SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.  20549

                                  FORM10-Q

 (Mark One)
    [X]  QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000

                                       OR

    [  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT
         OF 1934 For the transition period from to

                         Commission file number 0-29172

                           ProMedCo Management Company
               (Exact name of Registrant as specified in its charter)


            Delaware                                            75-2529809
 (State or other jurisdiction of                             (I.R.S. Employer
 incorporation or organization)                           Identification Number)


  801 Cherry Street, Suite 3200
        Fort Worth, Texas                                          76102
  (Address of principal executive offices)                       (Zip Code)

                            (817) 335-5035
         (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

              YES  ( X )                      NO (    )

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

                                                         Outstanding at
    Class of Common Stock                               October 31, 2000
    ---------------------                               ----------------
       $.01 par value                                   21,177,148 shares


<PAGE>



                  PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                            No.
<S>                                                                                                        <C>

Part I. Financial Information

         Item 1. Financial Statements

                  Condensed Consolidated Balance Sheets
                      September 30, 2000 and December 31, 1999                                               2

                  Condensed Consolidated Statements of Operations
                      Three Months and Nine Months Ended September 30, 2000 and 1999                         3

                  Condensed Consolidated Statements of Cash Flows
                      Nine Months Ended September 30, 2000 and 1999                                          4

                  Notes to Condensed Consolidated Financial Statements                                       5

         Item 2. Management's Discussion and Analysis of Financial Condition and Results of
                  Operations                                                                                12

Part II. Other Information

         Item 2. Changes in Securities and Use of Proceeds                                                  21

         Item 4. Submission of Matters to a Vote of Security Holders                                        21

         Item 5. Other Information                                                                          21

         Item 6. Exhibits and Reports on Form 8-K                                                           22

Signatures                                                                                                  23


</TABLE>


<PAGE>



                  PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                   (All amounts are expressed in thousands)
<TABLE>
<CAPTION>

                                                                           September 30, 2000       December 31,
                                                                               (Unaudited)              1999
                                                                           ------------------    ------------------
                                     ASSETS
<S>                                                                       <C>                     <C>
Current assets:
         Cash and cash equivalents                                         $           10,073      $          7,625
         Accounts receivable, net                                                      68,848                63,811
         Management fees receivable                                                     6,741                 9,905
         Due from affiliated medical groups                                             7,258                14,758
         Deferred tax benefit                                                           2,139                   537
         Income tax receivable                                                         15,037                  -
         Prepaid expenses and other current assets                                     16,864                14,681
                                                                           ------------------    ------------------
                  Total current assets                                                126,960               111,317
                                                                           ------------------    ------------------
Property and equipment, net                                                            26,255                24,352
Intangible assets, net                                                                201,233               227,006
Long-term receivables                                                                  52,353                50,355
Deferred income taxes                                                                   2,252                   993
Other assets                                                                            6,521                 5,290
                                                                           ------------------    ------------------
                  Total assets                                             $          415,574      $        419,313
                                                                           ==================    ==================


                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
         Accounts payable                                                  $            8,333      $          6,418
         Payable to affiliated medical groups                                          11,075                10,297
         Accrued salaries, wages and benefits                                           6,859                 7,578
         Accrued purchased medical services                                             8,418                 9,722
         Accrued expenses and other current liabilities                                19,460                 7,321
         Current maturities of long-term debt                                         151,169                11,463
         Current portion of obligations under capital leases                              596                   476
         Current portion of deferred purchase price                                     7,077                 2,293
         Income taxes payable                                                            -                    3,643
                                                                           ------------------    ------------------
                  Total current liabilities                                           212,987                59,211
                                                                           ------------------    ------------------
Long-term debt, net of current maturities                                               1,580               149,674
Obligations under capital leases, net of current portion                                1,413                   343
Deferred purchase price, net of current portion                                         7,190                17,592
Convertible subordinated notes payable                                                  2,019                 9,484
Other long-term liabilities                                                               770                   378
                                                                           ------------------    ------------------
                  Total liabilities                                                   225,959               236,682
                                                                           ------------------    ------------------

Redeemable convertible preferred stock                                                 52,508                  -
Stockholders' equity:
         Common stock                                                                     220                   219
         Additional paid-in capital                                                   156,587               156,106
         Common stock to be issued                                                         90                    90
         Treasury stock                                                                (2,956)               (2,865)
         Stockholder notes receivable                                                    (250)                 (250)
         Accumulated (deficit) earnings                                               (16,584)               29,331
                                                                           -------------------   ------------------
                  Total stockholders' equity                                          137,107               182,631
                                                                           ------------------    ------------------
                  Total liabilities and stockholders' equity               $          415,574      $        419,313
                                                                           ==================    ==================

</TABLE>

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

<PAGE>

                  PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
    (All amounts are expressed in thousands, except for per share amounts)
<TABLE>
<CAPTION>
                                                                Three Months Ended             Nine Months Ended
                                                                   September 30,                 September 30,
                                                            -------------------------    --------------------------
                                                               2000           1999           2000          1999
                                                            -----------   -----------    -----------    -----------
<S>                                                       <C>            <C>             <C>          <C>

Net revenue                                                 $    72,351   $    84,317     $  255,687    $   233,430

Operating expenses:
         Clinic salaries and benefits                            33,015        28,989         95,952         81,972
         Clinic rent and lease expense                            8,780         7,340         25,286         20,720
         Clinic supplies                                         10,598         9,514         31,401         27,073
         Purchased medical services                              15,274        13,631         47,863         35,294
         Other clinic costs                                      13,678        10,972         37,411         29,661
         General corporate expenses                               3,879         2,396          9,358          6,659
         Depreciation and amortization                           39,653         3,093         47,414          8,979
         Interest expense                                         4,160         1,798         11,158          4,075
         Restructuring charges                                    7,848          -             7,848           -
                                                            -----------   -----------    -----------    -----------

                  Total                                         136,885        77,733        313,691        214,433
                                                            -----------   -----------    -----------    -----------

Income (loss) before provision for (benefit from) income taxes and
     extraordinary charge                                       (64,534)        6,584        (58,004)        18,997
Provision for (benefit from) income taxes                       (16,534)        2,502        (13,776)         7,219
                                                            -----------   -----------    -----------    -----------

Net income (loss) before extraordinary charge                   (48,000)        4,082        (44,228)        11,778

Extraordinary charge-loss on extinguishment of debt, net of benefit from
     income taxes of approximately $468                            -             -               647           -
                                                            -----------   -----------    -----------    -----------

Net income (loss)                                               (48,000)        4,082        (44,875)        11,778

Dividends earned on preferred stock                                 918          -             1,040           -
                                                            -----------   -----------    -----------    -----------

Net income (loss) available to common stockholders          $   (48,918)  $     4,082     $  (45,915)   $    11,778
                                                            ===========   ===========     ===========   ===========

Net earnings (loss) per share
      Basic
         Income (loss) before extraordinary charge          $    (2.27)   $      0.19     $    (2.03)   $      0.56
              Extraordinary charge                                 -             -             (0.03)          -
                                                            -----------   -----------    -----------    -----------
              Net income (loss)                             $    (2.27)   $      0.19     $    (2.06)   $      0.56
                                                            ==========    ===========     ==========    ===========

