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<TITLE>HMS HOLDINGS CORP</TITLE>
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<P align="center"><FONT size="2">As filed with the Securities and
Exchange Commission on September&nbsp;2, 2003.<BR>
Registration No.&nbsp;333-
</FONT>

<P align="center"><FONT size="4"><B>SECURITIES AND EXCHANGE COMMISSION</B>
</FONT>

<DIV align="center"><FONT size="3">Washington, D.C. 20549
</FONT></DIV>
<P align="center"><FONT size="5"><B>FORM S-8</B>
</FONT>

<DIV align="center"><FONT size="3"><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933</B>
</FONT></DIV>
<P align="center"><FONT size="6"><B>HMS HOLDINGS CORP.</B>
</FONT>

<P align="center"><FONT size="2">(Exact name of Registrant as specified in its charter)
</FONT>

<P align="center"><FONT size="2">New York<BR>
(State or other jurisdiction of incorporation or organization)
</FONT>

<P align="center"><FONT size="2">11-3656261<BR>
(I.R.S. Employer Identification Number)
</FONT>

<P align="center"><FONT size="2">401 Park Avenue South, New York, New York 10016<BR>
(Address of Principal Executive Offices)
</FONT>

<P align="center"><FONT size="2"><B>1999 LONG-TERM INCENTIVE STOCK PLAN</B><BR>
(Full title of the Plan)
</FONT>

<P align="center"><FONT size="2">Philip Rydzewski, Chief Financial Officer<BR>
HMS Holdings Corp.<BR>
401 Park Avenue South<BR>
New York, New York 10016<BR>
(Name and address of agent for service)
</FONT>

<P align="center"><FONT size="2">(212)&nbsp;725-7965<BR>
(Telephone number, including area code, of agent for service)
</FONT>

<P align="center"><FONT size="2">copies to:<BR>
Kenneth S. Goodwin, Esq.<BR>
Brown Rudnick Berlack Israels LLP<BR>
120 West 45<SUP>th</SUP> Street<BR>
New York, New York 10036<BR>
(212)&nbsp;704-0100
</FONT>

<P align="center"><FONT size="2">&nbsp;</FONT>
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<P align="center"><FONT size="2"><B>CALCULATION OF REGISTRATION FEE</B>
</FONT>

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    <TD width="3%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center"><FONT size="1"><B>Title of each class of
securities<BR>
to be registered</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="1"><B>
Amount to be registered</B>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="1"><B>Proposed maximum<BR>
offering price per<BR>
shares(1)</B>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center"><FONT size="1"><B>Proposed maximum<BR>
aggregate offering<BR>
price(1)</B>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" nowrap><FONT size="1"><B>Amount of
registration fee</B></FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<HR size="1" noshade>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2"><HR size="1" noshade>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2"><HR size="1" noshade>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Common Stock, $.01 par value</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
1,500,000 shares
</FONT></TD>
    <TD align="right" valign="top"><FONT size="2">$
</FONT></TD>
    <TD align="right"><FONT size="2">3.73</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">$
</FONT></TD>
    <TD align="right"><FONT size="2">5,595,000</FONT></TD>

    <TD align="right" valign="top"><FONT size="2"></FONT></TD>

<TD align="right"><FONT size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;453</FONT></TD>
</TR>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<HR size="1" noshade>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2"><HR size="1" noshade>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2"><HR size="1" noshade>
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
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<P>
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    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule&nbsp;457(h)(1) of the Securities Act of 1933,
as amended, on the basis of $3.73 per share, the average of the high
($3.75) and low ($3.70) sale prices of the Registrant&#146;s common
stock, as reported in the Nasdaq National Market on August&nbsp;27, 2003.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Registration Statement shall be deemed to cover an indeterminate
number of additional shares of HMS Holdings Corp. Common Stock as may be
issuable pursuant to future stock dividends, stock splits or similar
transactions.
</FONT>
<P align="center"><FONT size="2"><B>EXPLANATORY NOTE</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HMS Holdings Corp. (the &#147;Registrant&#148;) is the successor issuer to the
common stock, $0.01 par value, of Health Management Systems, Inc. (&#147;HMS&#148;). On
March&nbsp;3, 2003, the Registrant became the parent company of HMS and the issued
and outstanding shares of HMS common stock were exchanged, on a share-for-share
basis, for the common stock, $0.01 par value, of the Registrant. On April&nbsp;27,
1999, HMS filed a Registration Statement on Form&nbsp;S-8 (No.&nbsp;333-77121), as
amended on May&nbsp;10, 1999 (the &#147;Prior Registration Statement&#148;) which registered
4,751,356 shares of common stock, par value $.01 per share (&#147;Common Stock&#148;),
for issuance under the 1999 Long-Term Incentive Stock Plan (the &#147;Plan&#148;).
Pursuant to Rule&nbsp;414(d) under the Securities Act of 1933, as amended (the
&#147;Securities Act&#148;), the Registrant expressly adopts such Registration Statement
as its own for all purposes of the Securities Act and the Securities Exchange
Act of 1934, as amended (the &#147;Exchange Act&#148;).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 1,500,000 shares of Common Stock being registered pursuant to this
registration statement (the &#147;Registration Statement&#148;) are additional securities
of the same class as other securities for which a registration statement on
Form&nbsp;S-8, namely, the Prior Registration Statement, was filed with the
Securities and Exchange Commission (the &#147;Commission&#148;). Pursuant to General
Instruction E to Form&nbsp;S-8, the contents of the Prior Registration Statements
are incorporated by reference into this Registration Statement, except that the
provisions contained in Part II of such earlier registration statement are
modified as set forth in this Registration Statement.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;4, 2003, the Registrant&#146;s shareholders approved an amendment to
the Plan to reserve for issuance thereunder an additional 1,500,000 shares of
Common Stock. Accordingly, this Registration Statement is being filed to
register the 1,500,000 additional shares of Common Stock.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under cover of this Form&nbsp;S-8 is a Reoffer Prospectus prepared in
accordance with the requirements of Part I of Form&nbsp;S-3. The S-3 Reoffer
Prospectus may be utilized for reofferings of Common Stock acquired by certain
Selling Shareholders through participation in the Plan.
</FONT>
<P align="center"><FONT size="2">&nbsp;</FONT>
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<P align="center"><FONT size="2"><B>PART I</B>
</FONT>

<P align="left"><FONT size="2"><B>INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Rule&nbsp;428(b)(1) under the Securities Act of 1933, as amended
(the &#147;Act&#148;), an Information Statement with respect to the 1999 Long-Term
Incentive Stock Plan (the &#147;Plan&#148;) will be distributed to holders of stock
options granted under such Plan. The Information Statement, together with the
documents incorporated by reference herein pursuant to Item&nbsp;3 of Part II below,
taken together, constitute a Section&nbsp;10(a) prospectus and the Information
Statement is hereby incorporated by reference in this Registration Statement.
</FONT>
<P align="center"><FONT size="2">&nbsp;</FONT>

<P align="center"><FONT size="2">I-1</FONT>
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<P align="center"><FONT size="2"><B>PROSPECTUS</B>
</FONT>

<P align="center"><FONT size="2"><B>1,553,038&nbsp;SHARES<BR>
HMS HOLDINGS CORP.</B>
</FONT>

<P align="center"><FONT size="2"><B>Common Stock, $.01 par value</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to the reoffer and resale by certain selling
shareholders of shares of our common stock that were issued or may be issued by
us to the selling shareholders upon the exercise of stock options granted under
our 1999 Long-Term Incentive Stock Plan, which we assumed in connection with
our merger and share exchange with Health Management Systems, Inc. HMS is now
our wholly-owned subsidiary. We previously registered the offer and sale of the
shares to the selling shareholders. This prospectus also relates to certain
underlying options that have not been granted as of this date. If and when such

options are granted to persons required to use this prospectus to reoffer and
resell the shares underlying such options, we will distribute a prospectus
supplement. The shares are being reoffered and resold for the account of the
selling shareholders, and we will not receive any of the proceeds from the
resale of the shares.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders have advised us that the resale of their shares
may be effected from time to time in one or more transactions on the Nasdaq
National Market, in negotiated transactions or otherwise, at market prices
prevailing at the time of the sale or at prices otherwise negotiated. See &#147;Plan
of Distribution.&#148; We will bear all expenses in connection with the preparation
of this prospectus.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our common stock is traded on the Nasdaq National Market under the symbol
&#147;HMSY.&#148; On August&nbsp;27, 2003, the closing price for the common stock, as reported
by the Nasdaq National Market, was $3.74.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal executive offices are located at 401 Park Avenue South, New
York, New York 10016, and our telephone number there is (212)&nbsp;725-7965.
</FONT>
<P align="center"><FONT size="2"><B><I>This investment involves risk. See &#147;Risk Factors&#148; beginning at page 1.</I></B>
</FONT>
<P align="center"><FONT size="2"><B>NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY<BR>
STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF<BR>
THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY<BR>
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A<BR>
CRIMINAL OFFENSE.</B>
</FONT>

<P align="center"><FONT size="2">The date of this Prospectus is
September&nbsp;2, 2003.
</FONT>

<P align="center"><FONT size="2">&nbsp;</FONT>
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<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
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<TR>
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	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">FORWARD-LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">THE COMPANY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">SELLING SHAREHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">PLAN OF DISTRIBUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">INDEX TO EXHIBITS</A></TD></TR>
<TR><TD colspan="9"><A HREF="y89544exv3w1wa.htm">AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="y89544exv4.htm">1999 LONG-TERM INCENTIVE STOCK PLAN, AS AMENDED</A></TD></TR>
<TR><TD colspan="9"><A HREF="y89544exv5.htm">OPINION OF BROWN RUDNICK BERLACK ISRAELS LLP</A></TD></TR>
<TR><TD colspan="9"><A HREF="y89544exv23w1.htm">CONSENT OF KPMG LLP</A></TD></TR>
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<P align="center"><FONT size="2"><B>TABLE OF CONTENTS</B>
</FONT>

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    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
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    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Page</B></FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Risk Factors</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Where You Can Find More Information</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Incorporation of Certain Documents by Reference</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Forward-Looking Statements</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Use of Proceeds</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">The Company</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Selling Shareholders</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Plan of Distribution</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Legal Matters</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Experts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Disclosure of Commission Position on Indemnification
for Securities Act Liabilities</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise indicated, all references in this prospectus to
&#147;Holdings,&#148; &#147;we,&#148; &#147;us&#148; and &#147;our&#148; refer to HMS Holdings Corp., a New York
corporation, and its wholly-owned subsidiaries, Health Management Systems, Inc.
(&#147;HMS&#148;), Accordis Inc. (&#147;Accordis&#148;), HMS Business Services Inc. (&#147;Services&#148;)
and Health Receivables Management, Inc. (&#147;HRM&#148;).
</FONT>
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<DIV align="left"><A NAME="000"></A></DIV>
<P align="center"><FONT size="2"><B>RISK FACTORS</B>
</FONT>

