UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

                       For the period ended March 31, 2000

                                       OR

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


                         Commission File Number: 1-14316

                           APRIA HEALTHCARE GROUP INC.

             (Exact name of registrant as specified in its charter)



             DELAWARE                                     33-0488566
  (State or other jurisdiction of                      (I.R.S. Employer
   incorporation or organization)                    Identification Number)


   3560 HYLAND AVENUE, COSTA MESA, CA                        92626
(Address of principal executive offices)                   (Zip Code)

       Registrant's telephone number, including area code: (714) 427-2000

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
                                               -----      ------

There were 52,323,382  shares of common stock,  $.001 par value,  outstanding at
May 9, 2000.
<PAGE>


                           APRIA HEALTHCARE GROUP INC.

                                    FORM 10-Q

                       For the period ended March 31, 2000


PART I. FINANCIAL INFORMATION
-----------------------------
Item 1.           Financial Statements (unaudited)

                  Consolidated Balance Sheets

                  Consolidated Statements of Operations

                  Consolidated Statements of Cash Flows

                  Notes to Consolidated Financial Statements

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

Item 3.           Quantitative and Qualitative Disclosures About Market Risk

PART II.  OTHER INFORMATION
---------------------------
Item 1.           Legal Proceedings
Item 2.           Changes in Securities
Item 3.           Defaults Upon Senior Securities
Item 4.           Submission of Matters to a Vote of Security Holders
Item 5.           Other Information
Item 6.           Exhibits and Reports on Form 8-K


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


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           APRIA HEALTHCARE GROUP INC.

                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                            March 31,  December 31,
(dollars in thousands)                                                        2000        1999
---------------------------------------------------------------------------------------------------
                                                                           (unaudited)
                            ASSETS
CURRENT ASSETS
<S>                                                                         <C>          <C>
  Cash and cash equivalents .............................................   $  29,065    $  20,493
  Accounts receivable, less allowance for doubtful accounts of $49,409
    and $44,652 at March 31, 2000 and December 31, 1999, respectively....     151,837      149,767
  Inventories ...........................................................      22,221       18,505
  Deferred income taxes .................................................      42,990       42,595
  Prepaid expenses and other current assets .............................       7,973        7,665
                                                                            ---------    ---------
          TOTAL CURRENT ASSETS ..........................................     254,086      239,025

PATIENT SERVICE EQUIPMENT, less accumulated depreciation of $287,189
  and $277,915 at March 31, 2000 and December 31, 1999, respectively ....     126,675      126,486
PROPERTY, EQUIPMENT AND IMPROVEMENTS, NET ...............................      38,752       41,503
DEFERRED INCOME TAXES ...................................................      87,090       95,974
INTANGIBLE ASSETS, NET ..................................................     127,697      125,641
OTHER ASSETS ............................................................         420          422
                                                                            ---------    ---------
                                                                            $ 634,720    $ 629,051
                                                                            =========    =========

                   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable ......................................................   $  47,675    $  47,202
  Accrued payroll and related taxes and benefits ........................      27,970       26,478
  Accrued insurance .....................................................       9,601       10,866
  Other accrued liabilities .............................................      48,984       51,307
  Current portion of long-term debt .....................................      26,056       23,528
                                                                            ---------    ---------
          TOTAL CURRENT LIABILITIES .....................................     160,286      159,381

LONG-TERM DEBT ..........................................................     384,671      394,201

COMMITMENTS AND CONTINGENCIES ...........................................           -            -

STOCKHOLDERS' EQUITY
  Preferred stock, $.001 par value:  10,000,000 shares authorized;
    none issued .........................................................           -            -
  Common stock, $.001 par value:  150,000,000 shares authorized;
    52,245,202 and 52,054,974 shares issued and outstanding at
    March 31, 2000 and December 31, 1999, respectively ..................          52           52
  Additional paid-in capital ............................................     330,407      328,894
  Accumulated deficit ...................................................    (240,696)    (253,477)
                                                                            ---------    ---------
                                                                               89,763       75,469
                                                                            ---------    ---------

                                                                            $ 634,720    $ 629,051
                                                                            =========    =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>

