As filed with the Securities and Exchange Commission on July 18, 1996
Registration No. 333-___________

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------------
FORM S-1
Registration Statement
Under the Securities Act of 1933
------------------------------
AMEDISYS, INC.
(Exact name of Registrant as specified in its charter)

DELAWARE 8082 11-3131700
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification Number)
organization) Code Number)

3029 S. SHERWOOD FOREST BLVD. WILLIAM F. BORNE,
SUITE 300 CHIEF EXECUTIVE OFFICER
BATON ROUGE, LOUISIANA 70816 AMEDISYS, INC.
(504)292-2031 3029 S. SHERWOOD FOREST BLVD.
(Address, including zip code, and SUITE 300
telephone number, including BATON ROUGE, LOUISIANA 70816
area code, of registrant's (504)292-2031
principal executive offices) (Name, address, including zip codes,
and telephone number, including
area code, of agent for service)

COPY TO:
THOMAS C. PRITCHARD
BREWER & PRITCHARD, P.C.
1111 BAGBY, SUITE 2450
HOUSTON, TEXAS 77002
PHONE (713) 659-1744

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [X]

----------------------------
As filed with the Securities and Exchange Commission on November 2, 1998
Registration No. 333-____

====================================================================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________________________
FORM S-1
Registration Statement
Under the Securities Act of 1933
______________________________
AMEDISYS, INC.

(Exact name of Registrant as specified in its charter)

DELAWARE 8082 11-3131700
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or Industrial Classification Identification Number)
organization) Code Number)

3029 S. SHERWOOD FOREST BLVD. WILLIAM F. BORNE,
SUITE 300 CHIEF EXECUTIVE OFFICER
BATON ROUGE, LOUISIANA 70816 AMEDISYS, INC.
(504)292-2031 3029 S. SHERWOOD FOREST BLVD.
(Address, including zip code, and SUITE 300
telephone number, including BATON ROUGE, LOUISIANA 70816
area code, of registrant's (504)292-2031
principal executive offices) (Name, address, including zip code,
and telephone number, including
area code, of agent for service)
Copy To:
THOMAS C. PRITCHARD
BREWER & PRITCHARD, P.C.
1111 BAGBY, SUITE 2450
HOUSTON, TEXAS 77002
PHONE (713) 209-2950
____________________________

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this registration statement
becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933. [_]

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check
the following box and list the Securities Act registration statement number of earlier effective registration statement for the same
offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and
list the Securities Act number of the earlier effective registration statement for the same offering. [_]

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and
list the Securities Act registration number of the earlier effective registration statement for the same offering. [_]

If the delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

=========================================================================================================================
Proposed Proposed
Title of Each Class of Amount Maximum Maximum Amount of
Securities To Be Being Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee
- -------------------------------------------------------------------------------------------------------------------------====================================================================================================================================

TITLE OF EACH CLASS OF AMOUNT PROPOSED PROPOSED
SECURITIES TO BE BEING MAXIMUM MAXIMUM AMOUNT OF
REGISTERED REGISTERED/(1)/ OFFERING PRICE AGGREGATE REGISTRATION FEE
---------- --------------- -------------- ---------- ----------------

CommonResale of Shares Underlying Preferred Stock 595,909 $7.00 $4,171,363 $1,438.401,678,855 $1.75 $2,937,996 $817

Resale of Shares Underlying Warrants 117,520 $1.75 $ 205,660 $ 57

TOTAL $1,438.40
=========================================================================================================================

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based on the average of the high and low
prices for the Common Stock, as reported by Nasdaq on July 15, 1996, or
$7.00 per share.
----------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A)1,796,375 $1.75 $3,143,656 $874
====================================================================================================================================

_______________

(1) Pursuant to Rule 416(a), this registration statement also covers an indeterminate number of shares of common stock issuable
pursuant to adjustment provisions of the preferred stock designation and the warrant agreement.
(2) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c), based on the average of the high
and low sale prices for the common stock, as reported by the OTC Bulletin Board on October 30, 1998, or $1.75 per share.

____________________________

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER
BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
i

AMEDISYS, INC.

Cross-Reference Sheet
Pursuant to Rule 404(a) of Regulation C and Item 501(b)
of Regulation S-K under the Securities Act of 1933

S-1 Item Number and Caption Heading In Prospectus
-------------------------------------------------

S-1 ITEM NUMBER AND CAPTION HEADING IN PROSPECTUS
--------------------------- ---------------------

1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus.............................................................Prospectus................................ Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back
Cover Pages of Prospectus..............................................Prospectus................. Inside Front and Outside Back Cover Pages
of Prospectus
3. Summary Information, Risk
Factors and Ratio of Earnings
to Fixed Charges.......................................................Charges.......................... Prospectus Summary; Risk Factors
4. Use of Proceeds........................................................ Use of ProceedsProceeds........................... *
5. Determination of Offering Price........................................Price........... *
6. Dilution...............................................................Dilution.................................. *
7. Selling Security Holders...............................................Holders.................. Plan of Distribution and Selling
Stockholders
8. Plan of Distribution...................................................Distribution...................... Outside Front Cover of Prospectus; Plan of
Distribution and Selling Stockholders
9. Description of Securities to be
Registered.............................................................Registered................................ Price Range of Common Stock and
Dividend Policy; Description of Securities
10. Interests of Named Experts and
Counsel................................................................Counsel................................... *
11. Information with Respect to
the Registrant.........................................................Registrant............................ Business; Management; Description of
Securities; Principal Stockholders; Price
Range of Common Stock and Dividend
Policy; Selected Financial Data;
Capitalization; Management's Discussion
and Analysis of Financial Condition and
Results of Operation
12. Disclosure of Commission
Position on Indemnification
for Securities Act Liabilities.........................................Liabilities............ *
- -----------------------_______________________

(*) Not applicable.

******************************************************************************
* *
*THE INFORMATION CONTAINED HEREININ THIS PROSPECTUS IS SUBJECT TO COMPLETION OR AMENDMENT. A *
*NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED *
* WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT *
* BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE *
* REGISTRATION STATEMENT BECOMESSEC IS EFFECTIVE. THIS PROSPECTUS SHALLIS NOT *
* CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OFTHESE SECURITIES AND
WE ARE NOT SOLICITING AN OFFER TO BUY NOR *
* SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH *
*WHERE THE
OFFER SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR *
* QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. *
* *
******************************************************************************

SUBJECT TO COMPLETION, DATED JULY 18, 1996IS NOT PERMITTED.

AMEDISYS, INC.

595,909RESALE OF 1,796,375 SHARES OfOF COMMON STOCK

================================================================================

This prospectus relates to the 595,909resale of 1,796,375 shares of common stock, par value $.001 per share
("Common Stock"), offered hereby, 150,000 shares are being offered by AMEDISYS,of
Amedisys, Inc., a Delaware corporation, ("Company"), and 445,909 shares are beingwhich shall be offered for resale by the Selling Stockholders. Of the shares to be resold, 321,759 shares
are issued and outstanding; 74,000 shares may be acquired upon exercise of
outstanding warrants ("Warrants"); and 50,150 shares may be acquired upon
exercise of outstanding options ("Options"). See "Description of Securities" and
"Plan of Distribution and Selling Stockholders." The Company will use the
proceeds from the sale of the shares offered by it for working capital and
general corporate purposes. The Company will not receive any of the proceeds
from the resale of the shares of Common Stock by the Selling Stockholders.

The Selling Stockholders may sell the Common Stock through
broker-dealers, through agents or directly to one or more purchasers. The
distribution of the Common Stock may be effected from
time to time in one or
more transactionsby certain stockholders of the company. These shares relate to the
company's private placement of its series A convertible preferred stock. The
750,000 shares of preferred stock sold in the over-the-counter market or in transactions otherwise
thanprivate placement are currently
convertible into 1,678,855 shares of common stock. In addition, the placement
agent in the over-the-counter market. Anyprivate placement received warrants to purchase 52,500 shares of
such transactions may be effected at
market prices prevailing atpreferred stock which are currently convertible into 117,520 shares of common
stock. Upon issuance, the time1,796,375 shares of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices. Any Selling
Stockholder may effect such transactions by sellingcommon stock underlying the
Common Stock to or
through broker-dealers, and such broker-dealers may receive compensation in the
form of discounts, concessions or commissions from the Selling Stockholders
and/or commissions from purchaserspreferred stock will represent 36% of the Common Stock for whom they may act as
agent (which discounts, concessions or commissions will not exceed those
customary in the typescompany's outstanding common stock.

================================================================================

The shares of transactions involved). The Selling Stockholders and
any broker-dealer or agents that participate in the distribution of the Common
Stock might be deemed to be underwriters, and any profitcommon stock are quoted on the sale of the
Common Stock by them and any discounts, commissions or concessions received by
any such broker-dealer or agents might be deemed to be underwriting discounts
and commissionsOTC Bulletin Board under
the Securities Act of 1933, as amended (the "Act"). The
Company has not agreed to indemnify any ofsymbol AMED. On October 30, 1998, the Selling Stockholders against any
liabilities under the Act. See "Plan of Distribution and Selling Stockholders."

The Company has agreed to bear all expenses (other than selling
discounts, concessions or commissions and certain other fees and expenses of
counsel and other advisers to the Selling Stockholders) in connection with the
registration and sale of the Common Stock being offered by the Selling
Stockholders. The Common Stock being offered hereby by the Selling Stockholders
has not been registered for sale under the securities laws of any state or
jurisdiction as of the date of this Prospectus. Brokers or dealers effecting
transactions in the Common Stock should confirm the registration thereof under
the securities law of the state in which such transactions occur, or the
existence of any exemption from registration. A current prospectus must be in
effect at the time of the sale of the shares of Common Stock to which this
Prospectus relates. Each Selling Stockholder or dealer effecting a transaction
in the registered securities, whether or not participating in a distribution, is
required to deliver a current prospectus upon such sale. The shares to be issued
by the Company will be offered on a "best-efforts, no-minimum" basis. The Common
Stock is traded on The Nasdaq SmallCap Market under the trading symbol "AMED."
On July 15, 1996, the last reported sales price of the
Common Stock as quoted by Nasdaqcommon stock was $7.00$1.75 per share.
------------------------------

AN______________________________

THIS INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK"RISKS FACTORS" ON
PAGE 5.
------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY9.
______________________________

NEITHER THE SECURITIES AND EXCHANGE COMMISSION ORSEC NOR ANY STATE SECURITIES COMMISSION NOR HAS THEAPPROVED OR
DISAPPROVED OF THESE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ADEQUACY OR ACCURACY OR ADEQUACY OF THISTHE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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

The date of this Prospectus is _____ ___, 1996

NO DEALER, SALESMANTHE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND
IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR ANY OTHER PERSON HAS BEENSALE IS NOT PERMITTED.

WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONSREPRESENTATION ABOUT THE COMPANY THAT DIFFERS FROM, OR ADDS TO, THE INFORMATION
IN CONNECTIONTHIS PROSPECTUS OR IN OUR DOCUMENTS THAT ARE FILED WITH THE OFFERING
DESCRIBED HEREIN, OTHER THAN THOSE CONTAINEDSEC.
ACCORDINGLY, IF ANYONE DOES GIVE YOU DIFFERENT OR ADDITIONAL INFORMATION YOU
SHOULD NOT RELY ON IT.

IF YOU ARE IN THIS PROSPECTUS. IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZEDA JURISDICTION WHERE IT IS UNLAWFUL TO BUY THE SECURITIES
OFFERED BY THE COMPANY OR BY ANY UNDERWRITER. THIS PROSPECTUS, DOES NOT CONSTITUTE AN OFFER TO SELL, OR IF YOU ARE A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKEDIRECT SUCH ANACTIVITIES, THEN THE OFFER OR SOLICITATIONPRESENTED BY THE PROSPECTUS DOES NOT
EXTEND TO YOU.

THE INFORMATION IN SUCH JURISDICTION. THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THATSPEAKS ONLY AS OF ITS DATE, UNLESS THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES.
___________________

The date of this prospectus is November 2, 1998

TABLE OF CONTENTS

SECTION PAGE SECTION PAGE
- ------- ---- -------
----

Available Information................................Prospectus Summary............................................................... 2
Business...................................... 17
Prospectus Summary................................... 3 Management.................................... 28The Company...................................................................... 2
Risk Factors......................................... 5 Principal Stockholders........................ 32Factors..................................................................... 9
Disclosure Regarding Forward Looking Statements............................. 9
Continuing Operating Losses................................................. 9
Capital Requirements; Limited Sources of Liquidity; Need for Additional
Capital; Continuing Default on Lines of Credit......................... 9
Increased Working Capital Needs and Risks of Collection Relating to
Fee-for-Service Reimbursement Programs................................. 10
Classification of Physicians and Nurses as Independent Contractors;
Potential State and Federal Tax Liability.............................. 11
Risks Related to the Company's Acquisition Strategy......................... 11
Risks Related to Acquisition Financing...................................... 11
Dependence on Management.................................................... 12
Corporate Exposure to Professional Liabilities.............................. 12
Possible Insufficiency of Liability Coverage................................ 12
Potential Restructuring of Healthcare Delivery System
through Healthcare Reform Proposals.................................... 12
Risks Related to Long-Lived Assets.......................................... 12
Changes in Health Care Regulations and Technology........................... 13
Reimbursement by Third Party Payors......................................... 13
Competition................................................................. 13
Relationship with Other Organizations....................................... 13
Federal and State Regulation................................................ 13
Dividends Not Likely........................................................ 13
Future Sales of Common Stock................................................ 13
Possible Adverse Effect of Future Issuances of Preferred Stock.............. 14
Status of Persons Reselling Common Stock.................................... 14
Penny Stock Regulation...................................................... 14
Ratio of Earnings to Fixed Charges............................................... 14
Use of Proceeds...................................... 10Proceeds.................................................................. 14
Determination of Offering Price.................................................. 15
Dilution......................................................................... 15
Selling Stockholders............................................................. 15
Plan of Distribution............................................................. 16
Description of Securities..................... 33
Price RangeSecurities to be Registered....................................... 16
Interest of Common StockNamed Experts and Plan of Distribution and Selling Stockholders. 35
Dividend Policy................................... 10 Legal Matters ................................ 38
Capitalization....................................... 11 Experts....................................... 38
Selected Financial Data.............................. 12 IndexCounsel............................................ 17
Information with Respect to Financial Statements.................F-1
Management's Discussion and Analysis
of Financial Condition and Results
of Operations..................................... 13the Registrant....................................... 17

EACH SELLING STOCKHOLDER

SUMMARY INFORMATION, RISK FACTORS AND ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, ARE
REQUIREDRATIO OF EARNINGS TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITER AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

----------------
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements and other information are available for inspection and copying at the
Public Reference Room of the SEC, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549; and at the Regional Offices of the SEC located at 500
West Madison Street, Suite 1400, Chicago, Illinois 60661; and at 7 World Trade
Center, New York, New York 10048. Copies of such material may be obtained from
the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549, at prescribed rates.

The Company has filed with the SEC in Washington, D.C. a Registration
Statement on Form S-1 (the "Registration Statement") under the Act with respect
to the securities offered by this Prospectus. Certain of the information
contained in the Registration Statement is omitted from this Prospectus, and
reference is hereby made to the Registration Statement and exhibits and
schedules relating thereto for further information with respect to the Company
and the securities offered by this Prospectus. Statements contained herein
concerning the provisions of any document are not necessarily complete and in
each instance reference is made to the copy of the document filed as an exhibit
or schedule to the Registration Statement. Each such statement is qualified in
its entirety by this reference. The Registration Statement and the exhibits and
schedules thereto are available for inspection at, and copies of such materials
may be obtained upon payment of the fees prescribed therefor by the rules and
regulations of the SEC, from the SEC, Public Reference Section, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549.

2FIXED
CHARGES

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY SHOULD BE READ IN CONJUNCTION WITH, AND IS
QUALIFIED IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION AND FINANCIAL DATA
APPEARING ELSEWHERE IN THIS PROSPECTUS.This summary highlights some information in this prospectus.

THE COMPANY

AMEDISYS, INC.GENERAL

Amedisys, Inc., a Delaware corporation, ("Company"), is a fully integrated provider of
alternative siteoutpatient health careservices and physicianoperates in two basic industry segments:
alternate-site provider services and management services.services operations. The
Company
providescompany's alternate-site provider segment includes the following services:
alternate-site infusion therapy, ambulatory surgery centers and home health
care. Its management services operations encompasses home health care
and supplemental staffing nurses andmanagement. The company operates outpatient surgical centers. The Company maintains 28 home health care and
supplemental staffing37 offices in eight states, and operates two outpatient
surgery centers in Texas and is developingwithin a surgery center in Louisiana. The
Company also manages home health agencies, physician practices and rural health
clinics and is the network manager of the Home Care Alliance of Louisiana.

The Company was incorporated as M&N Capital Corp. ("M&N") in October
1992 under the laws of the state of New York. Analytical Nursing Management
Corp., a Louisiana corporation, was formed in December 1992 ("ANMC"). In
December 1993, M&N acquired all of the issued and outstanding shares of common
stock of ANMC. In June 1994, M&N reincorporatedwholly owned
subsidiaries in the state of Delaware under
the name of Analytical Nursing Management Corp.,South and in August 1995, the Company
changed its name to AMEDISYS, INC.Southeastern United States.

The Companycompany operates through the following subsidiaries:

AMEDISYS
Staffing Services, Inc. ("AME"); AMEDISYS Nursing Services, Inc. ("ASI"); and
AMEDISYS(1) its wholly-owned subsidiaries Amedisys Specialized Medical Services,
Inc. ("ASM"), all of which are
wholly-owned Louisiana corporations; AMEDISYSAmedisys Surgery Centers, L.C. ("ASC"); Alliance Home Health, Inc., a
wholly-owned Texas limited liability company; AMEDISYSAmedisys
Management Services Organization, Inc.; Amedisys Alternate-Site Infusion
Therapy Services, Inc., Amedisys Durable Medical Equipment, Inc.;

(2) its 60%-owned subsidiary Amedisys Physician Services, Inc.,
a Louisiana corporation 60% owned by the company ("APS"); and

FutureCare(3) the wholly-owned and partially-owned subsidiaries of Amedisys
Specialized Medical Services, Inc., a
Nevada corporation 55% owned by the Company. Subsidiaries of the Company's
subsidiaries include:Amedisys Surgery Centers, L.C. and Amedisys
Alternate-Site Infusion Therapy Services, Inc., being MedAmerica, Inc. of Texas
a Texas corporation 80% owned
by AME; MedAMErica,and MedAmerica, Inc., a Louisiana corporationeach an 80% owned by AME; AMEDISYS-owned subsidiary of Amedisys Specialized
Medical Services, Inc., Quality Home Health Care, Inc., a Louisiana corporation wholly owned by ASM; AMEDISYSAmedisys Home Health
Inc. of Texas a Texas corporation wholly owned by ASM; Jackson Ruraland Home Health Clinic, Inc. a Lousiana corporation 60% owned by AMS; Kentwood Rural
Health Clinic,of Alexandria, Inc., a Louisiana corporation 60% owned by ASM; and Bastrop Rural
Health Clinic,each wholly-owned
subsidiaries of Amedisys Specialized Medical Services, Inc., Hammond Surgical
Care Center, L.C., a Lousiana corporation 60%56% owned by ASM.subsidiary of Amedisys Surgery Centers, L.C. and
Infusion Care Solutions, Inc. and PRN, Inc., each wholly-owned subsidiaries of
Amedisys Alternate-Site Infusion Therapy Services, Inc.

References to the Companycompany include references to its subsidiaries. The
Company'scompany's principal executive offices are located at 3029 South Sherwood Forest
Boulevard, Third Floor, Baton Rouge, Louisiana 70816, and its telephone number
is (504) 292-2031.

THE OFFERING

Common Stock OfferedRECENT DEVELOPMENTS

Letter of Intent

On June 2, 1998, the Company signed a non-binding letter of intent to
purchase a portion of Columbia/HCA homecare operations subject to satisfactory
completion of due diligence and approval by the Company 150,000 shares

Common Stock OfferedBoard of Directors of both
companies. The homecare operations covered by the Selling Stockholders 445,909 shares

Common Stock Outstanding........... 2,583,864 shares(1)

Risk Factors....................... An investmentletter of intent are located
in the securities offered
hereby involves states of Alabama, Georgia, Louisiana, North Carolina, Oklahoma, and
Tennessee and may include up to 116 offices and 50 Medicare provider numbers.
The Company is currently conducting due diligence and negotiating with
investment banks to obtain financing for the purchase of these operations.

Acquisitions

In August 1997, the company acquired substantially all of the assets of
Allgood Medical Services, Inc. d/b/a high degreeCare Medical and Mobility Equipment
Company, a home medical equipment company, for $1,165,000. The purchase price
consisted of risk.
Prospective investors should review
carefully the information set forth under
"Risk Factors."

Use$465,000 in cash, a two year $100,000 note bearing interest at a
rate of Proceeds.................... Working capital8% per annum, and general corporate
purposes.

Nasdaq Symbol...................... AMED
- ---------------------

(1) Does not include (i) 103,721115,518 shares of Common Stock underlying
outstanding warrants ("Warrants")company common stock having a value
of $600,000. This transaction has been accounted for as a purchase and the
excess of the total acquisition cost over the fair value of net assets acquired
(goodwill) of $852,000 is being amortized over 20 years using the straight-line
method. Subsequent to this purchase, certain reimbursement reductions were
announced to implement the Balanced Budget Act of 1997. Based on management's
estimate of the expected impact of these changes in reimbursement on future cash
flows, this goodwill was fully written off as other general and administrative
expenses at December 31, 1997 as required under SFAS No. 121.

On January 1, 1998, the company acquired all of the stock of Alliance Home
Health, Inc., a home health care business with locations throughout Oklahoma, in
exchange for $300,000 and (ii) 50,150194,286 shares of Common
Stock underlyingcommon stock. The amount of
consideration was negotiated through an arm's length transaction. Of the
194,286 shares of company common stock issued to the former owners of Alliance
Home Health, Inc., 122,857 shares were placed in escrow as

consideration for certain contingent liabilities which may be asserted against
the former stockholder of Alliance Home Health, Inc. to the extent such claims
exceed $500,000 (singularly and/or in aggregate). The contingent liabilities
include any material misstatement or omission in any representation or breach of
any warranty, covenant or agreement of Alliance Home Health, Inc. or its
stockholder, any Medicare liabilities, any liability from lawsuits or
arbitration, any payment to be made by Alliance Home Health, Inc. pursuant to a
previous acquisition, or any liability addressed in the purchase document. The
escrow period expires December 31, 2003. The majority stockholder of Alliance
Home Health, Inc. entered into a three year employment agreement and two year
non-compete and non-solicitation agreement with the company. The employment
agreement is for the position of vice president with duties incident to such
positions with the company. The non-compete and non-solicitation agreement is
for a period of two years after the termination of the employment agreement. The
non-compete and non-solicitation agreement provides that the employee will not
divert any business from the company or compete in the business area defined as
the State of Oklahoma. This restricted activity is in relation to home health
agencies or infusion-related business. Additionally, the non-compete and non-
solicitation agreement provides that the employee will not solicit employees or
clients from the company. This employee resigned in March 1998. The company does
not expect any material ramifications as a result of this action. The
acquisition of Alliance Home Health, Inc. was deemed "significant." Accordingly,
separate historical and pro forma financial statements were filed with the SEC
in a Current Report on Form 8-K, July 23, 1998.

In February 1998, the company acquired all of the issued and outstanding
options ("Options"). See "Descriptioncapital stock of Securities -- Warrants" and "Management -- Stock Options."

SUMMARY FINANCIAL INFORMATION
(In thousands, except per share data)

THREE MONTHS YEAR ENDED
ENDED MARCH 31, DECEMBER 31,
1996 1995 1995 1994 1993
---- ---- ---- ---- ----

STATEMENTS OF INCOME DATA:
Service Revenue.................. $10,116 $8,604 $37,589 $28,902 22,445
Gross Margin..................... 4,499 3,427 15,165 11,906 7,771
Operating income................. 360 518 1,380 2,166 567
Income before income tax......... 317 463 1,130 1,933 534
Net income....................... 194 368 942 1,905 495
Net income per share............. 0.08 0.14(1) 0.37(1) 0.75(1) 0.22(1)
Weighted average 2,570 2,525 2,570 2,525 2,285
shares outstanding.............

MARCH DECEMBER
BALANCE SHEET DATA: 31, 1996 31, 1995
-------- --------
Working capital.................. $ 1,598 $ 1,878
Total assets..................... 12,886 11,537
Long-term liabilities............ 1,651 1,490
Stockholders' equity............. 4,473 4,274
- -------------------------
(1) The Company acquired Surgical Care Centers of Texas, L.C.PRN, Inc., a home infusion pharmacy business located in San
Antonio, Texas, limited
liabilityin exchange for $430,000 and the assumption of $71,000 in debt.
The company ("ASC"), onhas agreed to pay additional consideration of up to $150,000 upon
PRN, Inc. reaching certain revenue goals. This additional consideration is to be
paid quarterly, bearing interest at 9% in proportion to target net revenue of
$625,000 annually. The assets of PRN, Inc. at fiscal year end, June 30, 19951997,
were $219,526. Net revenues for the same period were $560,695 with pre-tax
income of $15,783. The company has retained the right to offset certain
indemnifiable liabilities against the additional consideration. The two majority
stockholders of PRN, Inc. entered into two year non-competition and non-
solicitation agreements with the company. The acquisition of PRN, Inc. was not
deemed to be "significant." Accordingly, the financial statements of PRN, Inc.
will be consolidated with the company's financial statements and separate
financial statements in a transactionCurrent Report on Form 8-K will not be filed with the
SEC.

In February 1998, the company acquired all of the issued and outstanding
capital stock of Infusion Care Solutions, Inc., a home health care and infusion
business, based in Baton Rouge, Louisiana, in exchange for aggregate
consideration of $500,000, of which $375,000 was payable in cash at closing and
$125,000 was payable pursuant to a two year promissory note bearing interest at
a rate of prime plus 1% per annum. Infusion Care Solutions, Inc. had assets of
$251,996 at fiscal year end, December 31, 1997. Net revenues were $352,788 and
pre-tax income was $13,848 for the same period. The company has retained the
right to offset certain indemnifiable liabilities against the sums payable
pursuant to the promissory note. The majority stockholder of Infusion Care
Solutions, Inc. entered into a two year non-competition and non-solicitation
agreement with the company. The acquisition of Infusion Care Solutions, Inc.
was not deemed to be "significant." Accordingly, the financial statements of
Infusion Care Solutions, Inc. will be consolidated with the company's financial
statements and separate financial statements in a Current Report on Form 8-K
will not be filed with the SEC.

In February 1998, the company acquired substantially all of the assets of
Precision Health Systems, L.L.C., a home health care and infusion business,
based in Baton Rouge, Louisiana, in exchange for aggregate consideration of
$1,000,000, of which $750,000 was payable in cash at closing and $250,000 is
payable pursuant to a two year promissory note bearing interest at a rate of
9.5% per annum. The company has retained the right to offset certain
indemnifiable liabilities against the sums payable pursuant to the promissory
note. The majority stockholder of Precision Health Systems, L.L.C. entered into
a two year non-competition and non-solicitation agreement and a two year
consulting agreement with the company. The consulting agreement is in the
amount of $50,000 per year, payable in monthly increments. The majority
stockholder is to assist the company in developing referral sources and
retaining current referral sources. At fiscal year end, December 31, 1997,
assets were $383,340, net revenues were $1,120,839, and pretax income was
$121,249. The acquisition of Precision Health Systems, L.L.C. was not deemed to
be "significant." Accordingly, the financial statements of Precision Health
Systems, L.L.C. will be consolidated with the company's financial statements and
separate financial statements in a Current Report on Form 8-K will not be filed
with the SEC.

In April 1998, the company acquired all of the stock of Quality Home Health
Care, Inc., of Stilwell, Oklahoma. In exchange, the company paid $80,000 and
issued 4,897 shares of company common stock worth

$20,000. A key employee and former stockholder executed an employment agreement
for two years in conjunction with a non-compete and non-solicitation agreement
for a period of two years after employment with the company is terminated. The
non-compete and non-solicitation agreement provides that the key employee will
not divert any business from the company or compete with the company; as well as
not solicit any employees or clients of the company. The business area covered
by the non-compete and non-solicitation agreement is for the Counties of Adair,
Cherokee, Delaware, Haskell, Leflore, Mayes, McIntosh, Muskogee, Sequoyah and
Wagoner in the State of Oklahoma and is relative to home health agencies.
Quality Home Health Care, Inc. is a state licensed, Medicare certified home
health agency with three locations serving eastern Oklahoma. The acquisition of
Quality Home Health Care, Inc. was not deemed to be "significant." Accordingly,
the financial statements of Quality Home Health Care, Inc. will be consolidated
with the company's financial statements and separate financial statements in a
Current Report on Form 8-K will not be filed with the SEC.

Each of the above transactions was accounted for as a poolingpurchase.

Private Placement of interest. PriorPreferred Stock

In March 1998, the company completed a private placement of 750,000 shares
of series A preferred stock to accredited investors at a purchase price of
$10.00 per share in reliance upon an exemption from registration under the
Securities Act. In December 1997, the board of directors established a series
of shares setting forth the preferences, rights, and limitations and authorizing
the issuance of up to 1,000,000 shares of series A preferred stock. The face
value of the series A preferred stock is $10 per share. The series A preferred
stock is convertible, at any time at the holder's option, initially into a
number of shares of common stock equal to the face value divided by 88% (the
conversion factor) of the average closing sales price of the common stock for
the 15 trading days immediately prior to the initial closing date which was
$5.2556818. Beginning June 1, 1998, the conversion factor decreases by .5% on
the first day of each month that any of the shares underlying the preferred
stock continue not to be publicly tradeable pursuant to an effective
registration statement under the Securities Act. To date, the conversion factor
is 85% resulting in a conversion rate of $2.2384737. The series A preferred
stock will automatically convert to shares of common stock if the average sales
price for the common stock exceeds $7.09 for fifteen consecutive trading days.
The series A preferred stock is not redeemable by the company. The holders of
the series A preferred stock will be entitled to receive dividends, if and when
they are declared by the board of directors. The liquidation preference of the
series A preferred stock is the face value, subject to adjustment. The series
A preferred stock is senior to all outstanding classes and series of the
company's capital stock. Each holder of shares of series A preferred stock is
entitled to one vote for each share of common stock underlying the series A
preferred stock. Net proceeds from the private placement were used to fund the
company's acquisition program.

Stock Purchase by Officers and Directors

In July 1998, the company announced that 500,000 shares of its
common stock would be purchased by certain of its officers and directors. To
date, this transaction has not been consummated.

Disposition

Effective September 21, 1998, the company sold certain assets, subject to
the assumption of certain liabilities, of its wholly-owned subsidiaries of
Amedisys Staffing Services, Inc., Amedisys Nursing Services, Inc. and Amedisys
Home Health, Inc. to Nursefinders, Inc. The company had no relationship with
Nursefinders, Inc. prior to this transaction. The purchase price of $7,200,000
was calculated using a multiple of earnings before interest, taxes, depreciation
and amortization. At closing, $6,480,000 was payable immediately with the
balance of $720,000 placed in an escrow account. The escrow funds are to be
held for an initial ninety (90) day period. The funds will be released at the
end of the period conditional upon a percentage of purchased accounts receivable
collected, independent audit of net income from operations, and the absence of
undisclosed liabilities. The escrow period may be extended an additional ninety
(90) days if collections on purchased accounts receivable don't equal at least
90% of total purchased accounts receivable. The assets being sold consist
primarily of all accounts and notes receivable; prepaid expenses; advances and
deposits; on-site hardware and software; furniture, fixtures and leasehold
improvements; office supplies; records and files; transferable government
licenses, permits and authorizations; and rights in, to and under specified
licenses, contracts, leases, and agreements. The liabilities being assumed are
the trade accounts payable, accrued expenses, and other liabilities as of the
closing date. The company has agreed to a

five-year non-competition covenant. This covenant precludes the company from
directly engaging, or assisting other to engage, in supplemental staffing and/or
out of residence private duty staffing within a fifty mile radius of any
location included in the agreement. Additionally, the non-competition covenant
provides that Amedisys will not encourage any employees, customers, vendors or
agents to terminate or alter their relationship with Nursefinders, Inc. and its
respective subsidiaries or affiliates. The following presents consolidated pro
forma financial information regarding the sale.

The pro forma condensed consolidated balance sheet has been prepared by
applying certain pro forma adjustments to historical financial information,
assuming the Staffing Division sale occurred on June 30, 1998. The pro forma
condensed consolidated statement of operations for the year ended December 31,
1997 and the six-month period ended June 30, 1998 has been prepared based upon
certain pro forma adjustments to historical financial information, assuming the
Staffing Division sale occurred on January 1, 1997.

The pro forma data is not necessarily indicative of the operating results
or financial position that would have occurred had the transaction described
above been consummated at the dates indicated, nor necessarily indicative of
future operating results or financial position.

Basic net income (loss) per share of common stock is calculated by dividing
net income (loss) applicable to common stock by the weighted average number of
common shares outstanding during the year. Diluted net income (loss) per share
is not presented because stock options and convertible securities outstanding
during the periods presented were not dilutive.

AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998
(IN 000'S, EXCEPT PER SHARE AMOUNTS)

HISTORICAL EFFECT OF SALE/(1)/ PRO FORMA
----------- -------------------- ----------
ASSETS
Current Assets:

Cash $ 471 $ 5,075 $ 5,546
Accounts Receivable, Net of Allowance for Doubtful 4,292 (1,946) 2,346
Accounts
Prepaid Expenses 891 (28) 863
Other Current Assets 4,004 586 4,590
------- ------- -------
Total Current Assets 9,658 3,687 13,345
Notes Receivable from Related Parties 224 0 224
Property, Plant and Equipment, Net 6,056 (71) 5,985
Other Assets, Net 12,374 (46) 12,328
------- ------- -------
Total Assets $28,312 $ 3,570 $31,882
======= ======= =======
LIABILITIES
Current Liabilities:
Notes Payable $ 6,090 $(1,405) $ 4,685
Current Portion of Long-Term Debt 927 (45) 882
Accounts Payable 2,486 (346) 2,140
Accrued Expenses:
Payroll and Payroll Taxes 1,541 (145) 1,396

HISTORICAL EFFECT OF SALE/(1)/ PRO FORMA
----------- -------------------- ----------

Insurance 1,020 (233) 787
Income Taxes 0 0 0
Other 1,398 (35) 1,363
------- ------- -------
Total Current Liabilities 13,462 (2,209) 11,253
Long-Term Debt 4,948 (4) 4,944
Other Long-Term Liabilities 1,136 0 1,136
------- ------- -------
Total Liabilities $19,546 $(2,213) $17,333
======= ======= =======
Minority Interest 3 0 3
------- ------- -------
STOCKHOLDERS' EQUITY
Common Stock 3 0 3
Preferred Stock 1 0 1
Additional paid-in capital 12,006 0 12,006
Treasury Stock (25) 0 (25)
Stock Subscriptions Receivable (1) 0 (1)
Retained Earnings (deficit) (3,221) 5,783 2,562
------- ------- -------
Total Stockholders' Equity 8,763 5,783 14,546
------- ------- -------
Total Liabilities and Stockholders' Equity $28,312 $ 3,570 $31,882
======= ======= =======

AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998
(IN 000'S, EXCEPT PER SHARE AMOUNTS)

HISTORICAL EFFECT OF SALE/(2)/ PRO FORMA
----------- -------------------- ---------
Income:

Service Revenue $24,475 $(8,795) $15,680
Cost of Service Revenue 14,319 (5,933) 8,386
------- ------- -------
Gross Margin 10,156 (2,862) 7,294
------- ------- -------
General and Administrative Expenses:
Salaries and benefits 9,389 (1,309) 8,080
Other 7,098 (647) 6,451
------- ------- -------
Total General and Administrative Expenses 16,487 (1,956) 14,531
------- ------- -------
Operating Income (loss) (6,331) (906) (7,237)
------- ------- -------
Other Income and Expense:
Interest income 21 0 21
Interest expense (418) 51 (367)
Miscellaneous 25 (2) 23
------- ------- -------
Total Other income and Expense (372) 49 (323)
------- ------- -------

HISTORICAL EFFECT OF SALE/(2)/ PRO FORMA
----------- -------------------- ---------

Income (loss) before income taxes, minority interest, and
cumulative effect of change in accounting principle (6,703) (857) (7,560)
Provision (benefit) for Estimated Income Taxes (2,279) (343) (2,622)
------- ------- -------
Income (loss) before Minority Interest (4,424) (514) (4,938)
Minority Interest in Consolidated Subsidiary 0 0 0
------- ------- -------
Net Income(loss) before cumulative effect of
change in accounting principle $(4,424) $ (514) $(4,938)
======= ======= =======
Weighted Average Common Shares Outstanding 3,057 -- 3,057
Income (loss) per share before cumulative effect of
change in accounting principle $ (1.45) $ N/A $ (1.62)

AMEDISYS, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN 000'S, EXCEPT PER SHARE AMOUNTS)

HISTORICAL EFFECT OF SALE/(2)/ PRO FORMA
----------- -------------------- ---------

Income:

Service Revenue $54,496 $(17,292) $37,204
Cost of Service Revenue 30,641 (11,545) 19,096
------- -------- -------
Gross Margin 23,855 (5,747) 18,108
------- -------- -------
General and Administrative Expenses:
Salaries and benefits 12,651 (1,622) 11,029
Other 11,792 (763) 11,029
------- -------- -------
Total General and Administrative Expenses 24,443 (2,384) 22,059
------- -------- -------
Operating Income (loss) (588) (3,363) (3,951)
------- -------- -------
Other Income and Expense:
Interest income 31 0 31
Interest expense (870) 136 (734)
Miscellaneous (123) (7) (130)
------- -------- -------
Total Other income and Expense (962) 129 (833)
------- -------- -------
Income (loss) before income taxes, minority interest, and
cumulative effect of change in accounting principle (1,550) (3,234) (4,784)

Provision (benefit) for Estimated Income Taxes (382) (1,293) (1,675)
------- -------- -------
Income (loss) before Minority Interest (1,168) (1,940) (3,108)
Minority Interest in Consolidated Subsidiary 209 0 209
------- -------- -------
Net Income(loss) before cumulative effect of
change in accounting principle $ (959) $ (1,940) $(2,899)
======= ======== =======
Weighted Average Common Shares Outstanding 2,735 -- 2,735
Income (loss) per share before cumulative effect of
change in accounting principle $ (0.35) $ N/A $ (1.06)

AMEDISYS, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A. Basis of Presentation

On September 21, 1998, the individual membersCompany sold certain assets, subject to the
assumption of ASCcertain liabilities, of its wholly-owned subsidiaries of Amedisys
Staffing Services, Inc., Amedisys Nursing Services, Inc., and Amedisys Home
Health, Inc. to Nursefinders, Inc.

The accompanying pro forma condensed consolidated balance sheet has been
prepared by applying certain pro forma adjustments to historical financial
information, assuming the Staffing Division sale occurred on June 30, 1998. The
pro forma condensed consolidated statement of operations for the year ended
December 31, 1997 and the six-month period ended June 30, 1998 has been prepared
based upon certain pro forma adjustments to historical financial information,
assuming the Staffing Division sale occurred on January 1, 1997.

B. Staffing Division Effect of Sale

(1) Reflects the Staffing Division financial position as of June 30, 1998
in the balance sheet in addition to the following adjustments:
a. Increase to Cash of $6,480,000 to reflect the portion of the
purchase price payable upon closing.
b. Decrease to both Cash and Notes Payable of $1,405,000 to
reflect the pay-down on the line of credit which is secured
by accounts receivable.
c. Increase to Other Current Assets of $720,000 to reflect the
portion of the purchase price placed in escrow.
(2) Reflects the Staffing Division operating results and direct overhead
operating costs for all income taxes; therefore, nothe six month period ending June 30, 1998 in the
statement of operations, with an adjustment to the Company's income
tax expense was recorded through June 30, 1995.

4assuming an effective tax rate of 40%.

(3) Reflects the Staffing Division operating results and direct overhead
operating costs for the fiscal year ended December 31, 1997 in the
statement of operations, with an adjustment to the Company's income
tax expense assuming an effective tax rate of 40%.

RISK FACTORS

AN INVESTMENT IN THE SECURITIESSHARES OF COMMON STOCK OFFERED HEREBYBY THIS PROSPECTUS
INVOLVES A NUMBERHIGH DEGREE OF SIGNIFICANT RISKS.RISK. IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS
PROSPECTUS, PROSPECTIVE INVESTORSYOU SHOULD GIVE CAREFUL CONSIDERATION TOCAREFULLY CONSIDER THE FOLLOWING FACTORS.RISK FACTORS BEFORE
MAKING A DECISION TO PURCHASE THE COMMON STOCK OFFERED HEREBY.

DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS

This prospectus contains certain statements that are forward looking
statements within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act. Those statements include, among other things,
the discussions of the company's operations, margins, profitability, liquidity
and capital resources. Forward looking statements are included in this section
under "Increased Working Capital Needs and Risks of Collection Relating to Fee-
for-Service Reimbursement Programs," "Classification of Physicians and Nurses as
Independent Contractors; Potential State and Federal Tax Liability," "Risks
Related to the Company's Acquisition Strategy," "Risks Related to Acquisition
Financing," "Dependence on Management," "Corporate Exposure to Professional
Liabilities," "Possible Insufficiency of Liability Coverage," "Potential
Restructuring of Healthcare Delivery System through Healthcare Reform
Proposals," "Changes in Health Care Regulations and Technology," "Reimbursement
by Third Party Payors," and "Relationship with Other Organizations." Although
the company believes that the expectations reflected in forward looking
statements are reasonable, they can give no assurance that such expectations
will prove to have been correct. Generally, these statements relate to business
plans or strategies, projected or anticipated benefits or other consequences of
such plans or strategies, or projections involving anticipated revenues,
expenses, earnings, levels of capital expenditures, liquidity or indebtedness or
other aspects of operating results or financial position. All phases of the
operations of the company are subject to a number of uncertainties, risks and
other influences, many of which are outside the control of the company and any
one of which, or a combination of which, could materially affect the results of
the company's operations and whether the forward looking statements made by the
company ultimately prove to be accurate. Important factors that could cause
actual results to differ materially from the company's expectations are
disclosed in this "Risk Factors" section.

