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UNITED STATES
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 MARCH 31, 2000

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

FOR THE TRANSITION PERIOD FROM ________ TO ________

COMMISSION FILE NUMBER 000-19480

PER-SE TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)

DELAWARE 58-1651222
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

2840 MT. WILKINSON PARKWAY 30339
ATLANTA, GEORGIA (Zip code)
(Address of principal executive
offices)

(770) 444-5300
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE

NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

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

CLASS OUTSTANDING AT MAY 5, 2000
----- --------------------------

Common Stock 29,868,205 shares
$0.01 par value
Non-voting Common Stock 0 shares
$0.01 par value

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2

PER-SE TECHNOLOGIES, INC.

FORM 10-Q
FOR THE FISCAL QUARTER ENDED MARCH 31, 2000

PAGE
----

PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 2000
and December 31, 1999............................ 2
Consolidated Statements of Operations for the
three months ended March 31, 2000 and 1999....... 3
Consolidated Statements of Cash Flows for the
three months ended March 31, 2000 and 1999....... 4
Notes to Consolidated Financial Statements....... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............. 10
PART II: OTHER INFORMATION................................. 14
Item 1. Legal Proceedings................................ 14
Item 6. Exhibits and Reports on Form 8-K................. 15
Index to Exhibits......................................... 17

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

THIS FORM 10-Q AND OTHER STATEMENTS ISSUED OR MADE FROM TIME TO TIME BY
PER-SE TECHNOLOGIES, INC. OR ITS REPRESENTATIVES CONTAIN STATEMENTS WHICH MAY
CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE SECURITIES ACT
OF 1933 AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. 15 U.S.C.A. SECTIONS 77Z-2 AND 78U-5
(SUPP. 1996). THOSE STATEMENTS INCLUDE STATEMENTS REGARDING THE INTENT, BELIEF
OR CURRENT EXPECTATIONS OF PER-SE TECHNOLOGIES, INC. AND MEMBERS OF ITS
MANAGEMENT TEAM AS WELL AS THE ASSUMPTIONS ON WHICH SUCH STATEMENTS ARE BASED.
PROSPECTIVE INVESTORS ARE CAUTIONED THAT ANY SUCH FORWARD-LOOKING STATEMENTS ARE
NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, AND
THAT ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY SUCH
FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS CURRENTLY KNOWN TO MANAGEMENT THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN FORWARD-LOOKING
STATEMENTS ARE SET FORTH IN THE SAFE HARBOR COMPLIANCE STATEMENT FOR
FORWARD-LOOKING STATEMENTS INCLUDED AS EXHIBIT 99.1 TO THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FILED MARCH 27, 2000, WHICH IS INCORPORATED HEREIN BY
REFERENCE. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE
FORWARD-LOOKING STATEMENTS TO REFLECT CHANGED ASSUMPTIONS, THE OCCURRENCE OF
UNANTICIPATED EVENTS OR CHANGES TO FUTURE OPERATING RESULTS OVER TIME.
3

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT PAR VALUE DATA)

MARCH 31, DECEMBER 31,
2000 1999
--------- ------------

CURRENT ASSETS:
Cash and cash equivalents................................. $ 49,091 $ 74,354
Restricted cash........................................... 6,663 7,519
--------- ---------
Total cash (Note 2).................................... 55,754 81,873
Accounts receivable, billed............................... 46,710 46,097
Accounts receivable, unbilled............................. 4,513 42,813
Other..................................................... 8,148 7,394
--------- ---------
Total current assets................................... 115,125 178,177
Property and equipment, net................................. 32,483 34,103
Intangible assets........................................... 48,745 46,446
Other....................................................... 5,964 6,291
--------- ---------
$ 202,317 $ 265,017
========= =========
CURRENT LIABILITIES:
Accounts payable.......................................... $ 8,100 $ 10,005
Accrued compensation...................................... 13,504 21,842
Accrued expenses.......................................... 16,478 26,449
Accrued litigation settlements............................ 3,087 4,043
Current portion of long-term debt......................... 2,179 2,138
--------- ---------
43,348 64,477
Deferred revenue.......................................... 19,419 20,396
--------- ---------
Total current liabilities.............................. 62,767 84,873
Long-term debt.............................................. 175,000 175,000
Other obligations........................................... 3,588 3,704
--------- ---------
Total liabilities...................................... 241,355 263,577
--------- ---------
Stockholders' Equity:
Preferred stock, no par value, 20,000 authorized; none
issued................................................. -- --
Common stock, voting, $0.01 par value, 200,000 authorized,
29,868 and 29,575 issued and outstanding in 2000 and
1999, respectively..................................... 299 296
Common stock, non-voting, $0.01 par value, 600 authorized;
none issued............................................ -- --
Paid-in capital........................................... 774,259 771,864
Warrants.................................................. 1,495 1,495
Accumulated deficit....................................... (815,091) (772,215)
--------- ---------
Total stockholders' (deficit) equity................... (39,038) 1,440
--------- ---------
$ 202,317 $ 265,017
========= =========

