HMS (HMSY) 10-Q 4 Nov 19 2019 Q3 Quarterly report Financial data

COVER PAGE

COVER PAGE - shares	9 Months Ended
	Sep. 30, 2019	Oct. 31, 2019
Cover page.
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 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)		88,097,605
Entity Central Index Key	0001196501
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Amendment Flag	false

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 280,596	$ 178,946
Accounts receivable, net of allowance of $16,316 and $13,683, at September 30, 2019 and December 31, 2018, respectively	197,455	206,772
Prepaid expenses	20,035	19,970
Income tax receivable	8,891	18,817
Deferred financing costs, net	564	564
Other current assets	202	240
Total current assets	507,743	425,309
Property and equipment, net	84,028	94,435
Goodwill	517,460	487,617
Intangible assets, net	66,131	67,140
Operating lease right-of-use assets	18,351
Deferred financing costs, net	1,250	1,673
Other assets	2,100	2,344
Total assets	1,197,063	1,078,518
Current liabilities:
Accounts payable, accrued expenses and other liabilities	73,434	74,902
Liability for appeals	2,554	21,723
Total current liabilities	75,988	96,625
Long-term liabilities:
Revolving credit facility	240,000	240,000
Operating lease liabilities	16,269
Net deferred tax liabilities	24,280	18,485
Other liabilities	6,332	10,012
Total long-term liabilities	286,881	268,497
Total liabilities	362,869	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;101,756,679 shares issued and 88,092,640 shares outstanding at September 30, 2019; 98,924,501 shares issued and 85,261,664 shares outstanding at December 31, 2018	1,018	989
Capital in excess of par value	476,639	425,748
Retained earnings	492,113	422,235
Treasury stock, at cost: 13,663,194 shares at September 30, 2019 and December 31, 2018	(135,576)	(135,576)
Total shareholders' equity	834,194	713,396
Total liabilities and shareholders' equity	$ 1,197,063	$ 1,078,518

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Accounts receivable allowance	$ 16,316	$ 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)	101,756,679	98,924,501
Common stock, shares outstanding (in shares)	88,092,640	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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Revenue	$ 146,815	$ 154,246	$ 462,950	$ 442,462
Cost of services:
Compensation	56,258	58,188	172,033	169,455
Direct project and other operating expenses	22,751	19,228	63,693	53,835
Information technology	14,207	12,979	39,627	39,482
Occupancy	4,144	3,500	12,275	11,897
Amortization of acquisition related software and intangible assets	4,158	7,942	12,490	25,695
Total cost of services	101,518	101,837	300,118	300,364
Selling, general and administrative expenses	28,232	28,178	85,514	86,708
Settlement expense	0	0	0	20,000
Total operating expenses	129,750	130,015	385,632	407,072
Operating income	17,065	24,231	77,318	35,390
Interest expense	(2,677)	(2,880)	(8,379)	(8,562)
Interest income	1,210	292	3,291	600
Other income	7,697	0	7,697	0
Income before income taxes	23,295	21,643	79,927	27,428
Income taxes	2,159	3,069	10,049	5,830
Net income	$ 21,136	$ 18,574	$ 69,878	$ 21,598
Basic income per common share:
Net income per common share -- basic (in dollars per share)	$ 0.24	$ 0.22	$ 0.79	$ 0.26
Diluted income per common share:
Net income per common share -- diluted (in dollars per share)	$ 0.24	$ 0.22	$ 0.77	$ 0.25
Weighted average shares:
Basic (in shares)	86,324	83,509	88,190	83,373
Diluted (in shares)	88,324	85,144	90,441	85,241

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		13,633
Stock-based compensation expense		17,645
Vesting of restricted stock units, net of shares withheld for employee tax		(2,797)
Net income	$ 21,598		21,598
Purchase of treasury stock				$ (5,955)
Exercise of stock options (in shares)	686,111				685,812
Vesting of restricted stock units, net of shares withheld for employee tax (in shares)					366,593
Purchase of treasury stock (in shares)				383,801
Balance, end of period at Sep. 30, 2018	$ 651,780	398,167	389,189	$ (135,576)
Balance, end of period (in shares) at Sep. 30, 2018				13,663,194	97,588,656
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase of treasury stock (in shares)				383,801
Balance, beginning of period at Jun. 30, 2018		383,600	370,615	$ (135,576)
Balance, beginning of period (in shares) at Jun. 30, 2018				13,663,194	97,051,108
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		11,243
Stock-based compensation expense		3,437
Vesting of restricted stock units, net of shares withheld for employee tax		(113)
Net income	$ 18,574		18,574
Purchase of treasury stock				$ 0
Exercise of stock options (in shares)	535,077				534,778
Vesting of restricted stock units, net of shares withheld for employee tax (in shares)					2,770
Purchase of treasury stock (in shares)				0
Balance, end of period at Sep. 30, 2018	$ 651,780	398,167	389,189	$ (135,576)
Balance, end of period (in shares) at Sep. 30, 2018				13,663,194	97,588,656
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase of treasury stock (in shares)				0
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		39,175
Stock-based compensation expense		18,715
Vesting of restricted stock units, net of shares withheld for employee tax		(6,970)
Net income	$ 69,878		69,878
Purchase of treasury stock				$ 0
Exercise of stock options (in shares)	2,427,156				2,427,156
Vesting of restricted stock units, net of shares withheld for employee tax (in shares)					405,022
Purchase of treasury stock (in shares)				0
Balance, end of period at Sep. 30, 2019	$ 834,194	477,657	492,113	$ (135,576)
Balance, end of period (in shares) at Sep. 30, 2019				13,663,194	101,756,679
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase of treasury stock (in shares)				0
Balance, beginning of period at Jun. 30, 2019		462,569	470,977	$ (135,576)
Balance, beginning of period (in shares) at Jun. 30, 2019				13,663,194	101,014,406
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise of stock options		12,177
Stock-based compensation expense		2,934
Vesting of restricted stock units, net of shares withheld for employee tax		(23)
Net income	$ 21,136		21,136
Purchase of treasury stock				$ 0
Exercise of stock options (in shares)	740,748				740,748
Vesting of restricted stock units, net of shares withheld for employee tax (in shares)					1,525
Purchase of treasury stock (in shares)				0
Balance, end of period at Sep. 30, 2019	$ 834,194	$ 477,657	$ 492,113	$ (135,576)
Balance, end of period (in shares) at Sep. 30, 2019				13,663,194	101,756,679
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase of treasury stock (in shares)				0

