<PAGE>
 
================================================================================


                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                    Form 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
                      For the quarter ended March 31, 1997

                                       OR

                Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934
              For the transition period from _________ to _________

                         Commission File Number: 0-27364

                        AMISYS Managed Care Systems, Inc.

--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                                       13-3355918
----------------------------------------         -------------------------------
   (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                       Identification No.)

    30 W. Gude Drive, 5th floor
       Rockville, Maryland                                    20850
----------------------------------------         -------------------------------
(Address of principal executive offices)                   (Zip Code)
       Registrant's telephone number, including area code: (301) 251-8600
          Securities registered pursuant to Section 12(b) of the Act:
                                Not Applicable
          Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.001 par value
--------------------------------------------------------------------------------
                                 Title of Class

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, and (2) has been subject to such filing requirements
for the past 90 days. Yes X   No
                         ---    ---

As of April 25, 1997, there were 7,787,100 outstanding shares of Common Stock,
par value $.001 per share of the Registrant.

================================================================================
<PAGE>
 
                        AMISYS Managed Care Systems, Inc.
                                      INDEX
                                    FORM 10-Q


<TABLE> 
<CAPTION> 
                                                                           Page

PART I - FINANCIAL INFORMATION
      <S>       <C>                                                        <C> 
      Item 1.   Financial Statements (unaudited)

                Balance Sheets at March 31, 1997 (unaudited) and          
                December 31, 1996                                            3

                Statements of Operations for the three months ended
                March 31, 1997 and 1996 (unaudited)                          4
  
                Statements of Cash Flows for the three months ended
                March 31, 1997 and 1996 (unaudited)                          5

                Notes to Financial Statements                                6

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


PART II - OTHER INFORMATION

      Item 1-6. Exhibits and Reports on Form 8-K                             9

SIGNATURES                                                                  10

INDEX TO EXHIBITS                                                           11
</TABLE> 

                                       2
<PAGE>
 
                        AMISYS Managed Care Systems, Inc.
                                 Balance Sheets
                    (dollars in thousands, except share data)
<TABLE> 
<CAPTION> 

                                             March 31,              December 31,
                                               1997                     1996
                                               ----                     ----
                                           (unaudited)
                               ASSETS
<S>                                         <C>                       <C>  
Current Assets
   Cash and cash equivalents                $ 23,398                  $ 24,087
   Short-term investments                      1,121                     2,389
   Accounts receivable, net                   13,800                    14,781
   Prepaid expenses and other                  1,665                       710
                                              ------                    ------
        Total current assets                  39,984                    41,967
                                              ------                    ------
Property and equipment, net                    3,082                     2,313
Purchased software, net                           88                       122
                                              ------                    ------
        Total assets                         $43,154                   $44,402
                                              ======                    ======
<CAPTION> 

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<S>                                          <C>                       <C> 
Current Liabilities                          
   Accounts payable and accrued expenses     $ 6,127                   $ 8,564
   Income taxes payable                          924                       772
   Deferred revenue, net                       1,286                     1,282
                                               -----                     -----
        Total current liabilities              8,337                    10,618
                                               -----                    ------
                                             
Commitments and contingencies                     --                        --
                                             
Stockholders' equity                         
   Common stock, $.001 par value;            
   25,000,000 shares authorized,             
   7,783,500 and 7,754,000 issued            
   and outstanding as of March 31,           
   1997 and December 31, 1996,               
   respectively                                    8                         8
  Retained earnings (deficit)                    957                       (56)
   Additional paid-in capital                 33,852                    33,832
                                              ------                    ------
                                             
        Total stockholders' equity            34,817                    33,784
                                              ------                    ------
        Total liabilities and stockholders'  
        equity                               $43,154                   $44,402
                                              ======                    ======
</TABLE> 



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

                                       3
<PAGE>
 
                        AMISYS Managed Care Systems, Inc.
                            Statements of Operations
                  (dollars in thousands, except per share data)
                                   (unaudited)

