Quadramed 8-K QUADRAMED ANNOUNCES 1st QUARTER 2005 RESULTS

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:

David L. Piazza

Vice President, Finance

703-742-5312

dpiazza@quadramed.com

QUADRAMED ANNOUNCES 1st QUARTER 2005 RESULTS

Revenues from Continuing Operations Increase 5% Sequentially to $30.4 million

Loss from Operations Improves to $238 thousand

Benefits of Restructuring Reflected in Quarter

RESTON, VA – (May 10, 2005) – QuadraMed Corporation (Amex: QD) announced today its first quarter 2005 financial results.

Revenues from continuing operations were $30.4 million for the first quarter, representing an increase of 5% over comparable revenues for the fourth quarter of 2004. Compared to revenues in the first quarter of 2004, which included an unusually large amount of hardware revenue for a single customer, revenues declined 12%. Excluding hardware, revenues declined 2% in the current quarter when compared to the same quarter in 2004.

Loss from operations for the current quarter was $(238) thousand, compared to $(7.6) million for the fourth quarter of 2004, and $(1.8) million for the first quarter of 2004. Net loss for the current quarter was $(2.5) million, compared to $(11.3) million for the fourth quarter of 2004, and $(4.5) million for the first quarter of 2004. The improvement in operating results is due in large part to the corporate restructuring efforts that culminated with the January 2005 reduction in force and the February 2005 closure of the Financial Services Division.

QuadraMed’s Report on Form 10-Q for the Quarterly Period ended March 31, 2005 which will be filed on May 10, 2005, and other SEC filings can be accessed through the Investor Relations section of our website, www.quadramed.com, or through the SEC’s EDGAR Database at www.sec.gov (QuadraMed has EDGAR CIK No. 0001018833).

Management will review these results in an investment community conference call at 4:00 PM Eastern (1:00 PM Pacific) today, Tuesday, May 10, 2005. To ensure fair dissemination of information, no inquiries of management should be made regarding QuadraMed’s results until after the conference call. A brief question and answer period will follow management’s presentation. The dial-in number for the conference call is (800) 310-1961 domestic, and (719) 457-2692 international. Callers should dial in by 3:45 PM Eastern (12:45 PM Pacific) to register. The call will also be webcast live and available to the public via the Investor Relations section of QuadraMed’s webpage atwww.quadramed.com. Please note that the webcast is listen-only. Listeners should access the website at 3:45 PM Eastern (12:45 PM Pacific) to register and to download and install any necessary audio software. The webcast replays will be available until 12:00 AM Eastern on May 16, 2005 by dialing (719) 457-0820 or (888) 203-1112. The replay passcode is 6641187.

Attachments	Exhibit 1	Condensed Consolidated Balance Sheets (unaudited) as of March 31, 2005; and as of December 31, 2004
	Exhibit 2	Condensed Consolidated Statements of Operations (unaudited) for Three months ended March 31, 2005 and 2004
	Exhibit 3	Condensed Consolidated Statements of Cash Flows (unaudited) for Three months ended March 31, 2005 and 2004

About QuadraMed Corporation

QuadraMed is dedicated to improving healthcare delivery by providing innovative healthcare information technology and services. From clinical and patient information management to revenue cycle and health information management, QuadraMed delivers real-world solutions that help healthcare professionals deliver outstanding patient care with optimum efficiency. Behind our products and services is a staff of almost 700 professionals whose experience and dedication to service has earned QuadraMed the trust and loyalty of customers at approximately 2,000 healthcare provider facilities. To find out more about QuadraMed, visit www.quadramed.com.

Cautionary Statement on Risks Associated with QuadraMed’s Forward-Looking Statements.This press release contains forward-looking statements by QuadraMed within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. The words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “may,” “should,” “could,” and similar expressions are intended to identify such statements. Forward-looking statements are not guarantees of future performance and are to be interpreted only as of the date on which they are made. QuadraMed undertakes no obligation to update or revise any forward-looking statement except as required by law. QuadraMed advises investors that it discusses risk factors and uncertainties that could cause QuadraMed’s actual results to differ from forward-looking statements in its periodic reports filed with the Securities and Exchange Commission (“SEC”).

Note to editors: QuadraMed is a registered trademark of QuadraMed Corporation. All other trademarks are the property of their respective owners.