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities:
Net income	$ 69,878	$ 21,598
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and software	24,719	24,331
Amortization of intangible assets	7,009	18,889
Amortization of deferred financing costs	423	423
Gain on sale of cost basis investment	(7,697)	0
Stock-based compensation expense	18,715	17,645
Deferred income taxes	6,327	(7,582)
Noncash lease expense	2,955	0
Change in fair value of contingent consideration	0	(35)
Release of estimated liability for appeals, net	(10,478)	(8,436)
Changes in operating assets and liabilities:
Accounts receivable	508	(13,038)
Prepaid expenses and other current assets	72	285
Other assets	(1,746)	(66)
Income taxes receivable	9,926	(2,705)
Accounts payable, accrued expenses and other liabilities	(3,976)	4,394
Operating lease liabilities	(3,927)
Liability for appeals	211	(167)
Net cash provided by operating activities	112,919	55,536
Investing activities:
Acquisition of a business, net of cash acquired	(36,554)	0
Proceeds from sale of cost basis investment	9,776	0
Purchases of property and equipment	(5,840)	(4,333)
Investment in capitalized software	(10,763)	(15,100)
Net cash used in investing activities	(43,381)	(19,433)
Financing activities:
Proceeds from exercise of stock options	39,175	13,633
Payments of tax withholdings on behalf of employees for net-share settlements	(6,970)	(2,797)
Payments on capital lease obligations	(93)
Purchases of treasury stock	0	(5,955)
Net cash provided by financing activities	32,112	4,881
Net increase in cash and cash equivalents	101,650	40,984
Cash and Cash Equivalents
Cash and cash equivalents at beginning of year	178,946	83,313
Cash and cash equivalents at end of period	280,596	124,297
Supplemental disclosure of cash flow information:
Cash (refunds received)/paid for income taxes, net of refunds	(5,303)	15,501
Cash paid for interest	8,118	7,769
Supplemental disclosure of non-cash activities:
Change in balance of accrued property and equipment purchases	$ 2,291	$ 538

Business and Summary of Signifi

Business and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 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 of 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	9 Months Ended
	Sep. 30, 2019
Revenue from Contract with Customer [Abstract]
Revenue Recognition	Revenue Recognition The Company’s revenue disaggregated by solution for the three and nine months ended September 30, 2019 and 2018 was as follows (in thousands) : Three Months Ended Nine Months Ended 2019 2018 2019 2018 Coordination of Benefits $ 94,619 $ 105,694 $ 305,564 $ 298,201 Payment Integrity 37,016 33,289 113,863 103,122 Population Health Management 15,180 15,263 43,523 41,139 Total $ 146,815 $ 154,246 $ 462,950 $ 442,462 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 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 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 In connection with coordination of benefits and certain payment integrity services, lockboxes and their associated bank accounts are set up 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 $4.0 million as of September 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 nine months ended September 30, 2019 and 2018 was as follows ( in thousands ): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Commercial $ 69,711 $ 86,609 $ 225,014 $ 238,987 State 62,830 59,374 189,752 172,709 Federal 14,274 8,263 48,184 30,766 Total $ 146,815 $ 154,246 $ 462,950 $ 442,462 A portion of the Company’s services are deferred and revenue is recognized at a later time. Deferred revenue was approximately $4.6 million and $5.6 million as of September 30, 2019 and December 31, 2018, respectively, and is included in Accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets. Approximately $4.2 million of the December 31, 2018 balance was recognized in revenue during the year ended September 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	9 Months Ended
	Sep. 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) : September 30, December 31, Accounts receivable $ 213,771 $ 220,455 Allowance (16,316) (13,683) Accounts receivable, net $ 197,455 $ 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) September 30, December 31, Balance--beginning of period $ 13,683 $ 14,799 Provision 15,908 20,453 Charge-offs (13,275) (21,569) Balance--end of period $ 16,316 $ 13,683