<P align="center"><FONT size="2">PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995<BR>
SAFE HARBOR COMPLIANCE STATEMENT<BR>
FOR FORWARD-LOOKING STATEMENTS
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In passing the Private Securities Litigation Reform Act of 1995 (the
Reform Act), Congress encouraged public companies to make &#147;forward-looking
statements&#148; by creating a safe harbor to protect companies from securities law
liability in connection with forward-looking statements. We intend to qualify
both our written and oral forward-looking statements for protection under the
Reform Act and any other similar safe harbor provisions.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Forward-looking statements&#148; are defined by the Reform Act. Generally,
forward-looking statements include expressed expectations of future events and
the assumptions on which the expressed expectations are based. All
forward-looking statements are inherently uncertain as they are based on
various expectations and assumptions concerning future events and they are
subject to numerous known and unknown risks and uncertainties which could cause
actual events or results to differ materially from those projected. Due to
those uncertainties and risks, prospective investors are urged not to place
undue reliance on written or oral forward-looking statements of the Company. We
undertake no obligation to update or revise this safe harbor compliance
statement for forward-looking statements to reflect future developments. In
addition, we undertake no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of unanticipated
events or changes to future operating results over time.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We provide the following risk factor disclosure in connection with our
continuing effort to qualify our written and oral forward-looking statements
for the safe harbor protection of the Reform Act and any other similar safe
harbor provisions. Important factors currently known to management that could
cause actual results to differ materially from those in forward-looking
statements include the following:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Our Operating Results Are Subject To Significant Fluctuations Due To
Variability In The Timing Of When We Recognize Contingency Fee Revenue And
Other Factors. As A Result, You Will Not Be Able To Rely On Our Operating
Results In Any Particular Period As An Indication Of Our Future Performance</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our revenue and consequently our operating results may vary significantly
from period to period as a result of a number of factors, including the loss of
customers due to consolidation in the healthcare industry, fluctuations in
sales activity given our sales cycle of approximately three to eighteen months,
and general economic conditions as they affect healthcare providers and payors.
Further, we have experienced fluctuations in our revenue of up to 25% between
reporting periods due to the timing of periodic revenue enhancement projects
and the timing and delays in third-party payors&#146; adjudication of claims and
ultimate payment to our clients where our fees are contingent upon such
</FONT>
<P align="center"><FONT size="2">1</FONT>
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<P align="left"><FONT size="2"> collections. The extent to which future revenue fluctuations could occur
due to these factors is not known and cannot be predicted. As a result, our
results of operations are subject to significant fluctuations and our results
of operations for any particular quarter or fiscal year may not be indicative
of results of operations for future periods. A significant portion of our
operating expenses are fixed, and are based primarily on revenue and sales
forecasts. Any inability on our part to reduce spending or to compensate for
any failure to meet sales forecasts or receive anticipated revenues could
magnify the adverse impact of such events on our operating results.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We Are Subject To Claims If Our Service Offerings Contain Errors Or
Experience Failures Or Do Not Meet Customer Expectations And Could Lose
Customers And Revenue</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The healthcare claiming environment is complex. On behalf of our clients,
our Accordis business processes a very high volume of transactions in this
environment. From time to time we have been subject to claims by clients and
could be subject to claims by clients in the future for errors in our service
offerings, primarily for failures to secure reimbursement amounts otherwise
payable to our clients. We have often resolved such claims by providing
additional services to the client or by reducing fees on additional projects.
There can be no assurance that contractual limitations of our responsibility
for damages will be effective in these situations or that clients will not seek
significant damages for errors in our services. Further, these performance
failures could result in a loss of customers and resulting loss of revenue. In
addition, service performance failures could result in a delay in market
acceptance for our services, diversion of development resources, damage to our
reputation or increased service costs. We are currently discussing with an
Accordis client a claim for damages based on the client&#146;s assertion that it has
been significantly financially harmed by errors in our service. We are
currently assessing the claim both internally and with the client and believe
that it is likely that the claim will be settled in a manner that will not
adversely affect our financial position, results of operations, or ongoing
relationship with the client. However, there can be no assurances that the
claim will be settled or that the client will not seek to hold us responsible
for a substantial amount of alleged damages.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Majority Of Our Contracts With Customers May Be Terminated For
Convenience</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The majority of our contracts with customers are terminable upon short
notice for the convenience of either party. Although to date none of our
material contracts have ever been terminated under these provisions, we cannot
assure you that a material contract will not be terminated for convenience in
the future. Any termination of a material contract, if not replaced, could have
a material adverse effect on our business, financial condition and results of
operations.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We Face Significant Competition For Our Services</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Competition for our services is intense and is expected to increase.
Increased competition could result in reductions in our prices, gross margins
and market share. We
</FONT>
<P align="center"><FONT size="2">2</FONT>
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<P align="left"><FONT size="2"> compete with other providers of healthcare information management and data
processing services, as well as healthcare consulting firms. Some competitors
have formed business alliances with other competitors that may affect our
ability to work with some potential customers. In addition, if some of our
competitors merge, a stronger competitor may emerge.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current and prospective customers also evaluate our capabilities against
the merits of their existing information management and data processing systems
and expertise. Major information management systems companies, including those
specializing in the healthcare industry, that do not presently offer competing
services may enter our markets. Many of our competitors and potential
competitors have significantly greater financial, technical, product
development, marketing and other resources, and market recognition than we
have. As a result, our competitors may be able to respond more quickly to new
or emerging technologies, changes in customer requirements and changes in the
political, economic or regulatory environment in the healthcare industry. In
addition, several of our competitors may be in a position to devote greater
resources to the development, promotion, and sale of their services than us.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Simplification Of The Healthcare Transfer Payment Process Could Reduce
The Need For Our Services</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The complexity of the healthcare transfer payment process, and our
experience in offering services that improve the ability of our customers to
recover incremental revenue through that process, have been contributing
factors to the success our service offerings. Complexities of the healthcare
transfer payment process include multiple payors, the coordination and
utilization of clinical, operational, financial and/or administrative review
instituted by third-party payors in an effort to control costs and manage care.
If the payment processes associated with the healthcare industry are
simplified, the need for our services, or the price customers are willing to
pay for our services, could be reduced.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>We Are Subject To Government Regulation&nbsp;In Our Collections Services</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The collection industry in the United States is regulated both at the
federal and state level. In addition to specific regulation regarding debts for
healthcare services and among other collection regulations the Federal Fair
Debt Collection Practices Act (FFDCPA)&nbsp;regulates any person who regularly
collects or attempts to collect, directly or indirectly, consumer debts owed or
asserted to be owed to another person. The FFDCPA establishes specific
guidelines and procedures that debt collectors must follow in communicating
with consumer debtors, including the time, place and manner of such
communications and places restrictions on communications with individuals other
than consumer debtors in connection with the collection of any consumer debt.
Additionally, the FFDCPA contains various notice and disclosure requirements
and prohibits unfair or misleading representations by debt collectors. Many
states require that we be licensed as a debt collection company and we believe
that we are currently hold applicable licenses from all states where required.
If we fail to comply with applicable laws and regulations,
</FONT>
<P align="center"><FONT size="2">3</FONT>
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<P align="left"><FONT size="2"> it could result in the suspension or termination of our ability to conduct
collections, which would have a material adverse effect on us.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Changes In The United States Healthcare Environment Could Have A Material
Negative Impact On Our Revenue And Net Income</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The healthcare industry in the United States is subject to changing
political, economic and regulatory influences that may affect the procurement
practices and operations of healthcare organizations. Our services are designed
to function within the structure of the healthcare financing and reimbursement
system currently being used in the United States. During the past several
years, the healthcare industry has been subject to increasing levels of
governmental regulation of, among other things, reimbursement rates, certain
capital expenditures, and data confidentiality and privacy. From time to time,
certain proposals to reform the healthcare system have been considered by
Congress. These proposals, if enacted, may increase government involvement in
healthcare, lower reimbursement rates and otherwise change the operating
environment for our clients. Healthcare organizations may react to these
proposals and the uncertainty surrounding such proposals by curtailing or
deferring their retention of service providers such as us. See also &#147;The
Company &#150; Healthcare Reform and Regulatory Matters&#148; section on page 9 for
additional discussion on this topic. We cannot predict what impact, if any,
such proposals or healthcare reforms might have on our results of operations,
financial condition or business.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Our Business Is Subject To Extensive And Complex Governmental Regulations
And Violations Of Any Of Those Regulations Could Result In Significant
Penalties</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Most of the services offered by our Accordis business involve the billing
and collection of healthcare claims. These services require the interpretation
and application of sometimes ambiguous reimbursement regulations under various
government entitlement programs such as Medicaid and Medicare. In addition,
during the past several years, federal and state governments have placed an
increased emphasis on detecting and eliminating fraud and abuse in Medicare,
Medicaid, and other health care programs. Violation of health care billing
laws or regulations governing our services could result in the imposition of
substantial civil or criminal penalties, including temporary or permanent
exclusion from participation in government health care programs such as
Medicare and Medicaid, and loss of customers.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The interpretation and application of the healthcare reimbursement rules
to particular customer patient accounting environments involves judgment. If a
regulatory agency were to disagree with certain judgments we have made or will
make in providing healthcare billing services to a customer we could be subject
to penalties, or fines or other sanctions by regulators. In addition we could
find it necessary to alter or eliminate some of our services.
</FONT>
<P align="center"><FONT size="2">4</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Certain Provisions In Our Certificate Of Incorporation Could Discourage
Unsolicited Takeover Attempts, Which Could Depress The Market Price Of Our
Common Stock</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our certificate of incorporation authorizes the issuance of up to
5,000,000 shares of &#147;blank check&#148; preferred stock with such designations,
rights and preferences as may be determined by our Board of Directors.
Accordingly, our Board of Directors is empowered, without shareholder approval,
to issue preferred stock with dividend, liquidation, conversion, voting or
other rights, which could adversely affect the voting power or, other rights of
holders of our common stock. In the event of issuance, preferred stock could be
utilized, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control. Although we have no present intention to issue
any shares of preferred stock, we cannot assure you that we will not do so in
the future. In addition, our by-laws provide for a classified board of
directors, which could also have the effect of discouraging a change of
control.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Adverse Resolution Of Pending Litigation May Cause Us To Incur a
Significant Loss</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are party to the following legal proceedings as described below.
Although we believe that we have meritorious defenses to the claims of
liability or for damages in this action against us, we cannot assure you that
an outcome favorable to us will be reached in this litigation or that
additional lawsuits will not be filed against us. Further, we cannot assure you
that this lawsuit will not have a disruptive effect upon the operations of our
business, that the defense of the lawsuit will not consume the time and
attention of our senior management, or that the resolution of the lawsuit or
future lawsuits will not have a material adverse effect upon our results of
operations, financial position and cash flow.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On June&nbsp;28, 1998, eight holders of promissory notes (the Notes) of HHL
Financial Services, Inc. (HHL)&nbsp;commenced a lawsuit against us and others in the
Supreme Court of the State of New York, County of Nassau, alleging various
breaches of fiduciary duty between 1990 and 1996 against HHL (the first cause
of action) and that defendants intentionally caused HHL&#146;s default under the
Notes (the second cause of action). The complaint alleges that the defendants
caused HHL to make substantial unjustified payments to us which, ultimately,
led to defaults on the Notes and to HHL&#146;s filing for Chapter&nbsp;11 bankruptcy
protection in 1997. The plaintiffs are seeking damages in the amount of $2.3
million (for the unpaid notes) plus interest. As a result of motion practice
before the Bankruptcy Court, the breach of fiduciary duty claim was dismissed.
A motion to dismiss the remaining cause of action, for tortious interference
with contract, was denied by the New York Supreme Court, and an appeal was
taken. On March&nbsp;3, 2003, the Appellate Division Second Department affirmed the
lower Court&#146;s decision holding that the Complaint pleaded a cognizable cause of
action for tortious interference. We will now answer the Complaint, and both
sides will engage in discovery. We intend to continue our vigorous defense of
this lawsuit. Management believes the risk of loss is not probable and
accordingly has not recognized any accrued liability for this matter.
</FONT>
<P align="center"><FONT size="2">5</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Adverse Resolution Of Ongoing Investigation By The United States
Attorney&#146;s Office Will Cause Adverse Impact On Revenue and Expense Levels Over
The Near Term, And An Adverse Resolution Could Cause A Material Adverse Effect
On Our Business Thereafter</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;31, 2003, we announced that we had received a subpoena issued
under the Health Insurance Portability and Accountability Act of 1996 from the
United States Attorney&#146;s Office for the Southern District of New York in
connection with an investigation relating to possible federal health care
offenses. The subpoena seeks the production of certain documents from January
1982 to present relating to medical reimbursement claims submitted by us to
Medicare, Medicaid, and other federal healthcare programs, particularly on
behalf of a significant client of Accordis. At this point in the
investigation, the United States Attorney&#146;s Office has not filed any complaint
asserting any violations of law.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our board of directors has appointed a special committee to oversee our
response to the investigation. We continue to cooperate fully with the
investigation.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are not able to give any assurances as to the duration or outcome of
the investigation or as to the effect that any proceedings that may be brought
by the government may have on our financial condition or results of operations.
The initiation of proceedings against us, even if we are ultimately successful
in defending them, could have a material adverse effect on our business. Since
the receipt of the subpoena, our revenue and expense levels have been adversely
affected as management undertook to comply with the demands of document
production and to review the matters covered by the subpoena. We anticipate
that we will continue to incur significant legal expenses while the
investigation is still ongoing.
</FONT>
<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
<DIV align="left"><A NAME="001"></A></DIV>
<P align="center"><FONT size="2"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed a registration statement on Form&nbsp;S-8 with the SEC for our
common stock covered by this offering. This prospectus does not contain all of
the information set forth in the registration statement. You should refer to
the registration statement and its exhibits for additional information.
Whenever we make references in this prospectus to any of our contracts,
agreements or other documents, the references are not necessarily complete and
you should refer to the exhibits attached to the registration statement for the
copies of the actual contract, agreement or other document.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information and representations provided or
incorporated by reference in this prospectus or any related supplement. We have
not authorized anyone else to provide you with different information. The
selling shareholders will not make an offer to sell these shares in any state
where the offer is not permitted. You should not assume that the information in
this prospectus or any supplement is accurate as of any date other than the
date on the front of those documents.
</FONT>
<P align="center"><FONT size="2">6</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC maintains an Internet site at http://www.sec.gov, which contains
reports, proxy and information statements, and other information regarding us.
You may also read and copy any document we file with the SEC at its Public
Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of the Public
Reference Room.
</FONT>
<!-- link1 "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" -->
<DIV align="left"><A NAME="002"></A></DIV>
<P align="center"><FONT size="2"><B>INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The SEC allows us to &#147;incorporate by reference&#148; the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference
is considered to be a part of this prospectus and information that we file
later with the SEC will automatically update and replace this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Section&nbsp;13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">1.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Holdings&#146; Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 2002;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">2.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Holdings&#146; Quarterly Reports on Form&nbsp;10-Q for the quarters
ended March&nbsp;31, 2003 and June&nbsp;30, 2003; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">3.</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Holdings&#146; Current Reports on Form&nbsp;8-K, filed with the SEC on
May&nbsp;6, 2003 and July&nbsp;29, 2003.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will provide you with a copy of these filings, excluding the exhibits
to such filings which we have not specifically incorporated by reference in
such filings, at no cost, upon written or oral request, by writing or
telephoning us at HMS Holdings Corp., 401 Park Avenue South, New York, NY
10016, Attention: Corporate Secretary, telephone (212)&nbsp;857-5423.
</FONT>
<!-- link1 "FORWARD-LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="003"></A></DIV>
<P align="center"><FONT size="2"><B>FORWARD-LOOKING STATEMENTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus includes or incorporates by reference forward-looking
statements within the meaning of Section&nbsp;27A of the Securities Act of 1933 and
Section&nbsp;21E of the Securities Exchange Act of 1934. In some cases, you can
identify forward-looking statements by words such as &#147;may,&#148; &#147;will,&#148; &#147;should,&#148;
&#147;could,&#148; &#147;expect,&#148; &#147;plan,&#148; &#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;intend,&#148;
&#147;project,&#148; &#147;seek,&#148; &#147;predict,&#148; &#147;potential&#148; or &#147;continue&#148; or the negative of
these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially. In evaluating
these statements, you should specifically consider various factors, including
the risks outlined under &#147;Risk Factors.&#148; Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. We are under no duty to update any of the forward-looking
statements after the date of this prospectus to conform these statements to
actual results.
</FONT>
<P align="center"><FONT size="2">7</FONT>
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<!-- link1 "USE OF PROCEEDS" -->
<DIV align="left"><A NAME="004"></A></DIV>
<P align="center"><FONT size="2"><B>USE OF PROCEEDS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of common stock offered by this prospectus are being registered
for the account of the selling shareholders identified in this prospectus. See
&#147;Selling Shareholders.&#148; All net proceeds from the sale of the shares of common
stock will go to the shareholders that offer and sell their shares. We will not
receive any part of the proceeds from such sales of common stock. We will,
however, receive the exercise price of the options at the time of their
exercise. Such proceeds will be contributed to working capital and will be used
for general corporate purposes.
</FONT>
<!-- link1 "THE COMPANY" -->
<DIV align="left"><A NAME="005"></A></DIV>
<P align="center"><FONT size="2"><B>THE COMPANY</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At a special meeting held on February&nbsp;27, 2003, the shareholders of Health
Management Systems, Inc. approved the creation of a holding company structure.
Following that meeting, all the outstanding shares of Health Management
Systems, Inc. common stock were exchanged on a one-for-one basis for the shares
of common stock of HMS Holdings Corp., the new parent company. The adoption of
the holding company structure, pursuant to an Agreement and Plan of Merger
approved at the shareholders meeting, constituted a reorganization with no
change in ownership interests and no dilutive impact to the former shareholders
of Health Management Systems, Inc.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;HMS Holdings Corp. furnishes revenue recovery, business process and
business office outsourcing services to healthcare payors and providers. We
help our clients increase revenue, accelerate collections, and reduce operating
and administrative costs. We operate two businesses through our wholly owned
subsidiaries, Health Management Systems, Inc. (Health Management Systems)
(formerly our Payor Services Division) and Accordis Inc. (Accordis) (formerly
our Provider Services Division).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Health Management Systems offers state Medicaid and other government
agencies that administer health care entitlement programs a broad range of
services that are designed to identify and recover amounts that should have
been the responsibility of a third party, or that were paid inappropriately.
Further, by assisting these agencies in properly accounting for the services
that they deliver, we also help to ensure that they receive the full amount of
program funding to which they are entitled.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accordis provides business office outsourcing services for hospitals,
emergency medical transport agencies, and other healthcare providers. These
business office services may include identifying third-party resources,
submitting timely and accurate bills to third-party payors and patients,
recovering and properly accounting for the amounts due, responding to customer
service questions from patients, and securing the appropriate cost-based
reimbursement from entitlement programs. Clients may outsource the entirety of
their business office operations to us, or discrete revenue cycle activities.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1999, our Quality Standards in Medicine, Inc. (QSM)&nbsp;subsidiary acquired
substantially all of the assets and specified liabilities of Health Receivables
Management, LLC, an Illinois-based company that furnished Medicaid applications
service, accounts
</FONT>
<P align="center"><FONT size="2">8</FONT>
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<P align="left"><FONT size="2"> receivable management, and collections services to providers. Following
the acquisition, QSM&#146;s name was changed to Health Receivables Management, Inc.
(HRM). The operations of HRM have been consolidated into Accordis.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Healthcare Reform And Regulatory Matters</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The healthcare reimbursement landscape continues to evolve. Federal,
state, and local governments, as well as other third-party payors, continue
their efforts to reduce the rate of growth in healthcare expenditures. Many of
these policy initiatives have contributed to the complex and time-consuming
nature of obtaining healthcare reimbursement for medical services.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hospitals are subject to comprehensive federal and state regulation, which
affects hospital reimbursement. Medicaid and Medicare account for a significant
portion of hospital revenue. Since adoption, the Medicare and Medicaid programs
have undergone significant and frequent changes, and it is realistic to expect
additional changes in the future. Our services are subject to regulations
pertaining to billing for Medicaid and Medicare services, which primarily
involve record keeping requirements and other provisions designed to prevent
fraud. We believe that we operate in a manner consistent with such regulations,
the enforcement of which is increasingly more stringent. Violations of such
regulations could adversely affect our business, financial condition and
