SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10QSB

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

                 For the quarterly period ended March 31, 2001



                         COMMISSION FILE NUMBER 0-26168


                               CAREADVANTAGE, INC.
             (Exact name of registrant as specified in its charter)


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

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


       Registrant's telephone number, including area code: (732) 602-7000


     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  twelve  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 ___



                                   83,533,752
        Number of shares of Common Stock outstanding as of May 15, 2001

                  Transitional Small Business Disclosure Format
                                  Yes___   No_X_










<PAGE>





                      CareAdvantage, Inc. and Subsidiaries
                                   Form 10-QSB
                    For the three months ended March 31, 2001


                                    I N D E X


Part I - Financial Information

    Item 1.  Financial Statements

        Condensed Consolidated Balance Sheets -
        March 31, 2001 (Unaudited) and December 31, 2000 (Audited).........   2

        Condensed  Consolidated  Statements  of  Operations -
        Three  months  ended  March 31,  2001  (Unaudited)
        and  March 31,  2000 (Unaudited)....................................  3

        Condensed Consolidated Statements of Cash Flows -
        Three months ended March 31, 2001 (Unaudited) and
        March 31, 2000 (Unaudited)..........................................  4

        Notes to Condensed Consolidated Financial Statements................  5
        (Unaudited)

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

Part II - Other Information

    Item 1.  Legal Proceedings.............................................. 10

    Item 2.  Changes in Securities.......................................... 10

    Item 3.  Defaults Upon Senior Securities................................ 10

    Item 4.  Submission of Matters to a Vote of Security Holders............ 10

    Item 5.  Other Information ............................................. 10

    Item 6.  Exhibits and Reports on Form 8-K............................... 10

Signature................................................................... 11







<PAGE>





PART I - FINANCIAL INFORMATION
ITEM 1.  Financial Statements

<TABLE>
<CAPTION>
                       CAREADVANTAGE, INC AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<S>                                                                    <C>                                  <C>
                                                                 March 31,                         December 31,
                     ASSETS                                         2001                               2000
                                                                 Unaudited                           Audited
Current assets:
     Cash and cash equivalents                                   $2,704,000                        $1,479,000
     Restricted Cash                                                      0                           256,000
     Accounts receivable for services:
         Stockholder                                              1,109,000                         1,228,000
         Other                                                      917,000                         1,078,000
     Other current assets                                           309,000                           145,000
                                                                    -------                           -------
                  Total current assets                            5,039,000                         4,186,000

Property and equipment, at cost less accumulated depreciation       414,000                           438,000
Intangible assets                                                   809,000                           850,000
Other assets                                                        145,000                           113,000
                                                                    -------                           -------

Total Assets                                                    $ 6,407,000                     $   5,587,000
                                                                ===========                         =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

     Accounts payable                                               221,000                           190,000
     Due to stockholder                                           1,532,000                         1,532,000
     Accrued compensation and related benefits                      988,000                           747,000
     Accrued expenses and other current liabilities                 368,000                           335,000
                                                               ------------                        ----------

Total current liabilities                                         3,109,000                         2,804,000
                                                               ------------                        ----------
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 83,533,752                                 83,000                             83,000
     Additional capital                                         22,238,000                         22,238,000
     Accumulated deficit                                       (19,023,000)                       (19,538,000)
                                                               ------------                      -------------

Total Stockholders' Equity                                       3,298,000                         2,783,000
                                                                 ---------                        -----------
Total Liabilities and Stockholders' Equity                     $ 6,407,000                     $   5,587,000
                                                               ===========                      =============

</TABLE>

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

                                        2


<PAGE>




<TABLE>
<CAPTION>

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


<S>                                               <C>            <C>
                                             Three Months Ended March 31,

                                                  2001          2000
                                                  ----          ----

Net revenues                                  $ 5,142,000   $ 4,550,000

Costs of services                               2,755,000     2,239,000
                                              -----------   -----------


Gross margin                                    2,387,000     2,311,000
                                              -----------   -----------

Operating expenses:

Selling, general and administration             1,675,000     1,909,000
Depreciation and amortization                     175,000       178,000
                                              -----------   -----------

Total operating expenses                        1,850,000     2,087,000
                                              -----------   -----------

Operating income                                  537,000       224,000

Interest income - net                               8,000        14,000

Provision for income taxes                         30,000             -
                                              -----------   -----------


Net income                                        515,000       238,000
                                              ===========   ===========

Net income
per share of common stock-basic and diluted   $       .01   $       .00
                                              ===========   ===========

Weighted average number
of common shares outstanding -

     Basic                                     83,534,000    82,755,000
                                              ===========   ===========

     Diluted                                   89,903,000    93,344,000
                                              ===========   ===========
</TABLE>


