HMS (HMSY) 10-Q 5 Aug 19 2019 Q2 Quarterly report Financial data

COVER PAGE

COVER PAGE - shares	6 Months Ended
	Jun. 30, 2019	Jul. 31, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2019
Document Transition Report	false
Entity File Number	000-50194
Entity Registrant Name	HMS HOLDINGS CORP
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	11-3656261
Entity Address, Address Line One	5615 High Point Drive
Entity Address, City or Town	Irving
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75038
City Area Code	214
Local Phone Number	453-3000
Title of 12(b) Security	Common Stock $0.01 par value
Trading Symbol	HMSY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		87,353,476
Entity Central Index Key	0001196501
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 268,677	$ 178,946
Accounts receivable, net of allowance of $12,808 and $13,683, at June 30, 2019 and December 31, 2018, respectively	199,932	206,772
Prepaid expenses	20,348	19,970
Income tax receivable	9,431	18,817
Deferred financing costs, net	564	564
Other current assets	225	240
Total current assets	499,177	425,309
Property and equipment, net	86,607	94,435
Goodwill	487,617	487,617
Intangible assets, net	62,463	67,140
Operating lease right-of-use assets	18,940
Deferred financing costs, net	1,391	1,673
Other assets	3,544	2,344
Total assets	1,159,739	1,078,518
Current liabilities:
Accounts payable, accrued expenses and other liabilities	71,330	74,902
Estimated liability for appeals	2,948	21,723
Total current liabilities	74,278	96,625
Long-term liabilities:
Revolving credit facility	240,000	240,000
Operating lease liabilities	17,245
Net deferred tax liabilities	23,073	18,485
Other liabilities	7,173	10,012
Total long-term liabilities	287,491	268,497
Total liabilities	361,769	365,122
Commitments and contingencies
Shareholders' equity:
Preferred stock -- $0.01 par value; 5,000,000 shares authorized; none issued	0	0
Common stock -- $0.01 par value; 175,000,000 shares authorized;101,014,406 shares issued and 87,350,498 shares outstanding at June 30, 2019; 98,924,501 shares issued and 85,261,664 shares outstanding at December 31, 2018	1,010	989
Capital in excess of par value	461,559	425,748
Retained earnings	470,977	422,235
Treasury stock, at cost: 13,663,194 shares at June 30, 2019 and December 31, 2018	(135,576)	(135,576)
Total shareholders' equity	797,970	713,396
Total liabilities and shareholders' equity	$ 1,159,739	$ 1,078,518

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Accounts receivable, net of allowance of $12,808 and $13,683, at June 30, 2019 and December 31, 2018, respectively	$ 12,808	$ 13,683
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	175,000,000	175,000,000
Common stock, shares issued (in shares)	101,014,406	98,924,501
Common stock, shares outstanding (in shares)	87,350,498	85,261,664
Treasury cost, shares (in shares)	13,663,194	13,663,194

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Income Statement [Abstract]
Revenue	$ 168,182	$ 146,791	$ 316,135	$ 288,216
Cost of services:
Compensation	58,322	55,188	115,775	111,267
Direct project and other operating expenses	20,742	17,959	40,941	34,607
Information technology	12,316	14,240	25,420	26,503
Occupancy	4,052	4,014	8,131	8,397
Amortization of acquisition related software and intangible assets	4,166	9,621	8,332	17,753
Total cost of services	99,598	101,022	198,599	198,527
Selling, general and administrative expenses	28,036	26,532	57,282	58,530
Settlement expense	0	20,000	0	20,000
Total operating expenses	127,634	147,554	255,881	277,057
Operating income/(loss)	40,548	(763)	60,254	11,159
Interest expense	(2,853)	(3,034)	(5,702)	(5,682)
Interest income	966	188	2,080	308
Income/(loss) before income taxes	38,661	(3,609)	56,632	5,785
Income taxes	9,561	(242)	7,890	2,761
Net income/(loss)	$ 29,100	$ (3,367)	$ 48,742	$ 3,024
Basic income per common share:
Net income/(loss) per common share -- basic (in dollars per share)	$ 0.34	$ (0.04)	$ 0.56	$ 0.04
Diluted income per common share:
Net income/(loss) per common share -- diluted (in dollars per share)	$ 0.33	$ (0.04)	$ 0.55	$ 0.04
Weighted average shares:
Basic (in shares)	85,956	83,231	86,524	83,222
Diluted (in shares)	87,858	83,231	88,843	84,837

Consolidated Statement of Share

Consolidated Statement of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock and paid-in capital	Retained earnings	Treasury stock	Shares issued
Balance, beginning of period at Dec. 31, 2017		$ 369,686	$ 366,164	$ (129,621)
Balance, beginning of period (in shares) at Dec. 31, 2017				13,279,393	96,536,251
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		2,390
Stock-based compensation expense		14,208
Vesting of restricted stock units, net of shares withheld for employee tax		(2,684)
Net income/(loss)	$ 3,024		3,024
Purchase of treasury stock				$ (5,955)
Exercise of stock options (in shares)	151,034				151,034
Vesting of restricted stock units, net of shares withheld for employee tax (in shares)					363,823
Purchase of treasury stock (in shares)				383,801
Balance, end of period (in shares) at Jun. 30, 2018				13,663,194	97,051,108
Balance, end of period at Jun. 30, 2018	$ 618,639	383,600	370,615	$ (135,576)
Balance, beginning of period at Mar. 31, 2018		376,737	373,982	$ (135,576)
Balance, beginning of period (in shares) at Mar. 31, 2018				13,663,194	96,876,154
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		2,246
Stock-based compensation expense		4,714
Vesting of restricted stock units, net of shares withheld for employee tax		(97)
Net income/(loss)	$ (3,367)		(3,367)
Purchase of treasury stock				$ 0
Exercise of stock options (in shares)	87,230				141,991
Vesting of restricted stock units, net of shares withheld for employee tax (in shares)					32,963
Purchase of treasury stock (in shares)				0
Balance, end of period (in shares) at Jun. 30, 2018				13,663,194	97,051,108
Balance, end of period at Jun. 30, 2018	$ 618,639	383,600	370,615	$ (135,576)
Balance, beginning of period at Dec. 31, 2018	713,396	426,737	422,235	$ (135,576)
Balance, beginning of period (in shares) at Dec. 31, 2018				13,663,194	98,924,501
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		26,998
Stock-based compensation expense		15,781
Vesting of restricted stock units, net of shares withheld for employee tax		(6,947)
Net income/(loss)	$ 48,742		48,742
Purchase of treasury stock				$ 0
Exercise of stock options (in shares)	1,686,408				1,686,408
Vesting of restricted stock units, net of shares withheld for employee tax (in shares)					403,497
Purchase of treasury stock (in shares)				0
Balance, end of period (in shares) at Jun. 30, 2019				13,663,194	101,014,406
Balance, end of period at Jun. 30, 2019	$ 797,970	462,569	470,977	$ (135,576)
Balance, beginning of period at Mar. 31, 2019		454,087	441,877	$ (135,576)
Balance, beginning of period (in shares) at Mar. 31, 2019				13,663,194	100,745,077
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		3,859
Stock-based compensation expense		4,802
Vesting of restricted stock units, net of shares withheld for employee tax		(179)
Net income/(loss)	$ 29,100		29,100
Purchase of treasury stock				$ 0
Exercise of stock options (in shares)	242,723				242,723
Vesting of restricted stock units, net of shares withheld for employee tax (in shares)					26,606
Purchase of treasury stock (in shares)				0
Balance, end of period (in shares) at Jun. 30, 2019				13,663,194	101,014,406
Balance, end of period at Jun. 30, 2019	$ 797,970	$ 462,569	$ 470,977	$ (135,576)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating activities:
Net income	$ 48,742	$ 3,024
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software	15,989	16,758
Amortization of intangible assets	4,677	12,774
Amortization of deferred financing costs	282	282
Stock-based compensation expense	15,781	14,208
Deferred income taxes	4,588	(3,900)
Noncash lease expense	2,366
Release of estimated liability for appeals, net	(10,478)	(8,436)
Changes in operating assets and liabilities:
Accounts receivable	(2,062)	(3,654)
Prepaid expenses	(378)	63
Other current assets	15	570
Other assets	(1,200)	(29)
Income taxes receivable	9,386	(5,324)
Accounts payable, accrued expenses and other liabilities	(7,235)	(2,546)
Operating lease liabilities	(2,952)
Estimated liability for appeals	605	(99)
Net cash provided by operating activities	78,126	23,691
Investing activities:
Purchases of property and equipment	(945)	(2,455)
Investment in capitalized software	(7,465)	(10,173)
Net cash used in investing activities	(8,410)	(12,628)
Financing activities:
Proceeds from exercise of stock options	26,998	2,390
Payments of tax withholdings on behalf of employees for net-share settlements	(6,947)	(2,684)
Payments on capital lease obligations	(36)
Purchases of treasury stock	0	(5,955)
Net cash provided by/(used in) financing activities	20,015	(6,249)
Net increase in cash and cash equivalents	89,731	4,814
Cash and Cash Equivalents
Cash and cash equivalents at beginning of year	178,946	83,313
Cash and cash equivalents at end of period	268,677	88,127
Supplemental disclosure of cash flow information:
Cash (refunds received)/paid for income taxes, net of refunds	(6,509)	11,472
Cash paid for interest	5,524	4,916
Supplemental disclosure of non-cash activities:
Change in balance of accrued property and equipment purchases	$ 250	$ 1,082