See notes to consolidated financial statements.
2
4

PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

THREE MONTHS ENDED
MARCH 31,
--------------------
2000 1999
-------- --------

Revenue..................................................... $ 78,829 $ 81,374
-------- --------
Salaries and wages.......................................... 52,258 53,154
Other operating expenses.................................... 24,478 30,356
Depreciation................................................ 3,964 6,787
Amortization................................................ 2,419 2,267
Interest expense, net....................................... 3,653 3,904
-------- --------
Total expenses......................................... 86,772 96,468
-------- --------
Loss before income taxes.................................... (7,943) (15,094)
Income tax benefit.......................................... (1,114) (524)
-------- --------
Loss from continuing operations............................. (6,829) (14,570)
-------- --------
Discontinued operations, net of tax:
Income from discontinued operations....................... -- 304
Gain on sale of subsidiaries.............................. 1,654 470
-------- --------
1,654 774
-------- --------
Loss before cumulative effect of accounting change.......... (5,175) (13,796)
Cumulative effect of accounting change, net of tax.......... (37,684) --
-------- --------
Net loss............................................... $(42,859) $(13,796)
======== ========
Basic net (loss) income per common share:
Loss from continuing operations........................... $ (0.23) $ (0.55)
Income from discontinued operations, net of tax........... 0.06 0.03
Cumulative effect of accounting change, net of tax........ (1.27) --
-------- --------
Net loss.................................................. $ (1.44) $ (0.52)
======== ========
Weighted average shares outstanding......................... 29,757 26,309
======== ========

See notes to consolidated financial statements.

3
5

PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)

THREE MONTHS ENDED
MARCH 31,
--------------------
2000 1999
-------- --------

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss.................................................... $(42,859) $(13,796)
Adjustments to reconcile net loss to net cash used for
operating activities:
Income from discontinued operations....................... -- (304)
Depreciation and amortization............................. 6,383 9,054
Additional gain on sale of subsidiaries................... (1,654) (796)
Cumulative effect of accounting change.................... 37,684 --
Changes in assets and liabilities, excluding effects of
acquisitions and divestitures:
Restricted cash........................................ 353 (8)
Accounts receivable, billed............................ (541) (681)
Accounts receivable, unbilled.......................... 616 1,654
Accounts payable....................................... (1,905) 1,733
Accrued compensation................................... (8,354) 678
Accrued expenses....................................... (9,519) (7,106)
Accrued litigation settlements......................... (956) (515)
Deferred revenue....................................... (977) 2,503
Other, net............................................. (613) 2,275
-------- --------
Net cash used for continuing operations................ (22,342) (5,309)
Net cash used for discontinued operations.............. -- (5,952)
-------- --------
Net cash used for operating activities............... (22,342) (11,261)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions, net of cash acquired.......................... (955) --
Purchases of property and equipment......................... (2,216) (2,112)
Additional net proceeds from sale of subsidiaries........... 1,654 796
Proceeds from sale of property and equipment................ 21 373
Software development costs.................................. (1,773) (1,537)
-------- --------
Net cash used for investing activities............... (3,269) (2,480)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of stock............................. 299 503
Proceeds from the exercise of stock options................. 82 48
Payments of debt............................................ (29) (40)
Deferred financing costs.................................... (4) --
-------- --------
Net cash provided by financing activities............ 348 511
-------- --------
CASH AND CASH EQUIVALENTS
Net change.................................................. (25,263) (13,230)
Balance at beginning of period.............................. 74,354 54,409
-------- --------
Balance at end of period.................................... $ 49,091 $ 41,179
======== ========

