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Exhibit Number 10.3


                            THIRD AMENDMENT OF LEASE
                            ------------------------



         THIS AGREEMENT, made as of the 30th day of May, 2000 between 401 PARK
AVENUE SOUTH ASSOCIATES LLC, A New York Limited Liability Company having an
office at 30 West 26th Street, Eighth Floor, New York, New York ("Landlord") and
HEALTH MANAGEMENT SYSTEMS, INC., a New York Corporation having an office at 401
Park Avenue South, New York New York ("Tenant").


                              W I T N E S S E T H :
                              ---------------------


         WHEREAS, Landlord and Tenant entered into an Agreement of Lease made as
of January 6, 1986, as amended by a First Amendment of Lease dated November 25,
1987 and a Second Amendment of Lease dated February 28, 1990, covering certain
premises on a portion of the 11th floor in the building known as 401 Park Avenue
South in the City, County and State of New York (said Agreement of Lease, being
hereinafter called the "Lease"); and

         WHEREAS, the parties hereto desire to amend the Lease in the respects
and upon the terms and conditions hereinafter set forth.

         NOW THEREFORE, in consideration of the sum of One Dollar ($1.00) paid
by each of the Parties hereto to the other (the receipt and sufficiency of which
is hereby acknowledged) and of other good and valuable consideration, including
the covenants and understandings herein contained, it is hereby agreed as
follows:

         1.       Commencing January 1, 2001 the percentage 104.5% set forth in
                  Article 40. (h) of the Lease shall be changed to 103.5%.

         2.       All other terms and conditions of this Lease are hereby
                  confirmed and shall remain in full force and effect.

         3.       This Amendment of Lease shall not be binding upon Landlord
                  unless and until it has been duly executed by Landlord and
                  delivered by Landlord to Tenant.


         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.


                              401 PARK AVENUE SOUTH ASSOCIATES LLC


                              BY: /s/ Alan Fleisch
                                  ---------------------------------
                                      Alan Fleisch
                                      President

                              HEALTH MANAGEMENT SYSTEMS, INC.


                              BY: /s/ Vincent Hartley
                                  ---------------------------------
                                      Vice President
                                      Facilities Management