      Diluted
         Income (loss) before extraordinary charge          $    (2.27)   $      0.18     $    (2.06)   $      0.51
              Extraordinary charge                                 -             -             (0.03)          -
                                                            -----------   -----------    -----------    -----------
              Net income (loss)                             $    (2.27)   $      0.18     $    (2.06)   $      0.51
                                                            ==========    ===========     ==========    ===========

Weighted average number of common shares outstanding:
         Basic                                                   21,177        21,053         21,786         21,126
                                                            ===========   ===========    ===========    ===========
         Diluted                                                 21,177        22,978         21,786         23,291
                                                            ===========   ===========    ===========    ===========
</TABLE>

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

<PAGE>



                  PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                     (All amounts are expressed in thousands)
<TABLE>
<CAPTION>
                                                                                       Nine Months Ended
                                                                           ----------------------------------------
                                                                                         September 30,
                                                                           ----------------------------------------
                                                                                  2000                  1999
                                                                           ------------------    ------------------
<S>                                                                       <C>                     <C>

Cash flows from operating activities:
     Net income (loss)                                                     $          (44,875)     $         11,778
     Adjustments  to  reconcile  net  income  (loss)  to net  cash
     provided  by operating activities (net of effects of purchase
     transactions):
         Depreciation and amortization                                                 47,414                 8,979
         Provision for (benefit from) deferred income taxes                            (2,911)                1,488
         Changes in assets and liabilities:
              Accounts receivable, net                                                 (7,453)               (5,892)
              Management fees receivable                                                3,089                (1,342)
              Due from affiliated medical groups                                        9,724                  (789)
              Prepaid expenses and other assets                                         3,456                (3,641)
              Accounts payable                                                          2,291                  (369)
              Payable to affiliated medical groups                                        691                   495
              Accrued expenses and other liabilities                                   (7,227)               (3,090)
                                                                           ------------------    ------------------
Net cash provided by operating activities                                               4,199                 7,617
                                                                           ------------------    ------------------

Cash flows from investing activities:
     Purchases of property and equipment                                               (5,109)               (4,885)
     Purchases of clinic assets, net of cash acquired                                 (29,225)              (84,494)
     (Increase) decrease in notes receivable                                           (3,439)                1,462
                                                                           ------------------    ------------------
Net cash used in investing activities                                                 (37,773)              (87,917)
                                                                           ------------------    ------------------

Cash flows from financing activities:
     Borrowings under long-term debt                                                  197,500                90,000
     Payments on long-term debt                                                      (208,749)               (8,816)
     Payments on capital lease obligations                                               (368)                 (390)
     Payment of deferred financing costs                                               (3,206)                 (736)
     Proceeds from issuance of common stock, net                                            2                   269
     Proceeds from issuance of preferred stock, net                                    51,468                  -
     Purchase of treasury shares                                                         (625)               (2,914)
     Collection of stockholder note receivable                                           -                      120
                                                                           ------------------    ------------------
Net cash provided by financing activities                                              36,022                77,533
                                                                           ------------------    ------------------

Increase (decrease) in cash and cash equivalents                                        2,448                (2,767)

Cash and cash equivalents, beginning of period                                          7,625                13,871
                                                                           ------------------    ------------------

Cash and cash equivalents, end of period                                   $           10,073      $         11,104
                                                                           ==================      ================


Supplemental disclosure of cash flow information
     Cash paid during the period for -
         Interest expense                                                  $           11,352      $          5,567
         Income taxes                                                      $            7,552      $          4,927
</TABLE>

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


<PAGE>
                  PROMEDCO MANAGEMENT COMPANY AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.       SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation/Principles of Consolidation

The  condensed  consolidated  financial  statements  included  herein  have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission ("SEC"). Certain information and footnote
disclosures  normally  included in financial  statements  prepared in accordance
with generally  accepted  accounting  principles  have been condensed or omitted
pursuant  to such  SEC  rules  and  regulations.  Management  believes  that the
disclosures herein are adequate to prevent the information  presented from being
misleading.  The foregoing  financial  information,  not audited by  independent
public  accountants,  reflects,  in the opinion of the Company,  all adjustments
(which  included  only  normal  recurring  adjustments)  necessary  for  a  fair
presentation  of the financial  position and the results of  operations  for the
interim periods presented.  The results of operations for any interim period are
not necessarily indicative of the results of the operations for the entire year.
It is suggested that these condensed  consolidated  financial statements be read
in conjunction  with the financial  statements and notes thereto included in the
Company's  Annual  Report on Form 10-K for the year  ended  December  31,  1999.
Certain  prior period  amounts have been  reclassified  to conform with the 2000
presentation.

The accompanying condensed financial statements have been prepared assuming that
the  Company  will  continue as a going  concern.  As  discussed  in Note 3, the
Company is in violation of certain provisions of its bank credit agreement. As a
result,  the credit facility has been  classified as a current  liability in the
condensed  balance sheet at September 30, 2000.  These factors indicate that the
Company may be unable to continue as a going concern. The accompanying condensed
financial  statements  do not include any  adjustments  that might be  necessary
should the Company be unable to continue as a going concern.

The Company has been advised by its independent  public accountants that, if the
contingency relating to the Company's bank financing has not been resolved prior
to the  completion  of  their  audit  of the  Company's  consolidated  financial
statements  for the year ending  December 31, 2000,  their  auditors'  report on
those   consolidated   financial   statements   will  contain  a  going  concern
modification for that contingency.

Earnings (Loss) Per Share

Basic  earnings  (loss)  per share  ("EPS") is  calculated  by  dividing  income
available to common stockholders by the weighted average number of common shares
outstanding during the period. Common stock to be issued is assumed to be common
stock  outstanding  and is included  in the  weighted  average  number of common
shares  outstanding for the basic EPS calculation.  Options,  warrants,  and the
effects redeemable,  convertible  preferred stock and other potentially dilutive
securities  are  excluded  from basic EPS.  Diluted EPS includes the options and
warrants  using the treasury  method and the  redeemable  convertible  preferred
stock and convertible  subordinated notes using the if-converted  method, to the
extent that these  securities are not  anti-dilutive.  For the  three-month  and
nine-month periods ending September 30, 2000, approximately 5.0 million of stock
options were  excluded from the  computation  of diluted EPS because the Company
had a net loss for these  periods.  Similarly,  the  conversion  of  convertible
subordinated notes into common shares, approximately 176,000 common shares as of
September 30, 2000,  were excluded from the  computation  of diluted EPS because
the impact is anti-dilutive.  Similarly,  the impact of redeemable,  convertible
preferred  stock,  convertible  into 20.1  million  shares of common  stock,  is
excluded from the computation of diluted EPS for the  three-month  period ending
September 30, 2000 since the impact is anti-dilutive.

<PAGE>

Net Revenue

Net revenue  represents total revenue reduced by amounts paid to medical groups.
The amounts  paid to medical  groups  (typically  80-85% of the medical  group's
operating income)  represents amounts paid to the groups pursuant to the service
agreements between the Company and the groups and primarily consists of the cost
of the services of the group's  physicians.  Under the service  agreements,  the
Company  provides each medical group with the  facilities  and equipment used in
its  medical  practice,   assumes  responsibility  for  the  management  of  the
operations of the practice,  and employs  substantially  all of the non-provider
personnel.