Intangible Assets, Goodwill and

Intangible Assets, Goodwill and Other Assets	9 Months Ended
	Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets, Goodwill and Other Assets	Intangible Assets, Goodwill and Other Assets (a) Intangible Assets Intangible assets consisted of the following ( in thousands, except for weighted average amortization period ): Gross Carrying Amount Accumulated Net Carrying Amount Weighted Average Amortization Period in Years September 30, 2019 Customer relationships $ 68,290 $ (20,284) $ 48,006 12.3 Intellectual property 27,700 (9,575) 18,125 3.9 Trade names 136 (136) — 0.0 Restrictive covenants 133 (133) — 0.0 Total $ 96,259 $ (30,128) $ 66,131 Gross Carrying Amount Accumulated 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 nine months ended September 30, 2019) $ 2,487 2020 8,866 2021 8,399 2022 8,399 2023 6,024 Thereafter 31,956 Total $ 66,131 For the three months ended September 30, 2019 and 2018, amortization expense related to intangible assets was $2.3 million and $6.1 million, respectively. For the nine months ended September 30, 2019 and 2018, amortization expense related to intangible assets was $7.0 million and $18.9 million, respectively. (b) Goodwill On September 16, 2019, HMS acquired VitreosHealth, Inc. ("VitreosHealth"), a company that offers predictive and prescriptive health insights utilized by population risk models, for aggregate consideration of $36.6 million, which was funded with cash on hand. The purchase price is subject to certain post-closing adjustments based upon the final amounts of the adjusted working capital of VitreosHealth and other final amounts at closing. The Company's preliminary allocation of consideration exchanged to the net tangible and intangible assets acquired and liabilities assumed in the acquisition is based on estimated fair values as of September 16, 2019. The Company allocated the purchase price, net of cash acquired, to the following significant assets: intellectual property subject to amortization of $6.0 million, and goodwill of $29.8 million which represents the excess purchase price over the net identifiable tangible and intangible assets. There were no additional material allocations to assets and liabilities. The intangible assets are valued using various methods which requires several judgments, including growth rates, discount rates, expected levels of revenues, earnings, cash flows and tax rates. The intangible assets are amortized over their estimated useful lives on a straight-line basis and are not expected to be deductible for tax purposes. The goodwill recognized from the acquisition was a result of expected synergies to be realized from future revenue growth, is not expected to be deductible for tax purposes, has an indefinite useful life and will be included in the Company’s annual impairment testing. The amounts shown above are subject to change in the near term as management continues to assess the fair value of the acquired assets and liabilities. Pro forma historical results of operations related to this business acquisition for the year ended December 31, 2018, or interim periods thereafter, have not been presented and are not considered material. The results of VitreosHealth's operations since September 16, 2019 have been included in the Company's consolidated financial statements. (c) Other Assets During the three months ended September 30, 2019, a third party acquired one hundred percent of the outstanding stock of InstaMed Holdings, Inc. ("InstaMed") including the Company's cost based investment in Instamed of $2.1 million. As a result, the Company received proceeds of $9.8 million from the sale of the investment and recognized a $7.7 million gain in other income for the three and nine months ended September 30, 2019.

Accounts Payable, Accrued Expen

Accounts Payable, Accrued Expenses and Other Liabilities	9 Months Ended
	Sep. 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) : September 30, December 31, Accounts payable, trade $ 15,225 $ 12,394 Accrued compensation and other 27,188 42,833 Accrued operating expenses 24,142 19,675 Current portion of lease liabilities 6,879 — Total accounts payable, accrued expenses and other liabilities $ 73,434 $ 74,902

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2019
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes The Company’s effective tax rate decreased to 12.6% for the nine months ended September 30, 2019 from 21.3% for the nine months ended September 30, 2018. The effective tax rate for the nine months ended September 30, 2019 includes discrete tax benefits primarily related to net equity compensation deductions and releases of uncertain tax benefits. For the nine months ended September 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 $3.9 million and $4.8 million, as of September 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 $0.7 million and $0.7 million as of September 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 nine months ended September 30, 2019 and 2018 was $0.03 million and $0.4 million, respectively. The Company believes it is reasonably possible that the amount of unrecognized tax benefits may decrease by $0.1 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 and will file income tax returns in certain foreign jurisdictions in future periods as a result of its acquisition of VitreosHealth. HMS is generally no longer subject to U.S. Federal income tax examinations for years before 2016. HMS operates in a number of state, local and foreign jurisdictions. Accordingly, HMS is subject to state, local and foreign income tax examinations based on the various statutes of limitations in each jurisdiction.

Liability for Appeals

Liability for Appeals	9 Months Ended
	Sep. 30, 2019
Other Liabilities Disclosure [Abstract]
Liability for Appeals	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 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's liability for appeals related to CMS and commercial contracts was approximately $21.7 million as of December 31, 2018, and $2.6 million as of September 30, 2019. The Company determined, based on communications, that there was 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 during the second quarter of 2019. As a result of the release, there was a $10.5 million increase to the Company's revenue for the three months ended June 30, 2019. For the nine months ended September 30, 2019, the net change in the liability resulted in a $10.5 million increase to the Company's revenue.