<TABLE> 
<CAPTION> 
                                                                                     Three Months Ended
                                                                                     ------------------
                                                                                        March 31,
                                                                                        --------
                                                                              1997                   1996
                                                                              ----                   ----
<S>                                                                         <C>                    <C> 
Revenues
 Systems sales                                                              $10,002                $ 8,233
 Support and maintenance                                                      2,260                  1,395
                                                                             ------                 ------
  Total revenues                                                             12,262                  9,628
                                                                             ------                 ------

Cost of revenues                                                              6,751                  5,168
                                                                             ------                 ------

Gross profit                                                                  5,511                  4,460

Operating expenses
   Sales and marketing                                                        1,033                    809
   Research and development                                                   1,974                  1,696
   General and administrative                                                 1,357                  1,141
                                                                             ------                -------
       Total operating expenses                                               4,364                  3,646
                                                                             ------                  -----

Operating income                                                              1,147                    814

Other income                                                                    321                    330
                                                                             ------                  -----

Income before income tax provision                                            1,468                  1,144
Income tax provision                                                            455                    407
                                                                             ------                -------
Net income                                                                  $ 1,013                $   737
                                                                             ======                 ======


Net income per common share and common share equivalent                     $  0.12                $  0.09
                                                                             ======                 ======


Weighted average number of common shares outstanding                          8,295                  8,124
                                                                              =====                  =====

</TABLE> 


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

                                       4
<PAGE>
 
                        AMISYS Managed Care Systems, Inc.
                            Statements of Cash Flows
                             (dollars in thousands)
                                   (unaudited)


<TABLE> 
<CAPTION> 
                                                                                                   Three Months Ended
                                                                                                        March 31,
                                                                                                        ---------
                                                                                              1997                    1996
                                                                                              ----                    ----

<S>                                                                                        <C>                        <C> 
Cash flows from operating activities:
  Net income                                                                               $  1,013                   $ 737
  Adjustments to reconcile net income  to cash flows provided
     by operating activities, net of non-cash items:
     Depreciation and amortization                                                              303                     187
     Provision for doubtful accounts                                                             30                      27
     Deferred stock compensation                                                                 12                      12
     (Decrease) increase in cash resulting from changes in assets and
     liabilities:
     Accounts receivable                                                                        951                    (849)
     Deposits, prepaid expenses and other                                                      (927)                    146
     Accounts payable and accrued expenses                                                   (2,437)                    622
     Taxes payable                                                                              152                     267
     Deferred revenue                                                                             4                    (132)
                                                                                             ------                  -------

          Net cash (used in) provided by operating activities                                  (899)                  1,017
                                                                                             -------                 ------

 Cash flows from investing activities:
     Purchase of property and equipment                                                      (1,039)                   (153)
     Purchase of available-for-sale securities                                                1,268                    (260)
     Software development costs                                                                 (27)                      -
                                                                                              -----                 --------
          Net cash used in investing activities                                                 202                    (413)
                                                                                              -----                 -------

Cash flows from financing activities:
     Issuance of common stock, net of costs                                                       8                       4
                                                                                              -----                    ----
          Net cash provided by financing activities                                               8                       4
                                                                                              -----                    ----
Net (decrease) increase in cash                                                                (689)                    608
Cash and cash equivalents at beginning of period                                             24,087                   5,354
                                                                                             ------                   -----
Cash and cash equivalents at end of period                                                  $23,398                  $5,962
                                                                                            =======                   =====
</TABLE> 



        The accompanying notes are an integral part of these statements.

                                       5
<PAGE>
 
                        AMISYS Managed Care Systems, Inc.
                          Notes to Financial Statements
                                 March 31, 1997
                                   (unaudited)


1.         Summary of Significant Accounting Policies

           Basis of Presentation

           The financial statements included herein for AMISYS Managed Care
Systems, Inc. (the "Company") have been prepared by the Company, without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
In management's opinion, the interim financial data presented includes all
adjustments (which include only normal recurring adjustments) necessary for a
fair presentation. Certain information and footnote disclosures normally
included in the financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. However, the Company believes that the disclosures are
adequate to understand the information presented. The results of operations for
the three month period ended March 31, 1997 are not necessarily indicative of
the operating results expected for the entire year. The financial statements
included herein should be read in conjunction with the Company's December 31,
1996 financial statements and notes thereto included in the Company's Annual
Report on Form 10-K.