See notes to consolidated financial statements.
4
6

PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 -- BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of
Per-Se Technologies, Inc. ("Per-Se" or the "Company") are presented in
accordance with the requirements of Form 10-Q and Rule 10-01 of Regulation S-X.
For further information, the reader of this Form 10-Q may wish to refer to the
audited consolidated financial statements of the Company for the fiscal year
ended December 31, 1999 included in the Company's Annual Report on Form 10-K
filed March 27, 2000.

The unaudited condensed financial information has been prepared in
accordance with the Company's customary accounting policies and practices. In
the opinion of management, all adjustments, consisting of normal recurring
adjustments considered necessary for a fair presentation of results for the
interim period, have been included.

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenues
and expenses. Actual results could differ from those estimates.

Basic net loss per common share is based on the weighted average number of
shares of common stock outstanding during the period. Diluted net loss per
common share is not presented as it is antidilutive. Stock options and warrants
are the only securities issued that would have been included in the pro forma
diluted earnings per share calculation.

As more thoroughly discussed in Note 2, the Medaphis Services Corporation
("Hospital Services") and Impact Innovations Group ("Impact") segments have been
presented as discontinued operations for all periods presented.

NOTE 2 -- DIVESTITURES -- CASH RECEIPTS AND DISCONTINUED OPERATIONS

On November 30, 1998, the Company completed the sale of Hospital Services
to NCO Group, Inc. ("NCO") for initial consideration of $107.5 million. During
the first quarter of 1999, the Company received additional consideration of $0.8
million based on the Hospital Services final closing balance sheet and payment
on certain Hospital Services accounts receivable retained by Per-Se. The
additional consideration resulted in the recognition of an additional gain of
$0.5 million, net of tax of $0.3 million. In addition, Per-Se received a
purchase price adjustment of $10.0 million cash from NCO in May 2000 based on
Hospital Services' achievement of various operational targets in 1999. Receipt
of that payment will be reflected in the Company's second quarter of 2000
financial statements.

In 1999, the Company completed the sale of both divisions of Impact. After
reviewing several alternatives for Impact throughout 1998, management concluded
a sale of this segment would generate the greatest return to the stockholders
and finalized its plan to sell Impact. The Company sold the commercial division
of Impact to Complete Business Solutions, Inc. ("CBSI") effective April 15, 1999
for $14.4 million, net of the final closing balance sheet adjustment of $0.6
million which was paid on July 16, 1999. The government division of Impact was
sold on December 17, 1999 to J3 Technology Services Corp. for $46.5 million,
including a purchase price adjustment of $1.5 million received on March 30, 2000
based on the division's tangible net worth at closing. The purchase price
adjustment resulted in the recognition of an additional gain of $1.5 million.

Pursuant to APB No. 30, Reporting the Results of Operations -- Reporting
the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions, the consolidated financial
statements of the Company have been presented to reflect both Hospital Services
and Impact as discontinued operations for all periods presented.

5
7

The net operating results of these segments have been reported in the
Consolidated Statements of Operations as "Income from discontinued operations"
and the net cash flows have been reported in the Consolidated Statements of Cash
Flows as "Net cash used for discontinued operations."

Summarized financial information for the discontinued operations is as
follows:

FOR THE THREE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS)

IMPACT
-------

Revenue..................................................... $20,622
=======
Income from discontinued operations before income taxes..... 502
Income tax expense.......................................... 198
-------
Income from discontinued operations, net of tax............. $ 304
=======

NOTE 3 -- RECENT ACQUISITIONS

On February 9, 2000, the Company acquired the outstanding capital stock of
Knowledgeable Healthcare Solutions, Inc. ("KHS") for initial consideration of
$3.0 million, consisting of $1.0 cash and $2.0 million of the Company's Common
Stock. In addition, the purchase agreement provides for a purchase price
adjustment of up to $6.0 million, payable in cash and the Company's Common
Stock, should KHS meet certain operational targets over the next three years.
KHS has developed a managed care software product that is used by Per-Se to
provide business management services to numerous independent physician
associations.