results of operations.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;31, 2003, we announced that we had received a subpoena from the
United States Attorney&#146;s Office for the Southern District of New York in
connection with an investigation under the Health Issuance Portability and
Accountability Act of 1996 relating to possible federal health care offenses.
See &#147;Risk Factors &#150; Adverse Resolution Of Ongoing Investigation By The United
States Attorney&#146;s Office Will Cause Adverse Impact On Revenue And Expense
Levels Over The Near Term, And An Adverse Resolution Could Cause A Material Adverse
Effect On Our Business Thereafter&#148; on page 6.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Medicare program is administered by the Center for Medicare and
Medicaid Services (CMS), an agency of the United States Department of Health
and Human Services. CMS currently contracts with several intermediaries and
fiscal agents to process regional claims for reimbursement. Although CMS has
established the regulatory framework for Medicare claims administration,
Medicare intermediaries have the authority to develop independent procedures
for administering the claims reimbursement process. The Medicaid program is
subject to regulation by CMS, but is administered by state governments. State
governments provide for Medicaid claims reimbursement either through the
establishment of state operated processing centers or through contractual
arrangements with third-party fiscal agents who operate their own processing
centers. The requirements and procedures for reimbursement implemented by
Medicaid differ from state to state. Similar to the claims administration
processes of Medicare and Medicaid, many national health insurance companies
and self-insured employers administer reimbursement of claims through local or
regional offices. Consequently, because guidelines for the reimbursement of
claims are generally established by third-
</FONT>
<P align="center"><FONT size="2">9</FONT>
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<P align="left"><FONT size="2"> party payors at local or regional levels, hospital and other provider
reimbursement managers must remain current with the local procedures and
requirements of third-party payors. Generally, we are required to maintain
standards of confidentiality that are comparable to those of an agency
administering the Medicare or Medicaid program when we use data obtained from
such programs.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Health Insurance Portability and Accountability Act of 1996 requires
the Secretary of Health and Human Services to adopt national standards for
certain types of electronic health information transactions and the data
elements used in such transactions and to adopt standards to ensure the
integrity and confidentiality of health information. All covered entities
(providers, payors, and clearinghouses) will be mandated to implement
administrative, physical, and technical safeguards to protect health data
covered by HIPAA. The regulations are in the following stages of finalization
and implementation:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Transaction and code set standards. </I>The final regulation governing
transaction and code set standards was published and was expected to become
effective on October&nbsp;16, 2002. However, on December&nbsp;27, 2001 the Administrative
Simplification Compliance Act (ASCA)&nbsp;was enacted providing for a one-year
extension of the date for complying with the HIPAA standard transactions and
code set requirements for any covered entity that submits to the Secretary of
Health and Human Services a plan on how the entity will come into compliance
with the requirements by October&nbsp;16, 2003. We have submitted such a plan and
expect to be in full compliance with the standard transaction and code set
requirements by the October&nbsp;16, 2003 deadline.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Privacy Regulation</I>. The privacy regulation was published as a final
regulation and became effective on April&nbsp;14, 2001, requiring all covered
entities to be fully compliant by April 2003. We believe we were fully
compliant by that date and remain so.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Data Security. </I>The data security regulation was published as a final
regulation on February&nbsp;20, 2003, with an effective date of April&nbsp;21, 2003.
Full compliance is required two years after the effective date.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any material restriction on the ability of healthcare providers and payors
to obtain or disseminate health information could adversely affect our
business, financial condition, and results of operations. With the release of
the final HIPAA Privacy and Security rules, the &#147;protection of individually
identifiable healthcare information&#148; becomes a key component of the way we and
other covered entities perform our day-to-day business.
</FONT>
<P align="center"><FONT size="2">10</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Principal Products And Services</B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Accordis</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accordis offers hospitals and other healthcare providers Business Office
Outsourcing services and Reimbursement services.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Business Office Outsourcing Services. </I>Our Business Office Outsourcing
services encompass all or a portion of the patient accounting activities that
make up a healthcare provider&#146;s revenue cycle. Such revenue cycle activities
may include third-party resource identification and validation, submission of
timely and accurate bills to primary and secondary payors, generation of
patient statements, response to patient and third-party questions, recovery of
payments due, and proper accounting for payments, contractual allowances and
write-offs. These services are designed to increase the provider&#146;s revenue,
improve the proportion of provider gross charges ultimately collected,
accelerate cash flow, lower days in accounts receivable, and reduce
administrative costs. A client may outsource one or more aspects of its patient
accounting processes or may outsource the business office in its entirety,
enabling the client to re-deploy staff. In some cases, our services are used
by providers who need assistance in managing large backlogs of aged or complex
accounts. At the request of a client, we are also able to provide bad debt
collection services through a wholly owned subsidiary.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our electronic third-party resource identification capability is based on
our original service, Retroactive Claims Reprocessing (RCR), through which we
use data warehousing and electronic data matching techniques to identify
third-party coverage for unpaid accounts. RCR technology generates additional
revenue for clients following the completion of their own billing and
collection efforts. Today, we offer RCR technology to clients either as a
stand-alone service or as a value-added component of the Business Office
Outsourcing service.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Reimbursement Services. </I>Our Reimbursement services include four related
offerings: (1)&nbsp;Medicare Bad Debt Cost Report services, (2)&nbsp;Disproportionate
Share services, (3)&nbsp;Medicaid Application services, and (4)&nbsp;Indirect Medical
Education billing for Medicare managed care.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Federal legislation allows a healthcare provider to claim reimbursement
from Medicare Part A for coinsurance and deductible amounts that remain
uncollected after reasonable collection efforts. Our Medicare Bad Debt Cost
Report services assist providers in isolating unpaid Medicare coinsurance and
deductible balances that qualify for reimbursement on the Medicare Cost Report.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since 1986, Medicare has allowed hospitals serving a disproportionate
share of low-income patients to claim additional reimbursement to offset
payment shortfalls. Regardless of whether Medicaid paid for the service, the
hospital can qualify for reimbursement if the inpatient stay is
Medicaid-eligible. Through our Disproportionate
</FONT>
<P align="center"><FONT size="2">11</FONT>
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<P align="left"><FONT size="2"> Share services, we assist providers in qualifying for maximum
reimbursement on the Medicare Cost Report for inpatient services delivered to
Medicaid-eligible patients.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also provide Medicaid Application services, which assist eligible
patients in properly enrolling in public aid, thereby ensuring that providers
receive reimbursement for care rendered to such patients.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Teaching hospitals are permitted to claim supplemental reimbursement from
Medicare for Indirect Medical Education (IME)&nbsp;costs associated with inpatient
Medicare managed care enrollees. We assist these hospitals in identifying and
documenting qualifying amounts.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Health Management Systems</I></B>
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Health Management Systems offers Third Party Liability (TPL)&nbsp;services to
governmental agencies that administer healthcare entitlement programs, most
notably state Medicaid agencies.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Established in 1965, the Medicaid program is the payor of last resort for
healthcare services required by financially and medically needy individuals.
The Medicaid program is administered by individual states, and is jointly
funded by the federal and state governments. In the early 1980&#146;s, recognizing
that state Medicaid agencies were improperly paying amounts for healthcare
claims for individuals having some other form of third-party health insurance,
the federal government imposed statutory obligations requiring states to take
active measures to pursue those liable third parties.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 1985, we began to offer TPL services to state Medicaid agencies, as a
means of identifying third parties with prior liability for Medicaid claims.
Health Management Systems applies proprietary information management and
coordination of benefit methodologies in order to identify duplicate payments,
overpayments, compliance-related erroneous payments, and other inappropriate
payments. We then assist the Medicaid agency in recovering amounts due from
liable third parties. This post-payment revenue recovery methodology can be
defined as:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">Identification: We use proprietary software to match
Medicaid and other program data files to insurance eligibility
files obtained by us from third parties such as Medicare,
Commercial Insurers, HMOs, Third Party Administrators, TriCare,
and others. This process identifies potential third-party
eligibility.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">Validation: After identification of potential
third-party liability, we validate insurance eligibility by
verifying coverage for specific benefits. This process is
performed by deploying automated electronic transactions and
call center representatives.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">12</FONT>
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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">Recovery: When eligibility and coverage are in effect
for a specific Medicaid member and related episode of care, we
pursue recovery of the Medicaid payment from the liable
third-party. Most often we recover from third-parties through
direct billing of insurers or disallowance of overpayments to
the provider of services. On occasion, we recover payments
through negotiated settlements.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="91%"><FONT size="2">Cost Avoidance: Upon verification of coverage or
payment of claims by liable third-parties, we electronically
submit this coverage data to our Medicaid clients. This data is
used to avoid paying similar claims for the Medicaid member on a
going forward basis.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our TPL services also include subrogation services whereby we identify,
investigate and recover accident-related medical costs where a casualty insurer
(e.g., automobile or property insurance) should pay in lieu of Medicaid, or
where a deceased beneficiary&#146;s estate should reimburse Medicaid.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to our TPL services described above, we also offer the
following services:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Medical Support Enforcement (MSE). </I>Comprehensive medical support services
that assist state Medicaid and Child Support Enforcement agencies identify
health plan coverage available to children through their non-custodial or
custodial parents including assistance with enrollment.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Revenue Maximization. </I>Helping ensure that states receive the full amount
of federal health and human service funding to which they are entitled.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Global Health Information System (GHiS or Global). </I>The GHiS is a
comprehensive fully integrated suite of software modules designed to meet the
specific needs of public health care organizations and community health
clinics. The software includes a full suite of modules from Registration
through Case Management. We also offer training and client directed
customization services in connection with GHiS.
</FONT>
<P align="center"><FONT size="2">13</FONT>
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<!-- link1 "SELLING SHAREHOLDERS" -->
<DIV align="left"><A NAME="006"></A></DIV>
<P align="center"><FONT size="2"><B>SELLING SHAREHOLDERS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to the reoffer and resale of shares issued or that
may be issued to the selling shareholders under the Plan. This prospectus also
relates to such indeterminate number of additional shares of our common stock
that may be acquired by the selling shareholders as a result of the
anti-dilution provisions of the Plan. There can be no assurance that the
selling shareholders will sell any or all of such shares.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, the following table
sets forth (i)&nbsp;the number of shares of our common stock beneficially owned by
each selling shareholder as of the date of this prospectus, (ii)&nbsp;the number of
shares of our common stock to be offered for resale by each selling shareholder
and (iii)&nbsp;the number and percentage of shares of our common stock that each
selling shareholder will beneficially own after completion of this offering,
assuming that all shares that may be offered for resale are sold and no other
shares beneficially owned by the selling shareholders are also sold.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="38%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Shares of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Shares of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Percentage of</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Common Stock</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Number of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Common Stock</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Outstanding</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Beneficially</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Shares of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Beneficially</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Common Stock</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned Prior to</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Common Stock</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned After</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned After</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering (1)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Being Offered (2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering (3)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offering</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">William F. Miller III</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,472,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">200,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1,272,845</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">7.93</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Robert M. Holster</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">752,521</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">126,611</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">625,910</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4.07</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">William C. Lucia</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">329,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">325,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4,694</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.76</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Philip Rydzewski</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">250,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.34</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Randolph G. Brown</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">144,563</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">138,750</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">5,813</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.78</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">James T. Kelly</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">270,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">270,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.47</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">William W. Neal</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">147,274</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">100,479</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">46,795</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.80</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Galen D. Powers</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">117,008</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">102,198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">14,810</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.63</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Ellen A. Rudnick</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">101,125</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">92,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">8,625</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0.55</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Richard H. Stowe</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">283,187</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">217,500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">65,687</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD nowrap align="right"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1.52</FONT></TD>
    <TD nowrap><FONT size="2">%</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="left"><FONT size="2">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless otherwise indicated, we believe that all people named in the above
table have sole voting and investment power with respect to all shares of
common stock beneficially owned by them. Each beneficial owner&#146;s percentage
ownership is determined by assuming that all options held by such owner under
the Plan, as well as options, warrants and convertible securities held by such
person (but not those held by any other person), which are exercisable or
convertible within 60&nbsp;days, have been exercised or converted.
</FONT>
<P align="left"><FONT size="2">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consists of shares issuable upon the exercise of options both currently
exercisable and not currently exercisable.
</FONT>
<P align="left"><FONT size="2">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Beneficial ownership of shares held by each selling shareholder after this
offering assumes that each selling shareholder sold all of the shares it is
offering in this prospectus but actually will depend on the number of shares
sold by such selling shareholder in this offering.
</FONT>
<P align="center"><FONT size="2">14</FONT>
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<!-- link1 "PLAN OF DISTRIBUTION" -->
<DIV align="left"><A NAME="007"></A></DIV>
<P align="center"><FONT size="2"><B>PLAN OF DISTRIBUTION</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This offering is self-underwritten. Neither the selling shareholders nor
we have employed an underwriter for the sale of common stock by the selling
shareholders. We will bear all expenses in connection with the preparation of
this prospectus. The selling shareholders will bear all expenses associated
with the sale of the common stock. There can be no assurance that the selling
shareholders will sell any or all of the shares of common stock offered by them
under this prospectus or otherwise.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time a selling shareholder makes an offer to sell shares, to the
extent required by the Securities Act, a prospectus will be delivered. If a
supplemental prospectus is required, one will be delivered setting forth the
number of shares being offered and the terms of the offering.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders may also pledge their shares to banks, brokers or
other financial institutions as security for margin loans or other financial
accommodations that may be extended to the selling shareholders, and any such
pledgee may similarly offer, sell and effect transactions in the shares. In
addition, any shares covered by this prospectus which qualify for sale pursuant
to Rule&nbsp;144 under the Securities Act may be sold under Rule&nbsp;144 rather than
pursuant to this prospectus.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders may offer for sale their shares of common stock
directly or through pledgees, donees, transferees or other successors in
interest in one or more of the following transactions:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">on the Nasdaq National Market or on any stock exchange on which the
shares of common stock may be listed at the time of sale;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">in negotiated transactions;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">in the over-the-counter market; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">in a combination of any of the above transactions.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders may offer their shares of common stock at any of
the following prices:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">fixed prices which may be changed;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">market prices prevailing at the time of sale;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">prices related to such prevailing market prices; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">at negotiated prices</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders may effect such transactions by selling shares to
or through broker-dealers, and all such broker-dealers may receive compensation
in the form of discounts, concessions, or commissions from the selling
shareholders and/or the purchasers of shares of common stock for whom such
broker-dealers may act as agents or to whom they sell as principals, or both.
Compensation as to particular broker dealers may be in excess of customary
commissions.
</FONT>
<P align="center"><FONT size="2">15</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any broker-dealer acquiring common stock from the selling shareholders may
sell the shares either directly, in its normal market-making activities,
through or to other brokers on a principal or agency basis or to its customers.
Any such sales may be at prices then prevailing on the Nasdaq National Market
or at prices related to such prevailing market prices or at negotiated prices
to its customers or a combination of such methods. The selling shareholders and
any broker-dealers that act in connection with the sale of the common stock
hereunder might be deemed to be &#147;underwriters&#148; within the meaning of Section
2(11) of the Securities Act, and any commissions received by them and any
profit on the resale of shares purchased by them might be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
commissions, as well as other expenses incurred by the selling shareholders and
applicable transfer taxes, are payable by the selling shareholders.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders reserve the right to accept, and together with
any agent of the selling shareholder, to reject in whole or in part any
proposed purchase of the shares of common stock. The selling shareholders will
pay any sales commissions or other seller&#146;s compensation applicable to such
transactions.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not registered or qualified offers and sales of shares of the
common stock under the laws of any country other than the United States. To
comply with certain states&#146; securities laws, if applicable, the selling
shareholders will offer and sell their shares of common stock in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the selling shareholders may not offer or sell
shares of common stock unless we have registered or qualified such shares for
sale in such states or we have complied with an available exemption from
registration or qualification.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling shareholders have represented to us that any purchase or sale
of shares of our common stock by them will comply with Regulation&nbsp;M promulgated
under the Exchange Act. In general, Rule&nbsp;102 under Regulation&nbsp;M prohibits any
person connected with a distribution of our common stock (a &#147;Distribution&#148;)
from directly or indirectly bidding for, or purchasing for any account in which
he or she has a beneficial interest, any of our common stock or any right to
purchase our common stock, for a period of one business day before his or her
participation in the Distribution and ending on the completion of his or her
participation in the Distribution (we refer to that time period as the
&#147;Distribution Period&#148;).
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the Distribution Period, Rule&nbsp;104 under Regulation&nbsp;M prohibits the
selling shareholders and any other persons engaged in the Distribution from
engaging in any stabilizing bid or purchasing shares of our common stock except
for the purpose of preventing or retarding a decline in the open market price
of our common stock. No such person may effect any stabilizing transaction to
facilitate any offering at the market. Inasmuch as the selling shareholders
will be reoffering and reselling our common stock at the market, Rule&nbsp;104
prohibits them from effecting any stabilizing transaction in contravention of
Rule&nbsp;104 with respect to our common stock.
</FONT>
<P align="center"><FONT size="2">16</FONT>
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<!-- link1 "LEGAL MATTERS" -->
<DIV align="left"><A NAME="008"></A></DIV>
<P align="center"><FONT size="2"><B>LEGAL MATTERS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the shares of common stock offered by this prospectus has
been passed upon for us by Brown Rudnick Berlack Israels LLP, New York, New
York.
</FONT>
<!-- link1 "EXPERTS" -->
<DIV align="left"><A NAME="009"></A></DIV>
<P align="center"><FONT size="2"><B>EXPERTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements and schedule of HMS Holdings Corp.
and subsidiaries as of December&nbsp;31, 2002 and 2001 and for the years ended
December&nbsp;31, 2002 and 2001, the two months ended December&nbsp;31, 2000, and the
year ended October&nbsp;31, 2000 have been incorporated by reference herein and in
the registration statement in reliance upon the report of KPMG LLP, independent
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The audit report refers to the
Company&#146;s adoption of the provisions of Statement of Financial Accounting
Standards No.&nbsp;142 &#147;Goodwill and Other Intangible Assets&#148; in 2002 and the
Securities and Exchange Commission&#146;s Staff Accounting Bulletin No.&nbsp;101,
&#147;Revenue Recognition in Financial Statements&#148;, in 2000.
</FONT>
<!-- link1 "DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES" -->
<DIV align="left"><A NAME="010"></A></DIV>
<P align="center"><FONT size="2"><B>DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT<BR>
LIABILITIES</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers or persons controlling us, we
have been advised that it is the SEC&#146;s opinion that such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
</FONT>
<P align="center"><FONT size="2">17</FONT>
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<P align="center"><FONT size="2"><B>PART II</B>
</FONT>