                           APRIA HEALTHCARE GROUP INC.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (unaudited)
<CAPTION>
                                                                 Three Months Ended
                                                                      March 31,
                                                                ---------------------
(dollars in thousands, except per share data)                     2000         1999
-------------------------------------------------------------------------------------

<S>                                                             <C>          <C>
Net revenues ..............................................     $250,722     $228,294
Costs and expenses:
   Cost of net revenues:
      Product and supply costs ............................       49,255       45,325
      Patient service equipment depreciation ..............       18,853       17,746
      Nursing services ....................................          453          551
      Other ...............................................        2,940        2,447
                                                                --------     --------
                                                                  71,501       66,069
   Selling, distribution and administrative ...............      133,525      124,449
   Provision for doubtful accounts ........................       10,619        8,629
   Amortization of intangible assets ......................        2,440        1,873
                                                                --------     --------
                                                                 218,085      201,020
                                                                --------     --------
          OPERATING INCOME ................................       32,637       27,274
Interest expense, net .....................................       10,601       11,312
                                                                --------     --------
          INCOME BEFORE TAXES .............................       22,036       15,962
Income tax expense ........................................        9,255          400
                                                                --------     --------
          NET INCOME ......................................     $ 12,781     $ 15,562
                                                                ========     ========


Basic income per common share .............................     $   0.24     $   0.30
                                                                ========     ========

Diluted income per common share ...........................     $   0.24     $   0.30
                                                                ========     ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>

                           APRIA HEALTHCARE GROUP INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (unaudited)
<CAPTION>
                                                                                        Three Months Ended
                                                                                            March 31,
                                                                                      ---------------------
(dollars in thousands)                                                                  2000        1999
-----------------------------------------------------------------------------------------------------------

OPERATING ACTIVITIES
<S>                                                                                   <C>         <C>
  Net income ......................................................................   $ 12,781    $ 15,562
  Items included in net income not requiring (providing) cash:
     Provision for doubtful accounts ..............................................     10,619       8,629
     Depreciation and amortization ................................................     25,760      24,467
     Amortization of deferred debt costs...........................................        689       1,050
     Deferred income taxes and other ..............................................      8,418       1,568
  Changes in operating assets and liabilities, net of effects of acquisitions:
     Increase in accounts receivable ..............................................    (12,997)    (12,064)
     Increase in inventories ......................................................     (3,697)     (2,884)
     Increase in prepaids and other assets ........................................       (306)       (264)
     Increase in accounts payable .................................................        473       3,216
     (Decrease) increase in accrued expenses and other liabilities ................     (1,576)      5,958
  Net purchases of patient service equipment, net of effects of acquisitions ......    (18,920)    (14,826)
                                                                                      --------    --------

          NET CASH PROVIDED BY OPERATING ACTIVITIES ...............................     21,244      30,412

INVESTING ACTIVITIES
  Purchases of property, equipment and improvements,
     net of effects of acquisitions ...............................................     (1,708)     (1,687)
  Proceeds from disposition of assets .............................................         74         110
  Acquisitions and payments of contingent consideration ...........................     (4,860)     (4,835)
                                                                                      --------    --------

          NET CASH USED IN INVESTING ACTIVITIES ...................................     (6,494)     (6,412)

FINANCING ACTIVITIES
  Payments under term loan ........................................................     (5,000)     (6,938)
  Payments of other long-term debt ................................................     (2,691)     (1,835)
  Capitalized debt costs, net .....................................................          -        (680)
  Issuances of common stock .......................................................      1,513         150
                                                                                      --------    --------

          NET CASH USED IN FINANCING ACTIVITIES ...................................     (6,178)     (9,303)
                                                                                      --------    --------

NET INCREASE IN CASH AND CASH EQUIVALENTS .........................................      8,572      14,697
Cash and cash equivalents at beginning of period ..................................     20,493      75,475
                                                                                      --------    --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ........................................   $ 29,065    $ 90,172
                                                                                      ========    ========
</TABLE>
See notes to consolidated financial statements.
<PAGE>


                           APRIA HEALTHCARE GROUP INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A - BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of Apria
Healthcare  Group Inc.  ("Apria" or "the  company")  and its  subsidiaries.  All
significant intercompany transactions and accounts have been eliminated.

