form 10-KSB for the year
              ended December 31, 1999.

10.41         Settlement  Agreement  Settlement  Agreement  dated August 9, 2000
              among the  Company,  Horizon  Healthcare  of New Jersey,  Inc. and
              Allied Specialty Care Services, Inc.

10.42         Employment  Agreement,  effective  as of April 17,  2000,  between
              Christopher  Minor and the Company,  incorporated  by reference to
              Exhibit 10.2 filed with the Company's  Form 10-QSB for the quarter
              ended September 30, 2000.

10.43         Satisfaction  of Debt  Agreement  among  Horizon  Blue  Cross Blue
              Shield of New Jersey,  Horizon  Healthcare  of New  Jersey,  Inc.,
              CareAdvantage,   Inc.,  CareAdvantage  Health  Systems,  Inc.  and
              Contemporary HealthCare Management, Inc, incorporated by reference
              to Exhibit 10.1 filed on the Company's  Form 8-K dated December 5,
              2000 and filed on December 13, 2000.

10.44         Amendment  dated March 26, 2001 to  Satisfaction of Debt Agreement
              dated  as of  November  1,  2000  among  Horizon  BCBSNJ,  Horizon
              Healthcare of New Jersey, Inc., CareAdvantage, Inc., CareAdvantage
              Health Systems, Inc. and Contemporary HealthCare Management,  Inc,
              incorporated by reference to Exhibit 10.1 filed with the Company's
              Form 10-QSB for the quarter ended March 31, 2001.

10.45         Service  Agreement  dated as of January 1, 2000 between Blue Cross
              Blue Shield of Rhode Island, Coordinated Health Partners, Inc. and
              CareAdvantage Health Systems,  Inc.,  incorporated by reference to
              Exhibit 10.2 filed with the Company's  Form 10-QSB for the quarter
              ended March 31, 2001.

10.46         Amendment  dated as of  August  9,  2001 to  Satisfaction  of Debt
              Agreement  dated as of  November  1, 2000  among  Horizon  BCBSNJ,
              Horizon  Healthcare  of New  Jersey,  Inc.,  CareAdvantage,  Inc.,
              CareAdvantage  Health Systems,  Inc. and  Contemporary  HealthCare
              Management,  Inc,  incorporated by reference to Exhibit 10.1 filed
              with the  Company's  Form  10-QSB for the  quarter  ended June 30,
              2001.


31            Certifications  pursuant to Rule 13a-14(a),  promulgated under the
              Securities  Exchange  Act of 1934,  as amended  Section 302 of the
              Sarbanes-Oxley Act of 2002 (filed herewith).


32            Certifications  pursuant  to 18 U.S.C.  Section  1350,  as adopted
              pursuant  to  Section  906  of  the  Sarbanes-Oxley  Act  of  2002
              (furnished herewith).


                                       17