Net revenue is detailed as follows (in thousands):

<TABLE>
<CAPTION>
                                                       Three Months Ended             Nine Months Ended
                                                          September 30,                 September 30,
                                                   --------------------------    ---------------------------
                                                      2000           1999            2000           1999
                                                   -----------    -----------    -----------     -----------
<S>                                               <C>            <C>            <C>            <C>
  Total revenue                                    $   112,978    $   113,658    $   368,397     $   328,956
  Less-   Amounts paid to medical groups               (40,627)       (29,341)      (112,710)        (95,526)
                                                   -----------    -----------    -----------     -----------
  Net revenue                                      $    72,351    $    84,317    $   255,687     $   233,430
                                                   ===========    ===========    ===========     ===========
</TABLE>

During the third  quarter of 2000,  the Company  adjusted  total revenue and the
amounts paid to medical groups as part of the overall restructuring,  impairment
and other  charges (see Note 4).  Excluding  the impacts of these  non-recurring
charges,  net revenue  would have been  approximately  $87.9  million and $271.2
million for the three and nine months ended September 30, 2000, respectively.

Revenue  consists  primarily of billings  and charges to  patients,  third party
payors  and  others  and  payments   received  under  capitated   contracts  for
professional  and  ancillary  services  rendered.  Total  revenue also  includes
amounts earned for other services rendered,  including contract billing; medical
directorships;   interim  management;   strategic  and  financial  planning  and
management consulting.  Revenue is recorded at the estimated realizable amounts,
net of contractual  and other  adjustments,  including an allowance for doubtful
accounts. Revenue under certain third-party payor agreements is subject to audit
and  retroactive  adjustments.   Provisions  for  third  party  settlements  and
adjustments  are  estimated in the period the related  services are rendered and
adjusted in future periods as the final settlements are determined. There are no
material claims, disputes, or other unsettled matters that exist to management's
knowledge  concerning  third  party  reimbursements.   In  addition,  management
believes  there are no  retroactive  adjustments  that would be  material to the
Company's financial  statements.  Also, due to market changes and changes in the
strategic  direction  of the  Company,  management  fee  revenues  from  interim
management,  strategic and financial planning and management consulting services
are not expected to be a significant net revenue source in the future.

<PAGE>

Impairment of Long-Lived Assets

The Company  periodically  reviews its intangible assets for impairment whenever
events or changes in  circumstances  indicate  that the  carrying  amount of the
asset may not be recoverable.  If this review indicates that the carrying amount
of the asset may not be recoverable, based on the undiscounted cash flows of the
operations over the remaining  amortization  period,  then the carrying value of
the asset is reduced to estimated fair value. Among the factors that the Company
will  continually  evaluate are  unfavorable  changes in each physician  group's
relative market share and local market competitive  environment,  current period
and  forecasted  operating and cash flow levels of the  physician  group and its
impact on the management fee earned by the Company,  and legal factors governing
the practice of medicine.  During the three months ended September 30, 2000, the
Company recorded  approximately $35.6 million as an impairment to its intangible
assets (see Note 4).

2.       ACQUISITIONS:

Through  September  30, 2000 and during 1999,  the  Company,  through its wholly
owned  subsidiaries,  acquired certain operating assets of the following medical
clinics:


                     Medical Group               Date               Location
2000:    First Choice Medical (a)          January 2000         Flower Mound, TX
         Breton Medical Group (b)          June 2000            California, MD
         Healthtrac Resources              July 2000            Amarillo, TX

                     Medical Group               Date               Location
1999:    El Paseo Medical Center           January 1999 (c)     Las Cruces, NM
         Boca Raton Medical Associates     February 1999 (d)    Boca Raton, FL
         Medical Office Services           May 1999             Flagstaff, AZ
         Family Care Center of Indiana     May 1999             Dyer, IN
         MedGroup                          August 1999          Prescott, AZ
         Horizon Medical Group             October 1999 (e)     Columbus, GA

          (a)  The  physicians  of  First  Choice  Medical   combined  with  the
               HealthFirst  Medical Group, which had previously  affiliated with
               the Company in June 1996.

          (b)  The   physicians  of  Breton  Medical  Group  combined  with  the
               physicians of Shah  Associates,  which had previously  affiliated
               with the Company in November 1998.

          (c)  The Company  operated El Paseo  Medical  Center under a long-term
               service  agreement   effective  December  1,  1998.  The  Company
               completed  its  acquisition  in  January  1999.  During the third
               quarter  of 2000,  the  Company  recorded  an  impairment  of the
               intangible asset associated with this transaction (see Note 4).

          (d)  The  Company  operated  Boca Raton  Medical  Associates  under an
               interim service agreement  effective October 1, 1998. The Company
               completed its  acquisition  in February  1999, and entered into a
               long-term service agreement effective February 1, 1999.
<PAGE>

          (e)  The  Company  operated  Horizon  Medical  Group  under an interim
               service  agreement  effective July 1, 1998. The Company completed
               its  acquisition  in October  1999,  and entered into a long-term
               service agreement effective October 1, 1999.

Effective  August 1,  1999,  the  Company,  through a wholly  owned  subsidiary,
completed its acquisition of Primergy,  Inc.,  ("Primergy").  Based in Kingston,
New  York,  Primergy  is a  medical  network  management  company  that owns and
operates five IPAs in the Hudson Valley of New York and has under  contract more
than 1,500 physicians.

These  acquisitions  were  accounted  for as  purchases,  and  the  accompanying
condensed  consolidated  financial  statements  include  the  results  of  their
operations  from the  dates of their  respective  acquisitions.  Purchase  price
allocations to tangible assets acquired and liabilities assumed are based on the
estimated  fair  values at the dates of  acquisitions  and are  subject to final
revisions. Simultaneous with each medical group acquisition, the Company entered
into a long-term  service  agreement with the related medical group. The service
agreements are typically 40 years in length.

3.       LONG-TERM DEBT:

Long-term debt is summarized as follows (in thousands):

                                                 September 30,      December 31,
                                                      2000              1999
                                                 -------------    --------------
  Borrowings under bank credit facility         $      150,500    $     156,000
  Notes payable issued to medical groups                 1,635            4,309
  Other long-term debt                                     614              828
                                                --------------    --------------
                                                       152,749          161,137
  Less- current maturities                            (151,169)         (11,463)
                                                ---------------   --------------
  Long-term debt, net of current maturities     $        1,580    $     149,674
                                                ==============    ==============

In 2000, the Company entered into a two-stage  transaction in which it issued an
aggregate of 550,000 shares of convertible  preferred stock to an investor group
for aggregate gross proceeds of $55 million. The first stage of the transaction,
which was  completed  in January  2000,  involved  the  issuance  of $16 million
principal  amount of senior  subordinated  notes and 1,250,000  shares of common
stock for $16 million.  In the second stage,  which closed in June 2000, 425,000
shares of Series A Convertible  Preferred  Stock and 125,000  shares of Series B
Convertible Preferred Stock were issued to the new investors in exchange for the
notes,  common  stock,  and  an  additional  $39  million,  bringing  the  total
investment to $55 million.  Both series of  convertible  preferred  stock have a
liquidation  preference  of $100 per share,  are  entitled  to a dividend at the
annual rate of 6% of the liquidation preference, and are convertible into shares
of the Company's common stock. The conversion price of the Series A is $2.50 per
common  share,  and the  conversion  price of the  Series B is $4.00 per  common
share,  subject  to  adjustment  in  accordance  with  customary   anti-dilution
provisions.  The net proceeds from the sale of the  Convertible  Preferred Stock
were used to reduce the outstanding amount under the revolving credit portion of
the Company's credit facility. The Company failed to make the quarterly dividend
payment due  September  30,  2000,  as a result of which the unpaid  dividend is
accruing dividends at the annual rate of 8% of the liquidation preference.
<PAGE>

In  connection  with the  completion  of the  second  stage  of the  convertible
preferred  stock sale, the Company  expanded its credit facility by $20 million.
The new  commitment is comprised of a $57.5 million term loan that matures March
30,  2006, a $20.0  million  term loan that matures June 12, 2006,  and a $100.0
million  maximum  revolving  commitment  that  expires  December  17,  2003.  In
connection with the new,  expanded credit facility,  the Company was required to
write off the unamortized  deferred financing costs relating to the prior credit
facility. The resulting extraordinary charge amounted to approximately $647,000,
net of applicable income taxes of approximately $468,000.

