<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended DECEMBER 31, 1997

                         Commission file number 0-19600

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

             Massachusetts                                04-2828817
---------------------------------------      -----------------------------------
      (State of jurisdiction of               (IRS employer identification no.)
    incorporation or organization)


           18881 VON KARMAN AVENUE, SUITE 1750, IRVINE, CALIFORNIA 92612
                (Address of principal executive offices) (zip code)

         Registrant's telephone number, including area code: (714) 442-2100

          Securities registered pursuant to Section 12(b) of the Act: None

            Securities registered pursuant to Section 12(g) of the Act:

                      COMMON STOCK, PAR VALUE $0.10 PER SHARE
                                  (Title of class)

Indicate by check "X" 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 by check "X" if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The aggregate market value of the voting stock held by non-affiliates of the 
Registrant as of March 20, 1998 was $82,077,866. On March 20, 1998, there 
were 7,319,168 shares of the Registrant's Common Stock outstanding.

      Documents incorporated by reference: INFORMATION CALLED FOR IN PART III OF
THIS FORM 10-K IS INCORPORATED BY REFERENCE TO THE REGISTRANT'S DEFINITIVE PROXY
STATEMENT WITH RESPECT TO THE 1998 ANNUAL MEETING OF STOCKHOLDERS, TO BE FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO REGULATION 14A.


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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I                                                                      Page
<S>       <C>                                                              <C>
Item 1     Business                                                          3
Item 2     Properties                                                        11
Item 3     Legal Proceedings                                                 11
Item 4     Submission of Matters to a Vote of Security Holders               12
           Executive Officers of the Registrant                              12

PART II

Item 5     Market for Registrant's Common Equity and Related
           Stockholder Matters                                               14
Item 6     Selected Financial Data                                           16
Item 7     Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                        16
Item 7A    Quantitative and Qualitative Disclosures About Market Risk        16
Item 8     Financial Statements and Supplementary Data                       16
Item 9     Changes in and Disagreements with  Accountants on Accounting
            and Financial Disclosure                                         16
PART III

Item 10    Directors and Executive Officers of the Registrant                17
Item 11    Executive Compensation                                            17
Item 12    Security Ownership of Certain Beneficial Owners and Management    17
Item 13    Certain Relationships and Related Transactions                    17

PART IV

Item 14    Exhibits, Financial Statement Schedules and Reports on Form 8-K   18
</TABLE>


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                                      PART I

ITEM 1.  BUSINESS.

      CORE, INC. ("CORE" or the "Company") is a national provider of managed
disability and health care benefits management services to Fortune 500 companies
and other self-insured employers, third-party administrators and insurance
carriers. The Company's services include managed disability services (which
consist of the Company's proprietary WorkAbility(R) program, analytic consulting
services, social security disability benefits advocacy, Medicare coordination of
benefits, bill audit services and job analysis and loss prevention services),
specialty physician and behavioral health review services and health care
benefits utilization review and case management services. The Company's services
are designed to assist its clients monitor and control disability and health
care benefits costs without compromising the quality of health care services
provided to the patient.

      CORE's managed disability services include monitoring the appropriateness
of disability durations under short and long-term disability plans and workers'
compensation programs in order to reduce unnecessary absenteeism and its related
costs of wage replacement, hiring and training replacement personnel and lost
productivity. These services are based on CORE's WorkAbility program, a
proprietary software program developed over a ten-year period through the
statistical analysis of disability utilization data. CORE's WorkAbility managed
disability program provides an objective, medically based method for
recommending and monitoring employee's return-to-work dates. The WorkAbility
program is designed to obtain and analyze relevant medical and work-related
information with the initial onset of the employee's absence and thus assure
that the employee, attending physician and employer all have reasonable and
consistent expectations as to the projected return-to-work date. The Company's
social security disability benefits advocacy program provides assistance to
disabled employees with obtaining their Social Security Disability Insurance
("SSDI") benefits. CORE's Medicare program assists employees of self-insured
companies (mostly Fortune 500) with acquiring their Medicare entitlement and
securing claims for payments covered under the government funded Medicare
program.

      CORE's independent physician review programs provide pre-certification,
concurrent and appellate physician review services for use with utilization
management programs of the Company's insurance company and self-insured
corporate clients. The Company believes its more than 300 Board certified
physician reviewers comprise the largest independent physician review service in
the country. CORE's behavioral health review program provides comparable review
service by psychiatric specialists in sub-specialties such as adult and child
psychiatry, alcoholism and chemical dependency. The Company also provides
utilization review services designed to evaluate the medical necessity and
appropriateness of health care services prescribed for participants in health
care and medical plans. In cases of high cost injuries or illness, CORE also
renders case management services for individual cases to assure that
cost-effective treatment alternatives are utilized.

      This Annual Report on Form 10-K contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 and the
Company's actual results could differ materially from those contemplated by such
statements. Such statements reflect management's current views, are based on
many assumptions and are subject to risks and uncertainties. Some important
factors the Company believes could cause such results to differ include the
Company's reliance on its WorkAbility program, the Company's dependence on key
clients, risks associated with the Company's growth strategy, increases or
changes in government regulation and competition. The foregoing list of factors
are not intended to represent a complete list of the general or specific risks
that may affect the Company. It should be recognized that other risks may be
significant, presently or in the future.

HISTORY OF CORE

      The Company was incorporated in Massachusetts in April 1984 under the name
Peer Review Analysis, Inc. ("PRA") to provide physician-intensive utilization
management services to commercial insurance companies and self-insured
employers. PRA became a publicly-held entity in December 1991 with the
completion of an initial public offering.

      In March of 1995, PRA completed its merger (the "CMI/PRA Merger")
involving Core Management, Inc., a Delaware corporation ("CMI"). CMI was
incorporated in 1990 to acquire the health and disability cost management
services business (including the WorkAbility program) of Health Data Institute,
Inc., a subsidiary of Baxter International, Inc. The CMI/PRA Merger was treated
as a pooling of interests for accounting purposes. In July 1995, the Company
changed its name


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from Peer Review Analysis, Inc. to CORE, INC. The description herein of the
business of the Company includes the operations of both PRA and CMI from the
inception of both companies.

      On October 2, 1995, CORE acquired all the capital stock of Cost Review
Services, Inc., a workers' compensation bill audit firm. In June 1997, CORE
purchased certain of the assets of Social Security Disability Consultants and
Disability Services, Inc. (collectively, "SSDC"), a disability management
services firm which provides social security disability benefits advocacy and
Medicare coordination of benefits. In July 1997, the Company purchased the
assets and certain liabilities of Protocol Work Systems, Inc., a provider of job
analysis, employee physical abilities testing and other loss prevention services
to the workers' compensation market.

      The Company's executive offices are located at 18881 Von Karman Avenue,
Suite 1750, Irvine, California 92612, and its telephone number at that address
is (714) 442-2100.

      WorkAbility is a registered trademark of the Company.

INDUSTRY OVERVIEW

      In recent years, large corporations have begun to recognize the magnitude
of the annual cost of occupational and non-occupational injuries and illnesses,
which according to several 1997 studies exceeded $2,200 per employee, or 8% of
total payroll costs. These expenses present a significant challenge to corporate
productivity. The Company estimates that total U.S. costs due to injury and
illness-related workplace absence are approximately $260 billion per year,
growing to $340 billion by the year 2000.