<P align="left"><FONT size="2"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</FONT>

<P align="left"><FONT size="2"><B>Item&nbsp;3. Incorporation Of Documents By Reference.</B></FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents, filed by the Registrant or HMS with the
Securities and Exchange Commission (the &#147;SEC&#148;) are incorporated by reference in
this Registration Statement:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant&#146;s Annual Report on Form&nbsp;10-K for the year ended
December&nbsp;31, 2002;
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant&#146;s Quarterly Reports on Form&nbsp;10-Q for the periods ended
March&nbsp;31, 2003 and June&nbsp;30, 2003, filed with the SEC on May&nbsp;15, 2003 and July
30, 2003, respectively;
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant&#146;s Current Reports on Forms 8-K, filed with the SEC on
May&nbsp;6, 2003 and July&nbsp;29, 2003; and
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the description of HMS&#146; common stock contained in HMS&#146; Registration
Statement on Form&nbsp;8-A filed with the SEC, as amended by the Registrant&#146;s
Current Report on Form&nbsp;8-K/12g-3 filed with the SEC on March&nbsp;3, 2003.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents filed by the Registrant pursuant to Sections&nbsp;13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Registration Statement
and prior to the filing of a post-effective amendment hereto that indicate that
all securities offered have been sold or that deregisters all such securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such documents.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document that also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
</FONT>
<P align="left"><FONT size="2"><B>Item&nbsp;4. Description Of Securities.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</FONT>
<P align="left"><FONT size="2"><B>Item&nbsp;5. Interests Of Named Experts And Counsel.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</FONT>
<P align="center"><FONT size="2">II-1</FONT>
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<P align="left"><FONT size="2"><B>Item&nbsp;6. Indemnification Of Directors And Officers.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;722 of the New York Business Corporation Law (the &#147;BCL&#148;) provides
that a corporation may indemnify directors and officers as well as other
employees and individuals against judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys&#146; fees, in connection with actions
or proceedings, whether civil or criminal (other than an action by or in the
right of the corporation - a &#147;derivative action&#148;), if they acted in good faith
and in a manner they 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 their conduct was unlawful. A
similar standard is applicable in the case of derivative actions, except that
indemnification only extends to amounts paid in settlement and reasonable
expenses (including attorneys&#146; fees) incurred in connection with the defense or
settlement of such actions, and the statute does not apply in respect of a
threatened action, or a pending action that is settled or otherwise disposed
of, and requires court approval before there can be any indemnification where
the person seeking indemnification has been found liable to the corporation.
Section&nbsp;721 of the BCL provides that Article&nbsp;7 of the BCL is not exclusive of
other indemnification that may be granted by a corporation&#146;s certificate of
incorporation, disinterested director vote, stockholder vote, agreement or
otherwise. Article&nbsp;VIII, Section&nbsp;7, of the Registrant&#146;s by-laws requires the
Registrant to indemnify its officers and directors to the fullest extent
permitted under the BCL.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any amendment to or repeal of the Registrant&#146;s certificate of
incorporation or by-laws shall not adversely affect any right or protection of
a director of the Registrant for or with respect to any acts or omissions of
such director occurring prior to such amendment or repeal.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The certificate of incorporation of the Registrant (Article&nbsp;Ninth)
provides the following:
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to Section&nbsp;402(b) of the Business Corporation Law, the liability
of the Corporation&#146;s directors to the Corporation or its shareholders for
damages for breach of duty as a director shall be eliminated to the fullest
extent permitted by the Business Corporation Law, as it exists on the date
hereof or as it may hereafter be amended. No amendment to or repeal of this
Article shall apply to or have any effect on the liability or alleged liability
of any director of the Corporation for or with respect to any acts or omissions
of such director occurring prior to such amendment or repeal.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Registrant maintains directors&#146; and officers&#146; liability
insurance policies.
</FONT>
<P align="left"><FONT size="2"><B>Item&nbsp;7. Exemption From Registration Claimed.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</FONT>
<P align="center"><FONT size="2">II-2</FONT>