In connection with the conversion of the Company's  affiliation structure with a
medical group in  Pittsfield,  MA (See Note 4.), the Company offset $6.5 million
of convertible  subordinated notes that were payable to the group's shareholders
and $3.0 million of deferred  purchase  price  payable to the group against that
group's  obligations  to the Company  under the  termination  provisions  of the
service agreement.

Due primarily to the Company's continuing inability to provide the lending banks
with certain documents  relating to their security  interest in the assets,  the
Company was in violation of certain anks also  asserted  that the Company was in
breach  of  another  covenant  as a result  of its  termination  of its  service
agreement with its affiliated medical group in Pittsfield, MA, discussed in Note
4. As a result,  the lending  banks  limited the amounts the Company was able to
borrow during the third quarter of 2000 and  restricted its uses of the borrowed
proceeds.  In light  of these  circumstances,  together  with the fact  that the
Company was not in compliance with certain of the credit  agreement's  financial
covenants as of September  30, 2000,  the Company  requested an amendment of the
credit  agreement  that would  include (i)  waivers by the lending  banks of all
covenant  defaults,  (ii) modification of the financial  covenants,  and (iii) a
commitment  to  permit  future  borrowings  at a level  sufficient  to fund  the
Company's working capital requirements for the next 12 to 15 months. The lending
banks have  declined to enter into such an  amendment,  and have instead  agreed
only to forbear  from  taking any  action as a result of the  existing  defaults
through  November 30, 2000,  and to fund a single  payment to meet our immediate
cash requirements. The Company intends to continue to negotiate with the lending
banks to obtain an amendment  of the credit  agreement  that  relaxes  financial
covenants  and provides  for an adequate  lending  commitment,  but thus far the
banks have not  indicated a willingness  to enter into such an  amendment.  As a
result  of the  banks'  ability  to  declare  all of the  outstanding  principal
immediately  due and payable after  November 30, 2000,  the entire amount of the
indebtedness  ($155.6  million at November 17, 2000) has been  reclassified as a
current liability as of September 30, 2000.

<PAGE>

4.       RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

During the three months ended  September 30, 2000,  the Company  decided to exit
the Las Cruces market and terminate its service  agreement  with the  affiliated
medical  group and closed one of its sites in  Cullman,  AL.  The  Company  also
converted its affiliation structure with a medical group in Pittsfield,  MA from
a traditional service agreement to an ancillary services model. Together,  these
operations accounted for 6.6% and 8.9% of the Company's net revenue for the nine
months  ended  September  30,  2000  and  the  year  ended  December  31,  1999,
respectively.  Also during this  period,  the  Company  reorganized  PMC Medical
Management, its subsidiary that provides capitation management services.

The conversion of the agreement  with the  Pittsfield  group was a result of the
physicians' decision to dissolve their group following the departures of several
specialty  physicians as a result of disagreements  concerning the allocation of
income  within the group.  The  Company  has  terminated  its  original  service
agreement with the group and entered into modified agreements with approximately
half the remaining physicians who were shareholders of the group. The actions in
Las Cruces and Cullman resulted from the Company's determination that continuing
these operations would not be beneficial for the Company.

The reorganization of PMC Medical Management consists of a substantial staff and
facilities  reduction and results from the fact that managed care has not become
as significant a factor in the Company's affiliated medical groups as originally
anticipated  in 1997 when the  Company  acquired  PMC  Medical  Management.  PMC
Medical  Management's  primary  future  role will be to  support a managed  care
initiative  that began in 1999 with the affiliated  groups and IPA in Pittsfield
and is expected to continue under the modified agreements with the physicians in
that market.

Primarily as the result of the terminations,  conversion and reorganization, the
Company  recorded  restructuring,  impairment and other charges of approximately
$60.3 million  during the three months ended  September  30, 2000.  Considerable
management  judgement  is  necessary  to estimate  fair value and,  accordingly,
actual results could vary significantly from such estimates. The following table
summarizes the principal components of these charges (in thousands):

     Non-recoverable management fees and bad debts           $            7,710
     Reserves for advances to physicians                                  7,849
     Impairment of intangible assets                                     35,646
     Other clinic expenses                                                1,203
     Restructuring costs                                                  7,848
                                                             ------------------
              Total charges                                  $           60,256
                                                             ==================

Restructuring  costs include  approximately $3.7 million for severance and other
employee-related   costs.   As  part  of  the   terminations,   conversion   and
reorganization,  the  Company  plans  to  eliminate  substantially  all  of  the
approximately 400 employees at the locations  mentioned above.  During the three
months ended September 30, 2000,  approximately $320,000 in severance costs were
paid to terminated employees.

The  Company  expects  to  record  an  additional   estimated  $1.4  million  in
restructuring   charges  in  the  fourth  quarter.   It  is  expected  that  the
restructuring  actions will be  substantially  completed by the end of the first
quarter of 2001.

5.       INCOME TAXES:

Due to significant losses during the three-month period ended September 30, 2000
and certain  other  factors,  deferred  tax assets have been  reduced in part by
valuation allowances established in the third quarter of 2000.
<PAGE>

6.       SUPPLEMENTAL CASH FLOW INFORMATION:

In the first quarter of 2000,  the Company  converted  approximately  $35,000 of
convertible  subordinated  notes payable to a medical group into 3,912 shares of
the Company's common stock.

In the  first  nine  months  of 2000  and  1999,  an  affiliated  medical  group
surrendered  39,700 and 32,896  shares,  respectively,  of the Company's  common
stock as partial payment of an outstanding note balance and accrued interest.

In the third quarter of 2000,  the Company  acquired  approximately  $250,000 of
equipment through the issuance of a note payable.
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

ProMedCo, headquartered in Fort Worth, Texas, is a medical services company that
coordinates and manages the delivery of a wide variety of healthcare services in
non-urban  communities.  We currently  operate in 26 communities  throughout the
United  States,  where  we are  affiliated  with  medical  groups  comprised  of
approximately 770 physicians and 140 mid-level  providers.  In addition,  we are
associated  with  approximately  1,800  physicians  in  associated   independent
practice association (IPA) networks.

Until recently, when affiliating with a medical group we typically purchased the
group's  non-real  estate  operating  assets and entered into a 40-year  service
agreement  with the group in exchange  for  various  combinations  of cash,  our
common stock,  other  securities  issued by us and/or our  assumption of certain
liabilities.  Under these  service  agreements,  we receive a fixed  percentage,
typically  15%  to  20%,  of  the  group's  operating  income  before  physician
compensation and a percentage, ranging from 15% to 50%, of income from ancillary
services added  following our  affiliation.  We also typically earn initial fees
for  interim  management,   strategic  and  financial  planning  and  management
consulting  services  provided  during the period leading to our affiliation and
share between 25% and 50% of each group's surplus or deficit under  risk-sharing
arrangements pursuant to capitated managed care contracts.