      According to industry sources, workers' compensation expenditures grew
at an average annual rate of over 18% from 1990 through 1996, and the Company
believes this growth is continuing. The Company estimates that workers'
compensation costs were approximately $60 billion in 1994. Despite the general
awareness of this high level of workers' compensation costs, expenditures for
group disability (including short-term disability and long-term disability
plans), sick pay and family leave represent a far larger share of total
expenditures at approximately $200 billion in 1994. Two driving factors behind
the increase in group disability and workers' compensation expenditures are
workplace and legislative changes. Work-related changes that have contributed to
rising benefits costs include the aging of the active workforce, increased
volatility in hiring and layoffs (which often results in increased benefits
utilization) and increased diagnoses of repetitive stress-related injuries. Also
contributing to rising disability benefit costs and awareness are legislative
changes such as the Family Medical Leave Act and the Americans with Disabilities
Act, which mandate accommodation for family circumstances and disabled workers,
which both have a growing impact on accommodation and lost time issues.

      In response to these rising costs, a variety of insurance companies,
managed care organizations and self-insured employers have used various cost
reduction techniques, often borrowed from group health managed care, including
securing pricing concessions from providers, using case management tools, and
implementing "gatekeepers" as a means to control utilization. However, these
managed care initiatives focus almost entirely on medical costs generated after
a disability claim is received, not on the more significant productivity (lost
time) impacts of employee ill health. Furthermore, work absence duration, and
consequently disability payments, have traditionally been driven by the decision
of the treating physician. While workers' compensation cases are typically
attended by an occupational specialist, employees with non-occupational
disabilities tend to utilize their own primary care physician who have little or
no interaction with the employer and limited sensitivity to productivity (lost
time) issues.

      As traditional managed care tools become standard industry-wide, they are
generating diminishing marginal savings for employers, who must find more
aggressive and sophisticated utilization review mechanisms to yield further
savings. In addition, the new-found awareness of the additional costs associated
with workplace absence has brought with it an increasing demand for cost saving
strategies that address both health care expenditures and the productivity
impact of an employee's ill health. Corporate downsizing and global competition
have focused Corporate America on achieving real productivity gains. With the
importance of each remaining job magnified, employers are actively looking for
new tools to help control workplace absence. Until recently, recognition and
management of these productivity costs have been impaired by their difficulty in
measurement, the fragmentation of responsibilities for disability programs
within human resources and risk management departments of most corporations and
the historical focus on group health managed care.

      While a small group of companies is emerging that are applying managed
care principles to the workers' compensation industry, historically there have
been few, if any, companies focusing on the provision of managed care 


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techniques to the broader disabilities market. With the support of its analytic
and physician services, CORE's products provide employers with an integrated and
comprehensive approach to disability benefits management.

SERVICES AND PRODUCTS

      CORE offers services and products designed to assist the Company's clients
control and monitor disability, workers' compensation and health care costs
without compromising the quality of care or services available to patients. The
Company's services include: (i) managed disability services using CORE's
WorkAbility products and services, (ii) specialty physician and behavioral
health review services using more than 300 CORE-affiliated board certified
physicians and (iii) utilization review ("UR") and case management services.

      For the years ended December 31, 1996 and 1997 managed disability services
accounted for approximately 44% and 56%, respectively, of CORE's revenue,
specialty physician and behavioral health review services represented
approximately 32% and 26%, respectively, of revenue and UR and case management
services represented approximately 24% and 18%, respectively, of revenue.
Managed disability services, which include the Company's WorkAbility program as
well as its analytic consulting services, social security benefits advocacy,
Medicare coordination of benefits, bill audit services, and job analysis and
loss prevention services, accounted for approximately 91% of the Company's
revenue increase for 1997. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

MANAGED DISABILITY SERVICES

      The Company estimates that total direct and indirect disability
expenditures are approximately $260 billion annually, of which approximately $60
billion is attributable to workers' compensation costs. CORE's managed
disability services include monitoring of the appropriateness of disability
duration's under short and long-term disability plans and workers' compensation
programs in order to reduce unnecessary absenteeism and the costs associated
with such absences. The cost of absenteeism includes wage replacement, the costs
of hiring and training replacement personnel and lost productivity. The
Company's managed disability services are based on the WorkAbility program, a
proprietary software program developed and maintained through the statistical
analysis of disability utilization data. CORE's WorkAbility program provides an
objective, medically based method for managing disability and employees'
return-to-work dates. The WorkAbility program is designed to obtain and analyze
relevant medical and work-related information with the initial onset of the
employee's absence and thus assure that the employee, attending physician and
employer all have reasonable and consistent expectations as to the projected
return-to-work date.

      Among the characteristics of CORE's WorkAbility program which
differentiate it from other disability review programs are the following:

      DAY ONE INTERVENTION. Unlike retrospective disability review which is
      triggered only after an extended employee absence or after significant
      costs have been incurred, the WorkAbility program is designed to interact
      with the treating physician immediately upon occurrence of the disability
      event. Early intervention permits establishment of an appropriate
      return-to-work date prior to a significant absence.

      PROPRIETARY DATABASE. CORE began developing its WorkAbility program in
      1986. The program uses a database of more than 550,000 disability and 
      workers' compensation records collected by CORE over ten years. From this
      database, the Company has developed protocols with over 10,000 clinical 
      endpoints. As a result, the WorkAbility protocols and projected 
      return-to-work dates are in most instances based on an historical 
      record of similarly situated patients rather than theoretical models.
      As the WorkAbility program is utilized, the database is growing.

      CLINICAL CREDIBILITY. WorkAbility assists the Company in establishing
      clinical credibility with the attending physician by comparing CORE's
      database of similar medical episodes with the patient's medical and job
      profile. This information can be shared with the attending physician to
      assist in the development of an effective treatment plan and in
      determining the appropriate return-to-work schedule. The WorkAbility
      program, supported by the Company's more than 300 Board certified
      physicians, allows a treating physician to talk to a CORE physician
      specialist for peer review of complex diagnoses and treatment plans.

      CONCURRENT REVIEW. In addition to the initial recommendation of an
      appropriate return-to-work date, WorkAbility services include ongoing
      review of patient status to assure the expected date remains accurate. At
      these intervals, 


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      new information may be gathered about the treatment or the illness or
      injury requiring an adjustment to the return-to-work date.

      COMPLETE WORKFORCE COVERAGE. The WorkAbility program is designed to cover
      all workplace absences, not just the longer term and more costly absences.
      The program also provides consistent return-to-work dates for clinical
      conditions whether the condition causing the absence is a result of a
      workers' compensation workplace injury or an injury outside of the
      workplace covered by a disability plan.

      The WorkAbility program is operated primarily by registered nurse
reviewers using an automated review system to assess each disability claim in
the early stages of an employee's absence. Under the WorkAbility program, the
attending physician or office staff (depending on the severity of the case) uses
a toll-free number to contact CORE and speaks to a trained WorkAbility program
nurse reviewer who enters information on the diagnosis and severity of the
condition into CORE's proprietary WorkAbility system. Each case is then reviewed
by the nurse using the WorkAbility program's computerized medical protocols,
which consider such factors as the employee's age and general health, job
requirements, symptoms and severity of the condition, diagnosis of the attending
physician, treatment plan, medical procedure(s) performed and comorbid factors
which may affect the duration of the disability.

      Using the WorkAbility program, the nurse reviewer considers these various
factors and recommends an appropriate length of disability duration based on the
specifics of the case. To assure consistency, reviews are guided by program
standards based on both statistical and clinical analysis and, in certain
circumstances, are referred to physicians for further review. The WorkAbility
program can assign specific lengths of disability for more than 10,000 clinical
descriptions, or "endpoints." If CORE and the attending physician agree with
respect to the anticipated disability duration, a letter stating the expected
return-to-work date is sent to the employee and physician on the date the review
is completed. The employer is notified of the return-to-work date
electronically. If the employee's physician disagrees with the suggested length
of disability assigned by CORE's nurse reviewer (as occurs in less than 15% of
the cases), the case is referred to a WorkAbility physician advisor who will
discuss the case with the treating physician. In the event that they cannot
reach agreement, the case is referred to the employer for consultation to
determine whether or not an independent medical examination should be requested.
If the employee's condition or medical treatment changes during the absence or
the employee is not ready to return to work on the expected date, a request for
an extension of the disability leave is reviewed on a case by case basis using
the WorkAbility program and additional information provided by the attending
physician or patient.