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


                                        3


<PAGE>





<TABLE>
<CAPTION>
                      CAREADVANTAGE, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<S>                                                 <C>            <C>
                                                        Three Months Ended
                                                      March 31,      March 31,
                                                        2001           2000
                                                   ------------   ------------

Cash flows from operating activities:

Net income                                         $   515,000    $   238,000

Adjustments to reconcile net profit
to net cash (used in)/provided by
operating activities:

    Depreciation and amortization                      215,000        222,000
    Compensation due to option issuance                 13,000         13,000

Change in assets and liabilities:

    Due to/from customers/stockholders                 280,000       (376,000)
    Other assets                                      (208,000)       (88,000)
    Accounts payable                                    31,000        (89,000)
    Accrued expenses and other liabilities             273,000        (16,000)
    Deferred revenue                                         0        (43,000)
                                                   -----------    -----------

Net cash provided by/(used in)
operating activities                                 1,119,000       (139,000)
                                                   -----------    -----------

Cash flows from investing activities:

Capital expenditures                                  (150,000)       (24,000)
                                                   -----------    -----------

Cash flows from financing activities:

Transfer from restricted cash                          256,000              -
Proceeds from Issuance of Common Stock                       -         19,000
                                                   -----------    -----------

Net cash provided by financing activities              256,000         19,000
                                                   -----------    -----------

Net  (decrease)/increase in cash                     1,225,000       (144,000)

Cash - beginning of period                           1,479,000      1,615,000
                                                   -----------    -----------

Cash - end of period                               $ 2,704,000    $ 1,471,000
                                                   ===========    ===========
</TABLE>



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


                                        4


<PAGE>


                      CAREADVANTAGE, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Note A--Basis of preparation:

The condensed consolidated financial statements as of March 31, 2001 and for the
three months ended March 31, 2001 and 2000 have been prepared by the Company and
have not been audited by the Company's  independent  auditors.  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 as
of and for the periods ended March 31, 2001 and 2000.

Certain  information  and  note  disclosures  required  to be  included  in  the
financial  statements  prepared in accordance with generally accepted accounting
principles 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, 2000 Annual Report on
Form 10-KSB.  The results of operations  for the period ended March 31, 2001 are
not  necessarily  indicative  of  operating  results to be expected for the full
year.

Note B--Per share data:

Basic net  income  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 C--Contingencies:

Potential uninsured exposure to litigation:

The Company has been named as a party in an action  entitled Robert T. Caruso v.
Care  Advantage,  Inc.,  John J.  Petillo,  Vincent M.  Achillare,  Lawrence  A.
Whipple, Horizon BCBSNJ et al., which was filed in Superior Court of New Jersey.
Messrs. Petillo, Achillare and Whipple were officers of the Company and may have
claims for  indemnification for expenses and for any judgments against them. Mr.
Caruso  was a  consultant  to the  Company.  The  complaint  alleges  breach  of
contract, fraud, conspiracy, promissory estoppel and negligent misrepresentation
in  connection  with,  among  other  things,  the  termination  of Mr.  Caruso's
consulting  arrangement  with the Company.  The plaintiff seeks treble and other
damages for an unspecified  amount and claims actual damages in the  approximate
amount of $1.8 - $2.0  million.  The  Company  received  notice  from two of its
insurance  carriers  that they have  denied  coverage  on this  matter,  but the
Company plans to vigorously  contest these coverage  decisions.  The Company has
received  a written  claim  for  indemnification  for  defendants,  Petillo  and
Achillare  and,  subject to their  having  acted in good faith,  the Company has
agreed to  indemnify  them and  defendant  Whipple  and to pay their  reasonable
defense costs.  The parties to this litigation are currently  taking  discovery.
The Company  believes  that  plaintiff's  claims are without  merit and plans to
vigorously  contest them at trial. The Company has recorded a provision for this
contingency. There can be no assurance that this provision will be sufficient to
satisfy this claim.


                                        5


<PAGE>


                      CAREADVANTAGE, INC. AND SUBSIDIARIES
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




Note D - Supplemental Cash Flow Information:

Below is supplemental  cash flow  information  related to the three months ended
March 31, 2001 and March 31, 2000:

                                            March 31,             March 31,
                                            ---------             ---------

                                                2001                  2000
                                                ----                  ----

Income taxes paid                              3,000                31,000



Note E - Exercise of Stock Options

During the three months ended March 31, 2001, no options were exercised.