Since 1999 we have also been developing alternative affiliation structures that,
unlike  our   traditional   asset  purchase   model,   require  minimal  initial
investment--a  management  services  model,  an ancillary  services  model and a
network  services  model.  We  have  entered  into  one  affiliation  under  the
management  services  model and one  affiliation  under the  ancillary  services
model,  with a second  ancillary  services  affiliation  currently  subject to a
letter of  intent.  Under the  management  services  structure,  we enter into a
25-year  service  agreement  under which we receive  between 7.5% and 10% of the
group's  operating  income  and 6% to 8% of  revenues  and  50% of  income  from
ancillary  services added following our affiliation.  The service agreement also
allows  the  group to  terminate  the  agreement  for any  reason  at  five-year
intervals, provided the group purchases any of the practice assets then owned by
us and pays us a multiple of  additional  cash flows  created  since the initial
affiliation  date. Under the ancillary service model, we enter into an agreement
to develop  ancillary  services with a medical  group,  but do not take over the
day-to-day management of its clinic. We earn 6% to 8% of the revenues and 50% of
the income from these ancillary  services.  The network  services model is still
under  development  but we expect to begin  offering it within the next three to
six months. We do not anticipate  significant future affiliations  utilizing the
asset purchase model.

Substantially  all of our net  revenue to date  consists  of total  revenue  for
services  rendered by our affiliated  medical groups  (reported at the estimated
realizable  amounts  from  patients,  third-party  payors  and  others,  net  of
contractual and other adjustments including an allowance for doubtful accounts),
less  amounts  paid  to the  groups,  consisting  primarily  of the  cost of the
services of the groups' physicians.  Under our traditional service agreements we
provide each medical group with the facilities and equipment used in its medical
practice. Under these service agreements,  as well as those under our management
services  model,  we  also  assume  responsibility  for  the  management  of the
operations  of the  clinic  and  employ  substantially  all of the  non-provider
personnel.  We do not  consolidate  the  operating  results and  accounts of the
medical  groups.  Revenue under  alternative  affiliation  structures is not yet
significant.
<PAGE>

Results of Operations

After beginning  operations in our first two  communities  1995, we entered five
additional  communities in 1996, six in 1997,  seven in 1998,  four in 1999, and
two during the nine months  ended  September  30,  2000.  Through June 30, 2000,
changes in results of operations have been generally the result of our expansion
into additional  communities and same-market growth in our existing communities.
During  the  third  quarter  of 2000,  however,  we  experienced  a  substantial
reduction in new  affiliations  and thus in the initial  interim  management and
consulting   services  fees  that  have  normally  been   associated   with  new
affiliations.  As a result of our future emphasis on the alternative affiliation
structures described above, we do not anticipate that new service agreements and
the  interim  management,   strategic  and  financial  planning  and  management
consulting  fees  associated  with the asset  purchase and  management  services
models, will be as significant a factor in our future growth as in the past.

Also during the three months ended  September  30, 2000,  we decided to exit the
Las  Cruces,  NM market  and  closed  one of the sites in  Cullman,  AL. We also
converted  our  affiliation  structure  with  an  affiliated  medical  group  in
Pittsfield,  MA from a traditional asset purchase model to an ancillary services
model. Together, these operations accounted for 6.6% and 8.9% of our net revenue
for the nine months  ended  September  30, 2000 and the year ended  December 31,
1999,  respectively.   Also  during  this  period  we  reorganized  PMC  Medical
Management, our subsidiary that provides capitation management services.

The conversion of the agreement  with the  Pittsfield  group was a result of the
physicians' decision to dissolve their group following the departures of several
specialty  physicians as a result of disagreements  concerning the allocation of
income within the group. We have terminated our original service  agreement with
the group and entered  into  modified  agreements  with  approximately  half the
remaining  physicians  who were  shareholders  of the group.  Our actions in Las
Cruces  and  Cullman  resulted  from our  determination  that  continuing  these
operations would not be beneficial for our Company.

The reorganization of PMC Medical Management consists of a substantial staff and
facilities  reduction and results from the fact that managed care has not become
as  significant  a  factor  in  our  affiliated  medical  groups  as  originally
anticipated  in 1997,  when we  acquired  PMC  Medical  Management.  PMC Medical
Management's  primary  future role will be to support a managed care  initiative
begun in 1999 with the affiliated  groups and IPA in Pittsfield that is expected
to continue under the modified agreements with the physicians in that market.
<PAGE>

Primarily as the result of the terminations,  conversion and reorganization,  we
recorded  restructuring,  impairment  and other charges of  approximately  $60.3
million during the three months ended September 30, 2000 and will record another
estimated $1.4 million in the fourth quarter.  Considerable management judgement
is necessary to estimate fair value and, accordingly,  actual results could vary
significantly from such estimates.  The following table summarizes the principal
components of these charges (in thousands):

    Non-recoverable management fees and bad debts            $            7,710
    Reserves for advances to physicians                                   7,849
    Impairment of intangible assets                                      35,646
    Other clinic expenses                                                 1,203
    Restructuring costs                                                   7,848
                                                             ------------------
             Total charges                                   $           60,256
                                                             ==================

Restructuring  costs include  approximately $3.7 million for severance and other
employee-related   costs.   As  part  of  the   terminations,   conversion   and
reorganization,  we plan to eliminate substantially all of the approximately 400
employees  at the  locations  mentioned  above.  During the three  months  ended
September  30,  2000,  approximately  $320,000 in  severance  costs were paid to
terminated  employees.  It is expected  that the  restructuring  actions will be
substantially completed by the end of the first quarter of 2001.

The  foregoing  restructuring,  impairment  and other  charges,  the  decline in
revenue of the medical groups associated with the events leading to the charges,
together  with the  decline  in interim  management  and  management  consulting
services  revenues  associated  with new  service  agreements,  all  combined to
adversely affect the results of the quarter.

The following  table sets forth the  percentages  of net revenue  represented by
certain items reflected in our condensed consolidated statements of operations.

<PAGE>

<TABLE>
<CAPTION>
                                                              Three Months Ended             Nine Months Ended
                                                                 September 30,                 September 30,
                                                          --------------------------    ---------------------------
                                                             2000           1999            2000           1999
                                                          -----------    -----------    -----------     -----------
<S>                                                          <C>             <C>           <C>             <C>

Net revenue                                                   100.0%          100.0%         100.0%         100.0%
Operating expenses:
         Clinic salaries and benefits                          45.7            34.4           37.5           35.2
         Clinic rent and lease expense                         12.1             8.7            9.9            8.9
         Clinic supplies                                       14.6            11.3           12.3           11.6
         Purchased medical services                            21.1            16.2           18.7           15.1
         Other clinic costs                                    18.9            13.0           14.6           12.7
         General corporate expenses                             5.4             2.8            3.7            2.9
         Depreciation and amortization                         54.9             3.7           18.5            3.8
         Interest expense                                       5.7             2.1            4.4            1.7
         Restructuring charge                                  10.8             -              3.1              -
                                                            -------        --------       --------        --------
Income (loss) before provision for (benefit from)
   income taxes                                               (89.2)            7.8          (22.7)           8.1
Provision for (benefit from) income taxes                     (28.9)            3.0           (7.1)           3.1
                                                            -------        --------       --------        -------
Net income (loss) before extraordinary charge                 (60.3)            4.8          (15.6)           5.0
Extraordinary charge, net of tax benefit                        -               -              0.2             -
                                                            -------        --------       --------        --------
Net income (loss)                                             (60.3)%           4.8%         (15.8)%          5.0%
                                                            =======        ========       ========        =======