           Earnings Per Share

The Financial Accounting Standards Board has issued Statement of Financial 
Accounting Standards No. 128, "Earnings per Shares" ("SFAS 128"), which is 
required to be adopted for financial statements issued after December 15, 1997. 
At that time, the Company will change the method currently used to compute 
earnings per share and restate all prior periods presented. The Company does not
expect the adoption of SFAS 128 to have a material impact on the Company's 
financial condition or results of operations.

                                       6
<PAGE>
 
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Overview

           The Company develops, sells and supports an integrated information
system solution, which includes the Company's proprietary software, third-party
hardware and software and implementation services (the "AMISYS System"), to
health care payers and providers who offer managed care products and services.
The Company's revenues are generated primarily from the sale of integrated,
enterprise-wide systems. The components of these revenues consist of a license
fee for the perpetual use of the software, sales of third-party hardware and
software and labor charges to install and configure each system to meet the
client's needs. The price of each system will vary based upon many factors
including the number of covered lives, the level of third-party products
required and the level of installation and configuration work provided by the
Company's staff. As of March 31, 1997, the Company had licenses with 85 AMISYS
System clients supporting 92 sites nationwide. During the three months ended
March 31, 1997 the Company added 5 new clients, while retaining all existing
AMISYS System clients.

           Revenues are recognized for system sales and fixed fee contracts on a
percentage of completion basis measured primarily by the ratio of (i) labor
hours incurred to install each specific contract to (ii) total estimated labor
hours. When the total estimated cost of a contract is expected to exceed the
contract price, the total estimated loss is charged to expense in the period
when the information becomes known. Because the Company generally bills for
installation and implementation on an hourly basis, these labor revenues are
recognized as billed. AMISYS Systems are installed over a period of time ranging
generally from nine months to a year with an average period of approximately
nine months. Because revenues do not begin to be recognized until a client signs
a contract and because the length of the installation process depends on factors
outside the control of the Company, the Company is unable to predict accurately
the amount of revenues it expects to recognize from system sales in any
particular period.

           The Company also recognizes revenues from support and maintenance
fees, custom modifications and the sale of third-party products. Support and
maintenance fees are billed monthly and recognized as revenues when billed.
Third-party products not related to system installations are billed and
recognized as revenues upon shipment to the client. Revenues from custom
modifications are generally recognized when billed, if the project is contracted
on a time and material basis. If the project is contracted for a fixed fee,
revenues are recognized on a percentage of completion basis measured primarily
by the ratio of (i) labor hours incurred to complete each specific project to
(ii) total estimated labor hours.

                                       7
<PAGE>
 
Results of Operations

Quarter Ended March 31, 1997 Compared to Quarter Ended March 31, 1996

The following table sets forth the results of operations presented in the
Statement of Operations as a percentage of total revenues for each period
indicated.

<TABLE> 
<CAPTION> 

                                                       1997             1996
                                                       ----             ----
<S>                                                    <C>              <C>     
Revenues
   Systems sales                                       81.6%            85.5%
   Support and maintenance                             18.4             14.5
                                                       ----             ----
      Total revenues                                  100.0            100.0

Cost of revenues                                       55.1             53.7
                                                       ----             ----

Gross profit                                           44.9             46.3

Operating expenses
   Sales and marketing                                  8.4              8.4
   Research and development                            16.1             17.6
   General and administration                          11.0             11.9
                                                       ----             ----
       Total operating expenses                        35.5             37.9
                                                       ----             ----

Operating income                                        9.4              8.5

Other income                                            2.6              3.4
                                                        ---              ---

Income before income tax provision                     12.0             11.9
   Income tax provision                                 3.7              4.2
                                                       ----             ----
Net income                                              8.3%             7.7%
                                                       =====            =====

</TABLE> 

           Revenues. For the three months ended March 31, 1997, revenues
increased 27% to $12.3 million from $9.6 million in the corresponding period in
1996. System sales revenue increased 21.5% to $10.0 million from $8.2 million
due to the growing base of systems currently being installed and higher revenues
per system sale.

