1
Health Management Systems, Inc.                                      [HMS LOGO]
401 Park Avenue South                                              Nasdaq: HMSY
New York, New York 10016
(212) 685-4545
(212) 889-8776 (fax)

                                                       

                                  PRESS RELEASE

Release:   May 1, 1996; 6:00 am


                                                        
Contact:   Felice Blanco, Assistant Corporate Secretary    Patrick Hojlo
           Office of  Investor Relations                   Noonan/Russo Communications
           (212) 685-4545 ext. 457                         (212) 696-4455 ext. 246


          HEALTH MANAGEMENT SYSTEMS, INC. ACQUIRES CDR ASSOCIATES, INC.

NEW YORK, NY May 1, 1996 - Health Management Systems, Inc. (Nasdaq:HMSY)
announced the acquisition of CDR Associates, Inc. (CDR), a supplier of
third-party liability recovery services to the health care industry.

The transaction entails HMSY's issuance of 460,000 shares of its common stock in
exchange for all the shares of CDR stock. The transaction will be accounted for
using the pooling of interests method and was consummated effective April 29,
1996.

Paul J. Kerz, Chief Executive Officer of HMSY, said, "CDR's merger with HMSY
will grow and strengthen our robust Third Party Liability Recovery (TPLR)sm
proprietary service offerings. CDR complements the activities on which HMSY has
traditionally focused. We are currently moving to translate CDR's expertise into
additional revenue recoveries for existing TPLR clients."

Founded in 1989 and located in Baltimore, Maryland, CDR will continue to be led
by its founders. CDR's current clients include 15 Blue Cross and Blue Shield
plans in 12 states and the District of Columbia, as well as several commercial
insurers and HMOs.

HMSY furnishes proprietary information management services and software to
hospitals and other health care providers, government health services agencies,
other payors or purchasers of health care, and companies serving the health care
industry. The Company's offerings constitute an outsourcing of various aspects
of the information processing functions associated with the health care payment
process, affording HMSY's clients the benefits of enhanced revenue, accelerated
cash flow, and reduced operating and administrative costs.

                                      ####