Credit Agreement

Credit Agreement	9 Months Ended
	Sep. 30, 2019
Debt Disclosure [Abstract]
Credit Agreement	Credit AgreementIn 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 September 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 nine months ended September 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 the Amended Revolving 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 September 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 Nine Months Ended 2019 2018 2019 2018 Interest expense $ 2,342 $ 2,527 $ 7,392 $ 7,224 Commitment fees 157 211 473 688 As of September 30, 2019 and December 31, 2018, the unamortized balance of deferred origination fees and debt issuance costs was $1.8 million and $2.2 million, respectively. For the nine month periods ended September 30, 2019 and 2018, HMS amortized $0.4 million and $0.4 million, respectively, of interest expense related to the Company’s deferred origination fees and debt issue costs.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Sep. 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 Nine Months Ended 2019 2018 2019 2018 Net income $ 21,136 $ 18,574 $ 69,878 $ 21,598 Weighted average common shares outstanding-basic 86,324 83,509 88,190 83,373 Plus: net effect of dilutive stock options and restricted stock units 2,000 1,635 2,251 1,868 Weighted average common shares outstanding-diluted 88,324 85,144 90,441 85,241 Net income per common share -- basic $ 0.24 $ 0.22 $ 0.79 $ 0.26 Net income per common share -- diluted $ 0.24 $ 0.22 $ 0.77 $ 0.25 For the three months ended September 30, 2019 and 2018, (i) 625,573 and 21,105 stock options, respectively, and (ii) restricted stock units representing 1,693 and 202 shares of the Company's common stock, respectively, were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive. For the nine months ended September 30, 2019 and 2018, (i) 472,627 and 531,378 stock options, respectively, and (ii) restricted stock units representing 2,791 and 595 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	9 Months Ended
	Sep. 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. (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 Nine Months Ended 2019 2018 2019 2018 Cost of services-compensation $ 982 $ 1,537 $ 7,825 $ 5,802 Selling, general and administrative 1,952 1,900 10,890 11,843 Total $ 2,934 $ 3,437 $ 18,715 $ 17,645 (c) Stock Options For the three months ended September 30, 2019 and 2018, stock-based compensation expense related to stock options was approximately $0.9 million and $1.6 million, respectively. For the nine months ended September 30, 2019 and 2018, stock-based compensation expense related to stock options was approximately $7.8 million and $7.6 million, respectively. Presented below is a summary of stock option activity for the nine months ended September 30, 2019 ( in thousands, except for weighted average exercise price and weighted average remaining contractual terms ): Number of Options Weighted Weighted Aggregate Outstanding balance at December 31, 2018 4,402 $ 17.07 Granted 634 38.71 Exercised (2,427) 16.18 Forfeitures (146) 19.68 Expired (2) 15.78 Outstanding balance at September 30, 2019 2,461 Expected to vest at September 30, 2019 1,051 $ 28.22 8.75 $ 8,746 Exercisable at September 30, 2019 979 $ 17.18 5.78 $ 16,918 During the three months ended September 30, 2019 and 2018, the Company received proceeds of $12.2 million and $11.2 million, respectively, for the issuance of 740,748 and 535,077 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 September 30, 2019 and 2018 was $16.0 million and $4.0 million, respectively. During the nine months ended September 30, 2019 and 2018, the Company received proceeds of $39.2 million and $13.6 million, respectively, for the issuance of 2,427,156 and 686,111 shares of common stock upon the exercise of outstanding stock options, respectively. The total intrinsic value of stock options exercised during the nine months ended September 30, 2019 and 2018 was $45.5 million and $4.7 million, respectively. As of September 30, 2019, there was approximately $5.6 million of total unrecognized compensation cost related to stock options outstanding, which is expected to be recognized over a weighted average period of 1.1 years. The weighted-average grant date fair value per share of the stock options granted during the nine months ended September 30, 2019 and 2018 was $13.87 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: Nine 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 nine months ended September 30, 2019 and 2018 was $16.1 million and $1.0 million, respectively. (d) Restricted Stock Units For the three months ended September 30, 2019 and 2018, stock-based compensation expense related to restricted stock units was approximately $1.9 million and $1.9 million, respectively. For the nine months ended September 30, 2019 and 2018, stock-based compensation expense related to restricted stock units was approximately $10.9 million and $10.0 million, respectively. Presented below is a summary of restricted stock units activity for the nine months ended September 30, 2019 (in thousands, except for weighted average grant date fair value per unit): Number of Weighted Average Outstanding balance at December 31, 2018 1,488 $ 17.60 Granted 473 34.19 Vesting of restricted stock units, net of units withheld for taxes (405) 16.60 Units withheld for taxes (200) 16.60 Forfeitures (99) 19.97 Outstanding balance at September 30, 2019 1,257 $ 25.82 For the three months ended September 30, 2019 and 2018, HMS granted 12,687 and 1,794 restricted stock units, respectively, with an aggregate fair market value of $0.5 million and $0.1 million, respectively. For the nine months ended September 30, 2019 and 2018, HMS granted 474,520 and 762,877 restricted stock units, respectively, with an aggregate fair market value of $16.2 million and $12.8 million, respectively. As of September 30, 2019, 995,860 restricted stock units remained unvested and there was approximately $12.4 million of unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted average vesting period of 1.1 years.

Leases

Leases	9 Months Ended
	Sep. 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 September 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 nine months ended September 30, 2019 were as follows ( in thousands ): Three Months Ended Nine Months Ended Operating lease cost $ 1,653 $ 4,967 Finance lease cost: Amortization of right-of-use assets $ 59 $ 97 Interest on lease liabilities $ 8 $ 13 Total finance lease cost $ 67 $ 110 Supplemental cash flow and other information related to leases for the nine months ended September 30, 2019 were as follows ( in thousands ): Nine Months Ended Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 5,559 Operating cash flows from finance leases $ 11 Financing cash flows from finance leases $ 93 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 1,253 Finance leases $ 1,160 Supplemental balance sheet information related to leases as of September 30, 2019 consisted of the following ( in thousands ): Nine Months Ended Operating Leases Operating lease right-of-use assets $ 18,351 Other current liabilities $ 6,475 Operating lease liabilities $ 16,269 Total operating lease liabilities $ 22,744 Finance Leases Other Assets $ 1,167 Other current liabilities $ 404 Other long-term liabilities $ 769 Total finance leases liabilities $ 1,173 As of September 30, 2019, the weighted-average remaining lease term for operating and finance leases was 4.2 years and 2.8 years, respectively. As of September 30, 2019, the weighted-average discount rates were 5.7% and 4.6% for operating and finance leases, respectively. Sublease income for the nine months ended September 30, 2019 and 2018 was $1.6 million and $1.3 million, respectively. Maturities of lease liabilities were as follows ( in thousands ): Year ended December 31, Operating Leases Finance Leases 2019 (excluding the nine months ended September 30, 2019) $ 1,874 $ 112 2020 7,468 447 2021 5,768 447 2022 3,487 240 2023 3,259 — Thereafter 3,741 — Total lease payments 25,597 1,246 Less: Imputed interest 2,853 73 Total lease obligation $ 22,744 $ 1,173

