1196501--2/26/2010--HMS_HOLDINGS

related topics

{system, service, information}

{regulation, government, change}

{cost, contract, operation}

{stock, price, share}

{stock, price, operating}

{customer, product, revenue}

{provision, law, control}

{tax, income, asset}

{acquisition, growth, future}

{personnel, key, retain}

{condition, economic, financial}

Our business could be adversely affected if we lose a major client, our clients are not satisfied with our services or if they elect to terminate our contracts before their scheduled expiration date. Our operating results are subject to significant fluctuations due to factors including variability in the timing of when we recognize contingency fee revenue. As a result, you will not be able to rely on our operating results in any particular period as an indication of our future performance. We are subject to extensive government regulation and our government contracts are subject to audit and investigation rights. Any violation of the laws and regulations applicable to us or a negative audit or investigation finding could have a material adverse effect on our business, financial condition, results of operations and cash flow. Simplification of the healthcare payment process could reduce the need for and the price of our services. Changes in the United States healthcare environment could have a material negative impact on our business financial condition, results of operations and cash flow. Budget deficits and/or fluctuations in the number of requests for proposals issued by governments and their agencies may adversely impact our business. We must comply with laws and regulations regarding patient privacy and information security, including taking steps to ensure that our business associates who obtain access to sensitive patient information maintain its confidentiality. A failure to comply with those laws and regulations, whether or not inadvertent, could subject us to legal actions and negatively impact our operations. We obtain a significant portion of our business through competitive bidding in response to a government RFP. We may not be awarded contracts through this process on the same level in the future as in the past. If we fail to accurately estimate the factors upon which we base our contract pricing, we may generate less profit than expected or incur losses on those contracts. Our business depends on effective information systems and the integrity of the data in our information systems. We depend on information suppliers. If we are unable to manage successfully our relationships with a number of these suppliers, the quality and availability of our services may be harmed. We may rely on subcontractors and partners to provide clients with a single-source solution. We use software vendors, utility providers and network providers in our business, and could be materially adversely affected if they cannot deliver or perform as expected or if our relationships with them are terminated or otherwise change. The federal government may limit or prohibit the outsourcing of certain programs or may refuse to grant consents and/or waivers necessary to permit private entities, such as us, to perform certain elements of government programs. We may be precluded from bidding and performing certain work due to other work we currently perform. If we do not successfully integrate the businesses that we acquire, our results of operations could be adversely affected. We may not be able to realize the entire book value of goodwill and other intangible assets from acquisitions. We may be unable to attract and retain sufficient qualified personnel to properly operate our business. Risks Related to Our Common Stock The market price of our common stock may be volatile. Certain provisions of our certificate of incorporation could discourage unsolicited takeover attempts, which could depress the market price of our common stock. Because we do not intend to pay dividends, you will benefit from an investment in our common stock only if it appreciates in value.

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1196501--2/26/2010--HMS_HOLDINGS_CORP