Business and Summary of Signifi

Business and Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Business and Summary of Significant Accounting Policies	Business and Summary of Significant Accounting Policies (a) Business The terms “HMS,” “Company,” “we,” “us,” and “our” refer to HMS Holdings Corp. and its consolidated subsidiaries unless the context clearly indicates otherwise. HMS is an industry-leading provider of cost containment solutions in the healthcare marketplace. We use healthcare data technology, analytics and engagement solutions, to deliver coordination of benefits, payment integrity and population health management solutions to help payers reduce costs, improve healthcare outcomes and enhance member experiences. We provide coordination of benefits services to government and commercial healthcare payers to ensure that the correct party pays the claim, and our payment integrity services promote accuracy by fighting fraud, waste and abuse. Our population health management solutions consist of population risk analytics and care management and consumer engagement services that provide risk-bearing organizations with reliable intelligence across their member populations to identify risks and improve patient engagement and outcomes. Together these various services help move the healthcare system forward for our customers. We currently operate as one business segment with a single management team that reports to the Chief Executive Officer. The Consolidated Financial Statements and accompanying Notes in this Form 10-Q are unaudited. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These statements include all adjustments (which include only normal recurring adjustments, except as disclosed) that management considers necessary to present a fair statement of the Company’s results of operations, financial position and cash flows. The results reported in these unaudited Consolidated Financial Statements should not be regarded as necessarily indicative of results that may be expected for the entire year. It is suggested that these unaudited Consolidated Financial Statements be read in conjunction with the Company’s consolidated financial statements and notes thereto as of and for the year ended December 31, 2018 , which were filed with the SEC as part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”). The consolidated balance sheet as of December 31, 2018 included herein was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The preparation of the Company’s unaudited Consolidated Financial Statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, fixed assets, accrued expenses, estimated liability for appeals, the disclosure of contingent liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. The Company’s actual results could differ from those estimates. These unaudited Consolidated Financial Statements include HMS accounts and transactions and those of the Company’s wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (b) Summary of Significant Accounting Policies There have been no material changes to the Company’s significant accounting policies that are referenced in the 2018 Form 10-K other than as described below with respect to leases. Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires most lessees to recognize a majority of the company’s leases on the balance sheet, which increases reported assets and liabilities. ASU 2016-02 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases ; and ASU No. 2018-11, Targeted Improvements . The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within such annual reporting periods with early adoption permitted. The Company adopted this guidance on January 1, 2019, utilizing the optional transition method approach with an effective date of January 1, 2019. Consequently, financial information prior to the effective date was not updated and the disclosures required under the new standard are not provided for dates and periods prior to the effective date. There were no cumulative effect adjustments to retained earnings as part of adoption. The Company elected the available practical expedients, including the practical expedient to not separate lease and non-lease components of its leases and the short-term lease practical expedient. The Company’s internal control framework did not materially change, but existing internal controls were modified due to certain changes to business processes and systems to support the new leasing standard as necessary. As the Company previously disclosed, the standard had a material impact on its consolidated balance sheets, the most significant impact being the recognition of approximately $21.3 million of ROU assets and $26.3 million lease liabilities on the effective date, but there was no impact on its consolidated income statements. The Company continues to expect that any impact from its adoption of the new standard will be immaterial to its net income and its internal control framework for future periods. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting, (“ASU 2018-07”). ASU 2018-07 requires entities to apply similar accounting for share-based payment transactions with non-employees as with share-based payment transactions with employees. ASU 2018-07 is effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2019. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 introduces the current expected credit losses methodology for estimating allowances for credit losses. ASU 2016-13 applies to all financial instruments carried at amortized cost and off-balance-sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credit, and financial guarantees. The new accounting standard does not apply to trading assets, loans held for sale, financial assets for which the fair value option has been elected, or loans and receivables between entities under common control. ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company continues to evaluate whether the adoption of this guidance will have any impact on the Company’s financial statements but does not expect that this guidance will have a material impact on the Company’s financial position, results of operations or internal control framework. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal use software. ASU 2018-15 is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively to eligible costs incurred on or after the date this guidance is first applied or retrospectively. This guidance is not expected to have a material impact on the Company’s financial position, results of operations or internal control framework.

Revenue Recognition

Revenue Recognition	6 Months Ended
	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition The Company’s revenue disaggregated by solution for the three and six months ended June 30, 2019 and 2018 was as follows (in thousands) : Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Coordination of Benefits $ 105,094 $ 100,755 $ 210,945 $ 192,507 Payment Integrity 49,121 31,192 76,847 69,833 Population Health Management 13,967 14,844 28,343 25,876 Total $ 168,182 $ 146,791 $ 316,135 $ 288,216 Coordination of benefits revenue is derived from contracts with state governments and Medicaid managed care plans that can span years with the option to renew. Types of service contracts could include: (a) the identification of erroneously paid claims; (b) the delivery of verified commercial insurance coverage information; (c) the identification of paid claims where another third party is liable; and (d) the identification and enrollment of Medicaid members who have access to employer insurance. Most of these types of service contracts contain multiple promises, all of which are not distinct within the context of the contract. Therefore, the promises represent a single, distinct performance obligation for the types of services we offer. Revenue derived from these performance obligations is largely based on variable consideration where, based on the number of claims or amount of findings the Company identified, a contingent or fixed transaction price/recovery percentage is allocated to each distinct performance obligation. The Company utilizes the expected value method to estimate the variable consideration related to the transaction price for its service contracts. Key inputs and assumptions in determining variable consideration include identified pricing and expected recoveries and/or savings. The expected recoveries and/or savings are based on historical experience of information received from our customers. Revenue is primarily recognized at a point in time when our customers realize economic benefits from our services when our services are completed. However, we have a limited number of fixed fee arrangements where revenue is recognized over time as performance obligations are satisfied within one to three years . Generally, coordination of benefit contract payment terms are not standardized within the respective contract; however, payment is typically due on demand and there is a clear and distinct history of customers making consistent payments. Analytical services revenue consists of revenue for our payment integrity services and population health management solutions. Payment integrity services revenue is derived from contracts with federal and state governments, commercial health plans and other at-risk entities that can span years with the option to renew. Types of service contracts could include: (a) services designed to ensure that healthcare payments are accurate and appropriate; and (b) the identification of over/under payments or inaccurate charges based on a review of medical records. Most of these types of service contracts contain multiple promises, all of which are not distinct within the context of the contract. Therefore, the promises represent a single, distinct performance obligation for the types of services we offer. Revenue derived from these performance obligations is largely based on variable consideration where, based on the amount of recovery findings the Company identifies, a contingent or fixed transaction price/recovery percentage is allocated to each distinct performance obligation. The Company utilizes the expected value method to estimate the variable consideration related to the transaction price for its service contracts. Key inputs and assumptions in determining variable consideration include identified pricing and expected recoveries and/or savings. The expected recoveries and/or savings are based on historical experience of information received from our customers. Revenue is primarily recognized at a point in time when our customers realize economic benefits from our services when our services are completed. However, we have a limited number of fixed fee arrangements where revenue is recognized over time as performance obligations are satisfied within one to three years . Generally, payment integrity contract payment terms are not standardized within the respective contract; however, invoice payment is typically due on demand and there is a clear and distinct history of customers making consistent payments. Population health management revenue is derived from contracts with health plans and other risk-bearing entities that can span years with the option to renew. Types of service contracts could include: (a) programs designed to improve member engagement; and (b) outreach services designed to improve clinical outcomes. Most of these types of service contracts contain multiple promises, all of which are not distinct within the context of the contract. Therefore, the promises represent a single, distinct performance obligation for the types of services we offer. Revenue derived from these services is largely based on consideration associated with prices per order/transfer and PMPM/PMPY fees. The Company believes the output method is a reasonable measure of progress for the satisfaction of our performance obligations, which are satisfied over time, as it provides a faithful depiction of (1) our performance toward complete satisfaction of the performance obligation under the contract and (2) the value transferred to the customer of the services performed under the contract. The Company has elected the right to invoice practical expedient for recognition of revenue related to its performance obligations when the amount we have the right to invoice the customer corresponds directly with the value to the customer. Additionally, certain population health management contracts have distinct performance obligations related to software license and implementation fees which have historically been recognized as revenue ratably over the life of the contract. Lastly, we have a limited number of fixed fee arrangements where revenue is recognized over time as performance obligations are satisfied within one to three years . Upon adoption of ASC 606, revenue for software licenses is recognized at the beginning of the license period when control is transferred as the license is installed and revenue for implementation fees is recognized when control is transferred over time as the implementation is being performed. As the performance obligation is deemed to have been satisfied and control transferred to our customers for software licenses and implementation fees on or before December 31, 2017, the Company recorded a decrease to deferred revenue and an increase to opening retained earnings of $1.1 million , net of tax, as of January 1, 2018 for the cumulative adoption of ASC 606. Generally, population health management contract payment terms are stated within the contract and are due within an explicitly stated time period (e.g., 30, 45, 60 days) from the date of invoice. A portion of the payment received may relate to future performance obligations and will result in an increase to deferred revenue until the obligation has been met. In connection with coordination of benefits and certain payment integrity services, lockboxes and their associated bank accounts are setup to support recoveries and remittances. Generally, these bank accounts are for the benefit of the Company’s customers. Customer cash held in Company bank accounts for the benefit of the customer was approximately $4.9 million as of June 30, 2019 . This amount is included in cash and cash equivalents and other current liabilities on the accompanying consolidated balance sheet. The Company’s revenue disaggregated by market for the three and six months ended June 30, 2019 and 2018 was as follows ( in thousands ): Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Commercial $ 79,044 $ 80,493 $ 155,303 $ 152,278 State 65,180 58,815 126,922 113,435 Federal 23,958 7,483 33,910 22,503 Total $ 168,182 $ 146,791 $ 316,135 $ 288,216 A portion of the Company’s services are deferred and revenue is recognized at a later time. Deferred revenue was approximately $5.9 million and $5.6 million as of June 30, 2019 and December 31, 2018 , respectively, and is included in Accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets. Approximately $2.8 million of the December 31, 2018 balance was recognized in revenue during the quarter ended June 30, 2019 . Contract modifications are routine in nature and often done to account for changes in the contract specifications or requirements. In most instances, contract modifications are for services that are not distinct, and, therefore, modifications are accounted for as part of the existing contract. The Company has elected to use the practical expedient to expense the incremental costs of obtaining a contract if the amortization period of the asset that the Company would have otherwise recognized is one year or less.