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesIn 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 moved to dismiss the complaint and the Court heard oral arguments on May 2, 2019. A decision on the motion has not yet been issued by the Court. 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	9 Months Ended
	Sep. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events Investment in MedAdvisor On October 6, 2019, the Company announced its planned investment of $7.5 million in ordinary shares of MedAdvisor Limited ("MedAdvisor")(ASX: MDR), a leading digital medication management company based in Australia. On October 11, 2019, the Company completed the investment with cash on hand for a 12.8% ownership stake in MedAdvisor and the Company's Chief Financial Officer was appointed to MedAdvisor's board of directors in connection with the transaction. Share Repurchase On November 1, 2019, the Board of Directors of the Company approved a share repurchase program authorizing the Company to repurchase up to $50.0 million in shares of its common stock from time to time on the open market or in privately negotiated or other transactions. The repurchase program is authorized for a period of up to two years, and may be suspended or discontinued at any time. Repurchased shares will be available for use in connection with reissuance under the Company’s stock plans and for other corporate purposes. The timing and amount of any shares repurchased under the program will be determined by the Company’s management based on its evaluation of market conditions, share price and other factors. In order to facilitate repurchases, the Company may enter into a Rule 10b5-1 plan from time to time, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws or because of a self-imposed trading blackout period.

Business and Summary of Signi_2

Business and Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 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 of 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)	9 Months Ended
	Sep. 30, 2019
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue by Solution	The Company’s revenue disaggregated by solution for the three and nine months ended September 30, 2019 and 2018 was as follows (in thousands) : Three Months Ended Nine Months Ended 2019 2018 2019 2018 Coordination of Benefits $ 94,619 $ 105,694 $ 305,564 $ 298,201 Payment Integrity 37,016 33,289 113,863 103,122 Population Health Management 15,180 15,263 43,523 41,139 Total $ 146,815 $ 154,246 $ 462,950 $ 442,462
Disaggregation Of Revenue by Market	The Company’s revenue disaggregated by market for the three and nine months ended September 30, 2019 and 2018 was as follows ( in thousands ): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Commercial $ 69,711 $ 86,609 $ 225,014 $ 238,987 State 62,830 59,374 189,752 172,709 Federal 14,274 8,263 48,184 30,766 Total $ 146,815 $ 154,246 $ 462,950 $ 442,462

Accounts Receivable and Accou_2

Accounts Receivable and Accounts Receivable Allowance (Tables)	9 Months Ended
	Sep. 30, 2019
Receivables [Abstract]
Accounts Receivable, Net	The Company’s accounts receivable, net, consisted of the following (in thousands) : September 30, December 31, Accounts receivable $ 213,771 $ 220,455 Allowance (16,316) (13,683) Accounts receivable, net $ 197,455 $ 206,772
Activity in Allowance for Doubtful Accounts	The following is a summary of the activity in the accounts receivable allowance (in thousands) September 30, December 31, Balance--beginning of period $ 13,683 $ 14,799 Provision 15,908 20,453 Charge-offs (13,275) (21,569) Balance--end of period $ 16,316 $ 13,683

Intangible Assets, Goodwill a_2

Intangible Assets, Goodwill and Other Assets (Tables)	9 Months Ended
	Sep. 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 Net Carrying Amount Weighted Average Amortization Period in Years September 30, 2019 Customer relationships $ 68,290 $ (20,284) $ 48,006 12.3 Intellectual property 27,700 (9,575) 18,125 3.9 Trade names 136 (136) — 0.0 Restrictive covenants 133 (133) — 0.0 Total $ 96,259 $ (30,128) $ 66,131 Gross Carrying Amount Accumulated 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 nine months ended September 30, 2019) $ 2,487 2020 8,866 2021 8,399 2022 8,399 2023 6,024 Thereafter 31,956 Total $ 66,131

Accounts Payable, Accrued Exp_2

Accounts Payable, Accrued Expenses and Other Liabilities (Tables)	9 Months Ended
	Sep. 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) : September 30, December 31, Accounts payable, trade $ 15,225 $ 12,394 Accrued compensation and other 27,188 42,833 Accrued operating expenses 24,142 19,675 Current portion of lease liabilities 6,879 — Total accounts payable, accrued expenses and other liabilities $ 73,434 $ 74,902

Credit Agreement (Tables)

Credit Agreement (Tables)	9 Months Ended
	Sep. 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 Nine Months Ended 2019 2018 2019 2018 Interest expense $ 2,342 $ 2,527 $ 7,392 $ 7,224 Commitment fees 157 211 473 688

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Sep. 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 Nine Months Ended 2019 2018 2019 2018 Net income $ 21,136 $ 18,574 $ 69,878 $ 21,598 Weighted average common shares outstanding-basic 86,324 83,509 88,190 83,373 Plus: net effect of dilutive stock options and restricted stock units 2,000 1,635 2,251 1,868 Weighted average common shares outstanding-diluted 88,324 85,144 90,441 85,241 Net income per common share -- basic $ 0.24 $ 0.22 $ 0.79 $ 0.26 Net income per common share -- diluted $ 0.24 $ 0.22 $ 0.77 $ 0.25

