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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                              ---------------------

                                    FORM 10-Q

     (Mark one)

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

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999

                                       OR

     [ ]       TRANSITIONAL REPORT PURSUANT TO SECTION 13 0R 15 (d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM _________ TO __________

                         COMMISSION FILE NUMBER 0-17292


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

             New York                                   13-3176233
  -------------------------------           ---------------------------------
  (State or other jurisdiction of           (IRS Employer Identification No.)
  incorporation or organization)

               Ridge Hill
            Yonkers, New York                                      10710
  ---------------------------------------                     --------------
  (Address of principal executive offices)                      (Zip Code)

       Registrant's telephone number, including area code: (914) 964-6700

         Indicate by check mark (X) whether the registrant 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 [ ]

         APPLICABLE  ONLY TO  CORPORATE  ISSUERS:  Indicate the number of shares
outstanding  of each of the issuer's  classes of common stock,  as of the latest
practicable date.


                  CLASS                       OUTSTANDING AT JANUARY 31, 2000
    Common stock, par value $.01 per share             5,165,552 Shares

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<PAGE>


                                                                       Page No.
                                                                       --------

PART I.       FINANCIAL INFORMATION

Item 1.       Condensed Consolidated Financial Statements

              Condensed Consolidated Balance Sheets at
              December 31, 1999 and March 31, 1999.........................3

              Condensed Consolidated Statements of Operations and
              Comprehensive Gain for the three and nine months
              ended December 31, 1999 and 1998.............................4

              Condensed Consolidated Statements of Cash Flows for
              the nine months ended December 31, 1999 and 1998.............5

Item 2.       Management's Discussion and Analysis of Financial
              Condition and Results of Operations........................6-8

Item 3.       Quantitative and Qualitative Disclosures About Market
              Risk Not Applicable..........................................8

PART II.      OTHER INFORMATION............................................9

Item 1.       Legal Proceedings............................................9


SIGNATURES................................................................10

<PAGE>
<TABLE>
<CAPTION>
                                       ACCUHEALTH, INC. AND SUBSIDIARIES
                                     CONDENSED CONSOLIDATED BALANCE SHEETS
                           (AMOUNTS IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA)
                                                  (UNAUDITED)

                                                                                   December 31,    March 31,
                                                                                      1999           1999
                                                                                   ------------   -----------
<S>                                                                                <C>              <C>
ASSETS
   Current Assets:
     Cash ......................................................................   $        25             85
     Marketable securities .....................................................            --          2,372
     Accounts receivable, net ..................................................        16,300         14,499
     Inventories ...............................................................         1,119          1,653
     Prepaid expenses and other current assets .................................           216            267
                                                                                   -----------    -----------


     Total Current Assets ......................................................        17,660         18,876
Revenue producing equipment, net ...............................................           832            901
Fixed assets, net ..............................................................         2,492          2,100
Other ..........................................................................           189             93
                                                                                            --             --
                                                                                   -----------    -----------

     Total Assets ..............................................................   $    21,173    $    21,970
                                                                                   ===========    ===========

LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) EQUITY
Current Liabilities:
     Notes payable - revolving credit facility .................................   $     9,195    $     7,765
     Current portion of notes payable - other ..................................           676            857
     Margin payable ............................................................            --          1,281
     Accounts payable ..........................................................         7,797          5,517
     Accrued expenses and other current liabilities ............................         2,356          2,245
     Current portion of capital lease - Facility ...............................           601            232
     Current portion of other capital lease obligations ........................           301            430
                                                                                   -----------    -----------

   Total Current Liabilities ...................................................        20,926         18,327

12% Subordinated Debentures ....................................................         6,250          6,250
Notes payable - term loan ......................................................           650            750
Notes payable - other, less current portion ....................................            --            109
Other capital lease obligations, less current portion ..........................           256            388
                                                                                   -----------    -----------

   Total Liabilities ...........................................................        28,082         25,824

Stockholders' Deficiency:
   Preferred  Stock,  $.01 par value:  authorized 3,650,000 shares;  no shares
     issued  and  outstanding Preferred  stock,  $.01par  value;6%  cumulative
     convertible, $213 and liquidation preference,  authorized 1,350,000 shares;
     issued and outstanding 105,000 shares .....................................             1              1