The KHS acquisition was recorded using the purchase method of accounting
and, accordingly, the purchase price has been allocated to the assets acquired
and the liabilities assumed based on their estimated fair market value at the
date of acquisition. Approximately $2.9 million of the purchase price has been
allocated to intangible assets and will be amortized using the straight-line
method over five years. The operating results of KHS, which were not material to
the Company's operations, are included in the Company's Consolidated Statements
of Operations from the date of acquisition.

NOTE 4 -- CUMULATIVE EFFECT OF ACCOUNTING CHANGE

On December 3, 1999, the Securities and Exchange Commission (the
"Commission") issued Staff Accounting Bulletin Number 101, Revenue Recognition
in Financial Statements ("SAB 101"). SAB 101 summarizes certain of the
Commission's views in applying generally accepted accounting principles to
revenue recognition in financial statements. SAB 101 provides interpretative
guidance on the unbilled accounts receivable and related revenue recognition
within the Company's industry. The Commission's guidance encourages the
accounting change to be reflected by the Company's quarter ended March 31, 2000.
Therefore, consistent with the Commission's guidance and changing industry
practice, the Company began recognizing revenue in its Physician Services
segment on an "as billed" basis January 1, 2000. The Company does not expect
this change to significantly impact annual recognized revenue amounts. There is
no effect on cash flow resulting from this change.

The change in accounting method resulted in the elimination of $37.7
million of unbilled accounts receivable. The one-time, cumulative non-cash
charge in the Company's March 31, 2000 statement of operations reflects the
$22.7 million elimination of the unbilled accounts receivable on a net of tax
basis and a corresponding $15.0 million increase in the Company's deferred tax
valuation allowance. See Note 8 for further discussion of income taxes.

6
8

NOTE 5 -- LEGAL MATTERS

The Company is subject to claims and litigation in the ordinary course of
its business. Within the Company's industry, federal and state civil and
criminal laws govern medical billing and collection activities. These laws
provide for various fines, penalties, multiple damages, assessments and
sanctions for violations, including possible exclusion from Medicare, Medicaid
and certain other federal and state healthcare programs. The Company and its
clients have received, and the Company may continue to receive, official
inquiries concerning billing and collection practices.

On May 10, 1999, a motion by plaintiffs to reopen a putative class action
complaint filed by Ernest Hecht and Stephen D. Strandberger was granted by the
courts. During 1998, this case had been dismissed against Per-Se with prejudice
and without leave to amend. The reinstated appeal is pending. The Company is
unable to estimate the final outcome and any loss related to this matter.

On January 8, 1997, the Commission notified the Company that it was
conducting a formal, non-public investigation into, among other things, former
officers and Company transactions including the restatements of the Company's
consolidated financial statements for the three months and year ended December
31, 1995 and its unaudited balance sheets as of March 31, 1996 and June 30,
1996. The Company continues to monitor the investigation as it proceeds.

The Company believes that it has meritorious defenses to the claims
asserted in existing legal matters. There can be no assurance that existing or
future claims, government investigations, including the Commission
investigation, and legal matters will not have an adverse effect on the Company.
Since the Company is unable to estimate a range of awards or losses, if any, on
pending legal matters, no amounts have been reflected in the financial
statements.

NOTE 6 -- RESTRUCTURING AND OTHER CHARGES

The description of the type and the amount of restructuring costs applied
against each reserve in the quarter ended March 31, 2000 are as follows:

RESERVE RESERVE
BALANCE COSTS APPLIED BALANCE
12/31/99 AGAINST RESERVE 3/31/00
-------- --------------- -------
(IN THOUSANDS)

Lease termination costs.................................. $3,528 $(266) $3,262
Severance................................................ 273 -- 273
------ ----- ------
$3,801 $(266) $3,535
====== ===== ======

NOTE 7 -- LONG-TERM DEBT

Under the indenture governing the 9 1/2% $175 million of Senior Notes due
2005 (the "Notes"), the balance of the net sale proceeds, as defined, from the
sale of Hospital Services, the commercial division of Impact, the government
division of Impact or from the sale of any other asset having a fair value in
excess of $1.0 million, must be invested in the Company's business within 360
days of receipt of proceeds related to the sale. To the extent that such net
proceeds are not invested within 360 days, such amount constitutes "excess
proceeds." If the aggregate amount of excess proceeds is greater than $10.0
million, the Company is required to offer to repurchase the Notes at par with
such excess proceeds. As of May 15, 2000, aggregate excess proceeds did not
exceed $10.0 million.