CONTINUING OPERATING LOSSES

The company had losses from continuing operations before provisions for
income tax, minority interest and cumulative effect of change in accounting
principle of ($6,703,000) for the six months ended June 30, 1998, and
($1,550,000) and ($34,000) for the years ended December 31, 1997 and 1996,
respectively. The company's prospects, therefore, must be considered in light
of the risks, expenses and difficulties frequently encountered in operating a
business in a highly competitive industry.

CAPITAL REQUIREMENTS; LIMITED SOURCES OF LIQUIDITY; NEED FOR ADDITIONAL CAPITAL;
CONTINUING DEFAULT ON LINES OF CREDIT

The company requires substantial capital to pursue its operating strategy
and at June 30, 1998 had cash of $471,000. Until the company can maintain
operations sufficient to fund its working capital needs, the company will be
dependent on external sources of financing. To date, the company has no
internal sources of liquidity and it should be assumed that there will be no
internal sources of liquidity for the foreseeable future. Based on the

company's current plan of operations, it is anticipated that its current cash
balance coupled with the sale of the staffing division will provide sufficient
working capital through the end of the fiscal year.

At June 30, 1998, the company had a working capital deficit of $3,804,000.
The company maintains two revolving lines of credit of $7,500,000 with Union
Planters Bank and $750,000 with Deposit Guaranty Bank, bearing interest at bank
prime plus 1.5% and 1%, respectively. The lines of credit are collateralized by
80% of eligible receivables in outpatient surgery, 75% of eligible receivables
in home health care, and 80% of physician notes receivable. Eligible receivables
are defined principally as accounts that are aged less than 90 days for
outpatient surgery, and 120 days for home health care. At June 30, 1998,
approximately $109,000 was available based on eligible receivables under the
combined lines of credit. The lines of credit are subject to certain covenants,
including a monthly borrowing base, a debt service coverage ratio, and a
leverage ratio. At December 31, 1997, March 31, 1998 and June 30, 1998, the
company was in default on the debt service ratio coverage requirement of 1.1:1.0
due to the losses incurred in these periods. This default was waived by the bank
through December 27, 1998. Other than the lines of credit, the company does not
have any other external sources for financing, nor does it have any commitments
for external sources of financing. There can be no assurance that such financing
will be available or, if it is available, that it will be available on
acceptable terms. Accordingly, no assurance can be given that the company will
be successful in obtaining financing sufficient to fund the company's working
capital requirements after the end of the fiscal year. Failure to obtain
sufficient funding will adversely impact the company's financial position, and
could cause the company to curtail operations, sell assets or take other actions
as necessary in order to meet cash flow requirements.

INCREASED WORKING CAPITAL NEEDS AND RISKS OF COLLECTION RELATING TO FEE-FOR-SERVICEFEE-FOR-
SERVICE REIMBURSEMENT PROGRAMS

DuringFor the three month periodsix months ended March 31, 1996,June 30, 1998, approximately 60%59% of the Company'scompany's
revenue was derived from private insurers and patients, 37% from Medicare and 3%4%
from Medicaid. The percentage of revenues attributable to management services
contracts was 40% for the six months ended June 30, 1998. The portion of the
Company'scompany's revenues attributable to managementprovider services provided in connection with
fee-for-service agreements is expected to increase substantially. Management
believes that competitive trends will continue to increase the number and
percentage of the Company'scompany's fee-for-service agreements.

Under fee-for-service agreements, the Companycompany assumes the financial risks
arising from changes in patient volume, payor mix and third party reimbursement
rates. Fee-for-service arrangements also involve a credit risk related to
services provided to uninsured individuals. In addition, fee-for-service
contracts also have less favorable cash flow characteristics than traditional
flat-rate contracts due to longer collection periods. Private and third party
fee-for-service arrangements can result in longer collection cycles than
government fee-for service agreements. The Company'scompany has both types of contracts
in its payor mix.

The company's working capital needs are generally a function of the
acquisition of new contracts or the conversion of fixed fee contracts to fee-for-servicefee-
for-service contracts. As a result, the Companycompany may require additional working
capital in the event of significant growth. The Companycompany may experience a net
use of cash in its operating activities in future periods if the growth in fee-for-servicefee-
for-service contracts continues.

The company derives 37% of its revenues from the Medicare system. This
system is undergoing changes mandated by the congressional Balanced Budget Act
of 1997 which established the interim payment system for home health care. The
interim payment system was effective for home health agencies for cost reporting
periods beginning on or after October 1, 1997. Under the previous system, home
health agencies were reimbursed their costs-per-visit up to a specified limit,
which was based on geographic region. In the interim payment systems, home
health agencies will be reimbursed the lower of their actual cost-per-visit
limit or per-beneficiary limit. The per-

beneficiary limits are 75% provider specific and based on 1994 cost reports.
Cost limits are also based on the area where the patient resides and not the
area of the home health agency's office. The reduction in reimbursement relating
to the interim payment system ranges between 15% to 40%. Management anticipates
there may be further legislation adjusting the per-beneficiary cost limits; such
adjustment, if any, would not be known until after the start of the cost
reporting period.

The public and private sectors are experiencing increasing pressures to
restrainreduce health care costs and to restrict reimbursement rates for medical services.
Any change in reimbursement amounts or practices could materially adversely
affect the operations of the Company unless the Company is able to
renegotiate satisfactory contractual arrangements with its clients and
contracted physicians.company. In addition, while the Companycompany seeks to
comply with applicable Medicare and Medicaid reimbursement regulations, there
can be no assurance that the Companycompany would be found to be in compliance in all
respects with such regulations. See "Business -- Government Regulations."

CLASSIFICATION OF PHYSICIANS AND NURSES AS INDEPENDENT CONTRACTORS; POTENTIAL
STATE AND FEDERAL TAX LIABILITY

The Companycompany contracts with certain physicians and nurses as independent
contractors, rather than employees, to fulfill some of its supplemental staffing
obligations. Therefore, the Companycompany has not historically, and the Companycompany does
not currently, withhold federal or state income taxes, make federal or state
unemployment tax payments or provide worker's compensation insurance with
respect to such independent contractors. The payment of applicable taxes is
regarded as the responsibility of such independent contractors. Management
believes that classification of physicians and nurses as independent contractors
is standard industry practice and proper for federal tax purposes. A contrary
determination by federal taxing authorities or a change in existing law could
materially adversely affect the Companycompany and its operations. Most state taxing
authorities either have not challenged or have accepted the classification of
contract physicians and nurses as independent contractors. The Company'scompany's
records for independent contractors have been reviewed by federal taxing
authorities and no significant issues have been identified. In December 1995,
the Louisiana Department of Labor initiated an audit for the fiscal year ended
December 31, 1993 which resulted in an additional 341 nurses being listed as
employees of the company and holding that their earnings were taxable for
unemployment insurance purposes. The Company is currently under
review bycompany appealed the Department of Labor.Labor's
ruling in December 1995, a hearing was held in September 1996, and the ruling
was upheld by the administrative law judge. The company timely filed an appeal
in the District Court of the Parish of East Baton Rouge. To date, there has
been no further action. Management believes that the ultimate resolution of
this review will not have a significant effect on the Company'scompany's financial
position or results of operations. However, there are some states in which the
independent contractor classification of physicians and nurses is or has been
under administrative or judicial review.

RISKS OF EXPANSIONRELATED TO THE COMPANY'S ACQUISITION STRATEGY

The Company's plans include a focus on the expansion of its businesscompany intends to grow significantly through the additionacquisition of
new management agreements with professional associations
in Louisiana, Texasadditional outpatient health care and other areas.complementary businesses. The company
expects to face competition for acquisition candidates, which may limit the
number of acquisition opportunities and may lead to higher acquisition prices.
There can be no assurance that the Company's resourcescompany will be sufficientable to achieve such expansionidentify, acquire or
that upon
achieving such expansion its working capital and/manage profitably additional businesses or additional staffing will be
sufficient for itsto integrate any acquired businesses
into the company without substantial costs, delays or other operational or
financial problems. Further, acquisitions involve a number of risks, including
possible adverse effects on the company's operating needs. In addition,results, diversion of
management's attention, failure to retain key personnel of the Company's managementacquired business
and quality assurance procedures may not be sufficient inrisks associated with unanticipated events or liabilities, some or all of
which could have a material adverse effect on the event of such
expansion.

RISKS ASSOCIATED WITH FUTURECARE

The Company has or is committed to advance approximately $1.3 million
to capitalize the formation of a health maintenance organization ("HMO") through
its subsidiary, FutureCare, Inc. A portion of this amount is expected to be
reimbursed from the proceeds of a private placement offering of FutureCare, Inc.
In the event FutureCare, Inc. is unable to raise any proceeds from its offering,
the Company will not recover these expensescompany's business, financial
condition and this may adversely affect the
Company's results of operations. There canThe company has entered into several
non-competition and non-solicitation agreements in connection with certain of
its acquisitions. If those agreements are found to be no assurance that the HMO will be
profitable or that the Company will not be expected to provide additional
financing to support its development or operations.

The Company will provide management services to the HMO pursuant to a
management agreement. The Company has no prior experience managing an HMO and no
assurance can be given that the Company will successfully perform management
services under its agreement with the HMO. The Company may be exposed to
liability for mismanagement whichunenforceable,
competition by former owners of acquired companies could have an adverse effect
on resultsthe company's operations.

RISKS RELATED TO ACQUISITION FINANCING

The timing, size and success of operationsthe company's acquisition efforts and the
associated capital commitments cannot be readily predicted. The company
currently intends to finance future acquisitions by using shares of its common
stock for a portion of the consideration to be paid. In the event that the
common stock does not maintain a

sufficient market value, or potential acquisition candidates are otherwise
unwilling to accept common stock as part of the consideration for the sale of
their businesses, the company may be required to utilize more of its cash
resources, if significantavailable, in order to initiate and either uninsuredmaintain its acquisition
program. If the company does not have sufficient cash resources, its growth
could be limited unless it is able to obtain additional equity or underinsured.debt
financing.

DEPENDENCE ON MANAGEMENT

The success of the Companycompany is dependent upon its management, including the
Company's Chief Executive Officer,company's chief executive officer, William F. Borne.Borne, and president, James P.
Cefaratti. The Companycompany maintains key employee life insurance in the amount of
$4.5 million on the life of Mr. Borne; however, the CompanyBorne and has not entered into an employment
agreement with Mr. Borne.Messrs. Borne and Cefaratti. The loss to the Companycompany of the
services of Mr.Messrs. Borne or Cefaratti could materially adversely affect the
Company'scompany's operations. See "Management."

ADVERSE EFFECT OF STATE LAWS REGARDING THE CORPORATE PRACTICE OF MEDICINE

Business corporations are legally prohibited in many states from
providing or holding themselves out as providers of medical care. While the
Company has structured its operations to comply with the corporate practice of
medicine laws of states in which it operates and will seek to structure its
operations in the future to comply with the laws of any state in which it seeks
to operate, there can be no assurance that, given varying and uncertain
interpretations of such laws, the Company would be found to be in compliance
with restrictions on the corporate practice of medicine in such states. A
determination that the Company is in violation of applicable restrictions on
the practice of medicine in any state in which it operates could have a
materially adverse effect on the Company if the Company were unable to
restructure its operations to comply with the requirements of such state. Such
regulations may limit the states in which the Company can operate, thereby
inhibiting future expansion of the Company into potential markets in other
states.

CORPORATE EXPOSURE TO PROFESSIONAL LIABILITIES

Due to the nature of its business, the Companycompany and certain physicians who
provided services on its behalf may be the subject of medical malpractice
claims, with the attendant risk of substantial damage awards. The most
significant source of potential liability in this regard is the alleged
negligence of nurses placed by the Company in home health care and supplemental
staffing settings. In addition, the Companycompany could
be exposed to liability based on the negligence of physicians operating in the
Company'scompany's outpatient surgery centers. To the extent such nurses or physicians were
regarded as agents of the Companycompany in the practice of medicine, the Companycompany could
be held liable for any medical negligence of such persons. In addition, the
Companycompany could be found in certain instances to have been negligent in performing
its contract management services for hospital and clinics even if no agency
relationship between the Companycompany and such physician exists. There can be no
assurance that a future claim or claims will not exceed the limits of available
insurance coverage or that such coverage will continue to be available.

POSSIBLE INSUFFICIENCY OF LIABILITY COVERAGE

The Companycompany maintains two professional liability insurance;insurance policies
covering the Company and its subsidiaries; however, there can be no assurance
that any such claims will not be made in the future in excess of the limits of
such insurance, if any, or that any such claims, if successful and in excess of
such limits, will not have a material adverse effect on the Company'scompany's assets and
its ability

6 to conduct its business. There can be no assurance that the Companycompany
will continue to maintain such insurance or that such insurance can be
maintained at acceptable costs. The Company'scompany's insurance coverage currently
includes medical
malpractice, fire, property damage and general liability.liability with a $1,000,000 limit on
each wrongful act and a $3,000,000 limit in aggregate. There can be no
assurance that any claim will be within the scope of the Company'scompany's coverage or
that such claims will not exceed the Company'scompany's coverage.

POTENTIAL RESTRUCTURING OF HEALTHCARE DELIVERY SYSTEM THROUGH HEALTHCARE REFORM
PROPOSALS

President Clinton and members of Congress have made several additional
proposals for reform of the nation's health care system, including proposals
limiting payments under a Medicaid and Medicare programs. Many of these proposals
contain measures intended to control public and private spending on health care
as well as to provide universal public access to the health care system. If
enacted, such proposals are expected to result in a substantial restructuring of
the health care delivery system. The Companycompany cannot predict what additional
health care reform legislation, if any, will be enacted. Significant changes in
the nation's health care system are likely to have a substantial impact over
time on the manner in which the Companycompany conducts its business. Such changes
could have a materially adverse effect on the results of operations of the
Company.company.

RISKS RELATED TO LONG-LIVED ASSETS

In accordance with Statement of Financial Accounting Standard No. 121
("SFAS 121"), "Accounting for the Impairment of Long-Lived Assets to Be Disposed
of", the company quarterly evaluates assets for events or changes in
circumstances that indicate the carrying amount of an asset may not be
recoverable. The company uses undiscounted expected future cash flows to assess
the recoverability of the asset. Due to the Medicare reimbursement reductions
finalized in March 1998 in association with the Balanced Budget Act of 1997,
there can be no assurance that the carrying amount of the company's long-lived
assets, particularly goodwill recorded in acquisitions, will be recoverable.

CHANGES IN HEALTH CARE REGULATIONS AND TECHNOLOGY

There can be no assurance that the Companycompany will not be adversely affected
by future possible changes in medical and health regulations;regulations, the use, cost and
availability of hospitals and other health care services and medical
technological developments.

12
REIMBURSEMENT BY THIRD PARTY PAYORS

The Company and its subsidiaries arecompany is generally reimbursed by a variety of third-party payors,
with outpatient surgery reimbursements coming primarily from insurance companies
and patients, and home care reimbursements coming primarily from Medicare and
Medicaid and supplemental staffing reimbursements coming
primarily from hospitals and other institutions.Medicaid. Accordingly, the Companycompany may be materially adversely affected in the
event of future increased insurance premiums, increased insurance deductibles,
unavailability of insurance, changes in policy exclusions covering specific
types of disease or conditions or other changes in medical and health insurance.
The Companycompany typically receives payment between 15 and 120 days after rendering
an invoice, although such period can be longer. Accordingly, the Company'scompany's cash
flow may at times be insufficient to meet its accounts payable requirements. The
Companycompany at times has been required to borrow funds to meet its ongoing
obligations and may be required to do so in the future, and the Companycompany would be
adversely affected if in the future it were unable either to borrow funds or to
borrow funds on terms deemed favorable by management.

COMPETITION

The business in which the Companycompany operates is highly competitive. The
Companycompany is in competition with hospitals, nursing homes, temporary employment
companies and other businesses
that provide home health care services, somemany of which are large and established
companies with significantly greater resources than the Company.company.

RELATIONSHIP WITH OTHER ORGANIZATIONS

The development and growth of the Company'scompany's business depends to a
significant extent on its ability to establish close working relationships with
health maintenance organizations, preferred provider organizations, hospitals,
clinics, nursing homes, physician groups, and other health care providers.
Although the Companycompany has established such relationships, there is no assurance
that existing relationships will be successfully maintained and that additional
relationships will be successfully developed and maintained in existing and
future markets.

FEDERAL AND STATE REGULATION

As a provider of health care services, the Companycompany is subject to laws and
regulations administered by the various states. The Companycompany is subject to
certain federal laws and regulations as a result of the certification of its
operations in the Medicare/Medicaid Program. Compliance with laws and
regulations could increase the cost and time necessary to allow the Companycompany to
operate successfully and may affect the Companycompany in other respects not presently
foreseeable. Loss of certification in the Medicare/Medicaid Program could
adversely affect the ability of the Companycompany to effectively market its services.

CONTROL BY PRESENT STOCKHOLDERS

Officers and directors of the Company own approximately 34% of the
Company's outstanding Common Stock (approximately 32% assuming exercise of all
outstanding Warrants and Options). Accordingly, these stockholders will be in a
position to elect the entire Board of Directors of the Company for the
foreseeable future. See "Principal Stockholders."

DIVIDENDS NOT LIKELY

The Companycompany has never paid cash dividends on its Common Stock,common stock, and it is
not anticipated that any will be paid in the foreseeable future.

See "Price
Range of Common Stock and Dividend Policy."

DILUTION

The Company may issue up to 150,000FUTURE SALES OF COMMON STOCK

Approximately 3,000,000 shares of Common Stockcommon stock are currently tradeable, or
eligible for trading pursuant to this Prospectus. In addition,Rule 144 as promulgated under the Company has reserved an aggregate of 153,871
shares for issuance upon exercise of outstanding Warrants and Options and will
likely grant additional optionsSecurities
Act, in the future. The issuancepublic market. Sales of additional shares
of Common Stock willcommon stock in the public market may have
a dilutivedepressive effect on prevailing market prices for the current holders of the
Company's outstanding shares of Common Stock.

NO ASSURANCE OF A CONTINUED PUBLIC MARKETcommon stock. There is
no assurance that the public market for the Common Stockcommon stock will not be volatile,
sporadic or limited. Accordingly, purchasers may not be able to resell shares
of Common Stockcommon stock at or above their respective purchase price, and a purchaser may
not be able to liquidate his investment even at a loss without considerable
delay.

A substantial number of shares of Common Stock are currently
tradeable in the public market or will become eligible for sale in the near
future pursuant to Rule 144 as promulgated under the Act. Sales of Common Stock
in the public market may have a depressive effect on prevailing market prices
for the Common Stock. See "Plan of Distribution and Selling Stockholders."13

POSSIBLE ADVERSE EFFECT OF FUTURE ISSUANCES OF PREFERRED STOCK

The Company'scompany's Certificate of Incorporation authorizes the issuance of
2,500,0005,000,000 shares, par value $.001 per share, of "blank check" preferred stock
(the "Preferred Stock") with such designations, rights and preferencepreferences as may be determined from time to
time by the Boardboard of Directors.directors. Accordingly, the Boardboard of Directorsdirectors is
empowered, without stockholder approval, to issue Preferred
Stockpreferred stock with dividend,
liquidation, conversion, voting, or other rights that could adversely affect the
voting power or other rights of the holders of the Common
Stock.common stock. In the event of
issuance,additional issuances, the Preferred Stockpreferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company.company. The Companycompany has no present intention to issue any
additional shares of its Preferred Stock.preferred stock. However, there can be no assurance
that Preferred Stock the Companyadditional preferred stock will not be issued at some time in the future.
See "Description of Securities -- Preferred Stock."

CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION REQUIRED TO RESELL

A current prospectus relating to the shares offered for resale by the
Selling Shareholders must be in effect at the time of resale and the shares must
be qualified for sale or exempt under the securities laws of the applicable
state or states. The Company has undertaken and intends to file and keep
effective and current a prospectus which will

permit the resales of the Common Stock, but there can be no assurance that the
Company will be able to do so. In the event the Company is unable to maintain a
current prospectus due to lack of sufficient financial resources or for other
reasons, the Selling Stockholders will be unable to resell their shares in any
public market. Although the Company intends to seek to qualify for sale the
shares of Common Stock in those states in which the securities are to be
offered, no assurance can be given that such qualification will occur.

STATUS OF PERSONS RESELLING COMMON STOCK

Holders who subsequently resell shares of Common Stockcommon stock to the public
pursuant to this Prospectusprospectus may be deemed to be underwriters with respect to
such shares for purposes of the Securities Act with the result that they may be
subject to certain statutory liabilities if the registration statement is
defective. The Companycompany has not agreed to indemnify any of the Selling Stockholdersselling stockholders
regarding such liability. In addition, any profit on the sale of shares of
Common Stockcommon stock might be deemed underwriting discounts and commissions under the
Securities Act. See "Plan of DistributionDistribution."

PENNY STOCK REGULATION

The SEC has adopted rules that regulate broker-dealer practices in
connection with transactions in penny stocks. Penny stocks generally are equity
securities with a price of less than $5.00 (other than securities registered on
certain national securities exchanges or quoted on the Nasdaq system, provided
that current price and Selling Stockholders."

9volume information with respect to transactions in such
securities is provided by the exchange system). The penny stock rules require a
broker-dealer, prior to a transaction in a penny stock not otherwise exempt from
the rules, to deliver a standardized risk disclosure document prepared by the
SEC that provides information about penny stocks and the nature and level of
risks in the penny stock market. The broker-dealer also must provide the
customer with bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from such rules, the broker-dealer must
make a special written determination that a penny stock is a suitable investment
for the purchaser and receive the purchaser's written agreement to the
transaction. These disclosure requirements may have the effect of reducing the
level of trading activity in any secondary market for a stock that becomes
subject to the penny stock rules. The company's common stock is subject to the
penny stock rules, and accordingly, investors in this offering may find it
difficult to sell their shares, if at all.

RATIO OF EARNINGS TO FIXED CHARGES

Inapplicable.

USE OF PROCEEDS

AnyIn the event all of the placement agent warrants are exercised, the company
will receive $525,000 in net proceeds received from the issuance of shares of Common Stock
offered by the Companywhich will be usedutilized for working capital
and general corporate
purposes. However, there can be no assurance that any or all of the placement
agent warrants will be exercised. The Companyselling shareholders will receive noall of
the net proceeds from the sale of the common stock underlying the preferred
stock and placement agent warrants.

DETERMINATION OF OFFERING PRICE

Inapplicable.

DILUTION

Inapplicable.

SELLING STOCKHOLDERS

The following table sets forth certain information concerning each selling
stockholder. Assuming that the selling stockholders offer all of their shares,
the selling stockholders will not have any beneficial ownership. The shares are
being registered to permit the selling stockholders and certain of their
respective pledgees, donees, transferors, or other successors in interest to
offer the shares for resale of shares of
Common Stock by the Selling Stockholders.from time to time. See "Plan of Distribution and Selling
Stockholders.Distribution."

PRICE RANGERESALE OF COMMON STOCK BY SELLING STOCKHOLDERS
FOR SHARES TO BE ISSUED UPON CONVERSION OF PREFERRED STOCK ("P")
AND DIVIDEND POLICYSHARES TO BE ISSUED, AFTER CONVERSION OF PREFERRED STOCK, UPON
EXERCISE OF WARRANTS ("W")

AMOUNT
SHARES OFFERED SHARES
BENEFICIALLY (ASSUMING ALL BENEFICIALLY
OWNED BEFORE SHARES OWNED AFTER
STOCKHOLDER RESALE/(1)(2)(3)/ IMMEDIATELY RESALE PERCENTAGE
- ----------- ---------------- SOLD)/(2)(3)(4)/ ------ ----------
----------------

Bank Hofmann AG 22,384 22,384 P - -

Bank Julius Baer & Co. Ltd. 223,847 223,847 P - -

Bank Sarasin & Cie 44,770 44,770 P - -

Care Invest AG 67,154 67,154 P - -

CIBC 156,693 156,693 P - -

Clariden Bank 111,923 111,923 P - -

Credit Lyonnaise (Schweiz) AG 89,539 89,539 P - -

Cresvale Far East Limited Hong Kong 44,770 44,770 P - -
- -------------------------------------------------------------------------------------------------------------------

Delphic Global Opportunities Fund, 67,154 67,154 P - -
Ltd.

Rush & Co. 44,770 44,770 P - -

Sigler & Co. 22,384 22,384 P - -

Terra Healthy Living, Ltd. 783,467 783,467 P - -

Hudson Capital Partners, L.P. 117,520 117,520 W - -

- ---------------------------------------
(1) The Company's Commonselling stockholders have sole voting and sole investment power with
respect to all shares owned.
(2) Calculated using the current conversion rate for the Preferred Stock commenced tradingof
2.225 shares of common stock for each share of preferred stock, subject
to adjustment.
(3) Ownership is determined in accordance with Rule 13d-3 under the Exchange
Act. The actual number of shares beneficially owned and offered for sale
hereunder is subject to adjustment and could be materially more than the
estimated amount indicated depending upon factors which cannot be
predicted by the company at this time.
(4) Assumes the sale of all shares offered hereby to persons who are not
affiliates of the selling stockholders.

PLAN OF DISTRIBUTION

Pursuant to this prospectus, the selling stockholders, or by certain
pledgees, donees, transferees or other successors in interest to the selling
stockholders, may sell shares from time to time in transactions on the OTC
Electronic Bulletin Board, in January 1994privately-negotiated transactions or by a
combination of such methods of sale, at fixed prices which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The selling stockholders may
effect such transactions by selling the shares to or through broker-dealers, and
such broker-dealers may receive compensation in August 1994, the Company's Common Stock
began trading onform of discounts,
concessions or commissions from the Nasdaq SmallCap Market. The following table providesselling stockholders or the high and low pricespurchasers of
the Company's Common Stockshares for whom such broker-dealers may act as quotedagent or to whom they sell as
principal, or both (which compensation to a particular broker-dealer might be in
excess of customary commissions).

Other methods by Nasdaqwhich the shares may be sold include, without limitation:
(1) transactions which involve cross or block trades or any other transaction
permitted by the OTC Electronic Bulletin Board, (2) "at the market" to or
through market makers or into an existing market for the periods indicated. Such quotations reflect inter-dealer prices, without retail
mark-up, mark-downcommon stock, (3) in
other ways not involving market makers or commission,established trading markets, including
direct sales to purchasers or sales effected through agents, (4) through
transactions in options or swaps or other derivatives (whether exchange-listed
or otherwise), (5) through short sales, or (6) any combination of any other such
methods of sale. The selling stockholders may also enter into option or other
transaction with broker-dealers which require the delivery to such broker-
dealers of the shares offered hereby which shares such broker-dealer may resell
pursuant to this prospectus.

The selling stockholders and any broker-dealers who act in connection with
the sale of shares hereunder may not represent actual transactions.

1994 High Low
---- ------- -------
1st Quarter.......................be deemed to be underwriters, as that term is
defined under the Securities Act, and any commissions received by them and
profit on any resale of the shares as principal may be deemed to be underwriting
discounts and commissions under the Securities Act.

There is no assurance that the selling stockholders will sell all or any of
the shares which may be offered hereby.

DESCRIPTION OF SECURITIES TO BE REGISTERED

SERIES A PREFERRED STOCK

In December 1997, the board of directors established a series of shares
setting forth the preferences, rights, and limitations and authorizing the
issuance of up to 1,000,000 shares of series A preferred stock. The face value
of the series A preferred stock is $10 $ 8 1/2
2nd Quarter ...................... 9 1/2 6 3/4
3rd Quarter ...................... 8 3/4 6 1/2
4th Quarter ...................... 7 3/8 6 3/4
1995
1st Quarter ...................... $ 7 1/2 $ 6 3/4
2nd Quarter ...................... 11 1/4 6 3/4
3rd Quarter ...................... 12 9
4th Quarter ...................... 10 7 1/2
1996
1st Quarter ...................... $ 9 5/8 $ 7 1/2

Asper share. The series A preferred stock
is convertible, at any time at the holder's

option, initially into a number of July 15, 1996,shares of common stock equal to the last salesface
value divided by 88% (the conversion factor) of the average closing sale price
of the Common Stockcommon stock for the 15 trading days immediately prior to the initial
closing date, which was $7.00$5.2556818. Beginning June 1, 1998, the conversion
factor decreases by .5% on the first day of each month that any of the shares of
series A preferred stock continue not to be publicly tradeable pursuant to an
effective registration statement under the Securities Act. To date, the
conversion factor is 85% resulting in a conversion rate of $2.22384737. The
series A preferred stock will automatically convert to shares of common stock if
the average sales price for the common stock exceeds $7.09 for fifteen
consecutive trading days. The series A preferred stock is not redeemable by the
company. The holders of the series A preferred stock will be entitled to receive
dividends, if and when they are declared by the board of directors. The
liquidation preference of the series A preferred stock is the face value,
subject to adjustment. The series A preferred stock is senior to all outstanding
classes and series of the company's capital stock. Each holder of shares of
series A preferred stock is entitled to one vote for each share of common stock
underlying the series A preferred stock. There are currently 750,000 shares of
series A preferred stock issued and outstanding.

PLACEMENT AGENT WARRANTS

In December 1997, the placement agent for the private placement of the
series A preferred stock was granted five year warrants to purchase 52,500
shares of series A preferred stock at an exercise price of ten dollars per
share.

INTERESTS OF NAMED EXPERTS AND COUNSEL

Inapplicable.

INFORMATION WITH RESPECT TO THE REGISTRANT

INDUSTRY OVERVIEW

The Company believeshealth care industry continues to undergo changes. The focus is on
managing cost and utilization, as opposed to the hospital/physician centered
focus that there were approximately 163 holdersdominated healthcare since the early 1950's. Since the mid-1980's,
health care shifted from providing care at any cost to learning to manage costs.
It is predicted the next shift will require health care providers to truly learn
to manage care.

In an effort to manage health care expenditures, a strong focus has been
placed on moving the primary source of record of the Company's Common Stock and approximately 600 beneficial
holders. The Company has not paid any dividends on its Common Stock and expects
to retain any future earnings for use in its business development.

CAPITALIZATION

The table below sets forth the capitalization of the Company at March
31, 1996. The table should be read in conjunction with the Company's financial
statements and notes thereto included elsewhere in this Prospectus.

MARCH 31,
1996
(in thousands)

Current portion of long-term debt and capital lease obligations....... $660

Long-term debt and capital lease obligations, net of current portion.. 630
Notes Payable to Related Parties...................................... 1,021
-----
Total Debt.......................................................... 2,311
-----
Stockholders' equity
Preferred stock, $.001 par value,
2,500,000 shares authorized, no
shares issued and outstanding..................................... -
Common stock, $.001 par value,
10,000,000 shares authorized;
2,583,864 shares issued and
outstanding(1).................................................... 3
Additional paid-in-capital.......................................... 1,977
Stock Subscriptions Receivable...................................... (79)
Retained Earnings................................................... 2,572
-----
Total stockholders' equity........................................ 4,473
-----

Total capitalization.............................................. $6,784
======
- ------------
(1) Does not include an aggregate of 153,871 shares of Common Stock
underlying outstanding Warrants and Options. See "Description of
Securities -- Warrants" and "Management -- Stock Options."

SELECTED FINANCIAL DATA

The selected financial data below as of and for the three years in the
period ended December 31, 1995 are derivedhealth care from the Company's Financial
Statements, which have been audited by Arthur Andersen LLP and Hannis T.
Bourgeois & Co.traditional
institutional settings (hospitals), L.L.P., independent public accountants. The selected financial
data as of and for the two years in the period ended December 31, 1992, and as
of and for the three months ended March 31, 1995 and 1996, is unaudited and, in
the opinion of management, includes all adjustments, consisting solely of normal
recurring adjustments, necessary for a fair presentation for such periods. The
information below should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and the
financial statements and notes thereto included elsewhere in this Prospectus.

(In thousands, except per share data)

THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
-------------------- --------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----

STATEMENTS OF INCOME DATA
Service Revenue..................... $10,116 $8,604 $37,589 $28,902 $22,445 $18,131 $14,582
Gross Margin........................ 4,499 3,427 15,165 11,906 7,771 6,629 5,267
Operating expenses.................. 4,139 2,909 13,785 9,740 7,204 6,323 5,025
Operating income.................... 360 518 1,380 2,166 567 306 242
Income before income taxes and
minority interest................. 317 463 1,130 1,933 534 418 208
Net income.......................... 194 368 942 1,905 495 389 248
Earnings per common share........... .08 .14(1) .37(1) .75(1) .22(1) .17(1) .11(1)
Weighted average common shares 2,570 2,525 2,570 2,525 2,285 2,285 2,285
outstanding.......................

MARCH 31, DECEMBER 31,
----------------- ------------------------------------
BALANCE SHEET DATA: 1996 1995 1995 1994 1993(2)
---- ---- ---- ------ ------

Working capital..................... $1,598 $878 $1,878 $2,202 $2,992
Total assets........................ 12,886 6,692 11,537 9,160 7,190
Long-term liabilities............... 1,651 1,816 1,490 1,536 642
Stockholders' equity(3)............. 4,473 4,092 4,274 4,042 4,071
- ------------------------------------

(1) The Company acquired Surgical Care Centers of Texas, L.C., a Texas
limited liability company ("ASC"), on June 30, 1995 in a transaction
which was accounted for as a pooling of interest. Prior to the
acquisition by AMEDISYS, the individual members of ASC were responsible
for all income taxes; therefore, no income tax expense was recorded
through June 30, 1995.

(2) Prior to December 31, 1993, the Company operated on a fiscal year end
of March 31. On December 31, 1993, the Company adjusted its fiscal year
end to December 31, for accounting purposes.

(3) The Company has not declared or paid any dividends on its Common Stock.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The Company derives revenues from three sources: nursing services,
outpatient surgery and physician services. Nursing services revenues are derived
form fees for providing nurses incausing home health care settings and to hospitals and
other medical care providers under supplemental staffing arrangements.
Outpatient surgery revenues are derived from fees charged to patients and third
party payors for usage of the Company's surgery centers. Physician services
revenues are derived primarily from management fees charged to physician
practices and clinics under agreement.

Revenues are collected from Medicare, Medicaid, insurance companies,
hospitals and other institutions, doctors and patients. Average turnover for the
Company's receivables is approximately 70 days, with reimbursements collected
from 15 to 120 days after billing. Revenues are recorded on the accrual basis on
the date of service in amounts equal to the established rate or estimated cost
reimbursement rates. Allowances and contractual adjustments representing the
difference between established rates and estimated cost reimbursement rates are
also accrued and then deducted from gross revenues to determine net service
revenues.

In June 1995, the Company acquired all of the membership interests in
AMEDISYS Surgery Centers, L.C., formerly known as Surgical Care Centers of
Texas, LLC,play a Texas limited liability company ("ASC"), in exchange for 1,000,000
shares of Company Common Stock. This transaction was accounted for as a pooling
of interest, and the Company's financial statements have been restated to
include the results of ASC for all periods presented. Prior to the acquisition
by AMEDISYS, the individual members were responsible for all income taxes;
therefore, no income tax expense was recorded through June 30, 1995.

The Company's results of operations include the results of its
wholly-owned and majority-owned subsidiaries, and their wholly-owned and
majority-owned subsidiaries. See "Prospectus Summary."

Primary components of expenses for the Company include salaries,
benefits and normal operating expenses.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1996 AND 1995. The Company's revenue
increased by 17.5% during the first quarter of 1996 compared to the first
quarter of 1995. This revenue growth is primarily attributable to an increase in
the nursing services division which offset decreases in revenues in the
physician services and outpatient surgery center operations. Gross margins
increased 6.0% and general and administrative expenses increased 8.3% as a
percentage of revenue due to the increase of home health care in the business
mix. Home health care revenues are associated with higher general and
administrative expenses proportional to revenue than supplemental staffing and
the Company's other business segments because of the Medicare cost reimbursement
payment system. General and administrative expenses also increased because of
the addition of clinical personnel to the outpatient surgery centers and staff
increases in physician services in corporate development and operations.
Physician services was redesigned to a physician practice management model in
the fourth quarter of 1995.

Operating income as a percentage of revenue decreased by 2.6% in the
first quarter of 1996 compared to the first quarter of 1995 and net income
followed the same trend. All business segments were profitable in the first
quarter with physician services showing the most improvement in operating
income.

Physician services revenue declined 10.7% for the first quarter of 1996
compared to the first quarter of 1995 due to the Company's change from an equity
or ownership structure to a management model. The Company divested ownership in
its existing physician practices and replaced these arrangements with management
services agreements. The current contracts allow physicians to maintain control
of their practices and to benefit from corporate business systems and the
negotiating strength of a physician network. The Company's management agreements
are also more
profitable than the previous ownership model. Decrease in cost of
revenue and general and administrative expenses weredynamic role. As a result, of restructuring
of the physicians' agreements from an equity to a management model and this
resulted

in higher operating income. Operating income of physician services increased to
$62,000 in the first quarter of 1996 from a loss of $73,000 in the first quarter
of 1995.

Outpatient surgery revenue declined 8.48% for the first quarter of 1996
compared to the first quarter of 1995. This segment also experienced a 14.1%
decline in operating income proportional to revenues in the first quarter of
1996 compared to that period in 1995 because revenue decreased. Reduced revenues
and operating income are due to lower fees for individual cases because of
discounting to managed care organizations and a greater number of Medicare and
Medicaid procedures. However, the Company's strategy is to increase volume by
increasing the number of participating physicians. Inservices that are provided safely and
effectively in alternate sites has dramatically increased.

Managed care, Medicare/Medicaid and payor reimbursement pressures continue
to drive patients through the first quartercontinuum of 1996,care until they reach the surgery centerssetting
where the appropriate high quality care can be provided cost effectively. Over
the past several years, home care has evolved as a feasible (often preferred)
alternative in the Houston area had 55 participating surgeons comparedcontinuum. In addition to 51patient comfort, substantial cost
savings can be realized through treatment at home as an alternative to
institutional settings.

To compete in the first quarter of 1995 and the center received 22this new applicants for
privileges. Net income decreased due to lower revenue and increased expenses
related to a decision to improve the quality of operations by increasing
clinical personnel and upgrading medical equipment. The Company believes this
strategy will result in higher revenues,environment, it is critical that providers not only
provide high quality, patientcost effective care, but implement clinically-based
management information systems to reduce costs, improve productivity, produce
and improved
services to participating physicians resultinganalyze clinical outcomes data, and position themselves as partners in increased numbers of
physicians utilizing the centers.

Nursing services revenue increased 22.9% in the first quarter of 1996
compared to the first quarter of 1995 due to increases in home health revenue.
Increases in revenue are attributable to internal and external growth. Home
health care visits increased 60% from 54,000 visits in the first quarter of 1995
to 86,000 in the first quarter of 1996.risk
sharing.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The Company acquired two local home care
agencies and expanded its existing operations. Despite the increased revenues,
the nursing services segment experienced a decrease in operating income from
$301,000 in the first quarter of 1995 to $133,000 in the first quarter of 1996.
This decrease is due to increased expenses since home health care is cost
reimbursed by Medicare. Another factor in nursing services was a change in
Louisiana Medicaid from a cost reimbursed system to a fee for service system.
The change in the fee structure caused some losses prior to the necessary cost
adjustments. The revenue mix in nursing services was also greater in home health
care than supplemental staffing which affected overall income for the division
due to the nature of the Medicare cost reimbursement system.

YEARS ENDED DECEMBER 31, 1995 AND 1994. For the year ended December 31,
1995, the Company's revenues increased to $37,589,000 from $28,902,000 for the
year ended December 31, 1994, a 30% increase. The change is primarily
attributable to an increase in revenues generated by the Company's nursing
services division. Increased nursing revenues were a result of expansion of home
health care locations, acquisitions and internal growth in existing operations.
The Company acquired two independent home health care agencies in 1995. Home
health care visits increased 70% from 1994 to 1995.

Gross margin as a percentage of revenue decreased slightly to 40% for
1995 from 41% for 1994. General and administrative expenses as a percentage of
revenue increased by 3% for 1995 compared to 1994. The reasons for these changes
in gross margin and general and administrative expense are the following: (i) an
increase in home health visits by the nature of the cost reimbursement system of
Medicare is accompanied by an increase in the cost of revenue, (ii) decline in
the outpatient surgery revenue because of changes in the payor mix which reduced
revenues for individual cases, and (iii) the expansion in physician services
which required some start-up expenses before revenues were generated.

Operating income decreased by $786,000 or 36% for 1995 compared to
1994. Operating income was affected by an operating losscompany operates principally in two physician
clinics of $260,000, reduced margins in outpatient surgery, and increased
expenses in outpatient surgery to improve the quality of care.

The Company's net income of $942,000 in 1995 represented a decrease of
$964,000, compared to net income for 1994. The losses were due partially to a
loss of $349,000 in three of the Company's physician practices in which the
Company maintained an ownership interest. Ownership interests were divested in
the fourth quarter of 1995 and were replaced with management arrangements. The
Company's net income was also affected by lower net revenues in the outpatient
surgery segment of the business in 1995 compared to 1994. The decrease was due
to changes in the payor mix with a larger percentage of fees from Medicare,
Medicaid, and managed care organizations.