           Revenues attributable to support and maintenance increased 62% to 
$2.3 million from $1.4 million in the corresponding period in 1996. Increases in
support and maintenance revenues over the corresponding period in the prior
year, due to an expanding client base and higher consulting revenue from
clients.

           Cost of Revenues. Cost of revenues increased 31% to $6.8 million from
$5.2 million in the corresponding period in 1996. During the quarter ended March
31, 1997, the number of full time employees engaged in the implementation,
configuration and support of the Company's integrated system solution, which
includes the Company's proprietary software, third-party hardware and 

                                       8
<PAGE>
 
software and implementation services (the "AMISYS System") remained constant at
81. During the corresponding period in 1996, the number of people engaged in the
implementation, configuration and support of the AMISYS System remained constant
at 61. Because of this 33% increase in personnel and the use of outside
contractors, cost of sales as a percent of revenues increased to 55% for the
three months ended March 31, 1997 versus 54% for the corresponding period in
1996.

           Sales and Marketing. Sales and marketing expenses increased 28% to
$1.0 million from $0.8 million in the corresponding period in 1996. This
increase reflects an increase in sales and marketing personnel to 29 at March
31, 1997 from 24 as of March 31, 1996. This increase in personnel was due to an
increase in the volume of requests for proposals and other sales efforts. The
Company has a long sales cycle for its products which involves detailed
demonstrations, contract negotiations and considerable client contact. For the
three months ended March 31, 1997, sales and marketing expenses remained
constant at 8% of revenues compared to the corresponding period in 1996.

           Research and Development. Research and development expenses increased
16% to $2.0 million from $1.7 million during the corresponding period in 1996.
Expenses increased as a result of an increase in personnel to 121 as of March
31, 1997 from 77 as of March 31, 1996. This increase reflects the Company's
efforts to migrate the current AMISYS System to a client/server environment.
Research and Development expense as a percentage of revenues declined to 16%
during the three months ended March 31, 1997 compared to 17% during the
corresponding period in 1996. The Company capitalized a small amount of
development costs during the quarter.

           General and Administrative. General and administrative expenses
increased 19% to $1.4 million from $1.1 million in the corresponding period of
1996. This increase was primarily attributable to an increase in personnel to 37
people at March 31, 1997 from 23 at March 31, 1996 to assist the Company in
managing its growth. General and administrative expenses as a percentage of
revenues declined to 11% during the three months ended March 31, 1997 compared
to 12% during the corresponding period in 1996.

           Income Taxes. For the three months ended March 31, 1997, income tax
expense increased to $0.5 million from $0.4 million in the corresponding period
in 1996. Income tax expense for the three months ended March 31, 1997 was 31% of
pre-tax income compared to 36% for the corresponding period in 1996. The
effective tax rates were lower than the statutory rates due to the timing of
deductions allowed for income tax purposes as opposed to the periods in which
they are recognized as expense in the Company's financial statements.

Liquidity and Capital Resources

           Cash flow used in operating activities for the three months ended
March 31, 1997 was approximately $0.9 million compared to cash provided by
operating activities of $1.0 million for the three month period ended March 31,
1996. The decrease is primarily due to reductions in accounts payable and
accrued expenses offset by higher net income and decreased accounts receivables
for the three month period ended in 1997. The Company believes that current
levels of cash flow from operations provide

                                       9
<PAGE>
 
the Company with sufficient liquidity to meet its operating needs. The Company's
non-operating cash flows are primarily attributable to capital expenditures and
the reinvestment of investment income. At March 31, 1997, the Company had $23.4
million in cash invested principally in a money market fund.

           At March 31, 1997, the Company had $13.8 million in accounts
receivable, net of allowance for doubtful accounts, and $1.3 million in deferred
revenues, substantially all of which is expected to be earned over the next
twelve months. The accounts receivable balance does not directly correspond to
revenues recognized as the Company recognizes revenues primarily using the
percentage of completion basis as the work is performed. Amounts billed to
customers may be deferred and recognized in a future period as the work is
performed and ordinarily revenues are recognized in periods subsequent to the
payment of the invoice.