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 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 Nine Months Ended 2019 2018 2019 2018 Cost of services-compensation $ 982 $ 1,537 $ 7,825 $ 5,802 Selling, general and administrative 1,952 1,900 10,890 11,843 Total $ 2,934 $ 3,437 $ 18,715 $ 17,645
Summary of Stock Option Activity	Presented below is a summary of stock option activity for the nine months ended September 30, 2019 ( in thousands, except for weighted average exercise price and weighted average remaining contractual terms ): Number of Options Weighted Weighted Aggregate Outstanding balance at December 31, 2018 4,402 $ 17.07 Granted 634 38.71 Exercised (2,427) 16.18 Forfeitures (146) 19.68 Expired (2) 15.78 Outstanding balance at September 30, 2019 2,461 Expected to vest at September 30, 2019 1,051 $ 28.22 8.75 $ 8,746 Exercisable at September 30, 2019 979 $ 17.18 5.78 $ 16,918
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: Nine 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 nine months ended September 30, 2019 (in thousands, except for weighted average grant date fair value per unit): Number of Weighted Average Outstanding balance at December 31, 2018 1,488 $ 17.60 Granted 473 34.19 Vesting of restricted stock units, net of units withheld for taxes (405) 16.60 Units withheld for taxes (200) 16.60 Forfeitures (99) 19.97 Outstanding balance at September 30, 2019 1,257 $ 25.82

Leases (Tables)

Leases (Tables)	9 Months Ended
	Sep. 30, 2019
Leases [Abstract]
Components of Lease Expense	The components of lease expense for the three and nine months ended September 30, 2019 were as follows ( in thousands ): Three Months Ended Nine Months Ended Operating lease cost $ 1,653 $ 4,967 Finance lease cost: Amortization of right-of-use assets $ 59 $ 97 Interest on lease liabilities $ 8 $ 13 Total finance lease cost $ 67 $ 110
Supplemental Cash Flow and Other Information Related to Leases	Supplemental cash flow and other information related to leases for the nine months ended September 30, 2019 were as follows ( in thousands ): Nine Months Ended Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 5,559 Operating cash flows from finance leases $ 11 Financing cash flows from finance leases $ 93 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 1,253 Finance leases $ 1,160
Supplemental Balance Sheet Information Related to Leases	Supplemental balance sheet information related to leases as of September 30, 2019 consisted of the following ( in thousands ): Nine Months Ended Operating Leases Operating lease right-of-use assets $ 18,351 Other current liabilities $ 6,475 Operating lease liabilities $ 16,269 Total operating lease liabilities $ 22,744 Finance Leases Other Assets $ 1,167 Other current liabilities $ 404 Other long-term liabilities $ 769 Total finance leases liabilities $ 1,173
Maturities of Lease Liabilities	Maturities of lease liabilities were as follows ( in thousands ): Year ended December 31, Operating Leases Finance Leases 2019 (excluding the nine months ended September 30, 2019) $ 1,874 $ 112 2020 7,468 447 2021 5,768 447 2022 3,487 240 2023 3,259 — Thereafter 3,741 — Total lease payments 25,597 1,246 Less: Imputed interest 2,853 73 Total lease obligation $ 22,744 $ 1,173

Business and Summary of Signi_3

Business and Summary of Significant Accounting Policies (Details)	9 Months Ended
	Sep. 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	$ 18,351,000
Total operating lease liabilities	$ 22,744,000
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	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Jan. 01, 2018
Disaggregation of Revenue [Line Items]
Retained earnings	$ 492,113	$ 422,235
Deferred revenue	4,600	$ 5,600
Customer cash held in company bank accounts	4,000
Revenue recognized	$ 4,200
Minimum
Disaggregation of Revenue [Line Items]
Term, contracts with customers	1 year
Amortization period	1 year
Maximum
Disaggregation of Revenue [Line Items]
Term, contracts with customers	3 years
Accounting Standards Update 2014-09
Disaggregation of Revenue [Line Items]
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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 146,815	$ 154,246	$ 462,950	$ 442,462
Commercial
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	69,711	86,609	225,014	238,987
State
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	62,830	59,374	189,752	172,709
Federal
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	14,274	8,263	48,184	30,766
Coordination of Benefits
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	94,619	105,694	305,564	298,201
Payment Integrity
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	37,016	33,289	113,863	103,122
Population Health Management
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 15,180	$ 15,263	$ 43,523	$ 41,139

Accounts Receivable and Accou_3

Accounts Receivable and Accounts Receivable Allowance - Accounts Receivable, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Receivables [Abstract]
Accounts receivable	$ 213,771	$ 220,455
Allowance	(16,316)	(13,683)	$ (14,799)
Accounts receivable, net	$ 197,455	$ 206,772

Accounts Receivable and Accou_4

Accounts Receivable and Accounts Receivable Allowance - Activity in Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018	Dec. 31, 2017
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance--beginning of period	$ 16,316	$ 13,683	$ 14,799
Provision	15,908	20,453
Charge-offs	(13,275)	(21,569)
Balance--end of period	$ 16,316	$ 13,683