NOTE 8 -- INCOME TAXES

At March 31, 2000, the Company reassessed the recoverability of its
deferred tax asset. Based on its analysis, the Company determined a full
valuation allowance of $251.8 million against the deferred tax asset was
required. The increase in the valuation allowance of $15.0 million is directly
related to the elimination of the Company's unbilled accounts receivable (see
Note 4) and, as such, was recorded against the cumulative

7
9

effect of accounting change. When it becomes more likely than not that the
Company will generate sufficient taxable income to realize the deferred tax
asset, the Company will adjust this valuation allowance accordingly.

The Company recognized a $1.2 million tax benefit in the quarter ended
March 31, 2000 related to a state income tax refund.

NOTE 9 -- SEGMENT REPORTING

The Company's reportable segments are strategic business units that offer
different services and products. Per-Se provides its services and products
through its three operating segments: Physician Services, Application Software
and e-Health.

Physician Services provides business management services to physicians and
healthcare organizations, including clinical data collection, data input,
medical coding, billing, contract management, cash collections and accounts
receivable management. These services are designed to assist healthcare
providers with the business management functions associated with the delivery of
healthcare services, allowing physicians and hospital staff to focus on
providing quality patient care. These services also assist physicians and
healthcare organizations in improving cash flows and reducing administrative
costs and burdens.

The Application Software segment provides financial and clinical software
including patient scheduling, staff management, clinical information systems and
patient financial management software. These applications enable healthcare
organizations to simultaneously optimize the quality of care delivered and the
profitability of business operations.

The e-Health segment offers Internet-enabled and private network
connectivity to both integrated healthcare delivery networks and physician
practices, including electronic claims processing, referral submissions,
eligibility verification and other electronic and paper transaction processing.
In addition, e-Health offers physician practice management software as an
application service provider to physician practices.

Per-Se evaluates each segment's performance based on operating profit or
loss. The Company accounts for intersegment sales as if the sales were to third
parties.

8
10

Information concerning the operations in these reportable segments is as
follows:

THREE MONTHS ENDED
MARCH 31,
-------------------------
2000 1999
--------- ------------
(IN THOUSANDS)

Revenue:
Physician Services........................................ $ 58,822 $ 61,457
Application Software...................................... 14,352 15,193
e-Health.................................................. 8,487 7,580
Eliminations.............................................. (2,832) (2,856)
-------- --------
$ 78,829 $ 81,374
======== ========
Operating profit (loss)(1):
Physician Services........................................ $ 80 $ (2,839)
Application Software...................................... (1,692) (2,668)
e-Health.................................................. 905 (7)
Corporate................................................. (3,583) (5,676)
-------- --------
$ (4,290) $(11,190)
======== ========
Interest expense, net....................................... $ 3,653 $ 3,904
======== ========
Loss before income taxes.................................... $ (7,943) $(15,094)
======== ========
Depreciation and amortization:
Physician Services........................................ $ 3,332 $ 4,553
Application Software...................................... 1,764 1,713
e-Health.................................................. 610 615
Corporate................................................. 677 2,173
-------- --------
$ 6,383 $ 9,054
======== ========
Capital expenditures:
Physician Services........................................ $ 1,049 $ 1,242
Application Software...................................... 161 246
e-Health.................................................. 641 234
Corporate................................................. 365 390
-------- --------
$ 2,216 $ 2,112
======== ========

AS OF
-------------------------
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
(IN THOUSANDS)

Identifiable Assets:
Physician Services........................................ $ 78,171 $116,423
Application Software...................................... 40,012 39,265
e-Health.................................................. 19,244 18,904
Corporate................................................. 64,890 90,425
-------- --------
$202,317 $265,017
======== ========

- ---------------
(1) Includes depreciation and amortization expense; excludes interest expense,
net.