Accounts Receivable and Account

Accounts Receivable and Accounts Receivable Allowance	6 Months Ended
	Jun. 30, 2019
Receivables [Abstract]
Accounts Receivable and Accounts Receivable Allowance	Accounts Receivable and Accounts Receivable Allowance The Company’s accounts receivable, net, consisted of the following (in thousands) : June 30, December 31, Accounts receivable $ 212,740 $ 220,455 Allowance (12,808 ) (13,683 ) Accounts receivable, net $ 199,932 $ 206,772 We record an accounts receivable allowance based on historical patterns of billing adjustments, length of operating and collection cycle and customer negotiations, behaviors and payment patterns. Changes in these estimates are recorded to revenue in the period of change. The following is a summary of the activity in the accounts receivable allowance (in thousands) June 30, December 31, Balance--beginning of period $ 13,683 $ 14,799 Provision 7,717 20,453 Charge-offs (8,592 ) (21,569 ) Balance--end of period $ 12,808 $ 13,683

Intangible Assets and Goodwill

Intangible Assets and Goodwill	6 Months Ended
	Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets and Goodwill	Intangible Assets and Goodwill Intangible assets consisted of the following ( in thousands, except for weighted average amortization period ): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period in Years June 30, 2019 Customer relationships $ 68,290 $ (18,936 ) $ 49,354 12.5 Intellectual property 21,700 (8,606 ) 13,094 3.7 Trade names 136 (128 ) 8 0.2 Restrictive covenants 133 (126 ) 7 0.2 Total $ 90,259 $ (27,796 ) $ 62,463 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period in Years December 31, 2018 Customer relationships $ 156,790 $ (104,740 ) $ 52,050 12.8 Intellectual property 21,700 (6,670 ) 15,030 4.1 Trade names 16,246 (16,215 ) 31 0.7 Restrictive covenants 263 (234 ) 29 0.7 Total $ 194,999 $ (127,859 ) $ 67,140 Amortization expense of intangible assets is expected to approximate the following (in thousands): Year ending December 31, Amortization 2019 (excluding the six months ended June 30, 2019) $ 4,568 2020 7,613 2021 7,197 2022 7,197 2023 4,822 Thereafter 31,066 Total $ 62,463 For the three months ended June 30, 2019 and 2018 , amortization expense related to intangible assets was $2.3 million and $6.7 million , respectively. For the six months ended June 30, 2019 and 2018 , amortization expense related to intangible assets was $4.7 million and $12.8 million , respectively. There was no change in the carrying amount of goodwill for the six months ended June 30, 2019 .

Accounts Payable, Accrued Expen

Accounts Payable, Accrued Expenses and Other Liabilities	6 Months Ended
	Jun. 30, 2019
Payables and Accruals [Abstract]
Accounts Payable, Accrued Expenses and Other Liabilities	Accounts Payable, Accrued Expenses and Other Liabilities Accounts payable, accrued expenses and other liabilities consisted of the following (in thousands) : June 30, December 31, Accounts payable, trade $ 11,774 $ 12,394 Accrued compensation and other 26,735 42,833 Accrued operating expenses 26,301 19,675 Current portion of lease liabilities 6,520 — Total accounts payable, accrued expenses and other liabilities $ 71,330 $ 74,902

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s effective tax rate decreased to 13.9% for the six months ended June 30, 2019 from 47.7% for the six months ended June 30, 2018 . The effective tax rate for the six months ended June 30, 2019 includes discrete tax benefits related to net equity compensation deductions offset by interest on uncertain tax benefits. For the six months ended June 30, 2019 , the differences between the federal statutory rate and our effective tax rate are tax expense items related to state taxes, equity compensation impacts, unrecognized tax benefits, including interest, officer compensation deduction limits, research and development tax credits, and other permanent differences. Included in Other liabilities on the Consolidated Balance Sheets, are the total amount of unrecognized tax benefits (net of the federal benefit for state issues) of approximately $5.3 million and $4.8 million , as of June 30, 2019 and December 31, 2018 , respectively, that, if recognized, would favorably affect the Company’s future effective tax rate. Also included in Other liabilities on the Consolidated Balance Sheets, are accrued liabilities for interest expense and penalties related to unrecognized tax benefits of $1.0 million and $0.7 million as of June 30, 2019 and December 31, 2018 , respectively. HMS includes interest expense and penalties in the provision for income taxes in the unaudited Consolidated Statements of Income. The amount of interest expense (net of federal and state income tax benefits) and penalties in the unaudited Consolidated Statements of Income for the six months ended June 30, 2019 and 2018 was $0.3 million and $0.3 million , respectively. The Company believes it is reasonably possible that the amount of unrecognized tax benefits may decrease by $1.8 million over the next twelve months, due to the expiration of the statute of limitations in federal and various state jurisdictions. HMS files income tax returns with the U.S. Federal government and various state and local jurisdictions. HMS is no longer subject to U.S. Federal income tax examinations for years before 2013 . HMS operates in a number of state and local jurisdictions. Accordingly, HMS is subject to state and local income tax examinations based on the various statutes of limitations in each jurisdiction.

Estimated Liability for Appeals

Estimated Liability for Appeals	6 Months Ended
	Jun. 30, 2019
Other Liabilities Disclosure [Abstract]
Estimated Liability for Appeals	Estimated Liability For Appeals Under the Company’s contracts with certain commercial health plan customers and its Medicare Recovery Audit Contractor (“RAC”) contract with the Centers for Medicare & Medicaid Services (“CMS”) (included within the Company’s payment integrity services revenue), providers have the right to appeal HMS claim findings and to pursue additional appeals if the initial appeal is found in favor of HMS’s customer. The appeal process established under the Medicare RAC contracts with CMS includes five levels of appeals, and resolution of appeals can take substantial time to resolve. HMS records (a) a liability for findings which have been previously adjudicated in favor of providers and (b) an estimated liability based on the amount of revenue that is subject to appeals and which are probable of being adjudicated in favor of providers following their successful appeal. The Company’s estimate is based on the Company’s historical experience. To the extent the amount to be returned to providers following a successful appeal exceeds or is less than the amount recorded, revenue in the applicable period would be reduced or increased by such amount. Any future changes or modifications to the Company's Medicare RAC contract or commercial health plan customer contracts may force the Company to apply different assumptions, which could materially affect both the Company’s revenue and estimated liability for appeals in future periods. The following roll-forward summarizes the activity in Estimated liability for appeals ( in thousands ): Original RAC contract RAC 4 contract Commercial contracts Total Balance at December 31, 2018 $ 19,380 $ 20 $ 2,323 $ 21,723 Provision — 604 5,135 5,739 Appeals found in providers favor — (309 ) (4,825 ) (5,134 ) Release of liability (19,380 ) — — (19,380 ) Balance at June 30, 2019 $ — $ 315 $ 2,633 $ 2,948 The Company’s original Medicare RAC contract with CMS expired on January 31, 2018. As a result of the original contract expiration, which historically had net settlement terms, the Company’s contractual obligation with respect to any appeals resolved in favor of providers subsequent to the expiration date ceased, and the Company released its estimated liability and increased revenue by $8.4 million during the first quarter of 2018 . The Company has determined, based on communications, that there is no further contractual obligation to CMS with respect to the original Medicare RAC contract as of June 30, 2019. Accordingly, the Company released its remaining estimated liability of $19.4 million and net receivables. As a result of the release, there was a $10.5

