HMS (HMSY) 8-K HMS Holdings Corp. Announces Third Quarter 2007 Results and Full Year Guidance for 2007 and 2008

Exhibit 99.1

Contact: Francesca Marraro (media relations)		Christine Rogers (investor relations)
	(212) 857-5442	(212) 857-5986
	fmarraro@hmsy.com	crogers@hmsy.com

HMS HOLDINGS CORP. ANNOUNCES THIRD QUARTER 2007 RESULTS AND FULL YEAR
GUIDANCE FOR 2007 AND 2008

NEW YORK, November 1, 2007—HMS Holdings Corp. (NASDAQ: HMSY) today announced results for the quarter ended September 30, 2007, reporting revenue of $37.7 million, an increase of $16.6 million or 78.7% from the $21.1 million reported for the same quarter of the prior year. HMSY reported net income of $4.1 million or $0.16 per diluted common share for the quarter ended September 30, 2007, compared to net income of $0.6 million or $0.03 per diluted common share during the same quarter of the prior year.

For the nine months ended September 30, 2007, HMSY reported revenue of $105.0 million, an increase of $50.7 million or 93.3% from the $54.3 million during the same period of the prior year. HMSY reported net income of $10.9 million or $0.42 per diluted common share for the nine months ended September 30, 2007, compared to net income of $3.5 million or $0.15 per diluted common share during the same period of prior year.

The Company also announced that it has raised its 2007 full year guidance for revenues from $140 million to $145 million, and for adjusted EBITDA from $38 million to $40 million. The Company is providing newly announced 2008 full year revenue guidance of $170 million – an increase of 17.2% above 2007 guidance, and adjusted EBITDA of $49 million – an increase of 22.5% over 2007 guidance.

“HMS Holdings Corp. had a very solid quarter and we are pleased with the results. We delivered the highest quarterly revenues in our 33-year history,” said Robert Holster, Chairman and CEO. “Our fundamentals remain strong and in 2008 we foresee sustained growth arising from increased Medicaid spending; continued rapid growth in our Medicaid Managed Care (MCO) business and increased traction from our Program Integrity initiatives.”

As summarized in the following table, earnings before interest, taxes, depreciation and amortization, and share based compensation expense (adjusted EBITDA) was $10.7 million for the quarter ended September 30, 2007, an increase of 119% over the third quarter of 2006. For the nine months ended September 30, 2007, adjusted EBITDA was $29.6 million, an increase of 184.9% over the nine months ended September 30, 2006. Results for the three and nine months ended September 20, 2007 reflect the acquisition of the Benefits Solutions Practice Area (BSPA) of Public Consulting Group, Inc. in September 2006.

Reconciliation of net income to EBITDA and adjusted EBITDA

	Three Months Ended September 30,					Nine Months Ended September 30,
	2007		2006			2007		2006
Net Income	$	4,141	$	620		$	10,920	$	3,460
Income taxes		3,202		248			8,443		2,113
Depreciation and amortization		2,611		3,718			7,414		5,011
Net interest expense (income)		326		(119	)		1,361		(1,207	)
Earnings before interest, taxes, depreciation and amortization (EBITDA)		10,280		4,467			28,138		9,377
Share-based compensation expense		418		463			1,420		1,035
Adjusted EBITDA	$	10,698	$	4,930		$	29,558	$	10,412

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HMSY will be hosting its third quarter 2007 results conference call with the investment community on Friday, November 2, 2007 at 10:00 A.M. Eastern Time. The conference call will include listen-only capability for individual investors and interested parties. The conference call number is US/Canada: 1 (877) 272-8639 Int’l/Local Dial-In: (706) 634-1355 Participant Code: 20688907. A slide presentation will accompany the conference call and may be accessed through our website athttp://www.hmsholdings.com/news/quarterly_reports.asp.

A conference call replay will be available beginning 11/02/2007 1:00 PM EST through 11/9/2007 11:00 PM EST. To listen to the replay of the call, dial: US/Canada: (800) 642-1687 Int’l/Local Dial-In: (706) 645-9291 Participant Code: 20688907 or visit our website athttp://www.hmsholdings.com/news/quarterly_reports.asp.