Intangible Assets, Goodwill a_3

Intangible Assets, Goodwill and Other Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 96,259	$ 194,999
Accumulated Amortization	(30,128)	(127,859)
Net Carrying Amount	66,131	67,140
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	68,290	156,790
Accumulated Amortization	(20,284)	(104,740)
Net Carrying Amount	$ 48,006	$ 52,050
Weighted Average Amortization Period in Years	12 years 3 months 18 days	12 years 9 months 18 days
Intellectual property
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 27,700	$ 21,700
Accumulated Amortization	(9,575)	(6,670)
Net Carrying Amount	$ 18,125	$ 15,030
Weighted Average Amortization Period in Years	3 years 10 months 24 days	4 years 1 month 6 days
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 136	$ 16,246
Accumulated Amortization	(136)	(16,215)
Net Carrying Amount	$ 0	$ 31
Weighted Average Amortization Period in Years	0 years	8 months 12 days
Restrictive covenants
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 133	$ 263
Accumulated Amortization	(133)	(234)
Net Carrying Amount	$ 0	$ 29
Weighted Average Amortization Period in Years	0 years	8 months 12 days

Intangible Assets, Goodwill a_4

Intangible Assets, Goodwill and Other Assets - Estimated Amortization Expense of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
2019 (excluding the nine months ended September 30, 2019)	$ 2,487
2020	8,866
2021	8,399
2022	8,399
2023	6,024
Thereafter	31,956
Total	$ 66,131	$ 67,140

Intangible Assets, Goodwill a_5

Intangible Assets, Goodwill and Other Assets (Details) - USD ($) $ in Thousands	Sep. 16, 2019	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Business Acquisition [Line Items]
Amortization of intangible assets		$ 2,300	$ 6,100	$ 7,009	$ 18,889
Goodwill		$ 517,460		517,460		$ 487,617
Proceeds from sale of cost basis investment				9,776	0
Gain on sale of cost basis investment				7,697	$ 0
VitreosHealth, Inc.
Business Acquisition [Line Items]
Aggregate consideration	$ 36,600
Intellectual property subject to amortization	6,000
Goodwill	$ 29,800
InstaMed Holdings, Inc.
Business Acquisition [Line Items]
Percentage acquired		100.00%
Cost-based investment in Instamed		$ 2,100		2,100
Gain on sale of cost basis investment		$ 7,700		$ (7,700)

Accounts Payable, Accrued Exp_3

Accounts Payable, Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Payables and Accruals [Abstract]
Accounts payable, trade	$ 15,225	$ 12,394
Accrued compensation and other	27,188	42,833
Accrued operating expenses	24,142	19,675
Current portion of lease liabilities	6,879
Total accounts payable, accrued expenses and other liabilities	$ 73,434	$ 74,902

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Effective income tax rate, percent	12.60%	21.30%
Unrecognized tax benefits that would impact effective tax rate	$ 3,900		$ 4,800
Unrecognized tax benefits, income tax penalties and interest accrued	700		$ 700
Unrecognized tax benefits, income tax penalties and interest expense	30	$ 400
Possible decrease in unrecognized tax benefits	$ 100

Liability for Appeals (Details)

Liability for Appeals (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2019	Mar. 31, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Product Liability Contingency [Line Items]
Release of liability	$ 10,500	$ 8,400	$ 10,478	$ 8,436
Liability for appeals			$ 2,554		$ 21,723
Original RAC Contract
Product Liability Contingency [Line Items]
Release of liability	$ 19,400

Credit Agreement (Details)

Credit Agreement (Details)	1 Months Ended	9 Months Ended
	Dec. 31, 2017USD ($)	Sep. 30, 2019USD ($)	Sep. 30, 2018USD ($)	Dec. 31, 2018USD ($)
Line of Credit Facility [Line Items]
Letters of credit outstanding, amount		$ 6,500,000
Amortization of interest expense		423,000	$ 423,000
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		1,800,000		$ 2,200,000
Amortization of interest expense		$ 400,000	$ 400,000
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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Line of Credit Facility [Line Items]
Interest expense	$ 2,342	$ 2,527	$ 7,392	$ 7,224
Commitment fees	$ 157	$ 211	$ 473	$ 688

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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share [Abstract]
Net income	$ 21,136	$ 18,574	$ 69,878	$ 21,598
Weighted average common shares outstanding-basic (in shares)	86,324	83,509	88,190	83,373
Plus: net effect of dilutive stock options and restricted stock units (in shares)	2,000	1,635	2,251	1,868
Weighted average common shares outstanding-diluted (in shares)	88,324	85,144	90,441	85,241
Net income per common share-basic (in dollars per share)	$ 0.24	$ 0.22	$ 0.79	$ 0.26
Net income per common share -- diluted (in dollars per share)	$ 0.24	$ 0.22	$ 0.77	$ 0.25

Earnings Per Share (Details)

Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 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	625,573	21,105	472,627	531,378
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	1,693	202	2,791	595

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,934	$ 3,437	$ 18,715	$ 17,645
Proceeds from stock options exercised	$ 12,200	$ 11,200	$ 39,175	$ 13,633
Shares issued upon exercise of stock options	740,748	535,077	2,427,156	686,111
Total intrinsic value of stock options exercised	$ 16,000	$ 4,000	$ 45,500	$ 4,700
Unrecognized compensation cost related to stock options outstanding	5,600		$ 5,600
Weighted-average grant date fair value per share of stock options			$ 13.87	$ 7.52
Total income tax benefits	$ 2,159	$ 3,069	$ 10,049	$ 5,830
Restricted stock units granted (in shares)	12,687	1,794	474,520	762,877
Fair market value of restricted stock units	$ 500	$ 100	$ 16,200	$ 12,800
Share-based Payment Arrangement, Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	900	1,600	$ 7,800	7,600
Recognition period for compensation cost related to awards outstanding			1 year 1 month 6 days
Total income tax benefits			$ 16,100	1,000
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,900	$ 1,900	$ 10,900	$ 10,000
Recognition period for compensation cost related to awards outstanding			1 year 1 month 6 days
Restricted stock units granted (in shares)			473,000
Number of unvested restricted stock units (in shares)	995,860		995,860
Unrecognized compensation cost related to restricted stock units	$ 12,400		$ 12,400