Credit Agreement

Credit Agreement	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Credit Agreement	Credit Agreement In December 2017 , the Company entered into an amendment to its Amended and Restated Credit Agreement, as amended (the “Credit Agreement”) which, among other things, extended the maturity of its then existing $500 million revolving credit facility by five years to December 2022 (the “Amended Revolving Facility”). The availability of funds under the Amended Revolving Facility includes sublimits for (a) up to $50 million for the issuance of letters of credit and (b) up to $25 million for swingline loans. In addition, the Company may increase the commitments under the Amended Revolving Facility and/or add one or more incremental term loan facilities, provided that such incremental facilities do not exceed in the aggregate the sum of (i) the greater of $120 million and 100% of Consolidated EBITDA (as defined in the Credit Agreement) and (ii) an additional amount so long as our first lien leverage ratio (as defined in the Credit Agreement) on a pro forma basis is not greater than 3.00 :1.00, subject to obtaining commitments from lenders therefore and meeting certain other conditions. As of June 30, 2019 and December 31, 2018 , the outstanding principal balance due on the Amended Revolving Facility was $240 million . No principal payments were made against the Amended Revolving Facility during the six months ended June 30, 2019 . Borrowings under the Amended Revolving Facility bear interest at a rate equal to, at the Company’s election (except with respect to swingline borrowings, which will accrue interest based only at the base rate), either: ▪ a base rate determined by reference to the greatest of (a) the prime or base commercial lending rate of the administrative agent as in effect on the relevant date, (b) the federal funds effective rate plus 0.50% and (c) the one-month London Interbank Offered Rate (or any successor rate determined in accordance with the Credit Agreement) (“LIBO Rate”) plus 1.00% , plus an interest margin ranging from 0.50% to 1.00% based on the Company’s consolidated leverage ratio for the applicable period; or ▪ an adjusted LIBO Rate, equal to the LIBO Rate for the applicable interest period multiplied by the statutory reserve rate (equal to (x) one divided by (y) one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) established by the Board of Governors of the Federal Reserve System of the United States), plus an interest margin ranging from 1.50% to 2.00% based on the Company’s consolidated leverage ratio for the applicable period. In addition to paying interest on the outstanding principal, the Company is required to pay unused commitment fees on the Amended Revolving Facility during the term of the Credit Agreement ranging from 0.375% to 0.250% per annum based on the Company’s consolidated leverage ratio and letter of credit fees equal to 0.125% per annum on the aggregate face amount of each letter of credit, as well as customary agency fees. As part of a contractual agreement with a customer, the Company has an outstanding irrevocable letter of credit for $6.5 million , which is issued against its revolving credit facility and expires June 30, 2020. The Amended Revolving Facility is secured, subject to certain customary carve-outs and exceptions, by a first priority lien and security interest in substantially all tangible and intangible assets of the Company and certain subsidiaries of the Company. The Amended Revolving Facility contains certain restrictive covenants, which affect, among other things, the ability of the Company and its subsidiaries to incur indebtedness, create liens, make investments, sell or otherwise dispose of assets, engage in mergers or consolidations with other entities, and pay dividends or repurchase stock. The Company is also required to comply, on a quarterly basis, with two financial covenants: (i) a minimum interest coverage ratio of 3 :00:1:00, and (ii) a maximum consolidated leverage ratio of 4.75 :1.00 through December 2019 and 4.25 :1.00 from and after January 2020. The consolidated leverage ratio is subject to a step-up to 5.25 :1.00 for four full consecutive fiscal quarters following a permitted acquisition or similar investment. As of June 30, 2019 , the Company was in compliance with all terms of the Credit Agreement. Interest expense and the commitment fees on the unused portion of the Company’s Amended Revolving Facility were as follows ( in thousands ): Three Months Ended Six Months Ended 2019 2018 2019 2018 Interest expense $ 2,524 $ 2,627 $ 5,050 $ 4,697 Commitment fees 160 239 316 477 As of June 30, 2019 and December 31, 2018 , the unamortized balance of deferred origination fees and debt issuance costs was $2.0 million and $2.2 million , respectively. For the six month periods ended June 30, 2019 and 2018 , HMS amortized $0.3 million and $0.3 million , respectively, of interest expense related to the Company’s deferred origination fees and debt issue costs.

Earnings Per Share

Earnings Per Share	6 Months Ended
	Jun. 30, 2019
Earnings Per Share [Abstract]
Earnings Per Share	Earnings Per Share The following table reconciles the basic to diluted weighted average common shares outstanding using the treasury stock method (in thousands, except per share amounts) : Three Months Ended Six Months Ended 2019 2018 2019 2018 Net income/(loss) $ 29,100 $ (3,367 ) $ 48,742 $ 3,024 Weighted average common shares outstanding-basic 85,956 83,231 86,524 83,222 Plus: net effect of dilutive stock options and restricted stock units 1,902 — 2,319 1,615 Weighted average common shares outstanding-diluted 87,858 83,231 88,843 84,837 Net income/(loss) per common share -- basic $ 0.34 $ (0.04 ) $ 0.56 $ 0.04 Net income/(loss) per common share -- diluted $ 0.33 $ (0.04 ) $ 0.55 $ 0.04 For the three months ended June 30, 2019 , 588,379 stock options and restricted stock units representing 227,604 shares of the Company's common stock were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. For the three months ended June 30, 2018 , the Company incurred a net loss. As a result, there was no difference between the Company's basic and diluted earnings per share and 2,552,862 stock options and restricted stock units representing 626,341 shares of the Company's common stock were excluded from consideration in the calculation of diluted net loss per share because the effect would have been anti-dilutive. For the six months ended June 30, 2019 and 2018 , (i) 394,886 and 2,738,783 stock options, respectively, and (ii) restricted stock units representing 151,279 and 106,501 shares of common stock, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Stock-Based Compensation	Stock-Based Compensation (a) Long-Term Incentive Award Plans The Company grants stock options and restricted stock units to HMS employees and non-employee directors of the Company under the HMS Holdings Corp. 2019 Omnibus Incentive Plan (the “2019 Omnibus Plan”), as approved by the Company’s shareholders on May 22, 2019. The 2019 Omnibus Plan replaces and supersedes the HMS Holdings Corp. 2016 Omnibus Incentive Plan. Awards granted under the 2019 Omnibus Plan generally vest over one to four years. Subject to certain exceptions, the exercise price of stock options granted under the 2019 Omnibus Plan may not be less than the fair market value of a share of stock on the grant date, which is determined based on the closing price of the Company’s common stock reported on the Nasdaq Global Select Market on that date, and the term of a stock option may not exceed ten years. (b) Stock-Based Compensation Expense Total stock-based compensation expense in the Company’s unaudited Consolidated Statements of Income related to the Company’s long-term incentive award plans was as follows (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Cost of services-compensation $ 2,720 $ 1,673 $ 6,843 $ 4,236 Selling, general and administrative 2,082 3,041 8,938 9,972 Total $ 4,802 $ 4,714 $ 15,781 $ 14,208 (c) Stock Options For the three months ended June 30, 2019 and 2018 , stock-based compensation expense related to stock options was approximately $2.0 million and $2.1 million , respectively. For the six months ended June 30, 2019 and 2018 , stock-based compensation expense related to stock options was approximately $6.8 million and $6.1 million, respectively. Presented below is a summary of stock option activity for the six months ended June 30, 2019 ( in thousands, except for weighted average exercise price and weighted average remaining contractual terms ): Number of Options Weighted Average Exercise Price Weighted Average- Remaining Contractual Terms Aggregate Intrinsic Value Outstanding balance at December 31, 2018 4,402 $ 17.07 Granted 622 38.72 Exercised (1,686 ) 16.01 Forfeitures (140 ) 19.31 Expired — — Outstanding balance at June 30, 2019 3,198 $ 21.79 6.86 $ 37,514 Expected to vest at June 30, 2019 1,045 $ 28.12 8.98 $ 7,507 Exercisable at June 30, 2019 1,728 $ 16.91 5.13 $ 26,745 During the three months ended June 30, 2019 and 2018 , the Company received proceeds of $3.9 million and $2.2 million , respectively, for the issuance of 242,723 and 87,230 shares of common stock upon the exercise of outstanding stock options, respectively. The total intrinsic value of stock options exercised during the three months ended June 30, 2019 and 2018 was $3.7 million and $0.8 million , respectively. During the six months ended June 30, 2019 and 2018 , the Company received proceeds of $27.0 million and $2.4 million , respectively, for the issuance of 1,686,408 and 151,034 shares of common stock upon the exercise of outstanding stock options, respectively. The total intrinsic value of stock options exercised during the six months ended June 30, 2019 and 2018 was $29.4 million and $0.8 million , respectively. As of June 30, 2019 , there was approximately $6.4 million of total unrecognized compensation cost related to stock options outstanding, which is expected to be recognized over a weighted average period of 1.3 years . The weighted-average grant date fair value per share of the stock options granted during the six months ended June 30, 2019 and 2018 was $13.82 and $7.52 , respectively. HMS estimated the fair value of each stock option grant on the date of grant using a Black-Scholes option pricing model and weighted–average assumptions set forth in the following table: Six Months Ended 2019 2018 Expected dividend yield 0 % 0 % Risk-free interest rate 2.5 % 2.7 % Expected volatility 40.9 % 42.4 % Expected life (years) 6.35 6.00 The total tax benefits recognized on stock-based compensation related to stock options for the six months ended June 30, 2019 and 2018 was $12.4 million and $2.5 million , respectively. (d) Restricted Stock Units For the three months ended June 30, 2019 and 2018 , stock-based compensation expense related to restricted stock units was approximately $2.8 million and $2.6 million , respectively. For the six months ended June 30, 2019 and 2018 , stock-based compensation expense related to restricted stock units was approximately $8.9 million and $8.1 million , respectively. Presented below is a summary of restricted stock units activity for the six months ended June 30, 2019 (in thousands, except for weighted average grant date fair value per unit): Number of Units Weighted Average Grant Date Fair Value per Unit Outstanding balance at December 31, 2018 1,488 $ 17.60 Granted 460 34.10 Vesting of restricted stock units, net of units withheld for taxes (403 ) 16.49 Units withheld for taxes (200 ) 16.49 Forfeitures (82 ) 18.92 Outstanding balance at June 30, 2019 1,263 $ 25.74 For the three months ended June 30, 2019 and 2018 , HMS granted 51,546 and 62,259 restricted stock units, respectively, with an aggregate fair market value of $1.6 million and $0.9 million, respectively. For the six months ended June 30, 2019 and 2018 , HMS granted 459,985 and 761,083 restricted stock units, respectively, with an aggregate fair market value of $15.7 million and $12.7 million, respectively. As of June 30, 2019 , 1,003,051 restricted stock units remained unvested and there was approximately $14.3 million of unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted average vesting period of 1.38 years.