This press release includes presentations of earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA. Adjusted EBITDA represents EBITDA adjusted for share-based compensation expense. EBITDA is a measure commonly used by the capital markets to value enterprises. Interest, taxes, depreciation and amortization can vary significantly between companies due in part to differences in accounting policies, tax strategies, levels of indebtedness and interest rates. Excluding these items provides insight into the underlying results of operations and facilitates comparisons between HMSY and other companies. EBITDA is also a useful measure of the Company’s ability to service debt and is one of the measures used for determining debt covenant compliance. In addition, because of the varying methodologies for determining share-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding share-based compensation expense from EBITDA enhances the ability of management and investors to compare our core operating results over multiple periods with those of other companies. Management believes EBITDA and adjusted EBITDA information is useful to investors for these reasons. Both EBITDA and adjusted EBITDA are non-GAAP financial measures and should not be viewed as an alternative to GAAP measures of performance. Management believes the most directly comparable GAAP financial measure is net income and has provided a reconciliation of EBITDA and adjusted EBITDA to net income in this press release.

The HMS Holdings Corp. Form 10-Q for the quarter ended September 30, 2007 will be filed and available on our website www.hmsholdings.com on or about November 8, 2007, and will contain additional information about our results of operations for the fiscal year to date. This press release and the financial statements herein will be available at www.hmsholdings.com for at least a 12-month period. Shareholders and interested investors are also welcome to contact us through our Investor Relations phone number, 212-857-5423. Following the filing of the Form 10-Q, corporate executives will be available to respond to inquiries from shareholders and interested investors.

HMS Holdings Corp. is a national leader in cost containment and program integrity services for government healthcare programs. In 2006, HMS recovered more than $1.0 billion from third parties and other funding sources for its clients, and provided data that assisted them in saving billions more. HMS serves more than 70 Medicaid managed care plans and the Medicaid programs of 40 states. HMS Holdings Corp (NASDAQ: HMSY) is headquartered in New York.

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 that 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 uncertainties of litigation; (iii) HMSY’s dependence on significant customers; (iv) changing conditions in the healthcare industry which could simplify the reimbursement process and adversely affect HMSY’s business; (v) government regulatory and political pressures which could reduce the rate of growth of healthcare expenditures and/or discourage the

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assertion of claims for reimbursement against and delay the ultimate receipt of payment from third party payors; (vi) 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; (vii) all the risks inherent in the development, introduction, and implementation of new products and services; and (viii) other risk factors described from time to time in HMSY’s filings with the SEC, including HMSY’s Form 10-K for the year ended December 31, 2006. HMSY assumes no responsibility to update the forward-looking statements contained in this release as a result of new information, future events or otherwise. When/if used in this release, the words “focus”, “believe”, “confident”, “anticipate”, “expected”, “strong”, “potential”, and similar expressions are intended to identify forward-looking statements, and the above described risks inherent therein.

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HMS HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Statements of Income
(In Thousands, Except Per Share Amounts)
(unaudited)

	Three months ended Sep. 30,						Nine months ended Sep. 30,
	2007			2006			2007			2006
Revenue	$	37,684		$	21,091		$	104,983		$	54,319
Cost of services:
Compensation		14,422			8,992			40,882			24,938
Data processing		2,628			1,783			7,110			4,781
Occupancy		2,172			1,606			6,446			4,166
Direct project costs		5,498			3,259			15,843			8,225
Other operating costs		4,141			2,130			10,498			5,432
Amortization of acquisition related software and intangibles		1,154			2,827			3,480			2,827
Total cost of services		30,015			20,597			84,259			50,369
Operating income		7,669			494			20,724			3,950
Interest expense		(492	)		(338	)		(1,743	)		(354	)
Interest income		166			457			382			1,561
Income before income taxes		7,343			613			19,363			5,157
Income taxes		3,202			248			8,443			2,113
Income from continuing operations		4,141			365			10,920			3,044
Discontinued operations:
Income from operations		—			255			—			416
Net income	$	4,141		$	620		$	10,920		$	3,460
Basic income per share data:
Income per share from continuing operations	$	0.17		$	0.02		$	0.46		$	0.14
Income per share from discontinued operations		—			0.01			—			0.02
Net income per basic share	$	0.17		$	0.03		$	0.46		$	0.16
Weighted average common shares outstanding, basic		24,028			21,734			23,713			21,220
Diluted income per share data:
Income per share from continuing operations	$	0.16		$	0.02		$	0.42		$	0.13
Income per share from discontinued operations		—			0.01			—			0.02
Net income per diluted share	$	0.16		$	0.03		$	0.42		$	0.15
Weighted average common shares, diluted		26,254			23,862			26,077			23,287