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<P align="left"><FONT size="2"><B>Item&nbsp;8. Exhibits.</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Description</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Agreement and Plan of Merger (causing the Registrant to become the
parent of HMS) (incorporated by reference to Exhibit&nbsp;2.1 to the
Registrant&#146;s Registration Statement on Form&nbsp;S-4, File No.&nbsp;333-100521
(the &#147;Registration Statement&#148;))</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Restated Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit&nbsp;3.1 to Amendment No.&nbsp;1 to the Registration
Statement)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;*3.1(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amendment to the Restated Certificate of Incorporation of the Registrant</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By-laws of the Registrant (incorporated by reference to Exhibit&nbsp;3.2 to
the Registration Statement)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;*4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
1999 Long-Term Incentive Stock Plan, as amended</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;*5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion of Brown Rudnick Berlack Israels LLP re legality</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;*23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of KPMG LLP</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Brown Rudnick Berlack Israels LLP (included in Exhibit&nbsp;5)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Powers of Attorney (included on signature page)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Filed herewith.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2"><B>Item&nbsp;9. Undertakings.</B>
</FONT>

<P align="left"><FONT size="2">(A)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Registrant hereby undertakes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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
Commission pursuant to Rule&nbsp;424(b) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the &#147;Calculation of Registration
Fee&#148; table in the effective registration statement;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">II-3</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>
<TR valign="top">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2"><I>Provided, however, </I>That paragraphs (A)1(i) and (A)(1)(ii) of this
section do not apply if the registration statement is on Form&nbsp;S-3, Form
S-8 or Form&nbsp;F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement;</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that, for the purpose of determining any liability under the Act, 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 fide offering
thereof; and
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
</FONT>
<P align="left"><FONT size="2">(B)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant&#146;s annual
report pursuant to Section&nbsp;13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan&#146;s annual report pursuant to
Section&nbsp;15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement 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 fide offering thereof.
</FONT>
<P align="left"><FONT size="2">(C)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item&nbsp;6 above, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 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 Act and will be governed by the final
adjudication of such issue.
</FONT>

<P align="center"><FONT size="2">II-4</FONT>




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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="011"></A></DIV>
<P align="center"><FONT size="2"><B>SIGNATURES</B></FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form&nbsp;S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this 28th day of
August, 2003.
</FONT>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2">HMS HOLDINGS CORP.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/&nbsp;William F.
Miller, III</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR align="left" size="1" width="50%" noshade></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

<TD align="left" valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;William F. Miller, III</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Chairman and Chief Executive Officer</I></FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2"><B>POWER OF ATTORNEY</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We, the undersigned directors and officers of the Registrant, do hereby
constitute and appoint William F. Miller III and Philip Rydzewski and each and
either of them, our true and lawful attorneys-in-fact and agents, to do any and
all acts and things in our names and on our behalf in our capacities as
trustees and officers and to execute any and all instruments for us and in our
name in the capacities indicated below, which said attorneys and agents, or
either of them, may deem necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933 and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with this
Registration Statement, or any registration statement for this offering that is
to be effective upon filing pursuant to Rule&nbsp;462(b) under the Securities Act of
1933, including specifically, but without limitation, any and all amendments
(including post-effective amendments) hereto; and we hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of the 28th day of August, 2003.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="51%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Signature</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Title</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/&nbsp;William
F. Miller, III</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Chairman and Chief Executive Officer and</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director (Principal Executive Officer)</FONT></TD>
</TR>

<TR valign="bottom" align="center">
    <TD align="center" valign="top"><FONT size="2">William F. Miller, III</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Philip Rydzewski</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Chief Financial Officer and Treasurer</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
(Principal Financial Officer and</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">Philip Rydzewski</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Principal Accounting Officer)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Robert M. Holster</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
President and Chief Operating Officer</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">Robert M. Holster</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">II-5</FONT>
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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="51%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="44%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Signature</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Title</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Randolph G.
Brown</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">Randolph G. Brown</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ James T. Kelly</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">James T. Kelly</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ William W. Neal</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">William W. Neal</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Galen D. Powers</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">Galen D. Powers</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Ellen A. Rudnick</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">Ellen A. Rudnick</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">/s/ Richard H. Stowe</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
Director</FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">Richard H. Stowe</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">II-6</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>INDEX TO EXHIBITS</B></FONT>
<!-- link1 "INDEX TO EXHIBITS" -->
<DIV align="left"><A NAME="012"></A></DIV>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="75%">
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Description</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Agreement and Plan of Merger (causing the Registrant to become the
parent of HMS) (incorporated by reference to Exhibit&nbsp;2.1 to the
Registrant&#146;s Registration Statement on Form&nbsp;S-4, File No.&nbsp;333-100521
(the &#147;Registration Statement&#148;))</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Restated Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit&nbsp;3.1 to Amendment No.&nbsp;1 to the Registration
Statement)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;*3.1(a)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amendment to the Restated Certificate of Incorporation of the Registrant</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By-laws of the Registrant (incorporated by reference to Exhibit&nbsp;3.2 to
the Registration Statement)</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;*4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
1999 Long-Term Incentive Stock Plan, as amended</FONT></TD>
</TR>

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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;*5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion of Brown Rudnick Berlack Israels LLP re legality</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;*23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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Consent of KPMG LLP</FONT></TD>
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    <TD><FONT size="2">&nbsp;</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Brown Rudnick Berlack Israels LLP (included in Exhibit&nbsp;5)</FONT></TD>
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    <TD valign="top"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
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Powers of Attorney (included on signature page)</FONT></TD>
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<P align="left"><FONT size="2">* Filed herewith.
</FONT>

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HMS HOLDINGS CORP
Table of Contents
As filed with the Securities and
Exchange Commission on September 2, 2003.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
HMS HOLDINGS CORP.
(Exact name of Registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation or organization)
11-3656261
(I.R.S. Employer Identification Number)
401 Park Avenue South, New York, New York 10016
(Address of Principal Executive Offices)
1999 LONG-TERM INCENTIVE STOCK PLAN
(Full title of the Plan)
Philip Rydzewski, Chief Financial Officer
HMS Holdings Corp.
401 Park Avenue South
New York, New York 10016
(Name and address of agent for service)
(212) 725-7965
(Telephone number, including area code, of agent for service)
copies to:
Kenneth S. Goodwin, Esq.
Brown Rudnick Berlack Israels LLP
120 West 45
th
Street
New York, New York 10036
(212) 704-0100
Table of Contents
CALCULATION OF REGISTRATION FEE
Title of each class of
securities
to be registered
Amount to be registered
Proposed maximum
offering price per
shares(1)
Proposed maximum
aggregate offering
price(1)
Amount of
registration fee
Common Stock, $.01 par value
1,500,000 shares
$
3.73
$
5,595,000
$             453
(1)
Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(h)(1) of the Securities Act of 1933,
as amended, on the basis of $3.73 per share, the average of the high
($3.75) and low ($3.70) sale prices of the Registrant's common
stock, as reported in the Nasdaq National Market on August 27, 2003.
This Registration Statement shall be deemed to cover an indeterminate
number of additional shares of HMS Holdings Corp. Common Stock as may be
issuable pursuant to future stock dividends, stock splits or similar
transactions.
EXPLANATORY NOTE
HMS Holdings Corp. (the "Registrant") is the successor issuer to the
common stock, $0.01 par value, of Health Management Systems, Inc. ("HMS"). On
March 3, 2003, the Registrant became the parent company of HMS and the issued
and outstanding shares of HMS common stock were exchanged, on a share-for-share
basis, for the common stock, $0.01 par value, of the Registrant. On April 27,
1999, HMS filed a Registration Statement on Form S-8 (No. 333-77121), as
amended on May 10, 1999 (the "Prior Registration Statement") which registered
4,751,356 shares of common stock, par value $.01 per share ("Common Stock"),
for issuance under the 1999 Long-Term Incentive Stock Plan (the "Plan").
Pursuant to Rule 414(d) under the Securities Act of 1933, as amended (the
"Securities Act"), the Registrant expressly adopts such Registration Statement
as its own for all purposes of the Securities Act and the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
The 1,500,000 shares of Common Stock being registered pursuant to this
registration statement (the "Registration Statement") are additional securities
of the same class as other securities for which a registration statement on
Form S-8, namely, the Prior Registration Statement, was filed with the
Securities and Exchange Commission (the "Commission"). Pursuant to General
Instruction E to Form S-8, the contents of the Prior Registration Statements
are incorporated by reference into this Registration Statement, except that the
provisions contained in Part II of such earlier registration statement are
modified as set forth in this Registration Statement.
On June 4, 2003, the Registrant's shareholders approved an amendment to
the Plan to reserve for issuance thereunder an additional 1,500,000 shares of
Common Stock. Accordingly, this Registration Statement is being filed to
register the 1,500,000 additional shares of Common Stock.
Under cover of this Form S-8 is a Reoffer Prospectus prepared in
accordance with the requirements of Part I of Form S-3. The S-3 Reoffer
Prospectus may be utilized for reofferings of Common Stock acquired by certain
Selling Shareholders through participation in the Plan.
Table of Contents
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Pursuant to Rule 428(b)(1) under the Securities Act of 1933, as amended
(the "Act"), an Information Statement with respect to the 1999 Long-Term
Incentive Stock Plan (the "Plan") will be distributed to holders of stock
options granted under such Plan. The Information Statement, together with the
documents incorporated by reference herein pursuant to Item 3 of Part II below,
taken together, constitute a Section 10(a) prospectus and the Information
Statement is hereby incorporated by reference in this Registration Statement.
I-1
Table of Contents
PROSPECTUS
1,553,038 SHARES
HMS HOLDINGS CORP.
Common Stock, $.01 par value
This prospectus relates to the reoffer and resale by certain selling
shareholders of shares of our common stock that were issued or may be issued by
us to the selling shareholders upon the exercise of stock options granted under
our 1999 Long-Term Incentive Stock Plan, which we assumed in connection with
our merger and share exchange with Health Management Systems, Inc. HMS is now
our wholly-owned subsidiary. We previously registered the offer and sale of the
shares to the selling shareholders. This prospectus also relates to certain
underlying options that have not been granted as of this date. If and when such

