Heat oven to 400°F. Brown ground beef in large nonstick skillet until thoroughly cooked, stirring frequently.
Meanwhile, in ungreased 12x8-inch (2-quart) glass baking dish, combine potato slices and contents of sauce packet from potatoes.
In medium saucepan, combine pizza sauce and water. Bring to a boil. Pour over potato mixture; mix well. Add milk, mushrooms and beef mixture; mix well.
Bake at 400°F. for 30 minutes. Remove from oven; stir mixture gently. Sprinkle with cheese and onions. Return to oven; bake an additional 5 to 10 minutes or until potatoes are tender and cheese is melted. Let stand 5 minutes before serving to thicken sauce.