YEARS ENDED DECEMBER 31, 1994 AND 1993. The Company's revenues
increased to $28,902,000 for the year ended December 31, 1994, from $22,445,000
for the year ended December 31, 1993, a 29% increase. This increase is primarily
attributable to an increase in revenues generated by the Company's nursing
services division as a result

of expansion in home health locations and increased visits in existing regions,
as well as the start-up of the primary care division. Home health care visits
increased 102% from 1993 to 1994.

In 1994, the Company added four new home health care locations and it
acquired a home health care company in Northeast Louisiana. The Company entered
the primary care market through a joint venture with a clinic in Southeast
Louisiana in March 1994, and it has expanded those operations with four
affiliated clinics.

Although primary care services were still in a start-up phase, revenues
for this division grew to $1,001,000 for 1994. Revenues from physicians are
derived from physician office visits and clinical laboratory services. The
Company also generates management revenues in this business sector from managing
rural health clinics staffed by physicians and physician assistants.

Gross margins increased by 53% to $11,906,000 for 1994 from $7,771,000
for 1993. Increased gross margins are attributable to the increase in home
health care as part of the Company's business mix and changes in billing and pay
rates in supplemental staffing operations, as well as the start-up of primary
care.

General and administrative expenses increased by 35% to $9,740,000 for
1994, compared to $7,204,000 for 1993. The Company was able to control general
and administrative expenses by using internally developed resources for the
expansionsegments: Provider
Services (consisting of home health care and start-upoutpatient surgery) and Management
Services (consisting of primary care.

The Company's operating income increased by 282% to $2,166,000 in 1994
from $567,000 in 1993.

Operating income was affected by start-up costs associated with opening
newphysician support and home health care officesmanagement). See
Note 14 of the attached audited financial statements for segment information.

STRATEGY

The company's business objective is to enhance its position in 1993its market
areas as a leading provider of fully integrated alternate site health care
services. The company views its delivery system as a "hospital without walls"
and 1994its strategy to accomplish this is as follows:

. Offer Patients, Physicians, Hospitals and initiationPayors a Continuum of primaryFully
Integrated Care. A consistent quality of care operations. New regionsat a reasonable cost will
most successfully occur when the care comes from one provider.

The company's strategy to employ this concept in each of its service areas
appeals to referral sources and payors, who prefer coordinating care
through a single source.

. Focus on selective Geographic Markets. The company is targeting selected
markets in the south and southeastern United States. Through start-ups,
acquisitions and expansion of existing services, the company plans to
dominate these markets, to increase utilization of its services by payors
and referral sources and to enhance its overall market position. The
majority of states in the south and southeast have a low penetration of
managed care. As the presence of managed care increases in its service
area, the company believes it is well positioned to provide the broad
geographic and service coverage required to contract with these payors. In
addition, since many of the areas in which the company operates are rural,
home health care is an ideal delivery system.

. Technology and Innovation Reduce Costs and Expand Business Lines. The
development of proprietary software systems not only reduces the company's
costs to operate its business, but provides an additional business line for
the company. Management believes Amedisys will be the first company of its
kind to operate with a virtually paperless system, expected to be in use
company-wide by the end of 1999. Care givers will be equipped with hand
held computers which will not only create greater efficiencies, but will
tie information into one centralized source. By enhancing its operations
through the use of information technology, the company is positioned to not
only operate more efficiently and deliver care in a more cost-efficient
manner, but to compete in an environment increasingly influenced by managed
care and subject to changes in reimbursement and government regulation.

. Manage Costs Through Disease State Management. Payors are focusing on the
management of patients who suffer from chronic disease states which
represent substantial costs. Some of these major disease states include:
asthma, cancer, diabetes, HIV, and congestive heart failure. The company's
disease state management program includes: patient education, frequent
monitoring and coordinated care from specialists. This approach has been
proven to enhance quality of life and reduce the overall cost of care.

. Develop Effective Synergies. Many patients require multiple services
provided by the company, thereby allowing cross referrals between Amedisys
divisions. This not only benefits patients, but referral sources and payors
as well, by allowing them to utilize one company whom they know and trust.
Finally, through the synergistic operation of its divisions, the company
can realize cost savings with sales personnel who are educated to cross-
sell product lines and by sharing office overhead between a number of
divisions.

BUSINESS DEVELOPMENT

The company is committed to growth in each of its ongoing service lines, as
well as developing new services such as alternate site infusion therapy. It has
an active team of professionals who support business development of

ongoing and developing service areas. The team provides support services
including market analysis; planning; research; and community, public and media
relations which impact company wide and region specific budget goals.
Professionals on the team also provide advertising and educational campaigns.

Acquisition efforts are supported by business development professionals. A
specialized acquisition group works with the presidents of the company's service
lines to select and secure the best companies to meet the company's strategic
goals. Members of the acquisition team include operational, financial, legal,
and marketing specialists. After an acquisition is completed, the team
interfaces with other specialists from human resources and management
information systems to begin the integration process.

At the regional levels of the company, community relations and sales
professionals work with administrators and branch managers to capture additional
market share and enhance growth in each region and service sector.

PROVIDER SERVICES

Alternate-Site Infusion Therapy

Infusion therapy is the intravenous, intramuscular or subcutaneous
administration of medications and nutrition. These procedures were exceeding Medicare cost limits
whichonce
confined to hospital environments, however, with the portability of technology
and the expanded training and certification standards for registered nurses,
infusion procedures can be safely performed in the home setting, physician
office and ambulatory infusion suites. New therapies such as pain management
and first doses are often administered in ambulatory infusion suites to address
possible complications and adverse drug reactions.

According to Alex Brown in their Home Care Industry Perspective report, the
maximum Medicare will reimburse fortotal home infusion therapy market is approximately $5 billion or 13% of the
total home health care visits. Byexpenditures, representing the fourth quarter most regions were under their cost limits. Somesecond largest growing
segment of the initial costs associatedhome care industry. Beginning as a cottage industry in the
1970's, the home infusion business experienced explosive growth in the mid-
1980's. The industry became saturated in the 1990's. At that time, managed
care, which now represents approximately 2/3 of revenues in this segment, began
to negotiate lower pricing. This caused many companies to be driven out of
business or acquired by the large national providers. As a result of
questionable success in the integration of these combined companies, it appears
that regional and local providers have benefitted as the larger, most visible
companies continue to lose revenues and market share.

Among the therapies offered by the company are:

. Antibiotic therapy which is the infusion of antibiotic medications to
treat various infections and diseases.

. Total parenteral nutrition which is providing nutrients through
catheters for patients who cannot absorb nutrients through the
digestive tract due to chronic gastrointestinal conditions. This is
typically a long term therapy.

. Enteral nutrition which is the infusion of nutrients through a
feeding tube directly into the digestive tract. This can be a long
term therapy for patients who cannot eat or drink normally.

. Pain management which is the administration of infusion of drugs to
relieve chronic pain.

. Chemotherapy which is the infusion of drugs used to treat various
forms of cancer.

. Hydration therapy which is the infusion of fluids to patients who
have disease states which deplete their normal balance of fluids.

In addition, the company offers high tech respiratory therapy and home
medical equipment.

The company opened its first infusion office in the 4th quarter of 1997.

Ambulatory Surgery Centers

Ambulatory Surgery Centers offer an alternative to hospital surgical
suites. The number of procedures offered in these centers has increased due to
advances in technology, including the use of endoscopic procedures and laser
equipment. These techniques are less invasive and require shorter recovery
periods than traditional hospital services. The centers offer a high quality,
cost effective benefit for insurers, as well as patients who are responsible for
co-payments for their procedures. Facility fees are lower than similar hospital
procedures and the atmosphere is less institutional. Physicians who operate at
the centers can participate in ownership, and enjoy block scheduling and faster
turnaround times, allowing them more time with startingtheir patients. The centers offer
a variety of surgical services utilizing state-of-the-art technology and
equipment. All are accredited by the Accreditation Association for Ambulatory
Care.

According to a report by SMG Marketing Group in 1997, the market share for
freestanding surgery centers has increased in comparison to the outpatient
surgical hospital market. Of the 32.1 million total surgical procedures
performed in the nation last year, hospitals performed an estimated
24.1 million, of which 14.1 million or 58% occurred on an outpatient basis. It
is projected that hospitals will perform 64% of all outpatient surgical
procedures for the nation this year, a significant decrease from the 76%
performed in 1990. Meanwhile, the shift in total outpatient surgical volume has
increased 50% from 14.5 million cases in 1990 to 22.1 million cases in 1996. The
shift is due, in large part, to technological advances which allow more
procedures to be done in outpatient settings and payors seeking cost effective
services for their health plans.

The company operates four centers. Two of the centers are solely owned by
the company and two are partnerships with physicians who utilize the facility.
A fifth center in which the company has a minority interest is expected to open
in March 1999.

Home Health Care Nursing

In 1996, home health care and primary care clinics
may be recoveredservices was a $40 billion industry, growing 9-
11% annually, according to Medicare regulations on cost reporting.

The Company's net income increased by 284% to $1,905,000 in 1994 from
$495,000 in 1993. This increase is a result of improved margins.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1996, the Company had a revolving bank line of credit of
$3,500,000 bearing interest at the lender's prime rate. As of March 31, 1996,
$400,000 was available under the line of credit. The line of credit is
collateralized by 80% of eligible receivables in staffing and outpatient surgery
and 65% in home health care. Eligible receivables are defined principally as
trade accounts that are aged less than 90 days for staffing and outpatient
surgery and 120 days for home health care. As of June 12, 1996, the Company's
line of credit was increased to $4.5 million, with approximately $1 million
available under the line as of that date. To date, the Company has no other
source of external financing.

The Company used $610,951 in its operating activities during the first
quarter of 1996, whereas operating activities provided $483,668 during the first
quarter of 1995. Net cash used in investing activities increased from $78,674
during the first quarter of 1995 to $707,978 during the first quarter of 1996.
This increase is attributable to purchases of furniture, fixtures and equipment
during the first quarter of 1996. The Company's financing activities provided
$893,880 during the first quarter of 1996, whereas financing activities used
$556,928 in the first quarter of 1995. This increase is due primarily to an
increase in borrowings under the Company's line of creditAlex Brown Research and the issuanceNational Association of
notes payable.

At March 31, 1996, the Company had working capital of $1,598,149 and
stockholders' equity of $4,473,087. The Company's ratio of total liabilities to
equity at March 31, 1996 was 1.88 to 1. The Company expects to have sufficient
resources from its current financing structure and sources of additional
financing to achieve its goals for 1996. However, the Company's sources of
external and internal financing are limited. Therefore, the Company may

need to obtain additional financing, either through public or private securities
offerings or borrowing, in order to meet future capital requirements.

In February 1996, the Company formed FutureCare, Inc., a Nevada
corporation ("FutureCare"), to establish a health maintenance organization
(HMO). The Company has provided $1 million in financing to FutureCare to enable
it to meet the capital requirements for an HMO license in Louisiana. As of June
30, 1996, the Company had committed to advance up to $300,000 in development
expenses which are expected to be reimbursed from the proceeds of a private
placement offering of FutureCare stock. The Company currently owns 51% of
FutureCare stock; however, upon completion of FutureCare's offering and the
licensing of the HMO, the Company will exchange its shares in FutureCare for a
19% interest in an HMO subsidiary of FutureCare . See "Business-FutureCare."

INFLATION

The CompanyHome Care. This does not believe that inflation has had a material adverse
effect on its resultsinclude an additional $9-10 billion of operations. The Company expects that any increase in
costs attributable to inflation in the future would be offset by an increase in
fees charged for services.

SEASONALITY

The demand for the Company's home health, physician and management
services and outpatient surgery are not typically influenced by seasonal
factors. However, the demand for supplemental staffing services typically
decreases in the last quarter of the fiscal year due to the year-end cost
reduction strategies utilized by many hospitals and a decreased patient census.
The demand for supplemental staffing services typically increases during the
first and second quarter of the year.

BUSINESS
GENERAL

AMEDISYS, INC., a Delaware corporation ("Company"), is a provider of
alternative site health care and physician management services. The Company
provides home health care and supplemental staffing nurses and operates
outpatient surgical centers. The Company maintains 28 home health care and
supplemental staffing offices in eight states, and operates two outpatient
surgery centers in Texas, and is developing a surgery center in Louisiana. The
Company also manages home health agencies, physician practices and rural health
clinics and is the network manager of the Home Care Alliance of Louisiana.

The Company operates through the following subsidiaries: AMEDISYS
Staffinglow acuity or
companion care. Services Inc. and AMEDISYS Nursing Services, Inc. provide supplemental
staffing services; AMEDISYS Specialized Medical Services, Inc., AMEDISYS Home
Health, Inc. and AMEDISYS Home Health, Inc. of Texas provide home health
services; AMEDISYS Physician Services, Inc. provides management services to
physician group practices and rural health clinics; and AMEDISYS Surgery
Centers, L.C. operates two outpatient surgery centers in the greater Houston,
Texas area.

The Company's current strategy is to build a network of alternative
site providers which will support networks of physicians organized in
independent practice associations. Affiliations of physicians and alternative
providers, including home care networks and outpatient surgery centers offer
comprehensive and cost effective services to managed care organizations. These
networks can provide a panel of established physicians, alternative services to
hospitalization, and an existing management system designed to function
efficiently in a discounted fee arrangement or capitated ("pre-paid")
arrangement with a managed care organization or government agency.

NURSING SERVICES

HOME HEALTH CARE. Home health care is one of the fastest growing
segments of the Company's business mix. Home health care visits for the Company
increased 70% from 1994 to 1995. According to the Health Care Financing
Administration, home health care spending in the U.S. was $26 billion in 1995
with $17 billion spentprovided in home health care include four broad
categories; (1) nursing services. The annual industry
growth rateand allied health services, (2) infusion therapy, (3)
respiratory therapy and, (4) home medical equipment. Accounting for $28 billion
in expenditures in 1997, nursing and allied services represent the largest
sector of 70% of all home health care spending was 24% from 1986 to 1991 and 32% from
1992 to 1994.

Home health care has growth potential as payors strive to reduce
hospital stays. According to the SOCIAL SECURITY BULLETIN ANNUAL STATISTICAL
SUPPLEMENT, an average day in a hospital costs $1,756 and an average skilled
nursing visit in home care is $83. Even with pharmacy and home medical equipment
costs added to service charges, the savings potentialservices. Medicare reimbursements account
for approximately 65.2% of home care is
significant. With cost containment and reduction strategies atnursing. The Balanced Budget Act of 1997
established a premium innew reimbursement system for Medicare Medicaid and private health plans, the Company expects home care to be
an attractive alternative to hospital care.

Due to pressure from managed care organizations to contract withnursing services
for cost reporting periods beginning on or after October 1, 1997. This change
will have a limited number ofsignificant effect on the home care agenciesnursing industry since Medicare
is its largest payor source.

The company operates 15 home care nursing offices consisting of 10 Medicare
provider offices, 4 branch offices, and to select agenciesone office with geographic
coverage, central intake systems of information, comprehensive services and
moderate fees, consolidation and affiliation trends are emerging. These trends
present acquisition and management opportunitiesstate licensure.
Serving this market for the Company. The Company is
continuing to buildpast 10 years, the company has built an excellent
reputation, based on quality care and specialty nursing services. Because its
services are comprehensive, cost-effective and can be accessed 24 hours a critical mass ofday,
seven days a week, the company's home care agencies through internalnursing services are attractive to
payors and external growth. The Company acquired two local agencies in 1995.

In 1995, the Company also developed the Home Care Alliancephysicians. Each of Louisiana. This alliance is a consortium of independent home care agencies whichits offices are Medicare certified and accredited by the Joint
Commission on Accreditation of HealthcareHealth Care Organizations ("JCAHO").

The alliance is positionedcompany provides a wide variety of home health care services including:

Registered nurses who provide specialty services such as infusion therapy,
skilled monitoring, assessments, and patient education. Many of the company's
nurses have advanced certifications.

Licensed practical (vocational) nurses who perform technical procedures,
administer medications and change surgical and medical dressings.

Physical and occupational therapists who work to negotiatestrengthen muscles and
restore range of motion and help patients to perform the activities of daily
living.

Speech pathologists/therapists who work to restore communication and oral
skills such as swallowing.

Social workers who help families work through the problems associated with
managedacute and chronic illnesses.

Home health aides who provide personal care organizations for discounted service feessuch as bathing or assistance
in walking.

MANAGEMENT SERVICES

Home Health Care Management

Amedisys Resource Management provides a full menu of management and
capitated
contracts.consulting services particularly designed to meet the needs of home health care
agencies. Changing government regulations will force home health care agencies
to become more efficient and information oriented. It will be critical to
measure costs more accurately and operate below current cost structures.

The Company serves as network manager and provides central intakecompany's services include: financial reporting systems, general agency
management, quality improvement programs, receivables financing, and business
systemsdevelopment. In addition, a complete management information system is available
on a leased basis. This system is proprietary to Amedisys and gives the affiliated agencies.

Medicare is a significant payor of home care services. The federal
government has proposed changes in Medicare reimbursement which would convert
the system from cost reimbursement to prospective pay. The prospective pay
system allows agencies which control costs to become profitable entities. Other
changes, such as allowing managed

care organizations to enroll Medicare patients in their networks and capitate
contracts with providers, including home care agencies, will impact the home
care business. In the latter case, revenues are determined by the number of
patients in a network or contract rather than by patient visits.

The Company has positioned itself to handle changes in the home care
business by establishing systems that are necessary in the new health care
environment. The Company has a proprietary software system which featuresagency a
single entry system integration ofwhich integrates payroll and general ledger requirements with the general
accounting measures. The software packagesystem, reports clinical data and meets Medicare guidelines for
reporting, billing and collections. This division also has detailed multifaceted
reporting systems which meet Medicare and private insurance guidelines. The
Company currently leases its system to other agencies.

The Company currently has a well established network of 12 home health
care offices in Louisiana and four offices in Texas. The Company is
distinguished by its specialty home careoffers consulting
services and a staff dominated by RNs
and professional therapists. In addition to these services, the Company expanded
its product line to include private duty, psychiatric home care and additional
rehabilitation services. The Company received JCAHO accreditation with
commendation in 1995 which assures managed care organizations, Medicare and
Medicaid, as well as physicians and patients, that the agency has met national
quality standards and places the Company in a competitive position for
state-wide and regional insurance, managed care and governmental contracts.

HOME HEALTH CARE MANAGEMENT SERVICES. The Company offers management
services to independent home care agencies through its resource management
division. Management services include home health licensing, regulatory
compliance, administrative support services, clinical support services, billing
and reimbursement systems and proposal and bid development.

SUPPLEMENTAL STAFFING. The Company has successfully provided
supplemental staffing services for 11 years. The industry has undergone many
changes and the Company has remained competitive by being reliable and
responsive to the needs of clients. The Company distinguishes itself from its
competitors in the following ways: (i) clinical managers at each office recruit
nurses and manage client services, (ii) 24-hour access to staffing coordinators
using computerized scheduling and information systems, (iii) rigorous
orientation and screening procedures, and (iv) a proprietary software scheduling
program which generates faster scheduling response time than traditional
methods.

The Company continues to diversify its services and client base to meet
a changing health care delivery system. Ancillary personnel such as physical and
occupational therapists are assigned to home care agencies and registered nurses
are placed in subacute care units of long term care facilities. These units
require a higher level of nursing skill than the facility typically must provide
to meet government requirements.

The Company also offers management of nursing pools employed by
hospitals to fill temporary needs. Hospitals can gain greater efficiency and
lower costs by sharing nurse resources across a hospital system or among
cooperating facilities. The Company has systems which facilitate this process.

The continuing trend of downsizing hospital staffs and the desire of
nurses to achieve flexibility and independence offer continuing opportunities
for recruiting qualified nurses for supplemental staffing. The Company believes
that strong staffing companies will continue to serve needs in high census
periods and in markets where hospital consolidation has peaked and core staffing
levels have been reduced.

The Company currently operates 12 officeseducational seminars which provide supplemental
staffing. Many of these offices share resources and costs with home care
services. The Company services 300 medical facilities in eight states with the
largest segment in Louisiana and Texas.

OUTPATIENT SURGERY

Outpatient Surgery is the newest element in the Company's business mix.
The Company entered the outpatient surgery market and expanded its service
delivery network through the acquisition of Surgical Care Centers of Texas, L.C.
in June 1995. This subsidiary operates two outpatient surgery centers in the
Houston, Texas area and recently changed its name to AMEDISYS Surgery Centers,
L.C.

The Company is currently building a new facility in Hammond, Louisiana
in a joint venture with area surgeons and other physicians. The Company plans to
strategically buy, build or manage surgery centers where they complement a
network of physicians or Company-owned alternative services. The Company
believes that this industry will grow due to advances in technology which allow
more procedures to be performed in the outpatient setting. Specifically,
endoscopic and laser technologies are reducing the invasive nature of certain
procedures and lowering the amount of time required in surgery and post-surgical
care. Pain management techniques are also a rising trend in outpatient surgery
procedures.

Medicare and commercial insurers are also recognizing outpatient
surgery centers as a cost effective delivery system and the number of approved
and reimbursed outpatient procedures have increased. As of May 1994, the U.S.
Department of Health and Human Services had approved a list of approximately
2,200 procedural codes that were covered by Medicare in an ambulatory surgery
setting. During 1995, industry sources estimate that nearly four million
procedures were performed in surgery centers nationwide.

Outpatient surgery centers have a strong appeal to physicians because
of flexible operating schedules, shorter turnaround times of operating suites
and a willingness to provide specialized equipment and personalized services for
the physicians and the patients. According to SMG Marketing Group, independent
surgery centers represented approximately 66% of all outpatient operating rooms
in 1994.

Through the acquisition of Surgical Care Centers of Texas, L.C., the
Company gained entry into the outpatient surgery market which expanded the
Company's service delivery network. In addition, outpatient surgery centers have
a higher earning potential than nursing services. As the Company expands its
outpatient surgery centers in Louisiana, this expansion will provide physicians
participating in Company- affiliated independent practice associations an
opportunity to provide services within the AMEDISYS network and have an
alternative to costly hospital services. The Company believes that this feature
will have a high value to physicians who want to assume some risks with
capitated fees, a developing national trend.

Since acquisition of the surgery centers in June 1995, managed care
agreements have been negotiated with new companies in the Houston market and the
Company is aggressively increasing the number and variety of surgeons utilizing
the centers. The Company has also purchased new equipment and expanded hours of
operation.

PHYSICIAN SERVICES

Physician Services consists of physician practice management services
and development of independent practice associations ("IPA"). The Company
believes that physician practice management companies are positioned for
significant consolidation. According to the Medical Group Management Associates
(MGMA), there are approximately 600,000 physicians in the U.S., and 16,500
medical groups to which 185,000 physicians belong. Less than 5% of all group
practices have been acquired or are affiliated with investor owned physician
practice management companies.

In the Company's system, the physician can remain independent but have
access to information and business systems which allow the practice to remain
competitive. The physician can choose to use the Company's management services
or to join an IPA developed and/or managed by the Company. Leverage in
negotiating contracts with managed care organizations is a key reason physicians
belong to an IPA. Negotiating strength is particularly attractive in capitated
(prepaid) managed care contracts. According to MGMA, 53% of all group practices
derived revenue from at-risk managed care contracts in 1994. Capitated managed
care revenue rose from 13% in 1992 to an average of 20% of total medical
revenues for all group practices in 1993, while at-risk discounted
fee-for-service revenues held steady at 10% of total revenue. The percentage of
groups that derived revenue from at-risk HMO / PPO contracts rose with group
size in 1994. For large groups with 76 to 150 full-time physicians, this
percentage has increased steadily since 1992. In 1994, 85% of such groups
derived revenue from at-risk contracts.

The Company's affiliated IPAs have a higher percentage of primary care
physicians than traditional IPAs. Primary care physicians are the first access
point to the managed care system. Managed care emphasizes primary care, and
efficiently delivered services at an affordable cost. Providers give managed
care organizations discounted fees for a volume of patients. In capitated
arrangements, managed care organizations pre-pay physicians for their services
with

a negotiated flat fee per patient in the plan regardless of the services
performed. Providers, including physicians and hospitals, form integrated
networks to achieve a critical mass of patients which are attractive to large
managed care groups. The Company is positioning itself for continuing integration and consolidation by developing physician practice management and
IPA network services to assist physicians in remaining independent but aligned
in a larger entity.

The differentiating feature of the Company's system is that the IPAs
are linked with alternative site providers such as home health care and
outpatient surgery so that a strategic alliance of cost effective services can
be "bundled" in the future to accept multi-provider capitation. Such a system
could deliver quality health care at a significantly lower cost. Hospital
services could be included or excluded from such an arrangement. If hospital
services are included it would be on a per diem arrangement. Bed days would be
rented or contracted rather than owned. Since the hospital is the most expensive
provider in a health care delivery system, eliminating a portion of hospital
overhead would reduce costs of the total system. Specialty home care can deliver
many services previously requiring hospitalization. Outpatient surgery has also
expanded to provide laser and endoscopic procedures to achieve the same outcomes
produced by more invasive, hospital based techniques.

The Company believes that managed care organizations want to continue
to reduce hospital costs. By creating networks of alternate site providers and
linking them with physician networks, a "virtually integrated" health care
delivery system is achieved. As the system grows and requires more technology in
data collection, information systems and accounting and financial systems, these
services can be developed and owned or contracted depending on cost analysis and
quality control variables. A virtually integrated system can be therefore
expanded with speed and less capital than those required by traditional hospital
based systems. As networks are developed locally but concentrated in strategic
regions, the possibility of linking a wider geographic area is created.

FUTURE CARE

In February 1996, the Company formed FutureCare, Inc., a Nevada
corporation, to organize and operate a preferred provider network ("PPO");
provide health care services to independent health care providers, including
IPAs; and to merge with and capitalize FutureCare Health Plans of Louisiana,
Inc. ("Health Plans") which is expected to be licensed as a health maintenance
organization ("HMO") in the state of Louisiana. Upon licensing of the HMO,
Health Plans will merge with and become a 70% owned subsidiary of FutureCare.

The Company currently owns 51% of FutureCare. Ownership will be reduced
to 19% of Health Plans. Upon completion of an offering to capitalize FutureCare
and licensing of the HMO and the merger with Health Plans, the Company's The
Company owns approximately 33% of Health Plans and has provided $1 million in
cash to Health Plans in order to enable it to meet the capital requirements for
licensing as an HMO in the State of Louisiana. In addition the Company has
committed to advance up to $300,000 in start-up expenses which are expected to
be reimbursed upon completion of a private placement of FutureCare stock.

FutureCare plans to enter into a management agreement with the Company
whereby the Company will become the exclusive manager and administrator of
non-medical services relating to the operation of the network and the network
HMO. Pursuant to the management agreement, the Company will manage and
administer the network's day-to-day business functions, which include, but are
not limited to, assuming the responsibility for the administrative, accounting,
payroll and personnel functions relating to the provision of health services by
its participants on behalf of the network. Under the management agreement, the
Company will also bill and collect the feeseducational units for
medical services provided by
network participants, maintain all files and records, negotiate and administer
all contracts, and provide consulting services to network participants in
connection with the procurement and administration of professional liability
insurance and the employment of personnel.

The Company will also assist in the
implementation of appropriate marketing programs on behalf of the network.

The Company will utilize a combination of the its current management
information systems, management information systems to be developed and third
party management information systems to fulfill its duties under its management
agreement with FutureCare. These data processing systems will be designed to
support customer service, health care cost management and corporate management.
The systems will also be supported by custom applications that will be developed
to meet the unique needs of FutureCare's expected customers and products. The
Company also

plans to utilize an information system that will provide current statistics on
operational and financial performance, utilization and other cost data, sales
and revenue trends, health care cost trends and relative performance of
FutureCare as compared to its competitors.

FutureCare intends to develop an integrated network comprised of health
care service providers such as IPAs, physicians, homecare companies, ambulatory
medical centers, durable medical equipment companies and other health services
organizations. The network will coordinate the delivery of health care services
by such providers to employees and other persons eligible to receive covered
services under the health care plans of certain employers, unions, governmental
agencies, associations, and other entities in consideration of the payment of a
service fee. The network will, where appropriate, also enter into agreements
with certain self-insured groups and various health maintenance organizations,
preferred provider organizations, insurance companies and other third parties
and entities to provide a full range of health services through the network PPO
and network HMO. Once the network HMO is properly capitalized and approved for
operation in the State of Louisiana, network participants will be integrated
into the HMO for purposes of providing multi-provider capitation to IPA's and
managed care organizations and, where appropriate, prepaid health services to
various purchasers of health care services.

As a result of competitive pressures, the Company believes physicians
and other health service providers are encountering a changing environment in
which traditional private health services are being adversely affected by
increasing administrative, liability and reimbursement constraints and
complexities. Concerns over the accelerating costs of health care have resulted
in the increasing prominence of managed care and a decline in the once
traditional fee-for-service medicine. Managed care typically involves a third
party (frequently, the payor) assuming responsibility for ensuring that health
care is provided in a high quality, cost-effective manner.

The Company believes that this recent focus on cost containment has
particularly placed small to mid-sized physician groups and individual practices
at a disadvantage. These practices typically lack the capital to expand, develop
information systems and purchase new technologies, which often improve quality
of care and reduce costs. The Company believes they also lack the cost
accounting and quality management systems necessary to allow physicians or
physician organizations such as IPA's to enter into sophisticated risk-sharing
contracts with private third party payors. Additionally, the Company believes
that small to mid-size groups and individual practices often do not have formal
ties with other providers nor do they have the ability to offer a variety of
medical services, thus reducing their competitive position relative to larger
provider organizations. In order to remain competitive in the changing medical
services environment, physicians and other providers are increasingly
affiliating with larger organization which offer skilled and innovative
management, access to other health services providers, payors and their
enrollees, sophisticated information systems, greater capital resources and more
efficient cost structures.

The Company believes fully integrated networks of physicians and other
health service providers provide significant advantages to patients, physicians
and payors. Patients will benefit from the convenience of multiple services
delivered efficiently, while physicians and other providers benefit from having
supplemental management and administrative resources in a governance structure
that permits them to continue to dedicate their time and efforts to the growth
of their professional practices or other activities. Through the development of
integrated systems and operating efficiencies, the Company believes that it will
be possible to lower the cost of services provided. Consequently payors will
benefit from contracting with networks of efficient providers. Further, the
Company believes the formation of an integrated delivery network will afford the
Company significant opportunities for cross-referrals between network
participants, volume contracting with payors and their intermediaries and
expanded service capabilities.

The extensive managed health care provider network to be developed by
FutureCare should enable it to offer a comprehensive array of managed health
care plans throughout Louisiana. The network will include the network HMO, the
network PPO and specialty managed care and ancillary networks, as appropriate.
In establishing the network, FutureCare plans to enter into contracts with a
sufficient number of qualified providers in each geographic areas to serve its
members. These contracts are intended to control the cost of health care. As a
result, the Company expects to reduce or eliminate the need to utilize
out-of-network providers that are not subject to the Company's cost controls.

The FutureCare network, including the network PPO and network HMO and
their planned broad service offering, should enable it to pursue growth
opportunities throughout Louisiana. The Company believes that in the present
Louisiana health care environment there is greater opportunity for growth of
managed health care services in the individual and small employer group segment
than in the large employer group marketplace, due to the lower market
penetration of managed health care and the greater fragmentation in the
individual and small employer group market.

Competition in the market for large employer groups in Louisiana has
intensified as employers have reduced personnel as well as the number of health
care providers with which they contract. While total managed health care
industry enrollment in Louisiana has continued to increase, the industry has
been consolidating, primarily through a number of mergers and acquisitions. The
Company believes that the ability to offer statewide service and a range of
specialty managed care programs will allo it to achieve greater economies of
scale in the prevision of more cost-effective health care services and has
become a key competitive factor in attracting and retaining large employer group
accounts.

HEALTH CARE REFORM

The federal government's initiative to reform the American health care
delivery system failed in the 103rd Congress. However, the need to reduce the
escalation of costs of the Medicare and Medicaid programs still exists. The
outlook is uncertain about the method that will evolve to meet the need. Some
states have established waiver programs which allow innovations in the
administration of Medicaid programs. These programs such as TenCare in the state
of Tennessee are using managed care approaches to reduce costs. Private
insurance programs have also attracted Medicare enrollees in customized managed
care programs. The Company anticipates that these trends will continue.

BILLING AND REIMBURSEMENT

Revenues generated from the Company'scompany's home health care services are paid by
private insurance carriers, HMOs, PPOs,managed care organizations, individuals, Medicare,
Medicaid and other local health insurance programs. MedicaidMedicare is a federally
funded program available to persons with certain disabilities and persons aged
65 or older. Medicaid, a program jointly funded by federal and state
governments, and other local governmental health care programs, areis designed to
pay for certain health care and medical services provided to low income
individuals without regard to age. Home health care management services are
paid through a contractual agreement between the Companycompany and the client home
health care agency
oragency. The company has several statewide contracts for negotiated
fees with insurers and managed care organizations.

The Company writes proposals and negotiates
contracts on behalf of the Home Care Alliance of Louisiana.

The Company has 16 offices which are licensed to provide home health
care services and accept Medicare payments. Medicare reimburses the Company for
covered items and services at the lower of the Company's costs, as determined by
Medicare regulations, and cost limits established by the Health Care Financing
Administration. The Companycompany submits all Medicare claims to a single insurance company
acting as a fiscal intermediary for the federal government. The Medicaid system
in Texas follows similar reimbursement guidelines. Supplemental staffing services
are billed directly to health care facilities.The state of Louisiana
adopted a fee-for-service payment method in 1995. Physician management fees are
collected directly from managed practices.practices and networks. Outpatient surgery fees
are collected from commercial insurance systems, HMOs, PPOs,managed care organizations,
Medicare and Medicaid programs.programs and individuals.

MEDICARE REIMBURSEMENT REDUCTIONS AND RELATED RESTRUCTURING

As of June 30, 1998, the company derived 37% of its revenues from the
Medicare system. In 1997, Congress approved the Balanced Budget Act of 1997 (the
"Budget Act"). The Budget Act established an interim payment system (the "IPS")
that provided for the lowering of reimbursement limits for home health visits.
For cost reporting periods beginning on or after October 1, 1997, Medicare-
reimbursed home health agencies will have their cost limits determined as the
lesser of (i) their actual costs, (ii) cost limits based on 105% of median costs
of freestanding home health agencies, or (iii) an agency-specific per-patient
cost limit, based on 98% of 1994 costs adjusted for inflation. The new IPS cost
limits will apply to the company for the cost reporting period beginning January
1, 1998. During the three months ended December 31, 1997, various regulations
and interpretations of the Budget Act were published which enabled the company
to calculate the potential impact on reimbursement of the new IPS cost limits.
Additionally, on March 31, 1998, the government released its final determination
and definitions of the new IPS cost limits. Management's analysis, without
giving effect for any cost reductions, estimated the aggregate reduction in
reimbursement in 1998 to exceed $8.0 million for certain of the company's
Medicare-certified nursing agencies. Management is reviewing potential cost
reductions to decrease the estimated impact of the IPS.

The Budget Act also provided for a 25% reduction in home oxygen
reimbursement from the 1997 fee schedule effective January 1, 1998 and a further
reduction of 5% effective January 1, 1999. Compounding these reductions was a
freeze on consumer price index increases in oxygen reimbursement rates until the
year 2003. Additionally, due to the above reimbursement changes affecting home
health agencies, the company's main referral sources for its durable medical
equipment business have decreased, as well as the referrals the company
anticipated capturing from its existing agencies. These changes may result in a
significant impact on the profitability of these services.

Based upon management's determination of the expected impact of these
changes in reimbursement on future cash flows, goodwill was written down by
$835,000 during the three months ended December 31, 1997, as required under
Statement of Financial Accounting Standard No. 121 ("SFAS 121"), "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
of". This write-down is reflected in the accompanying consolidated statements
of operations for the year ended December 31, 1997.

DATA PROCESSING

The Companycompany maintains central computerized management information systems
including payroll, billing and other administrative functions at its corporate
headquarters. The information systems department has devised programs for
computerized scheduling, as well as a personnel system which monitors personnel
recruitment, evaluations and utilization and a tracingbenefits. The information system for monitoringalso monitors
client utilization of services.data.

The Companycompany has a proprietary home health care software program which
features a single entry system that allows data to flow through accounting,
general ledger, payroll and billing and meet the extensive cost reporting
requirements for Medicare reimbursement of home health care services. 22It also
provides clinical documentation for prospective pay and tracking of clinical
outcome results.

Each regional office site is linked electronically to the corporate
accounting and information system.systems. This feature allows management to monitor
daily business activities and produce management reports. The system promotes
accuracy in payroll and business systems and controls the daily pay system for
field nurses in staffing.

QUALITY CONTROL AND IMPROVEMENT

As a medical service business, the quality and reputation of the Company'scompany's
personnel and operations are critical to the Company'sits success. The Companycompany has
implemented quality assurance programs andas well as policies and procedures in its
subsidiariesdivisions at both the corporate and regional levels. The Companycompany strives to
meet guidelines set forth by the Joint Commission on Accreditation of Health
Care Organizations, on an ongoing basis as well as state and federal guidelines for Medicare and
Medicaid licensure.

The Company's home health care offices
received JCAHO accreditation with commendation in January 1995.

The Companycompany maintains an active quality assurance staffimprovement team who make periodic
on-site inspections of regional offices to review systems and operations. An
educationeducational division is also part of quality assurance operations and conducts
educational and training sessions at regional sites, as well as disseminating
continuing education materials to regional offices.

CORPORATE COMPLIANCE PROGRAM

The company has recently begun to formalize a Corporate Compliance Program.
The increasing complexity of the health care industry has driven the company to
adopt a program to assure that adequate systems are in place to facilitate
ethical and legal conduct. The laws and regulations affecting the industry and
reimbursement policies vary among each individual payor. In additional to these
regulations, the company must adhere to the guidelines established by the
Office of Inspector General. Being accustomed to operating in a highly
regulated environment, the company has a large number of policies, procedures,
and practices designed to ensure that the activities of the employees and the
company as a whole are in full compliance with relevant laws, standards, and
federal reimbursement guidelines.

RECRUITING AND TRAINING

The Company's human resources department works with corporate and
regional personnel to maintain activecompany's Human Resource Department coordinates recruiting efforts for
all levels ofcorporate and field personnel. Employees are recruited through newspaper
advertising, professional recruiters, the company's web page, networking and
word-of-mouth referrals. The Company recruitscompany believes it is competitive in the industry
and offers its employees upward mobility, health care personnel by offering competitive
compensation, variety and stability in work settingsinsurance, an Employee Stock
Option program, an Employee Stock Purchase Plan, a 401K plan, and a close communication
network which includes frequent contacts by staffing personnel, administrators
and directors. The Company offers daily pay to nurses who provide staffing
services. The daily pay system allows immediate payment for services performed
on a particular day or any day in the payment period. This system is a
competitive recruiting and retention feature. The Company is available to nurses
and ancillary personnel through a 24 hour direct communication system
encompassing regional staffers and central call personnel. Most nurses are
recruited by referral from active nurses within the network. The Company also
places advertisements in local newspapers and in direct mail solicitations. Each
office has registered nurses who act as clinical directors and many of these
nurses are active in professional associations. Administrators are also active
in professional and business associations.

The Company has uniformcafeteria
plan.

Uniform procedures for screening, testing and verifying references,
on field personnel, as well as utilizingincluding criminal checks where appropriate.appropriate, have been established. All
nurses must have one year of experience and active RN or LPN
licenses from their respective state boards of nursing. Therapists are licensed
throughemployees receive a formalized orientation program, including familiarization
with the appropriate authorities. Unlicenced health care personnel must
present documentation of certification through a state approved program or, if
acceptable to health care authorities, have evidence of prior experience in
patient care in hospitals, nursing homes or home health care agencies. Medical
field personnel are assigned to patient care after credentials and references
are verified. Employees are oriented to the Company'scompany's policies and procedures.

The Company has an in-service training program for home health aides
which it believes is in compliance with government regulations.

Managers and support personnel are recruited through newspaper
advertising, association networking and referral. The Company offers upward
mobility, good benefits including a health coverage program, 401K plan, a
cafeteria plan and the challenge of working in a growth oriented company. The
Company also offers a stock option plan which is administered by the
Compensation Committee of the Company's Board of Directors.

EducationContinuing professional education and training programs are offered through
the Company's
education department which is part ofAmedisys Institute, and advanced professional certifications are encouraged
and often underwritten by the quality assurance division.
Educational meetings are held for specific groups within the Company at which
various trends and operational procedures are discussed. Employee quarterly
meetings are also held and at that time senior managers give progress reports
and receive input and address concerns of employees.

23company.

GOVERNMENT REGULATION

The Company'scompany's home health care business is highly regulated by federal,
state and local authorities. Regulations and policies frequently change and the
Companycompany monitors changes through trade and governmental publications and
associations. Managers participate on various licensing and association boards.
As a provider of services under the Medicare and Medicaid programs, the company
is subject to the various "anti-fraud and abuse" laws, including the federal
health care programs anti-kickback statute. This law prohibits any offer,
payment, solicitation or receipt of any form of remuneration to induce the
referral of business reimbursable under a federal

health care program or in return for the purchase, lease, order, arranging for,
or recommendation of items or services covered by any such program. (Federal
health care programs or any health care plans or programs that are funded by the
United States (other than certain federal employee health insurance benefits)
and certain state health care programs that receive federal funds under various
programs, such as Medicaid.) A related law forbids the offer or transfer of any
item or service for less than fair market value, or certain waivers of copayment
obligations, to a beneficiary of Medicare or a state health care program that is
likely to influence the beneficiary's selection of health care providers.
Violations of the anti-fraud and abuse laws can result in the imposition of
substantial civil and criminal penalties and, potentially, exclusion from
furnishing services under any federal health care programs. In addition, the
states in which the company operates generally have laws that prohibit certain
direct or indirect payments or fee-splitting arrangements between health care
providers where they are designed to obtain the referral of patients to a
particular provider.