   Common stock $0.1 par value;  authorized  15,000,000 shares; 5,165,552,  and
     5,127,593 shares issued and outstanding, respectively .....................            51             51
   Additional paid-in capital ..................................................         7,618          7,606
   Accumulated other comprehensive income (loss) ...............................            --            (42)
   Accumulated deficit .........................................................       (13,955)       (10,846)
                                                                                   -----------    -----------
                                                                                        (6,285)        (3,230)
   Less treasury stock (308,004 shares) at cost ................................          (624)          (624)
                                                                                   -----------    -----------
Total Stockholders' Deficiency .................................................        (6,909)        (3,854)
                                                                                   -----------    -----------

Total Liabilities and Stockholders' Deficiency .................................   $   (21,173)   $    21,970
                                                                                   ===========    ===========
</TABLE>
                                                      3
<PAGE>
<TABLE>
<CAPTION>
                                                ACCUHEALTH, INC. AND SUBSIDIARIES
                                   CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE GAIN
                                     (AMOUNTS IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA)
                                                           (UNAUDITED)

                                                                           Three Months Ended              Nine Months Ended
                                                                              December 31,                    December 31,
                                                                        --------------------------    --------------------------
                                                                           1999            1998          1999            1998
                                                                        -----------    -----------    -----------    -----------
<S>                                                                     <C>            <C>            <C>            <C>
Net sales ...........................................................   $     8,918    $     9,973    $    27,029    $    27,460
Cost of goods sold ..................................................         6,069          6,026         18,535         16,311
                                                                        -----------    -----------    -----------    -----------

Gross Profit ........................................................         2,849          3,947          8,494         11,149
Selling, general and administrative expenses ........................         3,200          3,757          9,981         10,960
                                                                        -----------    -----------    -----------    -----------

Operating income (loss) .............................................          (351)           190         (1,487)           189
Interest expense ....................................................           563            456          1,613          1,105
                                                                        -----------    -----------    -----------    -----------
Net income (loss) ...................................................   $      (914)   $      (266)        (3,100)          (916)
                                                                        ===========    ===========    ===========    ===========

Net income (loss) per common share applicable to common shareholders:
    Basic ...........................................................   $      (.18)   $      (.08)   $      (.60)   $      (.28)
    Diluted .........................................................   $      (.18)   $      (.08)   $      (.60)   $      (.27)

Weighted number of common shares and equivalents outstanding:
    Basic ...........................................................     5,146,564      3,336,494      5,137,977      3,276,871
    Diluted .........................................................     5,146,564      3,441,880      5,137,977      3,382,257

    Net income (loss) ...............................................          (914)          (266)        (3,100)          (916)
Other comprehensive income, net of tax: unrealized gain on
marketable securities, net ..........................................            --             --             --             --
                                                                        -----------    -----------    -----------    -----------
Total comprehensive income (loss) ...................................   $      (914)   $      (266)   $    (3,100)   $      (916)
                                                                        ===========    ===========    ===========    ===========
</TABLE>
                                                                4
<PAGE>
<TABLE>
<CAPTION>
                                ACCUHEALTH, INC. AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                    (AMOUNTS IN THOUSANDS, EXCEPT SHARES AND PER SHARE DATA)
                                           (UNAUDITED)

                                                                 Nine Months Ended December 31,
                                                                       1999        1998
                                                                     --------    --------
<S>                                                                  <C>             <C>
OPERATING ACTIVITIES
Net income (loss) ................................................   $ (3,100)       (916)
Adjustments to reconcile net income (loss) to net cash provided by
     (used in) operating activities:
Depreciation and amortization ....................................        626         570
Changes in operating assets and liabilities:
Accounts receivable ..............................................     (1,801)     (4,392)
Inventories ......................................................        534      (1,229)
Prepaid expenses and other current assets ........................         51        (157)
Other assets .....................................................        (96)        443
Accounts payable .................................................      2,415        (979)
Accrued expenses and other current liabilities ...................        116          58
                                                                     --------    --------

Cash used in operating activities ................................     (1,255)     (6,602)
                                                                     --------    --------

INVESTING ACTIVITIES
Purchase of fixed assets .........................................     (1,047)       (584)
Purchase of marketable securities ................................         --      (4,249)
Proceeds from sales of marketable securities .....................      1,095          --
                                                                     --------    --------
Cash provided by (used in) investing activities ..................         48      (4,833)
                                                                     --------    --------