Leases

Leases	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Leases	Leases The Company determines if an arrangement is a lease at inception. Operating leases are reported on the Company’s consolidated balance sheet within Operating lease right-of-use assets, Operating lease liabilities and Accounts payable, accrued expenses and other liabilities. Finance leases are reported on the Company’s consolidated balance sheets within Other assets, Other liabilities and Accounts payable, accrued expenses and other liabilities. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, we use the Company’s incremental borrowing rate based on the information available at the lease’s commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For certain real estate and equipment leases, the Company has lease agreements with lease and non-lease components, which are generally accounted for as a single component. The Company primarily leases real estate, information technology equipment and data centers on terms that expire on various dates through 2026, some of which include options to extend the lease for up to 10 years . We evaluate whether to include the option period in the calculation of the ROU asset and lease liability on a lease-by-lease basis. As of June 30, 2019 , all operating and finance leases that create significant rights and obligations for the Company have commenced. The components of lease expense for the three and six months ended June 30, 2019 were as follows ( in thousands ): Three Months Ended Six Months Ended Operating lease cost $ 1,658 $ 3,314 Finance lease cost: Amortization of right-of-use assets $ 30 $ 38 Interest on lease liabilities $ 4 $ 5 Total finance lease cost $ 34 $ 43 Supplemental cash flow and other information related to leases for the six months ended June 30, 2019 were as follows ( in thousands ): Six Months Ended Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 3,700 Operating cash flows from finance leases $ 4 Financing cash flows from finance leases $ 36 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 163 Finance leases $ 331 Supplemental balance sheet information related to leases as of June 30, 2019 consisted of the following ( in thousands ): June 30, 2019 Operating Leases Operating lease right-of-use assets $ 18,940 Other current liabilities $ 6,301 Operating lease liabilities $ 17,245 Total operating lease liabilities $ 23,546 Finance Leases Other Assets $ 656 Other current liabilities $ 219 Other long-term liabilities $ 440 Total finance leases liabilities $ 659 As of June 30, 2019, the weighted-average remaining lease term for operating and finance leases was 4.5 years and 3 years , respectively. As of June 30, 2019, the weighted-average discount rates were 5.7% and 5.0% for operating and finance leases, respectively. Sublease income for the six months ended June 30, 2019 and 2018 was $1.1 million and $0.8 million , respectively. Maturities of lease liabilities were as follows ( in thousands ): Year ended December 31, Operating Leases Finance Leases 2019 (excluding the six months ended June 30, 2019) $ 3,728 $ 123 2020 7,308 245 2021 5,605 245 2022 3,313 91 2023 3,073 — Thereafter 3,578 — Total lease payments 26,605 704 Less: Imputed interest 3,059 45 Total lease obligation $ 23,546 $ 659

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies In July 2012, Dennis Demetre and Lori Lewis (the “Plaintiffs”), filed an action in the Supreme Court of the State of New York against HMS Holdings Corp., claiming an undetermined amount of damages alleging that various actions by HMS unlawfully deprived the Plaintiffs of the acquisition earn-out portion of the purchase price for Allied Management Group Special Investigation Unit, Inc. (“AMG”) under the applicable Stock Purchase Agreement (the “SPA”) and that HMS had breached certain contractual provisions under the SPA. The Plaintiffs filed a second amended complaint with two causes of action for breach of contract and one cause of action for breach of implied covenant of good faith and fair dealing. HMS asserted a counterclaim against Plaintiffs for breach of contract based on contractual indemnification costs, including attorneys’ fees arising out of the Company’s defense of AMG in Kern Health Systems v. AMG, Dennis Demetre and Lori Lewis (the “California Action”), which are recoverable under the SPA. In June 2016, Kern Health Systems and AMG entered into a settlement agreement that resolved all claims in the California Action. In July 2017, the Court issued a decision on the Company’s motion for partial summary judgment and granted the motion in part, dismissing one of Plaintiffs’ breach of contract causes of action against HMS. On November 3, 2017, following a jury trial, a verdict was returned in favor of the Plaintiffs on a breach of contract claim, and the jury awarded $60 million in damages to the Plaintiffs. On March 14, 2018, the Court held a hearing on the Company’s post-trial motion for an order granting it judgment notwithstanding the verdict or, alternatively, setting aside the jury’s award of damages. On June 27, 2018, prior to the Court issuing a decision on the motion, the Company entered into a Settlement Agreement (the “Settlement Agreement”) with the Plaintiffs, John Alfred Lewis and Christopher Brandon Lewis. Pursuant to the terms of the Settlement Agreement, the Company paid $20 million to resolve all matters in controversy pertaining to the lawsuit. On July 5, 2018, the Court entered an order to discontinue the lawsuit pursuant to the Stipulation of Discontinuance with Prejudice filed by the parties. In February 2018, the Company received a Civil Investigative Demand (“CID”) from the Texas Attorney General, purporting to investigate possible unspecified violations of the Texas Medicaid Fraud Prevention Act. In March 2018, the Company provided certain documents and information in response to the CID. HMS has not received any further requests for information in connection with this CID. In September 2018, a former employee filed an action in the New York County Supreme Court entitled Christopher Frey v. Health Management Systems, Inc. alleging retaliation under New York law. The complaint seeks recovery of an unspecified amount of monetary damages, including back pay and other compensatory and equitable relief. The Company has moved to dismiss the complaint. On May 2, 2019, the Court held a hearing on the Company’s motion to dismiss. The Company continues to believe that this claim is without merit and intends to vigorously defend this matter. From time to time, HMS may be subject to investigations, legal proceedings and other disputes arising in the ordinary course of the Company’s business, including but not limited to regulatory audits, billing and contractual disputes, employment-related matters and post-closing disputes related to acquisitions. Due to the Company’s contractual relationships, including those with federal and state government entities, HMS’s operations, billing and business practices are subject to scrutiny and audit by those entities and other multiple agencies and levels of government, as well as to frequent transitions and changes in the personnel responsible for oversight of the Company’s contractual performance. HMS may have contractual disputes with its customers arising from differing interpretations of contractual provisions that define the Company’s rights, obligations, scope of work or terms of payment, and with associated claims of liability for inaccurate or improper billing for reimbursement of contract fees, or for sanctions or damages for alleged performance deficiencies. Resolution of such disputes may involve litigation or may require that HMS accept some amount of loss or liability in order to avoid customer abrasion, negative marketplace perceptions and other disadvantageous results that could affect the Company’s business, financial condition, results of operations and cash flows. HMS records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred and the amount can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. If a loss contingency is not both probable and estimable, HMS does not establish an accrued liability.

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events As of June 30, 2019, the Company held common stock of InstaMed Holdings, Inc. On July 24, 2019, JP Morgan Chase & Co acquired one hundred percent of InstaMed Holdings, Inc., resulting in the sale of the Company's investment. As a result, the Company received proceeds of $9.8 million for the sale of the investment in the subsequent period.

Business and Summary of Signi_2

Business and Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2019
Accounting Policies [Abstract]
Basis of Accounting	The Consolidated Financial Statements and accompanying Notes in this Form 10-Q are unaudited. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles (“U.S. GAAP”) for complete financial statements. These statements include all adjustments (which include only normal recurring adjustments, except as disclosed) that management considers necessary to present a fair statement of the Company’s results of operations, financial position and cash flows. The results reported in these unaudited Consolidated Financial Statements should not be regarded as necessarily indicative of results that may be expected for the entire year. It is suggested that these unaudited Consolidated Financial Statements be read in conjunction with the Company’s consolidated financial statements and notes thereto as of and for the year ended December 31, 2018 , which were filed with the SEC as part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (“2018 Form 10-K”). The consolidated balance sheet as of December 31, 2018 included herein was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.
Use of Estimates	The preparation of the Company’s unaudited Consolidated Financial Statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, fixed assets, accrued expenses, estimated liability for appeals, the disclosure of contingent liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting periods. The Company’s actual results could differ from those estimates.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires most lessees to recognize a majority of the company’s leases on the balance sheet, which increases reported assets and liabilities. ASU 2016-02 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases ; and ASU No. 2018-11, Targeted Improvements . The new standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018 including interim periods within such annual reporting periods with early adoption permitted. The Company adopted this guidance on January 1, 2019, utilizing the optional transition method approach with an effective date of January 1, 2019. Consequently, financial information prior to the effective date was not updated and the disclosures required under the new standard are not provided for dates and periods prior to the effective date. There were no cumulative effect adjustments to retained earnings as part of adoption. The Company elected the available practical expedients, including the practical expedient to not separate lease and non-lease components of its leases and the short-term lease practical expedient. The Company’s internal control framework did not materially change, but existing internal controls were modified due to certain changes to business processes and systems to support the new leasing standard as necessary. As the Company previously disclosed, the standard had a material impact on its consolidated balance sheets, the most significant impact being the recognition of approximately $21.3 million of ROU assets and $26.3 million lease liabilities on the effective date, but there was no impact on its consolidated income statements. The Company continues to expect that any impact from its adoption of the new standard will be immaterial to its net income and its internal control framework for future periods. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) – Improvements to Nonemployee Share-Based Payment Accounting, (“ASU 2018-07”). ASU 2018-07 requires entities to apply similar accounting for share-based payment transactions with non-employees as with share-based payment transactions with employees. ASU 2018-07 is effective for public entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company adopted this guidance on January 1, 2019. The adoption of this guidance did not have a material effect on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (“ASU 2016-13”). ASU 2016-13 introduces the current expected credit losses methodology for estimating allowances for credit losses. ASU 2016-13 applies to all financial instruments carried at amortized cost and off-balance-sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credit, and financial guarantees. The new accounting standard does not apply to trading assets, loans held for sale, financial assets for which the fair value option has been elected, or loans and receivables between entities under common control. ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company continues to evaluate whether the adoption of this guidance will have any impact on the Company’s financial statements but does not expect that this guidance will have a material impact on the Company’s financial position, results of operations or internal control framework. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). The standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal use software. ASU 2018-15 is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period for which financial statements have not been issued. Entities can choose to adopt the new guidance prospectively to eligible costs incurred on or after the date this guidance is first applied or retrospectively. This guidance is not expected to have a material impact on the Company’s financial position, results of operations or internal control framework.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	6 Months Ended
	Jun. 30, 2019
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	The Company’s revenue disaggregated by solution for the three and six months ended June 30, 2019 and 2018 was as follows (in thousands) : Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Coordination of Benefits $ 105,094 $ 100,755 $ 210,945 $ 192,507 Payment Integrity 49,121 31,192 76,847 69,833 Population Health Management 13,967 14,844 28,343 25,876 Total $ 168,182 $ 146,791 $ 316,135 $ 288,216 The Company’s revenue disaggregated by market for the three and six months ended June 30, 2019 and 2018 was as follows ( in thousands ): Three Months Ended Six Months Ended June 30, 2019 June 30, 2018 June 30, 2019 June 30, 2018 Commercial $ 79,044 $ 80,493 $ 155,303 $ 152,278 State 65,180 58,815 126,922 113,435 Federal 23,958 7,483 33,910 22,503 Total $ 168,182 $ 146,791 $ 316,135 $ 288,216