Congress adopted legislation in 1989, known as the "Stark" Law, that
generally prohibits a physician ordering clinical laboratory services for a
Medicare beneficiary where the entity providing that service has a financial
relationship (including direct or indirect ownership or compensation
relationships) with the physician (or a member of his immediate family), and
prohibits such entity from billing for or receiving reimbursement for such
services, unless a specified exemption is available. Additional legislation
became effective as of January 1, 1993 known as "Stark II," that extends the
Stark Law prohibitions to services under state Medicaid programs, and beyond
clinical laboratory services to all "designated health services," including home
health services, durable medical equipment and supplies, and parenteral and
enteral nutrients, equipment, and supplies. Violations of the Stark Law may
also trigger civil monetary penalties and program exclusion. Pursuant to
Stark II, physicians who are compensated by the company are prohibited from
making referrals to the company, and the company will be prohibited from seeking
reimbursement for services rendered to such patients unless an exception
applies. Several of the states in which the company conducts business have also
enacted statutes similar in scope and purpose to the federal fraud and abuse
laws and the Stark Laws.

Various federal and state laws impose criminal and civil penalties for
making false claims for Medicare, Medicaid or other health care reimbursements.
The Company'scompany believes that it bills for its services under such programs
accurately. However, the rules governing coverage of, and reimbursements for,
the company's services are complex. There can be no assurance that these rules
will be interpreted in a manner consistent with the company's billing practices.

In May 1995, the federal government instituted Operation Restore Trust, a
health care fraud and abuse initiative focusing on nursing homes, home health
care subsidiaryagencies and durable medical equipment companies located in New York,
Florida, Illinois, Texas and California, the five states with the largest
Medicare populations. The purpose of this initiative is certifiedto identify fraudulent
and abusive practices such as billing for services not provided, providing
unnecessary services and making prohibited referral payments to health care
professionals. Operation Restore Trust has been responsible for significant
fines, penalties and settlements. Operation Restore Trust was recently expanded
to cover twelve additional states for the next two years. The program was also
expanded to include reviews of psychiatric hospitals, certain independent
laboratories and partial hospitalization benefits. Further, there are plans
eventually to apply the program's investigation techniques in all fifty states
and throughout the Medicare and Medicaid programs. One of the results of the
program has been increased auditing and inspection of the records governing
reimbursement and other issues. Specifically, the government plans to double
the number of comprehensive home health agency audits it performs each year
(from 900 to 1800) and also to increase the number of claims reviewed by 25.0%
(from 200,000 to 250,000). In general, the application of these anti-fraud and
abuse laws is evolving.

During 1997, the home health care industry experienced several significant
regulatory and reimbursement changes. In February 1997, the Health Care FinancingFinance
Administration ("HCFA") announced that it intended to implement mileage
limitations restricting the distance between a nursing agency's principal office
and it branches. During 1998, as a result of a moratorium on new Medicare
provider numbers announced by President Clinton, HCFA imposed a delay in
permitting branch office transfers.

Congress has also recently adopted a per-beneficiary limit on reimbursement
for nursing services based upon historical cost, and on March 31, 1998,
published regulations which set forth the national and regional medians on which
such limits will be based, but has not published regulations determining the
provider specific per-beneficiary limits. The company believes that the per-
beneficiary limits will have an adverse effect on the company's Medicare nursing
operations.

Other regulatory changes have reduced the level of reimbursement available
to the company. On January 2, 1998, HCFA published final Medicare nursing per-
visit cost limitation guidelines which reduce per-visit cost limitations for the
company by approximately 18%-20% for 1998. Also, regulations effective
February 1, 1998, eliminate venipuncture as a covered service Medicare nursing
visits, which will materially reduce the company's Medicare nursing revenues.

Recent other amendments affecting Medicare also require: (1) the imposition
of more stringent limits on reimbursable home health care costs; (2) the
establishment of a prospective payment system for home health care services to
be implemented in late 1999; (3) the separation of home health care services
into two distinct benefits under Medicare Part A and Medicare Part B; (4)
requiring billing by location of service rather than by location of the home
health care agency's headquarters; and (5) the establishment of guidelines for
the frequency and duration of reimbursable home health visits. Such provisions
may adversely affect reimbursement for Medicare home health services over the
next several years.

Recent Department of Health and Human Services ("DHHS") rule making
proposals affecting the home health care industry include: (i) a rule which
would revise Medicare's Conditions of Participation that home health agencies
must meet in order to participate in the Medicare program, and require that all
home health care agencies conduct background investigation of their employees;
(ii) a rule that would require home health care agencies to use standard
measurements of the quality and outcomes of patient care; and (iii) regulations
that require home health agencies to obtain surety bonds in order to continue to
participate in the Medicare nursing program. DHHS is expected to publish final
rules in these areas. The company believes that is has the capacity to comply
with changes in such rules.

The company's home health care subsidiaries are certified by HCFA and are
therefore eligible to receive reimbursement for services through the Medicare
system. Home health care offices have licenses granted by the health
authorities of respective states. Texas and Louisiana do not currently require
a Certificate of Need which some states require to establish a home health care
agency. Texas requires licensure and currently new licenses are being issued.
In both states, each location must be licensed and service areas are determined
by the state legislatures. Currently JCAHO accreditation of home health care
agencies is voluntary. However, managed care organizationsManaged Care Organizations ("MCO's"), use JCAHO
accreditation as a minimum standard for regional and state contracts.

The Company's regional offices work with client hospitals to follow
their protocol for supplemental staffing to meet the standards for JCAHO, which
includes verification of licensure and/or certification.

Outpatient SurgeryAmbulatory surgery centers require a Certificate of Need in some states and
are regulated by state and federal guidelines.

In its Physician Services division,guidelines, as well as Medicare standards.
While accreditation is not mandatory, the Company manages rural health
clinicsmajority of managed care companies
will only contract with accredited centers. All of the company's ambulatory
surgery centers have been accredited by the Accreditation Association for
physician practices and rural hospitals. These clinics are regulated
by federal and state guidelines and the policies of Medicare and Medicaid
reimbursement systems.Ambulatory Health Care ("AAAHC").

The Company meets all of these guidelines.

The Companycompany strives to comply with all federal, state and local regulations
and has satisfactorily passed all federal and state inspections and surveys.
24The ability of the company to operate properly will depend on the company's
ability to comply with all applicable healthcare regulations.

COMPETITION

25
The competition for the Company's nursingcompany's services consists of national
and local providers. According to Marion Merrill Dow 1995 Institutional Digest,
theare provided by a number of home health care agencies in the U.S. rose by 16% from 1993 to
1994. Home care agency chains accounted for 31.6% of all home health care
agencies in 1994. The Company believes it can compete and increase market share
by establishing strong statewide networks of offices, aligning with other
independent home health care agencies in networks to increase service areas,
offering comprehensive services with central intake features and continuing to
meet quality standards defined by JCAHO. Another key component in attracting
market share is loyalty in referring physicians. The Company currently has 1,500
physicians in its referral base. The Company has also invested in software
development which can produce utilization and data reports desired by government
and commercial insurance companies. These steps will put the Company in a
position to secure primary or preferred provider contracts with statewide
managed care organizations and maintain a strong Medicare patient population.

The Company's market niche of providing the latest technology and
pharmacology at home attracts a large referral network of primary care and
specialist physicians. Patients are referred by physicians and/or insurers. The
Company provides skilled nursing care that includes antibiotic therapy through
intravenous infusion, administration of oncology medication, care of children
with congenital anomalies and care of HIV and AIDS patients. Physicians
recognize that the skill of the Company's nurses and technology allow the
Company to provide alternative services to hospital care. These services are
reimbursed at a higher rate by payor sources than general home health care of a
maintenance or custodial nature.

The Company has been in the supplemental staffing market for 11 years
and established a reputation for quality of personnel, reliability and
responsiveness. Attention to reducing and monitoring costs of operations while
maintaining competitive pay for nurses, therapists and other field staff
personnel have enabled the Company to maintain and/or grow market share. A
volume based incentive system for regional administrators and managers also
spurs growth in revenue and encourages personnel to identify new service niches.

The Company's staffing services also compete with hospital per diem
staffing pools. In markets where hospitals share system-wide services and have a
need for a shared employee program, the Company has a management program it can
offer. The program offers a hospital staffing pool, computerized scheduling,
experienced staffing coordinators, 24-hour access to pool nurses and staffing
personnel, as well as personnel screening systems.

The outpatient surgery segment of the Company's business competes with
hospital facilities in its geographical area. The Company believes its centers
have well established physician referral sources and operating physicians. The
centers offer flexibility in scheduling, good turnaround times in surgical
suites, personalized service and access to technology. The Company has been
aggressive in seeking contracts with managed care organizations. Since managed
care organizations can replace traditional referral patterns with their own
provider networks, the Company's outpatient surgery centers can protect and
build market share by being a provider in the managed care networks. The centers
have also been seeking a wider variety of specialists to perform procedures to
increase surgery cases to compensate for some reductions in per case
reimbursements by managed care organizations.

In the physician practice management and IPA industries, the Company
competes withlocal, regional and
national companies.companies and are highly competitive. Unlike the company, many of
these competitors do not offer the continuum of care and/or do not have the
geographical coverage to secure contracts with many of the payors. Home health
care providers compete for referrals based primarily on scope and quality of
services, geographic coverage, pricing, and outcomes data.

The industrycompany believes its favorable competitive position is newattributable to
its reputation for nearly two decades of consistent, high quality care; its
broad menu of services; its state-of-the-art information management systems; and
growing
rapidly as physicians position their practicesits widespread service network.

SEASONALITY

The demand for the changes in health care.
The Company believes that it can effectively develop market share because it is
building its networks on alternative site providercompany's services and networks. The
system is "physician friendly" and keeps the physician in control of their
practice while offering a network of services which are alternatives to hospital
procedures. The physician also gains negotiating leverage and is relieved of
some of the cumbersome business operations required in the current medical
business environment.

BUSINESS DEVELOPMENT

The Company is committed to growth in each of its service segments. The
Company has a development team which seeks acquisitions and start-up
opportunities in home health care, staffing, physician management and network
services, and outpatient surgery. Members of the team consist of product line
presidents and consultants.

The business development department has driven internal growthnot typically influenced by
developing a comprehensive program to support business development of ongoing
business operations. A consistent corporate identity is maintained and has been
facilitated by the Company adopting the AMEDISYS name in the parent company and
its subsidiaries. All sales and educational materials are created in the home
office. Business development personnel assist regional personnel in developing
advertising and educational campaigns and recruiting activities. Business
development tools, including specialized presentation materials, customer
service programs and client satisfaction surveys are also developed in the home
office and implemented regionally.

The home office assists regional managers in developing a business
development plan and results of development efforts are monitored on a daily and
weekly basis with a computerized information system.

Identifying new market niches by working with corporate and regional
operational managers is an ongoing process. Regional efforts of administrators
and managers are supported by community relations' directors and client service
coordinators as well as staffing coordinators.seasonal factors.

EMPLOYEES

As of March 31, 1996,June 30, 1998, the Companycompany had 413 full timeapproximately 615 full-time employees,
excluding part time field nurses and other professionals in the field. Full
time employees include 6 in administration, 62 with12 Administrative Group Members consisting of product
line presidents and operational responsibilities
includingsupport personnel. The balance of the full time
employees include regional administrators, branch managers, general branch
managers, business development personnel, clerical support staff, clinical field
staff, information systems personnel, and directors, 300 staff nursesaccounting personnel.

All management and other
allied health professionals and 45 staffing coordinators and clerical employees.

Administrators and corporate managersbusiness development personnel are salaried. Regional
administrators and managers receive a salary andThe company
complies with the Fair Labor Standards Act in establishing compensation methods
for its employees. Select positions within the company are entitleddeemed to an incentive
programbe bonus
eligible based on budgeted revenuethe achievement of pre-determined budget criteria. The company
sponsors and earningscontributes toward the cost of the region. Staffing
coordinators and clerical staff are paid hourly wages. Employees are paid
semi-monthly. The Company contributes to a group health insurance program for
eachits eligible employeeemployees and their dependents. The group health insurance program
is self-funded by the company; however, there is an aggregate stop loss policy
in place to limit the liability for the company. The company also provides a
group term life insurance policy and a long term disability policy for eligible
employees. In addition, the company offers a 401K retirement plan as well as a cafeteria 125 plan.and encourages
all of its eligible employees to participate. The Companycompany has a stock optionCafeteria 125
plan in place and stock options are granted by
the Compensation Committee of the Board of Directors.

Supplemental staffing nurses are paid on a contractual shift basis.
Home health care employees who are field staff may be paid on an hourly or
per-visit basis.as well.

The Companycompany believes its employee relations are good. It successfully
recruits employees and many of its employees are shareholders.

INSURANCE

The Companycompany maintains casualty coverages for all of its operations,
including professional and general liability, workers' compensation, automobile,
property, and fiduciary liability. The insurance program is reviewed
periodically throughout the year and thoroughly on an employee committeeannual basis to insure
adequate coverage is in place. The company is approved through the State of
elected representatives of each
department and division of the Company. The employee committee meets monthly and
makes recommendationsLouisiana to the Company's administrative group. It also elects an
employee for a recognition award for outstanding accomplishmentsself-insure its workers' compensation program. All other states
are covered on a monthly
basis.

INSURANCE

The Company maintains casualty coverage on its corporate and regional
operations, including general and professional liability insurance and
automobile insurance. Management believes that the limits of coverage carried by
the Company are adequate for its operations. The Company maintains a self funded
workers' compensation fund in Louisiana. In all other states where it conducts
business, the Company maintains workers' compensation coverage with "A"fully insured basis through "A+" rated insurers. All of the
Company'scompany's employees are bonded. 26

PROPERTIES

The Companycompany is self-insured for its employee
health benefits.

PROPERTY

The company presently leases approximately 21,00023,850 square feet for its
executive officescorporate office located at 3029 South Sherwood Forest Boulevard, Baton Rouge,
Louisiana. The lease provides for a basic monthly rental rate of approximately
$11 per square foot and expiresthrough the expiration date on October 31, 1997, with a five year option to
renew at the same rate.September 30, 2002. The
Companycompany has an aggregate of 42,500109,257 square feet of leased space for regional
offices pursuant to leases which expire between March
1996November 1998 and September 2006.August 2005.
Rental rates for these regional offices range from $9 per square foot to $22 per

26
square foot with an average of $11$13 per square foot.foot, which terms and rates the
company believes to reflect market values. Some lease rates include utilities.
The Companycompany believes its facilities to be adequate for its current needs.

The Company acquired two outpatientcompany presently operates four ambulatory surgery centers, three
located in the Houston,
Texas areaand one in connection with the acquisition of Surgical Care Centers of Texas,
L.C. on June 30, 1995.Louisiana. These centers haveoccupy an aggregate of
20,00047,304 square feet. Of the total square footage 8,000occupied by ambulatory surgery
centers, 35,304 square feet are leased, and the restbalance is owned. The spacecompany
believes the terms and lease rates reflect current market values. Space in the
ambulatory surgery centers encompasses seven surgeryfifteen surgical suites, pre-op and post-oppost-
op areas, business offices, and consultation, and waiting areas. The outpatientambulatory
surgery centers are equipped with modern technology and equipment forto perform
surgery, lablaboratory studies and limited diagnostic testing equipment.testing. Construction has
recently begun on a fifth surgery center located in Lafayette, LA, with a
projected opening of March, 1999.

The following is a list of the company's offices. Unless otherwise
indicated, the company has one office in each city.

FLORIDA (1) MISSISSIPPI (1) TEXAS (9)

St. Petersburg Jackson Austin
Dallas (2)
LOUISIANA (16) Houston(2)
Alexandria Longview
Baton Rouge (4) NORTH CAROLINA (1) Nederland
Covington Morrisville Pasadena
Hammond (2) San Antonio
Harahan
Lafayette OKLAHOMA (7) TENNESSEE (1)
Lake Charles Ada
LaPlace Gore Bristol
Metairie Oklahoma City (2)
Monroe Stilwell SOUTH CAROLINA (1)
Prairieville Tahlequah Columbia
Shreveport Tulsa

LEGAL PROCEEDINGS

From time to time, the Companycompany and its subsidiaries are defendants to
lawsuits arising in the ordinary course of the Company'scompany's business. While the
outcome of these lawsuits cannot be predicted with certainty, management
believes that the resolution of these matters will not have a material adverse
effect on the Company'scompany's financial condition or results of operations.

In connection withMARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

From August 1994 through August 1997, the acquisitioncompany's common stock traded on
the Nasdaq Small Cap Market. From August 1997 until September 1998, the company
has been traded on the Nasdaq National Market. On September 28, 1998, the
company was notified by Nasdaq that its common stock would be traded on the OTC
Electronic Bulletin Board under the symbol AMED. The company's common stock
previously traded on the Nasdaq National Market, however, it failed the net
tangible asset requirement and was de-listed. The market for the company's
common stock is highly illiquid, sporadic and volatile.

As of October 22, 1998, there were approximately 147 holders of record of
the company's common stock and the company believes there are approximately 980
beneficial holders. The company has not paid any dividends on its common stock,
and expects to retain any future earnings for use in its business development.

The following table provides the high and low prices of the company's
common stock during 1996 and 1997 and the first two quarters of 1998 as quoted
by Nasdaq. Such quotations reflect inter-dealer prices, without retail mark up,
mark down or commission, and may not represent actual transactions.

HIGH LOW
---- ---

4/th/ Quarter 1996 8 1/2 4 1/2
1/st/ Quarter 1997 7 7/8 4 3/8
2/nd/ Quarter 1997 7 1/4 4 5/8
3/rd/ Quarter 1997 7 1/4 4 5/16
4/th/ Quarter 1997 7 4 5/16
1/st/ Quarter 1998 5 3/16 3 13/16
2/nd/ Quarter 1998 4 1/2 3 13/16

SELECTED FINANCIAL DATA

The following table sets forth certain historical data relating to the
company. For the years of 1994, 1995, 1996, and 1997, the data was derived from
audited consolidated financial statements. Data for the year of 1993 is
unaudited, but in the opinion of management, presents fairly the financial
condition and results of operations for this period.

SELECTED HISTORICAL STATEMENT OF INCOME DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

1997 1996 1995/(1)/ 1994/(1)/ 1993/(1)/
---------- ---------- ---------- ---------- (UNAUDITED)

Net Service Revenue........ $ 54,496 $ 46,060 $ 37,589 $ 28,902 $ 22,445
Cost of Service Revenue.... 30,641 26,405 22,424 16,996 14,674
---------- ---------- ---------- ---------- ----------

Gross Margin............... 23,855 19,655 15,165 11,906 7,771
General/Administrative
Expenses.................. 24,443 18,511 13,785 9,740 7,204
---------- ---------- ---------- ---------- ----------
Operating Income
(Loss).................... (588) 1,144 1,380 2,166 567
Other Income and
Expense................... (753) (1,123) (238) (248) (33)
Income Tax Expense
(Benefit)................. (382) 3 200 13 39
---------- ---------- ---------- ---------- ----------

Income (Loss) before

Cumulative Effect of
Change in Account
Principle................. (959) 18 942 1,905 495

Cumulative Effect of
Change in Accounting
Principle................. (235) -- -- -- --
---------- ---------- ---------- ---------- ----------

Net Income (Loss).......... $ (1,194) $ 18 $ 942 $ 1,905 $ 495
========== ========== ========== ========== ==========

Earnings (Loss) per
Common Share.............. $(0.43) $0.01 $0.37 $0.75 $0.22
========== ========== ========== ========== ==========

Weighted Average
Common Shares
Outstanding................ 2,735,000 2,575,000 2,570,000 2,525,000 2,285,000
========== ========== ========== ========== ==========

PROFORMA INFORMATION
(UNAUDITED)/(1)/

1997 1996 1995/(1)/ 1994/(1)/ 1993/(1)/
--------- ------ ---------- ---------- ----------

Net Income (Loss)
(Historical)............ $(1,194) $ 18 $ 942 $ 1,905 $ 495

Proforma Adjustments:
Income Taxes on SCC
Results................. -- -- 191 646 155
------- ----- ---------- ---------- ----------

Proforma Net Income
(Loss).................. $(1,194) $ 18 $ 751 $ 1,259 $ 340
======= ===== ========== ========== ==========
Proforma Earnings
(Loss)/Common Share... $ (0.43) $0.01 $ 0.29 $ 0.50 $ 0.15
======= ===== ========== ========== ==========

BALANCE SHEET DATA

1997 1996 1995/(1)/ 1994/(1)/ 1993/(1)/
------- ------- --------- --------- (UNAUDITED)

Total Assets........ $22,870 $16,858 $ 11,537 $ 9,160 $ 7,190

Total Long-term
Obligations........ $ 3,129 $ 3,223 $ 1,490 $ 1,537 $ 642

Total Convertible
Preferred Stock.... $ 1 $ $ $ $ --
-- -- --

- ---------------------------
(1) Surgical Care Centers of Texas, L.C.LC ("SCC"), Mr. Glenn D. Rodriguez,acquired on June 30, 1995,
was a limited liability company. Prior to the then presidenttransaction with Amedisys,
the individual owners were responsible for all income taxes and no income
tax expense was recorded on SCC through June, 30, 1995.

SUPPLEMENTARY FINANCIAL INFORMATION

Inapplicable.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The following discussion should be read in conjunction with the financial
statements and notes thereto included elsewhere herein.

GENERAL

The company is a fully integrated provider of SCCoutpatient health services
and operates in two basic industry segments: alternate-site provider services
and management services operations. The company's alternate-site provider
segment includes the following services: alternate-site infusion therapy,
ambulatory surgery centers and home health care nursing. Its management services
operations encompass: home health care management, software systems, and
physician support services.

Gross revenue is recorded on an accrual basis based upon the date of
service at amounts equal to the company's established rates or estimated cost
reimbursement rates, as applicable. Allowances and contractual adjustments
representing the difference between the established rates and the amounts
estimated to be payable by third parties are also recorded on an accrual basis
and deducted from gross revenue to determine net service revenues.

Reimbursement for home health care nursing services to patients covered by
the Medicare program is based on cost reimbursement rates. Final reimbursement
is determined after submission of annual cost reports and audits thereof by the
fiscal intermediaries. Effective October 1, 1997, home health cost limits were
reduced and per beneficiary limits were established which may serve to reduce
payments to home health care nursing providers in the future. Additional
proposed regulations are expected to change the payment methodology for home
health care nursing providers to Medicare patients from a cost based
reimbursement system to a prospective payment system in the future.

Based upon management's determination of the expected impact of these
changes in reimbursement on future cash flows, goodwill was terminated.written down by
$835,000 during the three months ended December 31, 1997, as

required under Statement of Financial Accounting Standard No. 121 ("SFAS 121"),
"Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to
Be Disposed Of." This write-down is reflected in the accompanying consolidated
statements of operations.

During the fourth quarter of 1997, the company also changed its accounting
policy relating to start-up costs. Prior to this change, costs incurred to
establish regional offices prior to beginning services were capitalized as other
assets and amortized over a five-year period based on accepted industry practice
and applicable Medicare regulations. Provisions of a proposed statement of
position ("SOP") expected to be issued by the American Institute of Certified
Public Accountants ("AICPA") in the second quarter of 1998 will require the
write-off of any start-up costs remaining on the balance sheet and expensing of
all start-up costs incurred in the future. The company chose to expense such
costs in 1997 to more properly reflect these costs as ongoing costs of expanding
the company's services.

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, certain items
included in the company's consolidated statements of operations as a percentage
of net revenues:

YEARS ENDED DECEMBER 31,

1995 1996 1997
Net services revenues..................................... 100.00% 100.00% 100.00%
Costs of service revenues................................. 56.23 57.33 59.66
------ ------ ------
Gross margin.............................................. 43.77 42.67 40.34
General and administrative expenses:
Salaries and benefits................................... 23.21 22.42 17.91
Other................................................... 21.64 17.77 18.76
------ ------ ------
Total general and administrative expenses................. 44.85 40.19 36.67
Operating Income (Loss)................................... (1.08) 2.48 3.67
Other Income and expense.................................. (1.38) (2.43) (0.63)
------ ------ ------
Net income (loss) before taxes and cumulative effect of
change in accounting principle........................... (2.46) 0.05 3.04
Income tax expense (benefit).............................. (0.70) 0.01 0.53
------ ------ ------
Net income (loss) before cumulative effect of change in
accounting principle..................................... (1.76) 0.04 2.51
Cumulative effect of change in
accounting principle..................................... (0.43) -- --
------ ------ ------

YEARS ENDED DECEMBER 31, 1997 AND 1996

Net Service Revenues

For the year ended December 31, 1997 and the year ended December 31, 1996,
the company's revenues increased to $54,496,000 from $46,060,000, an 18%
increase. This change is primarily attributable to increased revenues in the
management services line.

Provider services net revenues increased to $32,104,000 in 1997 from
$30,126,000 in 1996, an increase of 7%. The increase is primarily attributed to
continued growth in home health care nursing as well as a full year of
operations for St. Luke's SurgiCenter. Home medical equipment was added as a
product line in August 1997 with revenues of $465,000.

Management services net revenues increased to $22,392,000 in 1997 from
$15,934,000 in 1996, an increase of 41%. This increase is primarily attributed
to growth in staffing/professional services and home health care management.
Staffing/professional services revenues increased by 38% to $17,292,000 in 1997
from $12,538,000 in 1996. The increase in staffing services is attributed to
placement of private duty nursing, as well as the stabilization of hospital
consolidations in the markets the company services. Home health care management
revenues increased due to agencies seeking solutions to the expected changes in
Medicare reimbursement.

Cost of Service Revenues

Cost of service revenues include all costs directly associated with the
generation of net revenues, including salaries and employee benefits and medical
supply costs. In September1997, cost of service revenues increased 16% to $30,641,000
from $26,405,000 in 1996. As a percentage of net service revenues, cost of
service revenues decreased from 57% in 1996 to 56% in 1997. This decrease is
primarily a result of increased revenues in the home care management and
outpatient surgery divisions, which have lower direct costs.

General and Administrative Expenses

General and administrative expenses increased to $24,443,000 or 45% of
revenue in 1997 compared to $18,511,000 or 40% of revenue in 1996. This
increase is attributed to writeoff of previously recorded goodwill, increased
expenses resulting from the growth in the outpatient surgery division as well
as increased overhead expenses resulting from the development of the infusion
therapy division. Start-up costs related to the development of this new
division of $299,000 were expensed as incurred. The company also developed an
Employee Stock Ownership Plan (ESOP) for the home health care division with
accrued contributions of $721,000 for 1997.

Other Income/Expense

Other income/expense decreased from ($1,178,000) in 1996 to ($962,000) in
1997. This decrease is primarily attributed to a one-time charge to earnings in
1996 of $623,000 related to merger discussions with Complete Management, Inc.
("CMI"), offset by additional interest expense incurred in 1997.

Net Income (Loss)

Net loss for 1997 was ($1,194,000) or ($0.43) per share as compared to net
income of $18,000 or $.01 per share for 1996.

YEARS ENDED DECEMBER 31, 1996 AND 1995

Mr. Rodriguez initiatedNet Service Revenues

For the year ended December 31, 1996 and the year ended December 31, 1995,
the company's revenues increased to $46,060,000 from $37,589,000, a lawsuit filed23%
increase. This change is primarily attributable to increased revenues in Harris County,
Texas, namingthe
provider services line.

Provider services net revenues increased to $30,126,000 in 1996 from
$21,232,000 in 1995, an increase of 42%. This increase is primarily attributed
to continued expansion of home health care nursing and growth in

outpatient surgery. Home health care nursing increased 46% from $17,892,000 in
1995 to $26,057,000 in 1996. This increase resulted from expanding market share
in existing offices, opening branch offices, and increasing the scope of
services and the physician referral base.

Management services net revenues decreased to $15,934,000 in 1996 from
$16,357,000 in 1995, a decrease of 3%. This decrease is mainly attributable to
changes in the staffing/professional services division where revenues were
$12,538,000 in 1996 compared to $13,774,000 in 1995, a 9% decrease. The
majority of this decrease is the result of hospitals utilizing internal staffing
pools.

Cost of Service Revenues

Cost of service revenues increased 18% to $26,405,000 in 1996 from
$22,424,000 in 1995. As a percentage of net revenues, cost of service revenues
decreased from 60% in 1995 to 57% in 1996. This decrease is primarily
attributed to significant growth in the home health care nursing and outpatient
surgery divisions, which have lower direct costs.

General and Administrative Expenses

General and administrative expenses increased to $18,511,000 or 40% of
revenue in 1996 compared to $13,785,000 or 37% of revenue in 1995. The increase
is attributable to the expansion of the outpatient surgery division and
increased revenues in the home health care nursing division. As revenues
increased in the home health care nursing division, expenses also increased due
to the cost reimbursement method of home health care payments from the Medicare
system. General and administrative expenses also increased due to the addition
of three senior managers and additional personnel to enhance the information
system.

Other Income/Expense

Other income/expense increased to ($1,178,000) in 1996 from ($250,000) in
1995, a 371% increase. This increase is mainly attributable to a one-time
charge to earnings of $623,000. The charge was taken as defendants William F. Borne,a result of merger
discussions with CMI, a New York based provider of physician practice management
services. During discussions with the Companymanagement of CMI, company management
decided to write off certain investments. These investments consisted primarily
of advances made to develop a proposed managed care organization and Surgicare alleging
wrongful terminationcertain
non-operating equipment believed to have no realizable value to future
operations. The discussions with CMI began with a signed letter of intent in
October 1996 and slander, seeking monetary damages.were terminated in March 1997 because the companies could not
agree on terms.

Net Income

Net income decreased to $18,000 or $.01 per share for 1996 from $942,000 or
$.37 per share in 1995 mainly attributable to the one-time charge to earnings of
$623,000.

LIQUIDITY AND CAPITAL RESOURCES

The Company deniescompany's current capital resources are sufficient to fund current
operations for the plaintiff's allegationsforeseeable future. However, the company's business strategy
is to pursue the acquisition of complimentary business and plansexpand current
operations which would increase its capital requirements. The timing, size and
success of the company's acquisition and expansion efforts and the associated
capital commitments cannot be readily predicted. The company currently intends
to vigorously defendfinance future acquisitions by using shares of its common stock for a portion
of the lawsuit.
Discovery hasconsideration to be paid. In the event that the common stock does not
commenced andmaintain a sufficient market value, or potential acquisition candidates are
otherwise unwilling to accept common stock as part of the consideration for the
sale of their businesses, the company may be required to utilize more of its
cash resources. If the company does not have sufficient cash resources, its
growth could be limited unless it is able to obtain additional equity or debt

financing. Except for current lines of credit, the company has no firm
commitment for additional financings or borrowings.

At December 31, 1997, the company had revolving bank lines of credit of
$5,500,000 and $750,000 bearing interest at bank prime plus 1.5% and bank prime
plus 1%, respectively. Subsequent to year end, the $5,500,000 line of credit
was increased to $7,500,000 for 120 days. At December 31, 1997, approximately
$440,000 was unused under these lines of credit. These lines of credit are
collateralized by 80% of eligible receivables in the staffing and outpatient
surgery divisions and 75% in the home health care nursing division. Eligible
receivables are defined principally as trade accounts that are aged less than
90 days for the staffing and outpatient surgery divisions and 120 days for the
home health care nursing division. The line of credit is subject to certain
covenants, including a monthly borrowing base, a debt service coverage ratio,
and a leverage ratio. The company was not possiblein compliance with the debt service
coverage ratio requirement at December 31, 1997, which default was waived by the
bank through June 30, 1998. The company was not in compliance with the leverage
ratio covenant at December 31, 1996, which default was waived by the bank. The
loan agreement was subsequently amended to predictincrease the ultimate
outcomeleverage ratio
requirement from 2.5 to 1 to 3.0 to 1, which the company complied with as of
December 31, 1996.

Net cash used by operating activities decreased from ($1,937,000) in the
year ended December 31,1996 to ($141,000) in the year ended December 31,1997.
The change was due to certain cash amounts related to the statutory requirements
of FutureCare being restricted at December 31, 1996 and unrestricted at
December 31, 1997 when petition for dissolution had been filed. Net cash used in
investing activities decreased from ($2,713,000) in the year ended December 31,
1996 to ($1,241,000) in the year ended December 31, 1997. This decrease is
attributed to a decrease in the fixed asset acquisitions in the current period.

Net cash provided by financing activities increased from $3,883,000 in the
year ended December 31, 1996 to $5,349,000 in the year ended December 31, 1997.
This increase is primarily attributed to a private placement of 400,000 shares
of $.001 par value convertible preferred stock pursuant to Regulation D of the
lawsuitSecurities Act of 1933 at $10 per share for gross proceeds of $4 million.

At December 31, 1997, the company had working capital of $3,137,000 and
whatstockholders equity of $8,274,000. The company's ratio of total liabilities to
equity at December 31, 1997 was 1.8 to 1.0.

INFLATION

The company does not believe that inflation has had a material effect on
its results of operations for the twelve months ended December 31, 1997. The
company expects that any increase in costs attributable to inflation in the
future would be offset by an increase in fees charged for services.

YEAR 2000 COMPLIANCE ISSUES

The company is currently evaluating its entire operation as a result of
potential problems associated with Year 2000. A task force has been established
within the company to evaluate all areas for compliance issues and develop
correction plans if necessary. Some internal areas and processes being
evaluated include initial charge entry through billing and collections; accounts
payable invoice receipt through processing and payment; bank processing of
receipts and disbursements; computer hardware and software functionality; and
time and/or date-sensitive office and medical equipment functionality. At
present, the company does not anticipate any material disruption in its
operations or significant costs to be incurred to attain compliance. There can
be no assurance, however, that the company will identify or adequately assess
all aspects of the business that may be affected. Due to this uncertainty, a
contingency plan will be developed as each area is evaluated to minimize any
negative impact ifto the company. The company is in the process of soliciting
information concerning the Year 2000 compliance status of its payors (including
the Medicare and Medicaid governmental programs), suppliers, and customers. In
the event that any its resolution willof the company's significant payors, suppliers, or customers
do not successfully and timely achieve Year 2000 compliance, the company's
business and/or operations could be adversely affected.

RECENT ACCOUNTING PRONOUNCEMENTS

In 1997, the Emerging Issues Task Force ("EITF") of the Financial
Accounting Standards Board ("FASB") reached a consensus on Issue 97-2,
"Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician
Practice Management Entities and Certain Other Entities with Contractual
Management Arrangements." The guidance in Issue 97-2 applies to contractual
management relationships between physician practices in which the management
entity does not own a majority of the outstanding voting equity instruments of
the physician practice. The guidance in the issue is effective for the year
ended December 31, 1998 for arrangements existing at November 20, 1997 and
immediately for transactions occurring after November 20, 1997, and is not
expected to have any material impact on the Company'scompany's financial position or results of operations.

MANAGEMENTstatements.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

None.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Inapplicable.

DIRECTORS AND EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Companycompany are as follows:

NAME AGE POSITION
----Name Age Capacity
- ---------------------- --- --------

William F. Borne 3840 Chief Executive Officer

andRonald A. LaBorde 41 Director

Promod K. Seth 45Jake L. Netterville 60 Director

David R. Pitts 58 Director

Peter F. Ricchiuti 41 Director

James P. Cefaratti 55 President, Chief Operating Officer and Secretary

Mitchel G. Morel 3638 Chief Financial Officer

Irvin T. Gregory 58Cindy L. Doll 37 Vice President Outpatient Surgery and Director
Lynn S. Bernhard 39of Human Resources

Larry R. Graham 32 Senior Vice President Nursing Services
Barbara C. Carey 49 Secretary/Treasurerof Operations

Michael D. Lutgring 28 General Counsel

Joann B. Rushing 47 Executive Vice President
- ----------------

William M. Hession 44 Director
Dr. Karl A. LeBlanc 43 Director
Dr. Alan J. Ostrowe 55 Director
Dr. Boris L. Payan 63 Director

WILLIAM F. BORNEBorne founded the Companycompany in 1982 and has served as chief
executive officer and a director since that time. In 1988, Mr. Borne was an intensive care supervisor
for Keyalso
founded and served as president and chief executive officer of Amedisys
Specialized Medical Services, Inc. until June 1993. Mr. Borne also founded and
served as chief executive officer of Amedisys Staffing Services, Inc. and
Amedisys Nursing Corporation from June 1982 to July 1983 andServices, Inc.

Ronald A. LaBorde has been a director of nursing
at West St. James Hospital in Vacherie, Louisiana from 1980 to 1983.the company since 1997. Since
1995, Mr. Borne
is a registered nurse who worked clinically in specialty and medical-surgical
areas with supplemental staffing agencies in New Orleans from 1979 to 1980. Mr.
Borne is a graduate of the Charity Hospital School of Nursing.

PROMOD K. SETHLaBorde has served as the president and chief operatingexecutive officer of
Piccadilly Cafeterias, Inc. Mr. LaBorde has been a member of the Piccadilly
Cafeterias, Inc. board of directors since December
1995. From1992. Prior to 1995, Mr. LaBorde held
various executive positions with Piccadilly Cafeterias, Inc. including executive
vice president and chief financial officer from 1992 to 1996, he was an independent consultant1995, executive vice
president, corporate secretary and investment advisor
and,controller, from 19911986 to 1992 he was regional administratorand vice
president and assistant controller from 1982 to 1986. Mr. LaBorde is a
certified public accountant.

Jake L. Netterville has been a director of Devereaux, Inc. From
1989 to 1991,the company since 1997. Mr.
Seth wasNetterville is the managing director of Postlethwaite & Netterville, A
Professional Accounting Corporation, one of the largest privately held
accounting firms in Louisiana. Mr. Netterville has held that position since
1977. Mr. Netterville is a consultant to Methodist HospitalCertified Public Accountant and has served as
chairman of the board of the American Institute of CPAs, the highest national
office in Houston, Texas.the accounting profession. Mr. Seth received an M.S. degreeNetterville is a permanent member of
the American Institute of CPAs' Governing Council. Mr. Netterville serves as a
member of the board of directors of the Wall Street Deli, a Nasdaq listed
company, and Catalyst Vidalia Corporation. Mr. Netterville holds a B.S. in
physics from Delhi University in Delhi,
India and an M.B.A.accounting from Louisiana State University.

HeDavid R. Pitts has been a director of the company since 1997. Mr. Pitts is
licensedthe president and chief executive officer of Pitts Management Associates, Inc.,
a national hospital and healthcare consulting firm. Mr. Pitts has over thirty-
five years' experience in hospital operations, healthcare planning and multi-
institutional organization, and has served in executive capacities in a number
of hospitals, multi-hospital systems, and medical schools. Since 1984, Mr.
Pitts has served as president and chief executive officer of HSLI, Inc., a
company managing self-insured trusts and providing insurance consulting services
to corporations. Mr. Pitts serves as a CPAdirector of Union Planters Bank of
Louisiana. Mr. Pitts holds a B.S. degree in management and economics at Ohio
State University and Masters degrees in both hospital administration and public
administration at the University of Minnesota.

Peter F. Ricchiuti has been a director of the company since 1997. Mr.
Ricchiuti has been Assistant Dean and Director of Research at Tulane
University's A.B. Freeman School of Business since 1993, and an adjunct
professor of finance at Tulane since 1986. From 1993 to 1996, Mr. Ricchiuti was
the assistant dean and director of Career Development and Placement at the A.B.
Freeman School of Business at Tulane. From 1988 to 1993 Mr. Ricchiuti was
assistant state treasurer and chief investment officer for the Department of the
Treasury, State of Louisiana. Mr. Ricchiuti is a member of the board of
trustees for WYES-TV, the public broadcasting station in New Orleans, Louisiana.
Mr. Ricchiuti holds a B.S. degree from Babson College and a MBA from the
University of New Orleans.

James P. Cefaratti has served as president and chief operating officer of
the company since August, 1997, and secretary since April 1998. Mr. Cefaratti
was president and chief executive officer of Global Vision, Inc. from April 1995
to July 1997. From August 1993 until April 1995, Mr. Cefaratti was a private
investor involved in the statepurchase and sale of Texas.

MITCHELsmall health care companies. In
1989, Mr. Cefaratti joined Home Intensive Care, Inc. as president and chief
executive officer, until it was sold to W.R. Grace & Co. in June 1993.

Mitchel G. MORELMorel has served as chief financial officer of the Companycompany since
June 1994 and also served as vice president of finance from February 1991 to
June 1994.1991. Mr.
Morel is responsible for directing financial activities and financial reporting
systems of the company. From October 1989 to January 1991, Mr. Morel served as
comptroller

36
of Amedisys Staffing Services, Inc., a subsidiary of the Company.company. Mr. Morel has
a Bachelor of Science degree in business administration with a major in
accounting from Louisiana State University and is licensed as a Certified Public
Accountant in the state of Louisiana.

Cindy L. Doll has served as vice president of human resources of the
company since March 1996. From March 1988 to October 1989, Mr. Morel1995 until March 1996, Ms. Doll was human
resources director of the company. From July 1995 until March 1995 Ms. Doll was
the benefits coordinator of the company. From January 1993 until July 1993, Ms.
Doll was office manager of MedAmerica, Inc., a senior accountant atsubsidiary of the certified public accounting firm of Ellis-Apple and Co.
Mr. Morelcompany. Ms.
Doll received a B.S.Bachelor of Arts degree from University of Pennsylvania.

Larry R. Graham has served as senior vice president of operations of the
company since December 1997. From April 1996 until December 1997, Mr. Graham was
vice president, finance of the company. From July 1993 until April 1996, Mr
Graham was director of financial services of General Health System. Mr. Graham
received a Bachelor of Science degree in business administration from Louisiana State
University. He is licensed as a CPA in the
stateUniversity of Louisiana.