      The Company's WorkAbility program includes return-to-work case management
for high intensity, potentially high cost disability cases. This service is
focused on returning the patient to work as soon as clinically appropriate
through intensive involvement by a dedicated nurse case manager with the
patient, the health care providers and the workplace. Depending on the client's
benefits structure, the Company's return-to-work case managers can negotiate
services, coordinate on-site activities and channel the patient to appropriate
treatments or providers.

      The WorkAbility program has the capability to collect and report
information relating to the ongoing disability claims history of each employee
and documents all case reviews, thus allowing the identification of employee
disability patterns and physician treatment patterns. The WorkAbility program is
also able to identify prospective high cost disability events which can be
monitored in more detail through return-to-work case management. In addition,
the Company believes that the data transfer capabilities of the WorkAbility
program can also substantially improve the efficiency of its clients' claims
administration function. Electronic transfer of data required by the employer or
disability program administrator can minimize errors and reduce paperwork,
allowing faster processing of disability payments to employees.

      The WorkAbility On-line Medical Protocols ("WOMP") were developed and are
maintained by CORE and are licensed by the Company to third parties as a
separate product. These WorkAbility protocols are updated annually to, among
other things, reflect recent advancements in medical technology and procedures
and to update the recommended disability durations using the collective
experiential data collected by CORE through its services to clients. The
WorkAbility system automatically provides to the Company's clients monthly and
quarterly management reports which monitor disability benefits utilization
trends and identify potential problem areas.


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      In general, CORE's WorkAbility services are advisory only. The attending
physician and the patient remain responsible for determining the work-absence
period and all other aspects of the plan of treatment. Generally, the employer
or other payor is responsible for making all decisions with respect to the
payment or denial of benefits under the applicable benefits plan. Certain
clients, including Bell Atlantic Corporation, have delegated to CORE the
authority to decide whether an employee is eligible for benefits under the
client's plan.

      In order to assist employers identify and quantify the direct and indirect
costs associated with disability benefits and, to a lesser extent, health care
benefits, CORE also provides data analysis and consulting services to large
corporate clients. These services include in-depth customized information
concerning their disability and health care costs and utilization experience.
Health care costs, disability costs and workers' compensation costs are often
under separate departments in a large employer (human resources, benefits and
risk management) which has historically impaired corporations' ability to
recognize the magnitude of, and to manage, these costs. The basic objectives of
CORE's analytic services are to help employers and insurers obtain better value
for their disability, workers' compensation and health care expenditures with a
company's specific goals in mind. CORE assists in identifying the best means to
reduce the total costs of these benefits or slow the rate of increase, enhance
the appropriateness and quality of care, predict future benefit costs and
increase the return on investment from managed care programs. CORE's consulting
service can coordinate and analyze information on a company-wide basis and use
the client's information and CORE's proprietary disability and medical cost data
analysis methodologies to simulate changes in a benefit plan's structure and the
resulting impacts on overall benefit program cost. For example, CORE serves as a
data partner to several Fortune 500 companies and provides quarterly "CORE
Impact Reports" on integrated claims experience of the client covering
disability, workers' compensation and group health benefits.

      The Company's social security disability benefits advocacy program
includes claim file reviews, auditing, designing and implementing Social
Security assistance programs, and representation and assistance with Social
Security claims and appeals. The Company also coordinates overpayment
recoveries, provides in-service training and seminars on Social Security
Disability Insurance ("SSDI"), and assists with Medicare entitlement claims and
appeals. The Company's model is unique in that it integrates all aspects of the
Social Security process, producing a streamlined, efficient and effective
service.

      The Company's workers' compensation bill audit services involve auditing
medical bills, pharmacy bills and hospital bills for medical services or
products received by the client which are subject to applicable state fee
schedules. The bills are audited to determine whether the services or products
which are the subject of the medical bill are from legitimate medical providers,
contain the proper procedural codes and are billed accurately based on the
procedure codes. Finally, an audit report is prepared stating the result of such
audit with a recommendation for payment.

      The Company's JobSafe program provides on-site job profiling and
functionality assessments in an in-house management program that integrates the
physical abilities of each worker with the actual demands of the job to create a
safer working environment. The JobSafe program is tailored to each client's
specific facility to help ensure compliance with the Americans with Disabilities
Act (ADA), OSHA regulations and quality control requirements of ISO 9000. The
program begins with an on-site tour of the client's facility. The tour is
followed by a meeting with supervisors, interviews with employees, and the
collection of measurement and weight statistics. Job descriptions then are
created, videotapes are produced with descriptive commentary for each job, and
finally, physical ability testing of each employee is conducted. The process
culminates with a compilation of information for the client, along with
instructions on how to operate the program.

SPECIALTY PHYSICIAN AND BEHAVIORAL HEALTH REVIEW

      CORE's independent physician review programs provide pre-certification,
concurrent and appellate physician review services for use with existing
utilization management programs of clients, including insurance carriers that
service the group health, disability and workers' compensation markets, and
other managed care companies. The Company believes its more than 300 Board
certified physician reviewers comprise the largest independent physician review
organization in the country. The Company's consulting relationship with this
large base of physicians has positioned the Company to offer an appeal review
service, which is mandated under several state laws and generally requires
specialty-matched reviews. The Company believes that appellate review is one of
the few growing sectors of the otherwise mature utilization management industry.

      When a client's nurse reviewer determines that a case does not meet the
client's established criteria, the nurse reviewer will forward a referral to
CORE's physician reviewer. The referral describes the principal diagnosis of the
patient 

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and the reason for referral for physician review. In most instances the reason
for referral is based upon a question of medical necessity or therapeutic
benefit of a proposed treatment plan. CORE's independent physician reviews the
case information, which will have been previously entered into CORE's data
processing systems, and then telephones the attending physician to ascertain any
additional clinical data, the attending physician's rationale for the proposed
treatment plan or the proposed length of hospital stay. Based on discussions
with the attending physician, including, when appropriate, discussions of
possible alternative treatment plans, and using clinical judgment as well as
criteria based on national norms, CORE's physician makes a recommendation
concerning the appropriateness of the proposed or revised treatment plan.

      CORE then notifies its client of its recommendation regarding the
medical necessity or appropriateness under the client's health care benefit plan
of the proposed treatment plan, hospitalization or length of stay. If the
proposed hospitalization is not certifiable as such under the plan, the payor
typically denies or reduces the payment of benefits for the proposed
hospitalization. The decision of the payor may be appealed by the patient or the
attending physician. In such event a second Company physician of the same
specialty who was not involved in the original decision will review the case on
the merits of the clinical criteria or any additional information.

      Reviews under the Company's specialty physician review program are managed
from CORE's offices, and the majority of all review decisions are completed
within 24 hours of referral. In most instances, CORE's services are advisory in
nature. Determinations as to the payment or denial of benefits are typically
made by the third party payor, and the patient and the attending physician make
decisions as to the patient's medical treatment.

      CORE's behavioral health review program provides psychiatric review
services similar to the Company's specialty physician review services by
psychiatrists who are supported by a team of multi-specialty physicians. CORE's
independent psychiatrists include specialists in various psychiatric
sub-specialties such as adult psychiatry, child psychiatry and addictionology,
including alcoholism and chemical dependency. CORE believes that its
multi-specialty psychiatrists (including those in its Integrated Behavioral
Health Division) and CORE's emphasis on intensive specialty review distinguish
it from psychiatric review performed by other utilization management firms and
better addresses the more subjective nature of many behavioral health reviews.