Accounts Receivable and Accou_2

Accounts Receivable and Accounts Receivable Allowance (Tables)	6 Months Ended
	Jun. 30, 2019
Receivables [Abstract]
Accounts Receivable, Net	The Company’s accounts receivable, net, consisted of the following (in thousands) : June 30, December 31, Accounts receivable $ 212,740 $ 220,455 Allowance (12,808 ) (13,683 ) Accounts receivable, net $ 199,932 $ 206,772
Activity in Allowance for Doubtful Accounts	The following is a summary of the activity in the accounts receivable allowance (in thousands) June 30, December 31, Balance--beginning of period $ 13,683 $ 14,799 Provision 7,717 20,453 Charge-offs (8,592 ) (21,569 ) Balance--end of period $ 12,808 $ 13,683

Intangible Assets and Goodwill

Intangible Assets and Goodwill (Tables)	6 Months Ended
	Jun. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets	Intangible assets consisted of the following ( in thousands, except for weighted average amortization period ): Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period in Years June 30, 2019 Customer relationships $ 68,290 $ (18,936 ) $ 49,354 12.5 Intellectual property 21,700 (8,606 ) 13,094 3.7 Trade names 136 (128 ) 8 0.2 Restrictive covenants 133 (126 ) 7 0.2 Total $ 90,259 $ (27,796 ) $ 62,463 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Amortization Period in Years December 31, 2018 Customer relationships $ 156,790 $ (104,740 ) $ 52,050 12.8 Intellectual property 21,700 (6,670 ) 15,030 4.1 Trade names 16,246 (16,215 ) 31 0.7 Restrictive covenants 263 (234 ) 29 0.7 Total $ 194,999 $ (127,859 ) $ 67,140
Amortization Expense of Intangible Assets	Amortization expense of intangible assets is expected to approximate the following (in thousands): Year ending December 31, Amortization 2019 (excluding the six months ended June 30, 2019) $ 4,568 2020 7,613 2021 7,197 2022 7,197 2023 4,822 Thereafter 31,066 Total $ 62,463

Accounts Payable, Accrued Exp_2

Accounts Payable, Accrued Expenses and Other Liabilities (Tables)	6 Months Ended
	Jun. 30, 2019
Payables and Accruals [Abstract]
Accounts Payable, Accrued Expenses, and Other Liabilities	Accounts payable, accrued expenses and other liabilities consisted of the following (in thousands) : June 30, December 31, Accounts payable, trade $ 11,774 $ 12,394 Accrued compensation and other 26,735 42,833 Accrued operating expenses 26,301 19,675 Current portion of lease liabilities 6,520 — Total accounts payable, accrued expenses and other liabilities $ 71,330 $ 74,902

Estimated Liability for Appea_2

Estimated Liability for Appeals (Tables)	6 Months Ended
	Jun. 30, 2019
Other Liabilities Disclosure [Abstract]
Summary of Activity in the Estimated Liability for Appeals	The following roll-forward summarizes the activity in Estimated liability for appeals ( in thousands ): Original RAC contract RAC 4 contract Commercial contracts Total Balance at December 31, 2018 $ 19,380 $ 20 $ 2,323 $ 21,723 Provision — 604 5,135 5,739 Appeals found in providers favor — (309 ) (4,825 ) (5,134 ) Release of liability (19,380 ) — — (19,380 ) Balance at June 30, 2019 $ — $ 315 $ 2,633 $ 2,948

Credit Agreement (Tables)

Credit Agreement (Tables)	6 Months Ended
	Jun. 30, 2019
Debt Disclosure [Abstract]
Schedule of Interest Expense and Commitment Fees	Interest expense and the commitment fees on the unused portion of the Company’s Amended Revolving Facility were as follows ( in thousands ): Three Months Ended Six Months Ended 2019 2018 2019 2018 Interest expense $ 2,524 $ 2,627 $ 5,050 $ 4,697 Commitment fees 160 239 316 477

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
	Jun. 30, 2019
Earnings Per Share [Abstract]
Schedule of Earnings Per Share	The following table reconciles the basic to diluted weighted average common shares outstanding using the treasury stock method (in thousands, except per share amounts) : Three Months Ended Six Months Ended 2019 2018 2019 2018 Net income/(loss) $ 29,100 $ (3,367 ) $ 48,742 $ 3,024 Weighted average common shares outstanding-basic 85,956 83,231 86,524 83,222 Plus: net effect of dilutive stock options and restricted stock units 1,902 — 2,319 1,615 Weighted average common shares outstanding-diluted 87,858 83,231 88,843 84,837 Net income/(loss) per common share -- basic $ 0.34 $ (0.04 ) $ 0.56 $ 0.04 Net income/(loss) per common share -- diluted $ 0.33 $ (0.04 ) $ 0.55 $ 0.04

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Total Stock-Based Compensation Expense	Total stock-based compensation expense in the Company’s unaudited Consolidated Statements of Income related to the Company’s long-term incentive award plans was as follows (in thousands): Three Months Ended Six Months Ended 2019 2018 2019 2018 Cost of services-compensation $ 2,720 $ 1,673 $ 6,843 $ 4,236 Selling, general and administrative 2,082 3,041 8,938 9,972 Total $ 4,802 $ 4,714 $ 15,781 $ 14,208
Summary of Stock Option Activity	ly. Presented below is a summary of stock option activity for the six months ended June 30, 2019 ( in thousands, except for weighted average exercise price and weighted average remaining contractual terms ): Number of Options Weighted Average Exercise Price Weighted Average- Remaining Contractual Terms Aggregate Intrinsic Value Outstanding balance at December 31, 2018 4,402 $ 17.07 Granted 622 38.72 Exercised (1,686 ) 16.01 Forfeitures (140 ) 19.31 Expired — — Outstanding balance at June 30, 2019 3,198 $ 21.79 6.86 $ 37,514 Expected to vest at June 30, 2019 1,045 $ 28.12 8.98 $ 7,507 Exercisable at June 30, 2019 1,728 $ 16.91 5.13 $ 26,745
Schedule of Estimated Fair Value of Stock Option Grants	HMS estimated the fair value of each stock option grant on the date of grant using a Black-Scholes option pricing model and weighted–average assumptions set forth in the following table: Six Months Ended 2019 2018 Expected dividend yield 0 % 0 % Risk-free interest rate 2.5 % 2.7 % Expected volatility 40.9 % 42.4 % Expected life (years) 6.35 6.00
Summary of Restricted Stock Units Activity	Presented below is a summary of restricted stock units activity for the six months ended June 30, 2019 (in thousands, except for weighted average grant date fair value per unit): Number of Units Weighted Average Grant Date Fair Value per Unit Outstanding balance at December 31, 2018 1,488 $ 17.60 Granted 460 34.10 Vesting of restricted stock units, net of units withheld for taxes (403 ) 16.49 Units withheld for taxes (200 ) 16.49 Forfeitures (82 ) 18.92 Outstanding balance at June 30, 2019 1,263 $ 25.74

Leases (Tables)