options are granted to persons required to use this prospectus to reoffer and
resell the shares underlying such options, we will distribute a prospectus
supplement. The shares are being reoffered and resold for the account of the
selling shareholders, and we will not receive any of the proceeds from the
resale of the shares.
The selling shareholders have advised us that the resale of their shares
may be effected from time to time in one or more transactions on the Nasdaq
National Market, in negotiated transactions or otherwise, at market prices
prevailing at the time of the sale or at prices otherwise negotiated. See "Plan
of Distribution." We will bear all expenses in connection with the preparation
of this prospectus.
Our common stock is traded on the Nasdaq National Market under the symbol
"HMSY." On August 27, 2003, the closing price for the common stock, as reported
by the Nasdaq National Market, was $3.74.
Our principal executive offices are located at 401 Park Avenue South, New
York, New York 10016, and our telephone number there is (212) 725-7965.
This investment involves risk. See "Risk Factors" beginning at page 1.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY
STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is
September 2, 2003.
TABLE OF CONTENTS
RISK FACTORS
WHERE YOU CAN FIND MORE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
THE COMPANY
SELLING SHAREHOLDERS
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
SIGNATURES
INDEX TO EXHIBITS
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
1999 LONG-TERM INCENTIVE STOCK PLAN, AS AMENDED
OPINION OF BROWN RUDNICK BERLACK ISRAELS LLP
CONSENT OF KPMG LLP
Table of Contents
TABLE OF CONTENTS
Page
Risk Factors
1
Where You Can Find More Information
6
Incorporation of Certain Documents by Reference
7
Forward-Looking Statements
7
Use of Proceeds
8
The Company
8
Selling Shareholders
14
Plan of Distribution
15
Legal Matters
17
Experts
17
Disclosure of Commission Position on Indemnification
for Securities Act Liabilities
17
Unless otherwise indicated, all references in this prospectus to
"Holdings," "we," "us" and "our" refer to HMS Holdings Corp., a New York
corporation, and its wholly-owned subsidiaries, Health Management Systems, Inc.
("HMS"), Accordis Inc. ("Accordis"), HMS Business Services Inc. ("Services")
and Health Receivables Management, Inc. ("HRM").
Table of Contents
RISK FACTORS
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
SAFE HARBOR COMPLIANCE STATEMENT
FOR FORWARD-LOOKING STATEMENTS
In passing the Private Securities Litigation Reform Act of 1995 (the
Reform Act), Congress encouraged public companies to make "forward-looking
statements" by creating a safe harbor to protect companies from securities law
liability in connection with forward-looking statements. We intend to qualify
both our written and oral forward-looking statements for protection under the
Reform Act and any other similar safe harbor provisions.
"Forward-looking statements" are defined by the Reform Act. Generally,
forward-looking statements include expressed expectations of future events and
the assumptions on which the expressed expectations are based. All
forward-looking statements are inherently uncertain as they are based on
various expectations and assumptions concerning future events and they are
subject to numerous known and unknown risks and uncertainties which could cause
actual events or results to differ materially from those projected. Due to
those uncertainties and risks, prospective investors are urged not to place
undue reliance on written or oral forward-looking statements of the Company. We
undertake no obligation to update or revise this safe harbor compliance
statement for forward-looking statements to reflect future developments. In
addition, we undertake no obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of unanticipated
events or changes to future operating results over time.
We provide the following risk factor disclosure in connection with our
continuing effort to qualify our written and oral forward-looking statements
for the safe harbor protection of the Reform Act and any other similar safe
harbor provisions. Important factors currently known to management that could
cause actual results to differ materially from those in forward-looking
statements include the following:
Our Operating Results Are Subject To Significant Fluctuations Due To
Variability In The Timing Of When We Recognize Contingency Fee Revenue And
Other Factors. As A Result, You Will Not Be Able To Rely On Our Operating
Results In Any Particular Period As An Indication Of Our Future Performance
Our revenue and consequently our operating results may vary significantly
from period to period as a result of a number of factors, including the loss of
customers due to consolidation in the healthcare industry, fluctuations in
sales activity given our sales cycle of approximately three to eighteen months,
and general economic conditions as they affect healthcare providers and payors.
Further, we have experienced fluctuations in our revenue of up to 25% between
reporting periods due to the timing of periodic revenue enhancement projects
and the timing and delays in third-party payors' adjudication of claims and
ultimate payment to our clients where our fees are contingent upon such
1
Table of Contents
collections. The extent to which future revenue fluctuations could occur
due to these factors is not known and cannot be predicted. As a result, our
results of operations are subject to significant fluctuations and our results
of operations for any particular quarter or fiscal year may not be indicative
of results of operations for future periods. A significant portion of our
operating expenses are fixed, and are based primarily on revenue and sales
forecasts. Any inability on our part to reduce spending or to compensate for
any failure to meet sales forecasts or receive anticipated revenues could
magnify the adverse impact of such events on our operating results.
We Are Subject To Claims If Our Service Offerings Contain Errors Or
Experience Failures Or Do Not Meet Customer Expectations And Could Lose
Customers And Revenue
The healthcare claiming environment is complex. On behalf of our clients,
our Accordis business processes a very high volume of transactions in this
environment. From time to time we have been subject to claims by clients and
could be subject to claims by clients in the future for errors in our service
offerings, primarily for failures to secure reimbursement amounts otherwise
payable to our clients. We have often resolved such claims by providing
additional services to the client or by reducing fees on additional projects.
There can be no assurance that contractual limitations of our responsibility
for damages will be effective in these situations or that clients will not seek
significant damages for errors in our services. Further, these performance
failures could result in a loss of customers and resulting loss of revenue. In
addition, service performance failures could result in a delay in market
acceptance for our services, diversion of development resources, damage to our
reputation or increased service costs. We are currently discussing with an
Accordis client a claim for damages based on the client's assertion that it has
been significantly financially harmed by errors in our service. We are
currently assessing the claim both internally and with the client and believe
that it is likely that the claim will be settled in a manner that will not
adversely affect our financial position, results of operations, or ongoing
relationship with the client. However, there can be no assurances that the
claim will be settled or that the client will not seek to hold us responsible
for a substantial amount of alleged damages.
The Majority Of Our Contracts With Customers May Be Terminated For
Convenience
The majority of our contracts with customers are terminable upon short
notice for the convenience of either party. Although to date none of our
material contracts have ever been terminated under these provisions, we cannot
assure you that a material contract will not be terminated for convenience in
the future. Any termination of a material contract, if not replaced, could have
a material adverse effect on our business, financial condition and results of
operations.
We Face Significant Competition For Our Services
Competition for our services is intense and is expected to increase.
Increased competition could result in reductions in our prices, gross margins
and market share. We
2
Table of Contents
compete with other providers of healthcare information management and data
processing services, as well as healthcare consulting firms. Some competitors
have formed business alliances with other competitors that may affect our
ability to work with some potential customers. In addition, if some of our
competitors merge, a stronger competitor may emerge.
Current and prospective customers also evaluate our capabilities against
the merits of their existing information management and data processing systems
and expertise. Major information management systems companies, including those
specializing in the healthcare industry, that do not presently offer competing
services may enter our markets. Many of our competitors and potential
competitors have significantly greater financial, technical, product
development, marketing and other resources, and market recognition than we
have. As a result, our competitors may be able to respond more quickly to new
or emerging technologies, changes in customer requirements and changes in the
political, economic or regulatory environment in the healthcare industry. In
addition, several of our competitors may be in a position to devote greater
resources to the development, promotion, and sale of their services than us.
Simplification Of The Healthcare Transfer Payment Process Could Reduce
The Need For Our Services
The complexity of the healthcare transfer payment process, and our
experience in offering services that improve the ability of our customers to
recover incremental revenue through that process, have been contributing
factors to the success our service offerings. Complexities of the healthcare
transfer payment process include multiple payors, the coordination and
utilization of clinical, operational, financial and/or administrative review
instituted by third-party payors in an effort to control costs and manage care.
If the payment processes associated with the healthcare industry are
simplified, the need for our services, or the price customers are willing to
pay for our services, could be reduced.
We Are Subject To Government Regulation In Our Collections Services
The collection industry in the United States is regulated both at the
federal and state level. In addition to specific regulation regarding debts for
healthcare services and among other collection regulations the Federal Fair
Debt Collection Practices Act (FFDCPA) regulates any person who regularly
collects or attempts to collect, directly or indirectly, consumer debts owed or
asserted to be owed to another person. The FFDCPA establishes specific
guidelines and procedures that debt collectors must follow in communicating
with consumer debtors, including the time, place and manner of such
communications and places restrictions on communications with individuals other
than consumer debtors in connection with the collection of any consumer debt.
Additionally, the FFDCPA contains various notice and disclosure requirements
and prohibits unfair or misleading representations by debt collectors. Many
states require that we be licensed as a debt collection company and we believe
that we are currently hold applicable licenses from all states where required.
If we fail to comply with applicable laws and regulations,
3
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it could result in the suspension or termination of our ability to conduct
collections, which would have a material adverse effect on us.
Changes In The United States Healthcare Environment Could Have A Material
Negative Impact On Our Revenue And Net Income
The healthcare industry in the United States is subject to changing
political, economic and regulatory influences that may affect the procurement
practices and operations of healthcare organizations. Our services are designed
to function within the structure of the healthcare financing and reimbursement
system currently being used in the United States. During the past several
years, the healthcare industry has been subject to increasing levels of
governmental regulation of, among other things, reimbursement rates, certain
capital expenditures, and data confidentiality and privacy. From time to time,
certain proposals to reform the healthcare system have been considered by
Congress. These proposals, if enacted, may increase government involvement in
healthcare, lower reimbursement rates and otherwise change the operating
environment for our clients. Healthcare organizations may react to these
proposals and the uncertainty surrounding such proposals by curtailing or
deferring their retention of service providers such as us. See also "The
Company – Healthcare Reform and Regulatory Matters" section on page 9 for
additional discussion on this topic. We cannot predict what impact, if any,
such proposals or healthcare reforms might have on our results of operations,
financial condition or business.
Our Business Is Subject To Extensive And Complex Governmental Regulations
And Violations Of Any Of Those Regulations Could Result In Significant
Penalties
Most of the services offered by our Accordis business involve the billing
and collection of healthcare claims. These services require the interpretation
and application of sometimes ambiguous reimbursement regulations under various
government entitlement programs such as Medicaid and Medicare. In addition,
during the past several years, federal and state governments have placed an
increased emphasis on detecting and eliminating fraud and abuse in Medicare,
Medicaid, and other health care programs. Violation of health care billing
laws or regulations governing our services could result in the imposition of
substantial civil or criminal penalties, including temporary or permanent
exclusion from participation in government health care programs such as
Medicare and Medicaid, and loss of customers.
The interpretation and application of the healthcare reimbursement rules
to particular customer patient accounting environments involves judgment. If a
regulatory agency were to disagree with certain judgments we have made or will
make in providing healthcare billing services to a customer we could be subject
to penalties, or fines or other sanctions by regulators. In addition we could
find it necessary to alter or eliminate some of our services.
4
Table of Contents
Certain Provisions In Our Certificate Of Incorporation Could Discourage
Unsolicited Takeover Attempts, Which Could Depress The Market Price Of Our
Common Stock
Our certificate of incorporation authorizes the issuance of up to
5,000,000 shares of "blank check" preferred stock with such designations,
rights and preferences as may be determined by our Board of Directors.
Accordingly, our Board of Directors is empowered, without shareholder approval,
to issue preferred stock with dividend, liquidation, conversion, voting or
other rights, which could adversely affect the voting power or, other rights of
holders of our common stock. In the event of issuance, preferred stock could be
utilized, under certain circumstances, as a method of discouraging, delaying or
preventing a change in control. Although we have no present intention to issue
any shares of preferred stock, we cannot assure you that we will not do so in
the future. In addition, our by-laws provide for a classified board of
directors, which could also have the effect of discouraging a change of
control.
Adverse Resolution Of Pending Litigation May Cause Us To Incur a
Significant Loss
We are party to the following legal proceedings as described below.
Although we believe that we have meritorious defenses to the claims of
liability or for damages in this action against us, we cannot assure you that
an outcome favorable to us will be reached in this litigation or that
additional lawsuits will not be filed against us. Further, we cannot assure you
that this lawsuit will not have a disruptive effect upon the operations of our
business, that the defense of the lawsuit will not consume the time and
attention of our senior management, or that the resolution of the lawsuit or
future lawsuits will not have a material adverse effect upon our results of
operations, financial position and cash flow.
On June 28, 1998, eight holders of promissory notes (the Notes) of HHL
Financial Services, Inc. (HHL) commenced a lawsuit against us and others in the
Supreme Court of the State of New York, County of Nassau, alleging various
breaches of fiduciary duty between 1990 and 1996 against HHL (the first cause
of action) and that defendants intentionally caused HHL's default under the
Notes (the second cause of action). The complaint alleges that the defendants
caused HHL to make substantial unjustified payments to us which, ultimately,
led to defaults on the Notes and to HHL's filing for Chapter 11 bankruptcy
protection in 1997. The plaintiffs are seeking damages in the amount of $2.3
million (for the unpaid notes) plus interest. As a result of motion practice
before the Bankruptcy Court, the breach of fiduciary duty claim was dismissed.
A motion to dismiss the remaining cause of action, for tortious interference
with contract, was denied by the New York Supreme Court, and an appeal was
taken. On March 3, 2003, the Appellate Division Second Department affirmed the
lower Court's decision holding that the Complaint pleaded a cognizable cause of
action for tortious interference. We will now answer the Complaint, and both
sides will engage in discovery. We intend to continue our vigorous defense of
this lawsuit. Management believes the risk of loss is not probable and
accordingly has not recognized any accrued liability for this matter.
5
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Adverse Resolution Of Ongoing Investigation By The United States
Attorney's Office Will Cause Adverse Impact On Revenue and Expense Levels Over
The Near Term, And An Adverse Resolution Could Cause A Material Adverse Effect
On Our Business Thereafter
On January 31, 2003, we announced that we had received a subpoena issued
under the Health Insurance Portability and Accountability Act of 1996 from the
United States Attorney's Office for the Southern District of New York in
connection with an investigation relating to possible federal health care
offenses. The subpoena seeks the production of certain documents from January
1982 to present relating to medical reimbursement claims submitted by us to
Medicare, Medicaid, and other federal healthcare programs, particularly on
behalf of a significant client of Accordis. At this point in the
investigation, the United States Attorney's Office has not filed any complaint
asserting any violations of law.
Our board of directors has appointed a special committee to oversee our
response to the investigation. We continue to cooperate fully with the
investigation.
We are not able to give any assurances as to the duration or outcome of