9
11

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

GENERAL

Per-Se Technologies, Inc. ("Per-Se" or the "Company"), a corporation
organized in 1985 under the laws of the State of Delaware, is a global leader in
delivering technology-enabled business management services, financial and
clinical software solutions and Internet-enabled connectivity and e-health
solutions to healthcare providers. Per-Se delivers its services and products
through its three operating segments: Physician Services, Application Software
and e-Health.

The Physician Services segment provides business management services to
physicians and healthcare organizations, including clinical data collection,
data input, medical coding, billing, contract management, cash collections and
accounts receivable management. These services are designed to assist healthcare
providers with the business management functions associated with the delivery of
healthcare services, allowing physicians and hospital staff to focus on
providing quality patient care. These services also assist physicians and
healthcare organizations in improving cash flows and reducing administrative
costs and burdens.

Per-Se markets its products and services primarily to integrated healthcare
delivery networks, hospitals, physician practices, long-term care facilities,
home health providers and managed care organizations.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2000 AS COMPARED TO THREE MONTHS ENDED MARCH
31, 1999

Operating Profit (Loss). Operating profit (loss), which excludes interest
expense, classified by the Company's different operating segments is as follows:

THREE MONTHS ENDED
MARCH 31,
-------------------
2000 1999
------- --------
(IN THOUSANDS)

Physician Services.......................................... $ 80 $ (2,839)
Application Software........................................ (1,692) (2,668)
e-Health.................................................... 905 (7)
Corporate................................................... (3,583) (5,676)
------- --------
$(4,290) $(11,190)
======= ========

Physician Services' significant increase in operating profit for the three
months ended March 31, 2000 as compared to the operating loss for the same
period in 1999 is attributable to management's efforts to reduce costs by
streamlining processes and reducing the overall headcount of this segment.

The reduction in Application Software's operating loss for the three months
ended March 31, 2000 as compared to the three months ended March 31, 1999 is a
result of lower operating expenses.

e-Health's operating profit for the three months ended March 31, 2000 as
compared to an operating loss for the three months ended March 31, 1999 is
primarily due to the segment's increase in revenue.

10
12

The decrease in the Company's overhead is related to management's continued
commitment to reduce costs where feasible and create more efficient processes.

Revenue. Revenue classified by the Company's different reportable segments
is as follows:

THREE MONTHS ENDED
MARCH 31,
-------------------
2000 1999
------- --------
(IN THOUSANDS)

Physician Services.......................................... $58,822 $ 61,457
Application Software........................................ 14,352 15,193
e-Health.................................................... 8,487 7,580
Eliminations................................................ (2,832) (2,856)
------- --------
$78,829 $ 81,374
======= ========

Physician Services' revenue decreased slightly in the first quarter of 2000
as compared to the same period in 1999. The decline is primarily attributable to
Per-Se and client-initiated discontinuances throughout 1999. Client
discontinuances initiated by the Company are a result of management's ongoing
review and evaluation process of unprofitable or marginally profitable clients
that yield returns unacceptable to management. However, the rate of
client-initiated discontinuances continues to decrease. The discontinuances were
partially offset by the addition of new business during the first quarter of
2000.

Application Software's revenue decreased slightly in the first quarter of
2000 as compared to the same period in 1999. The decrease is attributable to
higher as sold revenue in the first quarter of 1999 and client-initiated
implementation delays in the first quarter of 2000.

e-Health's revenue increased 12% in the first quarter of 2000 as compared
to the same period in 1999. The increase is a result of greater external claims
processing. Approximately 56% of the increase is attributable to increases in
volume at the Company's statement processing center ("Laser Center").

Interest. Net interest expense was $3.7 million in the first quarter of
2000 as compared with $3.9 million in the first quarter of 1999. The decrease is
attributable to interest income of $0.9 million generated from the short-term
investment of cash offset by slightly greater debt outstanding and interest
related to the deferred portion of a prior period legal settlement.