In the opinion of management,  all  adjustments,  consisting of normal recurring
accruals  necessary for a fair presentation of the results of operations for the
interim periods presented,  have been reflected herein. The unaudited results of
operations for interim periods are not necessarily  indicative of the results to
be  expected  for  the  entire  year.  For  further  information,  refer  to the
consolidated  financial  statements  and  footnotes  thereto  for the year ended
December 31, 1999, included in the company's 1999 Form 10-K.

NOTE B - RECLASSIFICATIONS AND USE OF ACCOUNTING ESTIMATES

Reclassifications:  Certain amounts from prior periods have been reclassified to
conform to the current year presentation.

Use  of  Accounting  Estimates:  The  preparation  of  financial  statements  in
conformity with accounting principles generally accepted in the United States of
America requires management to make assumptions that affect the amounts reported
in the financial  statements and accompanying notes. Actual results could differ
from those  estimates.  Due to the nature of the industry and the  reimbursement
environment  in which the company  operates,  certain  estimates are required in
recording net revenues.  Inherent in these  estimates is the risk that they will
have to be revised or updated,  and the changes recorded in subsequent  periods,
as additional information becomes available to management.

NOTE C - REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISK

Revenues are  recognized on the date services and related  products are provided
to  patients  and  are  recorded  at  amounts  estimated  to be  received  under
reimbursement  arrangements with a large number of third-party payors, including
private insurers, managed care organizations, Medicare and Medicaid.

Apria  establishes   allowances  for  revenue  adjustments  which  are  normally
identified and recorded at the point of cash application or upon account review.
Revenue  adjustments  result  from  differences  between  estimated  and  actual
reimbursement amounts, failures to obtain authorizations acceptable to the payor
or other specified billing documentation, changes in coverage or payor and other
reasons  unrelated to credit risk.  The  allowance  for revenue  adjustments  is
deducted  directly from gross accounts  receivable.  Management also establishes
allowances for those accounts from which payment is not expected to be received,
although services were provided and revenue was earned.

Management   performs  various  analyses  to  estimate  the  revenue  adjustment
allowance  and the  allowance for doubtful  accounts.  Specifically,  management
considers  historical   realization  data,  accounts  receivable  aging  trends,
operating  statistics  and  relevant  business  conditions.  Apria  periodically
refines its procedures for estimating the allowances for revenue adjustments and
doubtful accounts based on experience with the estimation process and changes in
circumstances.  Apria's policy is to reserve 100% of all  receivables  aged over
360 days.  This policy is in addition to reserves  provided on receivables  aged
less than 360 days and to  amounts  provided  for  specific  payors.  Because of
continuing changes in the healthcare industry and third-party reimbursement,  it
is reasonably possible that management's  estimates of net collectible  revenues
could  change in the near term,  which  could have a  favorable  or  unfavorable
impact on operations and cash flows.

NOTE D - BUSINESS COMBINATIONS

Apria periodically  makes  acquisitions of complementary  businesses in specific
geographic  markets.  The  transactions  are  accounted for as purchases and the
results of operations of the acquired companies are included in the accompanying
statement of operations from the date of  acquisition.  During the first quarter
of 2000, cash paid for acquisitions  and related  contingent  consideration  was
$4,860,000.   For  the  acquisitions  that  closed  during  the  first  quarter,
$3,847,000 was allocated to intangible assets.  Goodwill is being amortized over
20 years and covenants not to compete are being  amortized  over the life of the
respective agreements.

NOTE E - LONG-TERM DEBT

Apria's  credit  agreement  with Bank of America  and a  syndicate  of banks was
amended for the fifth time in March 2000 to increase the  limitation  on capital
expenditures.

At  March  31,  2000,   total   borrowings   under  the  credit  agreement  were
$214,062,000,  outstanding  letters  of credit  totaled  $1,000,000  and  credit
available under the revolving facility was $29,000,000.