           During the three months ended March 31, 1997, the Company began an
expansion of its office space under a new lease agreement in January 1997. Under
the terms of the new lease agreement the Company will expand its office space to
90,000 square feet in its current location from 46,000 square feet previously
leased. Improvements and furnishings for the office space are estimated to cost
$6.3 million. The landlord is contractually obligated to reimburse the Company
for a portion of the cost and the Company estimates that the total reimbursement
by the landlord will equal $1.7 million. The remaining costs will be funded
by the Company from available cash balances and future operations.

           Certain statements in this report are forward-looking statements that
involve risks and uncertainties. The Company's actual results may differ
materially from those expressed or implied by such statements. Readers should
consider these statements in the context of the factors contained in the
Company's report on Form 8-K filed July 19, 1996.

                                      10
<PAGE>

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.

None

Item 2.    Changes in Securities.

A total of 65,000 options to purchase 65,000 shares of Common Stock were
issued during the first quarter of 1997 at exercise prices ranging from $15.375
to $16.625 per share.

Item 3.    Defaults Upon Senior Securities.

None

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

None

Item 5.    Other Information.

On February 10, 1997 the Company entered into an agreement of merger with HBO &
Company ("HBOC") (Nasdaq: HBOC). The acquisition, which is subject to regulatory
and Company shareholder approval, is expected to be accounted for as a pooling
of interests. Terms of the acquisition call for shareholders of the Company to
receive 0.35 of a share of HBOC common stock for each share of the Company's
common stock.

A Registration Statement on Form S-4 was declared effective by the Securities 
and Exchange Commission on May 13, 1997.

The transaction was unanimously approved by the Company's Board of Directors and
is expected to be completed during the second quarter of 1997. The Company's 
special meeting of stockholder's will be held on June 13, 1997.

                                      11
<PAGE>
 
<TABLE> 
<CAPTION> 


Item 6.    Exhibits and Reports on Form 8-K

(a)        Exhibits:  The following are annexed as Exhibits:

           Exhibit Number                 Description
           --------------                 -----------
               <S>                    <C> 
               10.15                  Standard Form Agreement Between Owner and
                                      Contractor, dated January 6, 1997, between
                                      the Company and Rand Construction
                                      Corporation.

               10.16                  Agreement dated February 5, 1997 and
                                      revised March 18, 1997, between the
                                      Company and DBI Architects, P.C.

               11.01                  Computation of Earnings Per Share.

               27.01                  Financial Data Schedule.
</TABLE> 
-------------------------
+ CONFIDENTIAL PORTIONS OMITTED AND SUPPLIED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION.


(b) Reports on Form 8-K:The Company did not file a current report on Form 8-K
during the quarter ended March 31, 1997.


                                      12
<PAGE>
 
                                   SIGNATURES
                                   ----------

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized. The undersigned signs this report
pursuant to his responsibilities as Principal Financial Officer and a duly
authorized officer of the Registrant.

                                     AMISYS Managed Care Systems, Inc.


Date:      May 15, 1997             By:    /s/ Robert J. Sullivan
                                        ------------------------------
                                    Robert J. Sullivan
                                    Vice President, Chief Financial
                                    Officer, and Secretary and Treasurer
                                    (Principal Financial Officer and
                                    Principal Accounting Officer)

                                      13
<PAGE>
 
<TABLE> 
<CAPTION> 


                               INDEX TO EXHIBITS

Exhibit Number           Description
--------------           -----------
    <S>            <C>   
    10.15          Standard Form Agreement Between Owner and Contractor, dated
                   January 6, 1997, between the Company and Rand Construction
                   Corporation.

    10.16          Agreement dated February 5, 1997 and revised March 18, 1997,
                   between the Company and DBI Architects, P.C.


    11.01          Computation of Earnings Per Share.

    27.01          Financial Data Schedule.
</TABLE> 
    
                                      14