                                        6


<PAGE>


                               CAREADVANTAGE, INC.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                            AND RESULTS OF OPERATIONS





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, 2000.
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 health care cost containment  services  designed to enable health
care  insurers and other  health  service  organizations  to reduce the costs of
medical services provided to their subscribers.  The management services include
care management program enhancement services,  executive and clinical management
services,  and training  programs;  the  healthcare  cost  containment  services
include utilization review in medical/surgical cases where  pre-authorization is
required  for   hospitalization   and  for  certain  in-patient  and  outpatient
procedures, case management and disease management, and independent reviews. The
Company's  management  services  have been  provided to  integrated  health care
delivery systems;  the Company's health care cost containment services have been
principally provided to several of the statewide Blue Cross/Blue Shield ("BCBS")
health service organizations in the Northeastern United States.

The Company has a service  agreement  with Horizon Blue Cross Blue Shield of New
Jersey  ("Horizon  BCBSNJ")  which  expired on June 30, 2000 and  accounted  for
approximately  75% of net revenue  for 2000.  Although  the  precise  terms of a
contract renewal have not yet been agreed upon, the Company has been informed by
Horizon  BCBSNJ that  Horizon  BCBSNJ  intends to continue to contract  with the
Company for care management  services for the indemnity  portion of the business
at least until January 1, 2002. The indemnity portion of the business  accounted
for approximately 90% of the total Horizon BCBSNJ contract revenues on an annual
basis.



RESULTS OF OPERATIONS:

The following  discussion  compares the Company's  results of operations for the
three months  ended March 31, 2001,  with those for the three months ended March
31, 2000. The Company's condensed  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.



Three Months Ended March 31, 2001, Compared to Three Months Ended March 31, 2000

Revenues:

The Company's total operating  revenues for the three-month  periods ended March
31,  2001 and  March 31,  2000 were  approximately  $5,142,000  and  $4,550,000,
respectively.  This  represents  an increase of  approximately  $592,000 for the
three-month  period  ended March 31, 2001 from the  corresponding  period of the
prior year.  The  increase  for the three months ended March 31, 2001 is largely
due to increased revenue of approximately $1,109,000 due to new contracts offset
by a decrease of approximately  $517,000 in revenue due to decreased  membership
from the Company's major customers.

                                       7

<PAGE>


                               CAREADVANTAGE, INC.

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

                            AND RESULTS OF OPERATIONS


Cost of services:

The Company's  total direct cost of services for the  three-month  periods ended
March 31, 2001 and March 31, 2000 was  approximately  $2,755,000 and $2,239,000,
respectively.  This  represents  an increase of  approximately  $516,000 for the
three-month  period  ended March 31, 2001 over the  corresponding  period of the
prior year.  The  increase in the cost of services  for the  three-month  period
ended  March  31,2001  was  primarily  due to  increased  costs  related  to new
contracts (i.e.,  increased  personnel costs of approximately  $145,000,  travel
costs of approximately  $138,000 which is reimbursed by the Company's  customers
and medical  consulting  services of  $169,000),  as well as  increases in other
travel  costs of  approximately  $9,000 and in other  professional  services  of
approximately  $60,000,  offset by a decrease in depreciation  and  amortization
expense of approximately $5,000.

Operating expenses:

Selling, general, and administrative:

The  Company's  total  selling,   general,  and  administrative  costs  for  the
three-month  periods ended March 31, 2001 and March 31, 2000 were  approximately
$1,675,000  and  $1,909,000,   respectively.   This  represents  a  decrease  of
approximately  $234,000 for the three-month period ended March 31, 2001 over the
corresponding period of the prior year. This decrease for the three-month
period ended March 31, 2001 is largely due to  decreases  in personnel  costs of
approximately  $161,000,  information and  communication  costs of approximately
$61,000,   travel  costs  of  approximately   $37,000,  and  other  general  and
administrative   costs  of  approximately   $58,000,   offset  by  increases  in
professional costs of approximately  $68,000 and facility costs of approximately
$15,000.

Depreciation and amortization:

The Company's  total  depreciation  and  amortization  costs for the three-month
periods ended March 31, 2001 and March 31, 2000 were approximately  $215,000 and
$222,000, respectively.  Approximately $39,000 and $44,000 were included in cost
of services for such periods.

Interest income:

The Company's total net interest income for the three-month  periods ended March
31, 2001 and March 31, 2000 was approximately $8,000 and $14,000,  respectively.
This  represents a decrease of  approximately  $6,000 in net interest income for
the three-month period ended March 31, 2001 from the corresponding period of the
prior year.  The  decrease in net  interest  income is largely due to  increased
interest costs of  approximately  $2,000 pursuant to a Horizon BCBNJ  promissory
note  in  the  face  amount  of  $1,862,823  and  increased  interest  costs  of
approximately  $14,000 pursuant to an obligation to a Horizon  subsidiary in the
amount of $839,000, offset by increased interest income of approximately $10,000
from the Company's short-term investments.