NOTE F - EQUITY

The  change  in  stockholders'  equity,  other  than from net  income,  resulted
primarily from the exercise of stock  options.  For the three months ended March
31, 2000, proceeds from the exercise of stock options amounted to $1,513,000.

NOTE G - INCOME TAXES

Income taxes for the first  quarter of 2000 have been  provided at the effective
tax rate expected to be applicable for the year.

At December 31, 1999 Apria's federal net operating loss  carryforwards  ("NOLs")
approximated  $225,000,000,  expiring in 2003 through  2013.  Additionally,  the
company has various  state NOLs which began  expiring in 1997. As a result of an
ownership  change in 1992,  which met  specified  criteria of Section 382 of the
Internal  Revenue  Code,  future use of a portion of the  federal and state NOLs
generated prior to 1992 are each limited to  approximately  $5,000,000 per year.
Because of the annual limitation,  approximately  $57,000,000 of each of Apria's
federal and state NOLs may expire unused.  The company  excludes the $57,000,000
of potentially  expiring NOLs from its deferred tax assets. In fiscal year 2000,
NOLs are being utilized to the extent of Apria's taxable income.

NOTE H - COMMITMENTS AND CONTINGENCIES

Apria is engaged in the defense of certain  claims and  lawsuits  arising out of
the ordinary  course and conduct of its business,  the outcomes of which are not
determinable  at this time. In the opinion of  management,  any  liability  that
might be  incurred  by the  company  upon the  resolution  of these  claims  and
lawsuits will not, in the aggregate,  have a material  adverse effect on Apria's
consolidated  results of operations and financial  position.  Apria provides for
losses related to certain  matters when such losses are considered  probable and
capable  of  estimation.  No  provision  for losses is made in respect of claims
which do not meet such requirements.
<PAGE>
NOTE I - PER SHARE AMOUNTS

The following  table sets forth the  computation  of basic and diluted per share
amounts:
<TABLE>
<CAPTION>
                                                                                        Three Months Ended
                                                                                             March 31,
                                                                                        -------------------
(in thousands, except per share data)                                                     2000       1999
-----------------------------------------------------------------------------------------------------------

Numerator:

<S>                                                                                      <C>        <C>
  Net income .........................................................................   $12,781    $15,562
  Numerator for basic per share amounts - income available to common stockholders ....   $12,781    $15,562

  Numerator for diluted per share amounts - income available to common stockholders...   $12,781    $15,562


Denominator:

  Denominator for basic per share amounts - weighted average shares ..................    52,191     51,796

    Effect of dilutive securities:
      Employee stock options .........................................................     1,756        868
                                                                                         -------    -------
      Dilutive potential common shares ...............................................     1,756        868
                                                                                         -------    -------
  Denominator for diluted per share amounts - adjusted weighted average shares .......    53,947     52,664
                                                                                         =======    =======

Basic income per common share ........................................................   $  0.24    $  0.30
                                                                                         =======    =======

Diluted income per common share ......................................................   $  0.24    $  0.30
                                                                                         =======    =======

Employee  stock  options  excluded  from the  computation  of diluted  per share
amounts:

    Exercise price exceeds average market price of common stock ......................     2,391      2,171

Average exercise price per share that exceeds average market price of common stock....   $ 18.67    $ 16.15
</TABLE>
<PAGE>



CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES  LITIGATION  REFORM  ACT OF 1995:  Apria's  business  is subject to a
number of risks, some of which are beyond the company's control. The company has
described  certain  of those  risks in its Form 10-K for the  fiscal  year ended
December 31, 1999, as filed with the Securities and Exchange Commission on March
27,  2000.  This  report  may be used for  purposes  of the  Private  Securities
Litigation  Reform  Act of  1995  as a  readily  available  document  containing
meaningful cautionary statements  identifying important factors that could cause
actual results to differ materially from those projected in any  forward-looking
statements  the  company  may make from time to time.  These  risks  include the
collectibility   of   Apria's   accounts   receivable,   the   ongoing   federal
investigations regarding Apria's billing practices, the effectiveness of Apria's
operating systems and controls,  healthcare reform and the effect of federal and
state healthcare regulations,  pricing pressures from large payors and continued
reductions  in  Medicare   reimbursement,   Apria's  ability  to  implement  its
acquisition strategy and the upcoming maturity of Apria's long-term debt.