Leases (Tables)	6 Months Ended
	Jun. 30, 2019
Leases [Abstract]
Components of Lease Expense	The components of lease expense for the three and six months ended June 30, 2019 were as follows ( in thousands ): Three Months Ended Six Months Ended Operating lease cost $ 1,658 $ 3,314 Finance lease cost: Amortization of right-of-use assets $ 30 $ 38 Interest on lease liabilities $ 4 $ 5 Total finance lease cost $ 34 $ 43
Supplemental Cash Flow and Other Information Related to Leases	Supplemental cash flow and other information related to leases for the six months ended June 30, 2019 were as follows ( in thousands ): Six Months Ended Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 3,700 Operating cash flows from finance leases $ 4 Financing cash flows from finance leases $ 36 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 163 Finance leases $ 331
Supplemental Balance Sheet Information Related to Leases	Supplemental balance sheet information related to leases as of June 30, 2019 consisted of the following ( in thousands ): June 30, 2019 Operating Leases Operating lease right-of-use assets $ 18,940 Other current liabilities $ 6,301 Operating lease liabilities $ 17,245 Total operating lease liabilities $ 23,546 Finance Leases Other Assets $ 656 Other current liabilities $ 219 Other long-term liabilities $ 440 Total finance leases liabilities $ 659
Maturities of Lease Liabilities	Maturities of lease liabilities were as follows ( in thousands ): Year ended December 31, Operating Leases Finance Leases 2019 (excluding the six months ended June 30, 2019) $ 3,728 $ 123 2020 7,308 245 2021 5,605 245 2022 3,313 91 2023 3,073 — Thereafter 3,578 — Total lease payments 26,605 704 Less: Imputed interest 3,059 45 Total lease obligation $ 23,546 $ 659

Business and Summary of Signi_3

Business and Summary of Significant Accounting Policies (Details)	6 Months Ended
	Jun. 30, 2019USD ($)Segment	Jan. 01, 2019USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Number of business segments | Segment	1
Operating lease right-of-use assets	$ 18,940,000
Total operating lease liabilities	$ 23,546,000
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cumulative effect of new accounting principle in period of adoption		$ 0
Operating lease right-of-use assets		21,300,000
Total operating lease liabilities		$ 26,300,000

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019	Dec. 31, 2018	Jan. 01, 2018
Disaggregation of Revenue [Line Items]
Increase to opening retained earnings	$ 470,977	$ 470,977	$ 422,235
Customer cash held in company bank accounts	4,900	4,900
Deferred revenue	(5,900)	$ (5,900)	$ (5,600)
Revenue recognized	$ 2,800
Minimum
Disaggregation of Revenue [Line Items]
Term, Contracts With Customers		1 year
Amortization period	1 year	1 year
Maximum
Disaggregation of Revenue [Line Items]
Term, Contracts With Customers		3 years
Accounting Standards Update 2014-09
Disaggregation of Revenue [Line Items]
Increase to opening retained earnings				$ 1,100
Deferred revenue				$ 1,100

Revenue Recognition - Revenues

Revenue Recognition - Revenues Disaggregated by Revenue Source and Market (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 168,182	$ 146,791	$ 316,135	$ 288,216
Commercial
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	79,044	80,493	155,303	152,278
State
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	65,180	58,815	126,922	113,435
Federal
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	23,958	7,483	33,910	22,503
Coordination of Benefits
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	105,094	100,755	210,945	192,507
Payment Integrity
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	49,121	31,192	76,847	69,833
Population Health Management
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 13,967	$ 14,844	$ 28,343	$ 25,876

Accounts Receivable and Accou_3

Accounts Receivable and Accounts Receivable Allowance - Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Receivables [Abstract]
Accounts receivable	$ 212,740	$ 220,455
Allowance	(12,808)	(13,683)	$ (14,799)
Accounts receivable, net	$ 199,932	$ 206,772

Accounts Receivable and Accou_4

Accounts Receivable and Accounts Receivable Allowance - Activity in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance--beginning of period	$ 12,808	$ 13,683	$ 14,799
Provision	7,717	20,453
Charge-offs	(8,592)	(21,569)
Balance--end of period	$ 12,808	$ 13,683

Intangible Assets and Goodwil_2

Intangible Assets and Goodwill - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 90,259	$ 194,999
Accumulated Amortization	(27,796)	(127,859)
Net Carrying Amount	62,463	67,140
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	68,290	156,790
Accumulated Amortization	(18,936)	(104,740)
Net Carrying Amount	$ 49,354	$ 52,050
Weighted Average Amortization Period in Years	12 years 6 months	12 years 9 months 18 days
Intellectual property
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 21,700	$ 21,700
Accumulated Amortization	(8,606)	(6,670)
Net Carrying Amount	$ 13,094	$ 15,030
Weighted Average Amortization Period in Years	3 years 8 months 12 days	4 years 1 month 6 days
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 136	$ 16,246
Accumulated Amortization	(128)	(16,215)
Net Carrying Amount	$ 8	$ 31
Weighted Average Amortization Period in Years	2 months 12 days	8 months 12 days
Restrictive covenants
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 133	$ 263
Accumulated Amortization	(126)	(234)
Net Carrying Amount	$ 7	$ 29
Weighted Average Amortization Period in Years	2 months 12 days	8 months 12 days

Intangible Assets and Goodwil_3

Intangible Assets and Goodwill - Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
2019 (excluding the six months ended June 30, 2019)	$ 4,568
2020	7,613
2021	7,197
2022	7,197
2023	4,822
Thereafter	31,066
Total	$ 62,463	$ 67,140

Intangible Assets and Goodwil_4

Intangible Assets and Goodwill (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 2,300,000	$ 6,700,000	$ 4,677,000	$ 12,774,000
Change in carrying amount of goodwill			$ 0

Accounts Payable, Accrued Exp_3

Accounts Payable, Accrued Expenses and Other Liabilities - Summary of Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accounts payable, trade	$ 11,774	$ 12,394
Accrued compensation and other	26,735	42,833
Accrued operating expenses	26,301	19,675
Current portion of lease liabilities	6,520
Total accounts payable, accrued expenses and other liabilities	$ 71,330	$ 74,902

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate, percent	13.90%	47.70%
Unrecognized tax benefits that would impact effective tax rate	$ 5.3		$ 4.8
Unrecognized tax benefits, income tax penalties and interest accrued	1		$ 0.7
Unrecognized tax benefits, income tax penalties and interest expense	0.3	$ 0.3
Possible decrease in unrecognized tax benefits	$ 1.8

Estimated Liability for Appea_3

Estimated Liability for Appeals - Activity in Estimated Liability for Appeals (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Estimated Liability for Appeals [Roll Forward]
Balance at December 31, 2018			$ 21,723
Provision			5,739
Appeals found in providers favor			(5,134)
Release of liability	$ (10,500)	$ (8,400)	(10,478)	$ (8,436)
Balance at June 30, 2019	2,948		2,948
Original RAC contract
Estimated Liability for Appeals [Roll Forward]
Balance at December 31, 2018			19,380
Provision			0
Appeals found in providers favor			0
Release of liability	(19,400)		(19,380)
Balance at June 30, 2019	0		0
RAC 4 contract
Estimated Liability for Appeals [Roll Forward]
Balance at December 31, 2018			20
Provision			604
Appeals found in providers favor			(309)
Release of liability			0
Balance at June 30, 2019	315		315
Commercial contracts
Estimated Liability for Appeals [Roll Forward]
Balance at December 31, 2018			2,323
Provision			5,135
Appeals found in providers favor			(4,825)
Release of liability			0
Balance at June 30, 2019	$ 2,633		$ 2,633

Estimated Liability for Appea_4

Estimated Liability for Appeals (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Product Liability Contingency [Line Items]
Release of liability	$ 10,500	$ 8,400	$ 10,478	$ 8,436
Original RAC Contract
Product Liability Contingency [Line Items]
Release of liability	$ 19,400		$ 19,380

Credit Agreement (Details)

Credit Agreement (Details)	1 Months Ended	6 Months Ended
	Dec. 31, 2017USD ($)	Jun. 30, 2019USD ($)	Jun. 30, 2018USD ($)	Dec. 31, 2018USD ($)
Line of Credit Facility [Line Items]
Letters of credit outstanding, amount		$ 6,500,000
Amortization of interest expense		282,000	$ 282,000
Credit Agreement
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 500,000,000
Line of credit facility, expiration period	5 years
Debt agreement, maximum borrowing capacity	$ 120,000,000
Debt agreement, maximum borrowing capacity percent of consolidated EBITDA	100.00%
Credit Agreement | Letter of Credit
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 50,000,000
Line of credit facility, unused capacity, commitment fee percentage	0.125%
Credit Agreement | Swingline Loans
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 25,000,000
Credit Agreement | Revolving Credit Facility
Line of Credit Facility [Line Items]
Debt instrument, covenant, interest coverage ratio	5.25
Long-term line of credit, total		240,000,000		$ 240,000,000
Repayments of long-term lines of credit		0
Debt issuance costs, net		2,000,000		$ 2,200,000
Amortization of interest expense		$ 300,000	$ 300,000
Credit Agreement | Revolving Credit Facility | Fed Funds Effective Rate Overnight Index Swap Rate
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	0.50%
Credit Agreement | Revolving Credit Facility | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	1.00%
Credit Agreement | Revolving Credit Facility | Minimum
Line of Credit Facility [Line Items]
Line of credit facility, unused capacity, commitment fee percentage	0.375%
Debt instrument, secured leverage ratio	3
Credit Agreement | Revolving Credit Facility | Minimum | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	0.50%
Credit Agreement | Revolving Credit Facility | Minimum | One-month LIBOR Rate
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	1.50%
Credit Agreement | Revolving Credit Facility | Maximum
Line of Credit Facility [Line Items]
Debt instrument, covenant, interest coverage ratio	3
Line of credit facility, unused capacity, commitment fee percentage	0.25%
Credit Agreement | Revolving Credit Facility | Maximum | Through December 2019
Line of Credit Facility [Line Items]
Debt instrument, covenant, interest coverage ratio	4.75
Credit Agreement | Revolving Credit Facility | Maximum | From and After January 2020
Line of Credit Facility [Line Items]
Debt instrument, covenant, interest coverage ratio	4.25
Credit Agreement | Revolving Credit Facility | Maximum | London Interbank Offered Rate (LIBOR)
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	1.00%
Credit Agreement | Revolving Credit Facility | Maximum | One-month LIBOR Rate
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	2.00%