IRVIN T. GREGORYSouthern Mississippi.

Michael D. Lutgring has served as a directorgeneral counsel of the Company and as
president of the Company's outpatient surgery divisioncompany since
August 1995. He
served as the vice president of development and as a director of The Company
Surgery Centers since January 1995.November 1997. From October 1996 until November 1997 Mr. Gregory has 30 years of management
experience in the health care field that includes services as regional vice
president for Surgical Partners of America, Inc., a Vivra, Inc. New York Stock
Exchange subsidiary, executive vice president of Medical Care International (now
Med America), and vice president development for the Lifemark Hospital Division
of Lifemark Corporation.Lutgring operated his
own law practice. Mr. Gregory filed a petition under Chapter 7 for
personal bankruptcy in November 1994. Mr. Gregory has a B.S. degree in
management from the University of Southwestern Louisiana.

LYNNE S. BERNHARD has served as president of the Company's nursing
services division since January 1994. Ms. Bernhard has also served in a variety
of positions with a subsidiary of the Company since 1988. Prior to her
affiliation with the Company, Ms. Bernhard was director of home health care
services for Medical Personnel Pool in Baton Rouge from August 1985 to September
1988. Mrs. Bernhard has a nursing degree from Southern Arkansas University and
she attended the College of St. Frances in Tollier, Illinois.

BARBARA C. CAREY has served as secretary/treasurer since March 1994 and
as vice president of corporate communications of the Company since October 1993.
From July 1989 to October 1993, she served in a variety of positions with a
subsidiary of the Company. She has a Bachelor of Arts and Masters degree in
speech from Louisiana State University and an M.B.A. from Tulane University.

WILLIAM M. HESSION, JR. has served as a director of the Company since
July 1983. Mr. Hession has served as president of Key Nursing Corporation since
1982 and as president of Key Medical Supply Inc. since 1992. He served as
consulting director of Nursing Services in Metairie, Louisiana from 1979 to
1982. Mr. Hession was director of nursing at Assumption General Hospital in
Napoleonville, Louisiana from 1977 to 1978. He worked as a staff nurse in the
intensive care unit at West Jefferson Hospital in New Orleans, and at Thibodaux
General Hospital in Thibodaux, Louisiana in 1976. Mr. Hession received a nursing
degree from Nicholls State University.

DR. KARL LEBLANC has served as a director of the Company since June
1993. Dr. LeBlanc has practiced in the area of general surgery since 1983. He is
on staff at Our Lady of the Lake Regional Medical Center, Baton Rouge General
Medical Center and Woman's Hospital in Baton Rouge, Louisiana. HeLutgring received his M.D. from Louisiana State University Medical Center in 1978, and a B.S. degree
from the University of Southwestern Louisiana. Dr. LeBlanc received an M.B.A.Juris Doctorate from Louisiana
State University in 1992.

DR. ALAN J. OSTROWEMay 1996.

Joann B. Rushing has served as a directorexecutive vice president of the Companycompany
since July
1994. Dr. Ostrowe has practicedOctober 1997. From June 1995 until June 1997, Ms. Rushing was officer and
vice president, marketing and public relations of Global Vision, Inc. From
January 1994 until June 1995, Ms. Rushing was executive vice president and
partner of Medical Data Resources. From June 1993 until January 1994, Ms.
Rushing was an independent consultant with various companies in the area of anesthesiology since 1971health care,
manufacturing and pain management since 1991. Heretail industries.

There is on the medical staff of Our Lady of the Lake
Regional Medical Center, Baton Rouge General Medical Center, Medical Center of
Baton Rougeno family relationship between or among any executive officers and
the Woman's Hospital of Baton Rouge. He received his M.D. from
New York Medical College in 1966. He is on the board of directors of GulfWest
Oil Company and is the medical director of one of the Company's subsidiaries.

DR. BORIS L. PAYAN was elected to the Board of Directors in February
1996. Dr. Payan has practiced in the area of anesthesiology since 1962. Dr.
Payan has served as a director of The Company Surgery Centers since 1978. He
received his M.D. from the University of Havana, Cuba and completed a year of
internship at Curie Hospital in Cuba and a second year at Methodist Hospital in
Houston. He did his residency at St. Luke's Hospital, St. Joseph's Hospital and
at Baylor College of Medicine in Houston. He is on staff at Southern Medical
Center. He is a director on the board of First Bank of Houston.

Directors serve until the expiration of their term at the annual
meeting of stockholders. All officers serve at the discretion of the Board of
Directors. Directors receive hourly compensation of $100 for board meetings and
reimbursements for reasonable out-of-pocket expenses to attend Board Meetings.directors.

EXECUTIVE COMPENSATION

The following table sets forth certain information regarding compensation
paid by the Companycompany to the Chief Executive Officer during 1995.
There were nochief executive officer and for all other executive
officers whose total annual salary and bonus exceeded $100,000 during 1995.1997. The
Companycompany maintains a disability insurance policy and life insurance policy on Mr.
Borne under which the Companycompany is a beneficiary. These policies are pledged as
collateral for a bank loan of the Company.company. The named executive officer receivesofficers
received perquisites and other personal benefits in amounts less than 10% of
histheir total annual salary and bonus.

2937

SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION
COMPENSATION
---------------------- ------------
NAME AND TITLE YEAR SALARY BONUS OPTIONS
-------------- ---- -------- ------- ---------
William F. Borne, 1995 $130,000 $20,000 3,250
Chief Executive Officer 1994 101,000
LONG-TERM
ANNUAL COMPENSATION COMPENSATION

OTHER
ANNUAL ALL OTHER
YEAR SALARY BONUS COMPENSATION/(1)/ OPTIONS COMPENSATION

William F. Borne
Chief Executive Officer 1997 $ 190,000 $ 20,000 $1,987 34,525 -
1996 153,771 20,000 - 35,000 -
1995 133,519 - - 3,250 -

Lynne Shackelford-
Bernhard/(2)/, President, 1997 $ 100,000 $ 43,649 $3,450 14,644 -
Amedisys Resource 1996 90,645 17,500 - 18,500 -
Management 1995 78,958 - - 3,250 -

Mitchel G. Morel,
Chief Financial Officer 1997 $ 100,000 $ 12,500 $1,000 24,128 -
1996 87,698 17,500 - 18,500 -
1995 84,297 - - 3,250 -

Charles M. McCall/(2)/
President, Staffing and 1997 $ 82,812 $ 33,203 $4,501 13,612 -
Patient Care Services 1996 75,071 5,525 - 9,500 -
1995 - - - - -
1993 119,000 25,000
- -------------------
(1) Comprised solely of a car allowance.
(2) Ms. Shackelford-Bernhard and Mr. McCall were executive officers for the
fiscal year ended December 31, 1997. In April 1998, the board of directors
appointed new executive officers and declined to appoint Ms. Shackelford-
Bernhard and Mr. McCall as executive officers. Ms. Shackelford-Bernhard
remains an employee of the company.

EMPLOYMENT AGREEMENTS

NoneExcept for Messrs. Borne and Cefaratti, none of the officers of the Companycompany
is subject to an employment agreement. On October 1, 1996, Mr. Borne entered
into an employment agreement with the company with a term through December 31,
1997 which provides for successive one-year renewals unless either party gives
30-day written notice of its election not to renew prior to the expiration of
the term. The agreement provides for a base salary of $16,666 monthly, which
may be adjusted by the Board of Directors, and an annual bonus equal to the
greater of (i) 25% of the base salary for the applicable year if the company
achieves a 20% or greater increase in its stock price, or (ii) 100% of the base
salary for the applicable year if the company's earnings per share is at or
above the company's budgeted projection for such year or if the company achieves
a 50% or greater increase in its stock price. Mr. Borne is entitled to
participate in company benefit plans, receives 20 business days vacation, the
use of an automobile with a value of at least $50,000, plus reasonable expenses.
Pursuant to the agreement, Mr. Borne has the option to borrow up to $125,000 in
the form of a three year loan bearing interest at the company's best borrowing
rate, the outstanding balance of which is currently $64,000. In the event of
termination of employment for death or disability, Mr. Borne shall be entitled
to payment of salary and bonus for the lesser of one year or the remaining term
under the agreement. In the event of termination without cause or if Mr. Borne
resigns for good reason he shall be entitled to the payment of the full base
salary for the period of one year and an amount equal to the aggregate bonus
amount paid to Mr. Borne for the most recently completed calendar year.
Additionally, the

agreement provides that during its term and for a one-year period thereafter,
Mr. Borne shall not compete with the company.

Effective January 1998, Mr. Cefaratti entered into an employment agreement
with the company for the position of president/chief operating officer. The
initial term of the agreement is through December 31, 2002, which will be
automatically extended for additional five-year terms unless either party
provides written notice of termination at least six (6) months prior to the
expiration of the initial or extended term. Commencing with the company's 1999
annual meeting of shareholders, the company will use its best efforts to
nominate and cause the election of Mr. Cefaratti to the company's board of
directors and its executive committee. If Mr. Cefaratti is not elected to the
board of directors, he shall be entitled to terminate the agreement.

The agreement provides for an annual base salary of $250,000 per year and
an automatic yearly cash increase on January 1 of the greater of: (1) six
percent (6%) or (2) the percentage increase of the Consumer Price Index for
Urban Wage and Earning and Clerical Workers (Greater Metropolitan Baton Rouge
Area, all items) issued by the Bureau of Labor Statistics of the U.S. Department
of Labor; or (3) $25,000. In addition, the company's board of directors may
grant yearly cash increases in excess of the amount provided for above. On
January 1, 1998 and January 1 of each year thereafter, the company shall issue
Mr. Cefaratti the number of shares of company common stock which will have a
market value equal to fifty percent (50%) of the yearly cash increase. The
market value of such yearly stock increase shall be cumulative and added to base
salary. Each year thereafter, common stock which represents an accumulation of
all previous yearly stock increases shall be issued by the company to Mr.
Cefaratti for that portion of the base salary on the first business day of each
year. Market value of the common stock issued in connection with the yearly
stock increase shall be calculated based upon the closing price per share for
the five (5) trading days preceding such date. Mr. Cefaratti shall be entitled
to receive a bonus payable within 120 days after the company's fiscal year end
and equal to 100% of his base salary in effect at the time the bonus is paid, if
the company attains or exceeds the operating income(loss) as presented in the
budget approved by the company's board of directors. Operating income shall be
calculated using EBITDA, as determined by generally accepted accounting
principles.

On January 1, of each year during the term of the agreement, the company
shall grant Mr. Cefaratti options to purchase shares of common stock equal to
the greater of (1) one and one-half percent (1 1/2%) of the number of shares of
common stock issued by the company during the preceding fiscal year or (2)
30,000 shares. Said options shall vest 100% at the time of grant and shall have
a term of ten (10) years from the date of grant. The exercise price shall be
the average closing price for the five (5) days prior to the date of grant.

In the event the company files a registration statement registering its
common stock with the SEC under the Act on any form other than S-4 or S-8, the
company will give written notice to Mr. Cefaratti at least thirty (30) days
prior to the filing of the registration statement. Mr. Cefaratti then has
twenty (20) days in which to notify the company of his intention to register any
common stock he owns. However, the company will not be required to include any
shares of common stock owned by Mr. Cefaratti if the offering is an underwritten
public offering, and (1) Mr. Cefaratti does not agree to sell his common stock
on the same terms and conditions as to which other common stock is being sold in
the offering by the company, (2) the managing underwriter determines and advises
the company in writing that the inclusion of such shares of common stock owned
by Mr. Cefaratti would jeopardize the success of the offering, and (3) in each
case all shares of common stock owned by Mr. Cefaratti which are not included in
the offering will be withheld from the market for no longer than three (3)
months after the effective date of the registration statement.

In the event that the company adopts a stock option plan, Mr. Cefaratti
shall be eligible to receive grants of stock options under such plan in such
amount as determined by the board of directors or any committee thereof. All
options granted to Mr. Cefaratti shall have a term of ten (10) years or such
lesser term as determined by the specific stock option plan under which options
are granted. All options so granted shall vest thirty-three and one-third
percent (33 1/3%) at the date of grant and thirty-three and one-third percent
(33 1/3%) at the end of each year thereafter, so long as Mr. Cefaratti remains
employed by the company and shall continue to vest during any deferred

compensation period. Vesting of options shall immediately accelerate upon a
change of control. Mr. Cefaratti shall have the right to exercise vested
incentive stock options for up to ninety (90) days after termination of the
deferred compensation period and non-statutory stock options for up to twelve
(12) months after termination of the deferred compensation period. All other
terms of the options shall be subject to and determined by the stock option
plan.

Unless otherwise agreed by Mr. Cefaratti, Mr. Cefaratti's principal place
of employment shall be within fifteen (15) miles of the company's executive
offices located at 3029 S. Sherwood Forest Boulevard. If Mr. Cefaratti agrees
to relocation, the company shall (1) pay all out-of-pocket expenses incurred by
Mr. Cefaratti in connection with relocation; (2) if requested by Mr. Cefaratti,
purchase his residence at fair market value as determined by a real estate
appraisor; and (2) lend Mr. Cefaratti the sum of $100,000 to be used solely for
the purchase of a residence, which shall accrue interest at the prime rate as
published in The Wall Street Journal and shall be payable in sixty (60) equal
installments of principal, plus accrued interest. The loan amount shall be
increased as of January 1 of each year during the term of the agreement by the
same percentage increase as the base salary.

Mr. Cefaratti is entitled to the following additional benefits: (1) five
(5) weeks vacation; (2) company car; (3) reimbursement of reasonable travel and
other expenses; (4) participation in employee benefit plans; (5) company payment
of life insurance premiums, not to exceed $25,000 per year; (6) membership fees
and dues in (a) a country club, not to exceed $15,000 per year, subject to
adjustment, (b) two business luncheon clubs, (c) airline clubs and (d) one
personal credit card; (7) payment by the company of IRS penalties for anything
connected with the agreement other than base salary or bonuses; (8) payment for
tax preparation and financial planning, not to exceed $1,500 per year, as
adjusted; (9) participation in any new or additional compensation concepts or
programs for any officer of the company (other than compensation based on sales
or other commissions); (10) a one percent (1%) equity ownership interest in each
business combination regardless of whether the company is a 100% owner,
sponsored by the company and its affiliates (any person controlling, under
common control with or controlled by the company) to own, lease or operate
health care services which either open for business, or as to which the funds
necessary to open for business are raised, during the term of the agreement.

The company may terminate the agreement for cause, which is defined as:

(a) a material default or breach by Mr. Cefaratti of any of the
provisions of the agreement materially detrimental to the company
which is not cured within thirty (30) days following written notice
thereof;

(b) actions by Mr. Cefaratti constituting fraud, embezzlement or
dishonesty which result in a conviction of a criminal offense not
overturned on appeal;

(c) intentionally furnishing materially false, misleading, or omissive
information to the company's board of directors or any committee
thereof, that is materially detrimental to the company;

(d) actions constituting a breach of the confidentiality of the business
and/or trade secrets of the company which is materially detrimental
to the company; and

(e) willful failure to follow reasonable and lawful directives of the
company's board of directors, which are consistent with Mr.
Cefaratti's job responsibilities and performance which is not cured
within thirty (30) days following written notice thereof.

The company shall have the right to terminate the agreement without cause
on ninety (90) days written notice. Mr. Cefaratti may terminate the agreements
upon thirty (30) days written notice, after an occurrence of a material default
by the company which is not cured within thirty (30) days.

Mr. Cefaratti may terminate the agreement upon thirty (30) days written
notice within eighteen (18) months following the occurrence of a change of
control, which is defined as:

(a) the acquisition by any person, entity or group within the meaning of
Section 13(d) or Section 14(d) of the Securities Exchange Act of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange act) of thirty percent (30%) or more of either the
then outstanding shares of the company's common stock or the combined
voting power of the company's then outstanding voting securities
entitled to vote generally in the election of directors, provided,
however, the purchase by underwriters in a firm commitment public
offering of the company's securities shall not constitute a change of
control;

(b) if the individuals who serve on the company's board of directors as
of the commencement date (the incumbent board) cease for any reason
to constitute at least a majority of the board of directors;
provided, however, any person who becomes a director subsequent to
the commencement date, whose election or nomination for election by
the company's shareholders was approved by a vote of at least a
majority of the directors then compiling the incumbent board, shall
for purposes of the agreement be considered as if such person was a
member of the incumbent board; or

(c) approval by the company's stockholders of: (1) a merger,
reorganization or consolidation whereby the company's shareholders
immediately prior to such approval do not, immediately after
consummation of such reorganization, merger or consolidation, own
more than fifty percent (50%) of the combined voting power entitled
to vote generally in the election of directors of the surviving
entity's then outstanding voting securities, or (2) liquidation or
dissolution of the company, or (3) the sale of all or substantially
all of the assets of the company.

Mr. Cefaratti shall be entitled to receive deferred compensation if his
employment is terminated for any of the following: (1) his death; (2)
termination by the company without cause; (3) termination by Mr. Cefaratti upon
default by the company; (4) termination by Mr. Cefaratti after a change of
control; (5) termination by the company pursuant to automatic extension; or (6)
termination by Mr. Cefaratti due to lack of board membership. Said deferred
compensation shall consist of the greater of: (i) the base salary payments Mr.
Cefaratti would have received had his employment continued for the remaining
term of the agreement (including yearly cash increases); or (ii) an amount equal
to one month's base salary for each $10,000 of total compensation (as
hereinafter defined) Mr. Cefaratti received in either (a) the highest of the
last five (5) fiscal years of the agreement or (b) an amount equal to 150% of
the total base salary (including yearly stock increases) for the previous fiscal
year, whichever is greater.

The agreement provides that during its term and for a two-year period
thereafter, Mr. Cefaratti shall not compete with the company.

STOCK OPTIONS

The Company's Amended and Restated Stock Option Plan ("Plan")company's amended stock option plan provides for the issuance of an
aggregate of 500,0001,000,000 shares of Common Stockcommon stock upon exercise of options granted
pursuant to such Plan.amended stock option plan. As of the date of this Prospectus,December 31, 1997, options to
purchase an aggregate of 50,150957,065 shares were outstanding under the Plan. Of this amount, options to purchase 27,650 shares become exercisable in
April 1997 at a price of $7.00 per share and expire in April 1998; and options
to purchase 22,500 shares vest ratably over a three-year period beginning in May
1997 at an exercise price of $6.75 per share and expire in May 2001.

The following tables show, as to the named executive officer, certain
information concerningamended stock
options.

1995 STOCK OPTION GRANTS

OPTIONS PERCENT OF
GRANTED TOTAL OPTIONS EXERCISE PRICE EXPIRATION
NAME (SHARES) GRANTED (PER SHARE) DATE
- ---- --------- ------------ -------------- ----------
William F. Borne 3,250 11.75 $7.00 April 1998option plan.

1997 STOCK OPTION GRANTS
------------------------
POTENTIAL
REALIZABLE
VALUE AT ASSURED
ANNUAL RATES OF
PERCENT OF STOCK PRICE
OPTIONS TOTAL APPRECIATION FOR
GRANTED OPTIONS EXERCISE PRICE EXPIRATION OPTION TERM
NAME (SHARES) GRANTED (PER SHARE) DATE 5% 10%
-- ---
- -----------------------------------------------------------------------------------------------------------

William F. Borne 34,525 3.6% $6.20 Feb 2007 $30,835 $43,071

Lynne Shackelford- 14,644 1.5% $6.20 Feb 2007 $13,079 $17,269
Bernhard

Mitchel G. Morel 24,128 2.5% $6.20 Feb 2007 $21,549 $30,099

Charles M. McCall 13,612 1.4% $6.20 Feb 2007 $12,158 $16,982

AGGREGATED OPTION EXERCISES IN 19951997
AND YEAR-END OPTION VALUES
NUMBER OF
SECURITIES VALUE OF
SHARES UNDERLYING UNEXERCISED
ACQUIRED VALUE UNEXERCISED IN-THE-MONEY
NAME ON EXERCISE REALIZED OPTIONS OPTIONS
---- ----------- -------- ----------- ------------
William F. Borne - - 3,250(1) (2)

(1) These options do not become exercisable until April 1997
(2) These options were out of
SHARES
ACQUIRED NUMBER OF SECURITIES
ON VALUE UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
NAME EXERCISE REALIZED OPTIONS MONEY OPTIONS/(*)/
- ---------------------------------------------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------

William F. Borne - - 26,425 46,330 $0 $0
Lynne Shackelford- - - 14,298 22,096 $0 $0
Bernhard
Mitchel G. Morel - - 17,459 28,419 $0 $0
Charles M. McCall - - 7,904 15,408 $0 $0

_____________________
(*) Computed based on the money at December 31, 1995

CERTAIN TRANSACTIONS

In 1994, AMEDISYS Surgery Centers, L.C. ("ASC") executed a note payable
to Vista Maple Partnership, an affiliate of Drs. Reyes, Payandifferences between the fair market value and
Hearn, in the
original principal amount of $1,080,000, bearing interest at 9% per annum. The
note is secured by all real estate and personal property of one of the Company's
surgical centers.

During 1993, the Company made payments totaling $169,500 to Drs. Reyes,
Hearn and Payan for services rendered in the capacity of medical director of
ASC.

During 1993, ASC made payments to RPH, Inc. an affiliate of Drs. Reyes,
Payan and Hearn, aggregating approximately $1,014,000 for leased employees.
Terms of the contract covering this transaction provided for ASC to pay RPH the
salary costs of these employees plus 30% for the term of the contract.

In 1995, 1994 and 1993, ASC made payments totaling approximately
$108,000, $229,000 and $206,000, respectively, to RPH, Inc., an affiliate of
Drs. Reyes, Payan and Hearn, for anesthesia services.

In February 1996, the Company formed FutureCare, Inc., a Nevada
corporation ("FutureCare"), to establish a health maintenance organization
(HMO). The Company has provided $1 million in financing to FutureCare to enable
it to meet the capital requirements for an HMO license in Louisiana. As of June
30, 1996, the Company had committed to advance up to $300,000 in development
expenses which are expected to be reimbursed from the proceeds of a private
placement offering of FutureCare stock. The Company currently owns 51% of
FutureCare stock; however, upon completion of FutureCare's offering and the
licensing of the HMO, the Company will exchange its shares in FutureCare for 11%
of the shares in the HMO. Mr. Borne pledged 400,000 shares of his stock in the
Company and provided a personal guaranty to secure a $1 million letter of credit
issued by Union Planters Bank in favor of FutureCare. Neither the Company nor
Mr. Borne have any further formal commitment in connection with the HMO and the
future development of the HMO is undeterminable at this time.

In May 1996, the Company granted Dr. Reyes' son an option to purchase
2,500 shares of Company Common Stock at anaggregate exercise price of $6.75 per share.
This option vests ratably over a three-year period beginning in May 1997 and
expires in May 2001. This resale of shares underlying this option is being
registered hereby.

Management believes that all prior related party transactions are on
terms as favorable to the Company as could be obtained from unaffiliated third
parties.

PRINCIPAL STOCKHOLDERSprices.

STOCK OWNERSHIP

The following table sets forth, as of June 3, 1996,October 22, 1998, certain information
with respect to the beneficial ownership of the Company's Common Stockcompany's common stock by (i)
each person known to the Companycompany who beneficially owns more than 5% of the
Company'scompany's outstanding Common Stock,common stock, (ii) each director, of the Company, (iii) all named
executive officers, and (iv) all directors and officers as a group:

SHARES BENEFICIALLY
OWNED
NAME AND ADDRESS ------------------------------------
OF BENEFICIAL OWNER NUMBER PERCENT
- ------------------- ---------- -------
William F. Borne 438,391(1) 17.0
3029 S. Sherwood Forest, #300
Baton Rouge, LA 70816

Boris L. Payan, M.D. 230,893(2) 8.9
3534 Vista
Pasadena, TX 77504

R.E. Hearn, M.D. 230,893(2)(3) 8.9
3534 Vista
Pasadena, TX 77504

Jose R. Reyes, M.D. 204,007(2) 7.9
3534 Vista
Pasadena, TX 77504

William M. Hession, Jr.(4) 82,947 3.2

Alan J. Ostrowe, M.D. 43,426(5) 1.7

Irvin T. Gregory 26,411 1.0

Karl A. LeBlanc, M.D. 3,620 *

ALL DIRECTORS AND OFFICERS
AS A GROUP (10 PERSONS) 885,438(6) 34
-------------------------42

SHARES OF PERCENT OF
NAME AND ADDRESS/(1)/ COMMON STOCK VOTING
POWER/(2)/

Terra Healthy Living, Ltd. 861,622/(3)/ 18.4%
William F. Borne 432,359/(4)/ 9.2%
Lynne Shackelford-Bernhard 56,606/(5)/ 1.2%
Mitchel G. Morel 39,155/(6)/ *
Charles M. McCall 33,754/(7)/ *
Cindy L. Doll 5,687/(8)/ *
David Pitts 5,000 *
Larry R. Graham 2,338/(9)/ *
Peter F. Ricchiuti 2,000 *
Ronald A. LaBorde 2,000 *
Jake Netterville 2,000 *
Michael D. Lutgring 793 *
James P. Cefaratti -- *
Joann B. Rushing -- *
All officers and directors as a group (11 persons) 491,332/(10)/ 10.4%

_____________________________
(*) Less than one percent.
(1) Does not include 38,500 shares held in trustEach address is the company, except for Mr. Borne's minor
children; does include 3,250 shares underlying an Option.(i) Terra Healthy Living,
Ltd., at Bahnofplatz 9, 8001 Zurich, Switzerland, (ii) David Pitts,
at 7946 Goodwood Boulevard, Baton Rouge, LA 70806, and (iii) Peter F.
Ricchiuti, Associate Dean, Director of Research, A.B. Freeman School
of Business, Tulane University, New Orleans, LA 70118.
(2) Includes 30,000common stock and common stock equivalents.
(3) Includes 861,622 shares owned of record by R.P.&H.,company common stock underlying 380,000
shares series A preferred stock.
(4) Includes options to purchase 26,425 shares of common stock.
(5) Includes options to purchase 14,298 shares of common stock.
(6) Includes options to purchase 17,459 shares of common stock.
(7) Includes options to purchase 7,904 shares of common stock.
(8) Includes options to purchase 5,687 shares of common stock.
(9) Includes options to purchase 2,338 shares of common stock.
(10) Includes options to purchase 51,909 shares of common stock.

CERTAIN TRANSACTIONS

In connection with the private placement, Terra Healthy Living, Ltd.
purchased 350,000 shares of series A preferred stock, which is currently
convertible into 783,467 shares of common stock. Terra Healthy Living, Ltd. is
only affiliated to the company through its stock ownership.

Notes receivable from related parties consist of unsecured and non-interest
bearing notes from the chief executive officer totaling approximately $64,000 at
December 31, 1997 and $65,000 at March 31, 1998. The maturity dates for the
notes receivable from the chief executive officer are as follows: (i) $8,000
payable in December 1998, (ii) $ 18,000 payable in December 1999, and (iii)
$38,000 payable in December 2000. Additional notes receivable from related
parties consist of receivables from the Internal Medicine Clinic of Tangipahoa,
Inc., an affiliate which owns 40% of Amedisys Physician Services, Inc. totaling approximately
$150,000 at December 31, 1997. The fair value of the shareholder.

(3) Includes 100,000 shares owned of record by Phoenix Anesthesia, EPSP, an
affiliatenotes receivable from
related parties is equal to the recorded value due to the short term nature of
the stockholder.

(4) Includes 82,947 shares ownednotes.

In March, 1994, the company entered into agreements with Internal Medicine
Clinic of record by Key Nursing Corporation,Tangipahoa, Inc. to form Rural Health Provider Network, Inc. ("RHPN")
of which the company owns 60% (the "Agreements"). The name of RHPN has
subsequently been changed to Amedisys Physician Services, Inc. ("APS"). APS
operated a lab, walk-in-clinic in Hammond, Louisiana, and managed the physician
practice of Internal Medicine Clinic of Tangipahoa, Inc. APS also invested in an
affiliateopthamology clinic in Hammond, Louisiana. Pursuant to the Agreements, the
company loaned APS $312,000. This amount was comprised of $112,000 for the
purchase of the stockholder.

(5) Includesfixed assets of Internal Medicine Clinic of Tangipahoa, Inc. and
a warrant exercisableworking capital loan of $200,000, collateralized by Internal Medicine Clinic
of Tangipahoa, Inc.'s accounts receivable. The company was responsible for
funding the operations of APS, including loaning additional funds to purchase 1,000APS if APS
did not have adequate cashflow to meet its current obligations. The balance owed
to the company by Internal Medicine Clinic of Tangipahoa, Inc. for working
capital requirements at December 31, 1995 was $256,000. Two notes were issued on
January 1, 1996 to the company by Internal Medicine Clinic of Tangipahoa, Inc.
in the combined amount of $256,000. These notes bear interest at 9%, require
monthly principal and interest payments of $4,706 with the balance due on
maturity of January 1, 1999 and are secured by the accounts receivable of
Internal Medicine Clinic of Tangipahoa, Inc. During 1996, the company collected
approximately $6,000 from Internal Medicine Clinic of Tangipahoa, Inc. on the
outstanding notes. Because of a dispute between the owners of Internal Medicine
Clinic of Tangipahoa, Inc. and the company over the amounts outstanding, the
company determined that the probability of collecting $100,000 of the payable
was uncertain and therefore, elected to expense that amount in December 1996,
resulting in a remaining balance owed at December 31, 1996 of $150,000. The
current amount outstanding on the notes payable due from Internal Medicine
Clinic of Tangipahoa, Inc. is $143,723, and management believes these notes are
collectible. In addition to the outstanding notes payable due from Internal
Medicine Clinic of Tangipahoa, Inc., APS recorded management fees of $28,097 in
1996 and $541,441 in 1995 from Internal Medicine Clinic of

Tangipahoa, Inc. As of December 31, 1996, management fees of $28,097 were still
outstanding. From January through August 1997, Internal Medicine Clinic of
Tangipahoa, Inc. made payments of varying amounts on the unpaid balance of
management fees. At August 1997, the entire balance of $28,097 was paid. The
company and Internal Medicine Clinic of Tangipahoa, Inc. terminated their
management relationship in August 1996, and have no other arrangements with
respect to management of physician practices or independent practice
associations.

In accordance with the terms of the Agreements, Internal Medicine Clinic of
Tangipahoa, Inc. has the right and option to sell its shares of Common
Stock.

(6) Includes 13,000 shares underlying OptionsAPS back to APS
at a price equal to 3.5 times the earnings per share of APS attributable to each
share of APS stock, to be calculated based on the largest annual earnings per
share amount during the three-year period prior to the time such repurchase is
requested by Internal Medicine Clinic of Tangipahoa, Inc. This option became
exercisable in March 1997, and 1,000 shares underlying a
Warrant.

DESCRIPTION OF SECURITIES

The following summary descriptiondoes not have an expiration date. In the
agreements, the company agreed to loan the funds to repurchase the stock to APS,
if necessary. In addition, the agreements provide that in the event the
management agreement between Internal Medicine Clinic of Tangipahoa, Inc. and
APS is terminated, Internal Medicine Clinic of Tangipahoa, Inc. shall be
required to repurchase all of the Company's securitiesassets of Internal Medicine Clinic of
Tangipahoa, Inc. acquired by APS at fair market value within 45 days of such
termination. At this time, the option has not been exercised by Internal
Medicine Clinic of Tangipahoa, Inc. The company has been reformulating its
business to emphasize three divisions: infusion therapy services, ambulatory
surgery centers and home health nursing services. In light of these changes, APS
has become a diminished portion of the company's business and constitutes less
than 5% of the company's operations. Accordingly, the exercise of the company's
repurchase right has not been a top priority of management. The company intends
to exercise its right to have Internal Medicine Clinic of Tangipahoa, Inc.
repurchase the assets acquired by APS, and is qualifiedcurrently in negotiations with
Internal Medicine Clinic of Tangipahoa, Inc. to determine the fair market value
of the assets. Management believes the fair market value of the assets will be
no more than $50,000.

Notes payable to related parties in 1996 consisted primarily of a note
issued in 1994 in the original amount of $1,080,000, bearing interest at 9% with
a fifteen year amortization, to Vista Maple, Ltd. During 1994, prior to its
entiretyacquisition by referencethe company, Amedisys Surgery Centers, L.C. purchased a building
and land from Vista Maple, Ltd., a real estate partnership, whose owners were
also owners of Amedisys Surgery Centers, L.C., and are now stockholders of the
company. The company currently has a 15% interest in Vista Maple, Ltd. The note
was refinanced under a five year installment note in June 1997 with Merrill
Lynch in the amount of $973,000. The principal monthly payment is $5,403 and the
interest rate is the 30-day commercial paper rate plus 2.75%, with a balloon
payment of $648,401. The remaining balance of notes payable to related parties
($45,000) consists of unsecured notes to certain stockholders of the company
that are due on demand and bear interest at rates from 0%-12%. The fair value of
these notes approximates the recorded balance due to the short-term nature of
the notes.

INDEX TO FINANCIAL STATEMENTS

AMEDISYS, INC.

For the Six Months Ended June 30, 1998

Consolidated Balance Sheets...................................... F-2
Consolidated Statements of Operations............................ F-3
Consolidated Statements of Cash Flows............................ F-4
Notes to Consolidated Financial Statements....................... F-5

Fiscal Year Ended December 31, 1997

Independent Auditor's Report..................................... F-11
Consolidated Balance Sheets...................................... F-12
Consolidated Statements of Operations............................ F-13
Consolidated Statement of Stockholders' Equity................... F-14
Consolidated Statements of Cash Flows............................ F-15
Notes to Financial Statements.................................... F-17

F-1

AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED, IN 000'S)

ASSETS JUNE 30, DECEMBER 31,
1998 1997

CURRENT ASSETS:
Cash $ 471 $ 4,070
Accounts Receivable, Net of Allowance for Doubtful
Accounts of $2,957 in June 1998 and $1,617 in
December 1997 4,292 9,630
Prepaid Expenses 891 247
Other Current Assets 4,004 654
------- ------
Total Current Assets 9,658 14,601

Notes Receivable from Related Parties 224 252

Property, Plant and Equipment, Net 6,056 4,785

Other Assets, Net 12,374 3,232
------- ------
Total Assets $ 28,312 $ 22,870
======= ======
LIABILITIES

CURRENT LIABILITIES:
Notes Payable $ 6,090 $ 5,806
Current Portion of Long-Term Debt 927 927
Accounts Payable 2,486 1,338
Accrued Expenses:
Payroll and Payroll Taxes 1,541 2,025
Insurance 1,020 521
Other 1,398 847
------- ------
Total Current Liabilities 13,462 11,464

Long-Term Debt 4,948 3,129
Other Long-Term Liabilities 1,136 0
------- ------
Total Liabilities 19,546 14,593
------- ------
Minority Interest 3 3
------- ------
STOCKHOLDERS' EQUITY

Common Stock 3 3
Preferred Stock 1 1
Additional paid-in capital 12,006 7,092
Treasury Stock (25) (25)
Stock Subscriptions Receivable (1) 0
Retained Earnings (deficit) (3,221) 1,203
------- ------
Total Stockholders' Equity 8,763 8,274
------- ------
Total Liabilities and Stockholders' Equity $ 28,312 $ 22,870
======= ======

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-2

Amedisys, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six months ended June 30, 1998 and 1997
(Unaudited, in 000's except per share data)

THREE MONTHS ENDED SIX MONTHS ENDED
--------------------- ------------------
JUNE 98 JUNE 97 JUNE 98 JUNE 97

Income:
Service revenue $ 11,765 $ 13,880 $ 24,475 $ 27,264
Cost of service revenue 6,652 8,094 14,319 15,973
------- ------- ------- -------
Gross margin 5,113 5,786 10,156 11,291
------- ------- ------- -------
General and administrative expenses:
Salaries and benefits 4,151 2,763 9,389 5,497
Other 3,663 2,276 7,098 4,433
------- ------- ------- -------
Total general and administrative expenses 7,814 5,039 16,487 9,930
------- ------- ------- -------
Operating income (loss) (2,701) 747 (6,331) 1,361
------- ------- ------- -------
Other income and expense:
Interest income 9 15 21 18
Interest expense (215) (209) (418) (393)
Miscellaneous 17 58 25 76
------- ------- ------- -------
Total other income and expenses (189) (136) (372) (299)
------- ------- ------- -------
Income (loss) before income taxes and minority interest (2,890) 611 (6,703) 1,062

Provision (benefit) for estimated income taxes (987) 217 (2,279) 379
------- ------- ------- -------
Income (loss) before minority interest (1,903) 394 (4,424) 683

Minority interest in consolidated subsidiary 0 (21) 0 (9)
------- ------- ------- -------
Net income (loss) $ (1,903) $ 373 $ (4,424) $ 674
======= ======= ======= =======
Basic earnings (losses) per common share $ (0.62) $ 0.14 $ (1.45) $ 0.26
======= ======= ======= =======
Weighted average common shares outstanding 3,064 2,697 3,057 2,639
======= ======= ======= =======

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-3

AMEDISYS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED, IN 000'S)

JUNE 1998 JUNE 1997

CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $ (4,424) $ 674
ADJUSTMENTS TO RECONCILE NET INCOME TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 870 581
PROVISION FOR BAD DEBTS 415 425
MINORITY INTEREST IN AFFILIATED COMPANY 0 9
(GAIN) LOSS ON DISPOSAL OF PROPERTY AND EQUIPMENT 4 (13)
LOSS ON SALE OF MARKETABLE SECURITIES 0 3

CHANGES IN ASSETS AND LIABILTIES:
(INCREASE) DECREASE IN ACCOUNTS RECEIVABLE 3,919 (974)
(INCREASE) IN PREPAID EXPENSES (644) (189)
(INCREASE) IN OTHER CURRENT ASSETS (3,217) (3)
(INCREASE) IN OTHER ASSETS (198) (391)
INCREASE (DECREASE) IN ACCOUNTS PAYABLE 170 (603)
INCREASE (DECREASE) IN ACCRUED EXPENSES (515) 723
--------- --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (3,620) 242
--------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
PURCHASE OF FURNITURE, FIXTURES & EQUIPMENT (1,625) (754)
PROCEEDS FROM SALE OF FURNITURE, FIXTURES & EQUIPMENT 0 56
CASH PAID FOR ACQUISITIONS (2,005) 0
(INCREASE) DECREASE IN NOTES RECEIVABLE FROM RELATED PARTIES 28 (5)
--------- --------
NET CASH (USED IN) INVESTING ACTIVITIES (3,602) (703)
--------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
PURCHASE OF TREASURY STOCK 0 (25)
CASH RECEIVED IN ACQUISITIONS 317 0
NET INCREASE IN BORROWINGS ON LINE OF CREDIT 284 672
PAYMENTS ON NOTES PAYABLE (704) (377)
PROCEEDS FROM NOTES PAYABLE 473 1,704
INCREASE (DECREASE) IN NOTES PAYABLE TO RELATED PARTIES 0 (988)
PROCEEDS FROM COMMON STOCK 0 831
DECREASE IN STOCK SUBSCRIPTIONS 0 1
PROCEEDS FROM PREFERRED STOCK 3,253 0
--------- --------
NET CASH PROVIDED BY FINANCING ACTIVITIES 3,623 1,818
--------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,599) 1,357

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,070 1,104
--------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 471 $ 2,461
========= ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
CASH PAYMENTS FOR:
INTEREST $ 426 $ 360
========= ========
INCOME TAXES $ 151 $ 22
========= ========
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITY (SEE NOTE 9 TO FINANCIAL STATEMENTS):
VALUE OF STOCK ISSUED IN EXCHANGE $ 894
VALUE OF NOTE PAYABLE ISSUED IN EXCHANGE 1,575
CASH ACQUIRED IN EXCHANGE (317)
WORKING CAPITAL DEFICIT ACQUIRED NET OF CASH AND CASH EQUIVALENTS 3,553
FAIR VALUE OF PROPERTY, PLANT AND EQUIPMENT ACQUIRED (385)
FAIR VALUE OF OTHER ASSETS ACQUIRED (27)
LONG TERM DEBT ASSUMED 3,069
FAIR VALUE OF OTHER LIABILTIES ASSUMED 54
---------
NON CASH PORTION OF ACQUISITIONS 8,416
CASH PAYMENT FOR ACQUISITIONS 2,005
---------
GOODWILL RECORDED IN EXCHANGE $ 10,421
=========

SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.

F-4

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. UNAUDITED FINANCIAL INFORMATION

The financial information as of June 30, 1998 and 1997, included herein is
unaudited; however, such information reflects, in the opinion of management, all
adjustments (consisting solely of normal recurring adjustments) that are
necessary to present fairly the results of operations for such periods. Results
of operations for the interim periods are not necessarily indicative of results
of operations which will be realized for the year ending December 31, 1998.
These interim consolidated financial statements should be read in conjunction
with the Company's Certificateannual financial statements and related notes in the
Company's Form 10-K.

2. EARNINGS PER SHARE

In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of IncorporationFinancial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share (EPS). The
Company adopted SFAS No. 128 in the fourth quarter of 1997. SFAS No. 128
requires the restatement of prior years' EPS data; however, application of the
statement has no impact on the Company's prior years' EPS data.

Basic net income per share of common stock is calculated by dividing net
income applicable to common stock by the weighted-average number of common
shares outstanding during the year. Diluted net income per share is not
presented as stock options and convertible securities outstanding during the
periods presented were not dilutive.

3. RECENT ACCOUNTING PRONOUNCEMENTS

Accounting for Start-up Costs. During April 1998, the Accounting Standards
Executive Committee of the AICPA issued Statement of Position 98-5 ("SOP"),
"Reporting on the Costs of Start-Up Activities." The SOP requires costs of
start-up activities and organization costs to be expensed as incurred. The SOP
is effective for financial statements for fiscal years beginning after December
15, 1998. The Company elected to write off start-up costs in the fourth quarter
of 1997 in anticipation of the issuance of the SOP.