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

RESULTS OF OPERATIONS

     NET REVENUES AND GROSS  MARGIN.  Net  revenues  were $250.7  million in the
first  quarter  of 2000,  up 9.8% from the first  quarter of 1999.  The  primary
reasons for the increase are new contracts  with  regional and national  payors,
the  acquisition  of  complementary  businesses  and price  increases in certain
managed care agreements.

     The table below sets forth a summary of net revenues by service  line.  The
largest  increase is in the respiratory  service line, which is largely due to a
sales  focus  on this  higher-margin  line  and to the  impact  of  acquisitions
consummated  during 1999. The increase  between periods in the infusion  therapy
service line was due predominantly to volume increases.
<TABLE>
<CAPTION>
                                                   Three Months Ended March 31,
                                       --------------------------------------------------
                                               2000                          1999
                                       --------------------          --------------------
(dollars in thousands)                      $           %                 $           %
-----------------------------------------------------------------------------------------

<S>                                     <C>           <C>             <C>           <C>
Respiratory therapy................     $163,263      65.1%           $145,223      63.6%
Infusion therapy...................       46,751      18.6%             42,237      18.5%
HME/other..........................       40,708      16.3%             40,834      17.9%
                                        --------     ------           --------     ------
     Total net revenues                 $250,722     100.0%           $228,294     100.0%
                                        ========     ======           ========     ======
</TABLE>

     The gross margin for the first quarter of 2000 was 71.5%, compared to 71.1%
for the same period last year.  The majority of this  improvement  is due to the
increase in respiratory revenues as a percentage of total revenues.

     Estimates and Revenue  Adjustments.  Substantially  all of Apria's revenues
are reimbursed by third party payors,  including Medicare,  Medicaid and managed
care  organizations.  Due to the nature of the  industry  and the  reimbursement
environment in which Apria operates, certain estimates are required in recording
net revenues.  Inherent in these estimates is the risk that they will have to be
revised  or  updated,  and  the  changes  recorded  in  subsequent  periods,  as
additional  information  becomes  available  to  management.  Specifically,  the
complexity of many  third-party  billing  arrangements  and the  uncertainty  of
reimbursement  amounts  for  certain  services  from  certain  payors  result in
adjustments  to billed  amounts.  Such  adjustments  are  fairly  common and are
typically identified and recorded at the point of cash application, claim denial
or upon  account  review.  Examples of revenue  adjustments  include  subsequent
changes to estimated  revenue amounts or denials for services not covered due to
changes in the patient's  coverage,  failure to obtain written  confirmation  of
authorization or other necessary  documentation  subsequent to service delivery,
and differences in contract  prices due to complex  contract terms or a biller's
lack of familiarity with a contract or payor.

     SELLING,   DISTRIBUTION  AND  ADMINISTRATIVE.   Selling,  distribution  and
administrative  expense, as a percentage of net revenue,  was 53.3% in the first
quarter of 2000,  versus 54.5% in the first  quarter of 1999.  This is primarily
due to  management's  ability to  maintain  the fixed and  controllable  expense
levels as revenues increase.

     PROVISION FOR DOUBTFUL  ACCOUNTS.  The provision for doubtful  accounts was
4.2% of net revenues for the first three months of 2000,  compared  with 3.8% in
the same  period in 1999.  The  increase in 2000 is largely  attributable  to an
increase in accounts  receivable  aged in excess of 180 days,  at which time the
likelihood  of  collectibility  decreases.  Accounts  greater than 180 days,  as
percentages of total accounts receivable, were 25.8% and 20.1% at March 31, 2000
and March 31, 1999, respectively.

     AMORTIZATION OF INTANGIBLE ASSETS. Amortization expense was $2.4 million in
the first  quarter of 2000 and $1.9  million in the first  quarter of 1999.  The
increase is directly attributable to the $49.3 million in intangible assets that
were recorded in 1999 in conjunction with the acquisitions that were consummated
in that period.