FINANCING ACTIVITIES
Proceeds from note payable - revolving credit facility ...........      1,430       3,747
Proceeds from subordinated debentures ............................         --       6,250
Proceeds from term loan ..........................................         --         250
Proceeds from sale of marketable securities ......................                    700
Proceeds from margin loan ........................................                  1,000
Payments on notes payable - revolving credit facility ............       (100)
Proceeds from notes payable-other ................................        368         600
Payments on notes payable - other ................................       (290)     (1,161)
Principal payments on capital lease - Facility ...................                     --
Proceeds from issuance of capital stock ..........................         --          89
Payments on other capital lease obligations ......................       (261)        (77)
                                                                     --------    --------
Cash provided by financing activities ............................      1,147      11,398
                                                                     --------    --------

Net increase (decrease) in cash ..................................        (60)        (37)
                                                                     --------    --------

Cash at beginning of period ......................................         85         249
                                                                     --------    --------
Cash at end of period ............................................   $     25    $    212
                                                                     ========    ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid ....................................................   $    948    $    773
                                                                     ========    ========

NONCASH INVESTING AND FINANCING ACTIVITIES:
Additions to capital leases ......................................   $     --    $    150
Accrued dividends and accretion on redeemable preferred stock ....   $     12    $     20
</TABLE>
                                               5
<PAGE>


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

This Management's Discussion and Analysis should be read in conjunction with the
condensed consolidated financial statements of the Company included elsewhere in
this Form 10-Q.

RESULTS OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998

NET REVENUES. Net revenues decreased approximately $ 1.1 million or 11% from the
comparable 1998 quarter to approximately $8.9 million for the three months ended
December 31, 1999.  The  decrease was  primarily  the result of decreases in the
Company's  infusion  therapy  revenues  and  decreases in the sale and rental of
durable medical equipment.

GROSS PROFIT. Gross profit for the three months ended December 31, 1999 and 1998
was  approximately  $2.8 million and $3.9  million,  respectively,  representing
approximately  32% of net sales for the three months ended  December 31, 1999 as
compared to 39% for the  comparable  prior year period.  Gross profit  decreased
primarily  due to  the  mix of  revenues.  The  Company  experienced  a  greater
percentage of revenues from its institutional pharmacy business, which generates
lower  gross  margin  as  compared  to the  other  lines of  business.  Further,
decreased  revenues  from the durable  medical  equipment,  which  generates the
Company's highest gross margin, also contributed to the decline in overall gross
profit.  Moreover,  declines in margins in the higher margin infusion  therapies
were  incurred due to changes in the customer  base.  Compounding  this downward
pressure on  reimbursement  rates has been a change in our managed  care patient
mix  to  lower  margin  modalities  as  a  result  of  the  prolonged,   reduced
availability of intravenous  immune gamma globulin - a higher margin  medication
frequently administered to our patients.

SELLING,   GENERAL   AND   ADMINISTRATIVE   EXPENSES.   Selling,   general   and
administrative  expenses  were  approximately  $3.2  million and $3.8 million or
approximately  37% and 38% of net sales for the three months ended  December 31,
1999 and 1998,  respectively.  There were  decreases due to the  elimination  of
certain  duplicate   overhead  costs  resulting  from  the  merger  with  Healix
Healthcare,  Inc. on April 9, 1998. Offsetting these decreases were increases in
bad  debt  expense  ($600,000)  and  costs  associated  with  consolidating  the
Company's headquarters' and operations in a new leased facility ($115,000).

INTEREST  EXPENSE.  Interest  increased  by $107,000  for the three months ended
December 31, 1999, to approximately $563,000. This increase was due to increased
net borrowings under our revolving line of credit and additional interest on the
$6,250,000,  12% Subordinated  Debentures due to the receipt of additional funds
in August, 1998 and additional interest accrued on unpaid interest per the terms
of the agreement.

PROVISION FOR INCOME TAXES.  No provision of income taxes has been reflected due
to the Company's federal and state net operating loss credits.

NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998

NET  REVENUES.  Net revenues  decreased  approximately  $431,000 or 2 % from the
comparable 1998 quarter to approximately $27.0 million for the nine months ended

                                       6
<PAGE>


December  31,  1999.  The decrease was  primarily  was  primarily  the result of
decreases in the Company's  infusion  therapy revenues and decreases in the sale
and rental of durable medical equipment.