Income Taxes. At March 31, 2000, the Company reassessed the recoverability
of its deferred tax asset. Based on its analysis, the Company determined a full
valuation allowance of $251.8 million against the deferred tax asset was
required, an increase of $15.0 million from December 31, 1999. The adjustment is
directly related to the elimination of the Company's unbilled accounts
receivable (see Cumulative Effect of Accounting Change discussion below) and, as
such, was recorded against the cumulative effect of accounting change. When it
becomes more likely than not that the Company will generate sufficient taxable
income to realize the deferred tax asset, the Company will adjust this valuation
allowance accordingly.

The Company recognized a $1.2 million tax benefit in the quarter ended
March 31, 2000 related to a state income tax refund.

11
13

Discontinued Operations. Summarized financial information for the
discontinued operations for the three-month period ended March 31, 1999 is as
follows:

FOR THE THREE MONTHS ENDED MARCH 31, 1999
(IN THOUSANDS)

IMPACT
-------

In 1999, the Company completed the sale of both divisions of Impact. After
reviewing several alternatives for Impact throughout 1998, management concluded
a sale of this segment would generate the greatest return to the stockholders
and finalized its plan to sell Impact. The Company sold the commercial division
of Impact to Complete Business Solutions, Inc. ("CBSI") effective April 15, 1999
for $14.4 million, net of the final closing balance sheet adjustment of $0.6
million which was paid on July 16, 1999. The government division of Impact was
sold on December 17, 1999 to J3 Technology Services Corp. for $46.5 million,
including a purchase price adjustment of $1.5 million received in March 2000
based on the division's tangible net worth at closing. The purchase price
adjustment resulted in the recognition of an additional gain of $1.5 million.

For the three months ended March 31, 1999, income from discontinued
operations before income taxes includes the reversal of a $1.1 million lease
abandonment reserve which was no longer necessary due to the sale of the
commercial division of Impact.

Cumulative Effect of Accounting Change. On December 3, 1999, the
Securities and Exchange Commission (the "Commission") issued Staff Accounting
Bulletin Number 101, Revenue Recognition in Financial Statements ("SAB 101").
SAB 101 summarizes certain of the Commission's views in applying generally
accepted accounting principles to revenue recognition in financial statements.
SAB 101 provides interpretative guidance on the unbilled accounts receivable and
related revenue recognition within the Company's industry. The Commission's
guidance encourages the accounting change to be reflected by the Company's
quarter ended March 31, 2000. Therefore, consistent with the Commission's
guidance and changing industry practice, the Company began recognizing revenue
in its Physician Services segment on an "as billed" basis January 1, 2000. The
Company does not expect this change to significantly impact annual recognized
revenue. There is no effect on cash flow resulting from this change.

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LIQUIDITY AND CAPITAL RESOURCES

The Company had working capital of $52.4 million at March 31, 2000,
including $49.1 million of unrestricted cash and cash equivalents. The $40.9
million decrease in working capital from December 31, 1999 is primarily the
result of the timing of payments on accruals, the payment of semi-annual
interest payments required under the $175 million of 9 1/2% Senior Notes due
2005 (the "Notes") and investment in the Company's operations.

The Company completed its divestiture of non-core operations in December
1999. The Company sold Hospital Services on November 30, 1998 for $103.2 million
net proceeds. In February 1999, the Company received additional proceeds of $0.5
million based on Hospital Services' tangible net worth at closing. In addition,
Per-Se received a purchase price adjustment of $10.0 million cash from NCO in
May 2000 based on Hospital Services' achievement of various operational targets
in 1999.

The Company sold the commercial division of Impact effective April 15, 1999
for $14.4 million, net of the final closing balance sheet adjustment of $0.6
million that was paid on July 16, 1999. The Company sold the government division
of Impact on December 17, 1999 for approximately $46.5 million, including a
purchase price adjustment of $1.5 million received in March 2000 based on the
division's tangible net worth at closing.

