UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                  FORM 12b-25

                          NOTIFICATION OF LATE FILING

(Check One)  [ ] Form 10-K   [ ] Form 20-F   [ ] Form 11-K   [X] Form 10-Q
             [ ] Form N-SAR

                      For Period Ended: October 31, 1996

                 [ ] Transition Report on Form 10-K
                 [ ] Transition Report on Form 20-F
                 [ ] Transition Report on Form 11-K
                 [ ] Transition Report on Form 10-Q
                 [ ] Transition Report on Form N-SAR
                 For the Transition Period Ended: _______________

     If the notification relates to a portion of the filing checked above,
identify the Item(s) to which the notification relates: ________________________

PART I - REGISTRANT INFORMATION

Health Management, Inc.                    
Full Name of Registrant

_________________________________________________________
Former Name if Applicable

1371-A Abbott Court                           
Address of Principal Executive Office (Street and Number)

Buffalo Grove,  Illinois  60089
City, State and Zip Code


PART II - RULES 12b-25(b) AND (c)

If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed.  (Check box if appropriate)

     (a) The reasons described in reasonable detail in Part III of this form
         could not be eliminated without unreasonable effort or expense;

[X]  (b) The subject annual report, semi-annual report, transition report on
         Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion thereof, will be
         filed on or before the fifteenth calendar day following the prescribed
         due date; or the subject quarterly report of transition report on Form
         10-Q, or portion thereof will be filed on or before the fifth calendar
         day following the prescribed due date; and

     (c) The accountant's statement or other exhibit required by Rule 12b-25(c)
         has been attached if applicable.


PART III - NARRATIVE

State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q,
N-SAR, or the transition report or portion thereof, could not be filed within
the prescribed time period.

    The registrant was unable to file its quarterly report on Form 10-Q for the
    period ending October 31, 1996 within the prescribed time period.  The delay
    is due to the timing of the Company's sale of 49% of its Common Stock to
    Transworld Home Healthcare, Inc. ("Transworld") which is described in the
    registrant's Current Report on Form 8-K filed with the Securities and
    Exchange Commission on November 27, 1996.  The registrant signed a
    definitive agreement to sell such common stock to Transworld on November 13,
    1996 and the closing for such transaction which was originally scheduled to
    be held on or about December 12, 1996 has been postponed to on or about
    December 23, 1996.  The notes to the registrant's financial statements for
    the quarterly period ended October 31, 1996 and in the description of
    Management's Discussion and Analysis of Financial Condition and Results of
    Operations need to be revised to reflect the current status of the
    transaction.


PART IV - OTHER INFORMATION

(1) Name and telephone number of person to contact in regard to this
    notification

    Cheryl V. Reicin          212           547-5522                  
        (Name)            (Area Code)   (Telephone Number)

(2) Have all other periodic reports required under Section 13 or 15(d) of the
    Securities Exchange Act of 1934 or Section 30 of the Investment Company Act
    of 1940 during the preceding 12 months or for such shorter period that the
    registrant was required to file such report(s) been filed?  If answer is no,
    identify report(s).

                                 [X] Yes   [ ] No

(3) Is it anticipated that any significant change in results of operations from
    the corresponding period for the last fiscal year will be reflected by the
    earnings statements to be included in the subject report or portion thereof?

                                 [X] Yes   [ ] No

    If so, attach an explanation of the anticipated change, both narratively and
    quantitatively, and, if appropriate, state the reasons why a reasonable
    estimate of the results cannot be made.

         A $7.2 million charge will be recorded in connection with the
         consolidated stockholder class action lawsuit In re Health Management,
         Inc. securities litigation, Master File No. 96 Civ. 0889 (ADS) and an
         additional charge of $1.4 million will be recorded in connection with
         certain estimates of amounts which are owing to New York State
         Medicaid.


                                  SIGNATURES

     Health Management, Inc. has caused this notification to be signed on its
behalf by the undersigned hereunto duly authorized.

                                       HEALTH MANAGEMENT, INC.

Date: December 16, 1996                By: /s/ Paul S. Jurewicz
                                       Name: Paul S. Jurewicz
                                       Title: Chief Financial Officer,
                                              Executive Vice President,
                                              Treasurer and Secretary