      The Company is certified by the Utilization Review Accreditation
Commission ("URAC") to perform various utilization review functions. URAC is a
nationally recognized organization that has developed standards to encourage the
availability of effective, efficient and consistent utilization review of health
care services throughout the United States. One of URAC's key objectives is to
establish standards for the procedures used to process appeals of utilization
review determinations. Many of the Company's clients rely on CORE's specialty
physician and behavioral health review services to comply with URAC's appellate
procedures.

UTILIZATION REVIEW AND CASE MANAGEMENT

      The Company provides medical and behavioral health utilization review and
case management services to Fortune 500 companies and other self-insured
employers, third-party administrators ("TPAs") and an insurance carrier. The
Company's services are designed to evaluate the medical necessity and
appropriateness of health care services prescribed for participants in health
care benefits plans, including hospital admissions, proposed length of hospital
stay, use of outpatient facilities and other treatment alternatives. In cases of
high cost diseases, conditions or catastrophic illnesses, CORE may also render
case management services of individual cases in order to assure that
cost-effective treatment alternatives are utilized. Clients may elect to
contract for all of the services offered under the programs or, in the
alternative, may elect to contract for only certain portions of services
offered.

      CORE provides its utilization review services and case management services
through a staff consisting primarily of registered nurses and physicians.
Clients which utilize CORE's utilization review programs advise their
participants of review requirements including the requirement to contact CORE
within a specified period of time. From these contacts, CORE's medical and
behavioral health review staff gathers the necessary personal and medical
information and enters this information into CORE's review system. Based on this
information and using CORE's review criteria, CORE conducts its review.


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CLIENTS AND MARKETING

      CORE has over 200 customers across the country, including 70 Fortune 500
companies. Revenues from Fortune 500 companies accounted for approximately 69%
of total revenues in 1997 (versus 48% in 1996). The following is a selected list
of CORE's clients which, the Company believes, is representative of its overall
client base:

BELL ATLANTIC CORPORATION                     MOTOROLA CORPORATION
CHRYSLER MOTOR CORPORATION                    HUGHES ELECTRONICS CORPORATION
RELIASTAR FINANCIAL CORP.                      (OWNED BY GENERAL MOTORS)
CHAMPION INTERNATIONAL CORPORATION            CNA INSURANCE COMPANY             
MEDICAL MUTUAL OF OHIO                        DANA CORPORATION                  
LIBERTY MUTUAL INSURANCE COMPANY, INC.        PCS HEALTH SYSTEMS, INC.          
                                              GENERAL ELECTRIC CORPORATION  

      CORE markets its services primarily to national, direct accounts,
including self-insured employers, and through group health and disability
insurance carriers and third party administrators. The Company also maintains
distribution agreements with Reliastar Financial Corp. and other insurance
companies pursuant to which these companies offer CORE's WorkAbility services to
their customers. For providing WorkAbility services, the Company is paid fees by
the insurance companies. Also, the Company is active in conferences addressing
disability management issues the Company's clients and prospective clients face,
including acting as a host or a co-host to several conferences in 1997.

      During 1996 and 1997, Bell Atlantic Corporation represented 13% and 23%,
respectively, of total revenues. No other client represented more than 10% of
total revenues. During the years ended December 31, 1996 and 1997, the Company's
five largest clients represented 36% and 43%, respectively, of total revenue,
and its ten largest clients represented 53% and 58%, respectively, of total
revenue.

      CORE typically enters into service agreements with its clients. These
agreements have automatically renewable successive terms of between one and
three years, but are generally terminable upon 60 to 90 days notice. They do not
generally provide for minimum payments and are usually non-exclusive. Subject to
earlier termination provisions set forth therein, CORE's Bell Atlantic
agreements range from 3 to 10 years. Certain contracts include provisions that
the fees payable to CORE can vary based upon CORE's performance and the savings
achieved by the client under the contract.

      For many of its programs, CORE charges its clients a "capitated fee"
(i.e., a fixed per employee per month ("PEPM") fee.) The amount of this fee
varies depending on the size of the client and the number and type of review
programs selected by the client. For other services, CORE charges fees on an
hourly, per case or percentage of cost recovery (for social security advocacy
and Medicare programs) basis rather than a capitated basis. In most cases,
CORE's services are advisory in nature. Notwithstanding the outcome of CORE's
review, decisions as to the payment or denial of benefits and eligibility or
coverage under the benefit plan are typically made by the administrator of the
participant's health care plan, not by CORE. The patient and the attending
physician always make decisions as to the patient's medical treatment, not by
CORE.

INFORMATION SYSTEMS

      CORE's key products and services--the WorkAbility program, physician
review services and utilization review and case management programs--are
supported by administrative software that was developed and is maintained by
in-house staff. Each of these software programs incorporates E-Mail and other
external data exchange features for client and remote user communications.

      CORE's wide area network (WAN) is designed to support the organization's
rapid growth. A "scalable" architecture has provided flexibility, allowing for
timely deployment of upgraded facilities in response to the business' needs.
CORE recently completed the installation of an alternative WAN capability that
will assure continuous business operations during network outages. Another
ongoing initiative within information systems development is the continual
implementation of available information technology to significantly enhance the
productivity of all CORE's key products and services. This includes,
specifically, the integration of imaging, network fax and computer integrated
telephone technology into the workflow. Additionally, in the near future, CORE's
WorkAbility clients will have access to information via an Internet connection.


                                       9
<PAGE>

      The WorkAbility-Plus system, CORE's client/server technology based
application has provided for the ability to migrate rapidly into expanding
business opportunities. CORE recently completed the development of a new module
to support our burgeoning Family Medical Leave ("FML") business. Totally
integrated with other absence management capabilities, the FML module provides
robust capabilities tailored to Federal guidelines as outlined in the Family
Medical Leave Act and other state sponsored legislation. This architecture is
designed to allow for client server operation and rapid feature development. The
WorkAbility-Plus application utilizes software architecture that provides
maximum flexibility in attaching industry-standard databases to support growth
and varying client needs. The Company believes that this architecture will
support the integration of additional absence management capabilities.

      Funding for the initial development of CORE's WorkAbility software
(original version) was provided by Chrysler Motor Corporation ("Chrysler") in
exchange for a perpetual, non-exclusive, non-transferable license to use such
software. Ownership of the WorkAbility software has been retained by CORE, which
has the exclusive right to market the software to others. Pursuant to the terms
of its agreement with Chrysler, CORE is paying Chrysler 25% of certain licensing
fees paid to CORE with respect to the WorkAbility software until the total of
such payments equal 140% of the development costs (approximately $2.8 million).
Only limited payments have been made by CORE through December 31, 1997. In
addition, in the event that CORE fails to attempt to market the software to
third parties, Chrysler will have certain rights to market and license the
software independently.

GOVERNMENT REGULATION; REIMBURSEMENT; HEALTH CARE REFORM

      A number of states, including several of those in which the Company
transacts business, have extensive licensing and other requirements applicable
to the Company's business. Additionally, the Company's clients, including
insurance companies, are subject to regulations that indirectly affect the
Company.

      The laws of many states regulate the provision of health care utilization
management services. These regulations generally require the provider of
utilization management services to be reasonably accessible by telephone to
doctors and patients, to have adequately qualified personnel, to provide
physicians and patients a procedure to appeal determinations of
non-reimbursement, and to maintain the confidentiality of patient records. Other
states regulate the provision of claims administration services and preferred
provider organizations which may indirectly affect CORE. CORE believes it is in
compliance with all applicable regulations governing the provision of managed
health care services in the states where CORE is subject to such regulations, as
currently in force and as currently interpreted.