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HMS HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(In Thousands, Except Share and Per Share Amounts)
(unaudited)

	September 30, 2007			December 31, 2006
Assets
Current Assets:
Cash and cash equivalents	$	6,723		$	12,527
Accounts receivable, net allowance of $493 and $512 at September 30, 2007 and December 31, 2006, respectively		39,555			30,930
Prepaid expenses and other current assets, including deferred tax assets of $1,341 and $3,353 at September 30, 2007 and December 31, 2006, respectively		3,475			5,352
		49,753			48,809
Property and equipment, net		14,934			12,160
Goodwill, net		80,242			65,242
Deferred income taxes, net		2,999			3,860
Intangible assets, net		23,181			26,204
Other assets		855			968
Total assets	$	171,964		$	157,243
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable, accrued expenses and other liabilities	$	15,084		$	14,285
Amounts due to Public Consulting Group, Inc.		507			1,385
Current portion of long term-debt		6,300			7,875
Total current liabilities		21,891			23,545
Long-term liabilities:
Long-term debt		18,900			23,625
Other liabilities		3,029			3,166
Total long-term liabilities		21,929			26,791
Total liabilities		43,820			50,336
Commitments and contingencies
Shareholders’ Equity:
Preferred Stock - $ .01 par value; 5,000,000 shares authorized; none issued		—			—
Common Stock - $ .01 par value; 45,000,000 shares authorized;
25,920,977 shares issued and 24,258,131 shares outstanding at September 30, 2007;
25,027,865 shares issued and 23,365,019 shares outstanding at December 31, 2006		259			250
Capital in excess of par value		121,235			110,876
Retained earnings		16,151			5,231
Treasury stock, at cost; 1,662,846 shares at September 30, 2007 and December 31, 2006		(9,397	)		(9,397	)
Accumulated other comprehensive loss		(104	)		(53	)
Total Shareholders’ Equity		128,144			106,907
Total liabilities and shareholders’ equity	$	171,964		$	157,243

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HMS HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Nine-month Periods ended September 30, 2007 and 2006
(in Thousands)
(unaudited)

	Nine months ended September 30,
	2007			2006
Operating activities:
Net income	$	10,920		$	3,460
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations		—			(416	)
Loss on disposal of fixed assets		80			7
Depreciation and amortization		7,698			5,027
Share-based compensation expense		1,420			1,035
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		(8,625	)		20
Decrease in prepaid expenses and other current assets		(135	)		(79	)
Decrease in deferred tax asset		2,873			2,135
Increase in other assets		(171	)		(17	)
Decrease in accounts payable, accrued expenses and other liabilities		(267	)		(3,335	)
Net cash provided by operating activities		13,793			7,837
Investing activities:
Purchases of short-term investments		—			(59,450	)
Sales of short-term investments		—			96,950
Accordis note receivable		—			5,360
Purchases of property and equipment		(6,772	)		(1,937	)
Acquisition of BSPA		(15,000	)		(80,838	)
Investment in software		(473	)		(938	)
Net cash used in investing activities		(22,245	)		(40,853	)
Financing activities:
Proceeds from exercise of stock options		3,840			2,495
Proceeds from long-term debt		—			40,000
Repayment of long-term debt		(6,300	)		(6,000	)
Deferred financing costs		—			(936	)
Tax benefit of disqualifying dispositions		5,108			—
Net cash provided by financing activities		2,648			35,559
Net (decrease) increase in cash and cash equivalents		(5,804	)		2,543
Cash provided by discontinued operations:
Cash provided by operating activities		—			416
Net cash provided by discontinued operations		—			416
Cash and cash equivalents at beginning of period		12,527			3,641
Cash and cash equivalents at end of period	$	6,723		$	6,600
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	47		$	304
Cash paid for interest		1,458			—
Supplemental disclosure of noncash investing activities:
Common stock issued in connection with BSPA acquisition	$	—		$	24,410

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