Other Financial Information:
     Total revenue, amounts in thousands (1)              $ 112,978     $   113,658      $ 368,397    $   328,956
     Payor breakdown (2)
         Commercial and discounted fee-for-service             42.4%           37.7%          41.8%          38.2%
         Medicare/Medicaid                                     31.2            29.9           30.4           29.3
         Capitation                                            15.3            17.2           15.7           17.1
         Other                                                 11.1            15.2           12.1           15.4
                                                            -------        --------       --------        -------
                                                              100.0%          100.0%         100.0%         100.0%
                                                            =======        ========       ========        =======
</TABLE>


     (1)  Total  revenue   represents  amounts  received  for  professional  and
          ancillary  services and for other services,  such as contract billing,
          medical  directorship  and  interim  management.   These  amounts  are
          recorded at the estimated  realizable amounts,  net of contractual and
          other adjustments  including an allowance for doubtful  accounts.  Our
          net revenue represents revenue, reduced by amounts paid to the medical
          groups.

     (2)  As a percentage of total revenue.

<PAGE>

Three Months Ended September 30, 2000 Compared With Three Months Ended September
30, 1999

     Net revenue  decreased  by 14.2% to $72.4  million  for the  quarter  ended
September 30, 2000, from $84.3 million for the quarter ended September 30, 1999.
The decrease resulted primarily from that portion, aggregating $15.5 million, of
the non-recurring  restructuring  and other charges that adversely  affected net
revenue.  We also  experienced  declines in net revenue from the medical  groups
with which we are  terminating  or  converting  our  service  agreements  and in
interim  management  fees and  consulting  services  revenue  as a result of the
decline in new affiliations.  These declines,  aggregating  approximately  $22.9
million,  were partially offset by increased  revenue derived from our remaining
affiliated  medical groups.  Excluding the effects of these three groups and the
related  adjustments,  same market growth in net revenue  (from new  physicians,
increased   productivity  of  existing   physicians  and  additional   ancillary
services)for  communities in which we operated for longer than one year was over
10% for the three months ended  September 30, 2000 compared with the same period
ended  September  30,  1999.  The  remainder  of the growth in net  revenue  was
attributable to communities we entered since July 1, 1999.

The  restructuring,  impairment  and other  charges  impact  the  evaluation  of
operating expenses in two ways. First, the charges taken into operating expenses
have caused those expense  categories to rise.  Second,  the charges against net
revenue lower the base on which the operating expenses are typically  evaluated.
As a result,  overall  clinic costs as a percentage of net revenue  increased to
112.4% for the  quarter  ended  September  30,  2000,  compared to 83.6% for the
quarter  ended  September 30, 1999.  Excluding the effects of the  non-recurring
charges,  operating expenses for the three months ended September 30, 2000 would
have been 91.3% of net  revenue,  which is still  substantially  higher than the
same period a year ago. This increase results from the higher operating  expense
margins  in  the  three  locations  where  reorganization  or  terminations  are
occurring and from the declines in interim  management and  consulting  services
revenues associated with the decline in new affiliations.

General corporate  expenses as a percentage of net revenue increased to 5.4% for
the quarter  ended  September  30, 2000,  compared to 2.8% for the quarter ended
September 30, 1999. Excluding the effects of the non-recurring charges,  general
corporate  expenses for the three months ended September 30,2000 would have been
4.4% of net revenue.  The primary  reason for the increase in general  corporate
expenses relates to legal expenses  incurred with the termination and conversion
of the service agreements discussed earlier.  During the quarter ended September
30, 2000, legal expenses were approximately $913,000,  compared to approximately
$124,000  for the same  period in 1999.  Management  expects  legal  expenses to
remain at or about the same  level  during the  fourth  quarter  of  2000,before
declining in 2001. In addition to legal  expenses,  general  corporate  expenses
increased  over  prior  year  levels  due  to the  addition  of  management  and
technology infrastructure.

Depreciation and amortization as a percentage of net revenue  increased to 54.9%
for the quarter ended September 30, 2000, compared to 3.7% for the quarter ended
September 30, 1999.  This increase  resulted  primarily  from the  impairment of
intangible  assets and the  adjustments  to bring  property and equipment to its
estimated net realizable value associated with the termination and conversion of
service agreements with the medical groups discussed earlier.
<PAGE>

Net interest  expense as a percentage  of net revenue  increased to 5.7% for the
quarter  ended  September  30,  2000,  compared  to 2.1% for the  quarter  ended
September 30, 1999.  Excluding  the effects of the  non-recurring  charges,  net
interest  expense for the three months ended  September 30, 2000 would have been
4.7% of net revenue.  The increase is primarily the result of an increase in the
effective  interest  rate  under  our  credit  facility,  which  was 11.2% as of
September 30, 2000, compared to 7.4% as of September 30, 1999.

The benefit from income taxes  includes  adjustments  to bring our  year-to-date
effective rate to 23.8%, which is our estimated  effective rate for all of 2000.
This rate is less than the statutory  federal rate of 35% because certain of the
restructuring  charges recorded in the third quarter of 2000 are not immediately
deductible  for  income  tax  purposes,  but will be  carried  forward to future
periods.  The amounts  carried  forward  have been  reduced in part by valuation
allowances established in the third quarter of 2000.

Nine Months Ended  September 30, 2000 Compared With Nine Months Ended  September
30, 1999

Net  revenue  increased  by 9.5% to $255.7  million  for the nine  months  ended
September 30, 2000,  from $233.4 million for the nine months ended September 30,
1999.   This  increase  was  offset  by  the  $15.5  million  of   non-recurring
restructuring and other charges in the third quarter of 2000 described  earlier,
as well as  declines in net  revenue  from the medical  groups with which we are
terminating or converting our service  agreements and in interim management fees
and consulting  services revenue as a result of the decline in new affiliations.
This decline was offset by a 30.5%  increase in net revenue  from our  remaining
medical  groups for the nine month period ended  September  30, 2000 compared to
the same period in 1999.  Excluding the effects of the previously  noted medical
groups and the related  adjustments  discussed above,  same market growth in net
revenue (from new physicians,  increased productivity of existing physicians and
additional  ancillary  services) for communities in which we operated for longer
than one year was  approximately  9.5% for the nine months ended  September  30,
2000  compared with the same period ended  September 30, 1999.  The remainder of
the growth in net revenue  was  attributable  to  communities  we entered  since
January 1, 1999.

Overall  clinic costs as a percentage of net revenue  increased to 93.0% for the
nine months  ended  September  30,  2000,  compared to 83.5% for the nine months
ended September 30, 1999.  Excluding the effects of the  non-recurring  charges,
operating expenses for the three months ended September 30, 2000 would have been
87.2% of net revenue, which is still substantially higher than the same period a
year ago. This increase  results from the higher  operating  expense  margins in
those locations where  reorganization or terminations are occurring and from the
declines in interim management and consulting  services revenues associated with
the slow down in new affiliation activity.