      CORE's operations depend upon its continued good standing under applicable
laws and regulations. To date, the cost of compliance has not been material.
Such laws and regulations, however, are subject to amendment or new
interpretation by authorities in each jurisdiction. If amended regulations or
new interpretations of federal or state laws or regulations arise, CORE, may
have difficulty complying without significant expense or changes in operations.
The Company is unable to predict what additional government regulations, if any
directly or indirectly affecting its business may be promulgated. Although the
Company believes that it is currently in compliance with applicable regulations
in those states in which it is subject to regulation, the Company's business
could be adversely affected by a revocation of or failure to obtain required
licenses and governmental approvals, a failure to comply with applicable
regulations or significant changes in regulations applicable to its clients.

      In addition to existing government health care regulation, there have been
numerous initiatives at the federal and state levels, as well as by third-party
payors, for comprehensive reforms affecting the payment for and availability of
health care services. The Company believes that such initiatives will continue
during the foreseeable future. The Company is unable to predict what, if any,
reform initiatives may be adopted, or what effect, if any, their adoption may
have on the Company.

COMPETITION

      CORE presently competes in two different markets: (i) health care
utilization management and (ii) managed disability and workers' compensation.
The managed health care market is fragmented but is consolidating rapidly as
national health care reform and other forces drive independent utilization
review and cost management firms into niche markets or to consolidation with
large insurance carriers and provider groups.

        The health care utilization management market is highly competitive.
Competitors include large established insurance carriers and large managed care
organizations. Some of the competitors are significantly larger and have greater


                                       10
<PAGE>

financial and marketing resources than CORE. CORE competes on the basis of
quality, cost-effectiveness and service.

      The managed disability and workers' compensation market is a developing
market which is also competitive. Competitors include both new companies focused
solely on the workers' compensation market and established disability insurance
carriers who have traditionally dealt with disability from an underwriting
rather than an employee productivity perspective. CORE competes on the basis of
quality and cost-effectiveness in this market, and the Company believes that its
proprietary disability management protocols and database of clinically defined
disability episodes give it a significant competitive advantage.

EMPLOYEES AND PHYSICIAN CONSULTANTS

      In addition to its available staff of approximately 370 physician
consultants (300 of whom are Board certified) covering the major medical
specialties, CORE has approximately 500 employees. Generally, CORE's physician
consultants are paid by CORE on a per hour or per case review basis. Almost all
of CORE's physicians are retained by the Company as independent contractors and
also maintain active practices. The majority of the Company's physicians work
between 5 and 20 hours per week for the Company. Compensation to CORE's
reviewers is not related to any cost savings achieved by CORE's clients.

ITEM 2.  PROPERTIES.

      The Company occupies its executive headquarters in Irvine, California
pursuant to leases for approximately 16,500 sq. feet, which expire in September
2000. The Company also leases facilities of approximately 18,000 sq. feet in
Boston, Massachusetts under a lease that expires in May 2000, and approximately
22,500 sq. feet in Burlington, Massachusetts under leases that expire in
December 2001 and April 2002. Additionally, the Company leases facilities of
approximately 16,000 sq. feet in Los Angeles, California under a lease that
expires in June 1998, approximately 18,000 sq. feet in Silver Spring, Maryland
under a lease that expires in June 2001, approximately 10,000 sq. feet in Novi,
Michigan under a lease that expires in August 1998, approximately 7,400 sq. feet
in Austin, Texas under a lease that expires in September 1999 and approximately
2,400 sq. feet in Forth Worth, Texas under a lease that expires in July 1998.

ITEM 3.  LEGAL PROCEEDINGS.

      Generally, the review services provided by the Company are advisory in
nature, and final determination as to payment or nonpayment of benefits is not
made by the Company. Certain clients, including Bell Atlantic Corporation, have
delegated to CORE the authority to decide whether an employee is eligible for
benefits under the client's plan. Determinations as to the medical care provided
to a patient are always made by the patient or the attending physician and are
not made by CORE. However, due to the significant number of claims in the
medical malpractice field in general, it is possible that a patient may assert
claims against the Company for damages due to adverse medical consequences. New
or existing legal theories by which patients or physicians may attempt to assert
liability against the Company or other companies engaged in the industry are
developing and are expected to continue to develop. Although the Company
believes that its procedures result in reasonable and accurate determinations of
coverage, there can be no assurance that claims will not be made or that the
Company's procedures for limiting liability will be effective. The Company
maintains professional liability insurance and such other coverages as the
Company believes are reasonable in light of the Company's experience to date.
However, there can be no assurance that such insurance will be sufficient to
protect the Company from liability which might adversely affect the Company's
business, operating results or financial condition or will continue to be
available to the Company at reasonable cost or at all.


                                       11
<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

      The following is a list of CORE's executive officers:

<TABLE>
<CAPTION>
          Name                       Age  Position
          ----                       ---  --------
<S>                                  <C>  <C>
          George C. Carpenter IV     39   Chairman of the Board of Directors 
                                             and Chief Executive Officer
          Craig C. Horton            43   President and Chief Operating Officer
          William E. Nixon           37   Executive Vice President, Chief Financial 
                                             Officer, Treasurer and Clerk
          Nancy S. Moore             48   Senior Vice President, Operations
          Michael Darkoch            54   Senior Vice President, Client Development
          R. Gary Dolenga            53   President, SSDC Corp.
          Ophelia Galindo          40   Corporate Vice President, Product 
                                             Management and Technical Development
</TABLE>

       Executive officers of the Company are elected by the Board of Directors
on an annual basis and serve at the discretion of the Board of Directors.

       George C. Carpenter IV was re-elected a Class III Director at the June
1997 Annual Stockholders Meeting, and was elected the Chairman of the Board of
Directors and Chief Executive Officer of the Company effective with the
Company's March 24, 1995 merger involving Core Management, Inc. (the "CMI/PRA
Merger"). Mr. Carpenter served as the Chief Executive Officer and a Director of
Core Management, Inc., a Delaware corporation ("CMI") and now wholly-owned
subsidiary of the Company, since its formation in 1990. In addition, Mr.
Carpenter served as the Chairman, Chief Executive Officer, Secretary and a
Director of Core Management, Inc., a California corporation and wholly-owned
subsidiary of CMI ("CMI-California"), from its formation in 1990. As a result of
the reorganization of CMI-California and Integrated Behavioral Health ("IBH"), a
California corporation and wholly-owned subsidiary of CMI in March 1993, Mr.
Carpenter was appointed as a Director of IBH. From 1988 to 1990, Mr. Carpenter
served as a Vice President, Operations of The Health Data Institute, Inc., a
provider of utilization review, case management and analytic services and a
developer of related software, a subsidiary of Baxter International, Inc.

       Craig C. Horton was re-elected a Class III Director at the June 1997
Annual Stockholders Meeting and was elected the President and Chief Operating
Officer of the Company on March 30, 1995. Mr. Horton served as the President and
a Director of CMI and CMI-California from their respective formations in 1990,
and also served as the acting Chief Financial Officer of CMI from 1994 to 1995.
In December 1994, Mr. Horton was named as a Director and Chief Executive Officer
of IBH. From 1988 to 1990, Mr. Horton was Vice President, Operations of The
Health Data Institute, Inc., a subsidiary of Baxter International, Inc.

      William E. Nixon is the Executive Vice President, Chief Financial Officer,
Treasurer and Clerk of the Company. Mr. Nixon joined the Company in December
1988 as Controller. In June 1989, Mr. Nixon became Assistant Treasurer; in
September 1990, he was elected Vice President, Finance and Administration; in
September 1991, he assumed his position as Treasurer. In December 1993, Mr.
Nixon was elected Chief Financial Officer of the Company. In December 1994, Mr.
Nixon was elected Executive Vice President and in March 1995, he was elected
Clerk. Prior to his employment with the Company, from 1985 to 1988, Mr. Nixon
served as a Senior Accountant at Gray, Gray and Gray, a public accounting firm.