LIQUIDITY, FINANCIAL CONDITION AND CAPITAL RESOURCES:



General overview:

At March 31, 2001, the Company had working capital of approximately  $1,930,000,
stockholders equity of approximately $3,298,000 and an accumulated deficit since
its inception of approximately $19,023,000. Management is of the opinion that it
must  continue to refine its current  service  lines in order to continue to add
value to existing and potential customers.  Additionally, the Company intends to
broaden its  services  offered  with unique and  complementary  cost-containment
strategies.  Management  will evaluate  each service with regard to  anticipated
changes in the health care industry,  the cost to enter any such line of service
as well as the availability of competent  resources.  To further expand its line
of services, the Company intends to pursue alternatives to its internal products
and service  development  efforts by entering into strategic alliances and joint
ventures as well as through acquisitions.



                                       8
<PAGE>



Financial condition:

At March 31, 2001, the Company had cash of approximately  $2,704,000 and working
capital of approximately  $1,930,000. At December 31, 2000, the Company had cash
of approximately $1,479,000 and working capital of approximately $1,382,000.

Net cash provided  by/(used in) operating  activities  amounted to approximately
$1,119,000 and ($139,000) for the  three-month  periods ended March 31, 2001 and
March 31, 2000,  respectively.  The increase in cash  provided of  approximately
$1,258,000  from 2001  operating  activities  is largely  due to an  increase in
accounts payable of approximately  $31,000,  an increase in accrued expenses and
other liabilities of approximately $273,000, an increase in customer receivables
of approximately $280,000, a decrease in other assets of approximately $208,000,
an increase in non-cash  charges of  approximately  $228,000 and $515,000 in net
profit.

Net cash used in investing  activities  amounted to  approximately  $150,000 and
$24,000 for the  three-month  periods  ended March 31, 2001 and March 31,  2000,
respectively.  The  increase  in cash used of  approximately  $126,000 is due to
increased  capital  expenditures  during the three-month  period ended March 31,
2001.

Net cash provided from financing  activities amounted to approximately  $256,000
and $19,000 for the three-month periods ended March 31, 2001 and March 31, 2000,
respectively.  The  increase  in  cash  of  approximately  $237,000  is due to a
transfer of restricted cash of $256,000 and a decrease of approximately  $19,000
in proceeds from common stock issuance.

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 calendar year ending December 31, 2001.


Capital resources:

Pursuant  to a  promissory  note dated April 1, 1997 in the  original  principal
amount of $1,862,823,  assigned to Horizon BCBSNJ,  the Company owes $693,000 to
Horizon BCBSNJ as of March 31, 2001.  The promissory  note bears interest at the
five-year U.S. Treasury yield, adjusted quarterly.  The Company has an agreement
with  Horizon  BCBSNJ to suspend  payments  and  convert  principal  and accrued
interest as of November 1, 2000 to common stock.

On November 1, 2000,  the Company and Horizon BCBSNJ signed a  "Satisfaction  of
Debt  Agreement"  which was amended on March 26, 2001 to extend the closing date
to May 31,  2001.  Under the terms of the  agreement,  the Company  will pay and
satisfy  amounts  outstanding to Horizon BCBSNJ of  approximately  $1,600,000 by
issuance  of  its  common  stock.  The  amount  of  $1,600,000  consists  of the
promissory  note  dated  April 1,  1997,  with a balance  at March  31,  2001 of
$693,000, the amount due to stockholder of $839,000, and accrued interest.

The  transaction  is subject to  approval  from the New  Jersey  Departments  of
Banking and Insurance and Health and Senior Services  Department and is expected
to close by the end of the second quarter 2001.

The Company had a credit  facility  with a bank that  provided  for a $1,500,000
working capital revolver to be used for general working capital needs, which was
effective through June 30, 2000. The Company did not renew such credit facility.



                                        9


<PAGE>

                               CAREADVANTAGE, INC.



PART II--OTHER INFORMATION

Item 1.  Legal Proceedings

For a description of legal proceedings,  see Note C to the Financial Statements.
With the exception of the legal proceedings described in Note C 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.

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
quarter ended March 31, 2001.

Item 5.  Other Information

None.

Item 6. Exhibits and reports on Form 8-K

   (a)  Exhibits


Exhibit No.       Description of Exhibit
-----------       ----------------------

10.1              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.

10.2              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.


(b)  Reports on Form 8-K

     None



                                       10


<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



May 15, 2001                    /s/ Dennis J. Mouras
                                ------------------------------------------------
                                Dennis J. Mouras
                                Chief Executive Officer



May 15, 2001                    /s/ R. Christopher Minor
                                ------------------------------------------------
                                R. Christopher Minor
                                Chief Financial Officer








                                       11

<PAGE>

                                 EXHIBIT INDEX
                                 -------------


Exhibit No.       Description of Exhibit
-----------       ----------------------

10.1              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.

10.2              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.



<PAGE>