Accounting for Derivative Instruments and Hedging Activities. In June
1998, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative
Instruments and Hedging Activities". The Statement establishes accounting and
reporting standards requiring that every derivative instrument (including
certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its Bylaws, copiesfair value. The
Statement requires that changes in the derivative's fair value be recognized
currently in earnings unless specific hedge accounting criteria are met.
Special accounting for qualifying hedges allows a derivative's gains and losses
to offset related results on the hedged item in the income statement, and
requires that a company must formally document, designate, and assess the
effectiveness of whichtransactions that receive hedge accounting. SFAS 133 is
effective for fiscal years beginning after June 15, 1999 and must be applied to
instruments issued, acquired, or substantively modified after December 31, 1997.
The Company does not expect the adoption of the accounting pronouncement to have
been fileda material effect on its financial position or results of operations.

4. MEDICARE REIMBURSEMENT REDUCTIONS AND RELATED RESTRUCTURING

The Company derives approximately 40% of its revenues from the Medicare
system. In 1997, Congress approved the Balanced Budget Act of 1997 (the "Budget
Act"). The Budget Act established an interim payment system (the "IPS") that
provided for the lowering of reimbursement limits for home health visits. For
cost reporting periods beginning on or after October 1, 1997, Medicare-
reimbursed home health agencies will have their cost

F-5

limits determined as exhibitsthe lesser of (i) their actual costs, (ii) cost limits
based on 105% of median costs of freestanding home health agencies, or (iii) an
agency-specific per-patient cost limit, based on 98% of 1994 costs adjusted for
inflation. The new IPS cost limits will apply to the Registration StatementCompany for the cost
reporting period beginning January 1, 1998. On March 31, 1998, the government
released its final determination and definitions of the new IPS cost limits.
These changes in the reimbursement of home health agencies will result in a
significant impact on the profitability of these services. There is currently
proposed legislation that may alter the determination of the IPS cost limits.

IPS was implemented to position the home care industry for a Prospective
Payment System (PPS) which is to be implemented for cost reporting periods
beginning on or after October 1, 1999. Although PPS is not defined at this
Prospectus istime, it will take into consideration an appropriate unit of service and number
of visits within that unit, variations in the acuity of patients and the related
costs, and a part.

COMMON STOCKgeneral system design that provides for continued access to quality
services.

During the 1st quarter of 1998, the Company initiated a restructuring plan
which included cost reductions and productivity enhancements to position the
Company to be successful under the new IPS, as well as PPS. The Company reduced
operational cost, increased operational efficiencies and enhanced marketing
efforts, which should result in projected annualized cost savings of
approximately $5 million. The restructuring was substantially completed as of
June 30, 1998.

The implementation of IPS and the strategic decisions made by management
has resulted in a decrease to net revenues in the first and second quarters of
1998. The Company also expects to report losses in the third quarter of 1998
due to IPS.

As the home care industry faces changes in reimbursement structure,
Amedisys is authorizedcommitted to issue upimprove and streamline systems and take appropriate
actions to 10,000,000 sharescombat these changes and create a company focused on long-term
growth.

5. ACCRUED PAYROLL AND PAYROLL TAXES

The Company currently has an Employee Stock Ownership Plan ("ESOP")
relating to a subsidiary of Common
Stock,the Company. During the second quarter of 1998, the
Company issued stock in the subsidiary valued at $705,000 to the ESOP.

4. PLACEMENT OF PREFERRED STOCK

In March, 1998, Amedisys completed a secondary phase of its private
placement of $.001 par value convertible preferred stock pursuant to Regulation
D of the Securities Act of 1933. The Company issued an additional 350,000
shares at $10 per share for gross proceeds of $3.5 million. The Company has
used the proceeds of this placement to fund synergistic acquisitions within the
South East and South Central regions of the U.S. in order to accelerate the
growth of its fully integrated network of outpatient health care services
including the Alternate Site Infusion Therapy division. These shares are
convertible into 756,757 shares of common stock which is equivalent to $4.625
per share.

5. ACQUISITIONS

In January 1998, the Company acquired all of the stock of Alliance Home
Health, Inc. ("Alliance"), a home health care business with locations throughout
Oklahoma, in exchange for $300,000 and 194,286 shares of common stock. Of the
194,286 shares of Company common stock issued to the former owners of Alliance,
122,857 shares were placed in escrow as consideration for certain contingent
liabilities which may be asserted against the former stockholder of Alliance to
the extent such claims exceed $500,000 (singularly and/or in aggregate). The
contingent liabilities include any material misstatement or omission in any
representation or breach of any warranty, covenant or agreement of Alliance or
its stockholder, any Medicare liabilities, any liability from lawsuits or
arbitration, any payment to be made by Alliance pursuant to a previous
acquisition, or any liability specifically addressed in the

F-6

purchase document. The escrow period expires December 31, 2003. The majority
stockholder of Alliance entered into a three year employment agreement and two
year non-compete and non-solicitation agreement with the Company. The employment
agreement was terminated in March 1998. The non-compete and non-solicitation
agreement is for a period of two years after the termination of the employment
agreement. The non-compete and non-solicitation agreement provides that the
employee will not divert any business from the Company or compete in the
business area defined as the State of Oklahoma. This restricted activity is in
relation to home health agencies or infusion-related business. Additionally, the
non-compete and non-solicitation agreement provides that the employee will not
solicit employees or clients from the Company. A Form 8-K was filed on July 23,
1998 relating to this acquisition and includes audited financial statements for
Alliance Home Health, Inc. as well as proforma financial statements for the
Company and Alliance Home Health, Inc. consolidated.

In February 1998, the Company acquired all of the stock of PRN, Inc.
("PRN"), a home infusion pharmacy business located in San Antonio, Texas, in
exchange for $430,000 and the assumption of $71,000 in debt. The Company has
agreed to pay additional consideration of up to $150,000 should PRN have annual
net revenues of $625,000 for the next two years. This additional consideration
is to be paid quarterly for a period of two years, bearing interest at 9% from
the date of acquisition. The sellers, a key employee and his spouse, executed a
non-compete and non-solicitation agreement at the date of closing for a period
of two years within Bexar County Texas, which includes San Antonio, and any
counties contiguous thereto. The non-compete and non-solicitation agreement
provides that the sellers will not divert any business from the Company or
compete with the Company; as well as, not solicit any employees or clients of
the Company. This restricted activity is in relation to home infusion pharmacy
business. The Company has retained the right to offset certain indemnifiable
liabilities against the additional consideration.

In February 1998, the Company acquired all of the stock of Infusion Care
Solutions, Inc. ("ICS") a home health care and infusion business, based in Baton
Rouge, Louisiana, in exchange for aggregate consideration of $500,000, of which
2,583,864 shares are$375,000 was payable in cash at closing and $125,000 was payable pursuant to a
two year promissory note. The note bears interest at prime plus 1% with 24
equal monthly payments. The sole stockholder executed a non-compete and non-
solicitation agreement at closing for a period of two years from the date of the
exchange. The business area is defined as the Parishes of East Baton Rouge,
Assumption, West Baton Rouge, Livingston, and Ascension in the State of
Louisiana. The non-compete and non-solicitation agreement provides that the
sole stockholder will not divert any business from the Company or compete with
the Company, as well as, not solicit any employees or clients of the Company.
The restricted business activity is in relation to any infusion or pharmacy
business unless such business is related to nursing home patients or assisted
living patients. The Company has retained the right to offset certain
indemnifiable liabilities against the sums payable pursuant to the promissory
note.

In February 1998, the Company acquired substantially all of the assets of
Precision Health Systems, L.L.C. ("PHS") a home health care and infusion
business, based in Baton Rouge, Louisiana, in exchange for aggregate
consideration of $1,000,000, of which $750,000 was payable in cash at closing
and $250,000 is payable pursuant to a two year promissory note. The note bears
interest at 9.5% with equal payments due monthly. The Company has retained the
right to offset certain indemnifiable liabilities against the sums payable
pursuant to the promissory note. The majority stockholder of PHS entered into a
two year non-competition and non-solicitation agreement and a two year
consulting agreement with the Company. The non-compete and non-solicitation
agreement provides that the sole stockholder will not divert any business from
the Company or compete with the Company; as well as, not solicit any employees
or clients of the Company. The business area is defined as the Parishes of East
Baton Rouge, Assumption, West Baton Rouge, Livingston, and Ascension in the
State of Louisiana. The restricted business is in relation to any infusion or
pharmacy business unless such business is related to nursing home patients or
assisted living patients. The consulting agreement is in the amount of $50,000
per year, payable in equal monthly increments. The majority stockholder is to
assist the Company in developing referral sources and retain current referral
sources.

F-7

In March 1998, the Company acquired certain assets and no liabilities,
contingent or certain, prior to the closing date, of StaffCor Staffing Services,
L.L.C. (StaffCor) in exchange for $30,000 cash and $20,000 in additional
consideration payable quarterly over two years, without interest. This
additional consideration is to be paid prorata based on net income of StaffCor
without any adverse changes due to purchaser's corporate headquarters expense,
additional capital expenditures or materially increased operating expense. The
assets acquired were a minimal amount of furniture and fixtures, the right to
the StaffCor Staffing Service name, and contracts to provide medical staffing to
hospitals and other health care providers. The seller entered into a two year
non-competition and non-solicitation agreement with the Company. The non-
compete and non-solicitation agreement is for the business area of Oklahoma,
Grady and Logan Counties in the State of Oklahoma relative to any supplemental
staffing business. The non-compete and non-solicitation agreement provides that
the sole stockholder will not divert any business from the Company or compete
with the Company; as well as, not solicit any employees or clients of the
Company. StaffCor is a medical staffing business located in Oklahoma City,
Oklahoma.

In April 1998, the Company acquired all of the stock of Home Health of
Alexandria, Inc., d/b/a Cornerstone Home Health (Cornerstone), a closely held
entity, in exchange for $20,000 cash. With this acquisition, the Company will
have home health agencies serving all the major metropolitan areas in Louisiana.
A key employee and former stockholder executed an employment agreement with the
Company for a two year period; along with a non-compete and non-solicitation
agreement. The non-compete and non-solicitation agreement provides that the key
employee will not divert any business from the Company or compete with the
Company; as well as, not solicit any employees or clients of the Company. The
business area covered by the non-compete and non-solicitation agreement is for
the Parishes of Allen, Avoyelles, Caldwell, Catahoula, Concordia, Evangeline,
Grant, LaSalle, Natchitoches, Rapides, St. Landry, and Winn and is relative to
home health agencies. The agreement is for a two year period after the key
employee is no longer employed by the Company. Cornerstone is a state
licensed, Medicare certified, JCAHO accredited home health agency in Alexandria,
Louisiana.

In April 1998, the Company acquired all of the stock of Quality Home
Health Care, Inc. (Quality), of Stilwell, Oklahoma. In exchange, the Company
paid $80,000 and issued and
outstanding. An aggregate of 50,1504,897 shares of CommonCompany common stock are reservedworth $20,000. A
key employee and former stockholder executed an employment agreement for issuance upon exercisetwo
years in conjunction with a non-compete and non-solicitation agreement for a
period of outstanding Options; 103,721 shares are reserved for
issuance upon exercise of outstanding Warrants;two years after employment with the Company is terminated. The non-
compete and 150,000 shares are reserved
for issuance pursuant to this Prospectus. The holders of Common Stock are
entitled to one vote for each share held of record on each matter submitted to a
votenon-solicitation agreement provides that the key employee will not
divert any business from the Company or compete with the Company; as well as,
not solicit any employees or clients of the stockholders, includingCompany. The business area covered
by the electionnon-compete and non-solicitation agreement is for the Counties of directors. ThereAdair,
Cherokee, Delaware, Haskell, Leflore, Mayes, McIntosh, Muskogee, Sequoyah, and
Wagoner in the State of Oklahoma and is no
cumulative votingrelative to home health agencies.
Quality is a state licensed, Medicare certified home health agency with respectthree
locations serving eastern Oklahoma.

In April 1998, the Company acquired certain assets of Precision Home
Health Care, Inc., (Precision) in exchange for $1,250,000; consisting of an
$800,000 note payable at 9.5% due July 1, 1998, a $400,000 note payable at 9.5%
payable monthly for a period of two years, and $50,000 in liabilities for
capital improvements. The $800,000 note payable has subsequently been extended
to October 1, 1998. The assets acquired were furniture and fixtures, inventory,
rights to use the Precision business name, current patients, and leasehold
interests. At closing the sole stockholder (who was also the majority
stockholder in the February 1998 ICS and PHS acquisitions) executed a non-
compete and non-solicitation agreement. The sole stockholder entered into a two
year non-competition and non-solicitation agreement which provides that the sole
stockholder will not divert any business from the Company or compete with the
Company; as well as, not solicit any employees or clients of the Company. The
business area is defined as the Parishes of East Baton Rogue, Assumption, West
Baton Rouge, Livingston, and Ascension in the State of Louisiana. The
restricted business activity is in relation to any Medicare or Medicaid home
health care business unless such business is related to nursing home patients or
assisted living patients. Additionally, the stockholder executed a consulting
agreement with the Company to provided services related to patient advocation,
introduce the Company to referral sources, and advise and assist the Company
concerning Medicare regulations. The consulting agreement is for a period of
two years in the amount of $50,000, payable monthly. Precision is a state
licensed, Medicare certified home health agency operating in the Baton Rouge,
Louisiana area.

Each of the above transactions was accounted for as a purchase.

F-8

8. INCOME TAXES

The Company recorded a tax benefit of 34% of pre-tax loss at June 30, 1998,
as the Company anticipates carrying back taxable losses to previous years in
which the Company paid income taxes or generating taxable income in future
periods to offset the first and second quarter 1998 losses.

9. SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING ACTIVITY

The following unaudited table presents (in 000's) a summary of the
acquisitions completed during the first quarter of 1998 and a detail of the
acquisitions completed during the second quarter of 1998 as presented in the
supplemental schedule to the electionconsolidated cash flow statement.

Precision Quality Home
1st Quarter Home Home Health of
1998 Health, Health, Alexandria
Total Inc. Inc. Inc. Total
-------------- ----------- --------- ------------ -----------

Supplemental schedule of non-cash investing activity:
Value of stock issued in exchange $ 874 $ 0 $ 20 $ 0 $ 894

Value of note payable issued in exchange 375 1,200 0 0 1,575

Cash acquired in exchange (123) (0) (132) (62) (317)

Working capital deficit acquired net of cash and cash
equivalents 3,272 0 306 (25) 3,553
Fair value of property, plant and equipment acquired (279) (102) 3 1 (385)

Fair value of other assets acquired (26) (0) 1 0 (27)

Long term debt assumed 2,998 0 2 69 3,069
Fair value of other liabilities assumed 54 0 0 0 54
------ ------- ----- ---- -------
Non cash portion of acquisitions 7,146 1,098 192 (20) 8,416
Cash payment for acquisition 1,905 0 80 20 2,005
------ ------- ----- ---- -------
Goodwill recorded in exchange $9,051 $ 1,098 $ 272 $ 0 $10,421
------ ------- ----- ---- -------

10. NOTES PAYABLE

Notes payable consist primarily of directors. Subjectborrowings under revolving bank lines of
credit of $7,500,000 and $750,000, bearing interest at bank prime plus 1.5% and
bank prime plus 1%, respectively. The lines of credit are collateralized by
80% of eligible receivables in staffing and outpatient surgery, 75% of eligible
receivables in home health care, and 80% of physician notes receivable.
Eligible receivables are defined principally as accounts that are aged less
than 90 days for staffing and outpatient surgery and 120 days for home health
care. At June 30, 1998, approximately $109,000 was available based on eligible
receivables under the combined lines of credit. The line of credit is subject to
certain covenants, including a monthly borrowing base, a debt service coverage
ratio, and a leverage ratio. At December 31, 1997, March 31, 1998, and June 30,
1998, the Company was in default on the debt service coverage ratio requirement
of 1.1 : 1.0 due to the prior rightslosses incurred in these periods. This default was
waived by the bank through June 30, 1998.

11. OTHER CURRENT ASSETS

Included in Other Current Assets at June 30, 1998 is a deferred tax asset
of any series$2,279,000 resulting from the first and second quarter 1998 losses. The
Company anticipates carrying back taxable losses to previous years in which the
Company paid income taxes or generating taxable income in future periods to
offset the first and second quarter 1998 losses.

12. ACCOUNTS RECEIVABLE

Included in Accounts Receivable at June 30, 1998 is an accrual of
Preferred Stock which may from time$2,600,000 for estimated Medicare reimbursement rate reductions for 1998 cost
reporting years related to time be
outstanding, if any, holdersthe Home Health Nursing division.

F-9

13. RECENT DEVELOPMENTS

On June 2, 1998, the Company signed a letter of Common Stock are entitledintent to receive ratably
such dividends as may be declaredpurchase a
portion of Columbia/HCA homecare operations subject to satisfactory completion
of due diligence and approval by the Board of Directors out of funds legally
available therefor. Uponboth companies. The
homecare operations covered by the liquidation, dissolution or windingletter of intent are located in the states of
Alabama, Georgia, Louisiana, North Carolina, Oklahoma, and Tennessee and may
include up of the
Company, holders of the Common Stock are entitled to share ratably in all assets
remaining after payment of liabilities116 offices and payment of accrued dividends and
liquidation preferences on the Preferred Stock, if any. Holders of Common Stock
have no preemptive rights and have no rights to convert their Common Stock into
any other securities.

PREFERRED STOCK50 Medicare provider numbers. The Company is
authorizedcurrently conducting due diligence and negotiating with investment banks to
issue up to 2,500,000 shares of Preferred
Stock, $.001 par value per share. The Preferred Stock may be issued in one or
more series, the terms of which may be determined at the time of issuance by the
Board of Directors, without further action by stockholders, and may include
voting rights (including the right to vote as a series on particular matters),
preferences as to dividends and liquidation, conversion and redemption rights
and sinking fund provisions.

No shares of Preferred Stock are outstanding, and the Company has no
present plansobtain financing for the issuance thereof. The issuance of any such Preferred Stock
could adversely affect the rights of the holders of Common Stock, and,
therefore, reduce the value of the Common Stock.

WARRANTS

In August 1993, the Company issued warrants to purchase 25,000 shares
to Carnegie Investor Services in connection with its initial public offering.
These warrants are exercisable at a price of $7.20 per share and expire in April
1998. In January 1996, a portion of the warrant was exercised and 1,000 shares
were issued. The resale of these shares, as well as the remaining 24,000 shares
underlying the warrant is being registered hereby.

In March 1994, the Company issued warrants to purchase an aggregate of
29,721 shares in connection with a private placement. These warrants are
exercisable at a price of $9.25 per share and expire in March 1997.

In March 1996, the Company entered into an agreement with I.W. Miller &
Co., Inc. ("Miller") for consulting services. Pursuant to such agreement, the
Company agreed to issue warrants to purchase an aggregate of 50,000 shares of
Company Common Stock to Miller in consideration of Miller's services. These
warrants, when issued, will be exercisable for $8 per share as to 25,000 shares
and $9 per share as to 25,000 shares. These warrants will vest immediately upon
issuance and will expire in March 1998. The resale of the shares underlying
these warrants is being registered hereby.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.

LIMITATION OF DIRECTORS' LIABILITY

The Company's Certificate of Incorporation eliminates, subject to
certain exceptions, the personal liability of directors of the Company or its
stockholders for monetary damages for breaches of fiduciary duty by such
directors. The Certificate of Incorporation does not provide for the elimination
of or any limitation on the personal liability of a director for (i) any breach
of the director's duty of loyalty to the Company or its stockholders, (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) unlawful corporate distributions, or (iv) any
transaction from which such director derives an improper personal benefit. This
provision of the Certificate of Incorporation will limit the remedies available
to the stockholder who is dissatisfied with a decision of the Board of Directors
protected by this provision; such stockholder's only remedy may be to bring a
suit to prevent the action of the Board. This remedy may not be effective in
many situations, because stockholders are often unaware of a transaction or an
event prior to Board action in respect of such transaction or event. In these
cases, the stockholders and the Company could be injured by a Board's decision
and have no effective remedy.

DELAWARE ANTI-TAKEOVER LAW

The Company is subject to Section 203 of The Delaware General
Corporation Law ("Section 203"), which, subject to certain exceptions, prohibits
a Delaware corporation from engaging in any business combinations with any
interested stockholder for a period of three years following the date that such
stockholder became an interested stockholder, unless (i) before such date the
Board of Directors of the Company approved either the business combination or
the transaction that resulted in the stockholder becoming an interested
stockholder, (ii) upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the Company outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares that are owned (x) by persons who are directors
and also officers and (y) by employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject to
the plan will be tendered in a tender or exchange offer, or (iii) on or after
such date the business combination is approved by the Board of Directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66-2/3% of the outstanding voting
stock which is not owned by the interested stockholder.

Section 203 defines "combination" to include (i) any merger or
consolidation involving the corporation and the interested stockholder, (ii) any
sale, lease, exchange, mortgage, transfer, pledge or other disposition involving
the interested stockholder of 10% or more of assets of the Company, (iii)
subject to certain exceptions, any transaction that results in the issuance or
transfer by the Company of any stock of the Company to the interested
stockholder, (iv) any transaction involving the Company that has the effect of
increasing the proportionate share of the stock of any class or series of the
Company beneficially owned by the interested stockholder, or (v) the receipt by
the interested stockholder of the benefit of any loans, advances guarantees,
pledges or other financial benefits provided by or through the Company. In
general, Section 203 defines an "interested stockholder" as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the Company
and any entity or person affiliated with or controlling or controlled by such an
entity or person.

PLAN OF DISTRIBUTION AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
resale of Common Stock by the Selling Shareholders.

SHARES SHARES
BENEFICIALLY BENEFICIALLY
OWNED PRIOR AMOUNT OWNED AFTER
NAME TO RESALE OFFERED RESALE PERCENTAGE(1)
----- --------- ------- ------ -------------

William F. Borne(2) .................................. 438,391(3) 3,250 435,141 15.9

Boris L. Payan, M.D.(2) .............................. 230,893(4) 30,134 200,759 7.3

R.E. Hearn, M.D.(2) .................................. 230,893(4)(5) 100,893(5) 30,000 1.1

Jose R. Reyes, M.D.(2) ............................... 204,007(4) 26,101 177,906 6.5

Phoenix Anesthesia, EPSP ............................. 100,000 100,000(6) -- --

Doris Montoya ........................................ 56,000 8,400 47,600 1.7

Steven Fein, M.D ..................................... 50,000 7,500 42,500 *

I.W. Miller & Co., Inc. .............................. 50,000(7) 50,000 -- --

Lynne S. Bernhard (2) ................................ 43,450(8) 3,250 40,200 1.5

S.F. Hartley, D.P.M .................................. 40,000 6,000 34,000 1.2

Eric H. Scheffey, M.D ................................ 39,744 5,961 33,783 1.2

R.P. & H, Inc. ....................................... 30,000 4,500 25,500 *

Donald C. Stran, D.P.M ............................... 30,000 4,500 25,500 *

Irvin T. Gregory (2) ................................. 26,411 3,962 22,449 *

Ariston P. Awitan, M.D ............................... 25,000 3,750 21,250 *

Gerald Brown, M.D .................................... 20,000 3,000 17,000 *

Mark Sands, D.P.M .................................... 20,000 3,000 17,000 *

Surgical Enterprises, L.C ............................ 20,000 3,000 17,000 *

Wayne Mulloy, Trustee ................................ 19,230 2,884 16,346 *

Jorge Cuza, D.P.M .................................... 16,411 2,462 13,949 *

Mitchel G. Morel(2) .................................. 12,875(8) 3,250 9,625 *

Carnegie Investor Services ........................... 12,500(9) 12,500 -- --

David Kaplan ......................................... 11,500(9) 11,500 -- --

Coastal Surgical Group, L.C .......................... 10,000 1,500 8,500 *

Jeffrey C. Tanenbaum, D.P.M .......................... 6,411 962 5,449 *

Zach Gerger, M.D ..................................... 5,000(10) 5,000 -- --

Scott McKinney, D.P.M ................................ 5,000(10) 5,000 -- --

Jorge Rodriquez, M.D ................................. 5,000(10) 5,000 -- --

Edward Wade, M.D ..................................... 5,000 750 4,250 *

Bruce R. Weiner, M.D ................................. 5,000 750 4,250 *

Barbara C. Carey (2) ................................. 4,625(8) 3,250 1,375 *

Randal M. Lepow, D.P.M ............................... 2,500 375 2,125 *

Michael G. Tucker, M.D ............................... 2,500 375 2,125 *

Jose R. Reyes, Jr., M.D .............................. 2,500(11) 2,500 -- --

Joseph Toothaker-Alvarez, M.D ........................ 2,500(11) 2,500 -- --

Floyd Hardimon, M.D .................................. 2,500(11) 2,500 -- --

Keith Barry .......................................... 1,000(12) 1,000 -- --

Landa H. Bernhard .................................... 3,250(8) 3,250 -- --

Cindy Doll ........................................... 500(13) 500 -- --

Michelle Wier ........................................ 500(13) 500 -- --

Stacey Westbrook ..................................... 500(13) 500 -- --

Peter Hartley ........................................ 500(13) 500 -- --

Wendy Williams ....................................... 500(13) 500 -- --

Shirley Foreman ...................................... 500(13) 500 -- --

Patty Bayhi .......................................... 500(13) 500 -- --

Kenneth Clement ...................................... 500(13) 500 -- --

Heather Luquette ..................................... 500(13) 500 -- --

Greg Stelly .......................................... 500(13) 500 -- --

Judith Coxe .......................................... 200(14) 200 -- --

Scott Reid ........................................... 200(14) 200 -- --

Elizabeth Lutzi ...................................... 200(14) 200 -- --

Brendas Delahoussaye ................................. 200(14) 200 -- --

Ann Broussard ........................................ 200(14) 200 -- --

Donna Fontenot ....................................... 200(14) 200 -- --

Christi Rogers ....................................... 200(14) 200 -- --

Liz Regard ........................................... 200(14) 200 -- --

Mike McCall .......................................... 200(14) 200 -- --

Theresa Boudreaux .................................... 200(14) 200 -- --

Alice Posseno ........................................ 200(14) 200 -- --

Marguerite Adams ..................................... 200(14) 200 -- --

Deborah Crumbley ..................................... 200(14) 200 -- --

Roy Holton ........................................... 200(14) 200 -- --

Milette Smiley ....................................... 200(14) 200 -- --

Susan Boyette ........................................ 200(14) 200 -- --

Darlene Stepp ........................................ 200(14) 200 -- --

Lynette Fontenot ..................................... 200(14) 200 -- --

Genie West ........................................... 200(14) 200 -- --

Melody Lane .......................................... 200(14) 200 -- --

Annette Patterson .................................... 200(14) 200 -- --

Lela Venable ......................................... 200(14) 200 -- --

Ann Thomas ........................................... 200(14) 200 -- --

Mary DiVincenti ...................................... 200(14) 200 -- --

Suzanne Burchfield ................................... 200(14) 200 -- --

Mona Landry .......................................... 200(14) 200 -- --

Vanessa Jenkins ...................................... 200(14) 200 -- --

Goldie LeBlanc ....................................... 200(14) 200 -- --

Martez Robinson ...................................... 200(14) 200 -- --

Bernardine Milton .................................... 200(14) 200 -- --

Sharon Ray ........................................... 200(14) 200 -- --

David Monic .......................................... 200(14) 200 -- --

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

(*) Less than one percent.

(1) Assumes the exercise of all outstanding Options and Warrants.

(2) See "Management -- Executive Officers and Directors" and "-- Certain
Transactions" for positions with the Company held by certain
stockholders and any material relationships and transactions within the
last three years between the Selling Stockholders and the Company.

(3) Does not include 38,500 shares held in trust for Mr. Borne's minor
children; does include 3,250 shares underlying an Option.

(4) Includes 30,000 shares owned of record by R.P.&H., Inc., an affiliate
of the shareholder.

(5) Includes 100,000 shares owned of record by Phoenix Anesthesia, EPSP, an
affiliate of the shareholder.

(6) Dr. Hearn has agreed to sell these shares to the Company. If the
Company does not buy these shares, Dr. Hearn has agreed to not sell
them to any third party without the Company's prior approval.

(7) Includes 50,000 shares underlying a Warrant

(8) Includes 3,250 shares underlying an Option.

(9 ) Includes 11,500 shares underlying a Warrant

(10) Includes 5,000 shares underlying an Option.

(11) Includes 2,500 shares underlying an Option.

(12) Includes 1,000 shares underlying a Warrant.

(13) Includes 500 shares underlying an Option.

(14) Includes 200 shares underlying an Option.

The Selling Stockholders may sell the Common Stock through
broker-dealers; through agents or directly to one or more purchasers. The
distribution of the Common Stock may be effected from time to time in one or
more transactions in the over-the-counter market or in transactions otherwise
than in the over-the-counter market. Any of

such transactions may be effected at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at negotiated prices
or at fixed prices. Any Selling Stockholder may effect such transactions by
selling the Common Stock to or through broker-dealers, and such broker-dealers
may receive compensation in the form of discounts, concessions or commissions
from the Selling Stockholders and/or commissions from purchasers of the Common
Stock for whom they may act as agent (which discounts, concessions or
commissions will not exceed those customary in the types of transactions
involved). The Selling Stockholders and any broker-dealers or agents that
participate in the distribution of the Common Stock might be deemed to be
underwriters, and any profit on the sale of the Common Stock by them and any
discounts, commissions or concessions received by any such broker-dealers or
agents might be deemed to be underwriting discounts and commissions under the
Act. The Company has not agreed to indemnify the Selling Stockholders against
liabilities under the Act.

The Company has agreed to bear all expenses (other than selling
discounts, concessions or commissions and certain other fees and expenses of
counsel and other advisers to the Selling Stockholders) in connection with the
registration and sale of the Common Stock being offered by the Selling
Stockholders. The Common Stock being offered hereby by the Selling Stockholders
has not been registered for sale under the securities laws of any state or
jurisdiction as of the date of this Prospectus. Brokers or dealers effecting
transactions in the Common Stock should confirm the registration thereof under
the securities law of the state in which such transactions occur, or the
existence of any exemption from registration. A current prospectus must be in
effect at the time of the sale of the shares of Common Stock to which this
Prospectus relates. Each Selling Stockholder or dealer effecting a transaction
in the registered securities, whether or not participating in a distribution, is
required to deliver a Prospectus. The shares to be issued by the Company will be
offered on a "best-effort, no-minimum" basis.

LEGAL MATTERS

The validity of the Common Stock to be offered hereby for the Selling
Stockholders will be passed upon by Brewer & Pritchard, P.C., Houston, Texas.

EXPERTS

The consolidated financial statements of the Company and its
subsidiaries included in this Prospectus and elsewhere in the Registration
Statement have been audited by Arthur Andersen LLP and Hannis T. Bourgeois &
Co., L.L.P., independent certified public accountants, as set forth in their
reports appearing elsewhere herein in reliance given upon the authority of those
firms as experts in accounting and auditing in giving said reports. The single
jointly signed auditor's report is considered to be the equivalent of two
separately signed auditor's reports. Thus, each firm represents that it has
complied with generally accepted auditing standards and is in a position that
would justify being the only signatory of the report.

AMEDISYS, INC. AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS

Report of Independent Public Accountants ................................. F-2
Consolidated Balance Sheets as of December 31, 1995 and 1994 ............. F-3
Consolidated Statements of Income for the Years Ended
December 31, 1995, 1994 and 1993 ......................................... F-4
Consolidated Statements of Stockholders' Equity for the Years Ended
December 31, 1995, 1994 and 1993 ......................................... F-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993 ......................................... F-6
Notes to Financial Statements ............................................ F-8

F-1operations.

F-10

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholders
of Amedisys, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Amedisys,
Inc. (a Delaware Corporation, formerly known as Analytical Nursing Management
Corporation) and Subsidiaries (the Company) as of December
31, 19951997 and 1994,1996, and the related consolidated statements of income,operations,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995.1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Amedisys,
Inc. and Subsidiaries as of December 31, 19951997 and 1994,1996, and the consolidated results of
their operations and their cash flows for each of the three years in the
period ended December 31, 1995,1997, in conformity with generally accepted
accounting principles.

As explained in Note 5 to the financial statements, effective January 1,
1997, the Company changed its method of accounting for start-up costs.

ARTHUR ANDERSEN LLP HANNIS T. BOURGEOIS & CO., LLP
MarchNew Orleans, Louisiana Baton Rouge, Louisiana

April 15, 1996

F-21998

F-11

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 19951997 AND 19941996

(IN 000'S EXCEPT SHARE DATA)

1995 1994
------------ -----------1997 1996
------- -------

CURRENT ASSETS:
Cash (Note 14) .......................................................................and cash equivalents.................................. $ 870,0044,070 $ 140,804103
Accounts receivable, net of allowance for doubtful accounts
of $258,670$1,617 in 19951997 and $277,845$732 in 1994 ........................................... 6,124,269 5,307,4331996........................ 9,630 8,271
Prepaid expenses ..................................................................... 432,930 185,823expenses........................................... 247 264
Income tax receivable (Note 9)............................. 118 74
Inventory and other current assets ................................................... 219,610 134,087
------------ -----------assets......................... 536 442
------- -------
Total current assets ......................................................... 7,646,813 5,768,147assets................................... 14,601 9,154
NOTES RECEIVABLE FROM RELATED PARTIES (Note 10) ......................................... 402,736 362,621.............. 252 190
OTHER INVESTMENTS (Note 4)................................... 399 456
PROPERTY, PLANT AND EQUIPMENT, netNET (Notes 3 and 7) ...................................... 2,449,468 2,449,685

ASSETS HELD FOR SALE, net (Note 4) ...................................................... 76,456 101,9408)........... 4,785 4,610
DEFERRED TAX ASSET (Note 9) ............................................................. 208,000 46,500.................................. 926 447
OTHER ASSETS, netNET (Note 5) .............................................................. 753,254 431,302
------------ -----------................................... 1,907 2,001
------- -------
Total assets ................................................................. $ 11,536,727 $ 9,160,195
============ ===========assets........................................... $22,870 $16,858
======= =======
CURRENT LIABILITIES:
Accounts payable .....................................................................payable........................................... $ 402,1401,338 $ 496,2131,416
Accrued expenses-expenses--
Payroll and payroll taxes .......................................................... 862,498 443,616taxes................................ 2,025 1,033
Insurance (Note 12) ............................................................... 483,155 70,301
Income taxes (Note 9) .............................................................. 287,987 39,993
Other .............................................................................. 616,869 359,738...................................... 521 643
Other.................................................... 847 883
Notes payable (Note 6) ............................................................... 2,456,971 1,674,468..................................... 5,806 4,379
Current portion of notes payable to related parties (Note
10) ........................ 90,711 286,221....................................................... 45 90
Current portion of long-term debt (Note 7) ........................................... 386,848 95,890................. 690 458
Current portion of obligations under capital leases (Note
8) ......................... 181,964 99,313
------------ -----------........................................................ 192 231
------- -------
Total current liabilities .................................................... 5,769,143 3,565,753liabilities.............................. 11,464 9,133
LONG-TERM DEBT (Note 7) ................................................................. 211,187 216,171...................................... 2,995 1,937
NOTES PAYABLE TO RELATED PARTIES (Note 10) .............................................. 987,924 1,028,457................... -- 943
OBLIGATIONS UNDER CAPITAL LEASES (Note 8) ............................................... 291,282 292,448
------------ -----------.................... 134 343
------- -------
Total liabilities ............................................................ 7,259,536 5,102,829
------------ -----------liabilities...................................... 14,593 12,356
------- -------
COMMITMENTS AND CONTINGENCIES (Notes 8, 12 and 14) ......................................15) -- --
------- -------
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES .......................................... 3,345 14,942
------------ -----------SUBSIDIARIES............... 3 188
------- -------
STOCKHOLDERS' EQUITY (Note 11):
Common stock ......................................................................... 2,584 2,547stock--$.001 par value; 10,000,000 shares
authorized; 2,850,067 and 2,576,191 shares outstanding in
1997 and 1996, respectively............................... 3 2
Preferred stock--$.001 par value; 2,500,000 shares
authorized and 400,000 shares outstanding in 1997......... 1 --
Additional paid-in capital ........................................................... 1,976,593 1,652,630capital................................. 7,092 1,916
Treasury stock--4,167 shares at $6.00 per share............ (25) --
Retained earnings .................................................................... 2,378,636 2,494,381earnings.......................................... 1,203 2,397
Stock subscriptions receivable ....................................................... (83,967) (107,134)
------------ -----------receivable............................. -- (1)
------- -------
Total stockholders' equity ................................................... 4,273,846 4,042,424
------------ -----------equity............................. 8,274 4,314
------- -------
Total liabilities minority interest, and stockholders' equity ............... $ 11,536,727 $ 9,160,195
============ ===========equity............. $22,870 $16,858
======= =======

The accompanying notes are an integral part of these statements.

F-3F-12

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOMEOPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

1994 AND 1993(IN 000'S EXCEPT SHARE DATA)

1997 1996 1995
1994 1993
------------ ------------ ---------------------- ---------- ----------

INCOME:
Net service revenues ..........................................revenues..................... $ 37,589,08854,496 $ 28,902,21946,060 $ 22,445,02637,589
Cost of service revenues ...................................... 22,424,192 16,996,011 14,673,624
------------ ------------ ------------revenues................. 30,641 26,405 22,424
---------- ---------- ----------
Operating revenues .................................... 15,164,896 11,906,208 7,771,402
------------ ------------ ------------revenues..................... 23,855 19,655 15,165
---------- ---------- ----------
GENERAL AND ADMINISTRATIVE EXPENSES:
Salaries and benefits ......................................... 6,732,356 4,863,770 3,667,373benefits.................... 12,651 10,327 6,732
Other ......................................................... 7,052,610 4,875,985 3,537,030
------------ ------------ ------------(Notes 2 and 5).................... 11,792 8,184 7,053
---------- ---------- ----------
Total general and administrative
expenses ............. 13,784,966 9,739,755 7,204,403
------------ ------------ ------------expenses.............................. 24,443 18,511 13,785
---------- ---------- ----------
Operating income ...................................... 1,379,930 2,166,453 566,999
------------ ------------ ------------income....................... (588) 1,144 1,380
---------- ---------- ----------
OTHER INCOME (EXPENSE):
Interest expense .............................................. (409,763) (270,764) (147,880)expense......................... (870) (579) (410)
Interest income ............................................... 71,969 66,510 53,405
Loss on investment in unconsolidated subsidiaryincome.......................... 31 43 72
Write-off of investments (Note 10) ...................................................4)........ -- (122,699)(623) --
Miscellaneous ................................................. 87,686 93,870 61,844
------------ ------------ ------------Miscellaneous............................ (123) (19) 88
---------- ---------- ----------
Total other income (expense) .......................... (250,108) (233,083) (32,631)
------------ ------------ ------------expense.................... (962) (1,178) (250)
---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES, AND
MINORITY
INTEREST ............................................. 1,129,822 1,933,370 534,368AND CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE................... (1,550) (34) 1,130
INCOME TAX EXPENSE (BENEFIT) (Note 9) ...................................... 199,636 13,393 39,495
------------ ------------ ------------...... (382) 3 200
---------- ---------- ----------
Income (loss)before minority interest in
net income of consolidated subsidiary .................. 930,186 1,919,977 494,873subsidiaries
and cumulative effect of a change in
accounting principle...................... (1,168) (37) 930
MINORITY INTEREST IN (INCOME) LOSS OF
CONSOLIDATED SUBSIDIARIES ..................................... 11,597 (14,942) --
------------ ------------ ------------SUBSIDIARIES................. 209 55 12
---------- ---------- ----------
Net income ..................................................(loss) before cumulative
effect of change in accounting
principle............................. (959) 18 942
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE (Note 5)........................ (235) -- --
---------- ---------- ----------
Net income (loss)...................... $ 941,783(1,194) $ 1,905,03518 $ 494,873
============ ============ ============942
---------- ---------- ----------
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING. 2,735,000 2,575,000 2,570,000
---------- ---------- ----------
EARNINGS (LOSS) PER COMMON SHARE (Notes 1
and 2) ........................:
Income (loss) before cumulative effect of
change in accounting principle.......... $ (0.35) $ 0.01 $ 0.37
Cumulative effect of change in accounting
principle............................... (0.08) -- --
---------- ---------- ----------
Net income (loss)...................... $ 0.75(0.43) $ 0.22
============ ============ ============
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING ................................................... 2,569,927 2,525,390 2,285,097
============ ============ ============
PROFORMA0.01 $ 0.37
========== ========== ==========
PRO FORMA INFORMATION (unaudited)(UNAUDITED): (Note 2)
NetHistorical net income (historical) .......................................(loss)............. $ 941,783(1,194) $ 1,905,03518 $ 494,873
Proforma adjustments-
Income942
Pro forma adjustments--Income taxes on
Surgicare results ........................... 190,760 645,682 154,950
------------ ------------ ------------
Proformaresults....................... -- -- 191
---------- ---------- ----------
Pro forma net income ...........................................(loss).............. $ 751,023(1,194) $ 1,259,35318 $ 339,923
============ ============ ============
Proforma earnings per common share ............................751
========== ========== ==========
PRO FORMA EARNINGS (LOSS) PER COMMON SHARE. $ (0.43) $ 0.01 $ 0.29
$ 0.50 $ 0.15
============ ============ ====================== ========== ==========

The accompanying notes are an integral part of these statements.

