What We Do

1. J.P. Morgan 29th Annual Healthcare ConferenceJanuary 10, 2011 Bill Lucia, CEOWalter Hosp, CFOContact:Christine Saenzcsaenz@hms.com212.857.5986

2. What We Do • We provide cost containment services for healthcare payors. • We help ensure that claims are paid correctly (Program Integrity) and by the responsible party (Coordination of Benefits). As a result, our clients spend more of their healthcare dollars on the people entitled to them.

3. Who We Serve Federal Programs Centers for Medicare & Medicaid Services Veterans Administration State Programs • Medicaid agencies • CHIPs (Children’s Health Insurance Programs) • Child Support agencies Commercial Programs • Medicaid Managed Care Organizations (MCOs) • Commercial Plans • Employers

4. Coordination of Benefits UNINSURED46 million lives MEDICAID$436 billion 57 million lives COMMERCIAL$847 billion164 million lives MEDICARE$515.5 billion 47 million lives Source: 2009 CMS Office of the Actuary

5. How We Grow Capture more lives Ride the Medicaid growth wave Add new products, enter new markets Upsell to existing customers

6. Capture More Medicaid Lives Sources: HMS & 2009 CMS Office of the Actuary.

7. Ride the Medicaid Growth Wave Actual Projected With reform 1995-2008 data, 2008 CMS Office of the Actuary 2010-2019 data, 2009 CMS Office of the Actuary

8. Add New Products, Enter New Markets Acquired AMG Acquired Chapman Kelly Medicare Employers Commercial Insures Dependent Eligibility Audits New Product Development Healthcare Reform Products M & A Market Service Acquired BSPA Premium Assistance Real-time COB Acquired PrudentRx Federal MIC Clinical Review 2005 2006 2007 2008 2009 2010 & Beyond Acquired IntegriGuard Acquired Verify Solutions Behavioral Health Long-term Care Audits Pharmacy Audits Acquired Permedion Hospital Audits CHIP Enrollment Integrity Managed Care

9. Upsell to existing customers

10. Upsell to existing customers

11. Upsell to existing customers

12. Healthcare Reform

13. Healthcare Financing Today MEDICAID$436 billion 57 million lives UNINSURED46 million lives COMMERCIAL$847 billion164 million lives MEDICARE$515.5 billion 47 million lives Source: 2009 CMS Office of the Actuary

14. Healthcare Financing 2019 UNINSURED16 million lives MEDICAID$994 billion 83 million lives COMMERCIAL$1335 billion 168 million lives MEDICARE$904 billion 60.5 million lives Source: 2019 Estimates, 2009 CMS Office of the Actuary.

15. Medicaid Expansion Actual Projected With reform 1995-2008 data, 2008 CMS Office of the Actuary 2010-2019 data, 2009 CMS Office of the Actuary

16. Reform Activity 2011-2014 • National healthcare expenditures • Early adoption of reform • Program compliance • Exchanges

17. National Healthcare Expenditures As a percentage of GDP CMS Office of the Actuary, “Estimated Financial Effects of PPACA as Amended”, April 2010

18. Early Adoption of Reform • Massachusetts (2007) • Connecticut (2010) • District of Columbia (2010) • California (2010) • Minnesota (2011)

19. Program Compliance • Medicaid RACs • Employer plan and claim audits • Third-level appeals • Managed care • Federal

20. Exchanges • Federal planning grants awarded • Pilots in place in several states • Coordination of benefits required • Responsible for eligibility determination • Right insurance home

21. Revenue Diversity and Growth $ Millions $ Millions

22. Key Financial IndicatorsRolling Four Quarters

23. Guidance

24. Investment Considerations Low risk, high growth core business High growth, early stage program integrity business Well positioned in current healthcare environment Multiple new growth opportunities - Products - Acquisitions - Markets Recurring, transparent and diversified revenue Strong financial position

25. Safe Harbor Statement Certain statements in this presentation constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of HMSY, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to (i) the information being of a preliminary nature and therefore subject to further adjustment; (ii) the uncertainties of litigation; (iii) HMSY’s dependence on significant customers; (iv) changing conditions in the healthcare industry which could simplify the reimbursement process and adversely affect HMSY’s business; (v) government regulatory and political pressures which could reduce the rate of growth of healthcare expenditures and/or discourage the assertion of claims for reimbursement against and delay the ultimate receipt of payment from third party payors; (vi) competitive actions by other companies, including the development by competitors of new or superior services or products or the entry into the market of new competitors; (vii) all the risks inherent in the development, introduction, and implementation of new products and services; and (viii) other risk factors described from time to time in HMSY’s filings with the SEC, including HMSY’s Form 10-K for the year ended December 31, 2009. HMSY assumes no responsibility to update the forward-looking statements contained in this release as a result of new information, future events or otherwise. When/if used in this presentation, the words “ focus,”“ believe, ”“ confident, ”“ anticipate, ”“ expected, ”“ strong, ”“ potential, ” and similar expressions are intended to identify forward-looking statements, and the above described risks inherent therein.

26. NASDAQ: HMSY