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Exhibit 1

QUADRAMED CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except percentages and per share amounts)

(unaudited)

	March 31, 2005			December 31, 2004
ASSETS
Current assets
Cash and cash equivalents	$	20,379		$	22,429
Accounts receivable, net of allowance for doubtful accounts of $3,174 and $3,303, respectively		35,792			25,550
Unbilled and other receivables		5,670			6,603
Notes and other receivables		1,173			832
Prepaid expenses and other current assets		6,779			8,001
Total current assets		69,793			63,415
Restricted cash		3,904			3,889
Property and equipment, net		4,410			5,129
Capitalized software development costs, net		1,173			1,427
Goodwill		25,983			25,983
Other intangible assets, net		11,089			12,451
Other long-term assets		7,091			7,116
Total assets	$	123,443		$	119,410
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued expenses	$	2,709		$	4,501
Accrued payroll and related		5,970			7,637
Other accrued liabilities		7,903			8,549
Dividends payable		12,570			13,780
Deferred revenue		54,634			44,040
Total current liabilities		83,786			78,507
Accrued exit cost of facility closing		2,956			2,898
Other long-term liabilities		5,372			5,366
Total liabilities		92,114			86,771
Stockholders equity
Preferred stock, $0.01 par, 5,000 shares authorized, 4,000 shares issued and outstanding		84,610			83,412
Common stock, $0.01 par, 150,000 shares authorized; 40,389 and 40,043 shares issued and outstanding, respectively		404			400
Additional paid-in-capital		301,699			301,231
Deferred compensation		(1,128	)		(1,870	)
Accumulated other comprehensive loss		(147	)		(124	)
Accumulated deficit		(354,109	)		(350,410	)
Total stockholders’ equity		31,329			32,639
Total liabilities and stockholders’ equity	$	123,443		$	119,410

Exhibit 1 to Press Release dated May 10, 2005

Exhibit 2

QUADRAMED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

	Three months ended March 31,
	2005			2004
Revenue
Services	$	3,077		$	2,603
Maintenance		13,410			11,618
Installation and other		2,696			3,420
Services and other revenue		19,183			17,641
Licenses		10,352			12,491
Hardware		840			4,514
Total revenue		30,375			34,646
Cost of revenue
Cost of services and other revenue		7,319			7,686
Royalties and other		2,167			2,506
Amortization of acquired technology and capitalized software		1,035			660
Cost of license revenue		3,202			3,166
Cost of hardware revenue		965			2,830
Total cost of revenue		11,486			13,682
Gross margin		18,889			20,964
Operating expense
General and administration		6,110			8,804
Software development		7,717			7,110
Sales and marketing		4,072			5,819
Amortization of intangible assets and depreciation		1,228			1,051
Total operating expenses		19,127			22,784
Loss from operations		(238	)		(1,820	)
Other income (expense)
Interest expense, includes non-cash charges of $165 and $521 respectively		(169	)		(2,298	)
Interest income		101			117
Other income (expense), net		(517	)		190
Benefit (provision) for income taxes		(11	)		175
Other income (expense)		(596	)		(1,816	)
Net loss from continuing operations	$	(834	)	$	(3,636	)
Loss from discontinued operations		(1,686	)		(906	)
Net loss	$	(2,520	)	$	(4,541	)
Preferred stock accretion		(1,175	)		—
Net loss attributable to common shareholders	$	(3,695	)	$	(4,541	)
Loss per share-basic and diluted
Continuing operations		(0.05	)		(0.13	)
Discontinued operations		(0.04	)		(0.03	)
Net income (loss)	$	(0.09	)	$	(0.16	)
Weighted average shares outstanding
Basic and diluted		40,219			29,155

Exhibit 2 to Press Release dated May 10, 2005

Exhibit 3

QUADRAMED CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three months ended March 31,
	2005			2004
Cash flows from operating activities
Net loss attributable to common shareholders	$	(3,695	)	$	(4,541	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		3,179			2,735
Preferred stock accretion		1,175			—
Exit cost of facility closing and other costs for Financial Services Division		914			—
Provision for bad debts		200			692
Loss on disposal of assets and other		363			(14	)
Changes in assets and liabilities:
Accounts receivable		(10,442	)		(2,630	)
Prepaid expenses and other		1,878			346
Accounts payable and accrued liabilities		(4,954	)		1,775
Deferred revenue		10,594			3,406
Cash provided by (used in) operating activities		(788	)		1,769
Cash flows from investing activities
Acquisition of Détente		—			(4,074	)
Purchases of property and equipment		(303	)		(1,162	)
Proceeds from (purchases of) securities and other		(82	)		106
Cash used in investing activities		(385	)		(5,130	)
Cash flows from financing activities
Proceeds from issuance of common stock and other		498			1,180
Payment of preferred stock dividends		(1,375	)		—
Cash provided by (used in) financing activities		(877	)		1,180
Net decrease in cash and cash equivalents		(2,050	)		(2,181	)
Cash and cash equivalents, beginning of period		22,429			36,944
Cash and cash equivalents, end of period	$	20,379		$	34,763
Supplemental disclosure of cash flow information
Cash paid for interest		—			1,964
Net cash (refunded) paid for taxes		11			(175	)

Exhibit 3 to Press Release dated May 10, 2005