the investigation or as to the effect that any proceedings that may be brought
by the government may have on our financial condition or results of operations.
The initiation of proceedings against us, even if we are ultimately successful
in defending them, could have a material adverse effect on our business. Since
the receipt of the subpoena, our revenue and expense levels have been adversely
affected as management undertook to comply with the demands of document
production and to review the matters covered by the subpoena. We anticipate
that we will continue to incur significant legal expenses while the
investigation is still ongoing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-8 with the SEC for our
common stock covered by this offering. This prospectus does not contain all of
the information set forth in the registration statement. You should refer to
the registration statement and its exhibits for additional information.
Whenever we make references in this prospectus to any of our contracts,
agreements or other documents, the references are not necessarily complete and
you should refer to the exhibits attached to the registration statement for the
copies of the actual contract, agreement or other document.
You should rely only on the information and representations provided or
incorporated by reference in this prospectus or any related supplement. We have
not authorized anyone else to provide you with different information. The
selling shareholders will not make an offer to sell these shares in any state
where the offer is not permitted. You should not assume that the information in
this prospectus or any supplement is accurate as of any date other than the
date on the front of those documents.
6
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The SEC maintains an Internet site at http://www.sec.gov, which contains
reports, proxy and information statements, and other information regarding us.
You may also read and copy any document we file with the SEC at its Public
Reference Room, 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of the Public
Reference Room.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference
is considered to be a part of this prospectus and information that we file
later with the SEC will automatically update and replace this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended:
1.
Holdings' Annual Report on Form 10-K for the year ended
December 31, 2002;
2.
Holdings' Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2003 and June 30, 2003; and
3.
Holdings' Current Reports on Form 8-K, filed with the SEC on
May 6, 2003 and July 29, 2003.
We will provide you with a copy of these filings, excluding the exhibits
to such filings which we have not specifically incorporated by reference in
such filings, at no cost, upon written or oral request, by writing or
telephoning us at HMS Holdings Corp., 401 Park Avenue South, New York, NY
10016, Attention: Corporate Secretary, telephone (212) 857-5423.
FORWARD-LOOKING STATEMENTS
This prospectus includes or incorporates by reference forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. In some cases, you can
identify forward-looking statements by words such as "may," "will," "should,"
"could," "expect," "plan," "anticipate," "believe," "estimate," "intend,"
"project," "seek," "predict," "potential" or "continue" or the negative of
these terms or other comparable terminology. These statements are only
predictions. Actual events or results may differ materially. In evaluating
these statements, you should specifically consider various factors, including
the risks outlined under "Risk Factors." Although we believe that the
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements. We are under no duty to update any of the forward-looking
statements after the date of this prospectus to conform these statements to
actual results.
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USE OF PROCEEDS
The shares of common stock offered by this prospectus are being registered
for the account of the selling shareholders identified in this prospectus. See
"Selling Shareholders." All net proceeds from the sale of the shares of common
stock will go to the shareholders that offer and sell their shares. We will not
receive any part of the proceeds from such sales of common stock. We will,
however, receive the exercise price of the options at the time of their
exercise. Such proceeds will be contributed to working capital and will be used
for general corporate purposes.
THE COMPANY
At a special meeting held on February 27, 2003, the shareholders of Health
Management Systems, Inc. approved the creation of a holding company structure.
Following that meeting, all the outstanding shares of Health Management
Systems, Inc. common stock were exchanged on a one-for-one basis for the shares
of common stock of HMS Holdings Corp., the new parent company. The adoption of
the holding company structure, pursuant to an Agreement and Plan of Merger
approved at the shareholders meeting, constituted a reorganization with no
change in ownership interests and no dilutive impact to the former shareholders
of Health Management Systems, Inc.
HMS Holdings Corp. furnishes revenue recovery, business process and
business office outsourcing services to healthcare payors and providers. We
help our clients increase revenue, accelerate collections, and reduce operating
and administrative costs. We operate two businesses through our wholly owned
subsidiaries, Health Management Systems, Inc. (Health Management Systems)
(formerly our Payor Services Division) and Accordis Inc. (Accordis) (formerly
our Provider Services Division).
Health Management Systems offers state Medicaid and other government
agencies that administer health care entitlement programs a broad range of
services that are designed to identify and recover amounts that should have
been the responsibility of a third party, or that were paid inappropriately.
Further, by assisting these agencies in properly accounting for the services
that they deliver, we also help to ensure that they receive the full amount of
program funding to which they are entitled.
Accordis provides business office outsourcing services for hospitals,
emergency medical transport agencies, and other healthcare providers. These
business office services may include identifying third-party resources,
submitting timely and accurate bills to third-party payors and patients,
recovering and properly accounting for the amounts due, responding to customer
service questions from patients, and securing the appropriate cost-based
reimbursement from entitlement programs. Clients may outsource the entirety of
their business office operations to us, or discrete revenue cycle activities.
In 1999, our Quality Standards in Medicine, Inc. (QSM) subsidiary acquired
substantially all of the assets and specified liabilities of Health Receivables
Management, LLC, an Illinois-based company that furnished Medicaid applications
service, accounts
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receivable management, and collections services to providers. Following
the acquisition, QSM's name was changed to Health Receivables Management, Inc.
(HRM). The operations of HRM have been consolidated into Accordis.
Healthcare Reform And Regulatory Matters
The healthcare reimbursement landscape continues to evolve. Federal,
state, and local governments, as well as other third-party payors, continue
their efforts to reduce the rate of growth in healthcare expenditures. Many of
these policy initiatives have contributed to the complex and time-consuming
nature of obtaining healthcare reimbursement for medical services.
Hospitals are subject to comprehensive federal and state regulation, which
affects hospital reimbursement. Medicaid and Medicare account for a significant
portion of hospital revenue. Since adoption, the Medicare and Medicaid programs
have undergone significant and frequent changes, and it is realistic to expect
additional changes in the future. Our services are subject to regulations
pertaining to billing for Medicaid and Medicare services, which primarily
involve record keeping requirements and other provisions designed to prevent
fraud. We believe that we operate in a manner consistent with such regulations,
the enforcement of which is increasingly more stringent. Violations of such
regulations could adversely affect our business, financial condition and
results of operations.
On January 31, 2003, we announced that we had received a subpoena from the
United States Attorney's Office for the Southern District of New York in
connection with an investigation under the Health Issuance Portability and
Accountability Act of 1996 relating to possible federal health care offenses.
See "Risk Factors – Adverse Resolution Of Ongoing Investigation By The United
States Attorney's Office Will Cause Adverse Impact On Revenue And Expense
Levels Over The Near Term, And An Adverse Resolution Could Cause A Material Adverse
Effect On Our Business Thereafter" on page 6.
The Medicare program is administered by the Center for Medicare and
Medicaid Services (CMS), an agency of the United States Department of Health
and Human Services. CMS currently contracts with several intermediaries and
fiscal agents to process regional claims for reimbursement. Although CMS has
established the regulatory framework for Medicare claims administration,
Medicare intermediaries have the authority to develop independent procedures
for administering the claims reimbursement process. The Medicaid program is
subject to regulation by CMS, but is administered by state governments. State
governments provide for Medicaid claims reimbursement either through the
establishment of state operated processing centers or through contractual
arrangements with third-party fiscal agents who operate their own processing
centers. The requirements and procedures for reimbursement implemented by
Medicaid differ from state to state. Similar to the claims administration
processes of Medicare and Medicaid, many national health insurance companies
and self-insured employers administer reimbursement of claims through local or
regional offices. Consequently, because guidelines for the reimbursement of
claims are generally established by third-
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party payors at local or regional levels, hospital and other provider
reimbursement managers must remain current with the local procedures and
requirements of third-party payors. Generally, we are required to maintain
standards of confidentiality that are comparable to those of an agency
administering the Medicare or Medicaid program when we use data obtained from
such programs.
The Health Insurance Portability and Accountability Act of 1996 requires
the Secretary of Health and Human Services to adopt national standards for
certain types of electronic health information transactions and the data
elements used in such transactions and to adopt standards to ensure the
integrity and confidentiality of health information. All covered entities
(providers, payors, and clearinghouses) will be mandated to implement
administrative, physical, and technical safeguards to protect health data
covered by HIPAA. The regulations are in the following stages of finalization
and implementation:
Transaction and code set standards.
The final regulation governing
transaction and code set standards was published and was expected to become
effective on October 16, 2002. However, on December 27, 2001 the Administrative
Simplification Compliance Act (ASCA) was enacted providing for a one-year
extension of the date for complying with the HIPAA standard transactions and
code set requirements for any covered entity that submits to the Secretary of
Health and Human Services a plan on how the entity will come into compliance
with the requirements by October 16, 2003. We have submitted such a plan and
expect to be in full compliance with the standard transaction and code set
requirements by the October 16, 2003 deadline.
Privacy Regulation
. The privacy regulation was published as a final
regulation and became effective on April 14, 2001, requiring all covered
entities to be fully compliant by April 2003. We believe we were fully
compliant by that date and remain so.
Data Security.
The data security regulation was published as a final
regulation on February 20, 2003, with an effective date of April 21, 2003.
Full compliance is required two years after the effective date.
Any material restriction on the ability of healthcare providers and payors
to obtain or disseminate health information could adversely affect our
business, financial condition, and results of operations. With the release of
the final HIPAA Privacy and Security rules, the "protection of individually
identifiable healthcare information" becomes a key component of the way we and
other covered entities perform our day-to-day business.
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Principal Products And Services
Accordis
Accordis offers hospitals and other healthcare providers Business Office
Outsourcing services and Reimbursement services.
Business Office Outsourcing Services.
Our Business Office Outsourcing
services encompass all or a portion of the patient accounting activities that
make up a healthcare provider's revenue cycle. Such revenue cycle activities
may include third-party resource identification and validation, submission of
timely and accurate bills to primary and secondary payors, generation of
patient statements, response to patient and third-party questions, recovery of
payments due, and proper accounting for payments, contractual allowances and
write-offs. These services are designed to increase the provider's revenue,
improve the proportion of provider gross charges ultimately collected,
accelerate cash flow, lower days in accounts receivable, and reduce
administrative costs. A client may outsource one or more aspects of its patient
accounting processes or may outsource the business office in its entirety,
enabling the client to re-deploy staff. In some cases, our services are used
by providers who need assistance in managing large backlogs of aged or complex
accounts. At the request of a client, we are also able to provide bad debt
collection services through a wholly owned subsidiary.
Our electronic third-party resource identification capability is based on
our original service, Retroactive Claims Reprocessing (RCR), through which we
use data warehousing and electronic data matching techniques to identify
third-party coverage for unpaid accounts. RCR technology generates additional
revenue for clients following the completion of their own billing and
collection efforts. Today, we offer RCR technology to clients either as a
stand-alone service or as a value-added component of the Business Office
Outsourcing service.
Reimbursement Services.
Our Reimbursement services include four related
offerings: (1) Medicare Bad Debt Cost Report services, (2) Disproportionate
Share services, (3) Medicaid Application services, and (4) Indirect Medical
Education billing for Medicare managed care.
Federal legislation allows a healthcare provider to claim reimbursement
from Medicare Part A for coinsurance and deductible amounts that remain
uncollected after reasonable collection efforts. Our Medicare Bad Debt Cost
Report services assist providers in isolating unpaid Medicare coinsurance and
deductible balances that qualify for reimbursement on the Medicare Cost Report.
Since 1986, Medicare has allowed hospitals serving a disproportionate
share of low-income patients to claim additional reimbursement to offset
payment shortfalls. Regardless of whether Medicaid paid for the service, the
hospital can qualify for reimbursement if the inpatient stay is
Medicaid-eligible. Through our Disproportionate
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Share services, we assist providers in qualifying for maximum
reimbursement on the Medicare Cost Report for inpatient services delivered to
Medicaid-eligible patients.
We also provide Medicaid Application services, which assist eligible
patients in properly enrolling in public aid, thereby ensuring that providers
receive reimbursement for care rendered to such patients.
Teaching hospitals are permitted to claim supplemental reimbursement from
Medicare for Indirect Medical Education (IME) costs associated with inpatient
Medicare managed care enrollees. We assist these hospitals in identifying and
documenting qualifying amounts.
Health Management Systems
Health Management Systems offers Third Party Liability (TPL) services to
governmental agencies that administer healthcare entitlement programs, most
notably state Medicaid agencies.
Established in 1965, the Medicaid program is the payor of last resort for
healthcare services required by financially and medically needy individuals.
The Medicaid program is administered by individual states, and is jointly
funded by the federal and state governments. In the early 1980's, recognizing
that state Medicaid agencies were improperly paying amounts for healthcare
claims for individuals having some other form of third-party health insurance,
the federal government imposed statutory obligations requiring states to take
active measures to pursue those liable third parties.
In 1985, we began to offer TPL services to state Medicaid agencies, as a
means of identifying third parties with prior liability for Medicaid claims.
Health Management Systems applies proprietary information management and
coordination of benefit methodologies in order to identify duplicate payments,
overpayments, compliance-related erroneous payments, and other inappropriate
payments. We then assist the Medicaid agency in recovering amounts due from
liable third parties. This post-payment revenue recovery methodology can be
defined as:
•
Identification: We use proprietary software to match
Medicaid and other program data files to insurance eligibility
files obtained by us from third parties such as Medicare,
Commercial Insurers, HMOs, Third Party Administrators, TriCare,
and others. This process identifies potential third-party
eligibility.
•
Validation: After identification of potential
third-party liability, we validate insurance eligibility by
verifying coverage for specific benefits. This process is
performed by deploying automated electronic transactions and
call center representatives.
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•
Recovery: When eligibility and coverage are in effect
for a specific Medicaid member and related episode of care, we
pursue recovery of the Medicaid payment from the liable
third-party. Most often we recover from third-parties through
direct billing of insurers or disallowance of overpayments to
the provider of services. On occasion, we recover payments
through negotiated settlements.
•
Cost Avoidance: Upon verification of coverage or
payment of claims by liable third-parties, we electronically
submit this coverage data to our Medicaid clients. This data is
used to avoid paying similar claims for the Medicaid member on a
going forward basis.
Our TPL services also include subrogation services whereby we identify,
investigate and recover accident-related medical costs where a casualty insurer
(e.g., automobile or property insurance) should pay in lieu of Medicaid, or
where a deceased beneficiary's estate should reimburse Medicaid.