General corporate  expenses as a percentage of net revenue increased to 3.7% for
the nine months ended  September 30, 2000,  compared to 2.9% for the nine months
ended September 30, 1999.  Excluding the effects of the  non-recurring  charges,
general  corporate  expenses for the three months ended September 30, 2000 would
have been 3.5% of net revenue..  The primary  reason for the increase in general
corporate  expenses relates to legal expenses  incurred with the termination and
conversion of the service  agreements  discussed  earlier.  For the  nine-months
ended  September  30,  2000,  legal  expenses  were  approximately  $1.5 million
compared to  approximately  $317,000 for the same period in 1999. In addition to
legal  expenses,  general  corporate  expenses  increased due to the addition of
management and technology infrastructure.
<PAGE>

Depreciation and amortization as a percentage of net revenue  increased to 18.5%
for the nine months  ended  September  30,  2000,  compared to 3.8% for the nine
months ended  September 30, 1999.  This  increase  resulted  primarily  from the
impairment of intangible  assets and  adjustments to bring the value of property
and  equipment  down to its  estimated  net  realizable  value  relating  to the
termination  and  conversion of the service  agreements  with the medical groups
discussed earlier.

Net interest  expense as a percentage  of net revenue  increased to 4.4% for the
nine months ended September 30, 2000, compared to 1.7% for the nine months ended
September 30, 1999.  Excluding  the effects of the  non-recurring  charges,  net
interest  expense for the three months ended  September 30, 2000 would have been
4.1%.  This  increase is  primarily  the result of an increase in the  effective
interest  rate under our credit  facility,  which was 11.2% as of September  30,
2000  compared to 7.4% as of September  30, 1999.  In addition,  interest on the
subordinated notes payable which were outstanding  between January and June 2000
as part of the convertible  preferred stock  transaction also contributed to the
increase in net interest expense.

The benefit from income taxes reflects an effective rate of 23.8%,  which is our
estimated  effective rate for all of 2000.  This rate is less than the statutory
federal rate of 35% because certain of the restructuring charges recorded in the
third quarter of 2000 are not  immediately  deductible  for income tax purposes,
but will be carried forward to future periods.  The amounts carried forward have
been reduced in part by valuation allowances.

Liquidity and Capital Resources

At September 30, 2000, we had working  capital of $(86.0)  million,  compared to
$52.1  million at December 31, 1999.  The decrease in working  capital  resulted
primarily  from the  reclassification  of our  borrowings  under the bank credit
facility from long-term to current  liabilities based on our current status with
our bank group discussed later in this section.  In addition,  certain  deferred
purchase price obligations that were previously  classified as long-term are now
classified  as current  liabilities  as of  September  30, 2000 due to a lack of
availability under our credit facility.  The amount outstanding under the senior
credit facility is $155.6 million at November 17, 2000.

In June 2000, we sold $55.0 million of convertible  preferred  stock and amended
and expanded our bank credit agreement. Application of the net proceeds from the
sale of the stock to reduce the amount  outstanding  under the revolving  credit
portion of the credit facility,  together with the credit agreement  amendments,
left us at June 30, 2000 with $43.5 million  available  for borrowing  under the
facility to fund  acquisitions and general working  capital,  subject to certain
conditions in the credit  agreement.  Although we borrowed $23.0 million of that
amount  subsequent to the amendment and expansion of the credit  facility,  as a
result of factors  described below we are currently unable to borrow  additional
amounts under the credit facility.
<PAGE>

 In  connection  with  the  conversion  of our  affiliation  structure  with the
Pittsfield  medical group,  we offset $6.5 million of  convertible  subordinated
notes payable to the group's  shareholders and $3.0 million of deferred purchase
price  payable to the group  against  the  group's  obligations  to us under the
termination provisions of the service agreement.

As amended in June 2000,  our credit  facility is comprised  of a $57.5  million
term loan  maturing  March 30, 2006, a $20.0 million term loan maturing June 12,
2006, and a $100.0 million revolving  commitment that expires December 17, 2003.
The term loans require scheduled quarterly principal payments beginning in March
2003.  The interest  rate is set at our option and varies based on our leverage,
as follows:  (i) the prime rate plus 1.0% to 3.5%, or (ii) the  Eurodollar  rate
plus 2.5% to 3.5%.  As of September 30, 2000,  the  effective  interest rate was
11.2%. The credit agreement contains various  restrictive  covenants,  including
limitations on the use of borrowed  proceeds,  as well as affirmative  covenants
including  requirements  to  maintain  specified  financial  ratios.  The credit
facility is secured by  substantially  all our assets and contains  requirements
for the furnishing of various security documents to the lending banks.

Due  primarily to our  continuing  inability  to provide the lending  banks with
certain documents  relating to their security interest in our assets, we were in
violation of certain provisions of the credit agreement during the third quarter
of 2000.  The  lending  banks  also  asserted  that we were in breach of another
covenant  as a result  of our  termination  of the  service  agreement  with the
Pittsfield group discussed above. As a result,  the banks limited the amounts we
were able to borrow during the third quarter of 2000 and  restricted our uses of
the borrowed proceeds.  In light of these circumstances,  together with the fact
that we were not in compliance with certain of the credit agreement's  financial
covenants  as of  September  30,  2000,  we requested an amendment of the credit
agreement  that would  include (i) waivers by the lending  banks of all covenant
defaults,  (ii) modification of the financial covenants,  and (iii) a commitment
to permit future  borrowings at a level  sufficient to fund our working  capital
requirements  for the next 12 to 15 months.  The lending  banks have declined to
enter into such an  amendment,  and have  instead  agreed  only to forbear  from
taking any action as a result of the  existing  defaults  through  November  30,
2000, and to fund a single payment to meet our immediate cash  requirements.  We
intend to continue to negotiate with the lending banks to obtain an amendment of
the credit  agreement  that  relaxes  financial  covenants  and  provides for an
adequate  lending  commitment,  but thus far the  banks  have  not  indicated  a
willingness to enter into such an amendment.

Net cash provided by operations for the nine months ended September 30, 2000 was
$4.2 million.  Our net loss,  combined with  depreciation  and  amortization and
deferred  taxes,  an  increase  in  accounts  receivable  and a decrease  in the
combination  of accrued  expenses and other  liabilities  created a use of $15.1
million.  This was offset by provisions of cash of $19.3 million  resulting from
decreases in management fees receivable,  due from affiliated medical groups and
prepaid expenses and other assets, and increases in accounts payable and payable
to affiliated medical groups.
<PAGE>

We had  aggregate  cash  expenditures  for  purchases of clinic  assets of $29.2
million for the nine months  ended  September  30, 2000.  Of this amount,  $11.2
million  related  primarily  to deferred  payments  associated  with  previously
completed  acquisitions  and $18.0 million related to acquisitions  completed in
the first nine months of 2000. Our capital expenditures amounted to $5.1 million
for the nine months  ended  September  30,  2000.  Although  each of the service
agreements with our affiliated  medical groups  requires us to provided  capital
for equipment,  additional physicians and other major expenditures,  we have not
committed a specific  amount in  advance.  Capital  expenditures  are made based
partially  upon the  availability  of funds,  the sources of funds,  alternative
projects and an acceptable return on investment.