F-4F-13

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

1994 AND 1993(IN 000'S, EXCEPT SHARE DATA)

PREFERRED
COMMON STOCK STOCK ADDITIONAL STOCK TOTAL
------------------------------------ -------------- PAID-IN RETAINED SUBSCRIPTIONS TREASURY STOCKHOLDERS'
SHARES AMOUNT SHARES AMOUNT CAPITAL EARNINGS RECEIVABLE STOCK EQUITY
--------- ------ ------- ----------- ----------- --------- ----------------- ---------- -------- ------------- -------- -------------

BALANCE, December 31,
1992 ......................... 2,074,6491994................... 2,546,721 $ 3,575 $ 3,925 $ 2,369,2262 -- -- $1,653 $2,494 $(107) $ -- $ 2,376,726

Public offering (Note 11) ....................... 250,000 250 1,499,750 -- -- 1,500,000
Public offering costs ........................... -- -- (283,853) -- -- (283,853)
Issuance of stock ............................... 351 -- 37,053 -- -- 37,053
Equity adjustment from purchase of ANMC stock ... 175,000 (1,325) 6,195 (4,870) -- --
Pooled acquisition-distribution to previous
owners (Note 2) ............................... -- -- -- (54,000) -- (54,000)
Net income ...................................... -- -- -- 494,873 -- 494,873
--------- ------- ----------- ----------- --------- -----------
BALANCE, December 31, 1993 ......................... 2,500,000 2,500 1,263,070 2,805,229 -- 4,070,799

Private placement stock offering (Note 11) ...... 29,721 30 233,577 -- (122,015) 111,592
Payments received on stock subscriptions ........ -- -- -- -- 14,881 14,8814,042
Issuance of stock for
acquisitions (Note 2) ..... 15,800 16 149,984. 37,143 1 -- -- 150,000324 -- -- -- 325
Pooled acquisition--
distributions to
owners (Note 2)....... -- -- -- -- -- (1,057) -- -- (1,057)
Payments received on
stock subscriptions... -- -- -- -- -- -- 23 -- 23
Net income............. -- -- -- -- -- 942 -- -- 942
--------- --- ------- --- ------ ------ ----- ---- -------
BALANCE, December 31,
1995................... 2,583,864 3 -- -- 1,977 2,379 (84) -- 4,275
Issuance of stock in
connection with
stock
optionwarrants (Note 11) .............................. 1,200 1 5,999 -- -- 6,000
Pooled acquisition:
Distributions to previous owners .................. 1,190 -- -- -- (2,068,883) -- (2,068,883)
Purchase of owners' interests .................9 -- -- -- (147,000)9
Payments received on
and write-off of stock
subscriptions......... (8,863) (1) -- (147,000)-- (70) -- 83 -- 12
Net income ......................................income............. -- -- -- 1,905,035 -- 1,905,035-- 18 -- -- 18
--------- --- ------- ----------- ----------- --------- -------------- ------ ------ ----- ---- -------
BALANCE, December 31,
1994 ......................... 2,546,721 2,547 1,652,630 2,494,381 (107,134) 4,042,424

Issuance of stock for acquisitions (Note 2) ..... 37,143 37 323,9631996................... 2,576,191 2 -- -- 324,000
Pooled acquisition - distributions to
previous owners (Note 2) ......................1,916 2,397 (1) -- -- -- (1,057,528) -- (1,057,528)4,314
Payments received on
stock subscriptions ........subscriptions... -- -- -- -- 23,167 23,167
Net income ......................................-- -- 1 -- 1
Issuance of stock in
connection with
private placement
stock, offering
acquisition, and 401K
plan (Notes 2 and 11). 273,876 1 -- -- 1,596 -- -- -- 941,7831,597
Cost of private
placement............. -- 941,783-- -- -- (110) -- -- -- (110)
Purchase of treasury
stock................. -- -- -- -- -- -- -- (25) (25)
Issuance of preferred
stock (Note 11)....... -- -- 400,000 1 3,999 -- -- -- 4,000
Costs of preferred
stock issuance (Note
11)................... -- -- -- -- (309) -- -- -- (309)
Net loss............... -- -- -- -- -- (1,194) -- -- (1,194)
--------- --- ------- ----------- ----------- --------- -------------- ------ ------ ----- ---- -------
BALANCE, DECEMBERDecember 31,
1995 ......................... 2,583,8641997................... 2,850,067 $ 2,5843 400,000 $ 1,976,5931 $7,092 $1,203 $ 2,378,636-- $(25) $ (83,967) $ 4,273,8468,274
========= === ======= =========== =========== ========= ============== ====== ====== ===== ==== =======

The accompanying notes are an integral part of these statements

F-5statements.

F-14

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

1994 AND 1993(IN 000'S)

1997 1996 1995
1994 1993
----------- ----------- ------------------ ------- -------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .............................................................(loss).................................. $(1,194) $ 941,78318 $ 1,905,035 $ 494,873942
Adjustments to reconcile net income to net cash
used in(used) provided by operating activities-activities--
Depreciation and amortization ...................................... 646,810 447,334 179,215amortization..................... 1,240 945 647
Provision for bad debts ............................................ 482,706 342,722 96,241debts........................... 1,427 878 483
Write-off of goodwill (Note 2).................... 1,028 -- --
(Gain) loss on disposal of property and equipment .................. 7,088equipment. (12) 8 7
Other, net........................................ 37 -- 18,017--
Deferred income taxes (benefit) .................................... (161,500) (26,600) (5,000)
Loss from unconsolidated subsidiaries ..............................tax benefit....................... (566) (240) (162)
Minority interest................................. (209) (55) (12)
Cumulative effect of change in accounting
principle........................................ 326 -- 122,699 15,960
Minority interest .................................................. (11,597) 14,942 --
Changes in assets and liabilities-
(Increase) decreaseliabilities--
Increase in accounts receivable ....................... (1,012,343) (1,713,397) (243,959)
(Increase) decrease in prepaid expenses .......................... (247,107) (55,887) 9,497receivable.................. (2,549) (3,025) (1,012)
(Increase) decrease in inventory and other
current assets ......................................................... (83,240) (4,477) (21,689)
(Increase) decreaseassets.................................. 46 (54) (330)
Increase in other assets .............................. (114,409) (194,699) (69,071)assets......................... (406) (1,734) (114)
Increase (decrease) in accounts payable .......................... (188,251) 54,433 135,632payable.......... (143) 1,014 (188)
Increase (decrease) in accrued expenses .......................... 1,292,246 246,995 (167,874)
----------- ----------- -----------expenses..................... 834 308 1,292
------- ------- -------
Net cash (used) provided by operating
activities ...................... 1,552,186 1,139,100 441,842
----------- ----------- -----------activities..................................... (141) (1,937) 1,553
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decreaseDecrease in notes receivable ................................ 10,483 (321,022) 13,533receivable....................... -- -- 10
Proceeds from sale of property, plant and
equipment .................... 42,000 -- --equipment......................................... 191 12 42
Purchase of property, plant and equipment .............................. (445,809) (1,573,525) (971,734)
Investmentequipment.......... (1,456) (2,965) (446)
Minority interest investment in unconsolidated subsidiaries ..............................subsidiary......... 24 240 --
(34,446) (87,580)
----------- ----------- ------------------ ------- -------
Net cash (used by)used by investing activities ....................... (393,326) (1,928,993) (1,045,781)
----------- ----------- -----------activities........... (1,241) (2,713) (394)
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash received in purchase acquisitions ................................. 10,890acquisitions............. -- -- 11
Cash used in purchase acquisitions................. (465) -- --
Net borrowings on line of credit agreement ............................. 782,503 299,359 325,948agreement......... 1,428 1,922 783
Proceeds from issuance of notes payable and capital
leases ............. 661,389 647,009 705,702leases............................................ 992 2,596 661
Payments on notes payable and capital leases ........................... (573,923) (824,887) (247,916)
Increase (decrease)leases....... (1,037) (699) (574)
Decrease in notes payable - related parties ................. (236,043) 1,265,964 (47,745)payable--related parties......... (1) (44) (236)
(Increase) decrease in notes receivable - related parties .............. (40,115) 160,000 (119,868)receivable--related
parties........................................... (62) 85 (40)
Proceeds from issuance of stock ........................................stock.................... 4,518 9 -- 132,577 1,524,558
Payments received on stock subscriptions
receivable .................... 23,167receivable........................................ 1 14 23
Distributions to members (Note 2).................. -- -- Distributions to previous members (Note 2) ............................. (1,057,528) (2,068,883) (54,000)(1,058)
Purchase of members' interest .......................................... -- (147,000) --
Purchaser of treasury stock ............................................stock......................... (25) -- --
(71,000)
Proceeds for sale of treasury stock .................................... -- -- 95,538
Offering costs ......................................................... -- -- (283,853)
----------- ----------- ------------------ ------- -------
Net cash provided (used) by financing
activities ............... (429,660) (535,861) 1,827,364
----------- ----------- -----------activities..................................... 5,349 3,883 (430)
------- ------- -------
NET INCREASE (DECREASE) IN CASH ........................................... 729,200 (1,325,754) 1,223,425AND CASH
EQUIVALENTS........................................ 3,967 (767) 729
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ................................................. 140,804 1,466,558 243,133
----------- ----------- -----------YEAR...... 103 870 141
------- ------- -------
CASH AND CASH EQUIVALENTS AT END OF YEAR .......................................................YEAR............ $ 870,0044,070 $ 140,804103 $ 1,466,558
=========== =========== ===========870
======= ======= =======

F-15

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)

FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995

(IN 000'S)

1997 1996 1995
----- ---- -----

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for-
Interest ...........................................................for--
Interest................................................. $ 365,934846 $495 $ 204,424366
===== ==== =====
Income taxes............................................. $ 156,520
=========== =========== ===========
Income taxes (refunds) .............................................-- $586 $ 36,00036
===== ==== =====
SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING AND FINANCING
ACTIVITIES
Acquisition of Health Care 24 Inc.--
Value of stock issued in exchange........................ $ (24,393)-- $ 209,287
=========== =========== ===========-- $ 50
Value of note payable issued in exchange................. -- -- 50
Fair value of property and equipment acquired............ -- -- (15)
----- ---- -----
Client lists acquired.................................... $ -- $ -- $ 85
===== ==== =====
Acquisition of Home Care Plus, Inc.--
Value of stock issued in exchange........................ $ -- $ -- $ 274
Cash acquired in exchange................................ -- -- (11)
Working capital acquired net of cash and cash
equivalents............................................. -- -- (151)
Fair value of property and equipment acquired............ -- -- (30)
Long-term debt assumed................................... -- -- 230
----- ---- -----
Goodwill recorded in exchange............................ $ -- $ -- $ 312
===== ==== =====
Related party note payable refinanced with financing
company.................................................. $ 988 $ -- $ --
===== ==== =====
Issuance of stock to 401(k) plan.......................... $ 59 $ -- $ --
===== ==== =====
Acquisition of Allgood Medical Services, Inc.--
Cash paid in exchange.................................... $ 465 $ -- $ --
Value of stock issued in exchange........................ 600 -- --
Value of note payable issued in exchange................. 100 -- --
Working capital acquired net of cash and cash
equivalents............................................. (313) -- --
----- ---- -----
Goodwill recorded in exchange (Note 2)................... $ 852 $ -- $ --
===== ==== =====

The accompanying notes are an integral part of these statements.

F-6

AMEDISYS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

1995 1994 1993
--------- --------- --------

SUPPLEMENTAL SCHEDULES OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Issuance of stock for acquisition of Priority Home Care, Inc. ............ $ -- $ 150,000 $ --
========= ========= ========
Acquisition Of Health Care 24, Inc.-

Value of stock issued in exchange ...................................... $ 50,000 $ -- $ --
Value of note payable issued in exchange ............................... 50,000 -- --
Working capital acquired net of cash and cash equivalents .............. -- -- --
Fair value of property and equipment acquired .......................... (15,000) -- --
--------- --------- --------

Client lists acquired .................................................. $ 85,000 $ -- $ --
========= ========= ========
Acquisition Of Home Care Plus, Inc.-

Value of stock issued in exchange ...................................... $ 274,000 $ -- $ --
Cash acquired in exchange .............................................. (10,890) -- --
Working capital acquired net of cash and cash equivalents .............. (150,659) -- --
Fair value of property and equipment acquired .......................... (30,245) -- --
Long-term debt assumed ................................................. 229,991 -- --
--------- --------- --------
Goodwill recorded in exchange .......................................... $ 312,197 $ -- $ --
========= ========= ========

The accompanying notes are an integral part of these statements.

F-7F-16

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 19951997, 1996 AND 19941995

1. NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

NATURE OF ORGANIZATIONNature of Organization

Amedisys, Inc. (the Company - formerly known as Analytical Nursing Management
Corporation) was acquired on December 21, 1993 by M & N Capital Corp. (M & N)
which had beenCompany) is incorporated under the laws of the State of New York on October
20, 1992 to serve as a vehicle to effect a combination with an operating
business. In connection with this transaction, 75,000 shares of M & N common
stock were issued as a finders fee to three individuals and the former
shareholders of the Company acquired approximately 73% of the issued and
outstanding capital stock of M & N. Prior to the acquisition, none of the
officers, directors or shareholders of M & N were affiliated with the officers,
directors or shareholders of the Company. This transaction was accounted for as
a reverse acquisition.

In July, 1994, Analytical Nursing Management Corporation (ANMC) was
reincorporated in the state of Delaware and
operates in August, 1994, M & N Capital
Corp. mergedeight states including Louisiana, Texas, Tennessee, Missouri,
Kansas, Mississippi, North Carolina and Minnesota with a concentration of
business in Louisiana and into ANMC, changing the name ofTexas. During 1997, the Company to "Analytical
Nursing Management Corporation." Duringpurchased a durable
medical equipment supplier in Louisiana and Mississippi and launched an
infusion therapy division; in 1996, the Company opened a new ambulatory
surgery center in Louisiana in which it has a 56% ownership interest; in 1995,
the Company changed its name and
began doing business as Amedisys; the Company also acquired an outpatient surgery center company in Texas and two
home care companies (see Note 2) in Louisiana. The Company provides a variety
of supplemental staffing, home health care, home care management, outpatient
surgery, infusion therapy, home medical equipment and primary care clinical
services. The Company's home care division now servicesserves all major metropolitan areas
in the state of Louisiana as well as the areas of Houston, Dallas and Beaumont
in Texas. The outpatient surgery centers are located in Houston, Texas.

NATURE OF OPERATIONSTexas, and
Hammond, Louisiana.

Nature of Operations

The Company provides services through a network of subsidiaries whichthat
include:

AMEDISYS STAFFING SERVICES, INC. (AME)Staffing Services, Inc. (ASS) supplies highly trained critical care
registered nurses and licensed practical nurses to all types of health care
facilities. Independent contract nurses are utilized to meet the staffing
needs of client health care facilities.

AMEDISYS NURSING SERVICES, INC. (ASI)Nursing Services, Inc. (ANS) is an employee-based staffing agency
that provides a variety of relief personnel such as registered and licensed
practical nurses, and certified nurses' aides for staff relief in all types of
health care facilities.

AMERINURSE, INC.Amerinurse, Inc. provides highly trained nurses who travel to client heath
care facilities and work on a contract basis. Effective January 1, 1996,
Amerinurse, Inc. was merged into ASI.ANS.

AMEDISYS SPECIALIZED MEDICAL SERVICES, INC.Specialized Medical Services, Inc. (ASM), Amedisys Home Health,
Inc. and Amedisys Home Health, Inc. of Texas provide skilled nursing care,
home health aid, physical therapy, occupational therapy, speech therapy and
medical social workers to homebound patients.

During 1994, ASM acquired a 60% ownership
interest in three rural health clinics located in Louisiana.

F-8

AMEDISYS SURGERY CENTERS,Surgery Centers, L. C. (ASC) operates two outpatient surgery
centers in Houston, Texas.Texas, and one surgery center in Hammond, Louisiana, which
commenced operation in November, 1996.

AMEDISYS PHYSICIAN SERVICES, INC.Physician Services, Inc. (APS) provides management of physician
practices and networks including Independent Practice Associations. APS also
operates a laboratory.

AMEDISYS Resource Management (ARM) and Physician Practice Management
provides management services to home health agencies and physician practices.

AMEDISYS Durable Medical Equipment, Inc. (DME) provides durable medical
equipment to patients in rural
areas throughhome health care settings, medical facilities and
health maintenance organizations in southern Louisiana and Mississippi. DME
has a comprehensive spectrum of products, including specialized equipment such
as customized wheelchairs.

AMEDISYS Alternate Site Infusion Therapy, Inc. (AASI) provides patients an
internal medicine clinic. Its servicesopportunity to have been expanded to
include a "walk-in" clinic and laboratory.

USE OF ESTIMATESintravenous drug therapy provided at home or at walk-in
centers.

F-17

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

Use of Estimates

The accounting and reporting policies of the Company and its subsidiaries
conform with generally accepted accounting principles. In preparing the
consolidated financial statements, the Company is required to make estimates
and assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.

PRINCIPLES OF CONSOLIDATIONPrinciples of Consolidation

The consolidated financial statements include the accounts of the Company,
and its wholly-owned subsidiaries (AME, ASI, ASM and ASC) andas well as its 60%-owned subsidiary (APS)
and their wholly-owned and partially-owned subsidiaries
Analytical Nursing Management Corporation of Texas, a wholly-owned subsidiary of
AME; MedAmerica, Inc. of Texas and MedAmerica, Inc., 80%-owned subsidiaries of
AME;subsidiaries; Amedisys Home Health,
Inc. and Amedisys Home Health, Inc. of Texas, both wholly-owned subsidiaries
of ASM; and Jackson Rural Health Clinic, Inc. (clinic closed February, 1996),
Kentwood Rural Health Clinic, Inc. (clinic closed in
August, 1995), and Bastrop
Rural Health Clinic, Inc. (clinic sold in September, 1996), all 60%-owned
subsidiaries of ASM.ASM and Hammond Surgical Care Center, LLC, a 56% owned
subsidiary of ASC. All material intercompany accounts and transactions have
been eliminated in these financial statements.

Prior yearThe 1995 financial statements have been restated to include the accounts of
a business combinationscombination accounted for as poolings-of-interests.a pooling-of-interests (See Note 2).
Business combinations accounted for as purchases are included from the
respective dates of acquisition.

Certain prior years' amounts have been reclassified to conform
with current year financial statement presentation.

REVENUE RECOGNITION POLICYRevenue Recognition Policy

Gross revenue is recorded on an accrual basis based upon the date of service
at amounts equal to the Company's established rates or estimated cost
reimbursement rates, as applicable. Allowances and contractual adjustments
representing the difference between the established rates and the amounts
estimated to be paidpayable by third parties are also recorded on an accrual basis
and deducted from gross revenue to determine net service revenues.

Reimbursement for home health care services to patients covered by the
Medicare program is based on cost reimbursement rates. Final reimbursement is
determined after submission of annual cost reports and audits thereof by the
fiscal intermediaries. Proposed legislation byEffective January 1, 1998, home health cost limits were
reduced and per beneficiary limits were established which will reduce payments
to Home Health Service providers in the U. S. Congress mayfuture. Additional proposed
regulations are expected to change the payment methodology for home health
care services to Medicare patients from a cost based reimbursement system to a
prospective payment system.

CASH AND CASH EQUIVALENTSsystem in the future.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash includes certificates of deposit
and all highly liquid debt instruments with maturities of three months or less
when purchased. The carrying amount approximates fair value because of the
short maturity of those instruments.

INVENTORYInventory

Inventories consist of medical supplies whichthat are utilized in the treatment
and care of home health and outpatient surgery patients. Inventories are
stated at the lower of cost (first-in, first-out method) or market.

F-9

PROPERTYF-18

AMEDISYS, INC. AND EQUIPMENTSUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

Property and Equipment

Property and equipment is generally carried at cost except for certain
property purchased from related parties (see Note 3).prior to 1995. Additions and
improvements are capitalized, but ordinary maintenance and repair expenses are
charged to income as incurred. The cost of property sold or otherwise disposed
of and the accumulated depreciation thereon are eliminated from the property
and related accumulated depreciation accounts, and any gain or loss is
credited or charged to income.

Included in property and equipment are capitalizedCapitalized leases, which consist primarily of computer equipment, phone systems, and vans
used by the home care divisions.divisions, are included in property and equipment.
Capital leases are recorded at the present value of the future rentals at
lease inception and are amortized over the lesser of the applicable lease term
or the useful life of the equipment.

For financial reporting purposes, depreciation and amortization of property
including those subject to capital leases ($1,101,000 in 1997, $788,000 in
1996 and $468,000 in 1995) is included in other general and administrative
expenses and is provided utilizing the straight-line method based upon the
following estimated useful service lives:

Buildings 40 years
Leasehold Improvements
Buildings....................................................... 40 years
Leasehold Improvements.......................................... 5 years
Equipment and furniture......................................... 5-7 years
Vehicles........................................................ 5 years
Computer software............................................... 5 years
Equipment

Accounting for the Impairment of Long-Lived Assets and furniture 5 - 7 years
Vehicles 5 years
Computer software 5 years

EARNINGS PER COMMON SHARE

Earnings per common shareLong-Lived Assets to
be Disposed of

Whenever there are computed by dividing net income (loss) byrecognized events or changes in circumstances that
indicate the weighted average numbercarrying amount of shares of common stock and common stock equivalents
outstanding duringan asset may not be recoverable, management
reviews the year. The warrants discussed in Note 11 were not included
inasset for possible impairment. In accordance with SFAS No. 121,
management uses undiscounted estimated expected future cash flows to assess
the computationrecoverability of the earnings per common share becauseasset. If the marketexpected future net cash flows are
less than the carrying amount of the asset, an impairment loss, measured as
the amount by which the carrying amount of the asset exceeds the fair value of
the common stock was not in excess of the exercise price and their inclusionasset, would have an anti-dilutive effect.

RECENT PRONOUNCEMENTSbe recognized.

Earnings Per Share

In March 1995,February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share (EPS). The
Company adopted SFAS No. 121, "Accounting for128 in the Impairmentfourth quarter of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of."1997. SFAS No. 121128
requires that long-lived assets and
certain identifiable intangibles to be held and used be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. Additionally, long-lived assets and certain identifiable
intangible assets to be disposedrestatement of are required to be reported atprior years' EPS data; however, application of the
lower of
carrying amount or fair value less selling costs. SFAS No. 121 is effective for
fiscal years beginning after December 15, 1995. The adoption of this statement will not have a materialhas no impact on the consolidatedCompany's prior years' EPS data.

Reclassifications

Certain amounts previously reported in the 1996 and 1995 financial
statements.

In Octoberstatements have been reclassified to conform to the 1997 presentation.

F-19

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

2. ACQUISITIONS:

On August 1, 1997, the FASB issued SFAS No. 123, "AccountingCompany acquired substantially all of the assets of
Allgood Medical Services, Inc. d/b/a Care Medical and Mobility Equipment
Company for Stock-Based
Compensation."$1,165,000. The purchase price consisted of $465,000 in cash,
$100,000 note payable, and $600,000 in common stock which represented 115,518
common shares. This statement provides accountingtransaction has been accounted for as a purchase and reporting standards for
stock-based employee compensation plans and also applies to equity instruments
issued to acquire goods and services from nonemployees. SFAS No. 123 defines athe
excess of the total acquisition cost over the fair value based method of accounting for employee stock options or similar
equity instruments. Entities may either adopt that accounting method or may
electnet assets
acquired (goodwill) of $852,000 was being amortized over twenty years using
the straight-line method. Subsequent to continuethis purchase, certain reimbursement
reductions were announced to implement the accounting treatment outlinedBalanced Budget Act of 1997. Based
on management's estimate of the expected impact of these changes in
APB Opinionreimbursement on future cash flows, this goodwill was fully written off as
Other General and Administrative Expense at December 31, 1997 as required
under Statement of Financial Accounting Standard No. 25,
"Accounting for Stock Issued to Employees." Entities electing to continue121.

The following Opinion No. 25 are required to makeunaudited pro forma disclosures of net
income and earnings per share,information has been prepared as if the
fair value based methodacquisition had occurred at the beginning of each of the periods ended
December 31, 1997 and 1996. This pro forma information has been adopted. SFAS No. 123prepared for
comparative purposes only and is effective for fiscal years beginning after December 15,
1995. The Company expects to continue following Opinion No. 25. Adoptionnot necessarily indicative of this
statement will notwhat would have
a material impactoccurred had the acquisition taken place on the consolidated financial
statements but will only require pro forma disclosure indates indicated, nor does it
purport to be indicative of the future years.

F-10

2. ACQUISITIONS:operating results of the Company
(000's, except share amounts):

(UNAUDITED)
1997 1996
------- -------

Revenues................................................ $55,147 $47,270
Net income (loss)....................................... (1,356) 130
Net income (loss) per common share...................... (0.50) 0.05

On June 30, 1995, the Company acquired all issued and outstanding membership
interests in ASC in exchange for 1,000,000 shares of Company common stock.
ASC's assets on June 30, 1995 were approximately $3,000,000. Upon closing of
the transaction, the former members of ASC owned approximately 40% of the
issued and outstanding stock of the Company. This transaction has beenwas accounted
for as a pooling of interests and accordingly the financial statements have been restated
to include the results of ASC for all periods presented, as follows (in
thousands):

1994 1993
----------------------------------- -----------------------------------
AS ORIGINALLY REPORTED AS RESTATED AS ORIGINALLY REPORTED AS RESTATED
---------------------- ----------- ---------------------- -----------

Operating revenues..... $ 8,728 $ 11,906 $6,099 $7,771
Net income............. 6 1,905 39 495
Earnings per common
share............... 0.00 0.75 .03 .22

Combined and separate results of the Company and Surgicare for the six months
ended June 30, 1995 are as follows (in thousands):

COMBINED
AMEDISYS SURGICARE TOTAL
-------- --------- --------
Operating revenue ....... $5,722 $ 1,118 $ 6,840
====== ======= =======
Net income .............. $ 11 $ 561 $ 572
====== ======= =======interests. ASC was a limited liability company and,
accordingly, had no income tax liabilities. The effect of providing for income
taxes on results of ASC operations prior to the 1995 acquisition areis shown
under "Proforma"Pro forma Information" in the accompanying statementsstatement of income.operations.

On May 31, 1995, the Company acquired all of the outstanding stock of Home
Care Plus, Inc. in exchange for 30,000 shares of its common stock valued at
$274,000. The $312,000 excess of the total acquisition cost over the fair
value of the net assets
acquired of $312,197 isliabilities assumed was recorded as goodwill and was being
amortized over seven years using the straight-line method. This operation was
closed in the second quarter of 1997 and the remaining $193,000 unamortized
balance of goodwill was written off in the fourth quarter of 1997. See Note 15
for restated operating results for the quarter ended June 30, 1997.

On March 19, 1995, the Company acquired all of the outstanding stock of
Health Care Services 24, Inc. in exchange for 7,143 shares of its common stock
valued at $50,000 and notes payable in the amount of $50,000, payable in
monthly installments through March, 1996. The remaining balance on these notes at December 31, 1995 was
approximately $8,500.

On April 28, 1994, the Company acquired all of the outstanding stock of Priority
Home Care, Inc. in exchange for 15,800 shares of its common stock valued at
$150,000. The excess of the total acquisition cost over theclient lists
(See Note 5) and property and equipment with a fair value of the
net assets acquired of $144,348 is being amortized over seven years using the
straight-line method.

F-11$85,000 and
$15,000, respectively.

The acquisitions of Home Care Plus, Inc., and Health Care Services 24, Inc. and
Priority Home Care, Inc.
were accounted for as purchases and as a result, operations of these entities
subsequent to the date of acquisition have been included in the consolidated
financial statements. Unaudited pro forma consolidated results of operations
for the yearsyear ended December 31, 1995 and
1994 (operations of these companies prior to 1994 were not significant) as though these companies had been
acquired as of January 1, 19931995 are as follows:

1995 1994
----------- -----------
Net service revenues ................... $38,108,293 $31,625,839
Net income ............................. 850,874 1,750,446
Earnings per common share ..............
1995
-----------

Net service revenues......................................... $38,108,293
Net income................................................... $ 850,874
Earnings per common share.................................... $ 0.33
0.68

F-20

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

The above amounts reflect adjustments for amortization of goodwill.

See Note 16 for additional acquisitions which occurred subsequent to
December 31, 1997.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of:
1995 1994
----------- -----------
Land ......................................... $ 162,246 $ 162,246
Buildings and leasehold improvements ......... 509,619 479,033
Equipment, furniture and vehicles ............ 2,910,087 2,524,168
Computer software ............................ 37,581 33,855
----------- -----------
Total ............................. 3,619,533 3,199,302
Accumulated depreciation ..................... (1,170,065) (749,617)
----------- -----------
Net ............................... $ 2,449,468 $ 2,449,685
=========== ===========

During 1994, prior to acquisition, ASC purchased a building, land and equipment
from a real estate partnership whose owners were also owners of ASC, and are now
owners of the Company. The purchase price of this property was $1.2 million and
resulted in a gain to the seller of approximately $475,000, which amount was
offset against the allocated purchase price of the property and treated as a
distribution in the accompanying financial statements. Lease payments on this
property prior to purchase ($104,000 in 1994 and $489,000 in 1993) are included
in other expenses.

During 1995, prior to acquisition, ASC also purchased certain other equipment
from owners of ASC. The sellers' basis in the equipment was undeterminable and
thus the entire purchase price of $115,000 was offset against the recorded
equipment balance and treated as a distribution in the accompanying financial
statements. Rental payments on this equipment were approximately $75,000 in 1994
and are included in other expenses. No rental payments were made on this
equipment in 1995.(000's):

1997 1996
------- -------

Land.................................................... $ 220 $ 220
Building and leasehold improvements..................... 717 607
Equipment, furniture and vehicles....................... 6,721 5,585
Computer software....................................... 114 95
------- -------
Total................................................. 7,772 6,507
Accumulated depreciation................................ (2,987) (1,897)
------- -------
Net................................................... $ 4,785 $ 4,610
======= =======

4. ASSETS HELD FOR SALE:

On April 1, 1991, Cajun-a-La-Carte, a 57.95%-owned subsidiary of AME in the
frozen seafood processing business, was merged into AME. Cajun-a-La-Carte ceased
operations in 1992 and its principal assets are being held for sale.OTHER INVESTMENTS:

The Company has an agreement to lease these assets for a period of three years beginning
April 1, 1994 for monthly lease payments ($1,025) which are sufficient to cover
the monthly debt service on these assets. Management believes that these assets
will be soldhad made advances totaling $366,000 at a price sufficient to realize the carrying value of $76,456 as
of December 31, 1995, which is net of accumulated depreciation of $70,932.

F-12

5. OTHER ASSETS:

Other assets include the following for the years ended December 31, 1995 and
1994:

1995 1994
-------- --------
GOODWILL, net of accumulated amortization of
$59,554 and $12,615 ................................... $397,022 $131,763

START-UP COSTS, net of accumulated amortization of
$129,241 and $45,377 .................................. 104,608 188,472

CLIENT LISTS ACQUIRED, net of accumulated amortization
of $115,343 and $73,265 ............................... 49,582 6,661

INVESTMENT IN A REAL ESTATE PARTNERSHIP .................. 50,174 42,585

OTHER .................................................... 151,868 61,821
-------- --------
$753,254 $431,302
======== ========

The excess of the total acquisition costs over the fair value of the net assets
acquired (goodwill)1997 in various acquisitions (see Note 2) is amortized using the
straight-line method over a seven-year period.

Costs incurred to establish regional offices of ASM prior to beginning services
are capitalized as Other Assets and amortized over a five-year period.

In
connection with the acquisition of various home health companies, ASM
purchased client lists whose costa 42% interest in a surgery center being
developed in Houston, Texas. The surgery center is being amortized overexpected to open in April
1998 and is to be managed by the Company under a three-year period.

Other assets also includelong-term management
contract. The Company accounts for this investment using the equity method.

On June 30, 1995, the Company acquired an investment in a real estate
partnership acquired in connection with the purchase of ASC (see Note 2), which has
certain partners who are also owners of the Company. TheThis investment is
accounted for onunder the equity method.

Management concluded in December, 1996, that the realization of certain
previously recorded assets might not be assured and, accordingly, wrote off
the portion of these investments (approximately $623,000) believed to be
unrealizable through future operations. These investments were primarily
comprised of advances made to develop FutureCare, Inc., a proposed managed
care organization, of $391,000, certain non-operating equipment of $132,000
believed to be unrealizable through future operations, and $100,000 in notes
receivable due from a related party. The $391,000 advance to FutureCare, Inc.
was to be reimbursed upon completion of a securities offering of its stock.
Due to the uncertainty of a successful offering, the Company chose to expense
these amounts. The $132,000 was comprised of opthamology and processing
kitchen equipment that the Company was attempting to sell. None of these
assets were producing, or expected to produce, a benefit in current or future
years. The $100,000 was written off because of a dispute between the Company
and Internal Medicine Clinic of Tangipahoa, Inc. ("IMC").

5. OTHER ASSETS:

Other assets also include deferred organizational costs,the following for the years ended December 31, 1997 and
1996 (000's):

1997 1996
------ ------

NOTES RECEIVABLE........................................... $1,530 $ 119
RESTRICTED CASH............................................ -- 1,001
GOODWILL, net of accumulated amortization of $70 and $124.. 71 329
START-UP COSTS, net of accumulated amortization of $173 in
1996...................................................... -- 326
CLIENT LISTS, net of accumulated amortization of $158 in
1996...................................................... -- 10
OTHER...................................................... 306 216
------ ------
$1,907 $2,001
====== ======

F-21

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

Notes receivable at December 31, 1997, consist primarily of advances of
$1,465,000 due from Alliance Home Health, Inc. which are beingwas acquired on January
1, 1998 (see Note 16).

Restricted cash at December 31, 1996, represents a minimum cash reserve
required by and pledged to the Louisiana Department of Insurance to guarantee
group member benefits associated with a proposed Health Maintenance
Organization project. In late 1996, the Company discontinued its efforts
related to this project and subsequently notified the Department of Insurance
of its intention to withdraw the minimum cash reserve balance.

Costs incurred to establish regional offices of ASM and ASC prior to
beginning services were capitalized as Other Assets and amortized over a five-yearfive-
year period based on accepted industry practice and consistent with the
treatment required under Medicare regulations. Start-up costs consist
primarily of incremental salaries and wages directly related to the new
operation, consulting fees and financing and legal fees. Provisions of a
proposed Statement of Position (SOP) expected to be issued by the American
Institute of Certified Public Accountants (AICPA) in the second quarter of
1998 will require the write-off of any start-up costs remaining on the balance
sheet and expensing of all start-up costs incurred in the future. During the
fourth quarter of 1997, the Company changed its accounting policy to expense
such costs to more properly reflect these costs as ongoing costs of expanding
the Company's services. The Company has reflected this adjustment as a change
in accounting principle from one acceptable method to another acceptable
method. The cumulative effect of this change in accounting principle, as if
the change were made effective January 1, 1997, of $235,000 (net of a $91,000
tax benefit), is shown on the 1997 statement of operations. Start-up costs of
$299,000 incurred during 1997 were expensed as incurred in general and
administrative expense.

See Note 15 for the restatement of the Company's quarterly results of
operations for 1997 giving effect to the change in accounting principle as of
January 1, 1997.

The following reflects pro-forma net income for 1996 and 1995, net of the
related tax effects, as if the Company expensed start-up costs as incurred in
those years.

YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995
--------------- --------------
AS PRO AS PRO
REPORTED FORMA REPORTED FORMA
-------- ------ -------- -----

Net income (loss)......................... $ 18 $ (202) $ 942 $ 845
Net income (loss) per common share........ $0.01 $(0.08) $0.37 $0.33

"Other" consists primarily of deposits on leased properties and workers'
compensation policy deposits.advances
made in connection with various other business development projects.

6. NOTES PAYABLE:

Notes payable as of December 31, 1995 and 1994, consist primarily of borrowings under a $3,500,000 revolving line$5,500,000 and $750,000
lines of credit which matures on August 7, 1996,
bearsthat bear interest at bank prime (10.25%plus 1.5% (10.0% at December
31, 1995)1997) and bank prime plus 1% (9.5% at December 31, 1997), and isrespectively.
Both lines are secured by accounts receivable, life insurance on the major
stockholder and personal guarantees of several stockholders. Such borrowings totaled $2,456,971Subsequent to
year-end, the $5,500,000 line of credit was increased to $7,500,000 for 120
days bearing interest at December 31, 1995 ($1,666,993 at December 31, 1994) at rates ranging from 8% to
10.25% (9% to 11% in 1994)bank prime plus 1.5%. As of December 31, 1995,1997,
approximately $1,043,000$444,000 was unused under this linethese lines of credit. The weighted
average monthly interest rate
on short-term borrowings was 10.67%9.79% and 10.04%9.78% in 19951997
and 1994,1996, respectively.

The revolving line of credit is subject to certain covenants, including a
monthly borrowing base or margin requirement calculation, a debt service
coverage ratio and a leverage ratio. The Company was not in default on one ofcompliance

F-22

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

with the covenants of these agreementsdebt service ratio requirement at December 31, 1994,1997, which default
was waived by the bank at that time. No such events of default existedthrough June 30, 1998. The Company was not in
compliance with the leverage ratio covenant at December 31, 1995.1996, which
default was waived by the bank. The loan agreement was subsequently amended to
increase the leverage ratio requirement from 2.5 to 1 to 3.0 to 1, which the
Company expects to renew the linecomplied with as of credit prior to its expiration.

F-13December 31, 1996.

7. LONG-TERM DEBT:

Long-term debt consists of notes payable to banks and other financial
institutions whichthat are due in monthly installments through 2000:

1995
---------------------------------------
PAYEE INTEREST RATE CURRENT LONG-TERM
----- ------------- -------- ---------
Notes payable to banks ............. 7.75 - 14.39% $103,474 $208,164
Notes payable to finance and
equipment companies ............. 8.00 - 12.75% 283,374 3,023
-------- --------
$386,848 $211,187
======== ========

1994
---------------------------------------
PAYEE INTEREST RATE CURRENT LONG-TERM
----- ------------- -------- ---------
Notes payable to banks ............. 7.00% - 11.99% $69,519 $189,358
Notes payable to finance and
equipment companies ............. 9.75% - 12.75% 26,371 26,813
------- --------
$95,890 $216,171
======= ========2003 (000's):

PAYEE 1997 1996
----- ------ ------

Notes payable to finance and equipment companies that
accrue interest at 8.00-11.25%............................ $3,154 $1,502
Notes payable to banks that accrue interest at 8.00-14.39%. 531 893
------ ------
Total.................................................... 3,685 2,395
Current portion............................................ 690 458
------ ------
Long-Term.................................................. $2,995 $1,937
====== ======

The fair value of long-term debt as of December 31, 1995,1997, estimated based on
the Company's current borrowing rate of 10.25%10%, is approximately $546,000.$3,582,000.

These borrowings are secured by equipment, vehicles and the personal
guarantee of a stockholder. Maturities of long-term debt as of December 31, 1995,1997, are as
follows:

December 31 ,1996 .............................. $386,848
December 31, 1997 .............................. 91,320
December 31, 1998 .............................. 99,042
December 31, 1999 .............................. 9,946
December 31, 2000 .............................. 10,879
--------
$598,035follows (000's):

December 31 ,1998.................................................. $ 690
December 31, 1999.................................................. 484
December 31, 2000.................................................. 417
December 31, 2001.................................................. 277
December 31, 2002.................................................. 1,688
Thereafter......................................................... 129
------
$3,685
======

8. CAPITAL LEASES:

During 1995 and 1994, theThe Company acquired certain equipment under capital leases. Theleases for which
related liabilities under these capital leases werehave been recorded at the present value of future minimum
lease payments due under the leases.

F-14 The present minimum lease payments under
the capital leases and the net present value of future minimum lease payments
are as follows:

December 31, 1996 ............................................. $ 234,205follows (000's):

December 31, 1998................................................... $220
December 31, 1999................................................... 110
December 31, 2000................................................... 45
----
Total future minimum payments....................................... 375
Amount representing interest........................................ (49)
----
Present value of future minimum lease payments.................... 326
Current portion..................................................... 192
----
Long-term portion................................................... $134
====

F-23

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, ............................................. 166,214
December 31, 1998 ............................................. 123,952
December 31, 1999 ............................................. 60,452
December 31, 2000 ............................................. 2,365
---------
Total future minimum payments ................................. 587,188
Amount representing interest .................................. (113,942)

Present value of future minimum lease payments ........... 473,246

Current portion ............................................... 181,964

Long-term portion ............................................. $ 291,282
=========1996 AND 1995

9. INCOME TAXES:

The Companies fileCompany files a consolidated federal income tax returns, including all
subsidiaries whichthat are owned more than 80%. State income tax returns are filed
individually by the subsidiaries in accordance with state statutes.

The Company utilizes the liability approach to measuring deferred tax assets
and liabilities based on temporary differences existing at each balance sheet
date using currently enacted tax rates in accordance with FASB StatementSFAS No. 109.
Deferred tax assets are reduced by a valuation allowance when, in the opinion
of management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.

