<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets at July 31, 1996 (unaudited) and 1995 (unaudited)
and the Consolidated Statement of Operations for the nine months ended July 31,
1996 (unaudited) and 1995 (unaudited) and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000861179
<NAME> Health Management Systems, Inc.
<MULTIPLIER> 1,000
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> OCT-31-1996 OCT-31-1995
<PERIOD-START> NOV-01-1995 NOV-01-1994
<PERIOD-END> JUL-31-1996 JUL-31-1995
<CASH> 12,013 10,069
<SECURITIES> 18,041 16,985
<RECEIVABLES> 47,400 29,857
<ALLOWANCES> (3,452) (286)
<INVENTORY> 0 0
<CURRENT-ASSETS> 87,105 59,071
<PP&E> 18,445 14,515
<DEPRECIATION> (11,188) (8,739)
<TOTAL-ASSETS> 108,793 79,451
<CURRENT-LIABILITIES> 31,277 19,418
<BONDS> 0 0
<PREFERRED-MANDATORY> 0 0
<PREFERRED> 0 0
<COMMON> 173 110
<OTHER-SE> 72,654 55,350
<TOTAL-LIABILITY-AND-EQUITY> 108,793 79,451
<SALES> 76,752 65,046
<TOTAL-REVENUES> 76,752 65,046
<CGS> 67,565 52,009
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 3,219 373
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 8,463 12,477
<INCOME-TAX> 3,209 5,840
<INCOME-CONTINUING> 9,026 12,848
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 5,254 6,637
<EPS-PRIMARY> 0.29 0.38
<EPS-DILUTED> 0.29 0.38