GROSS PROFIT.  Gross profit for the nine months ended December 31, 1999 and 1998
was   approximately   $8.5  and  $11.1   million,   respectively,   representing
approximately  32% of net sales for the nine months  ended  December 31, 1999 as
compared to 40% for the  comparable  prior year period.  Gross profit  decreased
primarily due to the  Company's  growth in sales in the  institutional  pharmacy
business,  which generates a lower gross margin,  continued downward pressure on
its fees within the infusion therapy business,  decreases in the durable medical
equipment business, which generates high gross margins and write off of unusable
revenue producing equipment. Compounding this downward pressure on reimbursement
rates  has  been a change  in our  managed  care  patient  mix to  lower  margin
modalities as a result of the  prolonged,  reduced  availability  of intravenous
immune gamma  globulin- a higher margin  medication  frequently  administered to
patients.

SELLING,   GENERAL   AND   ADMINISTRATIVE   EXPENSES.   Selling,   general   and
administrative   expenses   were   approximately   $10.0  and  $11   million  or
approximately  37% and 40% of net sales for the nine months  ended  December 31,
1999 and 1998,  respectively.  There were  decreases due to the  elimination  of
certain  duplicate   overhead  costs  resulting  from  the  merger  with  Healix
Healthcare,  Inc. on April 9, 1998. Offsetting these decreases were increases in
bad  debt  expense  ($700,000)  and  costs  associated  with  consolidating  the
Company's headquarters and operations in a new leased facility ($115,000).

INTEREST EXPENSE.  Interest  expenses  increased by $508,000 for the nine months
ended  December  31,  1999,  to  approximately  $1,613,000.  This  increase  was
primarily due to increased net borrowings under our revolving line of credit and
additional  interest on the  $6,250,000 12%  Subordinated  Debentures due to the
receipt of  additional  funds in August 1998 and  additional  interest on unpaid
interest per the terms of the agreement.

PROVISION FOR INCOME TAXES.  No provision of income taxes has been reflected due
to the Company's federal and state net operation loss credits.

FINANCIAL CONDITION

As  of  December  31,  1999,  the  Company  had  negative   working  capital  of
approximately $3,266,000.

The  Company's  cash  provided by financing  activities  of  approximately  $1.1
million was primarily  attributable  to the net proceeds of  approximately  $1.4
million under the Company's  revolving  credit  facility and term loan offset by
principal payments on capital leases and other notes payable.

Accounts receivable  includes amounts due from third party customers,  primarily
governmental  agencies  (Medicare  and  Medicaid).  At December 31, 1999,  gross
Medicare and Medicaid receivables aggregated approximately $5.5 million.

In addition to the  continuing  losses,  the  Company  operates  under cash flow
pressure due to difficulty in collecting its accounts receivable. The difficulty
in collecting  sufficient  accounts receivable during the quarter ended December
31, 1999 has required that the Company  attempt to negotiate  extended terms for
vendor payments.  In December 1999 the primary drug distributor stopped shipping
drugs to the Company and another drug  distributor  provided  drugs on a cash on
delivery (C.O.D.) basis. In January 2000 the primary drug distributor instituted
a lawsuit temporarily  restraining the operations of the Company.  Also, a prior
drug  distributor  restrained  the  operations of the Company in February  2000.
Moreover, a supplier of nursing services was successful in sustaining a judgment
against the Company for $143,448. The court has since lifted the restraints. The
Company has been granted the  opportunity  within 60 days from February 10, 2000
to negotiate a settlement with the Company's former primary drug distributor and

                                       7
<PAGE>


until March 17, 2000 to negotiate a settlement  with the prior drug  distributor
and is attempting to develop a payment plan with the nursing  service  provider.
(See Legal Proceedings,  Part II, Item 1 elsewhere in this Report). There can be
no assurance that the Company will be successful in reaching  agreement with any
of the plaintiffs,  the result of which could have a material  adverse effect on
the Company.