      Nancy S. Moore was elected Senior Vice President, Operations in September
1997. Ms. Moore served as Vice President, Eastern Operations of the Company
since the March 24, 1995 CMI/PRA merger. Ms. Moore joined the Company in July
1990 as Manager, Case Management. In November 1992 she became Director,
Operations and was promoted to Vice President, Operations in May 1994. Prior to
her employment with the Company, Ms Moore served as Administrator, Behavioral
Health Utilization Review Department of Blue Cross and Blue Shield of
Massachusetts and Director of Nursing Services of Charles River Hospital,
Community Care Systems, Inc.

      Michael Darkoch joined the Company in September 1997 and was elected
Senior Vice President, Client Development in December 1997. Mr. Darkoch came to
CORE from Caremark International, where he held senior


                                       12
<PAGE>

management positions, including Vice President of Corporate Account Management
and Vice President of Business Development. His background includes account
management process design and sales development. Mr. Darkoch has over 23 years
of experience in the health care industry.

      R. Gary Dolenga joined the Company in June 1997 upon acquisition of 
certain of the assets of Social Security Disability Consultants and 
Disability Services, Inc. (collectively, "SSDC"). SSDC was formed 
by Mr. Dolenga in 1979. For the 18 years prior to the acquisition 
of SSDC by CORE, Mr. Dolenga served as the Managing Director and 
President of SSDC where he was responsible for the administration, 
professional service and sales of the social security disability 
benefits advocacy and Medicare coordination of benefits components 
of SSDC.

      Ophelia Galindo was elected the Corporate Vice President, Product
Management and Technical Development of the Company on March 30, 1995. Formerly,
Ms. Galindo was employed by CMI, beginning in February 1986 as a senior
consultant; in June 1994, Ms. Galindo was promoted by CMI to be its Vice
President, Disability Analysis.


                                       13

<PAGE>

                                      PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

PRICE RANGE OF COMMON STOCK

      The Company's Common Stock is traded on the Nasdaq National Market tier 
of The Nasdaq Stock Market ("Nasdaq - NNM") under the symbol: "CORE." The 
following table shows the range of high and low sales prices per share for 
the shares of Common Stock on the Nasdaq - NNM for the calendar quarters 
indicated as reported by Nasdaq. Over-the-counter market quotations reflect 
inter-dealer prices, without retail mark-up, mark-down or commission and do 
not necessarily represent actual transactions.

<TABLE>
<CAPTION>
                                       High        Low
         1996
<S>                                   <C>        <C>
                First quarter          $13 3/8     $8 3/8
                Second quarter          17 1/4      11
                Third quarter           15 1/2      8
                Fourth quarter          12 5/8      6 7/8

         1997
                First quarter          9 5/8       5 7/8
                Second quarter         9           6 1/8
                Third quarter          11 1/8      8 5/8
                Fourth quarter         12 1/2      9 7/8
</TABLE>

      On March 20, 1998, the closing sale price of the Company's Common 
Stock, as quoted on the Nasdaq - NNM, was $13 per share.

      As of March 20, 1998, there were approximately 155 record holders of 
the Company's Common Stock and over 1,000 beneficial owners. There are no 
outstanding shares of the Company's Preferred Stock and, accordingly, no 
market for said shares.

DIVIDEND POLICY

      The Company has never paid a cash dividend. Inasmuch as the Company 
intends to retain earnings for the operation and expansion of its business, 
the Company does not intend to pay dividends on its Common Stock for the 
foreseeable future. The Company's Board of Directors will determine future 
dividend policy in light of the then prevailing financial condition of the 
Company and other relevant factors.

                                       14
<PAGE>

RECENT SALES OF UNREGISTERED SECURITIES

      In 1997, the Company sold the following shares of Common Stock which 
were not registered under Securities Act at the time of issuance. Except as 
otherwise noted, such shares were sold to present and former employees or 
consultants upon the exercise of stock options.

      These shares of Common Stock were not registered under the Securities 
Act at the time of sale issuance and, in reliance upon the exemption 
contained in Section 4(2) of the Securities Act for transactions by an issuer 
not involving any public offering.

<TABLE>
<CAPTION>
                                                    Number of  Purchase Price 
         Date       Security        Purchaser        Shares      per Share
         -----------------------------------------------------------------------
<S>                <C>             <C>             <C>        <C>
         5/27/97    Common Stock    T. Vermilya           95    $6.25
         5/29/97    Common Stock    J. Pappajohn (1)  26,800    $3.36
         5/30/97    Common Stock    E. Slater             47    $6.25
         5/30/97    Common Stock    M. Smotrich           23    $6.25
         6/19/97    Common Stock    D. Ferrell            26    $6.25
         7/29/97    Common Stock    K. Kemp               60    $6.25
         8/6/97     Common Stock    S. Caulfield(2)    7,500    $3.28
         8/6/97     Common Stock    S. Caulfield(2)    2,500    $6.25
         9/16/97    Common Stock    D. Vuong              30    $6.25
         9/26/97    Common Stock    J. Mushtare           68    $6.25
         10/20/97   Common Stock    S. Bradley            58    $6.25
         10/31/97   Common Stock    S. Gerson            388    $6.25
         10/31/97   Common Stock    S. Gerson          1,000    $3.13
         11/4/97    Common Stock    K. Cullen             30    $6.25
         11/21/97   Common Stock    R. Sarbanis           31    $6.25
         12/31/97   Common Stock    E. Dolenga           200    $8.75
</TABLE>
----------------
(1)    Mr. Pappajohn is a Director of the Company and these shares were sold to
       him pursuant to his exercise of a Warrant Agreement granted on June 1,
       1994.

 (2)   Mr. Caulfield is a Director of the Company and the shares were sold to
       him pursuant to his exercise of Stock Option Agreements granted on March
       24, 1995 and November 2, 1995, with respect to his services as a
       Director.


                                       15
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA.

        As set forth in the Company's Form 12b-25 filed on or about April 1, 
        1998, the Company's financial statements for the year ended 
        December 31, 1997 are not yet finalized. The Company intends to file 
        an Amendment to this Form 10-K within the 15 day time period 
        permitted under Rule 12b-25.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS.

        As set forth in the Company's Form 12b-25 filed on or about April 1, 
        1998, the Company's financial statements for the year ended 
        December 31, 1997 are not yet finalized. The Company intends to file 
        an Amendment to this Form 10-K within the 15 day time period 
        permitted under Rule 12b-25.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

        Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

        As set forth in the Company's Form 12b-25 filed on or about April 1, 
        1998, the Company's financial statements for the year ended 
        December 31, 1997 are not yet finalized. The Company intends to file 
        an Amendment to this Form 10-K within the 15 day time period 
        permitted under Rule 12b-25.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

        Not applicable.


                                       16
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

      Pursuant to General Instruction G(3) to Form 10-K, information required 
under this item is incorporated by reference from the Registrant's definitive 
proxy statement with respect to the 1998 Annual Stockholders Meeting, to be 
filed with the Securities and Exchange Commission pursuant to Regulation 14A.

      Certain information as it pertains to executive officers, is included 
at the end of Part I of this Form 10-K.

ITEM 11.  EXECUTIVE COMPENSATION.

      Pursuant to General Instruction G(3) to Form 10-K, information required 
under this item is incorporated by reference from the Registrant's definitive 
proxy statement with respect to the 1998 Annual Stockholders Meeting, to be 
filed with the Securities and Exchange Commission pursuant to Regulation 14A.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

      Pursuant to General Instruction G(3) to Form 10-K, information required 
under this item is incorporated by reference from the Registrant's definitive 
proxy statement with respect to the 1998 Annual Stockholders Meeting, to be 
filed with the Securities and Exchange Commission pursuant to Regulation 14A.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      Pursuant to General Instruction G(3) to Form 10-K, information required 
under this item is incorporated by reference from the Registrant's definitive 
proxy statement with respect to the 1998 Annual Stockholders Meeting, to be 
filed with the Securities and Exchange Commission pursuant to Regulation 14A.