During the first  nine  months of 2000,  we loaned  $3.4  million to  affiliated
medical  groups and to affiliated  physicians.  Loans totaling $2.3 million were
used for new physicians  starting their  practice.  Additionally,  in connection
with a 1999  affiliation,  we lent an  affiliated  medical  group $1.1  million,
during  the  second   quarter  of  2000,  who  used  the  proceeds  to  purchase
split-dollar life insurance policies for the physicians in the group.

We had cash and cash  equivalents  of $10.1  million at September  30, 2000.  In
addition  to this,  our  current  principal  source  of  liquidity  is  accounts
receivable  ($68.8  million at September 30, 2000).  This level of liquidity may
not be sufficient to meet our short-term  working  capital needs. As a result of
our limited  working  capital and our  inability  to obtain an  amendment of the
credit agreement,  we may be unable to continue as a going concern. If we do not
obtain an amendment,  the lending  banks could  declare all amounts  outstanding
under the credit facility immediately due and payable.

We  have  been  advised  by our  independent  public  accountants  that,  if the
contingency  relating to our bank  financing has not been resolved  prior to the
completion of their audit of our consolidated  financial statements for the year
ending December 31, 2000, their auditors' report on those consolidated financial
statements will contain a going concern modification for that contingency.

Forward-Looking Statements

This report includes  "forward-looking  statements" under the Private Securities
Litigation Reform Act of 1995 about anticipated results, including statements as
to operating results,  liquidity and capital  resources,  and expansion into and
within additional communities.  These forward-looking  statements are based upon
our  internal  estimates,  which are  subject  to change  because  they  reflect
preliminary  information and our  assumptions.  Thus, a variety of factors could
cause  our  actual  results  and  experience  to  differ   materially  from  the
anticipated   results  or  other   expectations   we  have   expressed   in  the
forward-looking  statements.  The  factors  that could cause  actual  results or
outcomes to differ from our  expectations  include our ability to: o continue to
operate profitably;
     o    expand in our existing communities;
     o    establish operations in additional communities; and
     o    obtain  additional  financing upon terms  acceptable to us;
along with the  uncertainties  and other factors described in this report and in
our public filings and reports.

<PAGE>
Item 2. Changes in Securities and Use of Proceeds

In May 2000, the Company  issued 178,362 shares of Common Stock to  stockholders
of a physician group in connection with December 1997 affiliation. In June 2000,
the Company issued 405,000  shares of Series A Convertible  Preferred  Stock and
125,000  shares of Series B Convertible  Preferred  Stock to a private  investor
group.  These issuances were exempt from registration  under the Securities Act,
pursuant to section 4(2) of the Act as they did not involve any public offering.


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

The Company held a special  meeting of  stockholders  on June 15,  2000.  At the
meeting,  the  stockholders  approved the second of a two-stage  transaction  in
which the Company issued an aggregate of 550,000 shares of convertible preferred
stock to an investor group for aggregate gross proceeds of $55 million.

The  voting  results  for  the  approval  of  the  convertible  preferred  stock
transaction are as follows:

         For                      11,713,398
         Against                   1,558,531
         Abstain                      45,751

The Company held its annual meeting of stockholders on September 8, 2000. At the
meeting,  the  stockholders  elected H. Wayne Posey,  Richard E. Ragsdale and E.
Thomas Chaney as Class III members of the Board of Directors with terms expiring
in 2003.  Other members of the Board of Directors whose terms continue after the
meeting include James F. Herd, M.D., Charles J. Buysse,  M.D. and Curtis S. Lane
who are Class I directors  with terms expiring in 2001, and Jack W. McCaslin and
Sanjeev K. Mehra who are Class II directors with terms expiring in 2002.

The voting results of the election of directors are as follows:

                                      Votes              Withheld
               Nominee:                For               Authority
               -------                 ---               ---------
       H. Wayne Posey                35,752,199           357,453
       Richard E. Ragsdale           35,960,999           148,653
       E. Thomas Chaney              35,960,249           149,403


Item 5.  Other Information.

On November 1, 2000 The Nasdaq Stock Market  notified the Company that,  because
the  Company's  Common Stock had failed to maintain a minimum bid price of $1.00
over the preceding 30 consecutive trading days as required for continued listing
on the Nasdaq  National  Market,  unless  the bid price is at least  $1.00 for a
minimum of 10  consecutive  trading  days prior to January  30,  2001 the Common
Stock will be delisted at the opening of business on February 1, 2001.

<PAGE>

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

         (a)      Exhibits:

                  11       Computation of Per Share Earnings
                  27       Financial Data Schedule

         (b)      Reports on Form 8-K

                  None.


<PAGE>

                             SIGNATURES


Pursuant to the  requirements  of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned  thereunto
duly authorized.

<TABLE>
<CAPTION>

Signature                                                 Title                                    Date
<S>                                            <C>                                         <C>
/s/ H. WAYNE POSEY
--------------------------------------
H. Wayne Posey                                  Chairman, President, Chief Executive         November 20, 2000
                                                Officer, and Director
                                                (Chief Executive Officer)

/s/ ROBERT D. SMITH
--------------------------------------
Robert D. Smith                                 Senior Vice President - Finance and          November 20, 2000
                                                Chief Financial Officer
                                                (Chief Accounting Officer)

</TABLE>

<PAGE>

PROMEDCO MANAGEMENT COMPANY
EXHIBIT 11
Computation of Per Share Earnings
(All amounts are expressed in thousands, except for earnings per share)
<TABLE>
<CAPTION>
                                                              Three Months Ended             Nine Months Ended
                                                                 September 30,                 September 30,
                                                          --------------------------    ---------------------------
                                                             2000           1999            2000           1999
                                                          -----------    -----------    -----------     -----------
<S>                                                       <C>            <C>            <C>            <C>

BASIC
     Weighted average shares outstanding                      21,177         21,043         21,786          20,873
     Contingently issuable shares in business
         combinations                                            -               10            -               253
         --                                                ---------     ----------     ----------      ----------
     Number of common shares outstanding                      21,177         21,053         21,786          21,126
                                                           =========     ==========     ==========      ==========

DILUTED
     Weighted average shares outstanding                      21,177         21,043         21,786          20,873
     Contingently issuable shares in business
        combinations                                            -                10            -               253
     Net common shares issuable on exercise of certain
        stock options and warrants (1)                          -             1,324            -             1,559
     Net common shares issuable on conversion of
        preferred stock(2)                                      -                -             -                -
     Other dilutive securities(2)                               -               601            -               606
                                                            --------     ----------     ----------      ----------
     Number of common shares outstanding                      21,177         22,978         21,786          23,291
                                                            ========     ==========     ==========      ==========

Net income (loss) available to common stockholders         $  48,000)    $    4,082     $  (44,875)     $   11,778
Dividends earned assuming conversion of preferred stock           -              -              -               -
Interest expense, net of tax assuming conversion of
    convertible subordinated notes payable                        -              66             -              199
                                                            --------     ----------     ----------      ----------
                                                           $ (48,000)    $    4,148     $  (44,875)     $   11,977
                                                            =========     =========     ==========       =========

</TABLE>

(1)  Net common  shares  issuable  on  exercise  of certain  stock  options  and
     warrants are  calculated  based on the treasury  stock method to the extent
     the individual options and warrants are not anti-dilutive.
(2)  Redeemable  convertible  preferred stock and other dilutive  securities are
     calculated  based  on the  if-converted  method  to  the  extent  that  the
     securities are not anti-dilutive.