In addition to our TPL services described above, we also offer the
following services:
Medical Support Enforcement (MSE).
Comprehensive medical support services
that assist state Medicaid and Child Support Enforcement agencies identify
health plan coverage available to children through their non-custodial or
custodial parents including assistance with enrollment.
Revenue Maximization.
Helping ensure that states receive the full amount
of federal health and human service funding to which they are entitled.
Global Health Information System (GHiS or Global).
The GHiS is a
comprehensive fully integrated suite of software modules designed to meet the
specific needs of public health care organizations and community health
clinics. The software includes a full suite of modules from Registration
through Case Management. We also offer training and client directed
customization services in connection with GHiS.
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SELLING SHAREHOLDERS
This prospectus relates to the reoffer and resale of shares issued or that
may be issued to the selling shareholders under the Plan. This prospectus also
relates to such indeterminate number of additional shares of our common stock
that may be acquired by the selling shareholders as a result of the
anti-dilution provisions of the Plan. There can be no assurance that the
selling shareholders will sell any or all of such shares.
Pursuant to the requirements of the Securities Act, the following table
sets forth (i) the number of shares of our common stock beneficially owned by
each selling shareholder as of the date of this prospectus, (ii) the number of
shares of our common stock to be offered for resale by each selling shareholder
and (iii) the number and percentage of shares of our common stock that each
selling shareholder will beneficially own after completion of this offering,
assuming that all shares that may be offered for resale are sold and no other
shares beneficially owned by the selling shareholders are also sold.
Number of
Number of
Shares of
Shares of
Percentage of
Common Stock
Number of
Common Stock
Outstanding
Beneficially
Shares of
Beneficially
Common Stock
Owned Prior to
Common Stock
Owned After
Owned After
Name
Offering (1)
Being Offered (2)
Offering (3)
Offering
William F. Miller III
1,472,845
200,000
1,272,845
7.93
%
Robert M. Holster
752,521
126,611
625,910
4.07
%
William C. Lucia
329,694
325,000
4,694
1.76
%
Philip Rydzewski
250,000
250,000
—
1.34
%
Randolph G. Brown
144,563
138,750
5,813
0.78
%
James T. Kelly
270,000
—
270,000
1.47
%
William W. Neal
147,274
100,479
46,795
0.80
%
Galen D. Powers
117,008
102,198
14,810
0.63
%
Ellen A. Rudnick
101,125
92,500
8,625
0.55
%
Richard H. Stowe
283,187
217,500
65,687
1.52
%
1.     Unless otherwise indicated, we believe that all people named in the above
table have sole voting and investment power with respect to all shares of
common stock beneficially owned by them. Each beneficial owner's percentage
ownership is determined by assuming that all options held by such owner under
the Plan, as well as options, warrants and convertible securities held by such
person (but not those held by any other person), which are exercisable or
convertible within 60 days, have been exercised or converted.
2.     Consists of shares issuable upon the exercise of options both currently
exercisable and not currently exercisable.
3.     Beneficial ownership of shares held by each selling shareholder after this
offering assumes that each selling shareholder sold all of the shares it is
offering in this prospectus but actually will depend on the number of shares
sold by such selling shareholder in this offering.
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PLAN OF DISTRIBUTION
This offering is self-underwritten. Neither the selling shareholders nor
we have employed an underwriter for the sale of common stock by the selling
shareholders. We will bear all expenses in connection with the preparation of
this prospectus. The selling shareholders will bear all expenses associated
with the sale of the common stock. There can be no assurance that the selling
shareholders will sell any or all of the shares of common stock offered by them
under this prospectus or otherwise.
At the time a selling shareholder makes an offer to sell shares, to the
extent required by the Securities Act, a prospectus will be delivered. If a
supplemental prospectus is required, one will be delivered setting forth the
number of shares being offered and the terms of the offering.
The selling shareholders may also pledge their shares to banks, brokers or
other financial institutions as security for margin loans or other financial
accommodations that may be extended to the selling shareholders, and any such
pledgee may similarly offer, sell and effect transactions in the shares. In
addition, any shares covered by this prospectus which qualify for sale pursuant
to Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this prospectus.
The selling shareholders may offer for sale their shares of common stock
directly or through pledgees, donees, transferees or other successors in
interest in one or more of the following transactions:
•
on the Nasdaq National Market or on any stock exchange on which the
shares of common stock may be listed at the time of sale;
•
in negotiated transactions;
•
in the over-the-counter market; or
•
in a combination of any of the above transactions.
The selling shareholders may offer their shares of common stock at any of
the following prices:
•
fixed prices which may be changed;
•
market prices prevailing at the time of sale;
•
prices related to such prevailing market prices; or
•
at negotiated prices
The selling shareholders may effect such transactions by selling shares to
or through broker-dealers, and all such broker-dealers may receive compensation
in the form of discounts, concessions, or commissions from the selling
shareholders and/or the purchasers of shares of common stock for whom such
broker-dealers may act as agents or to whom they sell as principals, or both.
Compensation as to particular broker dealers may be in excess of customary
commissions.
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Any broker-dealer acquiring common stock from the selling shareholders may
sell the shares either directly, in its normal market-making activities,
through or to other brokers on a principal or agency basis or to its customers.
Any such sales may be at prices then prevailing on the Nasdaq National Market
or at prices related to such prevailing market prices or at negotiated prices
to its customers or a combination of such methods. The selling shareholders and
any broker-dealers that act in connection with the sale of the common stock
hereunder might be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act, and any commissions received by them and any
profit on the resale of shares purchased by them might be deemed to be
underwriting discounts and commissions under the Securities Act. Any such
commissions, as well as other expenses incurred by the selling shareholders and
applicable transfer taxes, are payable by the selling shareholders.
The selling shareholders reserve the right to accept, and together with
any agent of the selling shareholder, to reject in whole or in part any
proposed purchase of the shares of common stock. The selling shareholders will
pay any sales commissions or other seller's compensation applicable to such
transactions.
We have not registered or qualified offers and sales of shares of the
common stock under the laws of any country other than the United States. To
comply with certain states' securities laws, if applicable, the selling
shareholders will offer and sell their shares of common stock in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the selling shareholders may not offer or sell
shares of common stock unless we have registered or qualified such shares for
sale in such states or we have complied with an available exemption from
registration or qualification.
The selling shareholders have represented to us that any purchase or sale
of shares of our common stock by them will comply with Regulation M promulgated
under the Exchange Act. In general, Rule 102 under Regulation M prohibits any
person connected with a distribution of our common stock (a "Distribution")
from directly or indirectly bidding for, or purchasing for any account in which
he or she has a beneficial interest, any of our common stock or any right to
purchase our common stock, for a period of one business day before his or her
participation in the Distribution and ending on the completion of his or her
participation in the Distribution (we refer to that time period as the
"Distribution Period").
During the Distribution Period, Rule 104 under Regulation M prohibits the
selling shareholders and any other persons engaged in the Distribution from
engaging in any stabilizing bid or purchasing shares of our common stock except
for the purpose of preventing or retarding a decline in the open market price
of our common stock. No such person may effect any stabilizing transaction to
facilitate any offering at the market. Inasmuch as the selling shareholders
will be reoffering and reselling our common stock at the market, Rule 104
prohibits them from effecting any stabilizing transaction in contravention of
Rule 104 with respect to our common stock.
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LEGAL MATTERS
The validity of the shares of common stock offered by this prospectus has
been passed upon for us by Brown Rudnick Berlack Israels LLP, New York, New
York.
EXPERTS
The consolidated financial statements and schedule of HMS Holdings Corp.
and subsidiaries as of December 31, 2002 and 2001 and for the years ended
December 31, 2002 and 2001, the two months ended December 31, 2000, and the
year ended October 31, 2000 have been incorporated by reference herein and in
the registration statement in reliance upon the report of KPMG LLP, independent
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The audit report refers to the
Company's adoption of the provisions of Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets" in 2002 and the
Securities and Exchange Commission's Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements", in 2000.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers or persons controlling us, we
have been advised that it is the SEC's opinion that such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation Of Documents By Reference.
The following documents, filed by the Registrant or HMS with the
Securities and Exchange Commission (the "SEC") are incorporated by reference in
this Registration Statement:
(a)     The Registrant's Annual Report on Form 10-K for the year ended
December 31, 2002;
(b)     The Registrant's Quarterly Reports on Form 10-Q for the periods ended
March 31, 2003 and June 30, 2003, filed with the SEC on May 15, 2003 and July
30, 2003, respectively;
(c)     The Registrant's Current Reports on Forms 8-K, filed with the SEC on
May 6, 2003 and July 29, 2003; and
(d)     the description of HMS' common stock contained in HMS' Registration
Statement on Form 8-A filed with the SEC, as amended by the Registrant's
Current Report on Form 8-K/12g-3 filed with the SEC on March 3, 2003.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act after the date of this Registration Statement
and prior to the filing of a post-effective amendment hereto that indicate that
all securities offered have been sold or that deregisters all such securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein or in any other
subsequently filed document that also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description Of Securities.
Not applicable.
Item 5. Interests Of Named Experts And Counsel.
Not applicable.
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Item 6. Indemnification Of Directors And Officers.
Section 722 of the New York Business Corporation Law (the "BCL") provides
that a corporation may indemnify directors and officers as well as other
employees and individuals against judgments, fines, amounts paid in settlement
and reasonable expenses, including attorneys' fees, in connection with actions
or proceedings, whether civil or criminal (other than an action by or in the
right of the corporation - a "derivative action"), if they acted in good faith
and in a manner they 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 their conduct was unlawful. A
similar standard is applicable in the case of derivative actions, except that
indemnification only extends to amounts paid in settlement and reasonable
expenses (including attorneys' fees) incurred in connection with the defense or
settlement of such actions, and the statute does not apply in respect of a
threatened action, or a pending action that is settled or otherwise disposed
of, and requires court approval before there can be any indemnification where
the person seeking indemnification has been found liable to the corporation.
Section 721 of the BCL provides that Article 7 of the BCL is not exclusive of
other indemnification that may be granted by a corporation's certificate of
incorporation, disinterested director vote, stockholder vote, agreement or
otherwise. Article VIII, Section 7, of the Registrant's by-laws requires the
Registrant to indemnify its officers and directors to the fullest extent
permitted under the BCL.
Any amendment to or repeal of the Registrant's certificate of
incorporation or by-laws shall not adversely affect any right or protection of
a director of the Registrant for or with respect to any acts or omissions of
such director occurring prior to such amendment or repeal.
The certificate of incorporation of the Registrant (Article Ninth)
provides the following:
Pursuant to Section 402(b) of the Business Corporation Law, the liability
of the Corporation's directors to the Corporation or its shareholders for
damages for breach of duty as a director shall be eliminated to the fullest
extent permitted by the Business Corporation Law, as it exists on the date
hereof or as it may hereafter be amended. No amendment to or repeal of this
Article shall apply to or have any effect on the liability or alleged liability
of any director of the Corporation for or with respect to any acts or omissions
of such director occurring prior to such amendment or repeal.
In addition, the Registrant maintains directors' and officers' liability
insurance policies.
Item 7. Exemption From Registration Claimed.
Not applicable.
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Item 8. Exhibits.
Exhibit
Number
Description
2
Agreement and Plan of Merger (causing the Registrant to become the
parent of HMS) (incorporated by reference to Exhibit 2.1 to the
Registrant's Registration Statement on Form S-4, File No. 333-100521
(the "Registration Statement"))
3.1
Restated Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 3.1 to Amendment No. 1 to the Registration
Statement)
*3.1(a)
Amendment to the Restated Certificate of Incorporation of the Registrant
3.2
By-laws of the Registrant (incorporated by reference to Exhibit 3.2 to
the Registration Statement)
*4
1999 Long-Term Incentive Stock Plan, as amended
*5
Opinion of Brown Rudnick Berlack Israels LLP re legality
*23.1
Consent of KPMG LLP
23.2
Consent of Brown Rudnick Berlack Israels LLP (included in Exhibit 5)
24
Powers of Attorney (included on signature page)
*
Filed herewith.
Item 9. 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;
(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
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
(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;
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Provided, however,
That paragraphs (A)1(i) and (A)(1)(ii) of this
section do not apply if the registration statement is on Form S-3, Form
S-8 or Form F-3, and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement;
(2)     that, for the purpose of determining any liability under the Act, 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 fide offering
thereof; and
(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.
(B)     The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in this
Registration Statement 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 fide offering thereof.
(C)     Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the provisions described in Item 6 above, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the 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 Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this 28th day of
August, 2003.
HMS HOLDINGS CORP.
By:
/s/ William F.
Miller, III
William F. Miller, III
Chairman and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned directors and officers of the Registrant, do hereby
constitute and appoint William F. Miller III and Philip Rydzewski and each and
either of them, our true and lawful attorneys-in-fact and agents, to do any and
all acts and things in our names and on our behalf in our capacities as
trustees and officers and to execute any and all instruments for us and in our
name in the capacities indicated below, which said attorneys and agents, or
either of them, may deem necessary or advisable to enable the Registrant to
comply with the Securities Act of 1933 and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with this
Registration Statement, or any registration statement for this offering that is
to be effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933, including specifically, but without limitation, any and all amendments
(including post-effective amendments) hereto; and we hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of the 28th day of August, 2003.
Signature
Title
/s/ William
F. Miller, III
Chairman and Chief Executive Officer and
Director (Principal Executive Officer)
William F. Miller, III
/s/ Philip Rydzewski
Chief Financial Officer and Treasurer
(Principal Financial Officer and
Philip Rydzewski
Principal Accounting Officer)
/s/ Robert M. Holster
President and Chief Operating Officer
Robert M. Holster
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Table of Contents
Signature
Title
/s/ Randolph G.
Brown
Director
Randolph G. Brown
/s/ James T. Kelly
Director
James T. Kelly
/s/ William W. Neal
Director
William W. Neal
/s/ Galen D. Powers
Director
Galen D. Powers
/s/ Ellen A. Rudnick
Director
Ellen A. Rudnick
/s/ Richard H. Stowe
Director
Richard H. Stowe
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INDEX TO EXHIBITS
Exhibit
Number
Description
2
Agreement and Plan of Merger (causing the Registrant to become the
parent of HMS) (incorporated by reference to Exhibit 2.1 to the
Registrant's Registration Statement on Form S-4, File No. 333-100521
(the "Registration Statement"))
3.1
Restated Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit 3.1 to Amendment No. 1 to the Registration
Statement)
*3.1(a)
Amendment to the Restated Certificate of Incorporation of the Registrant
3.2
By-laws of the Registrant (incorporated by reference to Exhibit 3.2 to
the Registration Statement)
*4
1999 Long-Term Incentive Stock Plan, as amended
*5
Opinion of Brown Rudnick Berlack Israels LLP re legality
*23.1
Consent of KPMG LLP
23.2
Consent of Brown Rudnick Berlack Israels LLP (included in Exhibit 5)
24
Powers of Attorney (included on signature page)
* Filed herewith.