The Company is also evaluating  alternatives to improve  profitability  and cash
flow such as  eliminating  unprofitable  product lines and reviewing  payors and
payor  groups to  determine  whether to  continue  to service  them,  as well as
exploring  financing  alternatives.  Three managed care  organizations have been
notified  that the  Company is no longer  accepting  their new  patients  and is
transferring  their existing  patients to other service  providers.  The company
will  continue  to evaluate  its payors and payor  groups to  selectively  cease
business with those deemed  unprofitable.  To further improve cash flow, various
product  lines are under  evaluation  to  determine  the  impact of  selling  or
terminating that business

 The need for  additional  cash is  critical to the  ongoing  operations  of the
Company;  and  accordingly,  efforts are  underway to identify the sources for a
cash  infusion.  As of December 31,  1999,  the Company had borrowed the maximum
allowable  under its  revolving  loan  agreement  ($9,000,000),  overdraft  line
($1,000,000),  term loan  ($700,000)  and received an advance on the sale of its
building  ($600,000).  The Company  entered  into a contract for the sale of its
Bronx facility and has rented new space where it  consolidated  its  operations.
The net cash proceeds anticipated from the sale of the building would be used to
pay the advance of $600,000  with the balance of the  proceeds  used to pay down
the overdraft  line.  Discussions  with vendors to convert a portion of accounts
payable  into notes or to  provide  more time for  repayment  are  presently  in
process.  There can be no  assurance  that the  Company  will be  successful  in
obtaining  additional cash infusion with favorable terms to the Company.  If the
Company  fails to obtain  such cash  infusion,  the  ability  of the  Company to
sustain operations and pay its creditors would be adversely effected.


DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for forward-looking  statements.  Certain information in Items 1 and 2 of Part I
of this Form 10-Q  includes  information  that is forward  looking,  such as the
Company's  plans to convert  accounts  payable  to notes  payable.  The  matters
referred  to in  forward-looking  statements  could be affected by the risks and
uncertainties involved in the Company's business.  These risks and uncertainties
include,  but are not limited to; the effect of economic and market  conditions,
the impact of the cost containment  efforts,  the sale or termination of product
lines, the ability to obtain a cash infusion and the Company's ability to obtain
and maintain  required  licenses.  Subsequent  written and oral forward  looking
statements  attributable  to the  Company  or  persons  acting on its behalf are
expressly  qualified  in their  entirety by the  cautionary  statements  in this
paragraph and elsewhere in this Form 10-Q.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

                                       8
<PAGE>


PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

On January 28, 2000 in an action entitled McKesson HBOC versus AccuHealth,  Inc.
and Midview Drug, Inc. in the Supreme Court of the State of New York,  County of
Westchester,  the Company was served with an order to shows cause with temporary
restraints and a verified  complaint  from its former  primary drug  distributor
alleging that the Company owed a sum in excess of $4,000,000 and the Company was
ordered via a restraining  order from conducting  business.  On February 1, 2000
the Company was successful in lifting the restraining  order and on February 10,
2000 was granted by the  plaintiff a 60 day time period to try and resolve  this
matter.

On February 9, 2000 in an action  entitled  Neuman  Distributors,  Inc.  against
Midview  Drug,  Inc,  in the Supreme  Court of the State of New York,  County of
Kings, the Company was also served with a restraining  notice to judgment Debtor
from another drug  distributor  alleging that it was owed $205,000.  On February
14,  2000 the  Company  was  successful  in  entering  into a  stipulation  with
plaintiff  obtaining a time period to resolve  this matter  until March 17, 2000
and the restrains were lifted.

In January 2000 a provider of nursing  services was successful in sustaining its
judgment  against the Company in the amount of $143,448.  This  resulted from an
action  entitled Staff Builders Inc.  against  Healix Health Care,  Inc.  a/k/a/
Accuhealth/Healix  Healthcare,  Inc.  in the  Supreme  Court of the State of New
York,  County of  Westchester.  The Company is  attempting to work out a payment
arrangement with the nursing service provider.

There  are  three  other  lawsuits  against  the  Company,   which  have  claims
aggregating  less than $100,000.  The Company's  management is confident that it
has meritorious defenses against such claims.

Item 2.  Changes in Securities

None

Item 3.  Default Upon Senior Securities

None

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

None

Item 5.  Other Information

None

Item 6.  Exhibits and Reports on Form 8-K

(a) Exhibits

None

(b) Reports

None

                                       9
<PAGE>


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                    ACCUHEALTH, INC.


Date:  February 23, 2000            /s/ GLENN C. DAVIS
                                    -------------------------------------
                                    Glenn C. Davis as
                                    President and Chief Executive Officer

                                       10