Health Management Systems, Inc. Discontinuing Multi-Year Development Of Its Managed Care System Offering

Apr 02, 2001, 01:00 ET from Health Management Systems, Inc.

    NEW YORK, April 2 /PRNewswire/ --
 Health Management Systems, Inc. (Nasdaq:   HMSY) announced today that the
 Company's Payor Systems Group has discontinued development of its managed care
 system offering after considering alternatives to its development partner's
 notification that it neither wishes to purchase this group, nor continue to
 participate in the development of this system.  As a consequence of the
 discontinuance of this project, the Company will be incurring restructuring
 charges in the second fiscal quarter ending April 30, 2001, currently
 estimated at up to $5.5 million (or up to $3.3 million, net of tax benefit),
 subject to possible reduction based upon the results of the Company's
 negotiated conclusion with its development partner.  The charges include the
 elimination of approximately 60 staff and consulting positions and reduction
 of office space in the Company's Payor Systems Group, and the write-off of the
 software capitalized to-date on this project, net of payments from the
 development partner.  The Company is assessing alternatives for operating the
 balance of this group's business, as it is committed to servicing its Payor
 Systems Group's clients.
     William F. Miller III, President and Chief Executive Officer of HMSY,
 commented: "As I have previously reported, since my arrival in October, we
 have been undergoing a reassessment of all areas of the organization.  We have
 concluded in this instance, based upon the additional investment of
 approximately $10 million required by the Company to complete this project
 without a development partner, its time to market, and our desire to refocus
 on fewer agendas, that we should discontinue this project.  We believe that
 the long-term interests of HMSY are better served in a more focused, less
 complex structure and continue to forge ahead with this ambitious agenda to
 allow us to transform our organization into a more sales-driven and formidable
 leader in our resultant core business."
     HMSY furnishes proprietary information management, data processing and
 software (including consulting) services to healthcare providers and payors,
 including government health service agencies.  The Company's offerings benefit
 its clients by enhancing revenue (achieved through improved reimbursability,
 profitability, and/or collectability), accelerating cash flow, reducing
 operating and administrative costs, and improving decision-making capabilities
 (by supplying advanced information analytics).  These services include
 decision support, payor information systems and revenue enhancement, including
 business office outsourcing, addressing the various types of data generated by
 the interaction of the participants in the healthcare delivery process: the
 providers of care, the third-party payors, and the patients.
 
     Certain statements in this press release constitute "forward-looking
 statements" within the meaning of the Private Securities Litigation Reform Act
 of 1995 (the "Reform Act").  Such forward-looking statements involve known and
 unknown risks, uncertainties, and other factors which may cause the actual
 results, performance, or achievements of HMSY, or industry results, to be
 materially different from any future results, performance, or achievements
 expressed or implied by such forward-looking statements.  The important
 factors that could cause actual results to differ materially from those
 indicated by such forward-looking statements include, but are not limited to
 (i) the information being of a preliminary nature and therefore subject to
 further adjustment; (ii) the ability of HMSY to contain costs in view of its
 revised revenue outlook, to grow internally or by acquisition and to integrate
 acquired businesses into the HMSY group of companies; (iii) the uncertainties
 of litigation; (iv) HMSY's dependence on significant customers; (v) changing
 conditions in the healthcare industry which could simplify the reimbursement
 process and adversely affect HMSY's business; (vi) government regulatory and
 political pressures which could reduce the rate of growth of healthcare
 expenditures; (vii) competitive actions by other companies, including the
 development by competitors of new or superior services or products or the
 entry into the market of new competitors; (viii) all the risks inherent in the
 development, introduction, and implementation of new products and services;
 and other factors both referenced and not referenced in this press release.
 When used in this release, the words "complete," "forge," "longer-term,"
 "desire," "interest," "areas," "sales-driven," "core," "focused," "believe,"
 "committed," "considering," "incurring," "operating," "leader," "less,"
 "discontinue," "concluded," "balance," "business," "currently," "development,"
 "reassessment," "agendas," "transform,"  "allow," "undergoing," "based,"
 "ahead," "servicing," "will," "alternatives," "reduction," "continue,"
 "subject to," "estimated," "consequence," "complex," "more," "resultant,"
 "additional," "all," "approximately," "fewer," "instance," "ambitious," "time
 to market," "results," "conclusion," "investment," "project," "served,"
 "formidable," "required," "assessing," "refocus," "structure," "possible," and
 similar expressions are intended to identify forward-looking statements, and
 the above described risks inherent therein.
 