The total provision (benefit) for income taxes consists of the following:

1995 1994 1993
--------- -------- --------
Current portion ............... $ 361,136 $ 51,893 $ 45,495
Deferred portion .............. (161,500) (38,500) (5,000)
--------- -------- --------
$ 199,636 $ 13,393 $ 39,495
========= ======== ========following
(including $91,000 of tax benefit related to the cumulative effect of change
in accounting principle (see Note 5) ) (000's):

1997 1996 1995
----- ----- -----

Current portion...................................... $ 93 $ 242 $ 361
Deferred portion..................................... (566) (239) (161)
----- ----- -----
$(473) $ 3 $ 200
===== ===== =====

Net deferred tax assets consist of the following components:

1995 1994
--------- --------
Deferred tax assets:
Receivable allowance ......................... $ 97,000 $ 53,900
Self-insurance reserves ...................... 106,000 --
Losses of consolidated subsidiaries
(not consolidated for tax purposes) ........ 54,000 67,700
Deferred tax liabilities:
Property and equipment ....................... (49,000) (30,900)
--------- --------
208,000 90,700
Less: Valuation allowance ...................... -- (44,200)
--------- --------
$ 208,000 $ 46,500
========= ========

F-15components (000's):

1997 1996
----- -----

Deferred tax assets:
Receivable allowance...................................... $ 523 $ 285
Self-insurance reserves................................... 161 202
Losses of consolidated subsidiaries (not consolidated for
tax purposes)............................................ 57 42
Start-up costs and other.................................. 453 47
Deferred tax liabilities:
Property and equipment.................................... (268) (129)
----- -----
$ 926 $ 447
===== =====

Total tax expense (benefit) on income before taxes resulted in effective tax
rates that differed from the federal statutory income tax rate. A
reconciliation follows:

1995 1994 1993
----- ----- -----
Income taxes computed on federal
statutory rate .......................... 34.00% 34.00% 34.00%
State income taxes ......................... 2.00 0.39 2.91
ASC income prior to merger (Note 2) ........ (16.88) (33.40) (31.30)
Losses of unconsolidated subsidiaries ......these rates is as follows for 1997, 1996 and 1995:

1997 1996 1995
------ ------ ------

Income taxes computed on federal statutory rate. (34.00)% (34.00)% 34.00%
State income taxes.............................. 5.00 1.00 2.00
ASC income prior to merger (Note 2)............. -- -- (16.88)
Losses of unconsolidated subsidiaries........... -- -- 8.33 (0.65) --
Write-off of notes receivable from
unconsolidated subsidiaries.................... -- -- (14.39)
Net operating losses utilized -- -- --
Nondeductible expenses and other................ 4.00 40.00 4.60
------ ------ ------
Total......................................... (25.00)% 7.00% 17.66%
====== ====== ======

The Company has $147,000 of operating loss carryforwards related to losses
from unconsolidated subsidiaries ............. (14.39) -- --
Net operating losses utilized .............. -- (1.61) --
Nondeductible expenses and other ........... 4.60 1.96 1.78
----- ----- -----
Total ........................... 17.66% 0.69% 7.39%
===== ===== =====for tax return purposes which expire
beginning in 2010.

F-24

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

10. RELATED PARTY TRANSACTIONS:

NOTES RECEIVABLENotes Receivable

Notes receivable from related parties consist of unsecured and noninterestnon-interest
bearing notes from the Presidentchief executive officer and certain stockholders of the
Company totaling approximately $18,000$102,000 and $40,000 at December 31, 19951997 and
1994,1996, and receivables from an internal medicine clinic (IMC) totaling approximately
$256,000 and $345,000$150,000 at December 31, 19951997 and 1994, respectively, and a receivable from the developer
of an outpatient surgery center to be leased by the Company in the future of
approximately $127,000 at December 31, 1995.1996. The fair value of the notes receivable
from related parties is equal to the recorded value due to the short
termshort-term
nature of the notes from the President, stockholders, and developer, and
the effective date of January 1, 1996 of the IMC notes.

In March, 1994, the Company entered into an agreement with IMC, an unrelated
party, to form a new corporation (APS) which is 60% owned by the Company and 40%
owned by the owners of IMC. APS acquired equipment and personal property from
IMC for approximately $340,000 and manages the continuing operations of IMC. The
Company loaned funds to APS to acquire the assets of IMC and meet working
capital requirements. This loan to APS, which is to be repaid solely from the
revenues of APS over a five-year period, bears interest at a rate of prime plus
2% and is eliminated in consolidation. APS recorded management fees of $541,449
in 1995 and $585,491 in 1994 from IMC. As discussed above, the unpaid management
fees are included in notes receivable from related parties. Effective January 1,
1996, IMC issued new notes to APS for the unpaid balance on this date. These
notes bear interest at 9%, require monthly principal and interest payments of
$4,076 with the balance due on maturity of January 1, 1999 and are secured by
the accounts receivable of IMC.

In accordance with the terms of the agreements with IMC, IMC has the right and
option to sell its stock back to APS at a price equal to 3.5 times the earnings
per share of APS attributable to each share of APS stock, to be calculated based
on the largest annual earnings per share amount during the three-year period
prior to the time such repurchase is requested by IMC. This option is not
exercisable until March 1, 1997 and, based on operations of APS through December
31, 1995, would not have a material effect on the Company's financial statements
if exercised.

F-16

NOTES PAYABLENotes Payable

Notes payable to related parties consistin 1996 consisted primarily of a note
issued in 1994 in the original amount of $1,080,000, bearing interest at 9% (see Note 3).
The note iswas secured by all real estate and personal property of one of the
surgical care centers. Maturities of this debt as of December 31, 1995 are as follows:

December 31, 1996 ........................... $ 40,533
December 31,The note was refinanced in 1997 ........................... 44,335
December 31, 1998 ........................... 48,894
December 31, 1999 ........................... 410,295
December 31, 2000 ........................... 91,531
Thereafter .................................. 392,869
----------
$1,028,457
==========

The fair value of this note at December 31, 1995, estimated based on the
Company's current borrowing rate of 10.25%, was approximately $987,624.with a financial
institution (See Note 7).

The remaining balance of notes payable to related parties at December 31,
1997 ($50,178)45,000) consists of unsecured notes to certain stockholders of the
Company that are due on demand and bear interest at rates from 0% - 12%-12%. The
fair value of these notes is
assumed to be equal toapproximates the recorded balance due to the short-termshort-
term nature of the notes.

OTHER

Prior to acquisition by the Company, ASC engaged in the following transactions
with related parties during 1995 and 1994.

During 1993, the Company made payments totaling $169,500 to three doctors
who were members of ASC for services rendered in the capacity of medical
director (no such payments were made or required for 1994):

During 1993, ASC made payments to RPH, Inc., an entity whose primary owners
were also the controlling owners of ASC, aggregating approximately
$1,014,000 for leased employees. Terms of the contract covering this
transaction provided for ASC to pay RPH the salary costs of these employees
plus 30% for the term of the contract.

The Company made payments aggregating approximately $75,000 in 1994 and
$16,000 in 1993 for equipment rented from doctors who were members of ASC.

Payments totalling approximately $108,000 in 1995, $229,000 in 1994 and
$206,000 in 1993 were made to RPH, Inc. for anesthesia services. The
primary owners of RPH, Inc. were also controlling owners of ASC.

During 1994, the Company purchased the interest of two members (totaling
7.6%) for $252,000. This purchase was effected through the issuance of
notes payable. Of the purchased interest, 3% was sold in 1994 for $105,000.
The remaining repurchased interest of 4.6% has been reflected as a
reduction of retained earnings in the accompanying financial statements.Other

The Companies paid $18,935medical directors fees to stockholders of $156,400 and
$116,000 in 19951997 and $21,000 in 1994 for legal1996, respectively.

ASC paid fees associated with a medical foundation to a stockholder of
$12,000 and director of the Company.

APS$3,000 in 1997 and 1996, respectively.

In 1997, ASC paid medical director fees of $24,000$10,800 for equipment rental to a stockholder of the
Company and a
total of $24,000 to two of the owners of IMC.

F-17

The Company had an investment in Network Wellness Systems, Inc. (NWS), the
corporate general partner of Sports/Spa and Clinic, a Louisiana Partnership In
Commendam ("SSC"), which operated a health club, spa, salon and wellness
facility within the Sandestin Resort (the Resort) in Destin, Florida. SSC began
business in November, 1991, and subsequently was placed in Chapter 11
Reorganization on April 23, 1993. The bankruptcy proceeding was thereafter
converted to a Chapter 7 liquidation. The Company determined the unpaid balance
due from NWS ($99,487) to be uncollectible and charged it against income in
1994. Two of the owners of IMC are also affiliated with NWS and SSC.Company.

11. CAPITAL STOCK:

PriorCommon Stock

On April 17, 1997, the Company completed, in two phases, a placement of
common stock with Plymouth Partners, LP under which the Company issued 37,500
shares of Common Stock to its acquisition of ANMC, M & N completed its initial public offering of
250,000 common sharesPlymouth Partners, LP, pursuant to a shelf
registration statement for gross proceeds of $1,500,000 on August 26, 1993.$262,500 and also issued 112,500
shares of Common Stock to Plymouth Partners, LP, pursuant to a shelf
registration statement for gross proceeds of $675,000. The net proceeds from
both of these offerings was $831,000.

Preferred Stock

In connection with the offering, M & N issued 25,000 warrants to the Underwriter
(the Underwriter's Warrants), which are exercisable at $7.20 per common share
forDecember, 1997, Amedisys completed a periodprivate placement of four years commencing April 28, 1994.

At December 31, 1993, there were 120,000,000400,000 shares
authorized of common stock, $.001 par value convertible preferred stock pursuant to Regulation D of the
Securities Act of 1933 at $10 per share for gross proceeds of $4 million. The
Company intends to use the proceeds of this placement to fund synergistic
acquisitions within the South East and 1,500,000 shares issued and outstanding.
Effective with the merger of M & N (merged corporation) with and into ANMC
(surviving corporation) in 1994 (see Note 1), each outstanding share of common
stock, $.001 par value per share,South Central regions of the merged corporation was convertedU.S. and
accelerate the growth of its fully integrated network of outpatient health
care services, including alternate site infusion therapy divisions and
outpatient surgery centers. These shares are convertible into one share of common stock, $.001 par value per share, of the surviving
corporation. As a result of the merger and reincorporation of ANMC in the state
of Delaware, the number and class of authorized shares of capital stock of the
Company changed. As of December 31, 1994, there were 5,000,000864,865 shares
of common stock authorized, $.001 par valuewhich is equivalent to $4.625 per share, and 5,000,000share. Warrants to purchase
52,500 shares of preferred stock authorized, $.001 par valueat $10 per share. As of Decembershare, convertible into

F-25

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

there were
10,000,000113,514 shares of common stock, authorized, $.001 par value per share, and
2,500,000 shares of preferred stock authorized, $.001 per share.

STOCK OPTIONSwere issued to the placement agent, Hudson
Capital Partners, L.P. in connection with the offering.

Stock Options

The Company's Board of Directors has approved a Statutory Stock Option Plan providingprovides incentive stock options
to key employees. The Plan is to be administered by a Compensation Committee
(appointed by the Board) which is to determine, within the provisions of the
Plan, those eligible employees to whom, and the times at which, options shall
be granted. Each option granted under the Plan is to be convertible into one
(1) share of common stock, unless adjusted in accordance with the provisions
of the Plan. Options may be granted for a number of shares not to exceed, in
the aggregate 500,0001,000,000 shares of common stock at an option price per share of
no less than 85% of the fair market value of a share of common stock on the
date the option is granted. If the option is granted to any owner of 10% or
more of the total combined voting power of the Company and its subsidiaries,
the option price is to be at least 110% of the fair market value of a share of
common stock on the date the option is granted. Each option is to be fully exercisable when grantedvests ratably over
a two-to-three year period and may be exercised during a period as determined
by the Compensation Committee, not to exceed 10 years from the date such
option is granted. The aggregate fair market value of common stock subject to
an option granted to a participant by the Committee in any calendar year shall
not exceed $100,000.

As of December 31, 1994, no options had been granted
under this Plan. During 1995, the Company granted 27,650 options at an exercise
price of $7.00 per share (87.5% of the fair market value on date of grant).
These options expire April, 1998. No options were exercised during 1995.

On December 19, 1990, the Company granted an option to purchase 1,600 shares of
its common stock at $5.00 per share to an employee under an arrangement whereby
share certificates were to be issued for all stock paid for through December
31st of each year, for the years 1991, 1992 and 1993. This option was later
converted to an option to purchase 2,032 shares of stock. This employee
purchased 1,648 shares of stock during 1993 and 1,200 shares of stock during
1994.

F-18

All administrative employees were given the option to purchase 6,250 shares for
$10,000 in September, 1992. Only one employee accepted this option which was
left open until March 31, 1993. This option to purchase 6,250 shares was later
converted to an option to purchase 7,938 shares of stock. During 1993, this
employee purchased 7,300 shares of ANMC stock in connection with this agreement.

An option to purchase shares of stock in a subsidiary was granted to an employee
in June, 1992. This option was later converted to the right to purchase 5,000
sharesA summary of the Company's stock for $6,300. During 1993, this employee purchased
3,150 shares of stock in connection with this agreement.

STOCK PURCHASE AGREEMENTS

On March 21, 1994, the Company had a private placement stock offering of 45,000
units, consisting of one share of common stock and one common stock purchase
warrant (unit) for $7.86 per share based on 85% of the average of the high and
low bid price per share on the first day of the offering which was March 21,
1994. The warrant included in the unit entitles the holder thereof to purchase
one share of common stock at a purchase price of $9.25 per share for a
three-year period. The private placement resulted in a total of 29,721 shares
being sold for $233,607. A portion of the sale was financed by the Company;
actual cash receivedoptions as of December 31, 1994,1997, 1996 and
1995, and changes during the year ended on those dates follows:

1997 1996 1995
-------------------- ------------------ -----------------
WGTD. AVG. WGTD. AVG. WGTD. AVG.
EXER. EXER. EXER.
SHARES PRICE SHARES PRICE SHARES PRICE
-------- ---------- ------- ---------- ------ ----------

Outstanding at beginning of
year....................... 288,723 $6.66 27,650 $7.00 -- $ --
Granted..................... 794,422 6.01 261,073 6.62 27,650 7.00
Exercised................... -- -- -- -- -- --
Cancelled/forfeited/expired. (126,080) (6.48) -- -- -- --
-------- ----- ------- ----- ------ -----
Outstanding at end of year.. 957,065 $6.14 288,723 $6.66 27,650 $7.00
======== ===== ======= ===== ====== =====
Exercisable at end of year.. 205,446 $6.49 88,741 $6.65 -- $7.00
======== ===== ======= ===== ====== =====
Weighted average fair value
of options granted during
the year................... $ 1.99 $ 3.11 $ 2.56
======== ======= ======

Of the 957,065 options outstanding at December 31, 1997, 403,604 become
exercisable in 1998, 341,348 in 1999, and 6,667 in 2000.

The following table summarizes information about stock options outstanding
at December 31, 1997:

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------- --------------------
WGTD. AVG. WGTD. WGTD.
NUMBER REMAINING AVG. NUMBER AVG.
OUTSTANDING CONTRACTUAL EXERCISE EXERCISABLE EXERCISE
RANGE OF EXERCISE PRICES AT 12/31/97 LIFE PRICE AT 12/31/97 PRICE
------------------------ ----------- ----------- -------- ----------- --------

$5.38-$7.00............. 957,065 8 years $6.14 205,446 $6.49

The Company applies APB Opinion No. 25 and related interpretations in
accounting for its stock option plans. FASB Statement No. 123 "Accounting for
Stock-Based Compensation" ("SFAS 123") was $126,473.issued by

F-26

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

the FASB in 1995 and changes the methods for recognition of cost on plans
similar to those of the Company. Adoption of SFAS 123 is optional; however,
pro forma disclosures, as if the Company had adopted the cost recognition
requirements under SFAS 123 in 1997 and 1996, are presented below.

The totalfair value of each option granted during the periods presented is
estimated on the date of grant using the Black-Scholes option pricing model
with the following assumptions: (i) dividend yield of 0%, (ii) expected
volatility ranging from 51.23%-53.69% for the options issued in 1997, 40.02%
and 45.44% for options issued in 1996, and 27.63% for options issued in 1995,
(iii) risk-free interest rate ranging from 5.70%-6.22% in 1997, 6.22% in 1996
and 5.23% in 1995, respectively, and (iv) expected life of 3 to 5 years.

Had compensation cost for the Company's 1997, 1996 and 1995 options been
determined consistent with SFAS 123, the Company's net income (loss), net
income (loss) applicable to common stockholders' and net income (loss) per
common share for 1997 and 1996 would approximate the pro forma amounts below
(000's, except share amounts):

1997 1996 1995
----------------- --------------- --------------
AS PRO AS PRO AS PRO
REPORTED FORMA REPORTED FORMA REPORTED FORMA
-------- ------- -------- ------ -------- -----

Net income (loss)............ $(1,194) $(1,813) $ 18 $ (59) $ 942 $ 933
======= ======= ===== ====== ===== =====
Net income (loss) applicable
to common stockholders...... $(1,194) $(1,813) $ 18 $ (59) $ 942 $ 933
======= ======= ===== ====== ===== =====
Net income (loss) per common
share....................... $ (0.43) $ (0.66) $0.01 $(0.02) $0.37 $0.36
======= ======= ===== ====== ===== =====

The effects of applying SFAS 123 in this pro forma disclosure are not
indicative of future amounts. SFAS 123 does not apply to awards prior to 1995,
and additional awards in future years are anticipated.

Subsequent to year end the Board of Directors authorized, subject to
shareholder approval, issuing 500,000 options under the Stock Option Plan with
up to 50% issued at $6.25 to existing employees.

ASM Employee Stock Ownership Plan

ASM developed an Employee Stock Ownership Plan (ESOP) effective January 1,
1997 to enable participating employees of ASM to share in the ownership of
ASM. Under the ESOP, the Company may make annual contributions to a trust for
the benefit of eligible employees, in the form of either cash or common stock
of ASM. The amount of $233,607the annual contribution is discretionary. The Company's
contribution for the year ended December 31, 1997 was recorded as common stock and additional paid-in capital. Equity has
been reduced for these sales for$721,000 which cash has not been receivedwas
accrued, but unfunded as of December 31, 1994 and 1995.1997.

Other

A predecessor entity to the Company, M & N, completed its initial public
offering of 250,000 common shares for gross proceeds of $1,500,000 on August
26, 1993. In connection with the offering, M & N issued 25,000 warrants to the
Underwriter (the Underwriter's Warrants), which are exercisable at $7.20 per
common share for a period of four years commencing April 28, 1994.

F-27

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

12. COMMITMENTS AND CONTINGENCIES:

LEASESLeases

The Company and its subsidiaries have leased office space at various
locations under noncancelable agreements which expire between January 1995,1, 1998,
and October,
2002,August 31, 2005, and require various minimum annual rentals. Total minimum
rental commitments at December 31, 1995,1997, are due as follows:follows (000's):

1998............................................................... $1,821
1999............................................................... 1,619
2000............................................................... 1,240
2001............................................................... 918
2002............................................................... 803
Due thereafter..................................................... 511
------
$6,912
======

Rent expense for all non-cancelable operating leases was $1,706,000,
$1,351,000 and $1,084,000 for the years ended December 31, 1997, 1996 ............................. $ 781,756and
1995, respectively.

The Company has arranged a $500,000 line of credit with a financing company
to lease equipment; $80,000 of this line was used at December 31, 1997 ............................. 646,329
1998 ............................. 570,163
1999 ............................. 518,044
2000 ............................. 473,746
Due thereafter ................... 1,083,733
----------
$4,073,771
==========

SELF-FUNDED INSURANCE PLANSleaving
available $420,000 for use on future equipment leases.

Self-Funded Insurance Plans

During 1995, the Company became self-insured for workers' compensation
claims in the State of Louisiana up to certain policy limits. Claims in excess
of $200,000 per incident and $756,200$1,300,000 in the aggregate over a two-year
policy period are insured by third party reinsurers. The Company has accrued a
liability for both outstanding as well asand incurred, but not reported claims based on
historical experience. Such reserves
totaledexperience totaling approximately $389,000$509,000 and $519,000 at December
31, 19951997 and are included in accrued
insurance in the accompanying financial statements.1996, respectively. In connection with the self
insuranceself-insurance and as
required by the State of Louisiana, the Company issued a $175,000 letter of
credit in favor of the Louisiana Department of Labor, which expired February
17, 1996,1998, and was renewed to February, 17, 1997.

F-19

PLANNED SURGICAL CARE CENTER

ASC plans1999.

During 1997, the Company became self-insured for health claims up to develop an additional surgical care operationcertain
policy limits. Claims in Hammond, Louisiana
in 1996. In connection with this development, ASCexcess of $35,000 per incident and approximately
$64,000 aggregate per month are insured by third party reinsurers. The Company
has committed to purchaseaccrued a 60% interest in Hammondliability of approximately $78,000 at December 31, 1997 for
outstanding and incurred, but not reported claims based on historical
experience.

Planned Surgical Care Center L.C.,and Other Projects

The Company is pursuing a limited liability company
(HSCC), for $960,000. HSCC is expected to operate thenumber of planned surgical care facility
which iscenter and other
projects to be leased from an unrelated entity whodeveloped or purchased in the future. While negotiations are
being conducted in connection with a number of possible projects, the Company
has made no formal commitments in this area beyond the investments discussed
below and in Note 16.

The Company plans to buildproceed to develop a $3.6 million surgery center in
Lafayette, Louisiana. The Company plans to hold a 21% interest in this
development with a group of physician investors and to manage the facilitydevelopment
under a management contract for a fee based on 4% of revenue.

F-28

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

Employment Contracts

The Company has commitments related to employment contracts with a number of
its top executives and lease itexecutives involved in the management of businesses
acquired (see Note 16 also) by the Company. Such contracts generally commit
the Company to HSCC.

OTHERpay bonuses on the attainment of certain operating goals and
severance benefits under certain circumstances.

Other

The Companies areCompany is subject to various types of claims and disputes arising in
the course of theirits businesses. While the resolution of such issues is not
presently determinable with certainty, management believes that the ultimate
resolution of such matters will not have a significant effect on the Companies'Company's
financial position or results of operations.

In 1997, the Company's Board of Directors approved the purchase of a point
of service device at an estimated cost of $1.5 million which will allow home
care providers to input patient information directly and electronically into
the Company's home care information system.

13. PENSIONBENEFIT PLAN:

The Company adopted a pension plan qualified under Section 401(k) of the Internal
Revenue Code 401(k) for all employees who are 21 years of age and have at least one
year of service. Under the plan, eligible employees may elect to defer a
portion of their compensation, subject to internal revenue service limits. The
Company may make matching contributions equal to a discretionary percentage of
the employee's salary reductions. No matching contributions werecontribution was made for the
year ended December 31, 1995. A matching contribution of $59,000 for the year
ended December 31, 1996 was made in 1997 and a matching contribution of
$71,000 will be made for 1997 in 1998.

14. SEGMENT INFORMATION:

The Company operates principally in two business segments: Provider Services
(consisting of home health care and outpatient surgery) and Management
Services (consisting of staffing/professional services and physician support
and home health care management). The following shows industry segment
information for the fiscal years ended December 31, 1997, 1996 and 1995 1994(in
000's):

1997 1996 1995
------- ------- -------

Net Service Revenues:
Provider Services
Home health care...................................... $25,817 $25,500 $17,631
Outpatient surgery.................................... 6,287 4,626 3,601
Management Services
Staffing/professional services........................ 17,292 12,538 13,774
Physician support and home health care management..... 5,100 3,396 2,583
Corporate support..................................... -- -- --
------- ------- -------
Total............................................... $54,496 $46,060 $37,589
======= ======= =======

F-29

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

1997 1996 1995
------- ------- -------

Operating Income (Loss):
Provider Services
Home health care.................................. $ 831 $ 2,038 $ 901
Outpatient surgery................................ (960) 1,175 1,152
Management Services
Staffing/professional services.................... 3,643 1,785 2,076
Physician support and home health care management. 1,494 347 193
Corporate support................................. (5,596) (4,201) (2,942)
------- ------- -------
Total........................................... (588) 1,144 1,380
Other expenses..................................... (962) (1,178) (250)
------- ------- -------
Income before income taxes, minority interest, and
cumulative effect of change in accounting
principle.......................................... $(1,550) $ (34) $ 1,130
======= ======= =======

CAPITAL EXPENDITURES
-------------------------
1997 1996 1995
------- ------- -------

Provider services
Home health care.................................. $ 348 $ 135 $ 96
Outpatient surgery................................ 631 2,233 284
Management services
Staffing/professional services.................... 21 7 12
Physician support and home health care management. 18 89 2
Corporate support................................. 438 501 52
------- ------- -------
Total........................................... $ 1,456 $ 2,965 $ 446
======= ======= =======

DEPRECIATION AND
AMORTIZATION
-------------------------
1997 1996 1995
------- ------- -------

Provider services
Home health care.................................. $ 344 $ 319 $ 246
Outpatient surgery................................ 609 271 148
Management services
Staffing/professional services.................... 16 60 77
Physician support and home health care management. 129 201 122
Corporate support................................. 142 94 54
------- ------- -------
Total........................................... $ 1,240 $ 945 $ 647
======= ======= =======

IDENTIFIABLE ASSETS
-------------------------
1997 1996 1995
------- ------- -------

Provider services
Home health care.................................. $ 5,243 $ 4,906 $ 4,537
Outpatient surgery................................ 6,180 6,541 3,341
Management services
Staffing/professional services.................... 1,924 1,820 1,745
Physician support and home health care management. 2,290 1,200 1,175
Corporate support................................. 7,233 2,391 739
------- ------- -------
Total........................................... $22,870 $16,858 $11,537
======= ======= =======

F-30

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

15. UNAUDITED QUARTERLY FINANCIAL INFORMATION:

The following table reflects the restatement of the Company's quarterly
results of operations for 1997, giving effect to the change in accounting
principle as of January 1, 1997 (see Note 5) and 1993.

14.the write-off of goodwill
associated with the Home Care Plus, Inc. acquisition in the second quarter
(see Note 2) (000's):

QUARTER ENDED (UNAUDITED)
------------------------------------------------------------------
SEPTEMBER 30,
MARCH 31, 1997 JUNE 30, 1997 1997
----------------- ----------------- -----------------
AS AS AS AS AS AS DECEMBER 31,
REPORTED RESTATED REPORTED RESTATED REPORTED RESTATED 1997
-------- -------- -------- -------- -------- -------- ------------

Income (loss) from
continuing operations.. $ 451 $ 473 $ 610 $ 415 $ 363 $ 344 $(2,782)
Net income (loss)....... $ 301 $ 116 $ 373 $ 179 $ 224 $ 214 $(1,703)
Net income (loss) per
common share........... $0.12 $0.04 $0.14 $0.06 $0.08 $0.08 $ (0.60)

16. SUBSEQUENT EVENTS:

During 1995,On January 1, 1998, the Company beganacquired all of the issued and outstanding
stock of Alliance Home Health, Inc. (Alliance), a process to develop ahome health maintenance
organization (HMO). In January, 1996, the Company deposited $500,000 in
connectionbusiness with
the HMO licensing process. The Company's president acquired a
67% interest in the HMO, which is still unlicensed,locations throughout Oklahoma, in exchange for arranging a
$1,000,000 letter$300,000 and 194,286 shares of
creditcommon stock. Of the 194,286 shares of Company common stock issued to the
former owners of Alliance, 122,857 shares were placed in escrow as
consideration for certain contingent liabilities which may be asserted against
the HMO, secured by sharesformer stockholder of Alliance to the extent such claims exceed $500,000
(singularly and/or in aggregate). The escrow period expires December 31, 2003.
The Company performed management services for Alliance during 1997 and
received revenues totaling approximately $1.3 million of which $695,000 is
included in accounts receivable at December 31, 1997. In addition, the Company
owned
by the president. Neitherhad advanced $1,465,000 to Alliance for cash flow purposes which is included
in other assets at December 31, 1997.

On February 23, 1998, the Company nor the Company's president have any
further formal commitment in connection with the HMO and the future developmentacquired all of the HMOissued and outstanding
capital stock of PRN, Inc. (PRN), a home infusion pharmacy business, in
exchange for $430,000 and assumption of $71,000 debt. The Company has agreed
to pay additional consideration of up to $150,000 upon PRN reaching certain
revenue goals ("Additional Consideration"). The Company has retained the right
to offset certain indemnifiable liabilities against the Additional
Consideration.

On February 27, 1998, the Company acquired all of the issued and outstanding
capital stock of Infusioncare Solutions, Inc. ("ICS") a home health care and
infusion business, based in Baton Rouge, Louisiana, in exchange for aggregate
consideration of $500,000, of which $375,000 was payable in cash at closing
and $125,000 was payable pursuant to a two year promissory note. The Company
has retained the right to offset certain indemnifiable liabilities against the
sums payable pursuant to the promissory note.

On February 27, 1998, the Company acquired substantially all of the assets
of Precision Health Solutions, L.L.C. ("PHS") a home health care and infusion
business, based in Baton Rouge, Louisiana, in exchange for aggregate
consideration of $1,000,000, of which $750,000 was payable in cash at closing
and $250,000 was payable pursuant to a two year promissory note. The Company
has retained the right to offset certain indemnifiable liabilities against the
sums payable pursuant to the promissory note.

F-31

AMEDISYS, INC. AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

DECEMBER 31, 1997, 1996 AND 1995

Each of the above transactions was accounted for as a purchase.

On March 3, 1998, the Company completed a secondary phase of its private
placement of preferred stock (see Note 11) and issued an additional 350,000
shares for gross proceeds of $3.5 million. These shares are convertible into
756,757 shares of common stock which is undeterminable at this time.

F-20equivalent to $4.625 per share.

F-32

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13.12. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be
incurred in connection with the distribution of the securities being registered.
The expenses shall be paid by the Registrant.

SEC Registration Fee ........................................ $ 1,440
Printing and Engraving Expenses ............................. 5,000
Legal Fees and Expenses ..................................... 20,000
Accounting Fees and Expenses ................................ 20,000
Blue Sky Fees and Expenses .................................. 1,000
Transfer Agent Fees ......................................... 500
Miscellaneous ............................................... 2,060
-------
TOTAL .................................................. $50,000
=======
SEC registration fee $ 874.00
Legal Fees and Expenses 10,000.00
Accounting Fees and Expenses 5,000.00
Miscellaneous $ 4,126.00
----------
Total $20,000.00

ITEM 14.15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Article XI of the Certificate of Incorporation of the Companycompany provides for
indemnification of officers, directors, agents and employees of the Companycompany as
follows:

(a) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of NOLO CONTENDEREnolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner in which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

II-1

(b) The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.

(c) To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) and (b) of this
Article, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.

II-1

(d) Any indemnification under subsections (a) and (b) of this Article
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
Article. Such determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (3) by the stockholders.

(e) Expenses (including attorneys' fees) incurred by an officer or director
in defending any civil, criminal, administrative or investigative action, suit
or proceeding may be paid by the Corporation in advance of the final disposition
of such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall ultimately
be determined that he is not entitled to be indemnified by the Corporation as
authorized by this Article. Such expenses (including attorneys' fees) incurred
by other employees and agents may be so paid upon such terms and conditions, if
any, as the Board of Directors deems appropriate.

(f) The indemnification and advancement of expenses provided by, or granted
pursuant to, the other subsections of this Article shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office.

(g) The Corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under this Article.

(h) For purposes of this Articlearticle references to "the Corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had the power
and authority to indemnify its directors, officers, and employees or agents, so
that any person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other

II-2
enterprise, shall stand in the same position under this Article with respect to
the resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.

(i) The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.

The foregoing discussion of the Company'scompany's Certificate of Incorporation, and
of the Delaware General Corporation Law is not intended to be exhaustive and is
qualified in its entirety by such Certificate of Incorporation and statutes,
respectively.

II-2

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

In December 1993, the Companycompany issued 351 shares of Common Stockcommon stock to employees
in exchange for an aggregate offering price of $37,000 which was paid in cash.

In December 1993, the Companycompany issued 75,000 shares to two unaffiliated third
parties for services rendered valued at nominal consideration.

In March 1994, the Companycompany issued 29,721 shares of Common Stockcommon stock to 38
purchasers pursuant to a private placement stock offering. An aggregate cash
consideration of $264,000 was received upon issuance of these shares.

In April 1994, the Companycompany issued 15,800 shares in exchange for all of the
outstanding stock of Priority Home Care, Inc. Consideration received for the
issuance of such shares was valued at $150,000.

In December 1994, the Companycompany issued 1,200 shares of Common Stockcommon stock upon
exercise of an outstanding stock option. Cash consideration received upon
exercise of this option was $6,000.

In March 1995, the Companycompany issued 7,143 shares of Common Stockcommon stock in exchange
for all of the outstanding stock of Health Care Services 24, Inc. The
consideration received for the issuance of these shares was valued at $50,000.

In May 1995, the Companycompany issued 30,000 shares of Common Stockcommon stock in exchange
for all of the outstanding stock of Home Care Plus, Inc. The consideration
received for the issuance of these shares was valued at $274,000.

In June 1995, the Companycompany issued 1,000,000 shares of Common Stockcommon stock in
connection with the acquisition of all of the outstanding membership interest in
Surgical Care Centers of Texas, LC. The consideration received for the issuance
of these shares was valued at $7 million.

In March 1998, the company issued 750,000 shares of preferred stock in
connection with a private placement offering. Consideration received for the
issuance of such shares was valued at $7.5 million.

In each case, the issuance of securities was exempt from registration under
the Securities Act pursuant to Section 4(2) as a transaction by an issuer not
involving any public offering. In each instance, the purchaser had a pre-existingpre-
existing relationship with the Company,company, the offers and sales were made without
public solicitation, the certificates bear restrictive legends, and appropriate
stop transfer orders have been given to the transfer agent. No underwriter was
involved in the transactions and no commissions were paid.

II-3
ITEM 16.17. EXHIBITS

AND FINANCIAL STATEMENT SCHEDULES

EXHIBIT NO. IDENTIFICATION OF EXHIBIT

2.1(1) - Acquisition Agreement dated December 20, 1993 between the Company and
M & N Capital Corp.

2.2(3) - Plan of Merger dated August 3, 1994 between M & N Capital Corp. and
the Company

2.3(4) - Certificate of Merger dated August 3, 1994 between M & N Capital
Corp. and the Company

3.1(4) - Certificate of Incorporation

3.2(4) - Bylaws

4.1(4) - Common Stock Specimen

4.2(1) - Representative's Warrant Agreement

5.1(6) - Opinion regarding Legality

10.1(4) - Loan Agreement with Sunburst Bank

10.2(4) - Loan Agreement with City National Bank of Baton Rouge

10.3(5) - Exchange Agreement dated June 30, 1995 between the Company and
Surgical Care Centers of Texas, L.C.

10.4(6) - Amended and Restated Stock Option Plan

16.1(2) - Letter dated February 14, 1994 from Poval, Scott & Company

21.1(6) - List of Subsidiaries

23.1(6) - Consent of Counsel (contained in Exhibit 5.1)

23.2(6) - Consents of Arthur Andersen, LLP and Hannis T. Bourgeois & Co.,
L.L.P., independent public accountants
- --------------------------
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
- ----------- -------------------------

2.1(1) -Acquisition Agreement dated December 20, 1993 between the company
and M&N Capital Corp. 2.2(3)-Plan of Merger dated August 3, 1994
between M&N Capital Corp. and the company
2.3(4) -Certificate of Merger dated August 3, 1994 between M&N Capital
Corp. and the company
2.4(7) -Acquisition Agreement dated August 1,1997 between the company
and Allgood Medical Services, Inc.
2.5(7) -Exchange Agreement dated January 1, 1998 between the company and
Alliance Home Health, Inc. and University Capital Corp. dated
December 10, 1997.
2.6(7) -Stock Purchase Agreement by and among Amedisys, Alternate-Site
Infusion Therapy Services, Inc., PRN, Inc. d/b/a Home IV Therapy,
Joseph W. Stephens, and Terry I. Stevens dated February 23, 1998.
2.7(7) -Agreement to Purchase by and between Amedisys, Alternate-Site
Infusion Therapy Services, Inc. and Precision Health Systems,
L.L.C. dated February 27, 1998.
2.8(7) -Promissory note in the amount of $250,000 to Precision Health
Solutions, L.L.C. in connection with the purchase of the company.
2.9(7) -Stock Purchase Agreement by and among Amedisys Alternate-Site
Infusion Therapy Services, Inc., Infusioncare Solutions, Inc. and
Daniel D. Brown dated February 27,1998.
2.10(7) -Promissory note in the amount of $125,000 to Daniel D. Brown in
connection with the purchase of the company.
2.11(8) -Exchange Agreement by and among Amedisys Specialized Medical
Services, Inc., Quality Home Health Care, Inc., Frances Unger
and James Unger dated May 1, 1998
2.12(9) -Asset Purchase Agreement by and among Nursefinders, Inc.,
Amedisys Staffing Services, Inc., Amedisys Nursing Services,
Inc., Amedisys Home Health, Inc. and Amedisys, Inc. dated as of
September 21, 1998.
3.1(4) -Certificate of Incorporation
3.2(4) -Bylaws
3.3(7) -Certificate of Designation for the series A preferred stock
4.1(4) -Common stock specimen
4.2(7) -Preferred stock specimen
4.3(7) -Form of Placement Agent's Warrant Agreement
5.1(10) -Opinion regarding Legality
10.1(4) -Master Note with Union Planter's Bank of Louisiana
10.2(4) -Merrill Lynch Term Working Capital Management Account
10.3(5) -Promissory Note with Deposit Guaranty National Bank
10.4(7) -Amended and Restated Stock Option Plan
10.5(7) -Registration Rights Agreement
21.1(10) -List of Subsidiaries
23.1(10) -Consent of Counsel (contained in Exhibit 5.1)
23.2(10) -Consents of Arthur Andersen, LLP and Hannis T. Bourgeois & Co.,
L.L.P., independent public accountants
- ---------------

(1) Previously filed as an exhibit to the Current Report on Form 8-K dated
December 20, 1993.1993, and incorporated herein by reference.
(2) Previously filed as an exhibit to the Current Report on Form 8-K dated
February 14, 1994.1994, and incorporated herein by reference.
(3) Previously filed as an exhibit to the Current Report on Form 8-K dated
August 11, 1994.1994, and incorporated herein by reference.

II-4

(4) Previously filed as an exhibit to the Annual Report on Form 10-KSB for the
year ended December 31, 1994.1994, and incorporated herein by reference.
(5) Previously filed as an exhibit to the Current Report on Form 8-K dated June
30, 1995.1995, and incorporated herein by reference, and incorporated herein by
reference.
(6) Previously filed as an exhibit to the Registration Statement on Form S-1
(333-8329) dated July 18, 1996, and incorporated herein by reference.
(7) Previously filed as an exhibit to the Registration Statement on Form S-3
dated March 11,1998, and incorporated herein by reference.
(8) Previously filed as an exhibit to the Company's Quarterly Report on Form
10-Q for the period ended June 30, 1998, and incorporated herein by
reference.
(9) Previously filed as an exhibit to the Company's Current Report on Form 8-K
dated September 21, 1998 and incorporated by herein by reference.
(10) Filed herewith.

II-4

ITEM 17.18. UNDERTAKINGS

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:

i. To include any prospectus required by Section 10(a)(3) of
the Securities Act of
1933;Act;

ii. To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the CommissionSEC
pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and

iii. To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.

Provided, however, that paragraphs (1) (i) and (1) (ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15 (d) of the Exchange Act that are incorporated by
reference in the registration statement.

(2) That, for the purpose of determining any liability under the
Securities Act, of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial BONA
FIDEbona fide offering thereof.

II-5

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) That,The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of 1933, the
information omitted fromregistrant's annual report pursuant to Section 13 (a) or 15 (d) of the form of prospectus filed as part of thisExchange
Act that is incorporated by reference in the registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act shall be
deemed to be part of thisa new registration statement asrelating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the time it
was declared effective.

(b)initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and
Exchange CommissionSEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-5II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrantregistrant
has duly caused this Registration Statementregistration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Baton Rouge, State of
Louisiana, on the 172nd day of July 1996.November, 1998.

AMEDISYS, INC.

By /s/ WILLIAM F. BORNE
---------------------------------------------
WILLIAM F. BORNE, Chief Executive Officer

------------____________________________

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statementregistration statement has been signed below by the following persons in the
capacities and on the dates indicated:

SIGNATURE TITLE DATE
- --------- ----- ----

/s/ WILLIAM F. BORNE Chief Executive Officer July 17, 1996
WILLIAM F. BORNE and Director (Principal
Executive Officer)

/s/ PROMOD K. SETH Chief Operating Officer July 17, 1996
PROMOD K. SETH

/s/ MITCHEL G. MOREL Chief Financial Officer July 17, 1996
MITCHEL G. MOREL (Principal Financial
and Accounting Officer)

/s/ IRVIN T. GREGORY President, Outpatient Surgery, July 17, 1996
IRVIN T. GREGORY and Director

/s/ WILLIAM M. HESSION, JR. Director July 17, 1996
WILLIAM M. HESSION, JR.

/s/ KARL A. LEBLANC Director July 17, 1996
KARL A. LeBLANC

/s/ ALAN J. OSTROWE Director July 17, 1996
ALAN J. OSTROWE

/s/ BORIS L. PAYAN Director July 17, 1996
BORIS L. PAYAN
Signature Title Date
- --------- ----- ----

//s// WILLIAM F. BORNE Chief Executive Officer November 2, 1998
- ------------------------------ and Director (Principal
WILLIAM F. BORNE Executive Officer)

//s// JAMES P. CEFARATTI President and Chief Operating November 2, 1998
- ------------------------------ Officer
JAMES P. CEFARATTI

//s// MITCHEL G. MOREL Chief Financial Officer November 2, 1998
- ------------------------------ (Principal Financial
MITCHEL G. MOREL and Accounting Officer)

//s// JAKE L. NETTERVILLE Director November 2, 1998
- ------------------------------
JAKE L. NETTERVILLE, CPA

Director November 2, 1998
- ------------------------------
DAVID R. PITTS

//s// RONALD A. LaBORDE Director November 2, 1998
- ------------------------------
RONALD A. LaBORDE

//s// PETER F. RICCHIUTI Director November 2, 1998
- ------------------------------
PETER F. RICCHIUTI

II-7