     INTEREST  EXPENSE.  Interest expense was $10.6 million in the first quarter
of 2000,  down  from  $11.3  million  for the same  period  last  year.  This is
primarily due to the reduction in long term debt levels between the two periods.
Partially  offsetting  the  decrease  in  interest  expense  was an  increase in
interest rates and a decrease in interest income due to lower cash balances.

     INCOME TAXES.  Income taxes were $9.3 million for the first three months of
2000  versus  $400,000  for the same period last year.  At  December  31,  1999,
management concluded that it is more likely than not that Apria will realize its
net  deferred  tax assets.  As a result,  the  company  released  the  remaining
deferred tax valuation allowance during the fourth quarter of 1999. The increase
in income tax  expense for the first  quarter of 2000,  as compared to the first
quarter of 1999, is primarily  attributable  to Apria's  partial  release of its
deferred tax valuation allowance in 1999.

     At December  31, 1999  Apria's  federal  NOLs  approximated  $225  million,
expiring in the years 2003 through 2013.  Additionally,  Apria has various state
NOLs which began  expiring in 1997. As a result of an ownership  change in 1992,
which met specified criteria of Section 382 of the Internal Revenue Code, future
use of a portion of the federal and state NOLs generated  prior to 1992 are each
limited to approximately $5 million per year.  Because of the annual limitation,
approximately  $57 million of each of Apria's  federal and state NOLs may expire
unused.  Apria  excludes the $57 million of  potentially  expiring NOLs from its
deferred  tax  assets.  In 2000,  NOLs are being  utilized  to the extent of the
company's taxable income.


LIQUIDITY AND CAPITAL RESOURCES

     OPERATING  CASH FLOW.  Operating  cash flow was $21.2  million in the first
quarter of 2000,  compared with $30.4 million in the first quarter of 1999.  The
decrease is largely due to increased  purchases of patient service  equipment to
support growth in the respiratory therapy patient base. Also contributing to the
decrease in operating cash flow for the first quarter of 2000 was the payment of
the annual performance bonuses.

     ACCOUNTS  RECEIVABLE.  Accounts  receivable,  before allowance for doubtful
accounts,  increased to $201.2  million at March 31, 2000 from $194.4 million at
December 31, 1999. The increase is largely  attributable to the continuing trend
of quarter-over-quarter revenue increases.

     Days  sales  outstanding  (calculated  as of each  period  end by  dividing
accounts receivable, less allowance for doubtful accounts, by the 90-day rolling
average of net  revenues)  decreased  a day to 55 days at March 31, 2000 from 56
days at December 31, 1999.  Accounts  aged in excess of 180 days as a percentage
of total  accounts  receivable  increased to 25.8% at March 31, 2000 compared to
24.1% at December 31, 1999.

     Collection  of its  accounts  receivable  remains  one of  Apria's  primary
focuses. Two factors impacting the collectibility of accounts receivable are (1)
continued high turnover among accounts  receivable  personnel in many of Apria's
locations and (2) the inability to collect  contractually-due  receivables  from
certain large managed care payors on a timely basis, or at all.

     Allowance  Evaluation.  Accounts receivable are reduced by an allowance for
estimated  revenue  adjustments  and further netted by an allowance for doubtful
accounts to reflect  accounts  receivable  in the  financial  statements  at net
realizable value. Bad debt and revenue adjustment  allowances are aggregated and
analyzed on a combined basis.  Management uses actual write-off  classifications
in conjunction  with historical  experience and account reviews to determine the
appropriate  categorization of revenue  adjustments and bad debts, both reserved
and expensed.  Apria's  methodology for estimating  allowances for uncollectible
accounts and providing for the related revenue  adjustments and bad debt expense
involves an extensive,  balanced evaluation of operating statistics,  historical
realization  data and accounts  receivable  aging trends.  Also  considered  are
relevant   business   conditions   such   as   system   conversions,    facility
consolidations,  business  combinations,  Medicare  carrier  conditions  and the
extent of contracted business. Finally, specific reviews of certain large and/or
problematic payors are performed.  Management  periodically refines the analysis
and allowance estimation process to consider any changes in related policies and
procedures  and adjusts the combined  allowance to reflect its best  estimate of
the allowance required at each reporting date.