 

SOURCE Health Management Systems, Inc.
    NEW YORK, April 2 /PRNewswire/ --
 Health Management Systems, Inc. (Nasdaq:   HMSY) announced today that the
 Company's Payor Systems Group has discontinued development of its managed care
 system offering after considering alternatives to its development partner's
 notification that it neither wishes to purchase this group, nor continue to
 participate in the development of this system.  As a consequence of the
 discontinuance of this project, the Company will be incurring restructuring
 charges in the second fiscal quarter ending April 30, 2001, currently
 estimated at up to $5.5 million (or up to $3.3 million, net of tax benefit),
 subject to possible reduction based upon the results of the Company's
 negotiated conclusion with its development partner.  The charges include the
 elimination of approximately 60 staff and consulting positions and reduction
 of office space in the Company's Payor Systems Group, and the write-off of the
 software capitalized to-date on this project, net of payments from the
 development partner.  The Company is assessing alternatives for operating the
 balance of this group's business, as it is committed to servicing its Payor
 Systems Group's clients.
     William F. Miller III, President and Chief Executive Officer of HMSY,
 commented: "As I have previously reported, since my arrival in October, we
 have been undergoing a reassessment of all areas of the organization.  We have
 concluded in this instance, based upon the additional investment of
 approximately $10 million required by the Company to complete this project
 without a development partner, its time to market, and our desire to refocus
 on fewer agendas, that we should discontinue this project.  We believe that
 the long-term interests of HMSY are better served in a more focused, less
 complex structure and continue to forge ahead with this ambitious agenda to
 allow us to transform our organization into a more sales-driven and formidable
 leader in our resultant core business."
     HMSY furnishes proprietary information management, data processing and
 software (including consulting) services to healthcare providers and payors,
 including government health service agencies.  The Company's offerings benefit
 its clients by enhancing revenue (achieved through improved reimbursability,
 profitability, and/or collectability), accelerating cash flow, reducing
 operating and administrative costs, and improving decision-making capabilities
 (by supplying advanced information analytics).  These services include
 decision support, payor information systems and revenue enhancement, including
 business office outsourcing, addressing the various types of data generated by
 the interaction of the participants in the healthcare delivery process: the
 providers of care, the third-party payors, and the patients.
 
     Certain statements in this press release constitute "forward-looking
 statements" within the meaning of the Private Securities Litigation Reform Act
 of 1995 (the "Reform Act").  Such forward-looking statements involve known and
 unknown risks, uncertainties, and other factors which may cause the actual
 results, performance, or achievements of HMSY, or industry results, to be
 materially different from any future results, performance, or achievements
 expressed or implied by such forward-looking statements.  The important
 factors that could cause actual results to differ materially from those
 indicated by such forward-looking statements include, but are not limited to
 (i) the information being of a preliminary nature and therefore subject to
 further adjustment; (ii) the ability of HMSY to contain costs in view of its
 revised revenue outlook, to grow internally or by acquisition and to integrate
 acquired businesses into the HMSY group of companies; (iii) the uncertainties
 of litigation; (iv) HMSY's dependence on significant customers; (v) changing
 conditions in the healthcare industry which could simplify the reimbursement
 process and adversely affect HMSY's business; (vi) government regulatory and
 political pressures which could reduce the rate of growth of healthcare
 expenditures; (vii) competitive actions by other companies, including the
 development by competitors of new or superior services or products or the
 entry into the market of new competitors; (viii) all the risks inherent in the
 development, introduction, and implementation of new products and services;
 and other factors both referenced and not referenced in this press release.
 When used in this release, the words "complete," "forge," "longer-term,"
 "desire," "interest," "areas," "sales-driven," "core," "focused," "believe,"
 "committed," "considering," "incurring," "operating," "leader," "less,"
 "discontinue," "concluded," "balance," "business," "currently," "development,"
 "reassessment," "agendas," "transform,"  "allow," "undergoing," "based,"
 "ahead," "servicing," "will," "alternatives," "reduction," "continue,"
 "subject to," "estimated," "consequence," "complex," "more," "resultant,"
 "additional," "all," "approximately," "fewer," "instance," "ambitious," "time
 to market," "results," "conclusion," "investment," "project," "served,"
 "formidable," "required," "assessing," "refocus," "structure," "possible," and
 similar expressions are intended to identify forward-looking statements, and
 the above described risks inherent therein.
 
 SOURCE  Health Management Systems, Inc.