                                       17
<PAGE>

                                      PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULE, AND REPORTS ON FORM 8-K.

      (a) FINANCIAL STATEMENTS, FINANCIAL STATEMENTS SCHEDULE AND EXHIBITS.

          As set forth in the Company's Form 12b-25 filed on or about April 1,
          1998, the Company's financial statements for the year ended 
          December 31, 1997 are not yet finalized. The Company intends to file
          an Amendment to this Form 10-K within the 15 day time period 
          permitted under Rule 12b-25.

      3. EXHIBITS.

<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------

<S>    <C>
2.1    Second Agreement and Plan or Reorganization by and between Core
       Management, Inc., Registrant and PRA Sub, Inc. dated as of December 19,
       1994. Filed as Appendix I to Prospectus and Joint Proxy Statement in
       Amendment No. 5 to Registrant's Registration Statement on Form S-4
       (Registration No. 33-73906), filed February 14, 1995, and incorporated
       herein by reference.
      
2.2    Capital Stock Purchase Agreement, by and between Registrant, Cost Review
       Services, Inc., Larry Bertrand Wallace and Leigh B. Goodwin, dated
       October 2, 1995 (without exhibits). Filed as exhibit 2.1 to Registrant's
       Current Report on Form 8-K, filed October 16, 1995, and incorporated
       herein by reference.
      
2.3    Asset Purchase Agreement dated June 14, 1997, by and among CORE, INC.,
       SSDC Corp., Social Security Disability Consultants Limited Partnership,
       Disability Services, Inc., DSI Medicare Consultants, Inc., R. Gary
       Dolenga and Phylis M. Dolenga, including Amendment No. 1 to Asset
       Purchase Agreement, dated June 25, 1997, and Exhibit A - Performance
       Criteria (excluding other Exhibits and Schedules). Filed as exhibit 2.1
       to Registrant's Current Report on Form 8-K, filed July 15, 1997, and
       incorporated herein by reference.
      
2.4*   Asset Purchase Agreement dated March 17, 1998, by and among CORE,
       INC., TCM Services, Inc., Transcend Case Management, Inc. and Transcend
       Services, Inc. (excluding exhibits and schedules).
      
3.1    Restated Articles of Organization of the Registrant, dated November 22,
       1991, as further amended by Articles of Amendment, dated March 24, 1995,
       July 28, 1995 and October 28, 1996. Filed as exhibit no. 4.1 to
       Registrant's Quarterly Report on Form 10-Q, filed November 13, 1996, and
       incorporated herein by reference.
      
3.2    By-Laws of the Registrant, as amended. Filed as exhibit no. 3.2 to
       Registrant's Annual Report on Form 10-K, filed March 30, 1993, and
       incorporated herein by reference.
      
4.1    Specimen Common Stock certificate. Filed as exhibit no. 4.1 to
       Registrant's Annual Report on Form 10-K, filed April 1, 1996, and
       incorporated herein by reference.
      
10.1   Software License Agreement, dated August 26, 1986, between Chrysler
       Corporation ("Chrysler") and The Health Data Institute ("HDI"). Filed as
       exhibit no. 10.59 to the Registrant's Registration Statement on Form S-4
       (Registration No. 33-73906), filed January 10, 1994, and incorporated
       herein by reference.
      
10.2   Amendment No. 1 to Software License Agreement, dated December 23,
       1987, between Chrysler and HDI. Filed as exhibit no. 10.60 to the
       Registrant's Registration Statement on Form S-4 (Registration No.
       33-73906), filed January 10, 1994, and incorporated herein by reference.
</TABLE>


                                       18

<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------

<S>    <C>
10.3   Services Agreement, dated as of August 1, 1996, between CORE, INC.
       and Bell Atlantic Corporation (without schedules and appendices).
       
10.4   Registrant's Amended and Restated 1986 Stock Option Plan. Filed as
       exhibit no. 10.11 to the Registrant's Registration Statement on Form S-1
       (Registration No. 33-43418), filed October 18, 1991, and incorporated
       herein by reference.
       
10.5   Amendment to Amended and Restated 1986 Stock Option Plan. Filed as
       exhibit no. 19.1 to the Registrant's Quarterly Report on Form 10-Q, filed
       November 16, 1992, and incorporated herein by reference.
       
10.6   Registrant's Amended and Restated 1991 Stock Option Plan. Filed as
       exhibit no. 4.3 to the Registrant's Registration Statement on Form S-8
       (Registration No. 333-15261), filed October 31, 1996, and incorporated
       herein by reference.
       
10.7   Form of Stock Option Agreement, dated as of May 17, 1993, between
       Registrant and William E. Nixon. Filed as exhibit no. 10.5 to 
       Registrant's Quarterly Report on Form 10-Q, filed June 30, 1993, and 
       incorporated herein by reference.
       
10.8   Form of Stock Option Agreement, granted January 16, 1994, to non-employee
       directors. Filed as exhibit no. 10.45 to the Registrant's Annual Report
       on Form 10-K, filed March 31, 1994, and incorporated herein by reference.
      
10.9   Form of Stock Option Agreement, granted March 23, 1995, to non-employee
       directors for services in 1994 and through March 23, 1995, including
       schedule of optionees. Filed as Exhibit No. 10.1 to Registrant's
       Quarterly Report on Form 10-Q, filed November 14, 1995, and incorporated
       herein by reference.

10.10  Form of Stock Option Agreement for 19,500 shares to vest quarterly over
       three years granted March 24, 1995, to non-employee directors, including
       schedule of optionees. Filed as Exhibit No. 10.2 to Registrant's
       Quarterly Report on Form 10-Q, filed November 14, 1995, and incorporated
       herein by reference.

10.11  Form of Stock Option Agreement for 4,875 shares, granted March 24, 1995
       to non-employee directors, including schedule of optionees. Filed as
       Exhibit No. 10.3 to Registrant's Quarterly Report on Form 10-Q, filed
       November 14, 1995, and incorporated herein by reference.

10.12  Form of Stock Option Agreement, granted April 27, 1995, to executive
       officers, including schedule of executive officer optionees. Filed as
       Exhibit No. 10.4 to Registrant's Quarterly Report on Form 10-Q, filed
       November 14, 1995, and incorporated herein by reference.

10.13  Form of Stock Option Agreement, granted April 27, 1995, for
       consulting and other services, including schedule of optionees. Filed as
       Exhibit No. 10.5 to Registrant's Quarterly Report on Form 10-Q, filed
       November 14, 1995, and incorporated herein by reference.

10.14  Form of Stock Option Agreement for 12,375 shares of Registrant's common
       stock granted November 8, 1995 to four non-employee directors. Filed as
       exhibit no. 10.58 to the Registrant's Annual Report on Form 10-K, filed
       April 1, 1996, and incorporated herein by reference.

10.15  Incentive Stock Option Agreement, dated December 8, 1995, between
       Registrant and Fredric L. Sattler. Filed as exhibit no. 10.50 to the
       Registrant's Annual Report on Form 10-K, filed April 1, 1996, and
       incorporated herein by reference.

10.16  Form of Stock Option Agreement, granted March 29, 1996, to officers,
       including schedule of officer optionees. Filed as exhibit no. 10.31 to
       Registrant's Registration Statement on Form S-1 (Registration No.
       333-03639), filed May 13, 1996, and incorporated herein by reference.
</TABLE>


                                       19

<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------

<S>    <C>
10.17  Form of Stock Option Agreement, granted March 29, 1996, for
       consulting services, including schedule of optionees. Filed as exhibit
       no. 10.32 to Registrant's Registration Statement on Form S-1
       (Registration No. 333-03639), filed May 13, 1996, and incorporated herein
       by reference.