Credit Agreement - Summary of I

Credit Agreement - Summary of Interest Expense and Commitment Fees on Unused Portion of Revolving Credit Facility (Details) - Revolving Credit Facility - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Line of Credit Facility [Line Items]
Interest expense	$ 2,524	$ 2,627	$ 5,050	$ 4,697
Commitment fees	$ 160	$ 239	$ 316	$ 477

Earnings Per Share - Summary of

Earnings Per Share - Summary of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Net income	$ 29,100	$ (3,367)	$ 48,742	$ 3,024
Weighted average common shares outstanding-basic (in shares)	85,956	83,231	86,524	83,222
Plus: net effect of dilutive stock options and restricted stock units (in shares)	1,902	0	2,319	1,615
Weighted average common shares outstanding-diluted (in shares)	87,858	83,231	88,843	84,837
Net income/(loss) per common share-basic (in dollars per share)	$ 0.34	$ (0.04)	$ 0.56	$ 0.04
Net income/(loss) per common share -- diluted (in dollars per share)	$ 0.33	$ (0.04)	$ 0.55	$ 0.04

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share-based Payment Arrangement, Option
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	588,379	2,552,862	394,886	2,738,783
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	227,604	626,341	151,279	106,501

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 4,802	$ 4,714	$ 15,781	$ 14,208
Shares issued upon exercise of stock options	242,723	87,230	1,686,408	151,034
Proceeds from stock options exercised	$ 3,900	$ 2,200	$ 26,998	$ 2,390
Total intrinsic value of stock options exercised	3,700	800	29,400	$ 800
Unrecognized compensation cost related to stock options outstanding	6,400		$ 6,400
Recognition period for compensation cost related to stock options outstanding			1 year 3 months 18 days
Weighted-average grant date fair value per share of stock options			$ 13.82	$ 7.52
Total income tax benefits	$ 9,561	$ (242)	$ 7,890	$ 2,761
Restricted stock units granted (in shares)	51,546	62,259	459,985	761,083
Fair market value of restricted stock units	$ 1,600	$ 900	$ 15,700	$ 12,700
Share-based Payment Arrangement, Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	2,000	2,100	6,800	6,100
Total income tax benefits			12,400	2,500
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,800	$ 2,600	$ 8,900	$ 8,100
Recognition period for compensation cost related to stock options outstanding			1 year 4 months 17 days
Restricted stock units granted (in shares)			460,000
Number of unvested restricted stock units	1,003,051		1,003,051
Unrecognized compensation cost related to restricted stock units	$ 14,300		$ 14,300
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted vesting period			1 year
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted vesting period			4 years

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 4,802	$ 4,714	$ 15,781	$ 14,208
Cost of services-compensation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	2,720	1,673	6,843	4,236
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	2,082	3,041	8,938	9,972
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,800	$ 2,600	$ 8,900	$ 8,100

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Number of Options
Number of options, outstanding, beginning balance (in shares)			4,402,000
Number of options, granted (in shares)			622,000
Number of options, exercised (in shares)	(242,723)	(87,230)	(1,686,408)	(151,034)
Number of options, forfeitures (in shares)			(140,000)
Number of options, expired (in shares)			0
Number of options, outstanding, ending balance (in shares)	3,198,000		3,198,000
Number of options, expected to vest (in shares)	1,045,000		1,045,000
Number of options, exercisable (in shares)	1,728,000		1,728,000
Weighted Average Exercise Price
Weighted average exercise price outstanding, beginning balance (in dollars per share)			$ 17.07
Weighted average exercise price, granted (in dollars per share)			38.72
Weighted average exercise price, exercised (in dollars per share)			16.01
Weighted average exercise price, forfeitures (in dollars per share)			19.31
Weighted average exercise price, expired (in dollars per share)			0
Weighted average exercise price outstanding, beginning balance (in dollars per share)	$ 21.79		21.79
Weighted average exercise price, expected to vest (in dollars per share)	28.12		28.12
Weighted average exercise price, exercisable (in dollars per share)	$ 16.91		$ 16.91
Weighted Average- Remaining Contractual Terms
Weighted average contractual life outstanding, ending balance			6 years 10 months 9 days
Weighted average contractual life, vested and expected to vest			8 years 11 months 23 days
Weighted average contractual life, vested and exercisable			5 years 1 month 17 days
Aggregate Intrinsic Value
Aggregate intrinsic value outstanding, ending balance	$ 37,514		$ 37,514
Aggregate intrinsic value, vested and expected to vest	7,507		7,507
Aggregate intrinsic value, vested and exercisable	$ 26,745		$ 26,745

Stock-Based Compensation - Weig

Stock-Based Compensation - Weighted Average Assumptions Used in Valuation of Stock Options (Details) - Black Scholes Model - Share-based Payment Arrangement, Option	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	2.50%	2.70%
Expected volatility	40.90%	42.40%
Expected life (years)	6 years 4 months 6 days	6 years

Stock-Based Compensation - Su_2

Stock-Based Compensation - Summary of Restricted Stock Units (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Number of Units
Granted (in shares)	51,546	62,259	459,985	761,083
Restricted Stock Units (RSUs)
Number of Units
Outstanding, beginning balance (in shares)			1,488,000
Granted (in shares)			460,000
Vesting of restricted stock units, net of units withheld for taxes (in shares)			(403,000)
Units withheld for taxes (in shares)			(200,000)
Forfeitures (in shares)			(82,000)
Outstanding, ending balance (in shares)	1,263,000		1,263,000
Weighted Average Grant Date Fair Value per Unit
Outstanding, beginning balance (in dollars per share)			$ 17.60
Granted (in dollars per share)			34.10
Vesting of restricted stock units, net of units withheld for taxes (in dollars per share)			16.49
Units withheld for taxes (in dollars per share)			16.49
Forfeitures (in dollars per share)			18.92
Outstanding, ending balance (in dollars per share)	$ 25.74		$ 25.74

Leases (Details)

Leases (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Lessee, Lease, Description [Line Items]
Operating lease, weighted average remaining lease term	4 years 6 months
Finance lease, weighted average remaining lease term	3 years
Operating lease, weighted average discount rate, percent	5.70%
Finance lease, weighted average discount rate, percent	5.00%
Sublease income	$ 1.1	$ 0.8
Maximum
Lessee, Lease, Description [Line Items]
Lessee, operating lease, renewal term	10 years

Leases - Components of Lease Ex

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Leases [Abstract]
Operating lease cost	$ 1,658	$ 3,314
Finance least cost: Amortization of right-of-use assets	30	38
Finance lease cost: Interest on lease liabilities	4	5
Total finance lease cost	$ 34	$ 43

Leases - Supplemental Cash Flow

Leases - Supplemental Cash Flow and Other Information Related to Leases (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019USD ($)
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$ 3,700
Financing cash flows from finance leases	4
Financing cash flows from finance leases	36
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	163
Finance leases	$ 331

Leases - Supplemental Balance S

Leases - Supplemental Balance Sheet Information Related to Leases (Details) $ in Thousands	Jun. 30, 2019USD ($)
Operating Leases
Operating lease right-of-use assets	$ 18,940
Other current liabilities	6,301
Operating lease liabilities	17,245
Total operating lease liabilities	23,546
Finance Leases
Other Assets	656
Other current liabilities	219
Other long-term liabilities	440
Total finance leases liabilities	$ 659

Leases - Maturities of Lease Li

Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Jun. 30, 2019USD ($)
Operating Leases
2019 (excluding the six months ended June 30, 2019)	$ 3,728
2020	7,308
2021	5,605
2022	3,313
2023	3,073
Thereafter	3,578
Total lease payments	26,605
Less: Imputed interest	3,059
Total operating lease liabilities	23,546
Finance Leases
2019 (excluding the six months ended June 30, 2019)	123
2020	245
2021	245
2022	91
2023	0
Thereafter	0
Total lease payments	704
Less: Imputed interest	45
Total finance leases liabilities	$ 659

Commitments and Contingencies C

Commitments and Contingencies Commitments and Contingencies (Details) $ in Millions	Nov. 03, 2017USD ($)	Jul. 31, 2012cause_of_action	Jun. 30, 2019USD ($)
Loss Contingencies [Line Items]
Loss contingency, damages awarded, value | $	$ 60
Payments for legal settlements | $			$ 20
Breach of Contract
Loss Contingencies [Line Items]
Causes of action		2
Breach of Implied Covenant
Loss Contingencies [Line Items]
Causes of action		1
Dismissed | Breach of Contract
Loss Contingencies [Line Items]
Causes of action		1

Subsequent Events Subsequent Ev

Subsequent Events Subsequent Events (Details) - Subsequent Event $ in Millions	Jul. 24, 2019USD ($)
Subsequent Event [Line Items]
Proceeds from sale of investment	$ 9.8
InstaMed Holdings, Inc.
Subsequent Event [Line Items]
Percentage acquired	100.00%

Uncategorized Items - hmsy-2019

Label	Element	Value
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 1,427,000