Under the Indenture governing the Notes, the balance of the net proceeds,
as defined, from the sale of Hospital Services, the two divisions of Impact or
the sale of any other asset having a fair value in excess of $1.0 million, must
be invested in the Company's business within 360 days of receipt of proceeds
related to the sale. To the extent that such net proceeds are not invested
within 360 days, such amount constitutes "excess proceeds." If the aggregate of
excess proceeds is greater than $10.0 million, the Company is required to offer
to repurchase the Notes at par with such excess proceeds.

As of March 31, 2000, uninvested net proceeds related to the sale of
non-core operations and other assets totaled approximately $61.4 million. The
net proceeds are the result of various asset sales and, as such, under the
Indenture, must be invested in the Company's business by varying points in time
during 2000. In addition, the Company will have to invest a minimum of
approximately $47.2 million by December 11, 2000 to preclude the Company's
obligation to make an offer to repurchase the Notes at par in the first quarter
of 2001. As of May 15, 2000, aggregate excess proceeds did not exceed $10.0
million.

The Company believes that its current cash flow is sufficient to permit the
Company to meet its operating expenses, service its debt requirements as they
become due in the next twelve months and for the long term and to invest in the
business.

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PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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16

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) Exhibits

EXHIBIT NUMBER DOCUMENT
-------------- --------

2.1 -- Stock Purchase Agreement dated as of October 15, 1998,
between Registrant and NCO Group, Inc. (incorporated by
reference to Exhibit 2.1 to Quarterly Report on Form 10-Q
for the quarter ended September 30, 1998).
2.2 -- Stock Purchase Agreement dated as of April 20, 1999, among
Complete Business Solutions, Inc., E-Business Solutions.com,
Inc., Impact Innovations Holdings, Inc. and Registrant
(incorporated by reference to Exhibit 2.1 to Current Report
on Form 8-K filed on May 5, 1999).
2.3 -- Stock Purchase Agreement dated as of November 4, 1999, among
J3 Technology Services Corp., Impact Innovations Holdings,
Inc., Impact Innovations Government Group, Inc. and
Registrant (incorporated by reference to Exhibit 2.3 to
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1999).
3.1 -- Restated Certificate of Incorporation of Registrant
(incorporated by reference to Exhibit 3.1 to Annual Report
on Form 10-K for the year ended December 31, 1999).
3.2 -- Restated By-laws of Registrant (incorporated by reference to
Exhibit 3.2 to Annual Report on Form 10-K for the year ended
December 31, 1999).
4.1 -- Indenture dated as of February 20, 1998, among Registrant,
as Issuer, the Subsidiary Guarantors named in the Indenture
and State Street Bank and Trust Company, as Trustee
(including form of note) (incorporated by reference to
Exhibit 10.3 to Current Report on Form 8-K filed on March 3,
1998).
4.2 -- Warrant Agreement dated as of July 8, 1998, between
Registrant and SunTrust Bank, Atlanta, as Warrant Agent
(including form of warrant certificate) (incorporated by
reference to Exhibit 4.2 to Registration Statement on Form
8-A filed on July 21, 1998).
4.3 -- Rights Agreement dated as of February 11, 1999, between
Registrant and American Stock Transfer & Trust Company
(including form of rights certificates) (incorporated by
reference to Exhibit 4 to Current Report on Form 8-K filed
on February 12, 1999).
4.4 -- First Amendment to Rights Agreement dated as of February 11,
1999, between Registrant and American Stock Transfer & Trust
Company, entered into as of May 4, 2000.
27 -- Financial Data Schedule (for SEC use only)
99.1 -- Safe Harbor Compliance Statement for Forward-Looking
Statements (incorporated by reference to Exhibit 99.1 to
Annual Report on Form 10-K for the year ended December 31,
1999).

(B) Reports on Form 8-K

The Company did not file any reports on Form 8-K during the quarter ended
March 31, 2000.

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SIGNATURES

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

Per-Se Technologies, Inc.
(Registrant)

By: /s/ WAYNE A. TANNER
--------------------------------------

Wayne A. Tanner
Executive Vice President and
Chief Financial Officer

By: /s/ MARY C. BLACKADAR
--------------------------------------

Mary C. Blackadar
Vice President and Controller
(Principal Accounting Officer)

Dated: May 15, 2000

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INDEX TO EXHIBITS

EXHIBIT NUMBER DOCUMENT
-------------- --------