     Unbilled  Receivables.  Included  in  accounts  receivable  are  earned but
unbilled  receivables  of $23.5  million and $23.0 million at March 31, 2000 and
December 31, 1999,  respectively.  Delays in billings can occur, from a few days
to several  weeks or more,  from the date of service due to delays in  obtaining
certain  required  payor-specific   documentation  from  internal  and  external
sources.  Such documentation  would include internal records of proof-of-service
and written  authorizations  from physicians and other referral sources.  Earned
but unbilled  receivables  are aged from date of service and are  considered  in
Apria's analysis of historical performance and collectibility.

     LONG-TERM DEBT.  Apria's credit agreement was amended for the fifth time in
March 2000. This latest amendment  increases the amount of capital  expenditures
permitted by the credit agreement.

     At March 31, 2000,  total borrowings under the credit agreement were $214.1
million  (none of which  were  advanced  from the  revolving  credit  facility),
outstanding  letters of credit totaled $1.0 million and credit  available  under
the revolving facility was $29.0 million

     BUSINESS   COMBINATIONS.   Apria   periodically   makes   acquisitions   of
complementary  businesses in specific geographic  markets.  The transactions are
accounted  for as  purchases  and the  results  of  operations  of the  acquired
companies are included in the accompanying statement of operations from the date
of acquisition. During the first quarter of 2000, cash paid for acquisitions and
related contingent  consideration was $4.9 million. For acquisitions that closed
during the first quarter, approximately $3.8 million was allocated to intangible
assets.  Goodwill is being  amortized over 20 years and covenants not to compete
are being amortized over the life of the respective agreements.

     OTHER.  Apria's  management  believes  that  cash  provided  by  operations
together  with cash invested in its money market  account and amounts  available
under its existing  credit  facility  will be  sufficient to finance its current
operations for at least the next year.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Apria currently utilizes no material derivative financial  instruments that
expose the company to  significant  market  risk.  However,  Apria is subject to
interest rate changes on its variable  rate term loan under the  company's  bank
credit  agreement  that may affect the fair value of that debt and cash flow and
earnings.  Based on the term debt  outstanding at March 31, 2000 and the current
market  perception,  a 50 basis point increase in the applicable  interest rates
would  decrease  Apria's  annual cash flow and  earnings by  approximately  $1.1
million.  Conversely, a 50 basis point decrease in the applicable interest rates
would increase annual cash flow and earnings by $1.1 million.


                           PART II - OTHER INFORMATION

ITEM 1.       NOT APPLICABLE

ITEM 2.       CHANGES IN SECURITIES

              On February 7, 2000, the Rights  Agreement dated as of February 8,
              1995,   between  Apria  and  Norwest  Bank   Minnesota,   National
              Association, as successor Rights Agent, expired. As  a result, all
              outstanding   Rights  issued  under  that   Agreement  that   were
              evidenced  by shares of the  company's  common stock  have becaome
              void and may no longer be exercised under any circumstances.

ITEMS 3-5.    NOT APPLICABLE

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

              (a) Exhibits:

                  Exhibit
                  Number     Reference
                  -------    ---------

                  10.1       Fifth  Amendment  to  Amended and  Restated  Credit
                             Agreement dated March  24, 2000,  among  Registrant
                             and certain  of its  subsidiaries,  Bank of America
                             National    Association   and     other   financial
                             institutions party to the Credit Agreement.

                  10.2       Executive Severance Agreement dated March 28, 2000,
                             between Registrant and George J. Suda.

                  27.1       Financial Data Schedule.

              (b) Reports on Form 8-K:

                  No reports on Form 8-K were filed during the quarter for which
                  this report is filed.
<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.

                           APRIA HEALTHCARE GROUP INC.
                           ---------------------------
                                    Registrant


May 15, 2000               /s/  JOHN C. MANEY
                           ---------------------------
                           John C. Maney
                           Executive Vice President and Chief Financial Officer
                           (Principal Financial Officer)