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,934	$ 3,437	$ 18,715	$ 17,645
Cost of services-compensation
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	982	1,537	7,825	5,802
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,952	$ 1,900	$ 10,890	$ 11,843

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Number of Options
Number of options, outstanding, beginning balance (in shares)			4,402,000
Number of options, granted (in shares)			634,000
Number of options, exercised (in shares)	(740,748)	(535,077)	(2,427,156)	(686,111)
Number of options, forfeitures (in shares)			(146,000)
Number of options, expired (in shares)			(2,000)
Number of options, outstanding, ending balance (in shares)	2,461,000		2,461,000
Number of options, expected to vest (in shares)	1,051,000		1,051,000
Number of options, exercisable (in shares)	979,000		979,000
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)			38.71
Weighted average exercise price, exercised (in dollars per share)			16.18
Weighted average exercise price, forfeitures (in dollars per share)			19.68
Weighted average exercise price, expired (in dollars per share)			15.78
Weighted average exercise price outstanding, beginning balance (in dollars per share)
Weighted average exercise price, expected to vest (in dollars per share)	28.22		28.22
Weighted average exercise price, exercisable (in dollars per share)	$ 17.18		$ 17.18
Weighted Average- Remaining Contractual Terms
Weighted average contractual life outstanding, ending balance
Weighted average contractual life, vested and expected to vest			8 years 9 months
Weighted average contractual life, vested and exercisable			5 years 9 months 10 days
Aggregate Intrinsic Value
Aggregate intrinsic value outstanding, ending balance
Aggregate intrinsic value, vested and expected to vest	8,746		8,746
Aggregate intrinsic value, vested and exercisable	$ 16,918		$ 16,918

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	9 Months Ended
	Sep. 30, 2019	Sep. 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		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Number of Units
Granted (in shares)	12,687	1,794	474,520	762,877
Restricted Stock Units (RSUs)
Number of Units
Outstanding, beginning balance (in shares)			1,488,000
Granted (in shares)			473,000
Vesting of restricted stock units, net of units withheld for taxes (in shares)			(405,000)
Units withheld for taxes (in shares)			(200,000)
Forfeitures (in shares)			(99,000)
Outstanding, ending balance (in shares)	1,257,000		1,257,000
Weighted Average Grant Date Fair Value per Unit
Outstanding, beginning balance (in dollars per share)			$ 17.60
Granted (in dollars per share)			34.19
Vesting of restricted stock units, net of units withheld for taxes (in dollars per share)			16.60
Units withheld for taxes (in dollars per share)			16.60
Forfeitures (in dollars per share)			19.97
Outstanding, ending balance (in dollars per share)	$ 25.82		$ 25.82

Leases (Details)

Leases (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Leases [Abstract]
Lessee, operating lease, maximum renewal term	10 years
Operating lease, weighted average remaining lease term	4 years 2 months 12 days
Finance lease, weighted average remaining lease term	2 years 9 months 18 days
Operating lease, weighted average discount rate, percent	5.70%
Finance lease, weighted average discount rate, percent	4.60%
Sublease income	$ 1.6	$ 1.3

Leases - Components of Lease Ex

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Leases [Abstract]
Operating lease cost	$ 1,653	$ 4,967
Finance lease cost
Amortization of right-of-use assets	59	97
Interest on lease liabilities	8	13
Total finance lease cost	$ 67	$ 110

Leases - Supplemental Cash Flow

Leases - Supplemental Cash Flow and Other Information Related to Leases (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019USD ($)
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$ 5,559
Operating cash flows from finance leases	11
Payments on capital lease obligations	93
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	1,253
Finance leases	$ 1,160

Leases - Supplemental Balance S

Leases - Supplemental Balance Sheet Information Related to Leases (Details) $ in Thousands	Sep. 30, 2019USD ($)
Operating Leases
Operating lease right-of-use assets	$ 18,351
Other current liabilities	6,475
Operating lease liabilities	16,269
Total operating lease liabilities	22,744
Finance Leases
Other Assets	1,167
Other current liabilities	404
Other long-term liabilities	769
Total finance leases liabilities	$ 1,173

Leases - Maturities of Lease Li

Leases - Maturities of Lease Liabilities (Details) $ in Thousands	Sep. 30, 2019USD ($)
Operating Leases
2019 (excluding the nine months ended September 30, 2019)	$ 1,874
2020	7,468
2021	5,768
2022	3,487
2023	3,259
Thereafter	3,741
Total lease payments	25,597
Less: Imputed interest	2,853
Total operating lease liabilities	22,744
Finance Leases
2019 (excluding the nine months ended September 30, 2019)	112
2020	447
2021	447
2022	240
2023	0
Thereafter	0
Total lease payments	1,246
Less: Imputed interest	73
Total finance leases liabilities	$ 1,173

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	Jun. 27, 2018USD ($)	Nov. 03, 2017USD ($)	Jul. 31, 2012cause_of_action
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 (Details)

Subsequent Events (Details) - Subsequent Event - USD ($)	Nov. 01, 2019	Oct. 11, 2019
Subsequent Event [Line Items]
Amount of stock authorized to be repurchased	$ 50,000,000
Repurchase program, period authorized (in years)	2 years
MedAdvisor Limited
Subsequent Event [Line Items]
Investment in ordinary shares		$ 7,500,000
Investment in ordinary shares, percent		12.80%

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