10.18  Core Management, Inc. Employee Stock Option Plan. Filed as exhibit
       no. 10.65 to the Company's Registration Statement on Form S-4
       (Registration No. 33-73906), filed January 10, 1994, and incorporated
       herein by reference.

10.19  Forms of Stock Option Agreement under Core Management, Inc. Employee
       Stock Option Plan. Filed as exhibit no. 10.66 to the Registrant's
       Registration Statement on Form S-4 (Registration No. 33-73906), filed
       January 10, 1994, and incorporated herein by reference.

10.20  Form of Non-Employee Director Stock Option Agreement of Core
       Management, Inc. Filed as exhibit no. 10.67 to the Company's Registration
       Statement on Form S-4 (Registration No. 33-73906), filed January 10,
       1994, and incorporated herein by reference.

10.21  Registration Rights Agreement, dated February 23, 1994, between CMI and
       Silicon Valley Bank. Filed as exhibit no. 10.81 to Amendment No. 1 to the
       Registrant's Registration Statement on Form S-4 (Registration No.
       33-73906), filed June 8, 1994, and incorporated herein by reference.

10.22* Registration Rights Agreement, dated March 17, 1998, between CORE,
       INC. and Transcend Services, Inc.

10.23  Option Agreement, dated June 14, 1997, by and between CORE, INC. and
       R. Gary Dolenga. Filed as exhibit 99.1 to Registrant's current Report on
       Form 8-K, filed July 15, 1997, and incorporated herein by reference.

10.24  CORE, INC. 1997 Stock Option Plan, including forms of stock option
       agreements. Filed as exhibit no. 10.1 to Registrant's Quarterly Report on
       Form 10-Q, filed November 14, 1997, and incorporated herein by reference.

10.25  Employment Agreement, dated November 19, 1993, between the
       Registrant and William E. Nixon. Filed as exhibit no. 10.49 to
       Registrant's Registration Statement on Form S-4 (Registration No.
       33-73906), filed January 10, 1994, and incorporated herein by reference.

10.26  Employment Agreement, dated December 1, 1995, between Registrant and
       Fredric L. Sattler. Filed as exhibit no. 10.49 to the Registrant's Annual
       Report on Form 10-K, filed April 1, 1996, and incorporated herein by
       reference.

10.27  Employment Agreement, dated June 25, 1997, by and between SSDC Corp.
       and R. Gary Dolenga. Filed as exhibit 99.2 to Registrant's Current Report
       on Form 8-K, filed July 15, 1997, and incorporated herein by reference.

10.28  401(k) Plan. Filed as exhibit no. 10.34 to the Registrant's
       Registration Statement on Form S-1 (Registration No. 33-43418), filed
       October 18, 1991, and incorporated herein by reference.

10.29  Form of Indemnification Agreement. Filed as exhibit no. 10.35 to the
       Registrant's Registration Statement on Form S-1 (Registration No.
       33-43418), filed October 18, 1991, and incorporated herein by reference.

10.30  Office Lease, dated December 30, 1992, between Registrant and Copley
       Place Associates Nominee Corporation (without exhibits). Filed as exhibit
       no. 19.5 to Registrant's Annual Report on Form 10-K, filed March 30,
       1993, and incorporated herein by reference.

10.31  First Amendment to Office Lease, dated June 3, 1993, between the
       Registrant and Copley Place Associates Nominee Corporation. Filed as
       exhibit no. 10.2 to Registrant's Quarterly Report on Form 10-Q, filed
       November 10, 1993, and incorporated herein by reference.

10.32  Agreement of Sublease, dated April 1, 1993, between Eastman Kodak
       Company and Core-California. Filed as exhibit no. 10.53 to the
       Registrant's Registration Statement on Form S-4 (Registration No.
       33-73906), filed January 10, 1994, and incorporated herein by reference.
</TABLE>

                                       20
<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------

<S>    <C>
10.33  Second Amendment to Agreement of Sublease, dated May 17, 1995,
       between Eastern Kodak Company and Core-California. Filed as exhibit no.
       10.45 to Registrant's Annual Report on Form 10-K, filed April 1, 1996,
       and incorporated herein by reference.

10.34  Lease, dated January 1, 1991, between Core-California and One
       Wheeler Road Associates. Filed as exhibit no. 10.55 to the Registrant's
       Registration Statement on Form S-4 (Registration No. 33-73906), filed
       January 10, 1994, and incorporated herein by reference.

10.35  First Amendment to Lease, dated November 28, 1995, between
       Core-California and One Wheeler Road Associates (without Exhibit). Filed
       as exhibit no. 10.47 to Registrant's Annual Report on Form 10-K, filed
       April 1, 1996, and incorporated herein by reference.

10.36  Office Building Lease, dated September 21, 1995, by and between
       McDonnell Douglas Realty Company and Registrant, including Exhibits and
       including Addendum to Lease Agreement. Filed as exhibit no. 10.48 to
       Registrant's Annual Report on Form 10-K, filed April 1, 1996, and
       incorporated herein by reference.

10.37  Sublease, dated May 23, 1996, between AT&T Corp., as Sublandlord,
       and Registrant, as Subtenant, for premises in Silver Spring, Maryland
       (without Exhibits). Filed as exhibit no. 10.63 to Registrant's Amendment
       No. 3 to Registration Statement on Form S-1 (Registration No. 333-03639),
       filed July 25, 1996, and incorporated herein by reference.

21.1*  Subsidiaries of the Registrant.

27.2*  Financial Data Schedule for years ended December 31, 1995 and 1996 and 
       for quarters ended March, June and September of 1996.

27.3*  Financial Data Schedule for quarters ended March, June and September 
       of 1997.

</TABLE>
------------------------------------
* Filed herewith


(b)    REPORTS ON FORM 8-K.

       There were no reports on Form 8-K filed during the last quarter of 1997.


                                       21
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                    CORE, INC.

Date:  March 27, 1998                 By: /s/ George C. Carpenter IV
                                         ------------------------------------
                                         George C. Carpenter IV
                                         Chairman of the Board and
                                           Chief Executive Officer


Date:  March 27, 1998                 By: /s/ William E. Nixon
                                         ------------------------------------
                                          William E. Nixon
                                          Chief Financial Officer, Executive
                                            Vice President and Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.

<TABLE>
<S>                                <C>                                    <C> 
 /s/ George C. Carpenter IV        Chairman of the Board of Directors     March 27, 1998
----------------------------            and Chief Executive Officer
George C. Carpenter IV             

 /s/ William E. Nixon              Chief Financial Officer, Executive     March 27, 1998
----------------------------            Vice President and Treasurer
William E. Nixon                        

 /s/ Pamela Ochs-Piasecki          Chief Accounting Officer               March 27, 1998
----------------------------
Pamela Ochs-Piasecki

 /s/ Leslie Alexandre              Director                               March 27, 1998
----------------------------                                             
Leslie Alexandre                                                         
                                                                         
 /s/ Stephen C. Caulfield          Director                               March 27, 1998
----------------------------                                             
Stephen C. Caulfield                                                     
                                                                         
 /s/ Richard H. Egdahl, M.D        Director                               March 27, 1998
---------------------------                                              
Richard H. Egdahl, M.D.                                                  
                                                                         
 /s/ Craig C. Horton               Director                               March 27, 1998
----------------------------                                             
Craig C. Horton                                                          
                                                                         
 /s/ John Pappajohn                Director                               March 27, 1998
----------------------------                                             
John Pappajohn                                                       
</TABLE>