Filed by Health Management Systems, Inc. Pursuant to Rule 425 under the
Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934.
Subject Company: HMS Holdings Corp.
Commission File Number for Registration Statement: 333-100521
On October 21, 2002, Health Management Systems, Inc. issued the following
press release:
HEALTH MANAGEMENT SYSTEMS, INC. [HEALTH MANAGEMENT SYSTEMS LOGO]
401 Park Avenue South
New York, New York 10016
(212) 685-4545
(212) 857-5004 (fax) Nasdaq:HMSY
Release: October 21, 2002
Contact: Kathy L. Arendt, Corporate Secretary
(212) 857-5486
(212) 857-5973 (fax)
E-Mail: invest@hmsy.com
http://www.hmsy.com
HEALTH MANAGEMENT SYSTEMS, INC. TO ADOPT HOLDING COMPANY STRUCTURE
New York, NY, October 21, 2002-- Health Management Systems, Inc. (HMSY) filed a
registration statement on October 11, 2002 with the Securities and Exchange
Commission (SEC) regarding its proposal to create a holding company named HMS
Holdings Corp. Following the creation of the holding company, HMSY's Provider
and Payor Services businesses will reside in separate subsidiaries.
The Board of Directors of HMSY believes that the holding company
structure will facilitate execution of the Company's growth and diversification
strategy. This will afford the following benefits, among others:
o Allow greater opportunity for the individual businesses to
identify and promote themselves in their respective marketplaces.
As Health Management Systems, Inc., the Payor Services business
will be utilizing and building upon a name and identity that is
extremely well recognized in the state governmental marketplace in
which it has operated for almost twenty years. The Provider
Services business will operate as Accordis Inc., a new name more
appropriate to the suite of outsourcing services that it now
offers to hospitals.
o Reduce the confusion that is inherent in the current structure,
with two businesses marketing to related but nonetheless very
different healthcare financial services marketplaces.
o Better permit each business to tailor compensation and incentive
programs to attract and retain employees with the skill sets
appropriate to that business.
The new holding company structure will result from a merger and share
exchange and the separation of HMSY's businesses. Because adoption of the
holding company structure will constitute a reorganization with no change in
ownership interests, there will be no dilutive impact to the shareholders of
HMSY. HMS Holdings Corp. will trade on NASDAQ under the symbol HMSY and no
interruption of trading is anticipated. Shareholders of HMSY will be asked to
vote to approve adoption of the holding company structure at a special meeting
to be scheduled as soon as possible following the effectiveness of the
registration statement.
* * *
HMSY FURNISHES INFORMATION-BASED REVENUE ENHANCEMENT AND BUSINESS
OFFICE OUTSOURCING SERVICES TO HEALTHCARE PROVIDERS AND PAYORS. WE HELP OUR
CLIENT INCREASE REVENUE, ACCELERATE REIMBURSEMENT AND REDUCE OPERATING AND
ADMINISTRATIVE COSTS.
* * *
HEALTH MANAGEMENT SYSTEMS, INC. [HEALTH MANAGEMENT SYSTEMS LOGO]
401 Park Avenue South
New York, New York 10016
(212) 685-4545
(212) 857-5004 (fax) Nasdaq:HMSY
A registration statement has been filed with the SEC on Form S-4
containing a preliminary joint proxy statement and prospectus of HMSY and HMS
Holdings Corp. and other relevant documents concerning the holding company
proposal. The common stock of HMS Holdings Corp. may not be sold, nor may offers
to buy be accepted prior to the time the registration statement becomes
effective. This release shall not constitute an offer to sell, or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any such
state. Investors are urged to read the definitive joint proxy statement and
prospectus when it becomes available and any other relevant documents filed with
the SEC, as well as any amendments and supplements to those documents, because
they will contain important information on the proposed restructuring. Investors
can obtain the documents filed with the SEC free of charge at the SEC's Web site
(www.sec.gov) under the name of HMS Holdings Corp. In addition, investors may
obtain a free copy of the definitive joint proxy statement and prospectus, when
available, and other documents filed by HMSY and HMS Holdings Corp. with the SEC
by contacting HMSY's Shareholder Services at 212-857-5486. Investors should read
the definitive joint proxy statement and prospectus when it becomes available
before making any voting or investment decision.
HMSY and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from HMSY shareholders. HMS Holdings
Corp. may also be deemed to be a participant in the solicitation. Investors may
obtain additional information regarding HMSY, HMS Holdings Corp. and their
respective officers and directors, including beneficial ownership information,
by reading the definitive joint proxy statement and prospectus when it becomes
available.
* * *
This release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on management's current expectations and are subject to
uncertainty and changes in circumstances. Economic, business, competitive and/or
regulatory factors could cause actual results to differ materially from those
described herein. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this release.
HMSY does not undertake any obligation to publicly release any revisions to
these forward-looking statements to reflect events or circumstances after the
date of this release.
* * *